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HomeMy WebLinkAbout05-20-19 City Commission Packet Materials - C4. Lease-Purchase Agreement with Merchants Bank for a 2019 Elgin Sweeper Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: John Van Delinder, Streets Superintendent Shawn Kohtz, Interim Director of Public Works SUBJECT: Authorize the City Manager to sign a Lease-Purchase agreement with Merchants Bank Equipment Finance for a 2019 Elgin Broom Bear Sweeper. MEETING DATE: May 20, 2019 AGENDA ITEM TYPE: Consent RECOMMENDATION: Authorize the City Manager to sign a Lease-Purchase agreement with Merchants Bank Equipment Finance for a 2019 Elgin Broom Bear Sweeper. BACKGROUND: The approved FY19 Street Maintenance Capital Improvement Program (CIP) STR34 and the FY19 approved budget lists $100,000 for sweeper leases. This sweeper was acquired by tagging onto the MDT bid for sweepers in order to get the best price. This expenditure is listed in the CIP plan through FY24, which will be last lease payment for this sweeper. UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. FISCAL EFFECTS: This item is in the FY19 Street Maintenance CIP and approved FY19 budget. Attachments: Lease-Purchase Agreement and Exhibits Report compiled on: May 9, 2019 15 Lease-Purchase Agreement 10/2017 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 LEASE-PURCHASE AGREEMENT Lessee: City of Bozeman Lease No.: 102043004 This Lease-Purchase Agreement dated the 29th day of April (the “Lease”), by and between Merchants Bank Equipment Finance, a division of Merchants Bank, National Association, whose address is 7600 Parklawn Avenue, Suite 384, Minneapolis, MN 55435, as agent for one or more persons (the “Lessor”) and City of Bozeman, located in Gallatin County, as Lessee (the “Lessee”), whose address is 121 N. Rouse Ave., Bozeman, Montana 59715. W I T N E S E T H: WHEREAS, Lessee is authorized by State statutes to acquire (1) 2019 Elgin Broom Bear Sweeper by entering into a lease-purchase agreement; and WHEREAS, pursuant to a resolution duly adopted by the Lessee on see attached, the Lessee has determined that it is necessary to further the maintenance purposes of the Lessee that it acquire (1) 2019 Elgin Broom Bear Sweeper described herein as Equipment; and WHEREAS, Lessor is willing to acquire the Equipment and to lease and sell it to Lessee pursuant to this Lease; NOW, THEREFORE, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties hereto recite and agree as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the meanings herein specified. Authorized Representative: Shall mean (a) with respect to the Lessee, the officer of the Lessee or any other Person or Persons at any time designated by resolution of Lessee's governing body or written certificate conferring authority upon such person to act on behalf of the Lessee with respect to this Lease; and (b) with respect to the Lessor, any authorized signatory of the Lessor authorized by their bylaws to act or to execute documents on behalf of the Lessor. Certificate of Acceptance: The Certificate of Acceptance of Lessee the form of which is attached hereto as Exhibit C. Code: The Internal Revenue Code of 1986, as amended and any regulations promulgated thereunder by the United States Department of the Treasury. Commencement Date: The date upon which Lessee’s obligations to make Lease- Purchase Payments accrues as evidenced by the issuance to Lessor of the Certificate of Acceptance attached hereto as Exhibit C. Contractor: Each of the manufacturers or vendors from whom Lessee (or Lessor at Lessee’s request) has ordered or will order or with whom Lessee (or Lessor at Lessee’s request) has contracted or will contract for the manufacture, delivery and/or installation of the Equipment. Cost or Costs: The costs of acquisition and installation of the Equipment and all other costs incidental and related thereto, including the costs of preparation, marketing and sale of this Lease. 16 Lease-Purchase Agreement 10/2017 Equipment: The (1) 2019 Elgin Broom Bear Sweeper described in the attached Exhibit A which is being leased and purchased by Lessee pursuant to this Lease. Fiscal Year: Each twelve (12) month fiscal period of Lessee commencing on 1st of July and ending on the 30th of June the following year. Independent Counsel: An attorney duly admitted to the practice of law before the highest court of the State who is not a full-time employee of Lessor or Lessee. Interest: The portion of any Lease-Purchase Payment designated as and comprising interest as shown in the attached Exhibit B. Lease: This Lease-Purchase Agreement dated as of 04/29/2019, whereby the Lessor has leased the Equipment to Lessee, as the same may from time to time be amended or modified. Lease-Purchase Payment: The payment due from Lessee to Lessor on each Payment Date, as shown on Exhibit B. Net Proceeds: Any insurance proceeds, paid with respect to the Equipment, remaining after payment therefrom of all expenses incurred in the collection thereof. Payment Date: The date upon which any Lease-Purchase Payment is due and payable as provided in Exhibit B. Permitted Encumbrances: As of any particular time: (i) liens for taxes and assessments not then delinquent, or which Lessee may, pursuant to the provisions of Section 7.3 hereof, permit to remain unpaid, (ii) this Lease and amendments hereto, (iii) Lessor’s interest in the Equipment, and (iv) any mechanic’s, laborers, materialperson’s supplier’s or vendor’s lien or right not filed or perfected in the manner prescribed by law, other than any lien arising through a Contractor or which Lessee may, pursuant to Article VIII hereof, permit to remain unpaid. Person or Persons: An individual, partnership, corporation, trust or unincorporated organization. Prepayment Price: With respect to the Equipment, as of any Payment Date, the amount so designated and set forth opposite such date in the attached Exhibit B. Principal: The portion of any Lease-Purchase Payment designated as principal in the attached Exhibit B. Request for Disbursement of Funds: The Request for Disbursement of Funds of Lessee, the form of which is attached hereto as Exhibit C-1. Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered the Equipment from a Contractor. State: The State of Montana. State and Federal Law or Laws: The Constitution and any law of the State and any charter, ordinance, rule or regulation or any agency or political subdivision of the State, and any law of the United States, and any rule or regulation of any federal agency. Term, Term of this Lease or Lease Term: The period commencing on the execution of this Lease and ending on the date the last Lease-Purchase Payment is due and payable, as shown on Exhibit B. Section 1.2 Exhibits. The following Exhibits are attached to and by reference made part of this Lease: Exhibit A: A description of the Equipment including the serial number thereof which shall be inserted when available. 17 Lease-Purchase Agreement 10/2017 Exhibit B: A schedule to be completed by Lessor as provided in Section 4.1, indicating the date upon which the Term of this Lease shall end, the date and amount of each Lease-Purchase Payment coming due under the Lease Term and the amount of Principal and Interest comprising each Lease-Purchase Payment. Exhibits C and C-1: A Certificate of Acceptance of Lessee with a Request for Disbursement of Funds attached indicating that the Equipment has been or will be delivered and installed in accordance with the Specifications, and has been accepted by Lessee, the date on which Lease-Payments shown in Exhibit B shall commence, and that certain other requirements have been met by Lessee. Exhibit D: An opinion of counsel to Lessee as to the organization, nature and powers of Lessee, the validity, execution and delivery of this Lease and various related documents; the absence of litigation; and related matters. Exhibit E: A form of resolution of the governing body of Lessee, relating to this Lease and, if applicable, certain federal tax matters. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1 Representations, Covenants and Warranties of Lessee. Lessee represents, covenants and warrants as follows: (a) Lessee is a political subdivision and municipal corporation, duly organized and existing under the Constitution and laws of the State. (b) Lessee is authorized under the Constitution and laws of the State to enter into this Lease and the transactions contemplated hereby, and to perform all of its obligations hereunder. (c) The officer of Lessee executing this Lease has been duly authorized to execute and deliver this Lease under the terms and provisions of a resolution of Lessee’s governing body, or by other appropriate official action. (d) In authorizing and executing this Lease, Lessee has complied with all open meeting laws, public bidding and other State and Federal laws applicable to this Lease and the acquisition of the Equipment by Lessee. (e) Lessee will not pledge, mortgage or assign this Lease, or its duties and obligations hereunder to any other Person, firm or corporation, except as provided under the terms of this Lease. (f) Lessee will use the Equipment during the Lease Term only to perform its essential governmental functions. (g) Lessee will take no action that would cause the interest portion of the Lease-Purchase Payments to become includable 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-Purchase Payments does not become includable in gross income of the recipient for federal income tax purposes under the Code and Regulations. (h) Upon execution of this Lease-Purchase Agreement, and upon each request for a disbursement of funds hereunder, Lessee will provide to Lessor a completed and executed copy of the Certificate of Acceptance attached hereto as Exhibit C. (I) Upon the execution of this Lease, Lessee will provide to Lessor an opinion of its legal counsel in the form attached hereto as Exhibit D. (j) Lessee will submit to the Internal Revenue Service an information reporting statement at the time and in the form required by the Code. 18 Lease-Purchase Agreement 10/2017 (k) Lessee will cause a resolution substantially in the form attached hereto as Exhibit E to be adopted by its governing body. (l) Lessee does not reasonably anticipate that it will issue tax-exempt obligations (not including “private activity bonds” as defined in Section 141 of the Code) in an aggregate amount in excess of $10,000,000 during the calendar year in which the Term commences, and this Lease is designated as a qualified tax-exempt obligation for purposes of Section 265(b)(3) of the Code relating to deductibility of interest by financial institutions. Section 2.2 Representations, Covenants and Warranties of Lessor. Lessor represents, covenants and warrants as follows: (a) Lessor has the power to enter into this Lease, is possessed of full power to own and hold real and personal property, and to lease and sell the same. (b) Neither the execution and delivery of this Lease, nor the fulfillment of or compliance with the terms and conditions thereof, nor the consummation of the transactions contemplated thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or agreement or instrument to which Lessor is now a party or by which Lessor is bound; constitutes a default under any of the foregoing; or results in the creation or imposition any lien, charge or encumbrance whatsoever upon any of the property or assets of Lessor, or upon the Equipment, except Permitted Encumbrances. ARTICLE III AGREEMENT TO LEASE Section 3.1 Lease. Lessor hereby leases the Equipment to Lessee, and Lessee hereby leases the Equipment from Lessor, upon terms and conditions set forth in this Lease and subject to the option to purchase set forth in Section 4.3 hereof. Section 3.2 Possession and Enjoyment. Lessor hereby covenants to provide Lessee during the Term with the quiet use and enjoyment of the Equipment, and Lessee intends to during the Term peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except as expressly set forth in the Lease. Lessor will, at the request of Lessee and at Lessee’s cost, join any legal action in which Lessee asserts its right to such possession and enjoyment to the extent Lessor lawfully may do so. All warranties extended upon the Equipment by the Contractors shall inure to the benefit of the Lessee during the term of this Lease. Section 3.3 Lessor Access to Equipment. Lessee agrees that Lessor shall have the right at all reasonable times to examine and inspect the Equipment. Lessee further agrees that Lessor shall have such rights of access to the Equipment as may be reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by Lessee to perform its obligations hereunder. Section 3.4 Tax and Ownership and Lessee. The Lessor warrants and represents that it shall not at any time during the term of the Lease claim depreciation, cost recovery deductions, or tax credit for federal income tax purposes with respect to the equipment, or portion thereof, and that it shall not take any position for federal income tax purposes that is inconsistent with the unequivocal title and ownership for any and all tax purposes of the Lessee. ARTICLE IV TERM OF LEASE Section 4.1 Lease Term. This Lease shall be in effect for a Term commencing upon the execution hereof and ending as provided in Section 4.2. Section 4.2 Termination of Lease Term. The Term of this Lease will terminate upon the occurrence of the first of the following events: (a) A default by Lessee and Lessor’s election to terminate this Lease pursuant to Article XII without payment of all Lease-Purchase Payments; or (b) The payment by Lessee of all Lease-Purchase Payments and all other amounts authorized or required to be paid by Lessee hereunder. 19 Lease-Purchase Agreement 10/2017 (c) Nonappropriation of funds by Lessee pursuant to Section 12.7 hereof. Section 4.3 Option to Purchase. Lessee has the option to purchase the Equipment by paying the applicable prepayment price in accordance with Section 10.1 hereof. ARTICLE V LEASE-PURCHASE PAYMENTS Section 5.1 Lease-Purchase Payments. Lessee agrees to pay Lease-Purchase Payments during the Term of this Lease, in the amounts and on the dates specified in Exhibit B. All Lease-Purchase Payments shall be paid to Lessor at its offices at the address specified in Section 1.1 of this Lease, or to such other Person or entity to which Lessor has assigned such Lease-Purchase Payments as specified in Article XI, at such place as such assignee may from time to time designate in lawful money of the United States of America to Lessor or, in the event of assignment of the right to receive Lease-Purchase Payments by Lessor, to its assignee. Interest shall accrue from the date of the Certificate of Acceptance. Section 5.2 Source of Payment. All Lease-Purchase Payments required to be paid Lessor pursuant to this Lease shall be paid from moneys duly budgeted, appropriated, obligated and otherwise provided and made available therefor by Lessee. Section 5.3 Interest Component. A portion of each Lease-Purchase Payment is paid as and represents the payment of Interest. Exhibit B sets forth the Interest component of each Lease-Purchase Payment. Section 5.4 Lease-Purchase Payments to be Unconditional. The obligation of Lessee to make Lease- Purchase Payments or any other payments required hereunder shall be absolute and unconditional in all events, except as expressly provided under this Lease. Notwithstanding any dispute between Lessee and Lessor or any other Person, Lessee shall make all Lease-Purchase Payments and other payments required hereunder when due and shall not withhold any Lease- Purchase Payment or other payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or counterclaim against its obligation to make such Lease-Purchase Payments or other payments required under this Lease. Lessee’s obligation to make Lease-Purchase Payments or other payments shall not be abated through accident or unforeseen circumstances. Except as provided in Section 12.7 hereof, nothing herein shall be construed to release Lessor from the performance of its obligations hereunder, and if Lessor should fail to perform any such obligation, Lessee may institute such legal action against Lessor as Lessee may deem necessary to compel the performance of such obligation or to recover damage therefor. Section 5.5 Late Payments. See Section 12.6. ARTICLE VI INSURANCE AND NEGLIGENCE Section 6.1 Liability Insurance. Upon receipt of possession of the Equipment, Lessee shall take measures as may be necessary to ensure that any liability for injuries to or death of any Person or damage to or loss of property arising out of or in any way relating to the condition or operation of the Equipment or any part thereof, is covered by a blanket or other general liability insurance policy maintained by Lessee. The Net Proceeds of all such insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which any Net Proceeds may be paid. Section 6.2 Property Insurance. Upon receipt of possession of the Equipment, Lessee shall have and assume the risk of loss with respect thereto. Lessee shall procure and maintain continuously in effect during the Term of this Lease, all-risk insurance, subject only to the standard exclusions contained in the policy, in such amount as will be at least sufficient so that a claim may be made for the full replacement cost of any part thereof damaged or destroyed. Such insurance may be provided by a rider to an existing policy or under a separate policy. Such insurance may be written with customary deductible amounts. The Net Proceeds of insurance required by this Section shall be applied to the prompt repair, restoration or replacement of the Equipment, or to the purchase of the Equipment, as provided in Section 6.6. Any Net Proceeds not needed for those purposes shall be paid to Lessee. Section 6.3 Worker’s Compensation Insurance. If required by State law, Lessee shall carry worker’s compensation insurance covering all employees on, in, near or about the Equipment, and upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Term of this Lease. 20 Lease-Purchase Agreement 10/2017 Section 6.4 Requirements for all Insurance. All insurance policies (or riders) required by this Article shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State; and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten (10) days before the cancellation or revision becomes effective. All insurance policies or riders required by Section 6.3 shall name Lessee as insured party. Lessee shall deposit with Lessor policies (or riders) evidencing any such insurance procedure by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any policy (or rider), Lessee shall furnish to Lessor evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, unless such insurance is not obtainable in which event Lessee shall notify Lessor of this fact. Section 6.5 Lessee’s Negligence. Lessee assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to the Equipment and for injury to or death of any Person or damage to any property, whether such injury or death be with respect to agents or employees of Lessee or of third parties, and whether such property damage be to Lessee’s property or property of others, which is proximately caused by the negligent conduct of Lessee, its officers, employees and agents. Section 6.6 Damage to or Destruction of Equipment. If after delivery of the Equipment to Lessee all or any part of the Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee shall as soon as practical after such event, replace the same at Lessee’s sole cost and expense with equipment of equal or greater value to the Equipment immediately prior to the time of the loss occurrence, such replacement equipment to be subject to Lessor’s reasonable approval, whereupon such replacement shall be substituted in this Lease by appropriate endorsement, subject to the provisions of Section 12.7 hereof. Lessee shall notify Lessor of which course of action it will take within fifteen (15) days after the loss occurrence. If Lessee fails or refuses to notify Lessor within the required period, Lessor may, at its option, exercise its remedies under Article XII hereof. The Net Proceeds of all insurance payable with respect to the Equipment shall be available to Lessee and shall be used to discharge Lessee’s obligations under this Section. Section 6.7 Cooperation of Lessor. The Lessor shall cooperate fully with the Lessee at the sole expense of the Lessee, in filing any proof of loss with respect to any insurance policy covering the casualties described in this Section. To the extent it may lawfully do so, the Lessor will permit the Lessee to litigate in any proceeding resulting therefrom and the name of it and on behalf of the Lessor. In no event will the Lessor voluntarily settle or consent to the settlement of any proceeding, arising out of any insurance claim with respect to the Equipment or any part thereof, without the written consent of the Lessee. ARTICLE VII OTHER OBLIGATIONS OF LESSEE Section 7.1 Use; Permits. Lessee shall exercise due care in the installation, use, operation and maintenance of the Equipment, and shall not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any State or Federal Law or for a purpose or in a manner contrary to that contemplated by this Lease. Lessee shall obtain all permits and licenses necessary of the installation, operation, possession and use of the Equipment. Lessee shall comply with all State and Federal Laws applicable to the installation, operation, possession and use of the Equipment, and if compliance with any such State or Federal Law requires changes or additions to be made to the Equipment, such changes or additions shall be made by Lessee at its expense. Section 7.2 Maintenance of Equipment by Lessee. Lessee shall, at its own expense, maintain, preserve and keep the Equipment in good repair, working order and condition, and shall from time to time make all repairs and replacements necessary to keep the Equipment in such condition. Lessor shall have no responsibility for any of these repairs or replacements. Section 7.3 Taxes, Other Governmental Charges and Utility Charges. (a) Except as expressly limited by this Section, Lessee shall pay all taxes and other charges of any kind whatsoever which are at any time lawfully assessed or levied against or with respect to the Equipment, the Lease-Purchase Payments or any part thereof, or which become due during the Term of this Lease, whether assessed against Lessee or Lessor. Lessee shall also pay when due all gas, water, steam, electricity, heat, power, telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment, and all special assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien of the Equipment; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as are required to be paid during the Term of this Lease as and when the same become due. Lessee shall not be required to pay any federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit, excess profit, 21 Lease-Purchase Agreement 10/2017 capital stock, corporate or other similar tax payable by Lessor, its successors or assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge which is the obligation of Lessee under this Section. (b) Lessee may, at its own expense and in its own name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments, utility or other charges so contest to remain unpaid during the period of such contest and any appeal therefrom unless Lessor shall notify Lessee that, in the opinion of Independent Counsel, by nonpayment of any such items the interest of Lessor in the Equipment will be materially endangered or the Equipment or any part thereof will be subject to loss for forfeiture, in which event Lessee shall promptly pay such taxes, assessments, utility or other charges or provide Lessor with full security against any loss which may result from nonpayment, in the form satisfactory to Lessor. Section 7.4 Advances. If Lessee shall fail to perform any of its obligations under this Article, Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and Lessee shall be obligated to repay all such advances on demand, with interest at the rate of 18.0 % per annum or the maximum rate permitted by law, whichever is less, from the date of the advance to the date of repayment. Section 7.5 Disbursements. (a) As payments are required for the Equipment under this Lease, the Lessee as the agent for the Lessor shall prepare and submit a Certificate of Acceptance of Lessee with a Request for Disbursement of Funds to the Lessor. (b) The Lessor shall permit the withdrawal of funds requested in the Request for Disbursement of Funds, and such funds shall be applied to the payment of the Cost of the Equipment. ARTICLE VIII TITLE Section 8.1 Title. During the Term of this Lease, legal title to the Equipment and any all repairs, replacements, substitutions and modifications to it shall be in Lessee’s name subject to Lessor's interest. Upon termination of this Lease for any of the reasons specified in Section 4.2 (b), Lessor’s interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor’s security or other interest in the Equipment. Section 8.2 Security Interest. Lessor shall have and retain a security interest under the Uniform Commercial Code, Certificate of Title or other applicable State or Federal Law in the Equipment, the proceeds thereof and all repairs, replacements, substitutions and modifications thereto or thereof pursuant to Section 8.5, in order to secure Lessee’s payment of all Lease-Purchase Payments due during the Term of this Lease and the performance of all other obligations herein to be performed by Lessee. Lessee will join with Lessor in executing such financing statements or other documents and will perform such acts as Lessor may request to establish and maintain a valid security interest in the Equipment. If requested by Lessor, Lessee shall conspicuously mark the Equipment with appropriate lettering, labels or tags, and maintain such markings during the Term of this Lease, so as clearly to disclose Lessor’s security interest in the Equipment. Section 8.3 Liens. During the Term of this Lease, Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Equipment, other than the respective rights of Lessor and Lessee as herein provided and Permitted Encumbrances. Except as expressly provided in Section 7.3 and this Article, Lessee shall promptly, at its own expense, take such action as may be necessary duly to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise at any time. Lessee shall reimburse Lessor for any expense incurred by Lessor in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. Section 8.4 Installation of Lessee’s Equipment. Lessee may at any time and from time to time, in its sole discretion and at its own expense, install other items of equipment in or upon the Equipment, which items shall be identified by tags or other symbols affixed thereto as property of Lessee. All such items so identified shall remain the sole property of Lessee, in which Lessor shall have no interest, and may be modified or removed by Lessee at any time provided that Lessee shall repair and restore any and all damage to the Equipment resulting from the installation, modification or removal of any such items. Nothing in this Lease shall prevent Lessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease-purchase contract, or subject to a vendor’s lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Equipment. Section 8.5 Modification of Equipment. Lessee shall at its own expense, have the right to make repairs to the Equipment, and to make repairs, replacements, substitutions and modifications to all or any part of the parts thereof. All such work and any part or component used or installed to make a repair or as a replacement, substitution or modification, shall 22 Lease-Purchase Agreement 10/2017 thereafter comprise part of the Equipment and be subject to the provisions of the Lease. Such work shall not in any way damage the Equipment or cause it to be used for purposes other than those authorized under the provisions of State or Federal Law or those contemplated by this Lease; and the Equipment, upon competition of any such work shall be of a value which is not less than the value of the Equipment immediately prior to the commencement of such work. Any property for which a replacement or substitution is made pursuant to this Section may be disposed of by Lessee in such manner and on such terms as are determined by Lessee. Lessee will not permit any mechanic’s or other lien to be established or remain against the Equipment for labor or materials furnished in connection with any repair, replacement, substitution or modification made by Lessee pursuant to this Section; provided that if any such lien is established and Lessee shall first notify Lessor of Lessee’s intention to do so, Lessee may in good faith contest any lien field or established against the Equipment, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period such contest and any appeal therefrom unless Lessor shall notify Lessee that, in the opinion of Independent Counsel, by nonpayment of any such items the interest of Lessor in the Equipment will be materially endangered or the Equipment or any part thereof will be subject to loss or forfeiture, in which event Lessee shall promptly pay and cause to be satisfied and discharged all such unpaid items or provide Lessor with full security against any such loss or forfeiture, in form satisfactory to Lessor. Lessee will cooperate fully with Lessee in any such contest. Section 8.6 Personal Property. The Equipment is and shall at all times be and remain personal property notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner affixed or attached to or embedded in or permanently rested upon real property or any building thereon or attached in any manner to what is permanently rested upon real property or any building thereon or attached in any manner to what is permanent by means of cement, plaster, nails, bolts, screws or otherwise. ARTICLE IX WARRANTIES Section 9.1 Selection of Equipment. The Equipment and the Contractor have been selected by Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment, its suitability for the use intended by Lessee, the acceptance by the Contractor or its sales representative of the order submitted, or any delay or failure by the Contractor or its sales representative to manufacture, deliver or install the Equipment for use by Lessee. Lessee authorized Lessor to add the serial number of the Equipment to Exhibit A when available. Section 9.2 Installation and Maintenance of Equipment. Lessor shall have no obligation to install, erect, test, inspect, service or maintain the Equipment under any circumstances, but such actions shall be the obligation of Lessee or the Contractor. Section 9.3 Contractor’s Warranties. Lessor hereby assigns to Lessee for and during the Term of the Lease, all of its interest in all Contractor’s warranties and guarantees, express or implied, issued on or applicable to the Equipment, and Lessor hereby authorizes Lessee to obtain the customary services furnished in connection with such warranties and guarantees at Lessee’s expense. Section 9.4 Patent Infringement. Lessor hereby assigns to Lessee for and during the Term of this Lease all of its interest in patent indemnity protection provided by any Contractor with respect to the Equipment. Such assignment of patent indemnity protection by Lessor to Lessee shall constitute the entire liability of Lessor for any patent infringement by Equipment furnished pursuant to this Lease. Section 9.5 Disclaimer of Warranties. THE EQUIPMENT IS DELIVERED AS IS, AND LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT. ARTICLE X PREPAYMENT Section 10.1 When Available. Lessee shall have the option to prepay its obligations under this Lease on any Payment Date at an amount equal to the applicable Prepayment Price. Section 10.2 Release of Lessor’s Interest. Upon the prepayment of Lessee’s obligations under this Lease in accordance with Section 10.1 hereof, Lessee shall have no further obligations under this Lease and this Lease shall terminate 23 Lease-Purchase Agreement 10/2017 in accordance with Section 4.2(b). Thereupon the Lessor shall relinquish title to the Equipment in accordance with Section 8.1. ARTICLE XI ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING Section 11.1 Assignment by Lessor. Except as otherwise provided herein, Lessor shall not assign its obligations under this Lease, and no purported assignment thereof shall be effective. All of Lessor’s rights, title and/or interest in and to this Lease, the Lease-Purchase Payments or other amounts due hereunder and the Equipment may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor at any time, without the consent of Lessee. No such assignment shall be effective as against Lessee unless and until the assignor shall have filed with Lessee a copy or written notice thereof identifying the assignee. Lessee shall pay all Lease-Purchase Payments due hereunder to or at the direction of Lessor or the assignee named in the most recent assignment or notice of assignment filed with Lessee. During the Lease Term, Lessee shall keep a complete and accurate record of all such assignments. In the event Lessor assigns participation in its right, title and/or interest in and to this Lease, the Lease-Purchase Payments and other amounts due hereunder and the Equipment, such participants shall be considered to be Lessor with respect to their participated shares thereof. Section 11.2 Assignment and Subleasing by Lessee. Neither this Lease nor Lessee’s interest in the Equipment may be assigned by Lessee without the written consent of Lessor. However, the Equipment may be subleased by Lessee, in whole or in part, without the consent of Lessor, subject, however, to each of the following conditions: (a) This Lease and the obligation of Lessee to make Lease-Purchase Payments hereunder, shall remain obligations of Lessee. (b) The sublease shall assume the obligation of Lessee hereunder to the extent of the interest subleased. (c) Lessee shall, within 30 days after the delivery thereof, furnish or cause to be furnished to Lessor a true and complete copy of such sublease. (d) No sublease by Lessee shall cause the Equipment to be used for a purpose other than an essential governmental function authorized under the provisions of the Constitution and the laws of the State. (e) No sublease shall cause the Interest component of the Lease-Purchase Payments due with respect to the Equipment to become includable in gross income of the recipient for federal income tax purposes. Section 11.3 Restriction on Mortgage or Sale of Equipment by Lessee. Except as provided in Section 11.2, Lessee will not mortgage, sell, assign, transfer or convey the Equipment or any portion thereof during the Term of this Lease, or remove the same from its boundaries, without the written consent of Lessor. ARTICLE XII EVENTS OF DEFAULT AND REMEDIES Section 12.1 Events of Default Defined. (a) The following shall be “events of default” under this Lease and the terms “events of default” and “default” shall mean, whenever they are used in this Lease, with respect to the Equipment, any one or more the following events: (i) Except as permitted by Section 12.7 hereof, failure by Lessee to pay any Lease-Purchase Payment or other payment required to be paid under this Lease at the time specified herein and the continuation of said failure for a period of three days after telephonic or telegraphic notice given by Lessor that the payment referred to in such notice has not been received, such telephonic or telegraphic notice to be subsequently confirmed in writing, or after written notice. (ii) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in clause (i) of this Section, for a period of thirty (30 days after written notice specifying such failure and requesting that it be remedied has been given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected. 24 Lease-Purchase Agreement 10/2017 (iii) The filing by Lessee of a voluntary petition in bankruptcy, or failure by Lessee promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Lessee to carry on its governmental or proprietary function or adjudication of Lessee as a bankrupt, or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to Lessee in any proceedings instituted under the provisions of the Federal Bankruptcy Statutes, as amended, or under any similar acts which may hereafter be enacted. (b) The provisions of this Section 12.1 and Section 12.2 are subject to the following limitation: if by reason of force majeure Lessee is unable in whole or in part to carry out its obligation under this Lease with respect to the Equipment, other than its obligation to pay Lease-Purchase Payments with respect thereto which shall be paid when due notwithstanding the provisions of this paragraph, Lessee shall not be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of god, strikes, lockouts or other labor disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or the State or their respective departments, agencies or officials, or any civil or military authority; insurrections, riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Lessee and not resulting from its negligence. Lessee agrees, however, to remedy with all reasonable dispatch the cause or causes preventing Lessee from carrying out its obligations under this Lease; provided that the settlement of strikes, lockouts and other labor disturbances shall be entirely within the discretion of Lessee and Lessee shall not be required to make settlement of strikes, lockouts and other labor disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of Lessee unfavorable to Lessee. Section 12.2 Remedies of Default. Whenever any event of default referred to in Section 12.1, clauses (i) to (iii) hereof shall have happened and be continuing with respect to the Equipment described on Exhibit A, Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps: (i) With or without terminating this Lease, re-enter and take possession of such Equipment and exclude Lessee from using it; provided, however, that if this Lease has not been terminated, Lessor shall return possession of such Equipment to Lessee when the event of default is cured; and provided further that Lessee shall continue to be responsible for the Lease-Purchase Payments due with respect to such Equipment during the Fiscal Year then in effect; or (ii) With or without terminating this Lease, re-enter and take possession of such Equipment, and sell, lease or sublease such Equipment or any part of it, holding Lessee liable for the difference between (a) the sales price, rent and other amounts paid by the purchaser, lessee or sublessee pursuant to such sales agreement, lease or sublease and (b) the balance of the Lease-Purchase Payments and other amounts owed by Lessee with respect to such Lease; provided, however, that nothing contained herein shall impose an obligation upon Lessor so to sell, lease or sublease such Equipment and provided that any excess proceeds from such disposition shall be retained by Lessor; or (iii) With or without terminating this Lease, declare all Lease-Purchase Payments during the Fiscal Year then in effect due or to become due with respect to such Lease in effect when the default occurs to be immediately due and payable by Lessee, whereupon such Lease-Purchase Payments shall be immediately due and payable; or (iv) Take whatever action at law or in equity may appear necessary or desirable to collect the Lease- Purchase Payments then due and thereafter to become due during the then current Fiscal Year of Lessee with respect to such Lease, or enforce performance and observance of any obligation, agreement or covenant of Lessee under this Lease. Section 12.3 Return of Equipment. Upon termination of this Lease prior to the payment of all Lease-Purchase Payments, Lessee shall return the Equipment to Lessor in the condition, repair, appearance and working order required in Section 7.2, in the following manner as may be specified by Lessor: (a) by delivering the Equipment at Lessee’s cost and expense to such place within the State as Lessor shall specify; or (b) by loading such portions of the Equipment as are considered movable at Lessee’s cost and expense, on board such carrier as Lessor shall specify and shipping the same, freight prepaid, to the place specified by Lessor. If Lessee refuses to return the Equipment in the manner designated, Lessor may repossess the Equipment and charge to Lessee the costs of such repossession or pursue any remedy described in Section 12.2. Section 12.4 No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under 25 Lease-Purchase Agreement 10/2017 this Lease. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof by any such right and power. Each remedy may be exercised from time to time and as often as may be deemed expedient by Lessor or its assignee. Section 12.5 Agreement to Pay Attorney’s Fees and Expenses. In the event either party to this Lease should default under any of the provisions hereof and the nondefaulting party should employ attorneys and/or incur other expenses for the collection of monies or for the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fee of such attorneys and/or such other reasonable expenses so incurred by the nondefaulting party. In the event that legal proceedings relating to this Lease are commenced in any court or before any other tribunal of competent jurisdiction, the reasonable legal fees and other reasonable costs and expenses of the prevailing party shall be paid by the nonprevailing party on demand of the prevailing party. Section 12.6 Late Charges. Whenever any event of default referred to in Section 12.1, clause (i) hereof shall have happened and be continuing with respect to the Equipment described on Exhibit A, Lessor shall have the right, at its option and without any further demand or notice, to require a late payment charge equal one and one-half percent (1.5%) per month of the delinquent Rental Payment, and Lessee shall be obligated to pay the same immediately upon receipt of Lessor's written invoice therefor; provided, however, that this Section 12.6 shall not be applicable if or to the extent that the application thereof would affect the validity of this Lease. Section 12.7 Non-Appropriation of Funds. (a) Notwithstanding any provision in the Lease to the contrary, in the event that no funds or insufficient funds are appropriated by Lessee’s governing body for the next fiscal year for Lease- Purchase Payments due under this Lease, this Lease shall terminate the end of such fiscal year on the last day of the fiscal year for which appropriations were received and Lessee shall return the Equipment to Lessor (at Lessee’s expense, to a destination Lessor directs, in good working condition less normal wear and tear). Lessee shall notify Lessor of nonappropriation within thirty (30) days of its occurrence. (b) Lessee and Lessor acknowledge and agree that the Lease-Purchase Payments hereunder shall constitute currently budgeting expenditures of Lessee from its capital expenditure fund or successor fund thereto. Lessee’s obligations under this Lease shall be subject to Lessee’s annual right to terminate this Lease, and shall not constitute a mandatory charge of requirement in any ensuing fiscal year beyond the then current fiscal year. No provision of this Lease shall be construed or interpreted as creating a general obligation or other indebtedness of Lessee within the meaning of any constitutional or statutory debt limitation. This Lease shall not directly or indirectly obligate Lessee to make any payments beyond those budgeted and appropriated from its general fund for Lessee’s then current fiscal year provided, Lessee, to the extent permitted by law, shall take all reasonable steps necessary to seek appropriations for the Lease Payments. Lessee shall be under no obligation whatsoever to exercise its option to purchase the Equipment. No provision of this Lease shall be construed to pledge or create a lien on any class or source of Lessee monies. ARTICLE XIII ADMINISTRATIVE PROVISIONS Section 13.1 Notices. All notices, certificates, legal opinions or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in registered form with postage fully prepaid to the addresses specified below; provided, that Lessor and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificate, legal opinion or other communication will be sent. Lessor: Merchants Bank Equipment Finance 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 Lessee: City of Bozeman 121 N. Rouse Ave. Bozeman, Montana 59715 Section 13.2 Financial Information. During the Term of this Lease, Lessee annually will provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing fiscal year and such other financial information 26 Lease-Purchase Agreement 10/2017 relating to the ability of Lessee to continue to pay Lease-Purchase Payments required under this Lease as may be requested by Lessor or its assignee. Section 13.3 Binding Effect. This Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 13.4 Severability. In the event any provision of this Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 13.5 Amendments, Changes and Modification. This Lease may be amended or any of its terms modified only by written document duly authorized, executed, and delivered by Lessor and Lessee. Section 13.6 Captions. The captions or headings in this Lease are for convenience only and in no way defend, limit or describe the scope or intent of any provisions, articles, sections or clauses of this Lease. Section 13.7 Further Assurances and Corrective Instruments. Lessor and Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Equipment hereby leased or intended so to be, for carrying out the expressed intention of this Lease. Section 13.8 Execution in Counterparts. This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 13.9 Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State. Section 13.10 Anti-Discrimination. Lessor agrees not to discriminate against any employee or applicant for employment because of race, creed, color, national origin, sex, age, sexual orientation , gender identification, marital status, religion, or physical defect or disability with regard to but not limited to employment, upgrading, promotion or transfer, recruitment or recruitment advertising, layoffs or termination or selection for training. Section 13.11 Lessor and Lessee Representatives. Whenever under the provisions of this Lease, the approval of the Lessor or the Lessee is required to take some action at the request of the other, such approval of such request shall be given by an Authorized Representative of the Lessor, for the Lessor, and by an Authorized Representative of the Lessee, for the Lessee. Any party hereto shall be authorized to rely on such approval of request. IN WITNESS WHEREOF, Lessor has caused this Lease to be executed in its corporate name by its duly authorized officers; and Lessee has caused this Lease to be executed in its name by duly authorized officers, as of the date first above written. LESSOR: LESSEE: MERCHANTS BANK EQUIPMENT FINANCE, City of Bozeman a division of Merchants Bank, National Association ____________________________________ ____________________________________ Print or type full name Print or type full name By: By: Signature Signature Title: Title: 27 Lease-Purchase Agreement 10/2017 EXHIBIT A DESCRIPTION OF EQUIPMENT (1) 2019 Elgin Broom Bear Sweeper Serial Number: 4MH11363 28 Lease-Purchase Agreement 10/2017 EXHIBIT B PAYMENT SCHEDULE Commencement Date: 04/29/2019 Date Payment Interest Principal *Purchase Option Price Loan 04/29/2019 223,395.00 1 04/29/2019 41,387.85 0.00 41,387.85 182,007.15 2019 Totals 41,387.85 0.00 41,387.85 2 04/29/2020 41,387.85 8,077.09 33,310.76 148,696.39 2020 Totals 41,387.85 8,077.09 33,310.76 3 04/29/2021 41,387.85 6,598.83 34,789.02 113,907.37 2021 Totals 41,387.85 6,598.83 34,789.02 4 04/29/2022 41,387.85 5,054.96 36,332.89 77,574.48 2022 Totals 41,387.85 5,054.96 36,332.89 5 04/29/2023 41,387.85 3,442.59 37,945.26 39,629.22 2023 Totals 41,387.85 3,442.59 37,945.26 6 04/29/2024 41,387.85 1,758.63 39,629.22 0.00 2024 Totals 41,387.85 1,758.63 39,629.22 Grand Totals 248,327.10 24,932.10 223,395.00 TOTAL: $223,395.00 INTEREST RATE: 4.35% *Amount due after payment of Lease-Purchase Payment due on the same day. All amounts received by Lessor shall be applied first to late payment charges and expenses, then to accrued interest, and then to principal payments in inverse order, as determined by lessor, as permitted by law. 29 Lease-Purchase Agreement 10/2017 EXHIBIT C ACCEPTANCE CERTIFICATE The undersigned, being a duly appointed Lessee Representative, under the Lease Purchase Agreement dated as of 04/29/2019 (the (“Lease”), by and between Merchants Bank Equipment Finance (“Lessor”), and the City of Bozeman, (“Lessee”), hereby certifies on behalf of Lessee with respect to the Equipment to be acquired under Lease Exhibit A, that the portion of the Equipment described on the attachment to this Acceptance Certificate has been delivered and installed pursuant to and in accordance with said Lease and has been accepted by Lessee. Dated: _______________________. As Lessee: City of Bozeman Print or type full name By: Signature Title: 30 Lease-Purchase Agreement 10/2017 EXHIBIT C-1 REQUEST FOR DISBURSEMENT OF FUNDS TO: Merchants Bank Equipment Finance (“Lessor”) 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 FROM: City of Bozeman (“Lessee”) 121 N. Rouse Ave. Bozeman, Montana 59715 The Lessee hereby requests disbursement of funds pursuant to the Lease Purchase Agreement dated 04/29/2019 (the “Lease”), between the Lessor and Lessee, as follows: 1. Amount to be disbursed: $223,395.00 2. The payee(s) are Titan Machinery. 3. Purchase of the payment: Payment for property as described in the Lease and Exhibit C. 4. Bills, receipts, invoices or other documents evidencing the amount requested are attached hereto. 5. The Lessee hereby certifies that the amounts requested to be disbursed were properly incurred in connection with the acquisition of the Equipment as described in the Lease and were not subject of any previous request for disbursement. 6. This request is the final disbursement request. Dated: _______________ LESSEE: City of Bozeman ____________________________________________ Print or type full name By _________________________________________ Signature Its__________________________________________ 31 Lease-Purchase Agreement 10/2017 EXHIBIT D OPINION OF COUNSEL To: Merchants Bank Equipment Finance (“Lessor”) 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 Re: Lease Purchase Agreement by and between Merchants Bank Equipment Finance, a division of Merchants Bank, National Association (“Lessor”) and the City of Bozeman (“Lessee”) dated as of 04/29/2019. Ladies and Gentlemen: I have acted as counsel to Lessee with respect to the Lease Purchase Agreement described above (the “Lease”) and various related matters, and in this capacity I have reviewed a duplicate original of the Lease and various other documents. Based upon the examination of these and such other documents as we deem relevant, it is our opinion that: 1. The Lessee is authorized and has power under State law to purchase, rent or otherwise provide for personal property and has power under state law to enter into the Lease and to carry out the obligations thereunder and the transactions contemplated thereby. 2. The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee, and the Lease is a valid and binding contract of Lessee enforceable in accordance with its terms, except to the extent such enforceability is limited by State and Federal laws affecting remedies and by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights. 3. The authorization, approval and execution of the Lease and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting laws, public bidding laws and all other applicable laws, rules and regulations of the State. 4. The execution of the Lease and the appropriation of moneys to pay the Lease-Purchase Payments coming due thereunder, does not result in the violation of any constitutional, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee. 5. There is no litigation, action, suit or proceeding threatened or pending before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Lessee; the authority of its officers; the proper authorization, approval and execution of the Lease and the other documents contemplated thereby; the appropriation of moneys to make Lease-Purchase Payments under the Lease for Lessee's current Fiscal Year; or the ability of Lessee otherwise to perform its obligations under the Lease and the transactions contemplated thereby. 6. The Lease is not a general obligation debt of Lessee. Dated: ________________________________________ Very truly yours, _________________________________________ 32 Lessee’s Authorization Resolution 1/2016 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 LESSEE’S AUTHORIZATION RESOLUTION Whereas, City of Bozeman, (the “Governmental Entity”), a body politic and corporate duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State of Montana (the “State”), is authorized by the laws of the State to purchase, acquire and lease personal property for the benefit of the Governmental Entity and its inhabitants and to enter into contracts with respect thereto; and Whereas, in order to acquire such equipment, the Governmental Entity proposes to enter into a lease-purchase transaction pursuant to that certain governmental Equipment Lease-Purchase Agreement (the “Lease”) with Merchants Bank Equipment Finance, a division of Merchants Bank, National Association, the form of which has been presented to the governing body of the Governmental Entity at this meeting; Section 1. Approval of Documents. The form, terms and provisions of the Lease and all other schedules and exhibits attached thereto are hereby approved in substantially the form presented at this meeting, with such insertions, omissions and changes as shall be approved by counsel of the Governmental Entity or other members of the governing body of the Governmental Entity executing the same, the execution of such documents being conclusive evidence of such approval; and the persons holding the titles listed below or any other officer of the Governmental Entity who shall have the power to execute contracts on its behalf are hereby authorized and directed to execute, acknowledge, countersign and deliver the Lease and all exhibits attached thereto, and the Secretary/Clerk of the Governmental Entity is hereby authorized to attest to the foregoing and affix the seal of the Governmental Entity to such documents. Section 2. Other Actions Authorized. The officers and employees of the Governmental Entity shall take all action necessary as reasonably required by the parties to the Lease to carry out, give effect to and consummate the transactions contemplated thereby and to take all action necessary to conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Lease. Section 3. No General Liability. Nothing contained in this Resolution, the Lease, or any other instrument shall be construed with respect to the Governmental Entity as incurring a pecuniary liability or charge upon the general credit of the Governmental Entity or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease, or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Governmental Entity or any charge upon its general credit or against its taxing power, except to the extent that the payments payable under the Lease are special limited obligations of the Governmental Entity as provided in the Lease. Section 4. Authorized Signatories. Following are the true names, correct titles and specimen signatures of the incumbent officers referred to in the foregoing resolution. Name ( Print or Type) Title ( Print or Type) Signature Section 5. Effective Date. This Resolution shall be effective immediately upon its approval and adoption. This Resolution was adapted and approved on ____________________________. Signature:________________________________________ Secretary/Clerk Name Printed: ____________________________________ Date: ___________________________________________ 33 M – Insurance Requirement – Equipment 9/2018 INSURANCE REQUIREMENTS FORM DATE: 4/29/2019 TO: City of Bozeman FROM: Merchants Bank Equipment Finance, a division of Merchants Bank, National Association (“MBEF”) ****Provide a copy of this to your insurance agent and/or carrier**** Per Section #6 of the Lease-Purchase Agreement dated 04/29/2019 you are required to provide and maintain insurance coverage as summarized below. If you have questions, please reference the Lease or call your MBEF representative. Satisfactory evidence of insurance must be provided to MBEF before the lease schedules can be completed. Equipment Description: (1) 2019 Elgin Broom Bear Sweeper Serial Number: 4MH11363 Insurance Agent Name: Address: Address: Phone Number: Fax Number: Email: INSURANCE REQUIREMENTS SUMMARY Merchants Bank, 7600 Parklawn Avenue, Suite 384, Minneapolis, MN 55435, and/or its assigns and/or its successors must be named as: /xx/ LOSS PAYEE for property damage coverage: /xx/ Fire/Lightening, extended coverage and vandalism/malicious mischief for $223,395.00 with a deductible to $1,000 acceptable. Forward the completed certification to: Merchants Bank Equipment Finance 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 MBEF Representative: Christian Lizaola Telephone: (952) 837-4904 Fax: (855) 815-2660 Account Number: 102043004 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 34 7600 Parklawn Avenue, Suite 384 Minneapolis, MN 55435 952-837-4900 REMIT TO: Merchants Bank Equipment Finance PO Box 228 Winona, MN 55987 City of Bozeman 121 N. Rouse Ave. Bozeman, Montana 59715 Contract # 102043004 INVOICE Invoice Date: 5/7/2019 Amount Due: $41,387.85 Payment: $41,387.85 Document Fee $0 Sales Tax: $0 Total Amount Due: $41,387.85 First advance lease payment and applicable documentation fee must be made by check and accompany original signed documents. Please refer to lease document for payment due date. If participating in ACH program, ACH will not apply to the first payment and documentation fee due. 35