R-2016-097 2016-06-27RESOLUTION NO. R2016-97
A Resolution of the City Council of the City of Pearland, Texas,
awarding a lease/purchase bid for the purchase of a ladder truck and
exercise/weight room equipment with J.P. Morgan, Bank, N.A., in the
amount of $1,169,843.18 at a 1.721 percent interest rate with a seven
(7) year declining amortization schedule.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City opened bids for lease/purchase financing of a ladder
truck and exercise/weight room equipment, and such bids have been reviewed and
tabulated.
Section 2. That the City Council hereby awards the bid to J.P. Morgan, Bank,
N.A., to finance up to $1,169,843.18 at a fixed rate of 1.721% for seven (7) years.
Section 3. The City Manager or his designee is hereby authorized to execute any
necessary documents for the Lease/Purchase Agreement.
PASSED, APPROVED and ADOPTED this the 27th day of June, A.D., 2016.
TOM REID
MAYOR
ATTEST:
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
J.P. Morgan
JPMORGAN CHASE BANK, N.A.
Mail Code OHI -1085
1111 Polaris Parkway, Suite 3-A
Columbus, OH 43240-2050
June 28, 2016
CITY OF PEARLAND
Attn: Bob Pearce
3519 LIBERTY DRIVE
PEARLAND, TX 77581
Dear Bob Pearce,
Resolution No. R2016-097
Enclosed you will find the docwnents necessary to complete your transaction with JPMORGAN CHASE
BANK, N.A. ("JPM"). These documents have been completed as of June 28, 2016 and reflect the pricing,
tenns and conditions of the transaction as of this date. Please be advised that JPM reserves the right to
adjust pricing in order to maintain .IPM's anticipated economic return as a result of material adverse
changes in money markets and capital markets up to the date of final funding.
• Master Lease Purchase Agreement- This document constitutes the main agreement for this
and future Schedules. Please have your Authorized Signer sign and record his/her title on the
fonn.
• Lease Schedule, Schedule A-1, and Payment Schedule - These are specific documents for
the current financing and detail the Schedule terms and conditions, describe the equipment
and state the repayment terms. Please have your Authorized Signer sign and record his/her
title on each fonn
• Prepayment Schedule Addendum, Vehicle Schedule Addendum, and Texas Lease
Schedule Addendum- These documents are specific for the current financing and details any
additional terns and conditions related to the Schedule. Please have your Authorized Signer
sign and rccord his/her title on the forms.
• Resolution and Declaration of Official Intent - Your governing board will need to review
and approve the financing and the Authorized Signer(s). Please have the Secretary/Clerk of
the board certify that the board has met and approved the financing, and that the titles of the
Authorized Signer(s) are correct.
• Certificate of Incumbency - Please have the Secretary/Clerk of the board certify that the
titles and specimen signature(s) of the Authorized Signer(s) are correct.
• Opinion of Counsel - Please have your counsel review the documents as soon as possible,
and prepare an Opinion of Counsel letter on their letterhead addressed to JPMORGAN
CHASE BANK, N.A. A sample of an Opinion of Counsel letter that will satisfy
JPMORGAN CHASE BANK, N.A. is enclosed.
• Proceeds Disbursement Authorization - Please complete the missing payment information,
sign and date, and provide the signer's title where indicated.
• IRS Form 8038/G/GC - This form is required for IRS reporting of a tax-exempt financing.
Please refer to the instructions when completing the information on the fonn and have an
Authorized Signer sign and date at the bottom. Please refer to www.irs.gov for the most
current version of the form.
• Insurance Request Letter — Prior to paying the vendor(s), we will need proof of insurance
on the equipment, and JPMORGAN CHASE BANK, N.A., its Parent, Affiliates, Successors
and Assigns, will need to be listed as both loss payee and additional insured on your policy.
Please have an Authorized Signer sign the bottom of the fonn. Also, please instruct your
Insurance Agent to provide a Certificate of Insurance as required on the form.
• Escrow Agreement, Receipt Certificate/Payment Request Forms (with Instructions), and
Escrow Funding Schedule Addendum and Arbitrage Certificate -These documents
establish an agreement with an Escrow Agent if you are acquiring the equipment over a
defined and allowable period of time. Please review the Schedule 1 Investment Authorization
form and select an investment for the escrowed funds. This will instruct the Escrow Agent
where you want the escrowed funds to be invested. The authorized Signer will need to sign
and insert his/her title on the Escrow Agreement, and the Escrow Funding Schedule
Addendum.
If you have any questions regarding your Escrow Investment selection please
contact: Mike Weber Tel. (704) 333-5744 Fax (704) 333-5850 Mobile (704) 661-0932
Etnail michael-r.weberliidb.com
• Auto Debit Form — For payments to be automatically deducted from an existing checking
account, please provide the requisite account information and sign.
For funding, please rctum your lease documents to JPMORGAN CHASE BANK, N.A., Mail Code OHI -
1085, 1111 Polaris Parkway, Suite A3, Columbus, OH 43240.
We would like to thank you for choosing JPMORGAN CHASE BANK, N.A. to assist with your equipment
financing. We appreciate your business and welcome the opportunity to work with you.
PLEASE MAKE A COPY OF THE DOCUMENTS FOR YOUR RECORDS. if you would like to
receive a copy of the signature pages post closing, please notify your Documentation Specialist of your
request. Your payments will be duc semi-annually as set forth in the Lease Schedule. You will be
receiving an invoice for the above referenced account at:
CITY OF PEARLAND
Attn: Bob Pearce
3519 LIBERTY DRIVE
PEARLAND, TX 77581
If you decide to enroll in the Automated Bill Payment your payments will be debited semi-annually on the
due date of your payment, beginning with your first payment. Payments debited will include your nonnally
scheduled payment plus any applicable sales tax and assessments.
If you have any questions, concerns, or if I can be of assistance, please feel free to call me. I can be
reached at 1-800-678-2601 or (614) 217-8827 from 8:00 a.m. through 5:00 p.m. ET Monday through
Friday. I'll be happy to help you. •
Sincerely,
Britney Posey
DOCUMENTATION SPECIALIST
RESPONSIVE RESULTS -ORIENTED TRUST -BUILDERS ACCOUNTABLE
City Attorney's Office
3519 Liberty Drive
Pearland, Texas 77581
Tel: 281.652.1664
Fax: 281.652.1679
pearlandtx.gov
DARRIN M. COKER
CITY ATTORNEY
TELEPHONE 281.652.1678
JENIFER SMITH
LEGAL SECRETARY
TELEPHONE 281.652.1664
Date: June 30, 2016
Lessee: CITY OF PEARLAND
Lessor: JPMORGAN CHASE BANK, N.A.
Re: Lease Schedule No. 1000141569 dated June 30, 2016 together with its Master Lease -Purchase Agreement
dated as of June 30, 2016 by and between the above-named Lessee and the above-named Lessor and the
Escrow Agreement dated June 30, 2016 relating to the foregoing.
Sir/Madam:
I have acted as counsel to Lessee with respect to the Lease Schedule and its Addenda, the Master Lease -Purchase
Agreement and its Addenda, and all other agreements described above or related thereto (collectively, the
"Agreements") and various related matters, and in this capacity have reviewed a duplicate original or certified copy
of the Agreements and such other documents as I have deemed necessary for the purposes of this opinion.
Based upon the examination of such documents, it is my opinion that:
1. Lessee is a political subdivision of the State of TX (the "State") duly organized, existing and operating under
the Constitution and laws of the State.
2. Lessee is authorized and has power under State law to enter into all of the Agreements, and to carry out its
obligations thereunder and the transactions contemplated thereby.
3. The Agreements and all other documents related thereto have been duly authorized, approved and executed by
and on behalf of Lessee, and each of the Agreements is a valid and binding contract of Lessee enforceable in
accordance with its terms, except to the extent limited by State and Federal laws affecting creditor's remedies
and by bankruptcy. reorganization or other laws of general application relating to or affecting the enforcement
of creditors' rights.
4. The authorization, approval and execution of the Agreements and all other proceedings of Lessee relating to the
transactions contemplated thereby have been performed in accordance with all applicable Local, State and
Federal laws (including open meeting laws and public bidding and property acquisition laws).
5. To the best of my knowledge, there is no litigation or proceeding pending before any court, administrative
agency or governmental body, that challenges: the organization or existence of Lessee; the authority of its
officers; the proper authorization, approval and execution of any of the Agreements or any documents relating
thereto; the appropriation of monies to make payments under the Agreements for the current fiscal year; or the
ability of Lessee otherwise to perform its obligations under the Agreements and the transactions contemplated
thereby.
6. Lessee is a political subdivision of the State as referred to in Section 103 of the Internal Revenue Code of 1986,
as amended, and the related regulations and rulings thereunder.
Lessor, its Assignee and any of their assigns may rely upon this opinion.
c/V:struly yours, Cel,„c
064...-..,A.
Darrin M. Coker
City Attorney
MASTER LEASE -PURCHASE AGREEMENT
Dated As of: June 30, 2016
Lessee: CITY OF PEARLAND
This Master Lease -Purchase Agreement together with all addenda, riders and attachments hereto, as the same may from time to time
be amended, modified or supplemented ("Master Lease") is made and entered by and between JPMORGAN CHASE BANK, N.A.
("Lessor") and the lessee identified above ("Lessee").
1. LEASE OF EQUIPMENT. Subject to the terms and conditions of this Master Lease, Lessor agrees to lease to Lessee, and Lessee
agrees to lease from Lessor, all Equipment described in each Schedule signed from time to time by Lessee and Lessor.
2. CERTAIN DEFINITIONS. All terns defined in the Lease are equally applicable to both the singular and plural form of such
terns. (a) "Schedule" means each Lease Schedule signed and delivered by Lessee and Lessor, together with all addenda, riders,
attachments, certificates and exhibits thereto, as the same may from time to time be amended, modified or supplemented. Lessee and
Lessor agree that each Schedule (except as expressly provided in said Schedule) incorporates by reference all of the terns and
conditions of the Master Lease. (b) "Lease" means any one Schedule and this Master Lease as incorporated into said Schedule. (c)
"Equipment" means the property described in each Schedule, together with all attachments, additions, accessions, parts, repairs,
improvements, replacements and substitutions thereto. (d) "Lien" means any security interest, lien, mortgage, pledge, encumbrance,
judgment, execution, attachment, warrant, writ, levy, other judicial process or claim of any nature whatsoever by or of any person.
3. LEASE TERM. The term of the lease of the Equipment described in each Lease ("Lease Term") commences on the first date any
of such Equipment is accepted by Lessee pursuant to Section 5 hereof or on the date specified in the Schedule for such Lease and,
unless earlier terminated as expressly provided in the Lease, continues until Lessee's payment and performance in full of all of
Lessee's obligations under the Lease.
4. RENT PAYMENTS.
4.1 For each Lease, Lessee agrees to pay to Lessor the rent payments in the amounts and at the times as set forth in the
Payment Schedule attached to the Schedule ("Rent Payments"). A portion of each Rent Payment is paid as and represents the payment
of interest as set forth in the Payment Schedule. Lessee acknowledges that its obligation to pay Rent Payments including interest
therein accrues as of the Accrual Date stated in the Schedule or its Payment Schedule; provided, that no Rent Payment is due until
Lessee accepts the Equipment under the Lease or the parties execute an escrow agreement. Rent Payments will be payable for the
Lease Terrn in U.S. dollars, without notice or demand at the office of Lessor (or such other place as Lessor may designate from time to
time in writing).
4.2 If Lessor receives any payment from Lessee later than ten (10) days from the due date, Lessee shall pay Lessor on
demand as a late charge five per cent (5%) of such overdue amount, limited, however, to the maximum amount allowed by law.
4.3 EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 6. THE OBLIGATION TO PAY RENT PAYMENTS
UNDER EACH LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS AND SHALL NOT BE SUBJECT
TO ANY SETOFF, DEFENSE, COUNTERCLAIM, ABATEMENT OR RECOUPMENT FOR ANY REASON WHATSOEVER.
5. DELIVERY; ACCEPTANCE; FUNDING CONDITIONS.
5.1 Lessee shall arrange for the transportation, delivery and installation of all Equipment to the location specified in the
Schedule ("Location") by Equipment suppliers ("Suppliers") selected by Lessee. Lessee shall pay all costs related thereto.
5.2 Lessee shall accept Equipment as soon as it has been delivered and is operational. Lessee shall evidence its acceptance of
any Equipment by signing and delivering to Lessor the applicable Schedule. If Lessee signs and delivers a Schedule and if all Funding
Conditions have been satisfied in full, then Lessor will pay or cause to be paid the costs of such Equipment as stated in the Schedule
("Purchase Price") to the applicable Supplier.
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Revised June 8, 2016
5.3 Lessor shall have no obligation to pay any Purchase Price unless all reasonable conditions established by Lessor
("Funding Conditions") have been satisfied, including, without limitation, the following: (a) Lessee has signed and delivered the
Schedule and its Payment Schedule; (b) no Event of Default shall have occurred and be continuing; (c) no material adverse change
shall have occurred in the Internal Revenue Code of 1986, as amended, and the related regulations and rulings thereunder
(collectively, the "Code"); (d) no material adverse change shall have occurred in the financial condition of Lessee or any Supplier; (e)
the Equipment is reasonably satisfactory to Lessor and is free and clear of any Liens (except Lessor's Liens); (f) all representations of
Lessee in the Lease remain true, accurate and complete; and (g) Lessor has received all of the following documents, which shall be
reasonably satisfactory, in fonn and substance, to Lessor: (1) evidence of insurance coverage required by the Lease; (2) an opinion of
Lessee's counsel; (3) reasonably detailed invoices for the Equipment; (4) Uniform Commercial Code (UCC) financing statements; (5)
copies of resolutions by Lessee's governing body authorizing the Lease and incumbency certificates for the person(s) who will sign the
Lease; (6) such documents and certificates relating to the tax-exempt interest payable under the Lease (including, without limitation,
IRS Form 80380 or 8038GC) as Lessor may request; and (7) such other documents and information previously identified by Lessor or
otherwise reasonably requested by Lessor.
6. TERMINATION FOR GOVERNMENTAL NON -APPROPRIATIONS.
6.1 For each Lease, Lessee represents and warrants: that it has appropriated and budgeted the necessary funds to make all
Rent Payments required pursuant to such Lease for the remainder of the fiscal year in which the Lease Term commences; and that it
currently intends to make Rent Payments for the full Lease Tenn as scheduled in the applicable Payment Schedule if funds are
appropriated for the Rent Payments in each succeeding fiscal year by its governing body. Without contractually committing itself to
do so, Lessee reasonably believes that moneys in an amount sufficient to make all Rent Payments can and will lawfully be
appropriated therefor. Lessee directs the person in charge of its budget requests to include the Rent Payments payable during each
fiscal year in the budget request presented to Lessee's governing body for such fiscal year; provided, that Lessee's governing body
retains authority to approve or reject any such budget request. All Rent Payments shall be payable out of the general funds of Lessee
or out of other funds legally appropriated therefor. Lessor agrees that no Lease will be a general obligation of Lessee and no Lease
shall constitute a pledge of either the full faith and credit of Lessee or the taxing power of Lessee.
6.2 If Lessee's governing body fails to appropriate sufficient funds in any fiscal year for Rent Payments or other payments
due under a Lease and if other funds are not legally appropriated for such payments, then a "Non -Appropriation Event" shall be
deemed to have occurred. If a Non -Appropriation Event occurs, then: (a) Lessee shall give Lessor immediate notice of such Non -
Appropriation Event and provide written evidence of such failure by Lessee's governing body; (b) on the Return Date, Lessee shall
return to Lessor all, but not less than all, of the Equipment covered by the affected Lease, at Lessee's sole expense, in accordance with
Section 21 hereof; and (c) the affected Lease shall terminate on the Return Date without penalty to Lessee, provided, that Lessee shall
pay all Rent Payments and other amounts payable under the affected Lease for which funds have been appropriated, provided further,
that Lessee shall pay month-to-month rent at the rate set forth in the affected Lease for each month or part thereof that Lessee fails to
retum the Equipment under this Section 6.2. "Return Date" means the last day of the fiscal year for which appropriations were made
for the Rent Payments due under a Lease.
7. LIMITATION ON WARRANTIES. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, AS TO THE
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE EQUIPMENT OR AS TO
THE VALUE, DESIGN, CONDITION, USE, CAPACITY OR DURABILITY OF ANY OF THE EQUIPMENT. For and
during the Lease Term, Lessor hereby assigns to Lessee any manufacturer's or Supplier's product warranties, express or implied,
applicable to any Equipment and Lessor authorizes Lessee to obtain the customary services furnished in connection with such
warranties at Lessee's sole expense. Lessee agrees that (a) all Equipment will have been purchased by Lessor in accordance with
Lessee's specifications from Suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no
liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to any manufacturer's or
Supplier's product warranties or guaranties, (d) no manufacturer or Supplier or any representative of said parties is an agent of Lessor,
and (e) any warranty, representation, guaranty or agreement made by any manufacturer or Supplier or any representative of said
parties shall not be binding upon Lessor.
8. TITLE; SECURITY INTEREST.
8.1 Upon Lessee's acceptance of any Equipment under a Lease, title to the Equipment shall vest in Lessee, subject to Lessor's
security interest therein and all of Lessor's other rights under such Lease including, without limitation, Sections 6, 20 and 21 hereof.
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Revised June 8, 2016
8.2 As collateral security for the Secured Obligations, Lessee hereby grants to Lessor a first priority security interest in any
and all of the Equiprnent (now existing or hereafter acquired) and any and all proceeds thereof. Lessee agrees to execute and deliver to
Lessor all necessary documents to evidence and perfect such security interest, including, without limitation, UCC financing statements
and any amendments thereto.
8.3 "Secured Obligations" means Lessee's obligations to pay all Rent Payments and all other atnounts due and payable under
all present and future Leases and to perfonn and observe all covenants, agreements and conditions (direct or indirect, absolute or
contingent, due or to become due, or existing or hereafter arising) of Lessee under all present and future Leases.
9. PERSONAL PROPERTY. All Equipment is and will remain personal property and will not be deemed to be affixed or attached to
real estate or any building thereon.
10. MAINTENANCE AND OPERATION. Lessee agrees it shall, at its sole expense: (a) repair and maintain all Equipment in good
condition and working order and supply and install all replacement parts or other devices when required to so maintain the Equiprnent
or when required by applicable law or regulation, which parts or devices shall automatically become part of the Equipment; and (b)
use and operate all Equipment in a careful manner in the normal course of its operations and only for the purposes for which it was
designed in accordance with the manufacturer's warranty requirements; and (c) comply with all laws and regulations relating to the
Equipment. If any Equipment is custotnarily covered by a maintenance agreement, Lessee will furnish Lessor with a maintenance
agreement by a party reasonably satisfactory to Lessor. No maintenance or other service for any Equiprnent will be provided by
Lessor. Lessee will not make any alterations, additions or improvements ("Improvements") to any Equipment without Lessor's prior
written consent unless the Improvements may be readily removed without damage to the operation, value or utility of such Equiprnent,
but any such Improvements not removed prior to the termination of the applicable Lease shall automatically become part of the
Equiprnent.
11. LOCATION; INSPECTION. Equipment will not be removed from, or if Equipment is rolling stock its permanent base will not
be changed from, the Location without Lessor's prior written consent which will not be unreasonably withheld. Upon reasonable
notice to Lessee, Lessor may enter the Location or elsewhere during normal business hours to inspect the Equiprnent.
12. LIENS, SUBLEASES AND TAXES.
12.1 Lessee shall keep all Equiprnent free and clear of all Liens except those Liens created under its Lease. Lessee shall not
sublet or lend any Equipment or permit it to be used by anyone other than Lessee or Lessee's employees.
12.2 Lessee shall pay when due all Taxes which may now or hereafter be unposed upon any Equiprnent or its ownership,
lease, rental, sale, purchase, possession or use, upon any Lease or upon any Rent Payments or any other payments due under any
Lease. If Lessee fails to pay such Taxes when due, Lessor shall have the right, but not the obligation, to pay such Taxes. If Lessor pays
any such Taxes, then Lessee shall, upon demand, immediately reimburse Lessor therefor. "Taxes" rneans present and future taxes,
levies, duties, assessments or other govermnental charges that are not based on the net income of Lessor, whether they are assessed to
or payable by Lessee or Lessor, including, without limitation (a) sales, use, excise, licensing, registration, titling, gross receipts, stamp
and personal property taxes, and (b) interest, penalties or fines on any of the foregoing.
13. RISK OF LOSS.
13.1 Lessee bears the entire risk of loss, theft, damage or destruction of any Equipment in whole or in part from any reason
whatsoever ("Casualty Loss"). No Casualty Loss to any Equiprnent shall relieve Lessee from the obligation to make any Rent
Payments or to perforin any other obligation under any Lease. Proceeds of any insurance recovery will be applied to Lessee's
obligations under this Section 13.
13.2 If a Casualty Loss occurs to any Equipment, Lessee shall immediately notify Lessor of the same and Lessee shall, unless
otherwise directed by Lessor, immediately repair the same.
13.3 If Lessor detennines that any item of Equiprnent has suffered a Casualty Loss beyond repair ("Lost Equipment"), then
Lessee shall either. (a) immediately replace the Lost Equiprnent with similar equipment in good repair, condition and working order
free and clear of any Liens (except Lessor's Liens), in which event such replacement equipment shall automatically be Equipment
under the applicable Lease, and deliver to Lessor true and complete copies of the invoice or bill of sale covering the replacement
equipment; or (b) on earlier of 60 days after the Casualty Loss or the next scheduled Rent Payment date (the "Loss Payment Due
Date"), pay Lessor (i) all amounts owed by Lessee under the applicable Lease, including the Rent Payments due on or accrued through
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Revised June 8, 2016
such date plus (ii) an amount equal to the Termination Value as of the Rent Payment date (or if the Casualty Loss payment is due
between Rent Payment dates, then as of the Rent Payment date preceding the date that the Casualty Loss payment is due) set forth in
the Payment Schedule to the applicable Lease plus (iii) a Break Funding Charge. If Lessee is making such payment with respect to
less than all of the Equipment under a Lease, then Lessor will provide Lessee with the pro rata amount of the Rent Payment and
Termination Value to be paid by Lessee with respect to the Lost Equipment and a revised Payment Schedule. "Break Funding Charge"
means the sum of the differences between (i) each scheduled interest payment which would have been made on the Termination Value
if such Casualty Loss payment had not occurred and (ii) the corresponding fixed-rate interest payment which would be received under
an interest rate swap which the Lender shall be deemed to have entered into as of the Loss Payment Due Date (the "Replacement
Swap") covering its payment obligations under an interest rate swap which the Lessor shall be deemed to have entered into when the
Lease was originally funded, with each such difference discounted to a present value as of the date of payment using the fixed interest
rate of the Replacement Swap as the applicable discount rate; the Lessee acknowledges that the Lessor might not fund or hedge its
fixed-rate loan portfolio or any prepayment thereof on a loan -by -loan basis at all times, and agrees that the foregoing is a reasonable
and appropriate method of calculating liquidated damages for any prepayment irrespective of whether any of the foregoing hedging
transactions have in fact occurred or occurred precisely as stated with respect to the Lease; all calculations and determinations by the
Lessor of the amounts payable pursuant to the preceding provisions or of any element thereof, if made in accordance with its then
standard procedures for so calculating or determining such amounts. shall be conclusive absent manifest arithmetic error.
13.4 Lessee shall bear the risk of loss for, shall pay directly, and shall defend Lessor against any and all claims, liabilities,
proceedings, actions, expenses (including reasonable attomey's fees), damages or losses arising under or related to any Equipment,
including, but not limited to, the possession, ownership, lease, use or operation thereof. These obligations of Lessee shall survive any
expiration or termination of any Lease. Lessee shall not bear the risk of loss of, nor pay for, any claims, liabilities, proceedings,
actions, expenses (including attorney's fees), damages or losses which arise directly from events occurring after any Equipment has
been returned by Lessee to Lessor in accordance with the terms of the applicable Lease or which arise directly from the gross
negligence or willful misconduct of Lessor.
14. INSURANCE.
14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all Casualty Losses for an amount not
less than the Termination Value of the Equipment. Proceeds of any such insurance covering damage or loss of any Equipment shall be
payable to Lessor as lender loss payee. (b) Lessee at its sole expense shall at all tithes carry public liability and third party property
damage insurance in amounts reasonably satisfactory to Lessor protecting Lessee and Lessor from liabilities for injuries to persons and
damage to property of others relating in any way to any Equipment. Proceeds of any such public liability or property insurance shall
be payable first to Lessor as additional insured to the extent of its liability, and then to Lessee.
14.2 All insurers shall be reasonably satisfactory to Lessor. Lessee shall promptly deliver to Lessor satisfactory evidence of
required insurance coverage and all renewals and replacements thereof. Each insurance policy will require that the insurer give Lessor
at least 30 days prior written notice of any cancellation of such policy and will require that Lessor's interests remain insured regardless
of any act, error, misrepresentation, omission or neglect of Lessee. The insurance maintained by Lessee shall be primary without any
right of contribution from insurance which may be maintained by Lessor.
15. NO PREPAYMENT. Lessee shall not be permitted to prepay the Rent Payments or any other obligation under a Lease in whole
or in part.
16. LESSEE'S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its Equipment, Lessee hereby
represents and warrants to Lessor that: (a) Lessee has full power, authority and legal right to execute and deliver the Lease and to
perform its obligations under the Lease, and all such actions have been duly authorized by appropriate findings and actions of Lessee's
governing body; (b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligation of
Lessee, enforceable in accordance with its terms; (c) the Lease is authorized under, and the authorization, execution and delivery of
the Lease complies with, all applicable federal, state and local laws and regulations (including, but not limited to, all open meeting,
public bidding and property acquisition laws) and all applicable judgments and court orders; (d) the execution, delivery and
performance by Lessee of its obligations under the Lease will not result in a breach or violation of, nor constitute a default under, any
agreement, lease or other instrument to which Lessee is a party or by which Lessee's properties may be bound or affected; (e) there is
no pending, or to the best of Lessee's knowledge threatened, litigation of any nature which may have a material adverse effect on
Lessee's ability to perform its obligations under the Lease; and (f) Lessee is a state, or a political subdivision thereof, as referred to in
Section 103 of the Code, and Lessee's obligation under the Lease constitutes an enforceable obligation issued on behalf of a state or a
political subdivision thereof.
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Revised June 8, 2016
17. TAX COVENANTS.
17.1 Lessee hereby covenants and agrees that: (a) Lessee shall comply with all of the requirements of Section 149(a) and
Section 149(e) of the Code, as the same may be amended from time to time, and such compliance shall include, but not be limited to,
executing and filing Internal Revenue Form 8038G or 8038GC, as the case may be, and any other information statements reasonably
requested by Lessor; (b) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act allow, any Lease
to be an "arbitrage bond" within the meaning of Section 148(a) of the Code or any Lease to be a "private activity bond" within the
meaning of Section 141(a) of the Code; and (c) Lessee shall not do (or cause to be done) any act which will cause, or by omission of
any act allow, the interest portion of any Rent Payments to be or become includable in gross income for Federal income taxation
purposes under the Code.
17.2 Upon the occurrence of an Event of Taxability, the interest portion of any Rent Payment shall be at the Taxable Rate
retroactive to the date of occurrence of the Event of Taxability, and Lessee shall pay such additional amount as will result in Lessor
receiving the interest portion of thc Taxable Rate identified in the Payment Schedule. For purposes of this section, "Event of
Taxability" means a determination that the interest portion of Rent Payments is included for federal income tax purposes in the gross
income of the Lessor due to Lessee's action or failure to take action, including breach of covenants set forth in section 17.1 hereof.
An Event of Taxability shall occur upon the earliest of: (1) the happening of any event which may cause such Event of Taxability, or
(2) Lessor's payment to the applicable taxing authority of the tax increase resulting from such Event of Taxability, or (3) the
adjustment of Lessor's tax return to reflect such Event of Taxability, or (4) the date as of which the interest portion of the Rent
Payments is determined by the Internal revenue Service to be includable in the gross income of the Lessor for federal income tax
purposes.
18. ASSIGNMENT.
18.1 Lessee shall not assign, transfer, pledge, hypothecate, nor grant any Lien on, nor otherwise dispose of, any Lease or any
Equipment or any interest in any Lease or Equipment.
18.2 Lessor may assign its rights, title and interest in and to any Lease or any Equipment, and/or may grant or assign a
security interest in any Lease and its Equipment, in whole or in part, to any party at any time. Any such assignee or lienholder (an
"Assignee") shall have all of thc rights of Lessor under the applicable Lease. LESSEE AGREES NOT TO ASSERT AGAINST
ANY ASSIGNEE ANY CLAIMS, ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER
SIMILAR DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Unless otherwise agreed by Lessee in writing, any
such assignment transaction shall not release Lessor from any of Lessor's obligations under the applicable Lease. An assignment or
reassignment of any of Lessors right, title or interest in a Lease or its Equipment shall be enforceable against Lessee only after Lessee
receives a written notice of assignment which discloses the name and address of each such Assignee, provided, that such notice from
Lessor to Lessee of any assignment shall not be so required if Lessor assigns a Lease to JPMORGAN CHASE & CO. or any of its
direct or indirect subsidiaries. Lessee shall keep a complete and accurate record of all such assignments in the form necessary to
comply with Section 149(a) of the Code and for such purpose, Lessee hereby appoints Lessor (or Lessor's designee) as the book entry
and registration agent to keep a complete and accurate record of any and all assignments of any Lease. Lessee agrees to acknowledge
in writing any such assignments if so requested.
18.3 Each Assignee of a Lease hereby agrees that: (a) the term Secured Obligations as used in Section 8.3 hereof is hereby
amended to include and apply to all obligations of Lessee under the Assigned Leases and to exclude the obligations of Lessee under
any Non -Assigned Leases; (b) said Assignee shall have no Lien on, nor any claim to, nor any interest of any kind in, any Non -
Assigned Lease or any Equipment covered by any Non -Assigned Lease; and (c) Assignee shall exercise its rights, benefits and
remedies as the assignee of Lessor (including, without limitation, the remedies under Section 20 of the Master Lease) solely with
respect to the Assigned Leases. "Assigned Leases" means only those Leases which have been assigned to a single Assignee pursuant
to a written agreement; and "Non -Assigned Leases" means all Leases excluding the Assigned Leases.
18.4 Subject to the foregoing, each Lease inures to the benefit of and is binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
19. EVENTS OF DEFAULT. For each Lease, "Event of Default" means the occurrence of any one or more of the following events
as they may relate to such Lease: (a) Lessee fails to make any Rent Payment (or any other payment) as it becomes due in accordance
with the terms of the Lease, and any such failure continues for ten (10) days after the due date thereof; (b) Lessee fails to perform or
observe any of its obligations under Sections 12.1, 14 or 18.1 hereof; (c) Lessee fails to perform or observe any other covenant,
condition or agreement to be performed or observed by it under the Lease and such failure is not cured within thirty (30) days after
Page 5 of 7
Revised June 8, 2016
receipt of written notice thereof by Lessor; (d) any statement, representation or warranty made by Lessee in the Lease or in any
writing delivered by Lessee pursuant thereto or in connection therewith proves at any time to have been false, misleading or erroneous
in any material respect as of the time when made; (e) Lessee applies for or consents to the appointment of a receiver, trustee,
conservator or liquidator of Lessee or of all or a substantial part of its assets, or a petition for relief is filed by Lessee under any federal
or state bankruptcy, insolvency or similar law, or a petition in a proceeding under any federal or state bankruptcy, insolvency or
similar law is filed against Lessee and is not dismissed within sixty (60) days thereafter, or (f) Lessee shall be in default under any
other Lease or under any other financing agreement executed at any time with Lessor.
20. REMEDIES. If any Event of Default occurs, then Lessor may, at its option, exercise any one or more of the following remedies:
(a) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all amounts then currently due under all Leases and
all remaining Rent Payments due under all Leases during the fiscal year in effect when the Event of Default occurs together with
interest on such amounts at the rate of twelve percent (12%) per annum (but not to exceed the highest rate permitted by applicable
law) from the date of Lessor's demand for such payment;
(b) Lessor may require Lessee to promptly return all Equipment under all or any of the Leases to Lessor in the manner set
forth in Section 21 (and Lessee agrees that it shall so return the Equipment), or Lessor may, at its option, enter upon the premises
where any Equipment is located and repossess any Equipment without demand or notice, without any court order or other process of
law and without liability for any damage occasioned by such repossession;
(c) Lessor may sell, lease or otherwise dispose of any Equipment under all or any of the Leases, in whole or in part, in one or
more public or private transactions, and if Lessor so disposes of any Equipment, then Lessor shall retain the entire proceeds of such
disposition free of any claims of Lessee, provided, that if the net proceeds of the disposition of all the Equipment exceeds the
applicable Termination Value of all the Schedules plus the amounts payable by Lessee under clause (a) above of this Section and
under clause (f) below of this Section, then such excess' amount shall be remitted by Lessor to Lessee;
(d) Lessor may terminate, cancel or rescind any Lease as to any and all Equipment;
(e) Lessor may exercise any other right, remedy or privilege which may be available to Lessor under applicable law or, by
appropriate court action at law or in equity, Lessor may enforce any of Lessee's obligations under any Lease; and/or
(f) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all out-of-pocket costs and expenses incurred by
Lessor as a result (directly or indirectly) of the Event of Default and/or of Lessor's actions under this section, including, without
limitation, any attorney fees and expenses and any costs related to the repossession, safekeeping, storage, repair, reconditioning or
disposition of any Equipment.
None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy available to Lessor. Lessor's
exercise of one or more remedies shall not preclude its exercise of any other remedy. No delay or failure on the part of Lessor to
exercise any remedy under any Lease shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise of any remedy preclude any other exercise thereof or the exercise of any other remedy.
21. RETURN OF EQUIPMENT. If Lessor is entitled under the provisions of any Lease, including any termination thereof pursuant
to Sections 6 or 20 of this Master Lease, to obtain possession of any Equipment or if Lessee is obligated at any time to return any
Equipment, then (a) title to the Equipment shall vest in Lessor immediately upon Lessor's notice thereof to Lessee, and (b) Lessee
shall, at its sole expense and risk, immediately de -install, disassemble, pack, crate, insure and return the Equipment to Lessor (all in
accordance with applicable industry standards) at any location in the continental United States selected by Lessor. Such Equipment
shall be in the same condition as when received by Lessee (reasonable wear, tear and depreciation resulting from normal and proper
use excepted), shall be in good operating order and maintenance as required by the applicable Lease, shall be free and clear of any
Liens (except Lessor's Lien) and shall comply with all applicable laws and regulations. Until Equipment is returned as required above,
all tens of the applicable Lease shall remain in full force and effect including, without limitation, obligations to pay Rent Payments
and to insure the Equipment. Lessee agrees to execute and deliver to Lessor all documents reasonably requested by Lessor to evidence
the transfer of legal and beneficial title to such Equipment to Lessor and to evidence the termination of Lessee's interest in such
Equipment.
22. LAW GOVERNING. Each Lease shall be governed by the laws of the state where Lessee is located (the "State").
Page 6 of 7
Revised June 8, 2016
23. NOTICES. Any notices and demands under or related to this document shall be in writing and delivered to the intended party at
its address stated herein (if to Lessor 1111 Polaris Parkway, Suite 3A — OH1-1085, Columbus, Ohio 43240-2050, to the attention of
the GNPH Operations Manager). Notice shall be deemed sufficiently given or made (a) upon receipt if delivered by hand, (b) on the
Delivery Day after the day of deposit with a nationally recognized courier service, (c) on the third Delivery Day after the day of
deposit in the United States mail, sent certified, postage prepaid with return receipt requested, and (d) only if to Lessee, on the third
Delivery Day after the notice is deposited in the United States mail, postage prepaid. "Delivery Day" means a day other than a
Saturday, a Sunday, or any other day on which national banking associations are authorized to be closed. Any party may change its
address for the purposes of the receipt of notices and demands by giving notice of such change in the manner provided in this
provision.
24. FINANCIAL INFORMATION. Lessee agrees to furnish to Lessor annual audited financial statements of Lessee within 180 days
of the end of each fiscal year of Lessee. Additionally, Lessee agrees to provide additional information as reasonably requested by
Lessor.
25. SECTION HEADINGS. All section headings contained herein or in any Schedule are for convenience of reference only and do
not define or limit the scope of any provision of any Lease.
26. EXECUTION IN COUNTERPARTS. Each Schedule to this Master Lease may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall be deemed one instrument. If more than one counterpart of each Schedule is
executed by Lessee and Lessor, then only one may be marked "Lessor's Original" by Lessor. A security interest in any Schedule may
be created through transfer and possession only of: the sole original of said Schedule if there is only one original; or the counterpart
marked "Lessor's Original" if there are multiple counterparts of said Schedule.
27. ENTIRE AGREEMENT; WRITTEN AMENDMENTS. Each Lease, together with the exhibits, schedules and addenda
attached thereto and made a part hereof and other attachments thereto constitute the entire agreement between the parties with respect
to the lease of the Equipment covered thereby, and such Lease shall not be modified, amended, altered, or changed except with the
written consent of Lessee and Lessor. Any provision of any Lease found to be prohibited by law shall be ineffective to the extent of
such prohibition without invalidating the remainder of the Lease.
28. REVISED.
CITY OF P AND /J /� JPMORGAN CHASE BANK. N.A.
(Lessee) i // ,4 (Lessor) ..
By:
Title:
Revised June 8, 2016
By.
Title:Authorized Officer
Page 7 of 7
LEASE SCHEDULE
Dated as of: June 30, 2016
Lease No.: 1000141569
This Lease Schedule, together with its Payment Schedule, is attached and made a part of the Master Lease -Purchase Agreement
described below ("Master Lease") between the Lessee and Lessor named below. All terns and conditions of the Master Lease are
incorporated herein by reference. Unless otherwise defined herein. capitalized terns defined in the Master Lease will have the same
meaning when used herein.
Master Lease -Purchase Agreement dated June 30, 2016.
A. EQUIPMENT DESCRIBED: The Equipment includes all of the property described on Schedule A-1 attached hereto and made
a part hereof.
B. EQUIPMENT LOCATION: See Attached Schedule A-1
C. ACCEPTANCE OF EQUIPMENT: AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED AND INSPECTED ALL EQUIPMENT; (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND
COMPLIES WITH ALL PURCHASE ORDERS, CONTRACTS AND SPECIFICATIONS; (c) LESSEE ACCEPTS ALL
EQUIPMENT FOR PURPOSES OF THE LEASE "AS -IS, WHERE -IS"; AND (d) LESSEE WAIVES ANY RIGHT TO
REVOKE SUCH ACCEPTANCE.
D. ESSENTIAL USE; CURRENT INTENT OF LESSEE: Lessee represents and agrees that the use of the Equipment is essential
to Lessee's proper, efficient and economic functioning or to the services that Lessee provides to its citizens and the Equipment
will be used by Lessee only for the purpose of performing its governmental or proprietary functions consistent with the
permissible scope of its authority. Lessee currently intends for the full Lease Tenn: to use the Equipment; to continue this Lease;
and to make Rental Payments if funds are appropriated in each fiscal year by its governing body.
E. RENTAL PAYMENTS; LEASE TERM: The Rental Payments to be paid by Lessee to Lessor, the interest rate at which the
interest portion of the Rental Payments is calculated, the Taxable Rate, the commencement date and the Lease Tenn of this Lease
Schedule are each set forth on the Payment Schedule attached to this Lease Schedule.
F. RE -AFFIRMATION OF THE MASTER LEASE: Lessee hereby re -affirms all of its representations, warranties and
obligations under the Master Lease (including, without limitation, its obligation to pay all Rental Payments, its disclaimers in
Section 7 thereof and its representations in Sections 6.1 and 16 thereof).
G. GOVERNMENT REGULATION. ANTI -CORRUPTION.
(a) Representations and Warranties Regarding Anti -Corruption Laws and Sanctions. Lessee has implemented and
maintains in effect policies and procedures designed to ensure compliance by Lessee and its officers, employees and agents with
Anti -Corruption Laws and applicable Sanctions, and Lessee and its officers and employees and to the knowledge of Lessee its
agents, are in compliance with Anti -Corruption Laws and applicable Sanctions in all material respects. None of (a) Lessee or to
the knowledge of Lessee any of its respective officers or employees, or (b) to the knowledge of Lessee, any agent of Lessee that
will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No
advance, letter of credit, use of proceeds or other transaction contemplated by this Lease will violate Anti -Corruption Laws or
applicable Sanctions.
(b) Compliance with Anti -Corruption Laws and Sanctions. Lessee shall maintain in effect and enforce policies and
procedures designed to ensure compliance by Lessee and its officers, employees and agents with Anti -Corruption Laws and
applicable Sanctions.
(c) Use of Proceeds. Lessee shall not use, or permit any proceeds of the Lease to be used, directly or indirectly, by Lessee or its
officers, employees and agents: (1) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving
of money, or anything else of value, to any Person in violation of any Anti -Corruption Laws; (2) for the purpose of funding,
financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country; or
(3) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
Page 1 of 2
(d) Definitions. For the purposes of this Section G, the following tenns shall have the following meanings:
"Anti -Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to the Lessee or its subsidiaries from
time to time concerning or relating to bribery or corruption. "Person" means any individual, corporation, partnership, limited
liability company, joint venture, joint stock association, association, bank. business trust, trust, unincorporated organization, any
foreign governmental authority, the United States of America, any state of the United States and any political subdivision of any
of the foregoing or any other form of entity. "Sanctions" means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including those administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury or the U.S. Department of State. "Sanctioned Country" means, at any time, a
country, region or territory which is the subject or target of any Sanctions (as at the time of this Agreement, Crimea, Cuba, Iran,
North Korea, Sudan and Syria). "Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions -related list of
designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S.
Department of State, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any
such Person.
Equipment/Escrow Acceptance Date: J(3(14__ a)O , 201 (0
CITY OF P AND JPMORGAN CHASE BANK, N.A.
(Lessee) / /, (Lessor)
By:
Title:
By:
Title:Authorized Officer
Page 2 of 2
Expected Equipment Purchase Price
Net Amount Financed
Equipment Location:
3519 Liberty Drive
Pearland, Texas 77581
Equipment Description:
Pierce Aerial 75' Ladder Truck
Exercise and Weight Room Equipment
SCHEDULE A-1
(Equipment List)
51,117,853.65
S1.117,853.65
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS,
REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to the Lease Schedule 1000141569 or a Receipt Certificate/Payment Request relating to the Lease
Schedule.
CITY OF PEA
(Lessee)
By:
Title:
rYllivQJer-
1 of 1
JPMORGAN CHASE BANK. N.A
(Lessor)
By:
Title:Authorized Officer
Payment Schedule
This Payment Schedule is attached and made a part of the Lease Schedule identified below which is part of the Master Lease -Purchase
Agreement identified therein. all of which are between the Lessee and Lessor named below.
Lease Schedule No.
Lease Schedule Dated:
Accrual Date
Amount Financed
Interest Rate
Taxable Rate
1000141569
June 30, 2016
June 30, 2016
S1,117,853.65
1.7210%
2.2625%
Rent Rent
Number Date
1 8/1/2016
2 12/1/2016
3 6/1/2017
4 12/1/2017
5 6/1/2018
6 12/1/2018
7 6/1/2019
8 12/1/2019
9 6/1/2020
10 12/1/2020
11 6/1/2021
12 12/1/2021
13 6/1/2022
14 12/1/2022
CITY OF PE
(Lessee)
By:
Title:
Rent
Payment
$111,416.49
$111,416.49
$111,416.49
$111,416.49
$111,416.49
$111,416.49
$62,668.03
$62,668.03
$62,668.03
$62,668.03
562,668.03
S62,668.03
S62,668.03
$62,668.03
Interest Principal
Portion Portion
$1,656.62 $109,759.87
$5,783.09 $105,633.40
$7,765.67 $103,650.82
$6,873.75 $104,542.74
$5,974.16 $105,442.33
$5,066.83 $106,349.66
$4,151.70 $58,516.33
$3,648.17 $59,019.86
$3,140.30 $59,527.73
$2,628.06 $60,039.97
$2,111.42 $60,556.61
$1,590.33 $61,077.70
$1,064.76 $61,603.27
$534.67 $62,133.36
$1,169,843.18 $51,989.53 $1,117,853.65
./4/1,5,
Principal
Balance
$1,008,093.78
$902,460.38
$798,809.56
$694,266.82
$588,824.49
$482,474.83
$423,958.50
$364,938.64
$305,410.91
$245,370.94
$184,814.33
$123,736.63
$62,133.36
($0.00)
JPMIORGAN CHASE BANK. N.A.
(Lessor)
By.
Title:Authorized Officer
Termination
Value
$1,038,336.59
$929,534.19
$822,773.85
5715,094.82
$606,489.22
$496,949.07
$436,677.26
$375,886.80
$314,573.24
$252,732.07
$190,358.76
$127,448.73
$63,997.36
($0.00)
PREPAYMENT SCHEDULE ADDENDUM
(Lockout Period)
Dated as of: June 30, 2016
Lease Schedule No.: 1000141569
Lessee: CITY OF PEARLAND
Reference is made to the above Lease Schedule ("Schedule") and to the Master Lease -Purchase Agreement ("Master Lease")
identified in the Schedule, which are by and between JPMORGAN CHASE BANK, N.A. ("Lessor") and the above lessee
("Lessee"). As used herein: "Lease" shall mean the Schedule and the Master Lease, but only to the extent that the Master Lease relates
to the Schedule. This Schedule Addendum amends and supplements the terms and conditions of the Lease. Unless otherwise defined
herein, capitalized terns defined in the Lease shall have the same meaning when used herein. Solely for purposes of the Schedule,
Lessor and Lessee agree as follows:
1. Notwithstanding anything to the contrary herein or the Lease, Lessee and Lessor agree that Lessee shall not exercise its
prepayment or early purchase rights under the Lease (including, without limitation. Section 15 of the Master Lease as it relates to
the Schedule) or this Addendum prior to the end of the Lock -Out Period specified below.
Lock -Out Period: the first 12 months of the Lease Term of the Schedule
2. Notwithstanding anything to the contrary in the Lease (including, without limitation, Section 15 of the Master Lease as it relates
to the Schedule), Lessee and Lessor agree that so long as no Event of Default has occurred and continues under the Lease and so
long as Lessee gives Lessor at least 30 days prior written notice (the "Notice Period") and so long as the above Lock -Out Period
has expired, Lessee may elect to prepay its obligations under the Schedule by paying to Lessor on the Rent Payment due date (a
"Prepayment Date") following the Notice Period the total of the following (the "Prepayment Amount"): (a) all accrued Rent
Payments, interest. taxes, late charges and other amounts then due and payable under the Lease; plus (b) the remaining principal
balance payable by Lessee under the Schedule as of said Prepayment Date.
3. The parties acknowledge that the Tennination Value column of the Payment Schedule to the Schedule is included solely for
purposes of the calculations required by Section 13.3 of the Master Lease (casualty loss of Equipment), Section 14.1 of the Master
Lease (required amount of casualty loss insurance) and Subsection 20(c) of the Master Lease (post -default remedies of Lessor)
and said Tennination Value column does not negate the restrictions on purchase options or voluntary prepayment in paragraphs 1
and 2 of this Addendum.
4. The prepayment or early purchase option rights granted herein shall control in the event of any conflict between the provisions of
this Addendum and the Master Lease as it relates to the Schedule. Except as expressly amended or supplemented by this
Addendum and other instruments signed by Lessor and Lessee, the Lease remains unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first written above.
CITY OF PE :t;�, ND
(Lessee)
By:
Title: /t'4
JPMORGAN CHASE BANK, N.A.
(Lessor)
By:
Title:Authorized Officer
VEHICLE SCHEDULE ADDENDUM
Dated As of: June 30, 2016
Lease Schedule No: 1000141569
Lessee: CITY OF PEARLAND
Reference is made to the above Lease Schedule ("Schedule") to the Master Lease -Purchase Agreement identified in the Schedule
("Master Lease") by and between JPMORGAN CHASE BANK, N.A. ("Lessor") and the above lessee ("Lessee"). This Addendum
amends and modifies the terns and conditions of the Schedule and is hereby made a part of the Schedule. Unless otherwise defined
herein, capitalized terms defined in the Master Lease shall have the same meaning when used herein.
NOW. THEREFORE, as part of the valuable consideration to induce the execution (Witte Schedule. Lessor and Lessee hereby agree to
amend the Schedule as follows:
1. In the event that any unit of Equipment covered by the Schedule is a vehicle or trailer under applicable State law, then the
following provisions shall also apply to the Schedule:
(a) each manufacturers statement of origin and certificate of title shall state that Lessor has the first and sole lien on or security
interest in such unit of Equipment;
(b) the public liability insurance required by the tents of clauses (b) of Section 14.1 of the Master Lease shall be in an amount
not less than S300,000.00 combined single limit per unit per occurrence. Physical damage should not be less than the
replacement cost coverage for the equipment identified on the Schedule A -I:
(c) Lessee shall furnish and permit only duly licensed. trained, safe and qualified drivers to operate any such unit of Equipment.
and such drivers shall be agents of Lessee and shall not be agents of Lessor: and
(d) Lessee shall cause each such unit of Equipment to be duly registered and licensed as required by applicable State law with
Lessor noted as Iienholder, listed at address below and Lessee as owner.
Lessor's Address:
JPMORGAN CHASE BANK, N.A.
1111 Polaris Parkway, Suite 3A
Colutnbus. Ohio 43240-2050
2. Except as expressly amended by this Addendum and other modifications signed by Lcssor, the Schedule remains unchanged and
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first referenced above.
CITY OF PEAR
(Lessee)
By:
Title:
JPMORGAN CHASE BANK, N.A.
(Lessor)
By:
�4�C� Title:Authorized Officer
TEXAS LEASE SCHEDULE ADDENDUM
(Local Government)
Dated: June 30, 2016
Lease Schedule No: 1000141569
Lessee: CITY OF PEARLAND
Reference is made to the above Lease Schedule ("Schedule") and to the Master Lease -Purchase Agreement ("Master Lease")
identified in the Schedule, which are by and between JPMORGAN CHASE BANK, N.A. ("Lessor") and the above lessee
("Lessee"). As used herein: "Lease" shall mean the Schedule and the Master Lease, but only to the extent that the Master Lease relates
to the Schedule. This Schedule Addendum amends and supplements the terms and conditions of the Lease. Unless otherwise defined
herein, capitalized terms defined in the Lease shall have the same meaning when used herein. Solely for purposes of the Schedule,
Lessor and Lessee agree as follows:
NOW THEREFORE, solely for purposes of the Lease, Lessor and Lessee hereby agree as follows:
1. AMENDMENTS.
(a) All of Section 6 of the Master Lease is deleted and replaced with the following:
"6. TERMINATION FOR GOVERNMENTAL NON -APPROPRIATIONS.
"6.1 For the Lease, Lessee represents and warrants: that it has appropriated and budgeted the necessary funds to make all Rent
Payments required pursuant to such Lease for the remainder of the fiscal year in which the Lease Tenn commences; and that
it currently intends to make Rent Payments for the full Lease Term as scheduled in the applicable Payment Schedule if funds
are appropriated for the Rent Payments in each succeeding fiscal year by its governing body. Without contractually
committing itself to do so, Lessee reasonably believes that moneys in an amount sufficient to make all Rent Payments can
and will lawfully be appropriated and made available for such Rent Payments. All Rent Payments shall be payable out of the
general funds of Lessee or out of other funds legally available for such Rent Payments. Lessor agrees that the Lease will not
be a general obligation of Lessee and the Lease shall not constitute a pledge of either the full faith and credit of Lessee or the
taxing power of Lessee.
"6.2 If Lessee's governing body fails to appropriate sufficient funds in any fiscal year for Rent Payments or other payments
due under the Lease and if other funds are not legally available for such payments, then a "Non -Appropriation Event" shall be
deemed to have occurred. If a Non -Appropriation Event occurs, then: (a) Lessee shall give Lessor immediate notice of such
Non -Appropriation Event and provide written evidence of such failure by Lessee's governing body; (b) on the Return Date,
Lessee shall return to Lessor all, but not less than all, of the Equipment covered by the Lease, at Lessee's sole expense, in
accordance with Section 21 hereof (provided, that if under applicable State law Lessee's obligation to pay the expenses of
returning the Equipment would render the Lease void or unenforceable under State law, then Lessee shall not be obligated to
pay the expenses of returning the Equipment under section 21 hereof, but Lessee shall be required to cooperate with Lessor in
Lessor's taking possession of the Equipment); and (c) the Lease shall terminate on the Return Date without penalty to Lessee,
provided, that Lessee shall pay all Rent Payments and other amounts payable under the Lease for which funds shall have
been appropriated or are otherwise legally available, provided further, that Lessee shall pay month-to-month rent at the rate
set forth in the Lease for each month or part thereof that Lessee fails to return the Equipment under this Section 6.2. "Return
Date" means the last day of the fiscal year for which appropriations were made for the Rent Payments due under the Lease."
(b) The following provision is added to Section 20 as a new subsection:
"(g) Lessor may enforce any and all rights to payment by mandamus;"
Page 1 of 2
2. DECLARATION OF PERSONAL PROPERTY FINANCING.
(a) LESSEE AND LESSOR EXPRESSLY DECLARE AND AGREE THAT THE EQUIPMENT SHALL CONSTITUTE
PERSONAL PROPERTY AND THAT THE EQUIPMENT SHALL NOT BE DEEMED, OR IDENTIFIED AS, ANY
OF THE FOLLOWING: REAL PROPERTY; AN IMPROVEMENT ON ANY REAL PROPERTY; A
PERMANENT BUILDING OR STRUCTURE ON ANY REAL PROPERTY; OR A FIXTURE ON ANY REAL
PROPERTY.
(b) Lessee represents and warrants to Lessor that the Equipment is personal property and that the Equipment is not any of the
following: real property; an improvement on any real property; a permanent building or structure on any real property; or a
fixture on any real property. Upon Lessor's written request, Lessee shall fumish to Lessor a certificate executed by an
independent engineer or architect who is reasonably satisfactory to Lessor wherein said engineer or architect certifies that the
Equipment is relocatable or transportable and will remain personal property.
(c) Without limiting the generality of the representations in the Master Lease as it applies to the Lease, Lessee represents and
warrants to Lessor that the Lease complies with all applicable provisions of the laws of the State of Texas. including. without
limitation, all applicable public finance laws of the State of Texas.
3. NO SALE OF FRACTIONAL INTERESTS IN THE LEASE. Lessor agrees that: (a) unless otherwise agreed by Lessee in
writing, Lessor will not create or sell fractional interests in the Lease or participation interests in the Lease; (b) if Lessor sells or
assigns its rights in the Lease, then, unless otherwise agreed by Lessee in writing, such sale or assignment shall be of an undivided
interest in all of Lessor's right, title and interest in the Lease to a single purchaser or assignee; and (c) if Lessee consents to the
creation or sale of any fractional interests in the Lease or any participation interests in the Lease, Lessor agrees that such
transaction shall comply with applicable State and federal law.
4. INTEREST RATE. The interest rate payable under the Lease Schedule shall never exceed the then maximum interest rate
allowed for similar governmental obligations pursuant to Chapter 1204, Texas Government Code, as amended. or other applicable
laws in effect as of the date of such Lease Schedule.
5. SECTION 26.02 NOTICE. THE MASTER LEASE, THE LEASE SCHEDULE, THIS SCHEDULE ADDENDUM AND ALL
OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION
THEREWITH EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY
AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING THERETO, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO.
Except as expressly amended or supplemented by this Addendum and other instruments signed by Lessor and Lessee, the Lease
remains unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first written above.
CITY OF PEAR JPMORGAN CHASE BANK, N.A.
(Lessee) (Lessor)
By: By:
Title: / //4- 1,4 Title: Authorized Officer
Page 2 of 2
RESOLUTION NO. R2016-97
A Resolution of the City Council of the City of Pearland, Texas,
awarding a (ease/purchase bid for the purchase of a ladder truck and
exercise/weight room equipment with J.P. Morgan, Bank, N.A., in the
amount of $1,169,843.18 at a 1.721 percent interest rate with a seven
(7) year declining amortization schedule.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City opened bids for lease/purchase financing of a ladder
truck and exercise/weight room equipment, and such bids have been reviewed and
tabulated.
Section 2. That the City Council hereby awards the bid to J.P. Morgan, Bank.
N.A., to finance up to $1,169,843.18 at a fixed rate of 1.721% for seven (7) years.
Section 3. The City Manager or his designee is hereby authorized to execute any
necessary documents for the Lease/Purchase Agreement.
PASSED, APPROVED and ADOPTED this the 27tr, day of June, A.D., 2016.
ATTEST:
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
<=�lL7-yl
C2 2.
TOM REID
MAYOR
0,1111i,„, .
.U;
RESOLUTION AND DECLARATION OF OFFICIAL INTENT
Lessee: CITY OF PEARLAND
Principal Amount Expected To Be Financed: $1,117,853.65
WHEREAS, the above Lessee is a political subdivision of the State in which Lessee is located (the "State") and is duly organized and
existing pursuant to the constitution and laws of the State.
WHEREAS, pursuant to applicable law, the governing body of the Lessee ("Governing Body") is authorized to acquire. dispose of and
encumber real and personal property, including, without limitation, rights and interests in property, leases and easements necessary to
the functions or operations of the Lessee.
WHEREAS, the Governing Body hereby finds and determines that the execution of one or more lease -purchase agreements
("Equipment Leases") in the principal amount not exceeding the amount stated above ("Principal Amount") for the purpose of
acquiring the property generally described below ("Property") and to be described more specifically in the Equipment Leases is
appropriate and necessary to the functions and operations of the Lessee.
Brief Description Of Property: See Attached Schedule A-1
WHEREAS, JPMorgan Chase Bank. N.A. ("Lessor") is expected to act as the lessor under the Equipment Leases.
WHEREAS, the Lessee may pay certain capital expenditures in connection with the Property prior to its receipt of proceeds of the
Equipment Leases ("Lease Purchase Proceeds") for such expenditures and such expenditures arc not expected to exceed the Principal
Amount.
WHEREAS, the U.S. Treasury Department regulations do not allow the proceeds of a tax-exempt borrowing to be spent on working
capital and the Lessee shall hereby declare its official intent to be reimbursed for any capital expenditures for Property from the Lease
Purchase Proceeds.
NOW, THEREFORE, Be It Resolved by the Governing Body of the Lessee:
SECTION 1. Either one of the (insert title) OR the (insert title)
(each an "Authorized Representative") acting on behalf of the Lessee is hereby authorized to negotiate, enter into, execute,
and deliver one or more Equipment Leases in substantially the form set forth in the docutnent presently before the
Governing Body, which document is available for public inspection at the office of the Lessee. Each Authorized
Representative acting on behalf of the Lessee is hereby authorized to negotiate, enter into, execute, and deliver such other
documents relating to the Equipment Lease (including, but not limited to, escrow agreements) as the Authorized
Representative deems necessary and appropriate. All other related contracts and agreements necessary and incidental to the
Equipment Leases are hereby authorized.
SECTION 2. By a written instrument signed by any Authorized Representative, said Authorized Representative may designate
specifically identified officers or employees of the Lessee to execute and deliver agreements and documents relating to the
Equipment Leases on behalf of the Lessee.
SECTION 3. The aggregate original principal amount of the Equipment Leases shall not exceed the Principal Amount and shall
bear interest as set forth in the Equipment Leases and the Equipment Leases shall contain such options to purchase by the
Lessee as set forth therein.
SECTION 4. The Lessee's obligations under the Equipment Leases shall be subject to annual appropriation or renewal by the
Governing Body as set forth in each Equipment Lease and the Lessee's obligations under the Equipment Leases shall not
constitute a general obligations of the Lessee or indebtedness under the Constitution or laws of the State.
SECTION 5. The Governing Body of Lessee anticipates that the Lessee may pay certain capital expenditures in connection with
the Property prior to the receipt of the Lease Purchase Proceeds for the Property. The Governing Body of Lessee hereby
declares the Lessee's official intent to use the Lease Purchase Proceeds to reimburse itself for Property expenditures. This
section of the Resolution is adopted by the Governing Body of Lessee for the purpose of establishing compliance with the
requirements of Section 1.150-2 of Treasury Regulations. This section of the Resolution does not bind the Lessee to make
any expenditure, incur any indebtedness, or proceed with the purchase of the Property.
Page 1 of 2
SECTION 6. This Resolution shall take effect immediately upon its adoption and approval.
ADOPTED AND APPROVED on this 2,L 7 , 2016
The undersigned Secretary/Clerk of the above-named Lessee hereby certifies and attests that the undersigned has access to the official
records of the Governing Body of the Lessee, that the foregoing resolutions were duly adopted by said Governing Body of the Lessee
at a meeting of said Governing Body and that such resolutions have not been amended or altered and are in full force and effect on the
date stated below.
ry/Clerk of Lel -e
Print Name:
Official Title:
Date:
Y
yozuf9 Lo('i;11 17-47/46
CirSt'-C,reJ(_ir
y y
Page 2 of 2
CERTIFICATE OF INCUMBENCY
Dated: June 30, 2016
Lease Schedule No: 1000141569
Lessee: CITY OF PEARLAND
I, the undersigned Secretary/Clerk identified below, do hereby certify that I am the duly elected or appointed and acting
Secretary/Clerk of the above Lessee (the "Lessee"), a political subdivision duly organized and existing under the laws of the State
where Lessee is located, that I have the title stated below, and that, as of the date hereof, the individuals named below are the duly
elected or appointed officers of the Lessee holding the offices set forth opposite their respective names.
[NOTE: Use same titles as Authorized Represent
Pe Alas.., C.TY t slA04brit.
Name
Name
Title
Title
gnature
solutions.]
Signature
IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such Lessee as of the date set forth below.
Name:
Official Title:
Date:
O;. .• , J► .
=C.a
tON
NOTE: In case the Secretary/Clerk is also the authorized representative that executes a Lease -Purchase Agreement / documents by the
above incumbency, this certificate must also be signed by a second officer.
Print Name:
Title:
Signature:
PROCEEDS DISBURSEMENT AUTHORIZATION
JPMORGAN CHASE BANK, N.A.
1111 Polaris Parkway, Suite A3 (OH1-1085)
Columbus, OH 43240
Date: June 30, 2016
Re: Disbursements Of Proceeds Under The MASTER LEASE PURCHASE AGREEMENT Referred To Below
Reference is made to that certain Master Lease Purchase Agreement dated June 30, 2016 between CITY OF PEARLAND,
("Lessee") and JPMORGAN CHASE BANK, N.A. (the "Lessor"), and the lease schedule number 1000141569 dated June 30, 2016
and the related Escrow Agreement dated June 30, 2016. I hereby instruct you and authorize you to disburse $1,117,853.65 to the
vendor as specified below:
Payee #1
DEUTSCHE BANK TRUST COMPANY AMERICAS
60 WALL STREET, 16TH FLOOR
NEW YORK, NY 10005
By signing below, Lessee authorizes Lessor to issue checks or direct fund transfers to the payees, in the amounts, and per the
instructions (if applicable) set forth above. Lessee also acknowledges that it may be responsible for paying other fees directly to third
parties, such as Lessor's counsel, and making other disbursements in connection with the lease transaction per the tenns of the lease
documents. Lessor may rely and act on the instructions set forth herein and shall not be responsible for the use or application of the
funds, and Lessee shall indemnify, defend and hold harmless Lessor from and against any and all losses, costs, expenses, fees, claims,
damages, liabilities, and causes of action in any way relating to or arising from acting in accordance therewith. In the event of any
conflict with any other instruction set forth herein, the ABA # and Account # shall control.
IN WITNESS WHEREOF, the Lessee has caused this Proceeds Disbursement Authorization to be executed as of the day and year
first above written.
CITY OF PE
(Lessee)
By:
Title:
Page 1 of 1
ESCROW AGREEMENT
(Gross Fund -Earnings to Lessee)
Dated as of: June 30, 2016
This Escrow Agreement together with all addenda, riders and attachments hereto, as the same may from time to time be amended,
modified or suppletnented ("Agreement") is made and entered as of the date set forth above by and among the Escrow Agent
identified below ("Escrow Agent"), the Lessee identified below ("Lessee") and JPMorgan Chase Bank, N.A. ("Lessor"). As used
herein, "Party" shall mean any of Lessee, Lessor or Escrow Agent, and "Parties" shall mean all of Lessee, Lessor and Escrow Agent.
The Parties hereby authorize the Escrow Agent to act as escrow agent hereunder. All references to Escrow Agent shall mean Deutsche
Bank Trust Company Americas in its capacity as escrow agent only, and all references to Lessor shall mean JPMorgan Chase Bank,
N.A. in its capacity as lessor only.
Escrow Agent: Deutsche Bank Trust Company Americas
Lessee: CITY OF PEARLAND
For good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. RECITALS.
1.01 Lessor and Lessee have entered into the Lease identified below whereby Lessor has agreed to lease and sell certain
property generally described in the attached Schedule A-1 (the "Equipment") to Lessee, and Lessee has agreed to lease and purchase
the Equipment from Lessor, in the manner and on the terms set forth in the Lease.
1.02 "Lease" means, collectively, the Lease Schedule identified below and the Master Lease -Purchase Agreement
identified in said Lease Schedule (to the extent that it relates to said Lease Schedule) together with all exhibits, schedules, addenda,
riders and attachments thereto. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any
requirements to comply with , the terms and conditions of any other agreement, instrument or document between Lessee and Lessor,
in connection herewith, if any, including without limitation the Lease, nor shall the Escrow Agent be required to determine if any
person or entity has complied with any such agreements, nor shall any such obligations of the Escrow Agent be inferred from the
terns of such agreements, even though reference thereto may be made in this Agreement. In the event of any conflict between the
terns and provisions of this Agreement, those of the Lease, any schedule or exhibit attached to the Agreement, or any other agreement
among the Parties, the terns and conditions of this Agreement shall control.
Lease Schedule No. 1000141569
1.03 LESSOR'S DEPOSIT: $1,117,853.65 Lessor shall pay or cause to be paid to the Escrow Agent the amount of the
Lessor's Deposit. The date that the Lessor's Deposit is paid to the Escrow Agent shall be referred to as the "Lessor's Deposit Date".
Escrow Agent shall credit the Lessor's Deposit to the Equipment Acquisition Fund established in Section 2 hereof on the Lessor's
Deposit Date. To the extent that the purchase price of the Equipment exceeds the Lessor's Deposit, Lessee shall either notify Escrow
Agent and then deposit with Escrow Agent funds which will be credited to the Equipment Acquisition Fund and used to pay the
balance of the purchase price of the Equipment or Lessee shall pay such balance directly to the suppliers.
1.04 FUNDING EXPIRATION DATE: December 30, 2017 ("Funding Expiration Date"). Lessee and Lessor agree that
all Equipment should be delivered and installed, and all funds disbursed from the Equipment Acquisition Fund, no later than the
above Funding Expiration Date.
1.05 Under the Lease, Lessee will cause each item of Equipment to be ordered from the applicable suppliers. Lessee shall
furnish to Lessor as soon as available, a copy of the purchase orders or purchase contracts for all Equipment ordered pursuant to the
Lease, showing the supplier, the purchase price and the estimated delivery dates.
Page 1 of 12
Revised June 8, 2016
1.06 Subject to such control by Lessee and Lessor as is provided herein, Lessor and Lessee agree to appoint the Escrow
Agent and the Escrow Agent accepts such appointment to receive, hold, invest and disburse the moneys deposited with the Escrow
Agent as described in this Agreement. The Escrow Agent shall not be obligated to assume or perfonn any obligation of Lessee or
Lessor under the Lease or of any supplier with respect to any Equipment by reason of anything contained in this Agreement. Escrow
Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in
nature, and no other duties shall be implied. Any funds in the Equipment Acquisition Fund not needed to pay the purchase price of
Equipment will be paid to Lessor or Lessee, all as hereinafter provided.
1.07 This Agreement is not intended to alter or change in any way the rights and obligations of Lessor and Lessee under
the Lease, but is entirely supplemental thereto. The provisions of this Agreement may be waived, altered, amended or supplemented,
in whole or in part, only by a writing signed by all Parties.
1.08 Each of the Parties hereto 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. Where, however, the conflicting provisions of any
such applicable law may be waived, they are hereby irrevocably waived by the Parties hereto to the fullest extent permitted by law, to
the end that this Agreement shall be enforced as written.
SECTION 2. EQUIPMENT ACQUISITION FUND.
2.01 The Escrow Agent's sole responsibility prior to the Lessor's Deposit Date shall be to establish an escrow account
designated as the Equipment Acquisition Fund (the "Equipment Acquisition Fund"). Escrow Agent shall keep such funds deposited
into the escrow account separate and apart from all other funds and money held by it, and shall administer such funds as provided in
this Agreement. Escrow Agent's rights and responsibilities under this Agreement, other than establishment of the Equipment
Acquisition Fund, shall begin on the Lessor's Deposit Date, which may be on or after the date of this Agreement.
2.02 The Lessor's Deposit and any funds deposited by Lessee under Section 1.03 hereof shall be credited to the
Equipment Acquisition Fund on the Lessor's Deposit Date and shall be used to pay the balance of the purchase price of each item of
Equipment subject to the Lease. The Escrow Agent shall pay to the suppliers of the Equipment the payment amounts then due and
payable with respect thereto upon receipt of a written request executed by an Authorized Representative (as defined in Section 7) of
the Lessor, delivered to the Escrow Agent in accordance with Section 9.02, and after the Escrow Agent has satisfied any applicable
security procedures as required by Section 7. The written request will specify the supplier/beneficiary, its address or wire instructions
and the applicable portion of the Equipment Acquisition Fund to be paid (the "Receipt Certificate/Payrnent Request"). As between
Lessee and Lessor only, Lessee agrees that it will submit to Lessor for Lessor's signature a Receipt Certificate/Payment Request that
has been executed by Lessee together with (a) the suppliers' invoices specifying the applicable portion of the purchase price of the
items of Equipment described in said Receipt Certificate, (b) if the item of Equipment is a titled vehicle, a copy of the Manufacturer's
Statement of Origin (MSO) covering such item showing Lessor as first and sole lienholder, and (c) any other documents required by
the Lease, and Lessee agrees that Lessor shall not be obligated to execute any such Receipt Certificate until all of the foregoing have
been submitted to Lessor.
2.03 If an Authorized Representative of the Lessor delivers to the Escrow Agent written notice of the occurrence of an
event of default under the Lease or of a termination of the Lease due to a non -appropriation event or non -renewal event under the
Lease, then the Escrow Agent shall irmnediately remit to Lessor the remaining balance of the Equipment Acquisition Fund. After its
receipt of a notice of an event of default under the Lease, the Escrow Agent shall comply with all written instructions from an
Authorized Representative of Lessor without further consent from Lessee or any other person. After its receipt of a notice of an event
of default under the Lease, the Escrow Agent shall not accept or act upon any instruction from Lessee nor shall it pemlit any
distribution or release of any part of the Equipment Acquisition Fund without written authorization from an Authorized Representative
of the Lessor.
2.04 Upon the Escrow Agent's receipt of a Full Funding Notice (as defined below), the Escrow Agent shall apply the
balance remaining in the Equipment Acquisition Fund:
first, to all reasonable fees and expenses incurred by the Escrow Agent in connection herewith as evidenced by its statement
forwarded to Lessee and Lessor, and
second to Lessor to be applied by Lessor for benefit of Lessee either: (a) toward the principal and interest portion of the Rent
Payment next coming due under the Lease; or (b) to reimburse the Lessee for the interest portion of their Rental Payments previously
made within the past 18 months; or (c) toward a partial prepayment of the principal amount remaining due under the Lease and
thereupon Lessor shall prepare and deliver to Lessee a revised Payment Schedule reflecting such partial prepayment of principal.
Page 2 of 12
"Full Funding Notice" means written notification by an Authorized Representative of the Lessor to the Escrow Agent of the Lessor's
receipt of the Final Receipt Certificate/Payment Request which confirms that all Equipment covered by the Lease has been delivered
to and accepted by Lessee under the Lease and that the full amount of the Lessor's Deposit has been paid to the applicable suppliers.
2.05 Upon the Funding Expiration Date stated in Section 1.04 above, the Escrow Agent shall apply the remaining balance
in the Equipment Acquisition Fund:
first, to all reasonable fees and expenses incurred by the Escrow Agent in connection herewith as evidenced by its statement
forwarded to Lessee and Lessor; and
second, to Lessor to be applied by Lessor for benefit of Lessee either: (a) toward the principal portion of the Rent Payment
next coming due under the Lease; or (b) to reimburse the Lessee for the interest portion of their Rental Payments previously made
within the past 18 months; or (c) toward a partial prepayment of the principal amount remaining due under the Lease and thereupon
Lessor shall prepare and deliver to Lessee a revised Payment Schedule reflecting such partial prepayment of principal.
Upon the Funding Expiration Date stated in Section 1.04 above, the Escrow Agent shall apply the interest earnings on the Equipment
Acquisition Fund as set forth in Section 2.04 above.
2.06 The Escrow Agent shall not be responsible for the sufficiency of the moneys credited to the Equipment Acquisition
Fund to make the payments herein required.
2.07 This Agreement shall terminate upon disbursement by the Escrow Agent of all money held by it hereunder, subject
to the provisions of Section 4.
SECTION 3. MONEY IN EQUIPMENT ACQUISITIONS FUND; INVESTMENT.
3.01 The money and investments held by the Escrow Agent under this Agreement are irrevocably held in escrow for the
benefit of Lessee and Lessor, and such money, together with any income or interest earned thereon, shall be expended only as
provided in this Agreement, and shall not be subject to any security interest or lien, by or for the benefit of any creditor of either
Lessee or Lessor; provided, that the money and investments held by the Escrow Agent under this Agreement shall be subject to the
security interests provided in Sections 3.07 and 4.03 hereof and further shall be subject to Section 12.04.
3.02 Money held by the Escrow Agent hereunder shall be invested and reinvested by the Escrow Agent at the written
direction executed by an Authorized Representative of Lessee in Qualified Investments (as defined below). Such investments shall be
registered in the name of the Escrow Agent and held by the Escrow Agent. The Escrow Agent may purchase or sell to itself or any
affiliate, as principal or agent, investments authorized by this Section. Such investments and reinvestments shall be made giving
consideration for the time at which funds are required to be available. No investment instruction shall be given that would cause the
Agreement to be deemed an "arbitrage bond" within the meaning of Section 148(a) of the Intemal Revenue Code of 1986, as
amended.
3.03 The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of
the Equipment Acquisition Fund. Lessee acknowledges and agrees that all investments made pursuant to this section shall be for the
account and risk of Lessee and any losses associated with investments shall be bome solely by Lessee. Escrow Agent shall from time
to time invest and reinvest the funds held in the Equipment Acquisition Fund account, as and when instructed by an Authorized
Representative of Lessee, in writing, in any one or more of the following (hereinafter, "Qualified Investments"): (a) obligations of the
United States of America or any agency created thereby; (b) general obligations of any State of the United States of America; (c)
general obligations of any political subdivision of a State of the United States of America, if such obligations are rated by at least two
recognized rating services as at least AA; (d) certificates of deposit of any national bank or banks (including, if applicable, Escrow
Agent or an affiliate of Escrow Agent) insured by the Federal Deposit Insurance Corporation (FDIC) with a net worth in excess of
5100,000,000.00 ("Acceptable Bank"); (e) obligations of State or Municipal Public Housing Authorities chartered by the United States
of America and guaranteed by the United States of America; (f) demand interest bearing accounts of Escrow Agent or an affiliate of
Escrow Agent if Escrow Agent or an affiliate of Escrow Agent is an Acceptable Bank; (g) money market funds whose assets are
solely invested in obligations listed in (a) through (f) above, including repurchase agreements secured by such obligations and which
money market funds are rated in either of the two highest categories of any Rating Agency at the time of purchase, including, without
limitation, the Deutsche Bank Trust Company Americas Funds, or any other mutual fund for which the Escrow Agent or an affiliate of
the Escrow Agent serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (1) the Escrow Agent or an affiliate of the Escrow Agent receives fees from such funds for services rendered, (2)
the Escrow Agent charges and collects fees for services rendered pursuant to this Agreement, which fees are, separate from the fees
received from such funds and (3) services performed for such funds and pursuant to this Agreement may at times duplicate those
provided to such funds by the Escrow Agent or its affiliates; and (h) any other obligations approved in writing by Lessor. Unless
otherwise directed in writing by an Authorized Representative of the Lessee, the Escrow Agent shall invest the Equipment Acquisition
Page 3of12
Fund, including all income earnings, as selected by the Lessee on schedule 1 hereto ("Schedule 1"2 upon the execution of this
Agreement. In the event that no election is made by an Authorized Representative of Lessee by the Lessor's Deposit Date, Escrow
Agent shall invest the Equipment Acquisition Fund in an investment available through the Escrow Agent's Trust Platfonn or in an
interest bearing account that the Escrow Agent has agreed to and upon written direction to the Escrow Agent.
3.04 If any of the above-described Qualified Investments are not legal investments of Lessee, then an Authorized
Representative of the Lessee shall immediately notify Escrow Agent which of said Qualified Investments are not legal investments of
Lessee, and shall provide Escrow Agent with direction to invest funds in accordance with Section 3.03. It is the sole responsibility of
the Lessee to ascertain that all investments comply with all applicable federal, state, and local laws, statues, and policies.
3.05 The Escrow Agent shall, without further direction, sell such investments as and when required to make any payment
from the Equipment Acquisition Fund. Any income received on such investments shall be credited to the Equipment Acquisition
Fund.
3.06 The Escrow Agent shall furnish a monthly statement listing all investments to Lessor and to Lessee. The Escrow
Agent shall not be responsible or liable for any loss suffered in connection with any investments of moneys made by it in accordance
with this Section. Market values, exchange rates and other valuation infonnation (including without limitation, market value, current
value or notional value) of any Qualified Investment furnished in any report or statement may be obtained from third party sources
and is furnished for the exclusive use of the Parties. The Escrow Agent has no responsibility whatsoever to determine the market or
other value of any Qualified Investment and makes no representation or warranty, express or implied, as to the accuracy of any such
valuations or that any values necessarily reflect the proceeds that may be received on the sale of a Qualified Investment.
3.07 Lessee hereby grants Lessor a security interest in the money and investments held by the Escrow Agent under this
Agreement as collateral security for the payment and perfonnance of all of Lessee's obligations under the Lease, this Agreement and
any agreement, contract or instrument related to the Lease or this Agreement. Lessee represents and warrants to Lessor that the money
and investments held by the Escrow Agent under this Agreement are free and clear of any liens, security interests or encumbrances
other than the security interests created under this Agreement. Escrow Agent hereby acknowledges that it holds the money and
investments held by the Escrow Agent under this Agreement subject to such security interest created by Lessee as bailee for Lessor;
provided, that Escrow Agent's security interest in such money and investments as created under Section 4.03 hereof shall be superior
to Lessor's security interest therein. It is understood that Escrow Agent has no responsibility with respect to the validity or perfection
of the security interest other than to act in accordance with the terns of this Agreement.
SECTION 4. ESCROW AGENT'S AUTHORITY; INDEMNIFICATION.
4.01 The Escrow Agent may: act in reliance upon any writing, notice, certificate, instruction, instrument or signature
which it, in good faith, believes to be genuine and to have been signed by an Authorized Representative of the applicable Party or
Parties; assume the validity and accuracy of any statement or assertion contained in such a writing, notice, certificate, instruction or
instrument; and assume that any person purporting to give any such writing, notice, certificate, instruction or instrument in connection
with the provisions hereof has been duly authorized to do so. Except as expressly provided otherwise in this Agreement, the Escrow
Agent shall not be liable in any manner for the sufficiency or correctness as to form of, the manner of execution of, or the validity,
accuracy or authenticity of any writing, notice, certificate, instruction or instrument deposited with it, nor as to the identity, authority
or right of any person executing the same. The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken
by it except to the extent that a final adjudication of a court of competent jurisdiction.detennines that the Escrow Agent's gross
negligence or willful misconduct was the primary cause of any loss to either Party. The Escrow Agent's duties hereunder (including,
without limitation, its duties as to the safekeeping, investment and disbursement of moneys in the Equipment Acquisition Fund) shall
be limited to those specifically provided herein.
4.02 To the extent allowed by law, Lessee and Lessor jointly and severally shall indemnify, defend and save harmless the
Escrow Agent from any and all claims, liabilities, losses, damages, fines, penalties and expenses (including out -of pocket and
incidental expenses and fees and expenses of in house or outside counsel) ("Losses") arising out of or in connection with (i) its
execution and performance of this Agreement, except to the extent and that such Losses are determined by a court of competent
jurisdiction through a final order to have been caused by the gross negligence or willful misconduct of the Escrow Agent, or (ii) its
following any instructions or other directions from Lessee or the Lessor, except to the extent that its following any such instruction or
direction is expressly forbidden by the terms hereof. The provisions of this Section 4.02 shall survive the termination of this
Agreement and the resignation or removal of the Escrow Agent for any reason. The indemnifications set forth herein are intended to
and shall include the indemnification of all affected agents, directors, officers and employees of the Escrow Agent. In no event shall
the Escrow Agent be liable for special, incidental, punitive, indirect or consequential Loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
Page 4 of 12
4.03 Lessee and Lessor hereby grant Escrow Agent a fust priority security interest in the money and investments held by
the Escrow Agent under this Agreement as collateral sccurity for the costs and expenses of the foregoing of Section 4.02 and for any
other expenses, costs, fees or charges of any character or nature which may be incurred by the Escrow Agent (including reasonable
attomeys' fees and court costs) relating to any suit (interpleader or otherwise) or other dispute arising between Lessee and Lessor as to
the correct interpretation of the Lease, this Agreement or any instructions given to the Escrow Agcnt hereunder, with the right of the
Escrow Agent, regardless of the instructions aforesaid. to hold the said property until and unless said expenses, costs, fees and charges
shall be fully paid.
4.04 Except as otherwise provided in accordance with Section 2.03 above, if Lessee or Lessor disagree about the
interpretation of the Lease or this Agreement, about their rights and obligations under the Lease or this Agreement, or about the
propriety of any action contemplated by the Escrow Agent hereunder, then the Escrow Agent may, but shall not be required to, file an
appropriate civil action to resolve the disagreement. Lessee and Lessor shall pay all costs, including reasonable attorneys' fees, in
connection with such action. Unless the Escrow Agent has received a notice of an event of default under the Lease in accordance with
Section 2.03 above, if Escrow Agent receives conflicting instructions from the Parties, the Escrow Agent shall be entitled and fully
protected in (a) suspending all or any part of its activities under this Agreement until it shall be given a joint written direction executed
by Authorized Representatives of the Parties which eliminates such conflict or by a final court order or (b) file an action in
interpleader. Lessor and Lessee agree to pursue any redress or recourse in connection with any dispute without making the Escrow
Agent a party to the same.
4.05
agents.
Escrow Agent may execute any of its powers and perfonn any of its duties hereunder directly or through affiliates or
4.06 The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and
protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of facts or errors of
judgment, or for any acts or omissions of any kind unless caused by the Escrow Agent's gross negligence or willful misconduct. None
of the provisions contained in this Agreement shall require the Escrow Agent to use or advance its own funds in the performance of
any of its duties or the exercise of any of its rights or powers hereunder.
SECTION 5. CHANGE OF ESCROW AGENT.
5.01 Upon agreement of the parties hereto, a national banking association or a state bank having capital (exclusive of
borrowed capital) and surplus of at least S 10,000,000.00, qualified as a depository of public funds, may be substituted to act as Escrow
Agent under this Agreement. Such substitution shall not be deemed to affect the rights or obligations of the parties hereto. Upon any
such substitution, the Escrow Agent agrees to assign to such substitute Escrow Agent all of its rights under this Agreement.
5.02 The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving thirty (30) calendar
days' prior written notice of such resignation to the Lessee and Lessor. The Lessee and Lessor may remove the Escrow Agent at any
time by giving thirty (30) calendar days' prior written notice to the Escrow Agent. Upon such notice, a successor escrow agent shall be
appointed by the Lessor and Lessee, who shall provide written notice of such to the resigning Escrow Agent. Such successor escrow
agent shall become the escrow agent hereunder upon the resignation or removal date specified in such notice. If the Lessor and Lessee
are unable to agree upon a successor escrow agent within thirty (30) days after such notice, the Escrow Agent may, in its sole
discretion, deliver the Equipment Acquisition Fund to the Lessor at the address provided herein or may apply to a court of competent
jurisdiction for the appointment of a successor escrow agent or for other appropriate relief. The costs and expenses (including its
attorneys' fees and expenses) incurred by the Escrow Agent in connection with such proceeding shall be paid by the Lessee and
Lessor. Upon receipt of the identity of the successor escrow agent, the Escrow Agent shall either deliver the Escrow Property then
held hereunder to the successor Escrow Agent, less the Escrow Agent's fees, costs and expenses or other obligations owed to the
Escrow Agent to be paid from any interest earned in respect of the Escrow Property, or hold any interest eamed in respect of the
Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid.
Upon its resignation and delivery of the Escrow Property as set forth in this Section, the Escrow Agent shall be discharged of and from
any and all further obligations arising in conncction with the Escrow Property or this Agreetnent.
5.03 The Escrow Agent may appoint an agent to exercise any of the powers, rights or remedies granted to the Escrow
Agent under this Agreement, to hold title to property or to take any other action which may be desirable or necessary hereunder.
5.04 Any corporation, association or other entity into which the Escrow Agent may be converted or merged, or with
which it may be consolidated, or to which it may sell or otherwise transfer all or substantially all of its corporate trust assets and
business to any corporation, association or other entity resulting frotn any such conversion, sale, merger consolidation or other transfer
to which it is a party, ipso facto, shall be and become successor escrow agent hereunder, vested with all other matters as was its
predecessor, without the execution or filing of any instrument or any further act on the part of the parties hereto, notwithstanding
anything herein to the contrary.
Page 5 of 12
SECTION 6. ADMINISTRATIVE PROVISIONS.
6.01 The Escrow Agent shall keep complete and accurate records of all money received and disbursed under this
Agreement, which shall be available for inspection by Lessee or Lessor, or the agent of either of them, at any time during regular
business hours.
6.02 This Agreement shall be construed and governed in accordance with the laws of the State where Lessee is located.
Each Party irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably
consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts
located in the State where the Lessee is located. To the extent that in any jurisdiction either Party may now or hereafter be entitled to
claim for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, such Party
shall not claim, and hereby irrevocably waives, such immunity.
6.03 The Parties represent, warrant and covenant that each document, notice, instruction or request provided by such
Party to Escrow Agent shall comply with applicable laws and regulations. Any provision of this Agreement found to be prohibited by
law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement.
6.04 This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and
assigns. Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to
which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Agreement without further
act. Specifically, the term "Lessor" as used herein means any person or entity to whom Lessor has assigned its right to receive Rent
Payments under the Lease and any other payments due to Lessor hereunder from and after the date when a written notice of such
assignment is filed with the Escrow Agent. Neither this Agreement nor any right or interest hereunder may be assigned by any Party
without the prior consent of Escrow Agent and the other Party; unless the assignment is to JPMorgan Chase & Co., then consent will
not be required.
6.05 This Agreement 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 Agreement. Except as expressly provided in Section 4 above, nothing in this
Agreement, whether express or implied, shall be construed to give to any person or entity other than Escrow Agent and the Parties any
legal or equitable right, remedy, interest or claim under or in respect of the Equipment Acquisition Fund or this Agreement.
6.06 All signatures of the Parties to this Agreement may be transmitted by a Portable Document Format ("PDF"), and
PDF will, for all purposes, be deemed to be the original signature of such Party whose signature it reproduces, and will be binding
upon such Party.
SECTION 7. SECURITY PROCEDURES.
In the event funds transfer instructions are given (whether in writing or by PDF), executed by the appropriate Party or Parties as
evidenced by the signatures of the person or persons signing this Agreement or one of their designated persons as set forth m Schedule
2 (each an "Authorized Representative"), and delivered to the Escrow Agent in accordance with Section 9.02, the undersigned is
authorized to certify that the signatories on Schedule 2 are specimen signatures of each of their respective Authorized Representatives.
The Escrow Agent and the beneficiary's bank in any funds transfer may rely solely upon any account numbers or similar identifying
numbers provided by the Lessee or Lessor to identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank. The
Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even where
its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary's bank
or an intermediary bank designated. The Lessor and Lessee acknowledge that these security procedures are commercially reasonable.
SECTION 8. ESCROW AGENT FEES.
$1,500 ("Administration Fee"). As compensation for Escrow Agent's services hereunder, Lessee agrees to pay Escrow Agent the
above Administration Fee. If the Acceptance Fee is payable by Lessee, then Lessee authorizes Escrow Agent either to deduct said
Administration Fee from the interest and earnings otherwise payable to Lessee under this Agreement or to bill and collect said
Administration Fee at any time. In addition, Lessee agrees to reimburse Escrow Agent for its reasonable out-of-pocket costs and
expenses and any extraordinary fees and expenses for performing its obligations hereunder (including, but not limited to, attorney's
fees and expenses) and to pay all other amounts expressly due and payable to Escrow Agent hereunder. The Escrow Agent may
impose, charge, pass-through and modify fees and/or charges for any account established and services provided by the Escrow Agent,
including but not limited to, transactions, maintenance, balance -deficiency, and service fees, agency or trade execution fees, and other
charges, including those levied by any governmental authority.
SECTION 9. NOTICES.
Page 6 of 12
9.01 Notwithstanding anything to the contrary as set forth Section 9.02, any notices and demands under or related to this
document shall be in writing and delivered to the intended Party at its address stated herein. Notice shall be deemed sufficiently given
or made (a) upon receipt if delivered by hand, (b) on the Delivery Day after the day of deposit with a nationally recognized courier
service, (c) on the third Delivery Day after the day of deposit in the United States mail, sent certified, postage prepaid with return
receipt requested, (d) only if to Lessee, on the third Delivery Day after the notice is deposited in the United States mail, postage
prepaid, and (e) upon receipt if delivered by confirmed facsimile. "Delivery Day" means a day other than a Saturday, a Sunday, or any
other day on which national banking associations are authorized to be closed. Any Party may change its address for the purposes of
the receipt of notices and demands by giving notice of such change in the manner provided in this provision.
9.02 Any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution
of funds, including but not limited to any such funds transfer instructions that may otherwise be set forth in a written instruction
permitted pursuant to Section 2 of this Agreement, shall be given to the Escrow Agent in writing, be executed by an Authorized
Representative and sent as a PDF attached to an email only. No instruction for or related to the transfer or distribution of the
Equipment Acquisition Fund shall be deemed delivered and effective unless Escrow Agent actually shall have received it on a
Delivery Day as a PDF attached to an email only at the email address set forth in this Section 9.02 and as evidenced by a confirmed
transmittal to the Party's or Parties email address and Escrow Agent has been able to satisfy any applicable security procedures as may
be required hereunder. The Escrow Agent shall not be liable to any Party or other person for refraining from acting upon any
instruction for or related to the transfer or distribution of the Equipment Acquisition Fund if delivered to any other fax number or
email address, including but not limited to a valid email address of any employee of the Escrow Agent. The Lessor and Lessee
acknowledge that there are certain security, corruption, transmission error and access availability risks associated with using open
networks such as the intemet and the Parties hereby expressly assume such risks.
Notices shall be addressed as follows:
(i) Jf to the Lessee:
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Attn: Bob Pearce
Email: BPearcc@Pearlandtx.gov
(ii) If to the Lessor:
JPMORGAN CHASE BANK, N.A.
1111 POLARIS PARKWAY, SUITE A-3
MAIL CODE OH1-1085
COLUMBUS, OHIO 43240
Attention: GNPH Operations Manager
Email: eer.escrow.disbursement.request(ipmchase.com
(iii) If to the Escrow Agent:
DEUTSCHE BANK TRUST COMPANY AMERICAS
60 WALL STREET, 16th Floor
NEW YORK, NY 10005
Attn: DBNY MP Escrow
Fax: 732-578-4593
Email: dbny-mpescrow(mlist.db.com
SECTION 10. FORCE MAJEURE.
Notwithstanding any other provision of this Agreement, no Party to this Agreement is liable to any other Party for losses due to, or if it
is unable to perform its obligations under the terms of this Agreement because of acts of God, war, terrorism, fire, floods, strikes,
electrical outages, equipment or transmission failures, or other causes reasonably beyond its control.
SECTION 11. JURY WAIVER.
ALL PARTIES TO THIS AGREEMENT WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTER CLAIM BROUGHT BY ANY PARTY AGAINST ANOTHER PARTY ON ANY MATTER WHATSOEVER ARISING
OUT OF, IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS AGREEMENT.
SECTION 12. MISCELLANEOUS.
Page 7 of 12
12.01 Patriot Act Section 326 Customer Identification Program. In order to comply with the laws, rules, regulations
and executive orders in effect from time to time applicable to banking institutions, including, without limitation, those relating to the
funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the United States
("Applicable Law"), the Escrow Agent are required to obtain, verify, record and update certain information relating to individuals and
entities which maintain a business relationship with the Escrow Agent. Accordingly, each of the parties agree to provide to the Escrow
Agent, upon their request from time to time such identifying information and documentation as may be available for such party in
order to enable the Escrow Agent to comply with Applicable Law.
12.02 Taxpayer Identification Numbers ("TINs"). The other Parties have provided the Escrow Agent with their
respective fully executed Internal Revenue Service ("IRS") Form W-8, or W-9 and/or other required documentation. The other Parties
each represent that its correct TIN assigned by the IRS, or any other taxing authority, is set forth in the delivered forms.
12.03 Tax Reporting. All interest or other income earned under the Agreement shall be allocated to the Lessee and
reported by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as
income earned from the Equipment Acquisition Fund by the Lessee whether or not said income has been distributed during such year.
The Lessor and Lessee hereby represent to the Escrow Agent that no other tax reporting of any kind is required given the underlying
transaction giving rise to this Agreement. Escrow Agent shall withhold any taxes it deems appropriate, including but not limited to
required withholding, in the absence of proper tax documentation or as required by law, and shall remit such taxes to the appropriate
authorities.
12.04 Court Orders. In the event that any of the Equipment Acquisition Fund shall be attached, garnished, levied upon, or
otherwise be subject to any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, the Escrow Agent is
hereby expressly authorized, in its sole discretion, to obey and comply with all such orders so entered or issued, which it is advised by
legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent
obeys or complies with any such order it shall not be liable to any of the Parties hereto or to any other person by reason of such
compliance notwithstanding such order be subsequently reversed, modified, annulled, set aside or vacated.
[The next page is the signature page.]
Page 8 of 12
IN WITNESS WHEREOF, the panics have executed this Agreetnent.
CITY OF
(Lessee)
By:
Title:
AND
OVILIS
DEUTSCHE BANK TRUST COMPANY AMERICAS. as
escrow agent
(Escrow Agent)
By:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
escrow agent
(Escrow Agent)
By:
Title:
Attachments: Schedule 1 (Investment Authorization)
JPMORGAN CHASE BANK, N.A.
(Lessor)
By:
Title: Authorized Officer
Schedule 2 (Name/telephone # of call -hack person(s) designated by Section 7 above)
Page 9 of 12
Schedule 1
Investment Authorization
Lessee: CITY OF PEARLAND
Lease No.: 1000141569
Investment: SELECT QUALIFIED INVESTMENT BELOW
[ ] During the term of this Agreement, the Equipment Acquisition Fund shall remain in a Non -Interest Bearing
Account.
[vi A money market mutual fund, including without limitation a JPMorgan Money Market Mutual Fund
(collectively, "MMMF"), as selected by Lessee below.
Check One (if the money market mutual fund option is selected above):
_ JPMorgan Prime Money Market Fund Morgan Shares (283)
_ JPMorgan U.S. Government Money Market Fund Morgan Shares (3916)
JPMorgan U.S. Treasury Plus Money Market Fund Morgan Shares (3919)
JPMorgan Federal Moncy Market Fund Morgan Shares (353)
JPMorgan 100% U.S. Treasury Money Market Fund Morgan Shares (677)
_ JPMorgan Tax Free Money Market Fund Morgan Shares (2)
Federated U.S. Treasury Cash Reserves Money Market Fund Institutional Service Shares (632)
Federated Government Obligations Tax -Managed Money Market Fund Institutional Service Shares (637)
_ Federated Treasury Obligations Money Market Fund Institutional Service Shares (398)
Federated Govemment Obligations Money Market Fund Institutional Service Shares (395)
Notes related to MMMFs:
1) An investment in any of the above investment options is subject to the availability of such money market mutual fund. If the
selected investment is not available at the present time you will be contacted by a Deutsche Bank Trust Company Americas
representative.
2) Each investment instrument above has a rating not lower than the highest rating category from both Standard & Poor's and
Moody's.
3) Lessee acknowledges that an affiliate of Escrow Agent, Deutsche Bank Trust Company Americas, serves as investment
manager for the selected MMMF and receives fees from the invested funds for services rendered separate from the fees for
services rendered by Escrow Agent as further provided within this Agreement. MMMFs have rates of compensation that may
vary from tune to time based upon market conditions. The Escrow Agent shall not be responsible or liable for any loss
suffered in connection with any investments of moneys made by it in accordance with Section 3 of the Agreement.
4) The Lessee, hereby acknowledges and confines that it makes its own investment decisions and has not been offered any
advice or recommendation on investing in any MMMF and if selected above, is based upon Lessee's independent review of
prospectuses previously delivered to Lessee. The Lessee recognizes and agrees that the Escrow Agent has not and will not
provide supervision, recommendations or advice relating to either the investment of moneys held in the Equipment
Acquisition Fund account or the purchase, sale, retention or other disposition of any Qualified Investment.
5) Market values, exchange rates and other valuation information (including without limitation, market value, current value or
notional value) of any MMMF furnished in any report or statement may be obtained from third party sources and is fumished
for the exclusive use of the Lessee and Lessor. Escrow Agent has no responsibility whatsoever to determine the market or
other value of any MMMF or other non-cash Qualified Investments and snakes no representation or warranty, express or
implied, as to the accuracy of any such valuations or that any values necessarily reflect the proceeds that may be received on
the sale of an MMMF or such Qualified Investments.
6) SHAREHOLDER SERVICES FEES: Lessee acknowledges that the Fund is authorized to make payments from its
management fee or any other source available to parties such as banks or broker-dealers ("Service Organizations") that
Page 10 of 12
provide shareholder support services to the Fund and that Service Organizations currently are compensated at a rate of up to
the Maximum Rate of .50% annually of the average net assets of each Fund with respect to which they provide or have
provided shareholder support services. Lessee further acknowledges that Deutsche Bank Trust Company Arnericas is a
Service Organization and is paid, and hereby consents to such payment, by the Fund up to the Maximum Rate annually of the
average daily balance of the Account invested in the Fund for shareholder support services rendered to the Fund by Deutsche
Bank Trust Company Americas, which services may include. without limitation, answering client's inquiries regarding the
Fund, assistance to clients in changing dividend options, account designations and addresses, processing purchase and
redemption transactions, providing periodic statements showing a client's account balance and the integration of such
statement with other transactions, arranging for Deutsche Bank Trust Cornpany Arnericas wires, and providing such other
information and services as the Fund's distributor or Lessee reasonably may request. Lessee further acknowledges that the
Fund may purchase securities from or through Deutsche Bank Trust Cornpany Americas or its affiliates, may engage in
repurchase transactions with Deutsche Bank Trust Company Americas or its affiliates, may place funds on deposit in
accounts with Deutsche Bank Trust Cornpany Arnericas or its affiliates and receive interest income thereon and may obtain
other services from Deutsche Bank Trust Cornpany Arnericas for which Deutsche Bank Trust Company Americas is paid a
fee.
This investment authorization and direction will remain in effect until and unless expressly revoked or superseded in writing and shall
specify the type and identity of the investments to be purchased and/or sold.
Page 11 of 12
SCHEDULE 2
Telephone Number(s) and Signature(s) for Person(s) Designated to Give Funds Transfer Instructions
If from Lessee:
Name
1. CARR. b►T74
7.
3.
Telephone Number
2151 C.orz 1672
Signature
If from Lessor:
Name
1. Timothy L. Ellerbrock
2. Mary Heubach
3. Nate J. Ruhe
4. Brimey Posey
5. Kelsey A. Bruck
Telephone Number
614-213-7645
614-213-1557
614-213-3859
614-217-8827
614-213-9516
Signature
(Standing Signature on File)
(Standing Signature on File)
(Standing Signature on File)
(Standing Signature on File)
(Standing Signature on File)
All instructions, including but not limited to funds transfer instructions, whether transmitted by facsimile or set forth in a PDF attached
to an email, must include the signature of the Authorized Representative authorizing said funds transfer on behalf of the Party.
Page 12 of 12
ESCROW FUNDING SCHEDULE ADDENDUM
AND ARBITRAGE CERTIFICATE
Dated as of: June 30, 2016
Lease Schedule No.: 1000141569
Lessee: CITY OF PEARLAND
Escrow Agent: DEUTSCHE BANK TRUST COMPANY AMERICAS
Escrow Agreement dated as of: June 30, 2016
Amount To Be Deposited Into Escrow: $1,117,853.65 ("Lessor's Deposit")
Reference is made to the above Lease Schedule ("Schedule") to the Master Lease -Purchase Agreement identified in the
Schedule ("Master Lease") by and between JPMORGAN CHASE BANK, N.A. ("Lessor") and the above lessee ("Lessee"). As used
herein, "Lease" shall mean the Schedule and the Master Lease, but only to the extent that the Master Lease relates to the Schedule.
This Addendum amends and tnodifies the terms and conditions of the Lease and is hereby made a part of the Lease. Unless otherwise
defined herein, capitalized terms defined in the Master Lease shall have the same meaning when used herein.
NOW, THEREFORE, as pan of the valuable consideration to induce the execution of the Lease, Lessor and Lessee hereby
agree to amend the Lease as follows:
1. Lessee and Lessor together with the above Escrow Agent ("Escrow Agent") have entered into the above Escrow
Agreement ("Escrow Agreement") establishing a fund ("Equipment Acquisition Fund") from which the Purchase Price of the
Equipment will be paid.
2. Lessor shall deposit such amount into escrow as is required by the Escrow Agreement, which amount shall be credited to
the Equipment Acquisition Fund. Lessee shall pay the balance of the Purchase Price of the Equipment, either by deposit in escrow to
the Equipment Acquisition Fund or by direct payment to the Suppliers of the Equipment.
3. The Lease Term of the Lease shall commence on the earlier of the date specified in the Payment Schedule to the Schedule
or the date of Lessor's deposit of funds into the Equipment Acquisition Fund. Notwithstanding the statements regarding delivery and
acceptance of the Equipment in the Schedule, the parties acknowledge that the Equipment will be accepted as provided in the Escrow
Agreement.
4. The delivery of documents and the satisfaction of any other conditions required by the Escrow Agreement or this
Addendum shall be additional Funding Conditions for the Lease.
5. Upon Lessee's execution of the Escrow Agreement, Lessee hereby represents and warrants to Lessor that: (a) Lessee has
full power, authority and legal right to execute and deliver the Escrow Agreement and to perforin its obligations under the Escrow
Agreement, and all such actions have been duly authorized by appropriate findings and actions of Lessee's governing body; (b) the
Escrow Agreement has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligation of Lessee,
enforceable in accordance with its tenns; and (c) the Escrow Agreement is authorized under, and the authorization, execution and
delivery of the Escrow Agreement complies with, all applicable federal, state and local laws and regulations (including, but not limited
to, all open meeting, public bidding and public investment laws) and all applicable judgments and court orders.
6. The opinion of Lessee's legal counsel will include statements to the same effect as the representations of Lessee in
paragraph 5 above.
7. It shall be an additional event of default under the Lease if Lessee fails to pay or perform any of its obligations under the
Escrow Agreement or this Addendum or if any of the representations of Lessee in the Escrow Agreement or this Addendum prove to
be false, misleading or erroneous in any material respect.
8. ARBITRAGE CERTIFICATE. Thc authorized representative of Lessee who executes this Addendum hereby certifies
that he/she is the duly qualified and acting representative of Lessee with the title set forth below his/her signature hereon; that Lessee
has executed and delivered the Schedule and the Master Lease (collectively, the "Lease"); that Lessee is a political subdivision of the
State identified in the Lease; and that in his/her official capacity as such officer he/she is responsible for executing and delivering, on
Page 1 of 3
behalf of the Lessee, the Lease and this Addendum. This paragraph of this Addendum (hereinafter, this paragraph shall be identified
as the "Arbitrage Certificate") is being issued by Lessee as a "no arbitrage certificate" pursuant to Section 148 of the Internal Revenue
Code of 1986, as amended (the "Code"), and Treasury Regulations, Sections 1.148-0 through 1.148.11 (the "Regulations"). Lessee
represents and warrants to Lessor that the following facts, estimates and circumstances are in existence on the date of this Arbitrage
Certificate or are reasonably expect to occur hereafter.
(a) The Lease provides for the lease of the Equipment described in the Lease by Lessor to Lessee. Under the Lease, Lessee is
required to make Rent Payments with respect to the Equipment, comprising principal and interest, on the dates and in the
amounts stated in the Payment Schedule to the Lease.
(b) Pursuant to the Lease and for the purpose of meeting its obligations thereunder and assuring the Lessee of the availability
of monies needed to pay the cost of the Equipment when due, Lessee, Lessor and the Escrow Agent have executed the
Escrow Agreement.
(c) Contracts or purchase orders providing for the acquisition and delivery of the Equipment have been issued by Lessee to
Equipment Vendors therefor and the Equipment will be acquired and installed with due diligence. Based upon the provisions
of the contracts or purchase orders, the Equipment will be acquired and installed no later than eighteen (18) months from the
date of the Escrow Agreement ("Funding Expiration Date").
(d) The Escrow Agreement provides that Lessor shall deposit the Lessor's Deposit into escrow to be credited to the
Equipment Acquisition Fund created by the Escrow Agreement and utilized to pay for the Equiptnent as provided therein. It
is presently expected that all such funds initially credited to the Equipment Acquisition Fund shall be disbursed to pay for the
Equipment, but any such amounts ultimately determined not to be needed for such purposes and the interest earnings on the
amounts held in escrow shall be utilized on or after the Funding Expiration Date to pay part of the principal due under the
Lease, as provided in the Escrow Agreement.
(e) A11 of the spendable proceeds of the Lease will be expended on the Equipment and related expenses on or before the
Funding Expiration Date.
(f) The original proceeds of the Lease, and interest to be earned thereon, do not exceed the amount necessary for the purpose
for which the Lease is issued.
(g) The interest of Lessee in the Equipment has not been and is not expected during the term of the Lease to be sold or
disposcd of by Lessee.
(h) No sinking fund is expected to be created by Lessee with respect to the Lease and Rental Payments.
(i) Lessee rcpresents, warrants and covenants to one of the following statements of this clause (i) as is initialed by Lessee
below [and if Lessee fails to initial its selection, then subclause (A) shall be deemed to have been selected by Lessee]:
(A) 100% of the proceeds of the Lease shall be paid for the acquisition of the Equipment within 18 months of
the date of the Escrow Agreement in accordance with the following schedule:
No less than 15% within 6 months of the date of the Escrow Agreement;
No less than 60% within 12 months of the date of the Escrow Agreement; and
No less than 100% within 18 months of the date of the Escrow Agreement.
(B) 100% of the proceeds of the Lease shall be paid for the acquisition of the Equipment within 6 months of the
date of the Escrow Agreement.
(C) Lessee qualifies for the "small issuer" exemption in section 148(f)(4)(D) of the Code because all of the
following are true: (1) Lessee is a governmental unit with general taxing powers, and (2) the Lease is not a "private
activity bond" as defined in Section 141 of the Code, and (3) 95% or more of the proceeds of the Lease shall be used
for the governmental activities of Lessee, and (4) the aggregate face amount of all tax exempt bonds and other tax
exempt obligations (other than "private activity bonds") issued by Lessee (and any subordinate entities of Lessee as
contemplated by Section 148(0 of the Code) during the calendar year in which the Lease is issued is not reasonably
expected to exceed $5,000,000.00.
(j) Lessee hereby covenants that Lessee shall comply with all of the requirements of the Code and Regulations relating to the
rebate of arbitrage profit to the United States of America (including, without limitation Section 148(0 of the Code) and will
rebate to the United States of America all arbitrage profit required thereby.
Page 2 of 3
(k) To the best of the knowledge and belief of the undersigned. the expectations of Lessee, as set forth above, are reasonable;
and there are no present facts, estimates and circumstances which would change the foregoing expectations.
(1) Lessee has not been notified of the listing or proposed listing of it by the Internal Revenue Service as an issuer whose
arbitrage certificates may not be relied upon.
9. If there is a partial prepayment of principal pursuant to the terms of either clause (c) of Section 2.04 second of the Escrow
Agreement or clause (c) of Section 2.05 second of the Escrow Agreement. then in addition to the payment of the Partial Principal
Amount, a Break Funding Charge (as defined below) shall be due and payable if (i) exceeds (ii) where (i) equals the interest portion of
each of the Rent Payments which would have been paid if such prepayment had not occurred calculated at the interest rate swap
including any forward rate swap, if any, which Lessor shall be deemed to have entered into on the earlier of (a) the date the Lease was
originally funded or (b) the date a rate lock letter was signed, if any, and (ii) equals the interest portion of each of the Rent Payments
which would have been paid if such prepayment had not occurred calculated at the interest rate swap which Lessor shall be deemed to
have entered into on the date of prepayment (the "Replacement Swap"). The "Break Funding Charge" equals the present value of the
difference between (i) and (ii) for each interest period discounted to a net present value as of the date of prepayment using the fixed
interest rate of the Replacement Swap. Lessee acknowledges that (i) Lessor might not fund or hedge its fixed-rate loan portfolio or any
prepayment thereof on a loan -by -loan basis at all times, and agrees that the Break Funding Charge is a reasonable and appropriate
method of calculating liquidated damages for any prepayment irrespective of whether any of the foregoing hedging transactions have
in fact occurred or occurred precisely as stated with respect to the Lease and (ii) all calculations and determinations by the Lessor of
the Break Funding Charge or of any element thereof. if made in accordance with its then standard procedures for so calculating or
determining such amounts, shall be conclusive absent manifest arithmetic error.
10. Except as expressly amended by this Addendutn and other modifications signed by Lessor, the Lease remains unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first referenced above.
CITY OF PEA ' ; r
(Lessee)
By:
Title:
JPMORGAN CHASE BANK. N.A.
(Lessor)
►ice By,
Title: Authorized Officer
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