HomeMy WebLinkAboutR-2010-076 TD Equipment Finance Fire truck RESOLUTION NO.2010-076
A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA
AUTHORIZING SEPARATE LEASE PURCHASE FINANCINGS FOR EACH
OF TWO FIRE TRUCKS AND EQUIPMENT RELATED TO EACH FIRE
TRUCK; APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A LEASE PURCHASE AGREEMENT AND
THE EXHIBITS ATTACHED TO THEM IN CONNECTION WITH THE
SEPARATE LEASE PURCHASE FINANCING OF EACH FIRE TRUCK AND
THE EQUIPMENT RELATED TO THEM; DESIGNATING THE LEASE
PURCHASE AGREEMENTS AS "QUALIFIED TAX EXEMPT
OBLIGATIONS;" GRANTING LIMITED GENERAL AUTHORITY WITH
RESPECT TO THEM; PROVIDING FOR CONFLICTS; FURTHER, AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS,the City of Dania Beach, Florida(the "City") has determined that a true and
very real need exists for the acquisition of two fire trucks and equipment related to each fire
truck(collectively, the "Fire Equipment"); and
WHEREAS, the City has already received one fire truck and its related equipment and
has placed a purchase order for the second fire trick and its related equipment (each fire truck
and its related equipment are referred to herein as a"Component of the Fire Equipment"); and
WHEREAS, the City has previously requested and received proposals for the financing
of the Fire Equipment; and
WHEREAS, the proposals submitted by TD Equipment Finance, Ina ("TD") to the City
for the financing of the Fire Equipment, which is attached as Exhibit B to this Resolution,
contained the terms most advantageous to the City; and
WHEREAS, to better coordinate the timing for obtaining financing with the delivery of
each Component of the Fire Equipment, the City and TD have agreed to split the proposed lease
purchase financing into two separate transactions; and
WHEREAS, the City contemplates that (i) the lease purchase financing for the
Component of the Fire Equipment already received by the City will be closed by May 15, 2010
and (ii) the lease purchase financing for the Component of the Fire Equipment yet to be received
by the City will be closed as contemporaneously as possible with the delivery of such equipment
to the City; and
WHEREAS, the City Commission of the City now desires to authorize and approve in
connection with the lease purchase financing of each Component of the Fire Equipment, (i) the
form of the Lease Purchase Agreement to be entered into by and between the City and TD (the
"Lease Agreement") and the exhibits attached thereto (collectively, the "Financing Documents"),
(ii) the execution and delivery of the Financing Documents in substantially the forms attached
hereto as Exhibit A with such terns as are necessary to properly reflect the Component of the
Fire Equipment being financed and the terms of TD's proposal and (iii) additional limited
general authority; and
WHEREAS, the City Commission does not reasonably anticipate that the amount of
qualified tax-exempt obligations to be issued by the City in the calendar year ending December
31, 2010,will exceed$30,000,000.00;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF DANIA BEACH, FLORIDA, that:
Section 1. Authority for Resolution. This Resolution is adopted pursuant to Article
VIII, Section 2, of the Constitution of the State of Florida and Chapter 166, Florida Statutes,
(collectively, the "Act").
Section 2. Definitions. As used herein:
"City" means the City of Dania Beach, Florida.
"City Manager" means the City Manager of the City or his designee.
"Clerk" means the Clerk of the City or her designee.
"Finance Director" means the Finance Director of the City.
"Mayor" means the Mayor of the City or in the Mayor's absence or unavailability the
Vice Mayor.
Section 3. Findings and Awards.
(A) The findings and declarations of the City contained in the above
WHEREAS clauses are hereby incorporated as a part of this Resolution.
B It is in the best interest of City and its inhabitants to purchase the Fire
( ) Y
Equipment and to obtain the financing therefor at the times indicated above.
(C) It is hereby ascertained, determined and declared that in light of prevailing
and anticipated market conditions, it is in the best interest of the City to enter into a separate
Lease Agreement with TD for each Component of the Fire Equipment, upon the satisfaction of
the conditions set forth in Section 4 hereof.
2 RESOLUTION#2010-076
Section 4. Authorization of Financing Documents. The forms of the Financing
Documents attached hereto as Exhibit A are hereby approved. The City Manager is hereby
authorized to execute and deliver Financing Documents for the lease purchase financing of each
Component of the Fire Equipment, in substantially the forms attached hereto, with such terms as
are necessary to properly reflect the Component of the Fire Equipment being financed and the
terms of TD's proposal, and with such additions, deletions and modifications as shall be
approved by the City Manager. The City Manager's execution thereof shall evidence approval
of any such additions, deletions and modifications thereto. Notwithstanding the foregoing, the
terms of the lease purchase financings for the Fire Equipment shall be in an aggregate principal
amount of not to exceed $1,895,599.00, each for a term of ten (10) years and bearing a fixed rate
of interest calculated using the formula provided in TD's proposal attached hereto as Exhibit B
and in no event exceeding the maximum interest rate allowed under Florida law.
Section 5. Additional Authorizations Concerning the Financing Documents. The
City Manager, the Mayor, the Clerk and the Finance Director and such other officers and
employees of the City as may be designated by the City Commission, are each designated as
agents of the City in connection with the execution and delivery of Financing Documents in
connection with the lease purchase financing of each Component of the Fire Equipment, and are
authorized and empowered, collectively or individually, to take all action and steps and to
execute all instruments, documents and contracts on behalf of the City that are necessary or
desirable in connection with the execution and delivery of the Financing Documents and which
are specifically authorized or are not inconsistent with the terms and provisions of this
Resolution or any action relating to the transaction contemplated hereunder. Such officers and
those so designated are hereby charged with the responsibility for executing the Financing
Documents and financing the Fire Equipment.
Section 6. Bank Oualitied. The City hereby designates both of the Lease Agreements
to be executed and delivered in connection with the lease purchase financing of each Component
of the Fire Equipment as "qualified tax-exempt obligations" within the meaning of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City and any
subordinate entities of the City and any issuer of"tax-exempt" debt that issues "on behalf of the
City do not reasonably expect during the calendar year ending December 31, 2010 to issue more
than $30,000,000 of"tax-exempt" obligations including the Lease Agreements, exclusive of any
3 RESOLUTION#2010-076
private activity bonds as defined in Section 141(a) of the Code (other than qualified 501(c)(3)
bonds as defined in Section 145 of the Code).
Section 7. Prerequisites Performed. The City has performed all acts, conditions, and
things relating to the acquisition of the Fire Equipment as are required by the Constitution and
Laws of the State of Florida, and the Charter and Code of Ordinance of the City.
Section 8. Severability. If any provision of this Resolution shall be held or deemed to
be or shall, in fact, be illegal, inoperative or unenforceable in any context, the same shall not
affect any other provision herein or render any other provision (or such provision in any other
context) invalid, inoperative or unenforceable to any extent whatever.
Section 9. Repealer. All resolutions of the City or parts thereof in conflict herewith, if
any, are hereby repealed to the extent of such conflict.
Section 10. Effective Date. This Resolution shall be in force and take effect immediately
upon its passage and adoption.
PASSED and ADOPTED on May 11, 2010.
C. K. M L
MAYOR-COMMISSIONER
pRD S F/qST
ATTEST: e'at
CA
LOUISE STILSON, CMC
CITY CLERK ,y
ATED 19"
n
APPROVED AS T E FORM AND CORRECTNESS:
THOMAS J. ANSB O
CITY ATTORNEY
4 RESOLUTION#2010-076
EXHIBIT A
LEASE PURCHASE AGREEMENT AND EXHIBITS
EXHIBIT B
PROPOSAL FROM TD EQUIPMENT FINANCE,INC.
5 RESOLUTION#2010-076
TD EQUIPMENT FINANCE, INC.
2070 Chain Bridge Road, Suite 145
Vienna, Virginia 22182
LEASE PURCHASE AGREEMENT
LESSEE: City of Dania Beach, Florida
AGREEMENT#:
DATED: 2010
This Lease Purchase Agreement (the "Agreement") is a binding contract between TD
Equipment Finance, Inc., its successors and assigns ("Lessor") and the City of Dania Beach,
Florida (the "Lessee," when referring to the governing body, and the "City," when referring to
the territorial boundaries and the legal entity governed by the Lessee).
1. Agreement: In executing this Agreement, Lessee agrees to rent the equipment
described in Exhibit A (the "Equipment"). Exhibit B sets forth the terms of the Agreement,
including the commencement date (the "Dated Date"), which is the date when the term begins
and Lessee's obligation to pay rent accrues. Rental payments (the "Rental Payments") consist of
both principal and interest components, must be paid to Lessor as instructed, and must be paid
only out of legally available non-ad valorem revenues budgeted and appropriated by the Lessee
for such purpose. A portion of each Rental Payment represents interest and the balance of each
Rental Payment represents principal, as shown on Exhibit B. To maintain the interest rate set
forth in Exhibit B attached hereto, Lessee must comply with the tax covenants as set forth in
Section 7 below and file informational federal tax Form 8038-G in a timely manner. If not, each
Rental Payment will be increased to the Taxable Rate (as defined herein) to compensate for the
loss of the tax exemption status which was assumed in the initial interest rate. The Form 8038-G
is an informational return only and will not require Lessee to pay a tax. Lessee agrees to accept
the Equipment when delivered, installed and operating to manufacturer's specifications and to
execute the Acceptance Certificate, attached hereto as Exhibit D (the "Acceptance Certificate")
supplied by Lessor as evidence thereof. Lessee agrees to hold Lessor harmless from damages, if
for any reason, the Equipment Vendor (as defined herein) fails to deliver, or delays in the
delivery of, the Equipment so ordered or if the Equipment is unsatisfactory for any reason
whatsoever. Lessee agrees that any delay in the delivery of the Equipment shall not affect the
validity of this Agreement or the obligation to make Rental Payments hereunder. Lessee's
execution of the Acceptance Certificate shall conclusively establish that the Equipment covered
thereby is acceptable to Lessee for all purposes of this Agreement. If Lessee fails or refuses to
sign the Acceptance Certificate within a reasonable time, not to exceed five (5) business days,
after the Equipment has been delivered, installed and is operating to manufacturer's
specifications, Lessor shall have the option of treating this Agreement as cancelled by Lessee
and Lessee shall automatically assume all of Lessor's rights and obligations as purchaser of the
Equipment.
2. The Obligation to Make Payments: Rental Payments shall be due and payable as set
forth in Exhibit B hereto. The obligation of Lessee to pay Rental Payments hereunder is a
current expense of Lessee and not a debt. This obligation shall not be or constitute a general
obligation or indebtedness of Lessee or be a"bond" within the meaning of the Constitution of the
State of Florida (the "State") but shall be a special, limited obligation of Lessee payable from
legally available non-ad valorem revenues annually budgeted and appropriated for such purpose
during the then current fiscal period ("Appropriation Period") provided herein. All payments
made by or on behalf of Lessee hereunder shall be nonrefundable. Except in the Event of
Nonappropriation (hereinafter defined) as set forth in this paragraph, Lessee's obligation to pay
such Rental Payments shall be absolute and unconditional and is not subject to any abatement,
set-off, defense or counter-claim for any reason whatsoever. Lessee hereby represents and
warrants that it has funds available to pay the Rental Payments set forth on Exhibit B through the
end of the current fiscal year ("First Appropriation Period"). Notwithstanding the foregoing, the
obligation of Lessee to make payments hereunder is subject to the annual appropriation by
Lessee in each successive Appropriation Period of funds sufficient to make the required Rental
Payments hereunder for such Appropriation Period. Hence, after the First Appropriation Period,
if Lessee has not appropriated sufficient funds to pay Lessor the Rental Payments due for the
then current Appropriation Period an Event of Nonappropriation (an "Event of
Nonappropriation") shall be deemed to have occurred. Lessee shall promptly deliver notice
thereof to Lessor and shall endeavor to give such notice as soon as a decision of non-
appropriation is made. Such notice shall state that the termination of this Agreement was caused
by the failure of the Lessee to appropriate moneys to make Rental Payments due hereunder and
that Lessee shall promptly, upon the effective date of such termination, return the Equipment at
the expense of the Lessee, and as instructed by Lessor, as hereinafter provided. If an Event of
Nonappropriation has occurred, this Lease shall terminate, in whole, but not in part, as to all
Equipment, effective upon the last day of the fiscal year for which funds were appropriated.
Upon termination of this Lease as provided in this Section, Lessee shall not be responsible for
the payment of any additional Rental Payments coming due in succeeding fiscal years. Lessee
shall then, at Lessee's expense, promptly return the Equipment to Lessor to such location as shall
be specified by Lessor. Lessor may then sell or re-lease the Equipment with or without
advertisement, at public or private sale or leasing, without notice to Lessee, free of any of
Lessee's interest, without any duty to account to Lessee for Lessor's actions or inaction or for
any sale or re-lease proceeds. Any net proceeds of any sale or re-lease of the Equipment upon
the occurrence of an Event of Non-Appropriation or as may otherwise be provided under this
Agreement shall be applied in the following order of priority: first, to pay all of Lessor's costs,
charges and expenses incurred in taking, holding, repairing, selling, leasing or otherwise
disposing of the Equipment; then second, to the extent not previously paid by the Lessee, to pay
Lessor all Rental Payments due under this Agreement through the termination date; then third, to
pay the purchase option amount applicable as of the date of the then current Appropriation
Period, as shown in the balance column on the debt service table set forth in Exhibit B; then
fourth, to pay any remainder to Lessee.
THE RENTAL PAYMENTS ARE TO BE MADE ONLY FROM LESSEE'S LEGALLY
AVAILABLE NON-AD VALOREM REVENUES BUDGETED AND APPROPRIATED ON
AN ANNUAL BASIS, AND NEITHER LESSEE, THE STATE, NOR ANY POLITICAL
SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY ANY SUMS
DUE UNDER THIS AGREEMENT FROM THE COMPELLED LEVY OF AD VALOREM
OR OTHER TAXES EXCEPT FROM THOSE LEGALLY AVAILABLE NON-AD
VALOREM REVENUES BUDGETED AND APPROPRIATED BY LESSEE ON AN
ANNUAL BASIS, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING
POWER OF LESSEE, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION
THEREOF ARE PLEDGED FOR PAYMENT OF SUCH SUMS DUE UNDER THIS
AGREEMENT.
3. The Equipment: Lessee agrees and acknowledges that (i) Lessee has selected the
Equipment to be acquired by Lessor and rented to Lessee, (ii) the Equipment is, and during the
period of this Agreement shall remain, personal property to the Lessee, (iii) the Equipment will
have a useful life in Lessee's hands that is substantially in excess of the initial term of this
Agreement, and (iv) Lessee does not intend to sell, or otherwise dispose of, the Equipment
during the term of the Agreement. Lessee may contact the seller of the Equipment directly, as
Lessor's agent, to effect the acquisition of the Equipment. When Lessee accepts the Equipment,
Lessee must deliver to Lessor an Acceptance Certificate. If the Equipment has not been
identified on the date of this Agreement, the purchase amount shown in the balance column
shown on Exhibit B shall be deposited in an account held pursuant to an escrow agreement to be
entered into among Lessor, Lessee, and TD Bank, National Association, as escrow agent
("Escrow Fund"). The Lessee shall submit an invoice for the Equipment to Lessor and upon
Lessor's approval of such invoice, Lessor shall cause the acquisition of the Equipment to be
funded directly to the Equipment Vendor (as defined herein) out of moneys in the Escrow Fund.
Alternatively, the Lessee shall submit to the Lessor an invoice for the Equipment and a check
evidencing payment to the Equipment Vendor by the Lessee for such Equipment and upon
Lessor's approval of such invoice and such evidence of payment, Lessor shall cause the Lessee to
be reimbursed for the acquisition of the Equipment out of moneys in the Escrow Fund.
However, upon acquisition of the Equipment, Lessee must execute and deliver to Lessor, an
Acceptance Certificate, according to the provisions set forth in Section 1. Lessee may assert
claims and rights that Lessor may have against any manufacturer of the Equipment as well as the
agents or dealers of the manufacturer of any portion of the Equipment (the "Equipment
Vendor").
4. Title to the Equipment: During the term of this Agreement, legal title to all
Equipment and any and all repairs, replacements, substitutions and modifications thereto for
federal income tax and accounting purposes, for purposes of Section 7 hereof, and for all other
purposes shall be in the name of Lessee. By paying the final rental payment due hereunder,
Lessee shall be deemed to have exercised Lessee's option to maintain ownership of the
Equipment after the term of this Lease, and upon such payment, Lessor shall be obligated to take
any actions necessary to evidence the termination of any obligations of Lessee to Lessor
hereunder. Following an Event of Default or an Event of Nonappropriation or upon other
termination of this Agreement for any reason other than Lessee's rights under Section 5, title to
the Equipment will immediately vest in Lessor and Lessee will surrender possession of the
Equipment to Lessor. Lessee will promptly execute, or otherwise authenticate, and deliver to
Lessor such further documents, instruments, assurances and other records, and take such further
action as Lessor from time to time may reasonably request in order to carry out the intent and
purpose of this Agreement and to establish and protect the rights and remedies created or
intended to be created in favor of Lessor under such documents.
5. Refinance/Option to Purchase: Lessee, at its sole discretion, may refinance this
Agreement at any time during the lease term. Lessee shall be entitled and shall have exercised
its option to retain title to the Equipment: (a) upon payment in full of all Rental Payments in
accordance with Exhibit B hereof and all other amounts due hereunder, or (b) upon written
notice delivered at least thirty (30) days in advance of a proposed date (which shall be a date
scheduled for payment of a Rental Payment) for payment and upon payment on such date of the
prepayment price equal to all principal due and remaining unpaid and interest accrued to such
date of prepayment, plus a prepayment fee of two percent (2%) of such principal due and
remaining unpaid.
When Lessee exercises its rights hereunder to retain title to the Equipment and Lessor
shall have received all amounts due under this Agreement, then this Agreement shall terminate,
and Lessee shall be deemed to have accepted such Equipment AS IS, WHERE IS, WITHOUT
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS
FOR THE USE CONTEMPLATED BY LESSEE, except that the Equipment shall not be subject
to further obligations of Lessee created by or arising through this Agreement.
6. Responsibilities for Repair and Maintenance: Lessee agrees to maintain the
Equipment in good condition and make all necessary repairs and replacements at Lessee's
expense. Lessee agrees to maintain a maintenance log for the Equipment and permit Lessor to
inspect the Equipment and the maintenance log(s). Lessee must have the Equipment serviced
and repaired at Lessee's expense when servicing or repair is required within intervals not
exceeding 125% of those recommended in the Equipment's owner's manual(s).
7. Tax Covenants: Lessee will not make or direct any use of the proceeds of the
obligation provided herein or any other funds which will cause such obligation to be an
"arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as
amended and the treasury regulations promulgated thereunder (the "Code"), to be "federally
guaranteed" within the meaning of Section 149 of the Code or to be a "private activity bond"
within the meaning of Section 141(a) of the Code. To that end, so long as any Rental Payments
are unpaid, Lessee, with respect to such proceeds and such other funds, will comply with all
requirements of such Code sections and all regulations of the United States Department of the
Treasury issued thereunder to the extent that such requirements are, at the time, applicable and in
effect. Furthermore, to the extent applicable pursuant to Section 148(f) of the Code, Lessee
covenants to complete or cause to be completed all reporting requirements and rebate all positive
arbitrage to the United States of America. Lessee covenants that the Equipment will be used only
for the purpose of performing one or more of Lessee's governmental or proprietary functions,
and that the Equipment will not be used in a trade or business of any person or entity other than
Lessee on a basis different from the general public. Lessee will not use or permit the use of the
Equipment by any person for a "private business use" within the meaning of Section 141(b) of
the Code in such matter or to such extent as would result in the inclusion of interest received
hereunder in gross income for federal income tax purposes under Section 103 of the Code.
Lessor and the Lessee agree to cooperate in performing all acts and things legally
required or desirable in order to assure that the interest component of the Rental Payments will
not be included in the gross income of Lessor or its assigns for federal income tax purposes.
If any event shall occur so that the interest component of the Rental Payments become
includible in the gross income for federal income tax purposes of the recipient of such Rental
Payments (an "Event of Taxability"), the interest rate on the lease payments shall increase to the
prime rate as published on the first day of the month in the Wall Street Journal plus two percent
(2%) (the "Taxable Rate") from the date of the occurrence of the Event of Taxability. Lessee
agrees to pay and indemnify Lessor for all interest, penalties, fines, additions to taxes, levied or
assessed on the lease or Lessor as a result of the Event of Taxability.
8. Lessee's Risk of Loss or Damaee: Lessee agrees to bear all risk of loss, damage,
destruction or theft of the Equipment. Lessee must maintain insurance of the types and in the
amounts not less than that set forth on Exhibit C, directing Lessee's insurance company to give
Lessor a certificate showing Lessor as lender loss payee and an additional named insured. If
Lessee does not maintain the required insurance, Lessor may obtain it and charge Lessee for it.
Upon demand therefor from Lessor, Lessee agrees to immediately reimburse Lessor for all such
costs and expenses of Lessor for obtaining said insurance. Lessee must give Lessor prompt
notice of (1) the loss, theft or destruction of any part of the Equipment, (2) any damage to the
Equipment exceeding $500, or (3) any claim arising out of the ownership, maintenance, storage
or use of the Equipment. The parties will cooperate in deciding if insurance proceeds will be
applied to the repair of the Equipment or to its purchase price. If Lessor receives insurance
proceeds exceeding the amount of the purchase price shown on Exhibit B, plus the interest due
thereon, or the amount required to complete agreed upon repairs to the Equipment, Lessor agrees
to forward the excess proceeds to Lessee.
9. Indemnification: Except for the negligent acts or omissions of Lessor arising out of
entering into this Agreement, including any misstatements of material fact, in connection with
any transfer of this Agreement, because Lessee has selected the Equipment for Lessee's use and
purposes, and because Lessee operates and maintains the Equipment, Lessee agrees, to the extent
permitted by law of the State of Florida, to indemnify Lessor against any and all loss, damage,
injury, claims, taxes (excluding Lessor's income taxes), fees, fines, penalties and expenses
(including legal fees and expenses) of every kind that relate to the use, operation, ownership,
condition or maintenance of the Equipment by Lessee. Lessee's obligation to indemnify Lessor
will continue after termination of the Agreement as to all matters, except those which arise from
Lessor's (or anyone Lessor sells or re-leases the Equipment to) use, operation, ownership,
condition or maintenance of the Equipment following termination.
10. No Warranty: LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES
CONCERNING THE EQUIPMENT, INCLUDING BUT NOT LIMITED TO
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE. THIS
SECTION IN NO EVENT IS INTENDED TO AFFECT THE WARRANTIES OR
REPRESENTATIONS CONTAINED IN ANY CONTRACT ENTERED INTO FOR THE
ACQUISITION OF THE EQUIPMENT.
11. Termination: This Agreement will terminate: (1) upon payment of all amounts due
hereunder by Lessee to Lessor for the term of this Agreement, (2) if there shall occur an Event of
Nonappropriation, at the time set forth in Section 2, provided that Lessee has returned the
Equipment and paid all amounts including interest thereon due and unpaid deriving from the
Appropriation Period then in effect for which the Lessee has appropriated adequate funds, (3)
upon Lessee's purchase or refinance of the Equipment under Section 5 and Lessee's payment of
all amounts due including interest and any prepayment fee due hereunder, (4) at Lessor's option
if Lessee defaults as described in Section 12, or (5) if all or any portion of the Equipment has
been lost, stolen or damaged beyond repair, upon Lessor's receipt of insurance proceeds
covering the purchase price of the lost, stolen or damaged Equipment and the remittance of any
excess proceeds as indicated in Section 8 above. When this Agreement terminates, if Lessee has
not paid to Lessor all amounts due hereunder, Lessee must, at Lessee's expense, return the
Equipment to Lessor at the address specified by Lessor, in as good condition as when Lessee
received it, ordinary wear excepted. Lessee must remove all signs and markings and make all
repairs (other than for ordinary wear) requested by Lessor. If Lessee does not, Lessor may do so
and charge Lessee for it. Lessor may sell or re-lease the Equipment with or without
advertisement, at public or private sale or leasing, without notice to Lessee, free of any of
Lessee's interest, without any duty to account to Lessee for Lessor's actions or inaction or for
any sale or re-lease proceeds. Any net proceeds of any sale or re-lease of the Equipment upon
the occurrence of an Event of Non-Appropriation or as may otherwise be provided under this
Agreement shall be applied in the following order of priority: first, to pay all of Lessor's costs,
charges and expenses incurred in taking, holding, repairing, selling, leasing or otherwise
disposing of the Equipment; then second, to the extent not previously paid by the Lessee, to pay
Lessor all Rental Payments due under this Agreement through the termination date; then third, to
pay the purchase option amount applicable as of the date of the then current Appropriation
Period, as set forth in Exhibit B;then fourth,to pay any remainder to Lessee. No prepaid interest
will be rebated to Lessee upon termination.
12. Default: The following constitute "Events of Default" under this Agreement: (a)
failure by Lessee, other than due to an Event of Non-Appropriation, to pay any Rental Payment
or other payment required to be paid hereunder within three days of when such amounts are due;
or (b) failure by Lessee to maintain insurance on the Equipment in accordance with Section 8; or
(c) failure by Lessee to observe and perform any other covenant, condition or agreement on its
part to be observed or performed for a period of fifteen (15) days after written notice is given to
Lessee by Lessor, specifying such failure and requesting that it be remedied; provided, however,
that if the failure stated in such notice is capable of being cured but cannot be corrected within
such fifteen (15) day period, Lessor will not unreasonably withhold its consent to an extension of
such time for so long as Lessor shall deem reasonable if corrective action is instituted by Lessee
within the applicable period and diligently pursued until the default is corrected; or (d) initiation
by Lessee of a proceeding under any federal or state bankruptcy or insolvency law seeking relief
under such laws concerning its indebtedness; or (e) the determination by Lessor that any
representation or warranty made by Lessee in this Lease was untrue in any material respect upon
the execution hereof. If any such Event of Default occurs, Lessor, by written notice to Lessee,
may declare this Agreement in default and demand that Lessee pay all unpaid Rental Payments
payable by Lessee pursuant to the Agreement and other amounts payable by Lessee due
hereunder to the end of the then current Appropriation Period. The Equipment must then be
returned to Lessor (as directed and at the address specified by Lessor) at Lessee's expense, and
the Equipment and all Lessee's rights therein shall be deemed surrendered to Lessor. Upon
declaration of an Event of Default, Lessor may repossess the Equipment with or without process
of law, and for the purposes may enter upon any of Lessee's premises or other's premises,
wherever the Equipment may be found, without liability therefor. Lessor may recover from
Lessee any unpaid amounts due or to become due for the remainder of the then current
Appropriation Period, together with all expenses, including attorney's fees and legal expenses (to
the extent permitted by law) incurred by Lessor to enforce its rights hereunder. The repossession
and sale of the Equipment shall not affect Lessor's right to recover from Lessee all damages
which Lessor has suffered because of Lessee's breach. Lessor may sell or release the Equipment
with or without advertisement, at public or private sale or leasing, without notice to Lessee, free
of any of Lessee's interest, without any duty to account to Lessee for Lessor's actions or inaction
or for any sale or re-lease proceeds. Any net proceeds of any sale or re-lease of the Equipment
upon the occurrence of an Event of Non-Appropriation or as may otherwise be provided under
this Agreement shall be applied in the following order of priority: first, to pay all of Lessor's
costs, charges and expenses incurred in taking, holding, repairing, selling, leasing or otherwise
disposing of the Equipment; then second, to the extent not previously paid by the Lessee, to pay
Lessor all Rental Payments due under this Agreement through the termination date; then third, to
pay the purchase option amount applicable as of the date of the then current Appropriation
Period, as set forth in Exhibit B; then fourth, to pay any remainder to Lessee. If Lessor is unable
to repossess any Equipment after a default. the Equipment shall be deemed to have suffered a
total loss compensable under Section 8. Subject to the next sentence, Lessor may take whatever
action at law or in equity may appear necessary or desirable to enforce its rights under such
Lease.
Lessor and the Lessee acknowledge that: (i) this Agreement is not intended to create a
mortgage of or a security interest in the Equipment as proscribed by Nohrr v. Brevard County
Educational Facilities Authority, 247 So. 2d 304 (Fla. 1971); and (ii) Lessor may not exercise
any foreclosure-type remedies if an Event of Default occurs, State v. Brevard County, 539 So. 2d
461 (Fla. 1989), notwithstanding any provisions to the contrary in this Agreement.
13. Liens: This Equipment must be kept free of all liens and encumbrances at all times.
14. Limitation on Assignment: The Lessee may not assign or sublease this Agreement
or any interest in it or the Equipment without Lessor's prior written consent and a written
opinion of nationally recognized bond counsel to the effect that any such assignment or sublease
of this Agreement or any interest in it or the Equipment will not adversely affect the exclusion of
the interest component of the Rental Payments from gross income for federal income tax
purposes. In no event may Lessee assign or sublet this Agreement or any interest in it or the
Equipment to a non-govemmental entity. Lessor may assign or sell its interest under this
Agreement, in whole or in part, without Lessee's consent, but the assignment will not be
effective until Lessee has received notice disclosing the name and address of assignee and
information sufficient to enable Lessee to meet the requirements of Section 149(a) of the Code.
Lessee shall be provided with written notice of Lessor's assignment; provided, however, Lessee
shall continue to submit Rental Payments to Lessor until it receives such notice. During the term
of this Agreement, Lessee shall keep a complete and accurate register of all such assignments in
form necessary to comply with Section 149(a) of the Code.
15. Late Charaes: If Lessee does not pay Rental Payments due under this Agreement on
their due date, Lessor may charge Lessee a late fee of$5.00 or 5% of the amount that is late,
whichever is more;provided that, in no case shall amounts be charged hereunder if such amounts
are treated as interest and the rate of such interest exceeds the maximum amount allowable by
law.
16. Exhibits: Exhibits A through H attached hereto are part of this Agreement,
incorporated herein by reference, and must be executed by Lessee, where applicable.
17. Other Terms: This Agreement constitutes the entire agreement between the parties
as to the subject matter it covers and may not be changed except by a written agreement signed
by Lessee and Lessor. If any part of this Agreement is or becomes invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability will not affect the other or
remaining provisions hereof. This Agreement and all rights and actions arising under it shall be
governed by the laws of the State of Florida. No waiver, consent, modification or change of
terms of this Agreement shall bind either party unless received in writing signed by both parties,
and then such waiver, consent, modification or change shall be effective only in the specific
instance and for the specific purpose given. This Agreement may be executed in several
counterparts. All notices must be addressed to the parties at their addresses shown on Exhibit B,
or at another address specified by either party in writing and shall be deemed given when
delivered or mailed by registered mail, postage prepaid. To the extent applicable, Lessee hereby
waives any and all rights and remedies granted Lessee by Sections 508 through 522 of Article
2A of the Uniform Commercial Code including, by way of example only and not as a limitation,
the right to repudiate this Agreement and reject the Equipment; the right to cancel this
Agreement; the right to revoke acceptance of the Equipment; the right to grant a security interest
in the Equipment in Lessee's possession and control for any reason; the right to recover damages
thereunder for any breach of warranty or for any other reason deduct all or any part of the
claimed damages resulting from Lessor's default, if any, under this Agreement; the right to
accept partial delivery of the Equipment; the right to "cover" by making any purchase or leases
of or contract to purchase or lease Equipment in substitution for those due from Lessor; the right
to recover any general, special, incidental or consequential damages, for any reason whatsoever;
and the right to specific performance, replevin, detinue, sequestration, claim and delivery and the
like for the Equipment. The waivers contained herein shall not constitute a waiver by Lessee of
any of its rights or remedies against the Equipment Vendor and/or manufacturer of the
Equipment.
18. Lessee Representations and Warranties: Lessee hereby represents, warrants and
covenants to Lessor the following with respect to this Agreement as of the date Lessee executes
the Acceptance Certificate: (a) Lessee is duly organized and validly existing under the laws of
the State of Florida, with adequate power and capacity to enter into this Agreement, all
documents related to the purchase of the Equipment and any other documents required to be
delivered in connection with this Agreement or the Equipment (hereinafter "Documents"); (b)
the Documents have been duly authorized, executed and delivered by Lessee and constitute
valid, legal and binding agreements, enforceable in accordance with their respective terms,
except to the extent that the enforcement of remedies therein provided may be limited under
applicable bankruptcy and insolvency laws; (c) no approval, consent or withholding of
objections is required from any federal, state or local governmental authority or instrumentality
with respect to the entry into or performance by Lessee of the Documents, except such as have
already been obtained; (d) the entry into and performance by Lessee of its obligations under the
Documents will not (i) violate any judgment, order, law or regulation applicable to Lessee or(ii)
result in any breach of, constitute a default under or result in the creation of any lien, charge,
security interest or other encumbrance upon any item of the Equipment pursuant to any
indenture, mortgage, deed of trust, bank loan or credit agreement or other instrument (other than
this Agreement or any purchase money security interest retained by any supplier) to which
Lessee is a party; and (e) there are no suits or proceedings pending or threatened in court or
before any regulatory commission, board or other administrative governmental agency against or
affecting Lessee, which will have a material adverse effect on the ability of Lessee to fulfill its
obligations under this Agreement; and (f) Lessee has complied with all statutes, laws, regulations
and procedures in entering into this Agreement and the matters contemplated hereby.
19. Lessor Representations and Warranties: Lessor represents, covenants and
warrants as following:
a) Lessor is a corporation duly organized, existing and in good standing under the laws
of the State of New Jersey and is authorized to do business in the State of Florida; has
full and complete power to enter into this Agreement, to enter into and to carry out the
transactions contemplated by it hereby and thereby and to carry out its obligations
under this Agreement, is possessed of full power to own and to hold real and personal
property and to lease the same, and has duly authorized the execution and the delivery
of this Agreement, and all other agreements, certificates and documents contemplated
hereby and thereby.
b) Neither the execution and the delivery of this Agreement, nor the fulfillment of or the
compliance with the terms and the conditions thereof, nor the consummation of the
transactions contemplated hereby and thereby conflicts with or results in a breach of the
terms, the conditions or the provisions of any restriction, any agreement or any
instrument to which Lessor is now a party or by which Lessor or its property is bound,
constitutes a default under any of the foregoing that results in the creation or the
imposition of any lien, charge or encumbrance whatsoever upon any of the property or
the assets of Lessor or upon the Equipment.
20. Financing: In consideration for and upon the execution of this Agreement, Lessor
hereby agrees to pay to the Lessee the amount of$ , which will be deposited in a
separate project account which will be maintained by the Lessee (subject to the provisions of
Section 3 hereof) for the purchase of the Equipment and related costs.
21. Conditions of Closing: Prior to payment to Lessee as stated in Section 20, Lessor
shall receive the following:
a) this Agreement executed by Lessee and Lessor;
b) an executed Exhibit B to this Agreement;
c) an executed Insurance Coverage Requirements Certificate, a form of which is attached
hereto as Exhibit C;
d) an executed Acceptance Certificate, a form of which is attached hereto as Exhibit D;
e) a duly adopted resolution of Lessee, in form and substance acceptable to Lessor and
including those matters set forth in Exhibit E hereof,
f) an executed Certificate of Lessee, a form of which is attached hereto as Exhibit F;
g) an executed Arbitrage and Tax Certificate, a form of which is attached hereto as
Exhibit G for New Money Projects;
h) an opinion of counsel to Lessee, substantially in the form of the opinions set forth in
Exhibit H;
i) for any Equipment that are motor vehicles, properly completed certificates of title for
such vehicles;
j) an executed Form 8038-G;
k) an executed escrow agreement, if required under the provisions of Section 3 hereof;
and
1) any and all opinions, certificates, instruments, financing statements or other documents
as Lessor may request to evidence compliance with the agreements to be performed
and all conditions to be satisfied under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement as of
the date first set forth above.
LESSOR:
TD EQUIPMENT FINANCE, INC.,
an Ohio corporation authorized to do
business in Florida
By:
Name: Charles Fiumefreddo
Title: Operations Manager
LESSEE:
CITY OF DANIA BEACH,FLORIDA,
a Florida municipal corporation
By:
Name: C. K. McELYEA
Title: Mayor-Commissioner
ATTEST:
Louise Stilson, CMC, City Clerk
Approved as to Legal Form and Correctness:
Thomas J. Ansbro, City Attorney
EXHIBIT A
EQUIPMENT
Description Value
1 (a) Pierce Velocity Aerial 75' Heavy Duty Ladder with $787,095.00
5-year Extended Warranty
1 x.... '#
f 1
Total: [$ 1
A-1
EXHIBIT B
TERMS
I. The Equipment which is the subject of the Lease Purchase Agreement is more fully
described in Exhibit"A"to the Lease Purchase Agreement.
2. Fixed Interest Rate: calculated on a 30-day/360 year basis
3. Principal Amount: $
4. Dated Date: 2010
5. Debt Service:
[Insert Table once finalize total principal amount]
6. The Equipment will be located at:
Items (a) and (b) of Exhibit A: 102 West Dania Beach Boulevard
Dania Beach, Florida 33004
7. Address of Lessee, for notification purposes, is:
Louise Stilson, City Clerk
City of Dania Beach, Florida
100 West Dania Beach Boulevard
Dania Beach, Florida 33004
Phone: (954)-924-6800 x.3624
With a copy to:
Mark Bates, Finance Director
City of Dania Beach, Florida
100 West Dania Beach Boulevard
Dania Beach, Florida 33004
Phone: (954)-924-6800 x3620
[Remainder of page intentionally left blank]
B-1
8. Address of TD for notification purposes, is:
TD Equipment Finance, Inc.
2070 Chain Bridge Road, Suite 145
Vienna, Virginia 22182
Acknowledged and Accepted:
LESSEE:
CITY OF DANIA BEACH, FLORIDA,
A Florida municipal corporation
By:
Name: Robert Baldwin
Title: City Manager
B-1
EXHIBIT C
INSURANCE COVERAGE REQUIREMENTS CERTIFICATE
1. In accordance with Section 8 of the Lease Purchase Agreement, we have instructed the
insurance agent named below (please fill in name, address, contact person, telephone and
facsimile numbers).
[INSERT INSURANCE AGENT INFORMATION]
to issue:
a. All Risk Physical Damage Insurance on the leased Equipment (as defined
in the Agreement) evidenced by a certificate of Insurance and Long Form
Lender Loss Payable Clause naming Lessor "and/or its assigns" as Lender
Loss Payee.
b. Public Coverage Required:
$1,000,000.00 per person
$1,000,000.00 aggregate bodily injury liability
$1,000,000.00 property damage liability
OR
2. We are self-insured for all risk, physical damage, and public liability and will provide
proof of such self-insurance in letter form together with a copy of the statute authorizing
this form of insurance.
3. Proof of insurance coverage as provided in Section 1 or 2 of this Exhibit C will be
provided to TD prior to the time that the Equipment or Unit thereof is delivered to us.
Certified this , 2010
LESSEE: CITY OF DANIA BEACH, FLORIDA
By:
Name: Robert Baldwin
Title: City Manager
I
C-1
EXHIBIT D
ACCEPTANCE CERTIFICATE
The undersigned, CITY OF DANIA BEACH, FLORIDA, as Lessee under the Lease
Purchase Agreement (the "Agreement') numbered with TD EQUIPMENT
FINANCE, INC., Lessor, acknowledges receipt in good condition of a fire truck and related
equipment described in Exhibit "A" attached to the Agreement, a copy of which is attached
hereto.
The undersigned officer of Lessee hereby reaffirms in all respects the provisions relating
to arbitrage contained in the Agreement, and represents that, to the best of his or her knowledge,
information and belief, the expectations therein expressed were reasonable as of the date on
which they were made, and are reasonable as of this date, and that there were, and are as of this
date, no facts, estimates or circumstances other than those expressed therein that would
materially affect the expectations expressed therein.
Certified this 2010:
LESSEE:
CITY OF DANIA BEACH, FLORIDA,
a Florida municipal corporation
By:
Name: Robert Baldwin
Title: City Manager
125559/004/00433853.DOCd2)
D-1
EXHIBIT E
MATTERS TO BE INCLUDED IN RESOLUTION OF GOVERNING BODY
Name:
Date:
At a duly called meeting of the governing body of Lessee (as defined in the Agreement)
held on , 2010 the following resolution was introduced and adopted.
WHEREAS the governing body of Lessee has determined that a true and very real need
exists for the acquisition of the Equipment described in the Lease Purchase Agreement presented
at this meeting, and
WHEREAS, the governing body of Lessee has taken the necessary steps, including any
legal bidding requirements, under applicable law to arrange for the acquisition of such
Equipment.
WHEREAS, the Lessee does not reasonably anticipate that the amount of qualified tax-
exempt obligations to be issued by it in the calendar year ending December 31, 2010, will exceed
$30,000,000.00;
BE IT RESOLVED, by the governing body of Lessee that the terms of said Lease
Purchase Agreement are in the best interests of Lessee for the acquisition of such Equipment,
and the governing body of Lessee designates and confirms the following persons to execute and
deliver, and to witness (or attest), respectively, the Lease Purchase Agreement and any related
documents necessary to the consummation of the transactions contemplated by the Lease
Purchase Agreement.
BE IT RESOLVED, by the governing body of Lessee that the Lessee designates the
Lease Purchase Agreement as a "qualified tax-exempt obligation", as defined in and for the
purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
By:
Title:
By:
Title:
The undersigned further certifies that the above resolution has not been repealed or amended and
remains in full force and effect and further certifies that the above and foregoing Lease Purchase
Agreement is the same as presented at said meeting of the governing body of Lessee.
Date
Clerk
[SEE RESOLUTION]
E-1
EXHIBIT F
CERTIFICATE OF LESSEE
The undersigned, CITY OF DANIA BEACH, FLORIDA, duly authorized representative
of the named Lessee under that certain Lease Purchase Agreement dated 2010
with TD EQUIPMENT FINANCE, INC. as Lessor(the "Agreement') hereby certifies as follows
and in accordance with the requirements of the Agreement. Capitalized terms used herein have
the same meaning as in the Agreement:
A. INCUMBENCY OF OFFICERS AND SIGNATURES:
I hold the position noted under my signature, and I have all the authority necessary to
execute and deliver this Certificate. The following officers of Lessee are duly elected or
appointed, and their signatures are true and correct, and where required, have been filed with the
appropriate officials of the State:
Signature Signature
Name: Robert Baldwin Name: Mark Bates
Title: City Manager Title: Finance Director
B. ESSENTIAL USE:
1. The Equipment will be used by the Lessee for the specific purpose of: public safety.
2. The Equipment is essential for the functioning of Lessee and is immediately needed
by Lessee. Such need is neither temporary nor expected to diminish during the term of the
Lease. The Equipment is expected to be used by Lessee for a period in excess of the term of the
Lease.
3. Funds are expected to come from the General Fund of Lessee.
This certificate is based upon facts, circumstances, estimates and expectations of Lessee
as of the date on which the Agreement was executed, and to the best of my knowledge and
belief, as of this date, such facts, circumstances and estimates are true and correct and such
expectations are reasonable.
F-1
IN WITNESS WHEREOF, I have executed and delivered this certificate as of
, 2010.
WITNESS:
Louise Stilson, CMC City Clerk
Signature Name & Title
F-2
EXHIBIT G
ARBITRAGE AND TAX CERTIFICATE
I, Mark Bates, hereby certify that I am the duly qualified Finance Director of the City of
Dania Beach, in the County of Broward, Florida ("Lessee"), and HEREBY CERTIFY TO THE
BEST OF MY KNOWLEDGE AND BELIEF as follows:
1. GENERAL.
1.1. The Lease. I am charged with the responsibility of executing a Lease Purchase
Agreement (the "Lease") with TD Equipment Finance, Inc. ("Lessor"), dated as of
, 2010 in the principal amount of $ . The Lease provides the
Lessor with certain rights to receive Rental Payments, consisting of a principal portion and an
interest portion, and with certain other rights under the lease. All initially capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Lease.
1.2. Amount Deemed Received Under the Lease. The Lessee is deemed to have
received $
1.3. The Lease Approval. The Lessee is authorized to enter into the Lease pursuant to
the Constitution and Laws of the State of Florida and certain proceedings of the governing body
of the Lessee.
1.4. Types of Proceeds. The proceeds from the Lease will consist of sale proceeds.
1.5. Regulations. References to Regulations mean the Treasury Regulations
promulgated under Section 103, and Sections 141 through 150 of the Internal Revenue Code of
1986, as amended (the "Code").
1.6. Defined Terms. The following terms have the meanings ascribed to them in the
Regulations (and the Code, where indicated) unless the context hereof clearly required
otherwise:
(a) available amount, §1.148-1(b);
(b) bona fide debt service fund, §1.148-1(b);
(c) bond year, §1.148-1(b);
(d) capital expenditure, §1.150-1(b);
(e) computation date, §1.148-3(e);
(t) fair market value, §1.148-5(d)(6);
(g) gross proceeds, §1.148-1(b);
G-1
(h) investment, §1.148-1(b);
0) investment proceeds, §1.148-1(b);
0) investment property, §148(b)(2);
(k) investment-type property, §1.148-1(e)(2);
(1) issue, §1.150-1(c);
(m) net sale proceeds, §1.148-1(b);
(n) nonpurpose investment, §1.148-1(b);
(0) nonpurpose receipts, §1.148-3(d)(2);
(p) proceeds, §1.148-1(b);
(q) rebate amount, §1.148-3(b);
(r) rebate requirements, §1.148-3;
(s) related party, §1.15 0-1(b);
(t) replacement proceeds, §1.148-1(c);
W sale proceeds, §1.148-1(b);
(v) sinking fund, §1.148-1(c)(2); and
(w) yield, §1.148-1(b).
11. PURPOSE OF ISSUE.
2.1. Purpose of the Lease. The Lease is being executed to provide
$ to finance the Equipment set forth in Exhibit A to the Lease (the "Project").
2.2. No Investment-Type Property. Unless expressly permitted herein, no portion of
the proceeds derived from the Lease will be used to finance "investment property" or
"investment-type property" with a yield in excess of the yield under the Lease.
2.3. No Over-issuance. The proceeds derived from the Lease do not exceed the
amount that is required for the purposes described in Section 2.1 above.
2.4. No Reimbursement. None of the proceeds derived from the Lease will be used to
reimburse the City for any costs paid 60 days prior to May 14, 2010, which is the date that the
City Commission declared the City's official intent to reimburse itself for certain costs of the
Project from the proceeds of a lease purchase financing.
G-2
2.5. No Refunding. No portion of the proceeds of the Lease will be used, directly or
indirectly, to refund another issue.
2.6. No Hedge Bonds. Not more than 50% of the proceeds of the Lease will be
invested in nonpurpose investments having a substantially guaranteed yield for four years or
more within the meaning of Section 149(g)(3)(A) of the Code, and at least 85% of the spendable
proceeds of the Lease will be used to carry out the governmental purposes of such issue within
the three year period beginning on the date hereof The Lease does not constitute a "hedge
bond" within the meaning of Section 149(g)of the Code.
2.7. No Replacement Proceeds.
(a) Other than the proceeds of the Lease, the Lessee has on hand no funds that
(i) could legally and practically be used for the governmental purposes for which the Lease is
being issued that are not pledged, budgeted, earmarked or otherwise necessary to be used for
other purposes, or (ii) would be used for the governmental purposes of the Lease if the proceeds
of the Lease were not used or to be used for such purpose.
(b) The Lessee does not reasonably expect that (i) the term of the Lease
(which has a weighted average maturity of years) will be longer than reasonably
necessary for the governmental purposes of the Lease, and (ii) there will be available amounts
during the period that the Lease remains outstanding longer than necessary.
(0 No portion of the proceeds of the Lease will be used directly or indirectly
(i) to replace funds of the Lessee or other agency, department, or division of the Lessee that
could be used for the Project, or (ii) to replace any proceeds of any prior issuance of obligations
by the Lessee or other agency, department or division of the Lessee.
2.8. No Private Business Use of Project.
(a) Not more than five percent (5%) of the proceeds of the Lease will be used,
directly or indirectly, in whole or in part, in any activity carried on by any person other than a
state or local governmental unit. Use of the proceeds includes (i) ownership of the Project, (ii)
actual or beneficial use of the Project pursuant to a lease or a management, incentive payment or
output contract, or (iii) any other similar arrangement, agreement or understanding, whether
written or oral. The payment of the principal of or the interest on more than five percent (5%) of
the Lease will not be, directly or indirectly, (i) secured by any interest in (A) property used or to
be used in any activity carried on by any person other than a state or local governmental unit, or
(B) payments in respect of such property; or (ii) derived from payments (whether or not by or to
the Lessee), in respect of property, or borrower money, used or to be used in any activity carried
on by any person other than a state or local governmental unit. For purposes of this paragraph
(a), persons (other than a state or local governmental unit) using such proceeds on the same basis
as the general public shall not be taken into account.
(b) None of the proceeds of the Lease will be used, directly or indirectly, to
make a finance loans to persons other than a state or local governmental unit.
W No proceeds of the Lease will be used to make grants to any person.
G-3
in. SOURCE AND DISTRIBUTION OF FUNDS.
3.1. Proceeds Derived from the Lease. The proceeds derived from the Lease are
$ which constitute the "proceeds" for purposes of this Certificate.
3.2. Deposit of Proceeds to the Purchase Fund. The proceeds will be deposited in an
account of the Lessee and will be applied for the costs of the Project.
3.3. Use of Proceeds. The Lessee will use the proceeds only for capital expenditures
in connection with the Project. Such proceeds are not expected to be used to repay, at maturity
or otherwise, any indebtedness of the Lessee. The proceeds will be used to pay all or a portion
of the costs of the Project within three (3) years from the date hereof. The Lessee certifies that:
(a) It reasonably expects that at least 85% of the net sale proceeds of the
Lease will be expended on the Project within three years after the date hereof;
(b) It reasonably expects to incur within 6 months from the date of issue
hereof a substantial binding obligation (not subject to contingencies within the Lessee's or a
related party's control) to a third party to expend at least 5% of the net sale proceeds of the Lease
on the Project; and
(c) It reasonably expects the completion of the Project, and the allocation of
net sale proceeds of the Lease to expenditures,to proceed with due diligence.
The proceeds of the Lease deposited into the account of the Lessee may be invested without
regard to yield restriction until three years from the date hereof in accordance with Regulations
Section 1.148-2(e)(2) and thereafter at a yield not materially higher (1/8 of one percentage point)
than yield on the Lease, unless the requirements of Treas. Reg. § 1.148-5(c) are met with respect
to yield reduction payments.
3.4. No Reserves. No reserve account has been established by the Lessee.
3.5. No Costs of Issuance. None of the proceeds will be used to pay the costs incurred
by the Lessee in connection with the authorization of the Lease.
3.6. Investment Limitation on Sinking Fund Proceeds. Amounts treated as proceeds
of the Lease because they are accumulated in any sinking fund for the Lease shall be invested
without regard to yield restriction for a period of thirty (30) days beginning on the date of
accumulation, and thereafter shall be invested at a yield not in excess of the yield on the Lease.
3.7. No Other Funds or Accounts. There are no other funds or accounts that are
reasonably expected to be used to pay rents under the Lease or that are pledged to the Lease, and
for which there is reasonable assurance that amounts on deposit therein will be available to pay
rents on the lease if the Lessee encounters financial difficult.
3.8. Investment of Proceeds Derived from the Lease. The Lessee covenants that any
and all investment proceeds earned on gross proceeds in excess of the yield under the Lease will
G-4
be held and set aside for rebate to the federal government. Such amount shall be calculated in
the manner and paid at the times required by the provisions of the Regulations.
Iv. TERMS OF THE LEASE AND CALCULATION OF YIELD.
4.1. Terms of the Lease and Method for Computing Yield. The dated date, the date of
maturity and the rate of interest of the Lease are as shown in the Lease, which by this reference is
made a part hereof as if set forth in full herein. When used in computing the present worth of all
payments of principal and interest to be paid on the Lease, produces an amount equal to the
purchase price thereof.
4.2. Computation of Purchase Price. The Purchase Price of the Lease (as defined in
section 4.4 below) is the product of arm's length negotiations between the Lessor and the Lessee,
who are unrelated parties. The Lessor has indicated that is does not intend to reoffer the Lease.
4.3. No Insurance. No insurance has been obtained for the Lease.
4.4. The Purchase Price. The Purchase Price under the Lease is $
("Purchase Price").
4.5. Computation of Yield. The yield under the Lease, as computed in accordance
with the method described in Section 4.1 above, using the Purchase Price that is specified in
Section 4.4 above, is %.
V. REBATE.
5.1. Unless the Lessee qualifies for an exemption from the application of the rebate
requirements of Code Section 148, the Lessee will comply with the rebate requirements.
Regulation Sections 1.148-7 and —8 sets forth the exemptions from rebate available to the
Lessee.
vl. MISCELLANEOUS.
6.1. Single Obligation. Except as discussed herein, there are no other issues of
governmental obligations which (i) will be paid out of substantially the same source of funds,
determined without regard to guarantees from unrelated parties, (ii) are being sold at
substantially the same time as the Lease (i.e., less than 15 days from the date of the execution of
the Lease), and (iii) are being sold pursuant to the same plan of financing in connection with the
Lease.
6.2. No Federal Guarantee. Except for the investments of the type described in the
last sentence of this Section 6.2, no portion of the payment of the principal portion or interest
portion of the rental payments or any credit enhancement or liquidity device relating to the
foregoing is or will be guaranteed, directly or indirectly (in whole or in part), by the United
States (or any agency or instrumentality thereof). No portion of the Lease has been or will be
used to make loans the payment of principal or interest with respect to which is or will be
guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof),
or invested (directly or indirectly) in federally insured deposits or accounts. The foregoing
G-5
provisions shall not apply to (a)proceeds of the Lease invested for an initial temporary period, as
described in section 148(c) of the Code, until such proceeds are needed for the purpose for which
said Lease was issued, (b) investments in a bona fide debt service fund, as described in
Regulation Section 1.148-1(b), (c) investments in a reserve fund that meets the requirements of
Section 148(d), (d) investments in obligations issued by the United States Treasury, or (e) any
other investments permitted under regulations promulgated by the Secretary of the Department
of the Treasury.
6.3. No Investments to Reduce Yield. The Lessee has not entered into and will not
enter into any transaction to reduce the yield on the investment of the proceeds of the Lease in
such a manner that the amount to be rebated to the Federal government is less than it would have
been had the transaction been at arm's length and had the yield on the issue not been relevant to
either party.
6.4. Basis for Statements as to Expectations. The statements as to the expectations of
the Lessee made herein are reasonable as of the date of this certificate, and there are no facts,
estimates or circumstances that would materially change the expectations expressed in this
certificate.
6.5. Management Contract Limitations. The Lessee shall not enter into, materially
modify or extend a management or service agreement with respect to any portion of the Project
financed with proceeds of the Lease with any entity other than a state or a local governmental
unit unless such agreement complies with Rev. Proc. 97-13 issued January 10, 1997, as
supplemented by Rev. Proc. 2001-39 issued June 18, 2001, or any successor revenue procedure
or regulation thereto.
6.6. Filing of Form 8038-G. On the date hereof, or within the time prescribed for
filing such report, the Lessee has caused (or will cause) the filing of a true and complete
information report on Form 8038-G with the Internal Revenue Service.
6.7. No Abusive Arbitrage Device. The Lease is not and will not be part of a
transaction or series of transactions that attempts to circumvent the provisions of Section 148 of
the Code and the Regulations thereunder (i) enabling the Lessee to exploit the difference
between tax-exempt and taxable interest rates to obtain a material financial advantage and (ii)
overburdening the tax-exempt bond market. The Lessee shall not intentionally use any portion of
the proceeds from the Lease to acquire higher yield investments or to replace funds which were
used, directly or indirectly, to acquire higher yielding investments except as otherwise described
herein.
6.8. No Sale of Project. No portion of the Project financed by the Lease is expected to
be sold, encumbered or otherwise disposed of prior to the last Rental Payment date without a
written opinion of nationally recognized bond counsel to the effect that any such disposition will
not adversely affect the exclusion of interest on the Lease from gross income for Federal income
tax purposes.
6.9. Alteration or Nonobservance of Restrictions. The yield restrictions and any other
restriction or covenant contained herein may be altered or ignored if the Lessee receives an
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opinion of nationally recognized bond counsel to the effect that such alteration or nonobservance
will not adversely affect the tax exemption of interest under the Lease to which it is otherwise
entitled.
6.10. Changes in Facts and Expectations. The Lessee acknowledges that any changes
in facts or expectations from those set forth herein may result in different yield restrictions or
rebate requirements from those set forth herein and that a nationally recognized bond counsel
should be contracted if such changes do occur.
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND TO THIS
ARBITRAGE AND TAX CERTIFICATE AS OF 2010.
LESSEE:
CITY OF DANIA BEACH, FLORIDA,
a Florida municipal corporation
By:
Name: Mark Bates, Finance Director
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EXHIBIT H
OPINION OF LESSEE'S COUNSEL
]. Lessee is duly organized and validly existing under the Constitution and laws of the State
of Florida, with full power and authority to enter into the Lease Purchase Agreement
dated , 2010, between the Lessee and TD Equipment Finance, Inc. (the
"Agreement"), all documents related to the purchase of the Equipment and any other
documents required to be delivered in connection with the Agreement or the Equipment
(hereinafter"Documents").
2. The Documents, including without limitation, the Agreement have been duly authorized
and executed and are legal, valid and binding obligations of Lessee, enforceable in
accordance with the respective terms thereof, except as enforcement may be affected by
any applicable bankruptcy, insolvency, debt adjustment, moratorium, reorganization or
other similar laws or legal or equitable principles relating to the enforcement of creditors
rights.
3. The transactions contemplated by and under the Agreement are in compliance with all
local, state and federal laws.
4. No approval, consent or withholding of objections is required from any federal, state or
local governmental authority or instrumentality with respect to the entry into or
performance by Lessee of its obligations under the Documents, except such as have
already been obtained.
5. The entry into and performance by Lessee of its obligations under the Documents will not
(i) violate any judgment, order, law or regulation applicable to Lessee or (ii) result in any
breach of, constitute a default under or result in the creation of any lien, charge, security
interest or other encumbrance upon any item of the Equipment pursuant to any indenture,
mortgage, deed of trust, bank loan or credit agreement or other instrument (other than the
Agreement or any purchase money security interest retained by any supplier) to which
Lessee is a party.
6. There are no suits or proceedings pending or threatened in court or before any regulatory
commission, board or other administrative governmental agency against or affecting
Lessee, which will have a material adverse affect on the ability of Lessee to fulfill its
obligations under the Agreement.
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