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Resolution - 2002 - 02-08 - Approval To Sign Municipal Lease Purchase - 06/18/2002CITY OF EAGLE RESOLUTION NO. 02-08 A RESOLUTION OF THE CITY OF EAGLE, ADA COUNTY, IDAHO, APPROVING THE EXECUTION OF A MUNICIPAL LEASE PURCHASE AGREEMENT AND AN ASSIGNMENT OF OPTION AGREEMENT, BETWEEN THE CITY OF EAGLE AND WELLS FARGO BROKERAGE SERVICES, LLC; AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AND ATTEST THE MUNICIPAL LEASE PURCHASE AGREEMENT AND THE ASSIGNMENT OF OPTION AGREEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Eagle City Council is authorized and empowered to enter into contracts to acquire and convey real property pursuant to Idaho Code § 50-301 and 50-1401, et seq. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF TI IE CITY OF EAGLE, Ada County, Idaho, as follows: Section 1: The Assignment of Option Agreement between the City of Eagle and Wells Fargo Brokerage Services, LLC, a copy of which is attached to this Resolution as Exhibit A, and incorporated herein by reference, is hereby approved in all respects. Section 2: The Municipal Lease Purchase Agreement between the City of Eagle and Wells Fargo Brokerage Services, LLC, a copy of which is attached to this Resolution as Exhibit B, and incorporated herein by reference, is hereby approved in all respects. Section 3: The Mayor and City Clerk are hereby authorized to execute and attest, respectively, the Assignment of Option Agreement on behalf of the City. Upon execution of the Option to Purchase by Wells Fargo Brokerage Services, LLC, and execution of the purchase of the real property subject to the Option to Purchase, the Mayor and City Clerk are hereby authorized to execute and attest, respectively, the Municipal Lease Purchase Agreement on behalf of the City. Section 4: The Mayor is authorized to sign any and all other documents necessary to complete the lease -purchase of the real property for the new city hall. Section 5: That this Resolution shall be effective as of the date of its passage, approval and adoption. DATED this jgjt day of ..j 6 , 2002. CITY OF EAGLE Ada County, Idaho By Rick Yzaguirre, RESOLUTION NO. 02-08 — PAGE 1 OF 2 ORIGINAL ATTEST: RESOLUTION NO. 02-08 - PAGE 2 OF 2 ASSIGNMENT OF OPTION TO PURCHASE REAL PROPERTY KNOW ALL MEN BY THESE PRESENTS, that the City of Eagle, "Optionee," for good and valuable consideration to it given, receipt of which is hereby acknowledged, does convey, transfer, assign and set over unto Wells Fargo Brokerage Services, LLC, "Assignee," all of its right, title and interest in and to that certain Option to Purchase Agreement, a copy of which is attached hereto as Exhibit A and incorporated herein by reference, "Option Agreement." Eagle Village, LLC, "Optioner" grants its permission to Optionee to assign Optionee's rights to the Option to Purchase Agreement to the Assignee. The Option Agreement grants Optionee the limited right to purchase certain real property, described in the Option Agreement, from Eagle Village LLC, "Optionor." TO HAVE AND TO HOLD unto Assignee, its successors and assigns, subject to the terms, covenants, conditions and payments set forth in the above -referenced Option Agreement. UPON PERFORMANCE of the terms, covenants, conditions and payments set forth in said Option Agreement, and upon closing and full payment of the subsequent obligations thereunder, Assignee is hereby authorized and empowered to demand from the Optionor the deed covenanted to be given in said Option Agreement in the same manner, to all intents and purposes as Optionee might or could do had this Assignment not been executed. IT IS THE INTENT and purpose of this Assignment to convey and assign unto Assignee, and Assignee's successors and assigns, all of the equitable estate and interest of Optionee in the described real property, subject to all the terms, conditions and reservations of title expressed and stated in said Option Agreement. Optioner agrees to Optionee's assignment of said Option Agreement to Assignee. IN CONSIDERATION of this Assignment, Assignee assumes and agrees to perform henceforth all of the covenants and agreements undertaken by Optionee in said Option Agreement, and agrees to protect, defend and hold harmless Optionee from and against any and all claims, suits or actions arising thereunder. Assignee further agrees that if Assignee fails to exercise the Option Agreement Assignee will reimburse Optionee for any costs and/or fees incurred in acquiring additional property. DATED this day of June, 2002. OPTIONEE ASSIGNEE CITY OF EAGLE WELLS FARGO BROKERAGE SERVICES, LLC Mayor Rick Yzaguirre PAGE 1 OF 2 By: Its: EXHIBIT OPTIONER EAGLE VILLAGE, LLC By: Its: ATTEST: Sharon Moore, Clerk (SEAL) PAGE 2 OF 2 LAND LEASE PURCHASE FORM MUNICIPAL LEASE PURCHASE AGREEMENT THIS MUNICIPAL LEASE/PURCHASE AGREEMENT (the "Agreement") dated as of June 21, 2002 by and between the City of Eagle, ("Purchaser") having ns principal offices at 310 E. State Street, State of Idaho (said state being referred to throughout this Agreement as the "State") and WELLS FARGO BROKERAGE SERVICES, LLC ("WFBS"), WITNESSETH WHEREAS, with regard to any Property (hereinafter defined) not owned by Purchaser, WFBS can acquire such Property and Purchaser desires to purchase said Property from WFBS through the financing herein provided; NOW, THEREFORE, in consideration of the covenants herein, the parties agree in entering the Agreement, as amended from time to time as follows: I. Title to and Rights in Pronertv: Sale to Purchaser: Term: Security Interest: Tax Certifications Section 1.1.. Title to and Rights in Pronertv . It is understood that WFBS will acquire the Property identified on Exhibit "A" hereto from the seller thereof and will sell the same to the Purchaser pursuant to this Agreement. Never the Tess, to the extent that Purchaser has or may hereafter acquire any rights to the Property, Purchaser assigns to WFBS all rights, if any, which Purchaser has or may hereafter acquire in the Property. Section 1.2. Sale to Purchaser. Subject to the terms hereof, WFBS agrees to sell the Property to Purchaser, and Purchaser will purchase the Property from WFBS by making the installment purchase payments (the "Installment Purchase Payments") according to the schedule set forth in Exhibit "B" hereto. The cost of each the Property, WFBS's legal expenses, origination fees, and all other related costs will be included in the total cost of the Item as shown in each Exhibit "B". Section 1.3. Term. This Agreement will be effective on the date hereof. The initial term of this Agreement (the 'Initial Term") begins as of the date hereof and expires at midnight on the last day of the Purchaser's current fiscal year (the "Fiscal Year"). Beginning at the expiration of the Initial Term, the term of this Agreement shall automatically be extended for a renewal term (the "Renewal Term") upon the successive appropriation by Purchaser 's governing body of amounts sufficient to pay the Installment Purchase Payments and other amounts payable hereunder The term of this agreement may be so extended for the number of Renewal Terms as necessary for all Installment Purchase Payments to be paid in full unless this Agreement is terminated as provided herein The temi of this Agreement shall expire upon the first to occur of (il the expiration of the Initial Tent or any Renewal Term under hereunder during which the temi of this Agreement is not renewed or extended by appropriation of the Purchaser, which is deternuned by the failure or refusal of purchaser's governing body to appropriate moneys sufficient to pay Installment Purchase Payments and other amounts due hereunder for Purchaser's next succeeding Fiscal Year (an "Event ofNonappropriation"), (ii) the day after the last scheduled Installment Purchase Payment due hereunder is paid in full, (iii) the day after the aggregate principal amount of Installment Purchase Payments are prepaid in full or (iv) an Event of Default under this Agreement and termination of Purchaser's rights hereunder as provided herein. Purchaser hereby agrees to notify WFBS immediately of the occurrence of an Event of Nonappropriation under this Agreement Section 1.4. Title. Title Insurance and Related Matters. Title to the Property shall be conveyed to WFBS as soon as possible on or after the date hereof and will be conveyed by WFBS to Purchaser subject to the WFBS's rights and other terms hereunder. Purchaser shall cause to be furnished to WFBS prior to WFBS acquiring title to the Property , such environmental reports, title policies and/or other reports and infomtanon as WFBS shall require. -1- Section 1.5. Security Interest in Aoorooriated Funds. To secure payment of al] amounts due under this Agreement and to secure the performance and observance by Purchaser of all the covenants expressed or implied herein, Purchaser does hereby grant a security interest in all funds appropriated by the Purchaser for payment under this Agreement to WFBS in accordance with the Uniform Commercial Code of the State. Section 1.6. Tax Certification and Indemnification. (a) Purchaser agrees and certifies as follows: (I) Moneys on deposit in any fund or account related to this Agreement will not be used in a way that will cause the interest component of any Installment Payment to be includable in WFBS's income for federal tax purposes; (2) No use will be made of proceeds of the Agreement, or any funds or accounts of Purchaser which may be deemed to be such proceeds, which would cause the Agreement to be an "arbitrage bond" under Section 148 of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder (the "Code"). Purchaser will comply with the requirements of Section 148 of the Code; (3) Purchaser will not take, cause to be taken or fail to take any action, the result of which would cause the interest component of any Installment Payment to be ineligible for exclusion from WFBS's gross income under Section 103 of the Code or would cause the Agreement to be a "private activity bond" or to fail to meet any applicable requirement of Section 149 of the Code; (4) Purchaser will file the information report required by Section 149(e) of the Code, and provide to WFBS other evidence of the Purchaser's filing of all necessary documents unless WFBS opts to make such filings as provided for under Section 6.1(c) below. (5) The Agreement will not at any time be a "private activity bond" (as defined in Section 141 of the Code); (6) the reasonably anticipated amount of tax exempt obligations as described in Section 103(a) of the Code ("Tax Exempt Obligation") (including qualified 501(c)(3) bonds and excluding other private activity bonds) which will be issued by Purchaser and its subordinate entities during the current calendar year will not exceed $10,000,000. Not more than $10,000,000 of obligations issued by Purchaser during the current calendar year will be designated by Purchaser for purposes of Section 265(b)(3) of the Code. This Agreement has been entered into on the basis that WFBS will be entitled to the exception contained in Section 265(b)(3) of the Code (the "Exception") with respect to the deduction of interest expense allocable to tax-exempt interest. If, as a result of the falsity or breach of Purchaser's representations or agreements in this Section 1.6, WFBS will not have or will lose the right to claim the Exception, upon thirty (30) days' written notice to Purchaser by WFBS, Purchaser shall, to the extent permitted by the Agreement and by applicable law, pay WFBS an amount which, in the reasonable opinion of WFBS and after deduction of all taxes required to be paid by WFBS with respect to receipt of such amount, will cause WFBS's net after-tax retum over the term of this Agreement to equal the net after-tax return that would have been available if WFBS had been entitled to the Exception. (b) Purchaser is exempt from the arbitrage rebate requirements of Section 148(1) of the Code because: (I I Under Section 148(f)(4)(D) of the Code (i) it is a political subdivision of the State with general taxing powers and is not a subordinate entity of any other political subdivision, (ii) this will not at any time be a "private activity bond" (as defined in Section 141 of the Code), (iii) 95% or more of the net proceeds of this Agreement will be used for local governmental activities of the Purchaser within the meaning of Section 148(0(4)(D)(i)(II1) of the Code, (iv) Purchaser has not issued any Tax Exempt Obligations in this calendar year other than this Agreement and those referenced in Section 1.6(a) above, (v) the aggregate face amount of all Tax Exempt Obligations (other than private activity bonds), including this Agreement, which will be issued by Purchaser and its subordinate entities during the calendar year in which an Item is delivered will not exceed $5,000,000; and/or (2) Purchaser is entitled to the exception under Section 148(f)(4)(B)(11 of the Code because the gross proceeds (as defined in Section 148(0(6)(B) of the Code) of this Agreement (including costs of issuance) will be expended for and allocated to the governmental purposes of this Agreement within six months after the date hereof FXH ! B VT B (c) To the extent Purchaser fails to qualify for either of the above rebate exceptions, it will (i) timely pay to the United States any payments necessary to preserve the tax-exempt status of the interest component of the Installment Payments (provided, that this section is not intended to create a debt for purposes of the Constitution of the State) and (ii) take all such actions that may be necessary to comply with the rebate requirements of Section 148(0 of the Code. (d) WFBS will pay the proceeds of this Agreement to the seller of the Property no later than five (5) business days after the date of this Agreement. Purchaser therefore reasonably expects that such proceeds will be spent within the three-year temporary period provided in the Treasury Regulations issued or proposed under the Code including amendments and successor provisions thereto (the "Regulations"). (e) Purchaser has investigated the facts, estimates and circumstances in existence on the date hereof, together with Purchaser's exceptions as to future events. These are true and are complete in all material respects, and on the basis of such, it is not expected that the use of the sale proceeds hereof or any other moneys or property will be used in a manner which will cause this Agreement to be an arbitrage bond within the meaning of Section 148 of the Code. Such expectations are reasonable, and there are no other facts, estimates or circumstances that would materially change such expectations. (0 None of the proceeds hereof will be used, directly or indirectly, in any trade or business carried on by any person other than a Governmental Unit, which is defined to include any state of the United States and any political subdivision, agency, instrumentality or entity acting by or on behalf of a state, but not including the United States or any agency or instrumentality thereof, no more than 10% of the Property will be used directly or indirectly in a trade or business carried on by any such person, and no more than 5% of the Property will be used directly or indirectly in a trade or business carried on by any such person which is not related to any govemment use of such Property. (g) The payment of the Installment Payments will not be directly or indirectly (i) secured by any interest in property used or to be used for a private business use or payments in respect thereof, or (ii) derived from payments in respect of property or borrowed money used or to be used for private business. (h) None of the proceeds hereof will be used, directly or indirectly, to make or finance loans to persons other than a Govemmental Unit. (i) No person, other than Purchaser or another Govemmental Unit, will use the Property on any basis other than the same basis as the general public; and no person other than a Governmental Unit will be a user of the Property as a result of (i) ownership, or (ii) actual or beneficial use pursuant to a lease or a management or incentive payment contract, or (iii) any other similar arrangement. (j) Subsequent to fifteen (15) days before the date hereof, Purchaser has not sold (nor will it deliver within fifteen (15) days after the date hereof) any other obligations pursuant to the same plan of financing, which will be paid from substantially the same source of funds (or which will have substantially the same claim to be paid from substantially the same source of funds) without regard to guarantees from unrelated parties as this Agreement or which will be paid directly or indirectly from the proceeds hereof. (k) The Property is not expected to be sold or otherwise disposed of prior to the expiration hereof. (I) The certifications and representations made herein are intended, and may be relied upon, as a certification described in Section 1.148-2(b)(2) of the Regulations. (m) WFBS represents as follows: (1) The interest rate on this Agreement is not unreasonably high. (2) WFBS enters into this Agreement for investment and not for assignment to others. The amount WFBS funds pursuant hereto is the issue price hereof and does -2- not exceed the fair market value of this Agreement as of the date hereof. (n) Should the payments hereunder be deemed by the State or the federal government not to be exempt from income taxation, Purchaser agrees that it will pay as additional sums hereunder sufficient funds to adjust the interest to be paid hereunder to an amount equivalent to the income contemplated hereunder as a tax exempt transaction. Said adjustment will be retroactive and apply to any installments already paid by Purchaser to WFBS to the extent that any ruling by any such taxing authority requires the payment of additional tax upon payments already received by WFBS. This obligation will survive the full performance of this Agreement. Il. Payment of Purchase Price: Warranty Disclaimers Section 2.1. Aereement to Pay. Subject to the limitation of Section 2.5 of this Agreement, Purchaser will pay WFBS from funds appropnated therefor and any other moneys legally available for that purpose at the place set forth in Exhibit "B" or such other place as WFBS may designate the Installment Payments, in such amounts, including principal and interest, and on such date as called for in Exhibit "B" hereto along with the reasonable expenses of WFBS related hereto, except expenses included in the cost of the Property pursuant to Section 1.2, and any other payment required under the Agreement. If any amount payable hereunder is not paid within ten (10) days after it is due, Purchaser will pay to WFBS an amount equal to five percent (5%) of such overdue payment plus interest on such overdue payment at the rate of eighteen percent (18%) per annum as a supplemental payment. Purchaser's payment obligation hereunder is not subject to any defense, right of setoff or counterclaim arising out of any breach by WFBS, hereunder or otherwise, or out of any indebtedness or any liability at any time owing by WFBS. WFBS HAS NO RIGHT TO COMPEL PURCHASER TO LEVY OR COLLECT TAXES TO MAKE ANY PAYMENTS REQUIRED HEREUNDER, OR TO EXPEND FUNDS BEYOND THE AMOUNT PROVIDED FOR IN THE THEN CURRENT FISCAL YEAR OF PURCHASER. Section 2.2 Warranties. WFBS MAKES NO EXPRESS OR IMPLIED WARRANTIES AS TO ANY MATTER WHATSOEVER, INCLUDING THE EXTENT OF OR ENFORCEABILITY OF ANY CLAIM, WARRANTY, AGREEMENT OR REPRESENTATION OF THE SELLER OF THE PROPERTY NO DEFECT OR UNFITNESS OF THE PROPERTY WILL RELIEVE PURCHASER OF ITS OBLIGATIONS HEREUNDER. WFBS MAKES NO REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, OR ITS DELIVERY, INSTALLATION, DESIGN, PERFORMANCE, SPECIFICATIONS, CONDITION, DURABILITY, SUITABILITY, FITNESS FOR USE OR MERCHANTABILITY. AS BETWEEN WFBS AND PURCHASER, ALL PROPERTY IS ACCEPTED AND PURCHASED HEREUNDER BY PURCHASER "AS IS," "WHERE -IS," AND "WITH ALL FAULTS," AND WFBS WILL NOT BE RESPONSIBLE FOR ANY PATENT OR LATENT DEFECTS THEREIN, OR ANY DAMAGES, WHETHER ACTUAL, SPECIAL. CONSEQUENTIAL OR INCIDENTAL, ARISING THEREFROM. Under no circumstances will WFBS be liable for actual, special, incidental, consequential or other damages of or to Purchaser or any other entity arising out of or in connection with the maintenance, use or performance of the Property. Section 2.3. Prenavment. If no Event of Default, or event which with notice or lapse of time, could become an Event of Default, exists, upon fifteen (15) days prior written notice Purchaser may prepay the purchase price of the Property on any date by paying the applicable After Payment Principal Balance set forth in Exhibit "B' plus accrued Interest to that payoff date and an amortization of the servicing fee, whereupon WFBS will transfer title to the Property to purchaser by a quit claim deed. Section 2.4. Anorooriations. (a) The Purchaser, by entering into this Agreement, acknowledges its current intention to make all payments due during its current fiscal year on the dates such payments are then due but does not commit to a legal or other obligation to make such payments or to incur any liability beyond the revenue and income provided during its then current fiscal year. In the event the Purchaser's goveming body fails to include in its proposed budget or related documents for the ensuing fiscal year or fails to appropriate sufficient funds to fully fund all 'of Purchaser's obligations to make payments hereunder for any future • fiscal year, or otherwise chooses not to renew the Lease Term of this Agreement for an additional fiscal year, then the Purchaser will immediately notify the WFBS or its assignee of such occurrence and the Purchaser's right to possession of the Property constituting, and all its interest in the Property, will terminate as of September 30 of the fiscal year in which the failure to appropriate occurs. In such case, the liability and obligations of the Purchaser and remedies of WFBS will be limited to recovery only of funds appropriated for payments for the then current fiscal year. (b) The Purchaser agrees to use its best efforts to obtain authorization and appropriation of such funds and that the governing body of the Purchaser shall, for each ensuing fiscal year in which the payments are scheduled to be made and that, to the extent funds have been appropriated for the current fiscal year, it will make all such payments; and that if sufficient funds are appropriated and budgeted by it for the next fiscal year for the lease of the Property, then the Term of this Agreement will be deemed renewed for such fiscal year and will be effective for such fiscal year. Section 2.5. Nonaonrooriation. If the goveming body of the Purchaser fails to specifically appropriate sufficient funds to make the payments due in any Fiscal Year with regard to any specific Item and no such appropriation is legally made within two weeks after demand by WFBS, an event of nonappropriation ("Event of Nonappropriation") will have occurred, and the term of this Agreement will be deemed not to have been renewed and this Agreement will terminate at the end of the then current Fiscal Year, whereupon Purchaser will be obligated to pay those amounts then due subject to the provisions herein. At the end of such Fiscal Year, WFBS will have the right to take possession of the Property. Nothing in this Section or elsewhere in this Agreement will be deemed in any way to obligate the Purchaser beyond its current Fiscal Year. If the Purchaser fails or refuses to renew the Teri of this Agreement for the next Fiscal Year as permitted above, makes any payment due for that purpose and relinquishes the Property as provided elsewhere in this Agreement, then Purchaser will have no further liability under this Agreement and the Property has been surrendered to the WFBS III. Duties of WFBS. So long as no Event of Default or Event of Nonappropriation has occurred WFBS agrees to cooperate with Purchaser, at Purchaser's expense, in asserting all such rights related to the Property, provided that Purchaser shall, to the extent permitted by law, indemnify and hold harmless WFBS from and against all related claims, costs, damages, losses and liabilities. if no Event of Default or Event of Nonappropriation has occurred, Purchaser's use of the Property will not be interrupted by WFBS or anyone claiming solely through or under WFBS. IV. Duties of Purchaser. Section 4.1. Use and Maintenance of Property. Purchaser will comply with all laws, rules and regulations with respect to the use, maintenance and operation of the Property, and if any additional improvement to the Property is required, Purchaser will do so at its own expense Section 4.2. Sale and Encumbrance. Purchaser will not attempt to sell, lease or encumber the Property and will continue to own and use it for the public purposes of Purchaser. Section 4.3. Inspection At any time during Purchaser's normal working hours, WFBS may inspect the Property where it is located and inspect all related records of Purchaser. Section 4.4. Insurance: Damaee or Destruction. Purchaser will provide public liability insurance and physical damage and loss acceptable to WFBS with respect to the Property in amounts not less than those specified in Exhibit "B" with either a responsible insurance company authorized to do business in the State. or an actuarially sound self-insurance program. Each policy will name WFBS as an additional insured and loss payee and provide that it may be altered or canceled only after thirty (30) days' written notice to WFBS. Purchaser will deliver to WFBS on demand evidence satisfactory to WFBS showing the existence of such insurance, and will deliver to WFBS evidence satisfactory to WFBS showing renewal or replacement of such insurance within thirty (30) days prior to expiration or cancellation. If Purchaser fails to maintain such insurance, WFBS may obtain such insurance as WFBS deems necessary, and Purchaser will reimburse WFBS for all premiums therefor together with interest at eighteen percent (18%) per annum. Purchaser will immediately notify WFBS of any loss for which an insurance claim may be made, and shall, at Purchaser's option: (a) Exercise its option to prepay under section 2.3; or (b) Place any damaged Items in as good a condition as before such damage, and replace any missing Items with similar Property of at least equal value. Any such replacement will be subject to this Agreement, and Purchaser grants a security interest therein free of all liens. Section 4.5. Taxes. Purchaser shall, to the extent permitted by law, pay when due and indemnify WFBS against all taxes and charges of any nature imposed against WFBS, Purchaser or the Property with respect to the Property or its purchase, ownership, delivery, leasing, possession, use, or disposition. or upon the rentals or earnings therefrom, or with respect to the Agreement, unless Purchaser is contesting such in good faith and by appropriate proceedings. If any report or return is required with respect to any obligation of Purchaser under this Section, Purchaser will notify WFBS and make such report or retum in a manner satisfactory to WFBS. Section 4.6. Indemnification. Purchaser will indemnify, protect, and hold harmless WFBS or assignee or transferee of WFBS and their respective agents and servants from and against all claims, causes of action, damages, liability (including strict liability in tort and environmental liability), costs, fees, or expenses (including attorney's fees) incurred in any manner by or for the account of any of them relating to the Property or any part thereof including without limitation the construction, purchase, delivery, installation, ownership, leasing or retum of the Property or as a result of the use, maintenance, repair, replacement, operation or condition, thereof (whether defects are latent or discoverable by WFBS or by Purchaser) except such as may result from the negligence or willful misconduct of WFBS, or assignee or transferee thereof and their respective agents and servants. Purchaser agrees to give WFBS prompt notice of any claim or liability hereby indemnified against. WFBS agrees to cooperate with Purchaser in any defense or other action which Purchaser is by this Article obligated to undertake. Section 4.7. Morteaees. Liens. Etc.. Purchaser will not directly or indirectly create, incur, assume, or permit the existence of any mortgage, secunty interest, pledge, lien, charge, encumbrance, or claim on or with respect to the Property, title thereto or any interest therein except the respective rights of WFBS and Purchaser as herein provided and liens for taxes either not yet due or being contested in good faith and by appropriate proceedings. Purchaser will promptly, at its own expense, take such actions as may be necessary duly to discharge any such mortgage, security interest, pledge, lien, charge encumbrance, or claim not specifically excepted above. V. Events of Default and Remedies Section 5.1. Events of Default. The following will be Events of Default: (a) Purchaser's failure to pay any payment hereunder 10 days after it is due; (b) Purchaser's failure to maintain the insurance required under section 4.4: (c) Purchaser's failure to perfomm any covenant, condition or agreement under the Agreement within 30 days after written notice requesting that such failure be remedied; (d) Ani representation or warranty made by Purchaser to WFBS being materially false or misleading when made; (e) Purchaser will become insolvent or bankrupt or make an assignment for the benefit of creditors or consent to the appointment of a trustee or receiver, or a trustee or a receiver will be appointed for Purchaser for a substantial part of its property without its consent and will not be dismissed within a period of sixty (60) days, or bankruptcy, reorganization or insolvency proceedings will be instituted by or against Purchaser and, if instituted against Purchaser, will not be dismissed for a period of sixty (60) days: and, (f) Purchaser defaults in any other material agreement to which Purchaser is a part with third parties resulting in a right by such third parties to accelerate the maturity of Purchaser's indebtedness under such other agreement, and such indebtedness materially impairs Purchaser's ability to pay its obligations to WFBS under this Agreement. Section 5.2. Remedies. Whenever an Event of Default has occurred subject to the limitation of Section 2.4 of this Agreement, WFBS may exercise any one or more of the following remedies: (a) By written notice to Purchaser, declare all amounts coming due during the current Fiscal Year for all Property to be immediately due and payable; (b) Take possession of the Property, sell or lease it and retain the proceeds, holding Purchaser liable for an amount equal to (i) all amounts payable hereunder to the end of the then current Fiscal Year less (ii) the proceeds of such sale or lease, however, if the proceeds of such sale or lease exceed the amount required to compensate the WFBS for all payments contemplated under this Agreement plus any expenses related to said sale or lease, any costs to repair or replace the Property and any other expenses related thereto, then such excess proceeds will be paid to Purchaser; and, (c) Take any action at law or in equity necessary or desirable to enforce its rights hereunder or as holder of title to the Property. Section 5.3. No Remedy Exclusive: Repossession. (a) No remedy herein is exclusive, and every remedy is in addition to every other remedy at law or in equity. No delay in exercising or failure to exercise any right or power will be a waiver thereof. No notice will be necessary to entitle WFBS to exercise any remedy, except as required in this Article. To the extent permitted by law, Purchaser waives any requirements of law, now or hereafter in effect, which might limit or modify WFBS's remedies; (b) If WFBS is entitled to repossess the Property, Purchaser shall, if WFBS requests, make it available at a reasonable place designated by WFBS and execute and deliver such documents as may be required to restore clear title to WFBS. Purchaser will bear all costs of removal and delivery of the Property and repairs to Purchaser's property. VI. Representations, Covenants and Warranties of Purchaser. Section 6.1. Representations. Covenants and Warranties of Purchaser. (a )Purchaser represents, covenants and warrants for the benefit of WFBS that Purchaser is a political subdivision of the State with statutory authority to enter into this Agreement, and has been duly authorized to execute, deliver and carry out its obligations under this Agreement and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body politic and corporate. Purchaser is not subject to any legal or contractual provision which restricts or prevents it from entering into performing under this Agreement, except laws affecting creditors' rights generally. There is no known pending or threatened action, proceeding, or investigation affecting Purchaser, nor to the best knowledge of Purchaser is there any basis therefor, wherein an unfavorable result would adversely affect this Agreement; (b) There are no Hazardous Substances on the Property and Purchaser shall comply with all Hazardous Substance taw, relating to the Propeny as though Purchaser were an owner of the Property (c) Purchaser will file all necessary statements under Section 149(e)(2) of the Code to allow the interest payable under this Agreement to be excluded from the WFBS's income that is subject to federal and the State income tax and will furnish to seller evidence of such filing, or at the WFBS's option, it will notify Purchaser of its intent to file necessary tax filings on behalf of Purchaser after which Purchaser will provide WFBS all needed cooperation to facilitate such tax filings The execution and performance of this Agreement will not violate any judgment, order, law or regulation, constitute a default under any instrument binding upon Purchaser, or create any encumbrance upon any assets of Purchaser or the Property, except as herein provided. Purchaser has never non -appropriated or defaulted under any of its obligations under any lease -purchase contract, bond, or other debt obligation. Purchaser has been duly authorized to execute and deliver this Agreement under the terms and provisions of its duh adopted Resolution and further represents, covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the due authorization of this Agreement. No approval, consent, or withholding of objection is required from any governmental authority other than Purchaser with respect to the entering into or performance by Purchaser of this Agreement. The balance sheet of Purchaser for its most recent fiscal year and the related earnings statement of Purchaser for such fiscal year have been furnished to WFBS and fairly present Purchaser's financial condition as of such -4- date and the result is of it's operations for such year in accordance with generally accepted accounting principles consistently applied, and since such date there has been no material adverse change in such conditions or operations. Section 6.2. Opinion of Counsel. If WFBS requests, Purchaser will deliver to WFBS an opinion of Purchaser's legal counsel on and as of the date of this Agreement with respect to the matters in Section 6.1 and such other matters as WFBS reasonably requests. In addition, Purchaser agrees to provide WFBS with any other documents reasonably requested by WFBS prior to WFBS's funding of this Agreement. VII. Assignments. WFBS may convey, assign and grant a security interest in any of its rights or interests in and subject to this Agreement or the Property. Purchaser will not conve, assign or grant a security interest in this Agreement or the Property in whole or in part. VIII. WFBS's Rights to Perform for Purchaser.(a) Subject to the limitations set forth within this Agreement, if Purchaser fails to perform or comply with any of its agreements contained herein, WFBS may, but will not be required to, make any payment or perform or comply with any covenant or agreement contained herein, and all reasonable expenses of WFBS incurred in connection therewith will be payable by Purchaser upon demand together with interest at the rate of eighteen percent (18%) per annum from the date of payment to the date of reimbursement; (b) Purchaser will promptly and duly execute and deliver to WFBS such further documents or instruments of further assurance and take such further action as WFBS may from time to time 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 WFBS hereunder, if requested, at the expense of Purchaser. IX. Miscellaneous. The Agreement will be govemed by the laws of the State . Notice to either party will be sufficient if sent by first class United States Mail to the address shown below the party's signature. If a provision of the Agreement is invalid or unenforceable, the remainder may be enforced to the fullest extent permitted by law. This Agreement may be executed in multiple original counterparts. The Agreement will bind and inure to the benefit of the parties' permitted successors and assigns. The headings herein will not in any way affect the Agreement. The Agreement is the entire agreement of the parties and supersedes all prior agreements and understandings, both written and oral, with respect to the subject matter hereof. The Agreement may not be amended, changed or modified except by written agreement executed by both parties hereto Idaho Code ' 9-505 provides that a promise or commitment to lend money or to grant or extend credit in an original principal amount of Fifty Thousand Dollars ($50,000 i or more, made by a person or entity engaged in the business of lending money or extending credit, must be in writing to be enforceable. IN WITNESS WHEREOF, Purchaser and WFBS have executed this Agreement as of the date first above written. THE CITY OF EAGLE, IDAHO "Purchaser" (SEAL) By: Its: Attested and Countersigned: Purchaser's Clerk or Recorder Notice address: 310 East State Street Eagle, ID 83616 Attention: Sharon Moore, City Treasurer WELLS FARGO BROKERAGE SERVICES, LLC. "WFBS" By: Its: Vice President Notice address: Wells Fargo Brokerage Services, LLC Public Finance Division MAC: N9303-095 608 Second Avenue South, 9th Floor Northstar East Building Minneapolis, MN 55479 Attention: Stephanie Opdahl -5- EXHIBIT "A" PROPERTY DESCRIPTION 1. The street address of the Property is: (Please fill in) 2. The legal description of the Property is as set forth below: Lot 6 & 7, Aquila Subdivision, Eagle, ID 83616 (insert legal description) EXHIBIT "B Date: June 21, 2002 c. Additional riders, exclusions or special terms required by WFBS 1. GENERAL PROPERTY INFORMATION Eagle Village LLC Seller 877 West Main, Suite 700 Address Boise City Jack Coonce Contact Name ID State 208' Telephone Number 83702 Zip Code 5 PURCHASER'S BILLING ADDRESS: City of Eagle Name 310 East State Street Address (Street or P.O. Box 2. PAYMENT AMORTIZATION SCHEDULE: Eagle ID 83616 Property Cost $493,980.00 Cin State Zip Code (Per Option or Earnest Money ) Less Down Payment $ 0.00 6. ADDRESS PAYMENTS TO (Place of Payment). Equals Amount Financed $493,980.00 Purchaser will pay 2 periodic Payments, the first on 7/21/02 of$300.000.00 (Number of payments) to payoff on 6/21/03 or as follows: AMORTIZATION AND REPAYMENT SCHEDULE OR SEE ATTACHED SUPPLEMENT TO EXHIBIT "B" Payment No. Date Payment Principal Interest Principal Amount Comoonent Component Balance 1 7/21/02 $300.000.00 $297,999.38 $2,000.62 $195,980.62 2 6/21/03 $204,711.56 $195,980.62 $8,730.94 $0 3. THIS OBLIGATION EARNS INTEREST AT AN ANNUAL PERCENTAGE RATE OF 4.86%. The payments herein will be composed of principal and interest. In the event of changes in the Annual Percentage Rate due to events as outlined in 1.6 (q) of this Agreement (Tax Indemnification), this payment and amortization schedule will be modified to seller's equivalent taxable annual percentage rate in order to preserve Seller's anticipated after tax yield 4. The minimum amount of insurance to be provided by Purchaser with respect hereto is as follows. a. Liability: $ each occurrence $ property damage liability b. All Risk Physical Damage and Loss. -7- Wells Fargo Brokerage Services, LLC Public Finance Division MAC: N9303-095 608 Second Avenue South, 9th Floor Northstar East Building Minneapolis, MN 55479 Attention: Stephanie Opdahl 7. PREPAYMENT: The option to prepay is available at par plus accrued interest to the payoff date plus an amortization of the servicing fee at any time with a 15 day written notice. 6/18/02 DRAFT