HomeMy WebLinkAboutPR 19280: GOVERNMENT CAPITAL AGREEMENT interoffice
MEMORANDUM
To : Mayor and City Council /
From: Valecia R. Tizeno, City Attorney 0.) /
Date : June 24, 2016
Subject: P.R. No. 19280
Please find attached P.R. No. 19280 authorizing the approval
of a Lease Purchase Agreement between Government Capital
Corporation and the City of Port Arthur for the lease-purchase of
six (6) new Mack garbage trucks for the Solid Waste Department.
The Legal Department, along with the Finance Department, has
submitted changes to the Lease Purchase Agreement, and we are
waiting on final approval from Government Capital Corporation.
s.pr19280 confidential memo
P. R. No. 19280
JJ: 6/23/16
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE APPROVAL
OF A LEASE PURCHASE AGREEMENT BETWEEN
GOVERNMENT CAPITAL CORPORATION AND
THE CITY OF PORT ARTHUR FOR THE LEASE-
PURCHASE OF SIX (6) NEW MACK GARBAGE
TRUCKS FOR THE SOLID WASTE DIVISION IN
THE AMOUNT OF $1,730,673.00.
WHEREAS, City of Port Arthur desires to enter into that certain Lease-Purchase
Agreement No. 7418, by and between City of Port Arthur and Government Capital Corporation,
for the purpose of financing six (6) Mack Garbage Trucks; and
WHEREAS, the City desires to designate this Agreement as a"qualified tax exempt
obligation"of the City for purposes of Section 265 (b) (3) of the Internal Revenue Code of 1986,
as amended; and
WHEREAS, the City desires to designate Brian McDougal, City Manager, as an
authorized signer of the Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That the City authorizes the execution of a Lease-Purchase Agreement
with Government Capital Corporation for the purpose of financing"Refuse Vehicles."
Section 3. That the Lease-Purchase Agreement dated as of June 28, 2016, by and
between the City and Government Capital Corporation is designated by the City of Port Arthur
as a"qualified tax exempt obligation"for the purposes of Section 265 (b) (3) of the Internal
Revenue Code of 1986, as amended.
Section 4. That the City of Port Arthur designates Brian McDougal, City Manager, as
an authorized signer of the Lease-Purchase Agreement No. 7418 by and between the City of Port
Arthur and Government Capital Corporation.
P. R. No. 19280
JJ: 6/23/16
Section 5. That the City Manager of the City of Port Arthur is authorized to accept the
financing agreement received from Government Capital Corporation, is substantially the same
form as attached hereto in substantially the same form Exhibit"A."
Section 6. That a copy of the caption of this Resolution shall be spread upon the
Minutes of the City Council.
READ, ADOPTED AND APPROVED THIS day of ,
2016, AD, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the
following vote:
AYES: Mayor ,
Councilmembers:
NOES: .
Debris Prince
Mayor
ATTEST:
Sherri Bellard Dr. Jimmie Johnson
City Secretary Assistant City Manager
P. R. No. 19280
JJ: 6/23/16
APPROVED AS TO FORM: APPROVED AT TO THE
AVAILABILITY OF FUNDS
(See memo)
Valecia Tizeno Jerry Dale, CPA, GFOA
City Attorney Interim Director of Finance
Clifton Williams, CPPB
Acting Purchasing Manager
APPROVED FOR ADMINISTRATION
Brian McDougal, City Manager
EXHIBIT "A"
(Lease-Purchase Agreement is under review by both the Legal
and Finance Departments for approval and submission to
Government Capital. It will be presented at or before the
City Council meeting.)
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT
THIS TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (hereafter referred to as "Agreement") dated as of June
28, 2016, by and between Government Capital Corporation, a Texas corporation (herein referred to as "Lessor"), and City of
Port Arthur, a political subdivision or agency of the State of Texas (hereinafter referred to as "Lessee").
WITNESSETH: In consideration of the mutual covenants and conditions hereinafter set forth, the parties hereto agree as
follows:
1. Term and Payments. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the property
described in Exhibit A hereto (hereinafter, with all replacement parts, substitutions, proceeds, increases, additions, accessions,
repairs and accessories incorporated therein or affixed thereto, referred to as the "Property") for the amounts to be paid in the sums
(the "Lease Payments") and on the dates (the "Lease Payment Dates") set forth in Exhibit B hereto. Except as specifically provided
in Section 2 hereof, the obligation of the Lessee to make the Lease Payments called for in Exhibit B hereto shall be absolute and
unconditional in all events and shall not be subject to any set-off, defense, counterclaim or recoupment for any reason. The term of
the lease hereunder shall commence upon the dated date of the lease and shall continue until the end of the Lessee's current fiscal
period and thereafter for such additional fiscal periods as are necessary to complete the anticipated total lease term as set forth in
Exhibit B, unless earlier terminated as provided herein. The interest is calculated on the basis of a 30/360-day year on the unpaid
principal amounts from the Schedule Date of the EXHIBIT B.
2. Non-Appropriation and Right of Termination. The obligations of Lessee to make Lease Payments (called for in
Exhibit B) and to make any other payments to Lessor (or to any other person) pursuant to this Agreement are subject to
appropriation by the Lessee of funds that are lawfully available to be applied for such purpose. If Lessee fails to make such an
appropriation prior to a fiscal period of Lessee for the Lease Payments scheduled in such a fiscal period, this Agreement shall
terminate at the end of the last fiscal period immediately preceding the fiscal period for which funds have not been appropriated.
The Lessee shall deliver notice to Lessor of such termination at least forty-five (45) days prior to such termination, but failure to give
such notice shall not prevent the termination of this Agreement. Upon any such termination of this Agreement, all of Lessee's right,
title and interest in and its obligations under this Agreement and to the Property shall terminate effective on the last day of the last
fiscal period of Lessee for which such an appropriation was made.
3. Taxes. In addition to the Lease Payments to be made pursuant to Section 1 hereof, Lessee agrees to indemnify
and hold Lessor harmless from and against and to pay Lessor, as additional rent, on demand, an amount equal to all licenses,
assessments, sales, use, real or personal property, gross receipts or other taxes, levies, imposts, duties or charges, if any, together
with any penalties, fines, or interest thereon imposed against or on Lessor, Lessee or the Property by any governmental authority
upon or with respect to the Property or the purchase, ownership, rental, possession, operation, return or sale of, or receipt of
payments for, the Property, except any Federal or State income taxes, if any, payable by Lessor. Lessee may contest any such taxes
prior to payment provided such contest does not involve any risk of sale, forfeiture or loss of the Property or any interest therein.
4. Lessee's Covenants and Representations. Lessee covenants and represents as follows:
(a) Lessee represents, and will provide an opinion of its counsel to the effect that, it has full power and authority
to enter into this Agreement which has been duly authorized, executed, and delivered by Lessee and is a valid and binding obligation
of Lessee enforceable in accordance with its terms, and all requirements for execution, delivery and performance of this Agreement
have been, or will be, complied with in a timely manner;
(b) Lessee has budgeted and appropriated for the current fiscal period sufficient funds to make the Lease
Payments scheduled to come due in the current fiscal period and all other Payments expected to come due in the current fiscal
period; Lessee currently expects to budget and appropriate sufficient funds to pay the Lease Payments coming due hereunder in
each future fiscal period, but the decision whether to budget and appropriate funds for any future fiscal period is solely within the
discretion of the then-current governing body of Lessee;
(c) There are no pending or threatened lawsuits or administrative or other proceedings contesting the authority
for, authorization of, performance of, or expenditure of funds pursuant to this Agreement;
(d) Information supplied and statements made by Lessee in any financial statement or current budget prior to or
contemporaneously with the Agreement are true and correct;
(e) Lessee has an immediate need for, and expects to make immediate use of, substantially all the Property,
which need is not temporary or expected to diminish in the foreseeable future.
(f) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which
Lessee has been a party at any time during the past ten (10) years has been terminated by Lessee as a result of insufficient funds
being appropriated in any Fiscal Year. No event has occurred which would constitute an event of default under any debt, revenue
bond or obligation which Lessee has issued during the past ten (10) years.
(g) Lessee will pay the Lease Payment Due by check, wire transfer, or ACH only.
5. Use and Licenses. Lessee shall pay and discharge all operating expenses and shall cause the Property to be
operated by competent persons only. Lessee shall use the Property only for its proper purposes and will not install, use, operate or
maintain the Property improperly, carelessly, or in violation of any applicable law, ordinance, rule or regulation of any governmental
authority, or in a manner contrary to the nature of the Property or the use contemplated by its manufacturer. Lessee shall keep the
property at the location stated on the Certificate of Acceptance executed by Lessee upon delivery of the Property until Lessor, in
writing, permits its removal, and the Property shall be used solely in the conduct of the Lessee's operations. Lessee shall obtain, at
its expense, all registrations, permits and licenses, if any, required by law for the installation and operation of the Property. Any
license plates used on the Property shall be issued in the name of the Lessee. If a certificate of title is issuable with respect to the
Property, it shall be delivered to the Lessor showing the interest of the Lessor.
GOVERNMENT CAPITAL
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 1
6. Maintenance. Lessor shall not be obligated to make any repairs or replacements. At its own expense, Lessee
shall service, repair and maintain the Property in as good condition, repair, appearance and working order as when delivered to
Lessee hereunder, ordinary wear and tear from proper use alone excepted, and shall replace any and all parts thereof which may
from time to time become worn out, lost, stolen, destroyed, or damaged beyond repair or rendered unfit for intended use, for any
reason whatsoever, all of which replacements shall be free and clear of all liens, encumbrances and claims of others and shall
become part of the Property and subject to this Agreement. Lessor may, at its option, discharge such costs, expenses and insurance
premiums necessary for the repair, maintenance and preservation of the Property, and all sums so expended shall be due from
Lessee in addition to rental payments hereunder.
7. Alterations.
(a) Lessee may, at its own expense, install or place in or on, or attach or affix to, the Property such equipment or
accessories as may be necessary or convenient to use the Property for its intended purposes provided that such equipment or
accessories do not impair the value or utility of the Property. All such equipment and accessories shall be removed by Lessee upon
termination of this Agreement, provided that any resulting damage shall be repaired at Lessee's expense. Any such equipment or
accessories not removed shall become the property of Lessor.
(b) Without the written consent of Lessor, Lessee shall not make any other alterations, modifications or
improvements to the Property except as required or permitted hereunder. Any other alterations, modifications or improvements to
the Property shall immediately become part of the Property, subject to the provisions hereof. Without the prior written consent of
Lessor, Lessee shall not affix or attach any of the Property to any real property. The Property shall remain personal property
regardless of whether it becomes affixed or attached to real property or permanently rests upon any real property or any
improvement thereon.
8. Liens. Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, security
interest, pledge, lien, charge, encumbrance or claim on or with respect to the Property, title thereto or any interest therein, except
the respective rights of Lessor and Lessee hereunder.
9. Damage to or Destruction of Property. Lessee shall bear the entire risk of loss, damage, theft or destruction of
the Property from any and every cause whatsoever, and no loss, damage, destruction or other event shall release Lessee from the
obligation to pay the full amount of the rental payments or from any other obligation under this Agreement. In the event of damage
to any item of the Property, Lessee will immediately place the same in good repair, with the proceeds of any insurance recovery
applied to the cost of such repair. If Lessor determines that any item of Property is lost, stolen, destroyed or damaged beyond
repair, Lessee, at the option of Lessee, will either (a) replace the same with like property in good repair or (b) on the next Lease
Payment Date, pay Lessor(i) all amounts then owed by Lessee to Lessor under this Agreement, including the Lease Payment due on
such date, and (ii) an amount equal to the applicable Option to Purchase Value set forth in Exhibit B.
10. Insurance. Lessee shall either be self-insured with regard to the Property or shall purchase and maintain
insurance with regard to the Property. Lessee shall indicate on each Certificate of Acceptance executed in relation to this Agreement
its election to be self-insured or company insured with regard to the Property listed on that Certificate of Acceptance. Whether
Lessee is self-insured or company insured, Lessee shall, for the term of this Agreement, at its own expense, provide comprehensive
liability insurance with respect to the Property, insuring against such risks, and such amounts as are customary for lessees of
property of a character similar to the Property. In addition, Lessee shall, for the term of this Agreement, at its own expense, provide
casualty insurance with respect to the Property, insuring against customary risks, coverage at all times not less than the amount of
the unpaid principal portion of the Lease Payments required to be made pursuant to Section 1 as of the last preceding Payment Date
specified in Exhibit B on which a Lease Payment was made. If insurance policies are provided with respect to the Property, all
insurance policies shall be with insurers authorized to do business in the State where the Property is located and shall name both
Lessor and Lessee as insured as their respective interest may appear. Insurance proceeds from casualty losses shall be payable
solely to the Lessor, subject to the provisions of Section 9. Lessee shall, upon request, deliver to Lessor evidence of the required
coverage together with premium receipts, and each insurer shall agree to give Lessor written notice of non-payment of any premium
due and ten (10) days notice prior to cancellation or alteration of any such policy. Lessee shall also carry and require any other
person or entity working on, in or about the Property to carry workmen's compensation insurance covering employees on, in or about
the Property. In the event Lessee fails, for any reason, to comply with the requirements of this Section, Lessee shall indemnify, save
harmless and, at Lessee's sole expense, defend Lessor and its agents, employees, officers and directors and the Property against all
risk of loss not covered by insurance.
11. Indemnification. Lessee shall indemnify, to the extent permitted by law, and save harmless, Lessor and its
agents, employees, officers and directors from and, at Lessee's expense, defend Lessor and its agents, employees, officers and
directors against all liability, obligations, losses, damages, penalties, claims, actions, costs and expenses (including but not limited to
reasonable attorneys' fees) of whatsoever kind or nature which in any way relate to or arise out of this Agreement or the ownership,
rental, possession, operation, condition, sale or return of the Property. All amounts which become due from Lessee under this
Section 11 shall be credited with any amounts received by the Lessor from insurance provided by the Lessee and shall be payable by
Lessee within thirty (30) days following demand therefor by Lessor and shall survive the termination or expiration of this Agreement.
12. No Warranty. ALL WARRANTIES, PROMISES AND SERVICE AGREEMENTS, IF ANY, RELATING TO THE PROPERTY
THAT THE MANUFACTURERS OR THE PARTY WHO SUPPLIED THE PROPERTY TO LESSOR (THE"VENDOR") HAVE MADE TO LESSOR IN
CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE PROPERTY ARE HEREBY ASSIGNED TO
LESSEE. Lessee may communicate with Vendor and receive an accurate and complete statement of all such warranties, promises and
service agreements, if any. All claims or actions on any warranty so assigned shall be made or prosecuted by Lessee, at its sole
expense, upon prior written notice to Lessor. Lessor may, but shall have no obligation whatsoever to participate in such claim or
action on such warranty, at Lessor's expense. Any recovery under such a warranty shall be made payable jointly to Lessee and
Lessor. Lessee acknowledges that Lessee has selected the Vendor and that Lessee has directed Lessor to acquire the Property from
Vendor in connection with this Agreement. Lessee further acknowledges that this Agreement is a "Finance Lease" within the
meaning of the Uniform Commercial Code and that Lessee is entitled to the Vendor's warranties and promises described above, if
any. LESSOR HAS MADE AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND ASSUMES NO OBLIGATION
WITH RESPECT TO THE TITLE, MERCHANTABILITY, CONDITION, QUALITY OR FITNESS OF THE PROPERTY DESCRIBED IN EXHIBIT A
FOR ANY PARTICULAR PURPOSE OR THE CONFORMITY OF THE PROPERTY TO ANY SPECIFICATION OR PURCHASE ORDER, OR AS TO
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 2
THE PROPERTY'S DESIGN, DELIVERY, INSTALLATION OR OPERATION. All such risks shall be borne by Lessee without in any way
excusing Lessee from its obligations under this Agreement, and Lessor shall not be liable to Lessee for any damages on account of
such risks.
13. Option to Purchase. Provided Lessee has complied with the terms and conditions of this Agreement, Lessee shall
give written notice of its intention to exercise the option contemporaneous with the execution of this agreement. Lessee shall also
request a payoff letter from Lessor at least forty-five (45) days prior to the payment date the option is being exercised. If not
exercised earlier than the final payment the option shall be fully exercised upon Lessee's timely payment of all Lease Payments
specified in Exhibit B. Payment of the applicable Option to Purchase Value shall occur on the applicable Lease Payment Date
specified in Exhibit B hereto, at which time Lessor shall, unless not required hereunder, deliver to Lessee a quitclaim bill of sale
transferring Lessor's interest in the Property to Lessee free from any lien, encumbrance or security interest except such as may be
created, or permitted and not discharged, by Lessee but without other warranties. Upon Lessee's actual or constructive payment of
the Option to Purchase Value and Lessor's actual or constructive delivery of a quitclaim bill of sale covering the Property, this
Agreement shall terminate except as to obligations or liabilities accruing hereunder prior to such termination.
14. Default and Lessor's Remedies.
(a) The occurrence of one or more of the following events shall constitute an Event of Default, whether occurring
voluntarily or involuntarily, by operation of law or pursuant to any order of any court or governmental agency:
(1) Lessee fails to make any payment hereunder when due or within ten (10) days thereafter;
(2) Lessee fails to comply with any other covenant, condition or agreement of Lessee hereunder for a
period of the ten (10) days after notice thereof;
(3) Any representation or warranty made by Lessee hereunder shall be untrue in any material respect as
of the date made;
(4) Lessee makes, permits or suffers any unauthorized assignment, transfer or other disposition of this
Agreement or any interest herein, or any part of the Property or any interest therein; or
(5) Lessee becomes insolvent; or admits in writing its inability to pay its debts as they mature; or applies
for, consents to or acquiesces in the appointment of a trustee, receiver or custodian for the Lessee or a substantial part of its
property; or, in the absence of such application, consent or acquiescence, a trustee, receiver or custodian is appointed for Lessee or
a substantial part of its property and is not discharged within sixty (60) days; or any bankruptcy, reorganization, debt arrangement,
moratorium, or any proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by
or against Lessee and, if instituted against Lessee, is consented to or acquiesced in by Lessee or is not dismissed within sixty (60)
days.
(b) Upon the occurrence of any Event of Default specified herein, Lessor may, at its sole discretion, exercise
any or all of the following remedies:
(1) Enforce this Agreement by appropriate action to collect amounts due or to become due hereunder, by
acceleration or otherwise, or to cause Lessee to perform its other obligations hereunder in which event Lessee shall be liable for all
costs and expenses incurred by Lessor;
(2) Take possession of the Property, without demand or notice and without court order or any process of
law, and remove and relet the same for Lessee's account, in which event Lessee waives any and all damages resulting therefrom and
shall be liable for all costs and expenses incurred by Lessor in connection therewith and the difference, if any, between the amounts
to be paid pursuant to Section 1 hereof and the amounts received and to be received by Lessor in connection with any such reletting;
(3) Terminate this Agreement and repossess the Property, in which event Lessee shall be liable for any
amounts payable hereunder through the date of such termination and all costs and expenses incurred by Lessor in connection
therewith;
(4) Sell the Property or any portion thereof for Lessor's account at public or private sale, for cash or
credit, without demand on notice to Lessee of Lessor's intention to do so, or relet the Property for a term and a rental which may be
equal to, greater than or less than the rental and term provided herein. If the proceeds from any such sale or rental payments
received under a new agreement made for the periods prior to the expiration of this Agreement are less than the sum of (i) the
costs of such repossession, sale, relocation, storage, reconditioning, reletting and reinstallation (including but not limited to
reasonable attorneys' fees), (ii) the unpaid principal balance derived from Exhibit B as of the last preceding Lease Payment Date
specified in Exhibit B, and (iii) any past due amounts hereunder (plus interest on such unpaid principal balance at the rate specified
in Section 20 hereof, prorated to the date of such sale), all of which shall be paid to Lessor, Lessor shall retain all such proceeds and
Lessee shall remain liable for any deficiency; or
(5) Pursue and exercise any other remedy available at law or in equity, in which event Lessee shall be
liable for any and all costs and expenses incurred by Lessor in connection therewith. "Costs and expenses", as that term is used in
this Section 14, shall mean, to the extent allowed by law: (i) reasonable attorneys' fees if this Agreement is referred for collection
to an attorney not a salaried employee of Lessor or the holder of this Agreement; (ii) court costs and disbursements including such
costs in the event of any action necessary to secure possession of the Property; and (iii) actual and reasonable out-of-pocket
expenses incurred in connection with any repossession or foreclosure, including costs of storing, reconditioning and reselling the
Property, subject to the standards of good faith and commercial reasonableness set by the applicable Uniform Commercial Code.
Lessee waives all rights under all exemption laws.
(6) Under no circumstances shall Lessee be liable under this subsection 14 (b) for any amount in excess
of the sum appropriated pursuant to Section 1 hereof for the previous and current fiscal years, less all amounts previously due and
paid during such previous and current fiscal years from amounts so appropriated.
15. Termination. Unless Lessee has properly exercised its option to purchase pursuant to Section 13 hereof, lessee
shall, upon the expiration of the term of this Agreement or any earlier termination hereof pursuant to the terms of this Agreement,
deliver the Property to Lessor unencumbered and in at least as good condition and repair as when delivered to Lessee, ordinary wear
and tear resulting from proper use alone excepted, by loading the Property, at Lessee's sole expense, on such carrier, or delivering
the Property to such location, as Lessor shall provide or designate at or within a reasonable distance from the general location of the
Property. If Lessee fails to deliver the Property to Lessor, as provided in this Section 15, on or before the date of termination of this
Agreement, Lessee shall pay to Lessor upon demand, for the hold-over period, a portion of the total payment for the applicable
period as set forth in Exhibit B prorated from the date of termination of this Agreement to the date Lessee either redelivers the
Property to Lessor or Lessor repossesses the Property.
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT— Page 3
16. Assignment. Without Lessor's prior written consent, Lessee will not either (i) assign, transfer, pledge,
hypothecate, grant any security interest in or otherwise dispose of this Agreement or the Property or any interest in this Agreement
or the Property; or (ii) sublet or lend the Property or permit it to be used by anyone other than Lessee or Lessee's employees.
Lessor may assign its rights, title and interest in and to this Agreement, the Property and any other documents executed with
respect to this Agreement and/or grant or assign a security interest in this Agreement and the Property, in whole or in part. Any
such assignees shall have all of the rights of Lessor under this Agreement. Subject to the foregoing, this Agreement inures to the
benefit of and is binding upon the heirs, executors, administrators, successors and assigns of the parties hereto. No assignment or
reassignment of any of Lessor's rights, title or interest in this Agreement or the Property shall be effective with regard to Lessee
unless and until Lessee shall have received a copy of the document by which the assignment or reassignment is made, disclosing the
name and address of such assignee. No further action will be required by Lessor or by Lessee to evidence the assignment. During
the term of this Agreement, Lessee shall keep a complete and accurate record of all such assignments in form necessary to comply
with the United States Internal Revenue Code of 1986, Section 149 (a), and the regulations, proposed or existing, from time to time
promulgated thereunder.
17. Personal Property. The Property is and shall at all times be and remain personal property.
18. Title. Upon acceptance of the Property by Lessee hereunder, Lessee shall have title to the Property during the
term of this Agreement; however, in the event of (i) an Event of Default hereunder and for so long as such Event of Default is
continuing, or(ii) termination of this Agreement pursuant to the provisions of Section 2 hereof, title shall be reverted immediately in
and shall revert to Lessor free of any right, title or interest of Lessee unless Lessor elects otherwise.
19. Lessor's Right to Perform for Lessee. If Lessee fails to make any payment or perform or comply with any of its
covenants or obligations hereunder, Lessor may, but shall not be required to, make such payment or perform or comply with such
covenants and obligations on behalf of Lessee, and the amount of any such payment and the expenses (including but not limited to
reasonable attorneys' fees) incurred by Lessor in performing or complying with such covenants and obligations, as the case may be,
together with interest thereon at the highest lawful rate, shall be payable by Lessee upon demand.
20. Interest on Default. If Lessee fails to pay any Lease Payment specified in Section 1 hereof within ten (10) days
after the due date thereof, Lessee shall pay to Lessor interest on such delinquent payment from the due date until paid at the
highest lawful rate.
21. Notices. Any notices to be given or to be served upon any party hereto in connection with this Agreement must
be in writing and may be given by certified or registered mail, and shall be deemed to have been given and received forty-eight (48)
hours after a registered or certified letter containing such notice, postage prepaid, is deposited in the United States mail, and if given
otherwise shall be deemed to have been given when delivered to and received by the party to whom it is addressed. Such notice
shall be given to the parties at their respective addresses designated on the signature page of this Agreement or at such other
address as either party may hereafter designate.
22. Security Interest. As security for Lessee's covenants and obligations hereunder, Lessee hereby grants to Lessor,
and its successors, a security interest in the Property, all accessions thereto and proceeds therefrom, and, in addition to Lessor's
rights hereunder, all of the rights and benefits of a secured party under the Uniform Commercial Code as in effect from time to time
hereafter in the State in which the Property is located or any other State which may have jurisdiction over the Property. Lessee
agrees to execute, acknowledge and deliver to Lessor in recordable form upon request financing statements or any other instruments
with respect to the Property or this Agreement considered necessary or desirable by Lessor to perfect and continue the security
interest granted herein in accordance with the laws of the applicable jurisdiction. Lessee hereby authorizes Lessor or its agent or
assigns to sign and execute on its behalf any and all necessary UCC-1 forms to perfect the Purchase Money Security interests herein
above granted to Lessor.
23. Tax Exemption. Lessee certifies that it does reasonably anticipate that not more than $10,000,000 of "qualified
tax-exempt obligations", as that term is defined in Section 265 (b) 3 (D) of the Internal Revenue Code of 1986 ("the Code"), will be
issued by it and any subordinate entities during 2016. Further, Lessee designates this issue as comprising a portion of the $10
million in aggregate issues to be designated as "qualified tax exempt obligations" eligible for the exception contained in Section 265
(b) 3 (D) of the Code allowing for an exception to the general rule of the Code which provides for a total disallowance of a deduction
for interest expense allocable to the carrying of tax exempt obligations.
24. Continuing Disclosure. Specifically and without limitation, Lessee agrees to provide audited financial statements,
prepared by a certified public accountant not later than six (6) months after and as of the end of each fiscal year. Periodic financial
statements shall include a combined balance sheet as of the end of each such period, and a combined statement of revenues,
expenditures and changes in fund balances, from the beginning of the then fiscal year to the end of such period. These reports must
be certified as correct by one of Lessee's authorized agents. If Lessee has subsidiaries, the financial statements required will be
provided on a consolidated and consolidation basis.
25. Miscellaneous.
(a) Lessee shall, whenever requested, advise Lessor of the exact location and condition of the Property and shall
give the Lessor immediate notice of any attachment or other judicial process affecting the Property, and indemnify and save Lessor
harmless from any loss or damage caused thereby. Lessor may, for the purpose of inspection, at all reasonable times enter upon
any job, building or place where the Property and the books and records of the Lessee with respect thereto are located.
(b) Lessee will take no action that would cause the interest portion of the Lease Payments to become coverage in
gross income of the recipient for federal income tax purposes under the Internal Revenue Code of 1986 (the "Code") and Treasury
Regulations promulgated thereunder (the "Regulations"), and Lessee will take and will cause its officers, employees and agents to
take all affirmative actions legally within its power necessary to ensure that the interest portion of the Lease Payments does not
become coverage in gross income of the recipient for federal income tax purposes under the Code and Regulations.
(c) Lessee agrees to equitably adjust the payments payable under this Agreement if there is a determination for
any reason that the interest payable pursuant to this Agreement (as incorporated within the schedule of payments) is not excludable
from income in accordance with the Internal Revenue Code of 1986, as amended, such as to make Lessor and its assigns whole.
(d) Time is of the essence. No covenant or obligations hereunder to be performed by Lessee may be waived
except by the written consent of Lessor, and a waiver of any such covenant or obligation or a forbearance to invoke any remedy on
any occasion shall not constitute or be treated as a waiver of such covenant or obligation as to any other occasion and shall not
preclude Lessor from invoking such remedy at any later time prior to Lessee's cure of the condition giving rise to such remedy.
Lessor's rights hereunder are cumulative and not alternative.
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 4
(e) This Agreement shall be construed in accordance with, and governed by, the laws of the State in which the
Property is located.
(f) This Agreement constitutes the entire agreement between the parties and shall not be modified, waived,
discharged, terminated, amended, altered or changed in any respect except by a written document signed by both Lessor and
Lessee.
(g) Any term or provision of this Agreement found to be prohibited by law or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without, to the extent reasonably possible, invalidating the remainder of this
Agreement.
(h) The Lessor hereunder shall have the right at any time or times, by notice to Lessee, to designate or appoint
any person or entity to act as agent or trustee for Lessor for any purposes hereunder.
(i) All transportation charges shall be borne by Lessee. Lessee will immediately notify Lessor of any change
occurring in or to the Property, of a change in Lessee's address, or in any fact or circumstance warranted or represented by Lessee
to Lessor, or if any Event of Default occurs.
(j) Use of the neuter gender herein is for purposes of convenience only and shall be deemed to mean and include
the masculine or feminine gender whenever and wherever appropriate.
(k) The captions set forth herein are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
(I) Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns, where permitted
by this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day of in the year 2016.
Lessor: Government Capital Corporation
Witness Signature:
Authorized Signature
345 Miron Dr. Print Name:
Southlake, TX 76092
Print Title:
Lessee: City of Port Arthur
Witness Signature:
Brian McDougal, City Manager
444 4th Street Print Name:
Port Arthur, TX 77640
Print Title:
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 5
EXHIBIT A
DESCRIPTION OF PROPERTY
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Dated as of June 28, 2016
QTY DESCRIPTION
Refuse Vehicles and Equipment as follows:
Three (3) 2016 - 318 Automated Side Loader with HEIL DURAPACK - MACK LEU613
VIN # 1M2AUO4C3GM010209
VIN # 1M2AUO4CXGM010210
VIN # 1M2AUO4C1GM010211
Three (3) 2017 - 318 Automated Side Loader with HEIL DURAPACK - MACK LEU613
VIN # 1M2LR02C4HM001338
VIN # 1M2LR02C6HM001549
VIN # 1M2LRO2C2HM001550
PROPERTY LOCATION:
Operations Center
201 H.O. Mills Boulevard
Port Arthur, TX 77640
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 6
EXHIBIT B
>> SCHEDULE OF PAYMENTS & OPTION TO PURCHASE <<
Municipal Lease Purchase Agreement No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Government Capital Corporation and Lessee, City of Port Arthur
Schedule dated as of July 8, 2016
PMT PMT DATE TOTAL INTEREST PRINCIPAL OPTION TO PURCHASE
NO. MO. DAY YR PAYMENT PAID PAID after pmt on this line
1 2/15/2017 $369,289.77 $21,979.18 $347,310.59 $1,407,863.09
2 2/15/2018 $369,289.77 $28,577.61 $340,712.16 $1,066,026.65
3 2/15/2019 $369,289.77 $21,647.53 $347,642.24 $717,524.40
4 2/15/2020 $369,289.77 $14,576.49 $354,713.28 $362,226.36
5 2/15/2021 $369,289.77 $7,361.63 $361,928.14 $1.00
Grand Totals $1,846,448.85 $94,142.44 $1,752,306.41
Interest Rate: 2.034%
Accepted By Lessee:
Brian McDougal, City Manager
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 7
INCUMBENCY, INSURANCE, AND ESSENTIAL USE CERTIFICATES
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Dated as of June 28, 2016
I, Sherri Bellard, do hereby certify that I am the duly elected or appointed and acting City Secretary (Keeper of the
Records), of City of Port Arthur, a political subdivision or agency duly organized and existing under the laws of the State of Texas,
that I or my designee have custody of the records of such entity, and that, as of the date hereof, the individual(s) named below are
the duly elected or appointed officer(s) of such entity holding the offices) set forth opposite their respective name(s). I further
certify that (i) the signature(s) set opposite their respective name(s) and title(s) are their true and authentic signature(s), and (ii)
such officers have the authority on behalf of such entity to enter into that certain Texas Municipal Lease-Purchase Agreement dated
as of June 28, 2016, between such entity and Government Capital Corporation.
Name Title Signature
Brian McDougal City Manager
IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such entity hereto this day of
2016.
By Lessee:
Sherri Bellard, City Secretary
Lessee certifies that property and liability insurance, if applicable, have been secured in accordance with the Agreement and such
coverage will be maintained in full force for the term of the Agreement. "Lessor or its Assigns" should be designated as loss payee
until Lessee is notified, in writing, to substitute a new loss payee. The following information is provided about insurance—
(PLEASE FILL IN THE INFORMATION BELOW)
INSURANCE COMPANY/AGENT'S NAME:
INSURANCE COMPANY ADDRESS:
PHONE NUMBER:
POLICY NUMBER:
I, Brian McDougal, City Manager, of City of Port Arthur("Lessee"), hereby certify that the Equipment, to be leased to the undersigned
under the certain Lease Agreement, dated as of June 28, 2016, between such entity and Government Capital Corporation ("Lessor"),
will be used by the undersigned Lessee for the following purpose:
(PLEASE FILL OUT PRIMARY USE BELOW)
PRIMARY USE--
The undersigned hereby represents that the use of the Equipment is essential to its proper, efficient and economic operation.
IN WITNESS WHEREOF, I have set my hand this day of , 2016.
By Lessee:
Brian McDougal, City Manager
For Lessee: City of Port Arthur
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 8
TAX AND ARBITRAGE CERTIFICATE
TEXAS MUNICIPAL LEASE PURCHASE AGREEMENT NO.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Dated as of June 28, 2016
This Tax and Arbitrage Certificate is executed on this day of , 2016 by the
undersigned ("Lessee") and pertains to that equipment lease or financing agreement dated June 28, 2016,
as is more fully described above (the "Lease"). This Certificate is being issued pursuant to Section 148 of
the Internal Revenue Code of 1986, as amended (the "Code") and Treasury Regulation, Sections 1.141-1
through 1.141-15, 1.148-0 through 1.148-11, 1.149(d), 1.149(g)-1, 1.150-1 and 1.150-2 (the
"Regulations"). Lessee hereby agrees that: (a) proceeds derived from the issuance of the Lease shall
only be used to acquire equipment that has a governmental purpose and will not be used to acquire
equipment that will benefit any private business activity; (b) proceeds derived from the issuance of the
Lease shall never be invested in instruments yielding an interest rate return in excess of the rate of
interest set forth in the Lease; (c) proceeds derived from the issuance of the Lease shall be fully and
completely expended for their anticipated purpose within at least one year from the date of the Lease; (d)
proceeds derived from the issuance of the Lease shall not be used to finance any acquisition other than
the purchase of that equipment identified in the Lease along with related costs and costs of issuance; (e)
the repayment of the Lease is not guaranteed directly or indirectly by the federal government; (f) Lessee
shall execute a Form 8038-G and allow for such to be filed of record with the Internal Revenue Service;
(g) the Lease is in registered form and that the Lessee shall maintain a record regarding the ownership of
the Lease and the payment of all sums payable under the Lease; (h) the proceeds derived from the
issuance of the Lease are not in excess of the sum required in order to acquire the property that is the
subject of the Lease and to fund the costs associated with the issuance of the Lease; (i) Lessee does not
currently contemplate the sale or disposition of the equipment that is the subject of the Lease prior to the
expiration of the Lease's payment terms; and (j) the Lessee shall otherwise abide by all applicable rules
and regulations related to the issuance of the Lease.
To the best of the knowledge and belief of the undersigned, the expectations as set forth above,
are reasonable; and there are no present facts, estimates, and circumstances which would change the
foregoing expectations. 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.
Executed on the date first referenced above.
Lessee: City of Port Arthur
Brian McDougal, City Manager
444 4th Street
Port Arthur,TX 77640
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT— Page 9
[to be retyped on letterhead of lessee's counsel]
Government Capital Corporation
Attention: Documentation Department
345 Miron Drive
South lake, TX 76092
RE: Texas Municipal Lease-Purchase Agreement No.7418 (the "Agreement")
Dear Lessor,
I have acted as Counsel to City of Port Arthur with respect to that certain Texas Municipal Lease-Purchase
Agreement No.7418, by and between Government Capital Corporation as Lessor and City of Port Arthur as
Lessee. I have reviewed the Agreement and such other documents, records and certificates of Lessee and
appropriate public officials as I have deemed relevant and am of the opinion that:
1. The Lessee is a political subdivision or agency of the State of Texas with the requisite power
and authority to incur obligations, the interest on which is exempt from taxation by virtue of
Section 103(a) of the Internal Revenue Code of 1986;
2. The execution, delivery and performance by the Lessee of the Agreement have been duly
authorized by all necessary action on the part of the Lessee; and
3. The Agreement constitutes a legal, valid and binding obligation of the Lessee enforceable in
accordance with its terms.
4. The above opinions may be relied upon by the Lessee, Lessor, or its Assigns.
Sincerely,
Attorney at Law
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 10
RESOLUTION #
A RESOLUTION REGARDING A LEASE PURCHASE AGREEMENT FOR THE PURPOSE OF FINANCING
"REFUSE VEHICLES":
WHEREAS, City of Port Arthur desires to enter into that certain Lease-Purchase Agreement No. 7418, by
and between City of Port Arthur and Government Capital Corporation, for the purpose of financing
"Refuse Vehicles": The City desires to designate this Agreement as a "qualified tax exempt obligation"
of the City for the purposes of Section 265 (b) (3) of the Internal Revenue Code of 1986, as amended.
The City desires to designate Brian McDougal, City Manager, as an authorized signer of the Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF THE CITY OF PORT ARTHUR:
Section 1. That the City enters into a Lease Purchase Agreement with Government Capital
Corporation for the purpose of financing "Refuse Vehicles';
Section 2. That the Lease Purchase Agreement dated as of June 28, 2016, by and between the
City and Government Capital Corporation is designated by the City of Port Arthur as a "qualified tax
exempt obligation" for the purposes of Section 265 (b) (3) of the Internal Revenue Code of 1986, as
amended.
Section 3. That the City of Port Arthur designates Brian McDougal, City Manager, as an
authorized signer of the Lease Purchase Agreement No. 7418 by and between the City of Port Arthur and
Government Capital Corporation.
PASSED AND APPROVED by the Board of the City of Port Arthur in a meeting held on the day of
, 2016.
Lessee: City of Port Arthur Witness Signature
Deloris "Bobbie" Prince, Mayor Sherri Bellard, City Secretary
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 11
ESCROW AGREEMENT
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Tax ID # 74-6001885 Dated as of June 28, 2016
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of June 28, 2016 ("Agreement Date"), by and among
Government Capital Corporation ("Lessor), City of Port Arthur("Lessee") and ("Agent").
WITNESSETH:
WHEREAS, Lessor and Lessee have entered into a certain Texas Municipal Lease-Purchase Agreement dated as of June 28, 2016
(the "Lease") pursuant to which the property more particularly described therein (the "Equipment") will be leased to the Lessee under the
terms stated in the Lease;
WHEREAS, Lessor and Lessee desire to make funding arrangements for the acquisition of the Equipment, and Agent agrees to serve
as escrow agent for such funding and acquisition;
NOW THEREFORE, in consideration of the mutual agreements and covenant herein contained and for other valuable consideration,
the parties hereby agree as follows:
1. Agent shall undertake the duties and obligations of escrow agent as set forth in this Agreement. Agent shall not be deemed to be a party
to the Lease.
2. Lessor has delivered to Agent the sum of$1,730,673.00 ("Escrow Amount") for deposit by Agent in the Escrow Account(the "Fund"). The
Fund will be administered by Agent pursuant to the terms of this Agreement.
3. Deposits in the Fund shall be used to pay for the acquisition of the Equipment. The Equipment may be acquired as individual items or as
groups of items. Agent shall make disbursements from the Fund in payment for the acquisition of each item or group of items of the
Equipment promptly upon receipt of a properly executed Escrow Disbursement Request Form, in the form attached hereto as"Schedule 1",
for that portion of the acquisition of the Equipment for which payment is requested. Upon full acquisition of an item or group of items of the
Equipment, any remaining cost of such item or group of items shall be disbursed promptly by the Agent upon receipt of a properly executed
Acceptance Certificate and a corresponding Escrow Disbursement request Form in the form attached hereto as"Schedule 1", for that portion
of the Equipment for which payment is requested. Payment by Agent shall be to the payee shown on the Escrow Disbursement request Form.
4. Agent will invest the Fund, as specified by Lessor, in general obligations of the United States or in obligations fully insured by the United
States or in certificates of deposit of a bank which is either fully insured by an agency of the federal government or fully collateralized by such
federal or federally guaranteed obligations, or in no-load money market mutual funds registered with and regulated by the Securities and
Exchange Commission that includes in their investment objectives the maintenance of a stable net asset value of$1 for each share, or Money
Market Mutual Funds registered under the Investment Act of 1940. Agent will retain in the Fund all earnings from investment of the Fund until
termination of the Fund pursuant to Section 5 hereof.
5. Upon execution of one or more Acceptance Certificates by Lessee and payment of acquisition costs by Agent for all the Equipment, this
Agreement and the Funds shall terminate, and Agent shall transfer to Lessor all remaining sums in the Fund. If not terminated earlier, this
Agreement and the Fund shall terminate on June 28, 2017 ("Termination Date"). In this latter event, interest accrued pursuant to investment
of the Fund under the terms of Section 4 hereof and all remaining principal in the Fund shall be transferred by Agent to Lessor; "Exhibit A"
attached to the Lease shall thereupon be revised to delete any non-acquired portions of the Equipment and to substitute an amended
amortization payment schedule to reflect the reduced acquisition costs.
6. Lessor and Lessee may by written agreement between themselves remove the Agent, at any time and for any reason, and appoint a
successor escrow agent. Such removal shall not be effective until thirty (30) days after written notice thereof if provided to Agent.
7. Agent may at any time and for any reason resign as escrow agent by giving written notice to Lessor and Lessee of its intention to resign
and of the proposed date of resignation, which date shall be not less than thirty (30) days after giving Lessee and Lessor written notice of
intent to resign, nor less than thirty (30) days after being appointed by Lessor and Lessee.
8. Agent shall have no obligation under the terms of this Agreement to make any disbursement except from the Fund. Agent makes no
warranties or representations as to the Equipment or as to performance of the obligations of Lessor or Lessee under this Agreement or the
Lease.
9. Agent shall be entitled to rely in good faith upon any documents signed by a party hereto and shall have no duty to investigate the
veracity of such documents. Agent (i) may assume that any person giving notice pursuant to the terms hereof is authorized to do so and (ii)
shall not be liable for good faith reliance thereon.
10. To the limited extent required to perfect the security interest granted by Lessee to Lessor in the cash and negotiable instrument from
time to time comprising the Fund, Lessor hereby appoints the Agent as its security agent, and the Agent hereby accepts the appointment as
security agent,and agrees to hold physical possession of such cash negotiable instruments on behalf of Lessor.
11. This Agreement may be amended by written agreement executed by all the parties.
12. This Agreement may be executed in several counterparts, each of which shall be an original.
IN WITNESS WHEREOF,the parties have executed this Agreement as of the date first written above.
LESSOR: Government Capital Corporation
BY:
Authorized Signer
LESSEE: City of Port Arthur
BY:
Brian McDougal,City Manager
AGENT:
BY:
Agent Rep,Agent Rep Title
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 12
ESCROW AGREEMENT
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Tax ID # 74-6001885 Dated as of June 28, 2016
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of June 28, 2016 ("Agreement Date"), by and among
Government Capital Corporation ("Lessor"), Port Arthur("Lessee") and ("Agent").
WITNESSETH:
WHEREAS, Lessor and Lessee have entered into a certain Texas Municipal Lease-Purchase Agreement dated as of June 28, 2016
(the "Lease") pursuant to which the property more particularly described therein (the "Equipment") will be leased to the Lessee under the
terms stated in the Lease;
WHEREAS, Lessor and Lessee desire to make funding arrangements for the acquisition of the Equipment, and Agent agrees to serve
as escrow agent for such funding and acquisition;
NOW THEREFORE, in consideration of the mutual agreements and covenant herein contained and for other valuable consideration,
the parties hereby agree as follows:
1. Agent shall undertake the duties and obligations of escrow agent as set forth in this Agreement. Agent shall not be deemed to be a party
to the Lease.
2. Lessor has delivered to Agent the sum of$1,730,673.00 ("Escrow Amount") for deposit by Agent in the Escrow Account (the "Fund"). The
Fund will be administered by Agent pursuant to the terms of this Agreement.
3. Deposits in the Fund shall be used to pay for the acquisition of the Equipment. The Equipment may be acquired as individual items or as
groups of items. Agent shall make disbursements from the Fund in payment for the acquisition of each item or group of items of the
Equipment promptly upon receipt of a properly executed Escrow Disbursement Request Form, in the form attached hereto as"Schedule 1",
for that portion of the acquisition of the Equipment for which payment is requested. Upon full acquisition of an item or group of items of the
Equipment, any remaining cost of such item or group of items shall be disbursed promptly by the Agent upon receipt of a properly executed
Acceptance Certificate and a corresponding Escrow Disbursement request Form in the form attached hereto as"Schedule 1", for that portion
of the Equipment for which payment is requested. Payment by Agent shall be to the payee shown on the Escrow Disbursement request Form.
4. Agent will invest the Fund, as specified by Lessor, in general obligations of the United States or in obligations fully insured by the United
States or in certificates of deposit of a bank which is either fully insured by an agency of the federal government or fully collateralized by such
federal or federally guaranteed obligations, or in no-load money market mutual funds registered with and regulated by the Securities and
Exchange Commission that includes in their investment objectives the maintenance of a stable net asset value of$1 for each share, or Money
Market Mutual Funds registered under the Investment Act of 1940. Agent will retain in the Fund all earnings from investment of the Fund until
termination of the Fund pursuant to Section 5 hereof.
5. Upon execution of one or more Acceptance Certificates by Lessee and payment of acquisition costs by Agent for all the Equipment, this
Agreement and the Funds shall terminate, and Agent shall transfer to Lessor all remaining sums in the Fund. If not terminated earlier, this
Agreement and the Fund shall terminate on June 28, 2017 ("Termination Date"). In this latter event, interest accrued pursuant to investment
of the Fund under the terms of Section 4 hereof and all remaining principal in the Fund shall be transferred by Agent to Lessor; "Exhibit A"
attached to the Lease shall thereupon be revised to delete any non-acquired portions of the Equipment and to substitute an amended
amortization payment schedule to reflect the reduced acquisition costs.
6. Lessor and Lessee may by written agreement between themselves remove the Agent, at any time and for any reason, and appoint a
successor escrow agent. Such removal shall not be effective until thirty(30) days after written notice thereof if provided to Agent.
7. Agent may at any time and for any reason resign as escrow agent by giving written notice to Lessor and Lessee of its intention to resign
and of the proposed date of resignation, which date shall be not less than thirty (30) days after giving Lessee and Lessor written notice of
intent to resign, nor less than thirty (30) days after being appointed by Lessor and Lessee.
8. Agent shall have no obligation under the terms of this Agreement to make any disbursement except from the Fund. Agent makes no
warranties or representations as to the Equipment or as to performance of the obligations of Lessor or Lessee under this Agreement or the
Lease.
9. Agent shall be entitled to rely in good faith upon any documents signed by a party hereto and shall have no duty to investigate the
veracity of such documents. Agent (i) may assume that any person giving notice pursuant to the terms hereof is authorized to do so and (ii)
shall not be liable for good faith reliance thereon.
10. To the limited extent required to perfect the security interest granted by Lessee to Lessor in the cash and negotiable instrument from
time to time comprising the Fund, Lessor hereby appoints the Agent as its security agent, and the Agent hereby accepts the appointment as
security agent,and agrees to hold physical possession of such cash negotiable instruments on behalf of Lessor.
11. This Agreement may be amended by written agreement executed by all the parties.
12.This Agreement may be executed in several counterparts,each of which shall be an original.
IN WITNESS WHEREOF,the parties have executed this Agreement as of the date first written above.
LESSOR: Government Capital Corporation
BY:
Authorized Signer
LESSEE: City of Port Arthur
BY:
Brian McDougal,City Manger
AGENT:
BY:
Agent Rep,Agent Rep Title
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 13
ESCROW AGREEMENT
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Tax ID # 74-6001885 Dated as of June 28, 2016
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of June 28, 2016 ("Agreement Date"), by and among
Government Capital Corporation ("Lessor"), City of Port Arthur("Lessee") and ("Agent").
WITNESSETH:
WHEREAS, Lessor and Lessee have entered into a certain Texas Municipal Lease-Purchase Agreement dated as of June 28, 2016
(the "Lease") pursuant to which the property more particularly described therein (the "Equipment") will be leased to the Lessee under the
terms stated in the Lease;
WHEREAS, Lessor and Lessee desire to make funding arrangements for the acquisition of the Equipment, and Agent agrees to serve
as escrow agent for such funding and acquisition;
NOW THEREFORE, in consideration of the mutual agreements and covenant herein contained and for other valuable consideration,
the parties hereby agree as follows:
1. Agent shall undertake the duties and obligations of escrow agent as set forth in this Agreement. Agent shall not be deemed to be a party
to the Lease.
2. Lessor has delivered to Agent the sum of$1,730,673.00 ("Escrow Amount") for deposit by Agent in the Escrow Account(the "Fund"). The
Fund will be administered by Agent pursuant to the terms of this Agreement.
3. Deposits in the Fund shall be used to pay for the acquisition of the Equipment. The Equipment may be acquired as individual items or as
groups of items. Agent shall make disbursements from the Fund in payment for the acquisition of each item or group of items of the
Equipment promptly upon receipt of a properly executed Escrow Disbursement Request Form, in the form attached hereto as "Schedule 1",
for that portion of the acquisition of the Equipment for which payment is requested. Upon full acquisition of an item or group of items of the
Equipment, any remaining cost of such item or group of items shall be disbursed promptly by the Agent upon receipt of a properly executed
Acceptance Certificate and a corresponding Escrow Disbursement request Form in the form attached hereto as"Schedule 1", for that portion
of the Equipment for which payment is requested. Payment by Agent shall be to the payee shown on the Escrow Disbursement request Form.
4. Agent will invest the Fund, as specified by Lessor, in general obligations of the United States or in obligations fully insured by the United
States or in certificates of deposit of a bank which is either fully insured by an agency of the federal government or fully collateralized by such
federal or federally guaranteed obligations, or in no-load money market mutual funds registered with and regulated by the Securities and
Exchange Commission that includes in their investment objectives the maintenance of a stable net asset value of$1 for each share, or Money
Market Mutual Funds registered under the Investment Act of 1940. Agent will retain in the Fund all earnings from investment of the Fund until
termination of the Fund pursuant to Section 5 hereof.
5. Upon execution of one or more Acceptance Certificates by Lessee and payment of acquisition costs by Agent for all the Equipment, this
Agreement and the Funds shall terminate, and Agent shall transfer to Lessor all remaining sums in the Fund. If not terminated earlier, this
Agreement and the Fund shall terminate on June 28, 2017 ("Termination Date"). In this latter event, interest accrued pursuant to investment
of the Fund under the terms of Section 4 hereof and all remaining principal in the Fund shall be transferred by Agent to Lessor; "Exhibit A"
attached to the Lease shall thereupon be revised to delete any non-acquired portions of the Equipment and to substitute an amended
amortization payment schedule to reflect the reduced acquisition costs.
6. Lessor and Lessee may by written agreement between themselves remove the Agent, at any time and for any reason, and appoint a
successor escrow agent. Such removal shall not be effective until thirty(30) days after written notice thereof if provided to Agent.
7. Agent may at any time and for any reason resign as escrow agent by giving written notice to Lessor and Lessee of its intention to resign
and of the proposed date of resignation, which date shall be not less than thirty (30) days after giving Lessee and Lessor written notice of
intent to resign, nor less than thirty (30) days after being appointed by Lessor and Lessee.
8. Agent shall have no obligation under the terms of this Agreement to make any disbursement except from the Fund. Agent makes no
warranties or representations as to the Equipment or as to performance of the obligations of Lessor or Lessee under this Agreement or the
Lease.
9. Agent shall be entitled to rely in good faith upon any documents signed by a party hereto and shall have no duty to investigate the
veracity of such documents. Agent (i) may assume that any person giving notice pursuant to the terms hereof is authorized to do so and (ii)
shall not be liable for good faith reliance thereon.
10. To the limited extent required to perfect the security interest granted by Lessee to Lessor in the cash and negotiable instrument from
time to time comprising the Fund, Lessor hereby appoints the Agent as its security agent, and the Agent hereby accepts the appointment as
security agent,and agrees to hold physical possession of such cash negotiable instruments on behalf of Lessor.
11. This Agreement may be amended by written agreement executed by all the parties.
12. This Agreement may be executed in several counterparts,each of which shall be an original.
IN WITNESS WHEREOF,the parties have executed this Agreement as of the date first written above.
LESSOR: Government Capital Corporation
BY:
Authorized Signer
LESSEE: City of Port Arthur
BY:
Brian McDougal,City Manager
AGENT:
BY:
Agent Rep,Agent Rep Title
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 14
Escrow Disbursement Request Form—Instruction Sheet
* * * THE FOLLOWING FORM IS TO PAY YOUR
VENDOR FROM THE ESCROW ACCOUNT* * *
To process the payment to your Vendor, please make sure to:
1) Print or make copies of the blank Escrow Disbursement Request Form if there are multiple
disbursements.
2) Complete an Escrow Disbursement Request Form for each Vendor.
3) Attach a copy of your Vendor's Invoice(s).
4) Have the Authorized Signer sign the Disbursement Form in BOTH places as well as date the form at the
bottom.
5) You can fax or e-mail the Disbursement Form to start/begin the disbursement process; however, please
send the original by regular mail to avoid delays.
WHEN YOU ARE READY TO PAY YOUR VENDOR, PLEASE FOLLOW THE ABOVE PROCEDURES,
AND SEND FORMS TO:
Government Capital Corporation
Attn.: Doc. Dept.
345 Miron Drive
Southlake, TX 76092
Phone: 817-421-5400
Fax: 817-251-3208
docdept@govcap.com
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 15
ESCROW AGREEMENT - SCHEDULE 1
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT No.7418 (THE "AGREEMENT")
BY AND BETWEEN
Lessor, Government Capital Corporation and Lessee, City of Port Arthur
Dated as of June 28, 2016
ESCROW DISBURSEMENT REQUEST FORM
, acting as escrow agent (the "Agent") under the Escrow Agreement dated as of June
28, 2016 (Escrow Date), by and among the Agent, Government Capital Corporation as Lessor and City of Port Arthur as Lessee, is
hereby requested to pay to the person or corporation designated below as Payee the sum set forth below in payment of the
acquisition and installation costs of the equipment described below. The amount shown below is due and payable under the invoice
of Payee with respect to the described equipment and has not formed the basis any prior request for payment.
PAYEE:
AMOUNT:
DESCRIPTION OF EQUIPMENT:
INVOICE # DATED:
Indicate Method for Payment Disbursement:
Overnight Check*** Regular Mail Check Wire Funds
Mailing Address: Wire Instructions:
[***Please note that there might be a fee charged for overnight delivery. This fee will be
deducted from the Escrow Balance before disbursement is made.]
Lessee: City of Port Arthur
By:
Brian McDougal, City Manger
Lessor: Government Capital Corporation or its Assigns
By:
Authorized Signer
ACCEPTANCE CERTIFICATE
City of Port Arthur as Lessee under that certain Texas Municipal Lease-Purchase Agreement dated as of June 28, 2016 ("Agreement
Date") (the "Lease"), hereby acknowledges receipt in good condition of all the equipment described on the attached Vendor
Invoice(s), hereby accepts such equipment and hereby certifies that Lessor has fully and satisfactorily performed all covenants and
conditions to be performed by it under the Lease with regard to such equipment, that such equipment is fully insured in accordance
with Section 10 of the Lease and that such equipment constitutes all or a portion of the Equipment as that term as defined in the
Lease.
Date: , 2016.
By Lessee: City of Port Arthur
Brian McDougal, City Manager
For Lessee: City of Port Arthur
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 16
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev.September 2011) ►Under Internal Revenue Code section 149(e) OMB No.1545-0720
►See separate instructions.
Department of the Treasury Caution:If the issue price is under$100,000,use Form 8038-GC.
Internal Revenue Service
Part I Reporting Authority If Amended Return, check here ► ❑
1 Issuer's name 2 Issuer's employer identification number(EIN)
City of Port Arthur 74-6001885
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a
Jennifer Edwards, Pretreatment Coordinator 409-983-8115
4 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 5 Report number(For IRS Use Only)
P.O. Box 1089 3
6 City,town,or post office,state,and ZIP code 7 Date of issue
Port Arthur,TX 77641-1089
8 Name of issue 9 CUSIP number
Lease Purchase Agreement No.7418 None
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown on 10a
Brian McDougal,City Manager 409-983-8115
Part II Type of Issue (enter the issue price). See the instructions and attach schedule.
11 Education 11
12 Health and hospital 12
13 Transportation 13
14 Public safety 14
15 Environment(including sewage bonds) 15
16 Housing 16
17 Utilities 17
18 Other. Describe ► Refuse Vehicles and Equipment 18 $1,752,306 41
19 If obligations are TANs or RANs, check only box 19a ► ❑
If obligations are BANs, check only box 19b ► ❑
20 If obligations are in the form of a lease or installment sale, check box ► ❑✓
Part III Description of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (e)Yield
price at maturity average maturity
21 02/15/2021 $ 1,752,306.41 $ N/A 3.0247 years 2.034 %
Part IV Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest 22 N/A
23 Issue price of entire issue(enter amount from line 21, column (b)) 23 $1,752,306 41
24 Proceeds used for bond issuance costs(including underwriters'discount) . . 24 $21,633 41
25 Proceeds used for credit enhancement 25 N/A
26 Proceeds allocated to reasonably required reserve or replacement fund 26 N/A
27 Proceeds used to currently refund prior issues 27 N/A
28 Proceeds used to advance refund prior issues 28 N/A
29 Total (add lines 24 through 28) 29 $21,633 41
30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . 30 $1,730,673 00
Part V Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► N/A years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . ► N/A years
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) ► N/A
34 Enter the date(s)the refunded bonds were issued►(MM/DD/YYYY)
For Paperwork Reduction Act Notice,see separate instructions. Cat.No.63773S Form 8038-G(Rev.9-2011)
Form 8038-G(Rev.9-2011) Page 2
Part VI Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC)(see instructions) 36a
b Enter the final maturity date of the GIC►
c Enter the name of the GIC provider►
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units 37
38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box► ❑and enter the following information:
b Enter the date of the master pool obligation►
c Enter the EIN of the issuer of the master pool obligation►
d Enter the name of the issuer of the master pool obligation►
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III)(small issuer exception), check box . . ► ❑✓
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑
41a If the issuer has identified a hedge, check here► ❑ and enter the following information:
b Name of hedge provider►
c Type of hedge►
d Term of hedge►
42 If the issuer has superintegrated the hedge, check box ► ❑
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations(see instructions),check box 0,-
44
44 If the issuer has established written procedures to monitor the requirements of section 148,check box ► ❑
45a If some portion of the proceeds was used to reimburse expenditures, check here► ❑ and enter the amount
of reimbursement ►
b Enter the date the official intent was adopted►
Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge
Signature and belief,they are true,correct,and complete.I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary to
and process this return,to the person that I have authorized above.
Consent ' ' Brian McDougal, City Manager
Signature of issuer's authorized representative Date Type or print name and title
Paid Print/Type preparer's name Preparer's signature Date check ❑ if PTIN
Preparer self-employed
Use Only Firm's name ► Firm's EIN ►
Firm's address ► Phone no.
Form 8038-G(Rev.9-2011)
0)11
GOVERNMENT CAPITAL,
CORPORATION
345 MIRON DRIVE SOUTH LAKE,TEXAS 76092 817 421 5400
WWW.GOVCAP.COM
As you may be aware, during the 84th Regular Legislative Session, the Texas Legislature passed House Bill
1295 ("HB1295") which creates a new reporting process effective for governmental contracts executed on
and after January 1, 2016. Pursuant to the rules promulgated by the Texas Ethics Commission ("TEC"),
GCC is required to submit the enclosed "Certificate of Interest Parties" form (Form 1295). This form has
been signed and notarized by GCC and as required under the rules, has also been filed electronically with
the TEC.
Under the TEC's rules, you are required to acknowledge receipt of this Form 1295 on the TEC's
website (https://www.ethics.state.tx.us/whatsnew/elf info form1295.htm). At this web site, you will find
further background on HB1295 and your reporting responsibilities, including instructions on how to log in
to the TEC's web portal, frequently asked questions and on-line tutorials. We encourage you to log on and
acknowledge receipt of the attached form at your earliest convenience. Pursuant to the TEC's rules, you
are required to file the electronic acknowledgment within 30 days after the date of the financing contract.
Should you have further questions about HB1295, we encourage you to contact a representative at GCC
or your legal counsel.
TEXAS MUNICIPAL LEASE-PURCHASE AGREEMENT- Page 17
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
1 of 1
Complete Nos.1-4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos.1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING
1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number:
of business. 2016-68874
Government Capital Corporation
Southlake,TX United States Date Filed:
2 Name of governmental entity or state agency that is a party to the contract for which the form is 06/10/2016
being filed.
City of Port Arthur Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a
description of the services,goods,or other property to be provided under the contract.
2016-7418
Public Property Finance Act Contract for Various Personal Property
4 Nature of interest
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling I Intermediary
Temple,Tim Southlake,TX United States X
Shirey, Stewart Southlake,TX United States X
King, Ed Southlake,TX United States X
Lerner, Kevin Southlake,TX United States X
5 Check only if there is NO Interested Party. ❑
I 1 ` I swear,or affirm,under penalty of perjury,that the above disclosure is true and correct.
ANN SCHMIDT $ m
, My Commission Expires
� .o,4 . April 29,2019
lG
Signature of authoriz:. agent contracting business entity
AFFIX NOTARY STAMP/SEAL ABOVE Vet1:0
1 ,,��Sworn to and subscribed before me,by the said I`�"—'— this the day�ll� ,
())
20 l+to,to certify which,witness my hand and seal of office.
r
GA/A Au ...4 ' # I A143WirAk .. --f POrOWS-1/46F--.
Signature of•fficer administering oath Printed name of officer administering lath Title of officer administering oath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.1021
SIGNING INSTRUCTION SHEET
These documents have been prepared and are being provided with the intent of a smooth and
timely funding; however, by providing these documents an irrevocable offer to provide funding
for this transaction is not represented until such time as adequate financial information is
provided and loan committee approval is granted.
IF YOU HAVE ANY QUESTIONS, PLEASE CALL THE DOCUMENTATION DEPARTMENT AT 817-421-5400.
Enclosed or attached please find the documents for the financing of your current needs. Please sign in blue ink the
following documents and witness as indicated.
Closing Date currently scheduled for July 8, 2016
❑ FINANCE CONTRACT, PROMISSORY NOTE, OR LEASE AGREEMENT
Please read and understand the document. The document requires the signature and date of an authorized
individual with the signature witnessed.
EXHIBIT "B"
Please review and verify that the information contained in this document is correct.
INCUMBENCY CERTIFICATE
The authorized individual needs to sign this document, in front of a witness, who is either the "Keeper of the
Records", Secretary of the Board, Clerk of the Board, City Secretary, or other Administrative Official.
INSURANCE CERTIFICATE (if applicable)
Please provide current Insurance Information, such as, Company name, Phone Number, Policy Number, etc. If you
are Self-Insured, please indicate and provide a Self Insurance Certificate.
CERTIFICATE OF ACCEPTANCE (if applicable)
If equipment has been received please sign and date this Certificate. If equipment has not been received please do
not sign, but complete the bottom portion of the Certificate.
ATTORNEY'S OPINION
Provided in your doc package, is an Attorney's Opinion letter. This letter needs to be retyped on your attorney's
letterhead paper. Urge your attorney to call us with any questions, or comments.
RESOLUTION
The Resolution authorizes the actual financing and the Authorized Signer's authority to sign the documents. Please
sign as indicated and date the day of Board or Council action.
ESCROW AGREEMENT (if applicable)
Sign all three originals as indicated. An "Agent" will be determined upon our receipt of the documents.
EXHIBIT A AND ATTACHMENT 1 /PAYMENT REQUEST/ ACCEPTANCE CERTIFICATE (if applicable)
When you are ready to pay your vendor, please complete and return this form to our Documentation Department
along with the vendor invoice. If equipment has not been received, please keep this form, so we can proceed with
the paperwork. Then send the Payment Request/Acceptance Certificate Form when equipment is received.
8038 FORM
An 8038 is required by the IRS. Please sign and date the form. We will file on your behalf.
ADVANCE PAYMENT (if applicable)
If applicable, include any Advance Payment, "At Signing", or Fee as invoiced, and return your payment along with
the signed documents.
PLEASE RETURN ALL ORIGINAL DOCUMENTS AND ANY PAYMENTS DUE TO:
GOVERNMENT CAPITAL CORPORATION
Attn: Documentation Department
345 Miron Drive
Southlake, TX 76092
Ph: 817-421-5400