Okaloosa County BOCC — January 7, 2014 — grader-lease-Contracts

EICOWIN EQUIPMENT COMPANY, INC. BIRMINGHAM MOBILE HUNTSVILLE MONTGOMERY OXFORD PENSACOLA ATLANTA Mr. John Hofstad December 2, 2013 Public Works Director Okaloosa County Florida Re: Lease Documents for 4 Volvo G930B Graders Dear Mr. Hofstad, As you know, the first four Volvo G930B graders were delivered and are doing a great job from what | hear and see. The operators really seem to like the added features | ordered such as the 11 speed transmission and the anti stall function it has. We are anticipating the arrival of the next four G930B units in late December. Knowing that you will need to present the second set of lease Documents to the Board of County Commissioners for approval, | have provided them for your use as well as some other documents you may need. | know the commission meets a few times in December, so as you know, time is of the essence so that the delivery of the new units is not delayed. These lease documents are identical to the documents that were approved by the board for the first units. If you have any questions, please let me know. Again, we appreciate the opportunity to serve your needs and would value being trusted with your business. Thanks, ae ee John Edwards Governmental Sales Manager Cowin Equipment Company 850-685-7055 Jolin Edwards, Governmental Sales Manager 850-685-7055 jedwards@cowin.com , solutionje@gmaif.com EIGCOWIN BIRMINGHAM MOBILE HUNTSVILLE MONTGOMERY OXFORD PENSACOLA ATLANTA John Hofstad August 1, 2013 Okaloosa County Re: Grader Lease Good morning Mr. Hofstad, First let me say that | appreciate you making time in your schedule for us to meet yesterday. | would like to recap the main item we talked about and offer a solution that should resolve the question at hand. From the beginning of this lease process, the goa! has been to give Okaloosa County the opportunity to operate motor graders at the lowest possible cost, both on a monthly basis and on a life cycle cost basis. To accomplish this, together, we utilized a finance document that allows Okaloosa County the ability to pay a balloon at the end of the term and thereby reducing the budgetary needs on a monthly basis. At the end of the term, Okaloosa County has the following options: 1, Submit payment of the balloon and fully receive ownership of the motor graders 2. Refinance the balloon and operate the motor graders for a longer period of time 3. Exercise your buyback option and have the dealer pay Okaloosa County for the motor graders after you have made payment to the leasing company, or directly to the leasing company and then the dealer takes ownership of the motor graders. With the first group of motor graders coming off lease, the dealer, ASC Construction Equipment, paid the leasing company directly at your request, and took ownership of those graders. Those are the graders that we have rented to allow you to continue to use until your new graders arrive. By Okaloosa County retaining these options with the intent to own, you will once again have the option to keep the graders at the end of the term, refinance them at the end of the term or once again explore what the cost to replace the graders will be and possibly exercise your buyback options. In each option, you can control your budgetary needs and still provide valuable services to the public. Almost two years ago, Cowin Equipment Company purchased the Volvo Construction Equipment Dealership for this area. It has been a very smooth and seamless transition. Cowin Equipment is no stranger to Okaloosa County, so it was easy for your folks to experience the same great service with your Volvo Motor Graders that you are accustomed to receiving. Cowin has been in business for over 75 years and | can personally attest that it is the best company | have ever worked for. The Cowin family has bulit a strong legacy and financial standing in our industry. Jamie Cowin has allowed his people to grow the business and offer exceptional customer service. | can tell you that he is one of few these days and that is a man who keeps his word and insists that his people keep theirs. With that being said, we understand that you must do everything possible to reduce or eliminate all risk in the transaction of providing services. Okaloosa County attorney, Mr. John Dowd has expressed concern over the obligation of future funds with the buyback agreement and that ultimately, Okaloosa Jolin Edwards, Governmental Sales Manager 850-685-7055 jedwards@cowin.com , solutionje@gmail.com FEICOWIN EQUIPMENT COMPANY, INC. BIRMINGHAM MOBILE HUNTSVILLE MONIGOMERY OXFORD PENSACOLA ATLANTA Page 2 County is liable for the balloon. He is correct in that in order for Okaloosa County to take advantage of the low municipal lease rates, there has to be an intent to own the equipment. If there is no intent, you are just renting the equipment and the rental rates are much higher because the dealer retains ownership. In order for us to be able to offer you the lease with the balloon that offers the lowest possible cost per month, we offered Okaloosa County a buyback agreement and submitted a copy to the leasing company, Kansas State Bank. This is the same leasing company we used for the graders with the same lease document 3 years ago and they are great to work with. Leasing companies will offer higher balloons on municipal leases based on the strength of the dealer and their offer of a buyback. Kansas State Bank has allowed Mr. Dowd to suggest some changes such as non appropriation and some other items that further protect the interest of Okaloosa County. Kansas State Bank has agreed to those changes just as they did three years ago. The issue of ownership and intent came up and the only way to completely protect Okaloosa County is with a performance bond. This is a bond that is purchased and protects Okaloosa County in the event that the dealer can’t or won’t make the final balloon payment in the event Okaloosa County wants to exercise its buyback option. When this bid was initiated, there was no request in the bid for a performance bond. For years now, the municipalities have opted out of asking for simple bid bonds on most equipment purchases, so performance bonds are very rarely asked for but can be employed in situations like we have now. If a performance bond is required and placed in the bid package up front, the costs is passed on to the customer as it is a requirement of the bid. For that reason, a performance bond requested now can be purchased and we will ask Okaloosa County to issue individual purchase orders for each grader as they are delivered. | have attached a quote for the bond so that you can see what the cost of the bond is. As a result of the strong financial strength of Volvo, there is substantial savings in the performance bonds through BB & T. This should remedy Okaloosa County’s need to mitigate the risk of future obligation in the event that Okaloosa County wishes to exercise its’ buyback option at the end of the lease. Again, the quote covers the cost of the bond per motor grader. Even with the cost of the bond, the cost per month to operate the G930B graders will save you money over the previous lease and much more than any other lease offered. Mr. Hofstad, again, | appreciate us being able to work through this question concerning the lease of the Volvo Motor Graders. If you have any questions about the performance bond please give me a call. Thanks he a0 John Edwards Governmental Sales Manager Cowin Equipment Company 850-685-7055 John Edwards, Governmental Sales Manager 850-685-7055 jedwards@cowin.com , solutionje@gmail.com PLATTE RIVER INSURANCE COMPANY SURETY BOND FOR THE REPURCHASE OF EQUIPMENT Bond Number: Bond Effective Date: KNOWN ALL MEN BY THESE PRESENTS, that the Surety and the Principat under this Surety Bond are the parties named and identified as follows: Surety Principal Name: Platte River Insurance Company Principal's Name: Address: PO Box 5900 Madison, WI 53705 Primary address: Incorporated: Nebraska Telephone: (678) 528-6600 BY THIS SURETY BOND, the above named and identified Surety and Principal are held and firmly bound to: in the amount of: g } to the payment of which said sum of money, well and truly to be made and done, the Principal himself, his heirs, executors, administrators, successors and assigns, and the Suraty binds itself, ifs successors and assigns, jointly and severally, firmly by ihese presents. WHEREAS, the above named and identified Principal has entered Into a written Contract with the Obligee dated the day of fo supply the fallowing: , In accordance with specifications prepared by the Obligee which Contract is by reference made part hereof, and is herein after referred to as the "Contract" WHEREAS, the Contract provides for an established guaranteed repurchase price for the Equipment for a peroid until from date units are placed in service and upon compliance with certain stipulated conditions, and WHEREAS, the Obligee requires and the Principal and Surety agree to provide this Surety Bond in support of the above stated guarantees. NOW, THE CONDITIONS of this Surety Bond obligation are that, if the Principal shall promptly and faithfully keep his promises and perform his duties as required under the terms and conditions of his Contract with the Obligee, then this Surety Bond obfigation shall be nulf and void: otherwise it shalt remain in full force and effect. tT IS FURTHER AGREED AND UNDERSTOOD THAT: (1) The llablity of the Surety under this Surety Bond shall in no avent exceed the Bond Amount shown above; (2) The Principal and the Surety have entered into a Bond indemnity Agreement which governs their respective rights, duties and obligations to one another and limitations on such rights, duties and obligations; (3) Any suits a! law or proceedings in equity for any clalm hereunder must be filed before the expiration of one year from which final payment under the Contract falls due; (4) No right of action shall accrue on this Surety Bond to or for the use of any person or corporation other than the Obligea named heraia, or the executors, administrators, successors or assigns of the Obligee. , BURETY Platte River Insurance Company PRINCIPAL Signature: _ Signature: x. Print name: Rachel Fell Print name: Title: Attorney-in-Fact Title: Form 14096 (Rev 24/2002) ‘Authorized Countersignature (Whee Required} EIGOWwIN BIRMINGHAM MOBILE HUNTSVILLE MONTGOMERY OXFORD PENSACOLA ATLANTA Mr. Don Amunds August 12, 2013 Chairman Okaloosa County Commission Re: Grader Lease Dear Mr. Amunds, This is to update our previously signed agreement concerning the buy back of the 8 Volvo G930B Motor Graders. | have attached the original agreement for your convenience. As you know, we have agreed to provide a buy back agreement for each of the graders in the amount of $148,967.00. The amount is subject to the same condition of return as with the lease. With this lease, you have three options at the end of the term. You can pay the balloon of $148,967.00 and retain ownership of the units, you can agree to finance the balloon for a longer term if you so desire or you can exercise the buyback option. If you decide to exercise the buyback option, Cowin Equipment Company can make payment directly to Kansas State Bank for the balloon and take ownership of the graders, thereby removing your responsibility for the payment of the balloon. !t is because of our stability and the stability of Volvo that we can offer such a high residual lease option. Although no performance bond was requested with the initial bid, one has been asked for to help alleviate any possible future financial risk to Okaloosa County. Again, because of our strength, we can offer performance bonds through BB&T. The cost of these performance bonds is .70% of the balloon amount, which amounts to $3128.00 per unit. As this is something that your legal counsel has requested, we are asking that you agree to pay for the cost of each performance bond. We will have to purchase each bond and can invoice Okaloosa County as each is delivered. Again, it is because of our strength and the strength of Volvo that we can offer such a low bond rate. f want to thank you for the opportunity to help you serve the citizens of Okaloosa County. As a resident of Okaloosa County myself, | can appreciate the steadfastness with which these type of transactions are processed. We intend to stand behind our word and consider it an honor to be able to trade with clients who conduct business in the same fashion. Sincerely, John Edwards Don Amunds Governmental Sales Manager Chariman Cowin Equipment Company Inc. Okaloosa County Board of County Commissioners John Edwards, Governmental Sales Manager 850-685-7055 jedwards@cowin.com , solutionje@gmail.com _»> [cownn| Mr. Don Amunds April 22, 2013 Okaloosa County Commission 302 N Wilson Street Crestview FI 32536 Re: Buyback offer for Volvo Motor Graders Dear Mr. Amunds, | want to thank you for allowing us to offer Volvo G930B Motor Graders for your consideration. The following conditions will apply to the buyback of the units. 1. Each unit shall be in good working order and will be inspected by Cowin Equipment. Any repairs deemed necessary will be at the sole discretion of Cowin Equipment. All glass shail be intact and shall have no cracks. The sheet metal shall be in good condition and should only reflect normal wear and tear. The tires shall have at least 50% tread life remaining. All maintenance shail be performed in accordance with Volvo recommendations and Volvo filters shall be used. Preventive maintenance checklist will be provided for your use. Documentation of maintenance records will be required. 6. Each unit shail have less than 1500 hours per year of operation. For a three year buyback this will be 4500 hours. Each unit shall be enrolled in 4 year/6000 hour Extended Warranty program. 8. Cowin Equipment will perform regular inspections at no cost to Okaloosa County. In the event one of the conditions is not met, the cost to remedy will be deducted from the buyback amount. 9. It will be the responsibility of Okaloosa County to notify Cowin Equipment 90 days prior to the 36 month delivery anniversary. veer ™ Three year Buyback $148,967.00 Mr. Amunds, thank you for allowing us to continue to serve your needs. If you have any questions, please feel free to give me a call. CL phLb Ay art hn Edwards Governmental Sales Manager Cowin Equipment Company 850-685-7055 Okaloosa County Florida PURCHASE AGREEMENT This Purchase Agreement dated as of August 19, 2013 is between Kansas State Bank of Manhattan, a Kansas corporation, whose principal place of business is 1010 Westloop, Manhattan, Kansas 66502 (Seller) and Cowin Equipment Company, Inc, a Florida corporation, whose principal place of business is 7950 Pittman Avenue, Pensacola, Florida 32591 (Buyer). Whereas, Seller is the Obligee on the Lease with Option to Purchase Agreement dated as of August 19, 2013 {Contract} between Kansas State Bank of Manhattan (Obligee) and Okaloosa County Board of Commissioners (Obligor}; and Whereas, Buyer was the Vendor who supplied ail of the Equipment (Equipment) listed on Exhibit A of the Contract; and Whereas, the Obligor has agreed to pay under the payment terms of the Contract ¢ final payment of $595,868.00 which is due on January 15, 2017; and Whereas, the possibility exists that Obligor will not appropriate all of the funds necessary to make this final payment of $595,868.00 in which case the Seller (Obligee on the Contract) will most likely exercise one or more of the remedies avaifable to Seller including obtaining possession and title to the Equipment; and Whereas, Buyer has agreed to enter into this Purchase Agreement with Seller as 2 condition for the Seiler to enter into the Contract with Obligor; NOW THEREFORE, the parties hereto hereby agree as follows: {1) In the event that Seller receives notice from the Obligor that the Obiigor does not intend to appropriate the funds to pay the final payment, then, upon notification from the Seller to the Buyer of such event, Buyer agrees to take assignment of the Contract from the Selfer for an amount equal to the final payment amount of $595,868.00 plus any accrued interest earned thereon up until the date of the transfer. Once Seller assigns ali of its rights, title and interest in the Contract to Buyer as provided herein, the Buyer will have fult authority to repossess the Equipment. Seller agrees to execute any additional documentation that may be necessary in order to facilitate the repossession of the Equipment by the Buyer. (2) inthe event that the Seller actually exercises its remedy under the Contract and takes titte to the Equipment as a result of Obligors failure to pay the final Contract Payment then Buyer hereby agrees to buy the Equipment from Seller in an amount equal to the final payment amount of $595,868.00 plus accrued interest earned thereon up until the date of the transfer (3) Buyer represents and warrants as follows: a. Buyer is duly organized and vaticily existing in goad standing under the laws of the state of its incorporation. b. Buyer has full power and authority to carry on its business as presently conducted, to enter into this agreement, and to perform its obligations under this agreement, G The execution, delivery and performance of this agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of the Buyer. d. This agreement is a legal and binding obligation of Buyer, enforceable in accordance with its terms. e. Buyer has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transaction contemplated by this agreement for which Seller shall have any responsibility whatsoever. fh Buyer is knowledgeable, competent, and experienced in the industry and has independently evaluated and interpreted ail information and data relating to the equipment prior to entering into this agreement and understands and is fully able to bear the risk associated with this agreement. Buyer acknowledges that Seller has made no statements or representations concerning the present or future value of the equipment and Buyer has relied solely upon its independent inspection, estimates, computations, evaluations, reports, studies and knowledge of the equipment. g. These representations and warranties shall survive the closing. (4) Notwithstanding anything to the contrary, Seller makes no representations or warranties with respect to the equipment that is the subject of this agreement. Buyer agrees to purchase and Seller shall convey the property “as is, where is” without any representations, understandings, and/or express or implied warranties of any kind, including representations, understandings, and/or warranties as to description, value, quality, condition, merchantability, or fitness for a particular purpose. Buyer acknowledges and agrees that Selter is not in the possession of the equipment and that the Obtigor is in possession of the equipment and in contro! of such equipment. Buyer acknowledges that Seller is neither the manufacturer or distributor, and that Seller has no knowledge or familiarity with the equipment. Buyer agrees to settle alt claims, defenses, setoffs, and counterclaims it may have with any manufacturer, distributor, or other party related to the equipment, and will not assert any such claims against Selter. (5) The terms and conditions of this agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Cowin Equipment Company, Inc Kansas State Bank of Manhattan Signature Signature (ha Ediuvadds Covernmadial SalesM\annger — _Marsha Jarvis, Vice President Printed Name and Title Printed Name and Title GB- Of fl 9YZ Tax 1D Number DOCUMENTATION INSTRUCTIONS The instructions listed below should be followed when completing the enclosed documentation. Dacumentation completed improperly will delay funding. If you have any questions regarding the Conditions to Funding, instructions or the documentation, please calf us at (877) 587-4054. 1. Attached Documentation 1. 2. 3. 4, 5. 6. N ~ e Exhibit A — Description of Equipment # Review equipment description. Complete serial number/VIN if applicable. List the location where the equipment will be located after delivery/installation. Exhibit B — Payment Schedule * = Sign and print name and title Exhibit C - Certificate of Acceptance = Sign and print name and title Exhibit D - Obligor Resolution @ Type in the date of the meeting in which the purchase was approved. Print or type the name and title of the individual(s} who is authorized to execute the Contract. @ The secretary, chairman or other authorized board member of the Obligor must sign the Resolution where indicated. @ = Asecond authorized individual that is with the Obligor should attest the Resolution where indicated. Exhibit E£ - Bank Qualified Certificate @ Sign and print name and title Opinion of Counsel Request that your legal counsel retype Opinion of Counsel onto letterhead, sign and date it. # Legal counsel shall not alter the opinion. If counsel would like changes made to the opinion, they must first contact Obligee. insurance Requirements # Complete insurance company contact information where indicated. Debit Authorization — (Preferred) ¢ Complete form and attach a voided check 80386 IRS Form # Please read 8038 Review Form * In Box 2, type Employer Identification Number @ =~ Sign and print name and title il. Additional Documentation Required 1 2. 3. 4. First payment check as stated on attached invoice insurance Certificate as stated on the Insurance Requirements Form Vendor invoice for the amount to finance listing applicable SN/VIN, down payment, trade, etc. Front and back copies of MSO or title listing “Kansas State Bank AOIA” as first lien holder Hl. Condition to Funding If, for any reason: {i) the required documentation is not returned by January 22, 2014, is incomplete, or has unresolved issues relating thereto, or (ii) on, or prior to the return of the documentation, there is a change of circumstance which adversely affects the expectations, rights or security of the Obligee or its assignees; then Obligee or its assignees reserve the right to adjust the quoted interest rate or withdraw/void its offer to fund this transaction in its entirety. All documentation should be returned to: Kansas State Bank of Manhattan 1680 Charles Place Manhattan, Kansas 66502 Schedule (02’ EXHIBIT A DESCRIPTION OF EQUIPMENT RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan (Obligee) and Okaloosa County Board of Commissioners {Obligor) Below is a detailed description of all the items of Equipment including quantity, model number and serial number where applicable: Four (4) Volvo G930B Motor Graders, SN: 576117, 576118, 576119, 576120 Physical Address of Equipment after Delivery : 1759 S. Ferdon Blvd., Crestview, FL 32536 Schedule {02} EXHIBIT B PAYMENT SCHEDULE RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan (Obligee} and Okaloosa County Board of Commissioners (Obtigor) Date of First Payment: At Closing Originat Balance: $740,263.00 Total Number of Payments: Thirty-Seven (37) Number of Payments Per Year: Twelve (12) Pmt Due Contract Appliedto Applied to *Purchase No. Date Payment Interest Principal Option Price 1 At Closing $5,325.53 $0.00 $5,325.53 Not Available 2 15-Feb-14 $5,325.53 $1,451.50 $3,874.03 $739,914.85 3 15-Mar-14 $5,325.53 $1,443.85 $3,881.68 $735,760.85 4 15-Apr-14 $5,325.53 $1,436.18 $3,889.35 $731,600.27 5 15-May-14 $5,325.53 $1,428.50 $3,897.03 $727,433.11 6 15-Jun-14 $5,325.53 $1,420.80 $3,904.73 $723,259.35 7 i5-Jul-14 $5,325.53 $1,413.09 $3,912.44 $719,078.98 8B 15-Aug-14 $5,325.53 $1,405.37 $3,920.16 $714,891.99 9 15-Sep-14 $5,325.53 $1,397.62 $3,927.91 $710,698.37 10 15-Oct-14 $5,325.53 $1,389.87 $3,935.66 $706,498.11 12 15-Nov-14 $5,325.53 $1,382.09 $3,943.44 $702,291.20 12 15-Dec-14 $5,325.53 $1,374.30 $3,951.23 $698,077.63 13 15-Jan-15 $5,325.53 $1,366.50 $3,959.03 $693,857.39 14 15-Feb-15 $5,325.53 $1,358.68 $3,966.85 $689,630.47 45 9 15-Mar-15 $5,325.53 $1,350.85 $3,974.68 $685,396.85 16 15-Apr-15 $5,325.53 $1,343.00 $3,982.53 $681,156.53 17° 15-May-15 $5,325.53 $1,335.13 $3,990.40 $676,909.50 18 15-Jun-15 $5,325.53 $1,327.25 $3,998.28 $672,655.74 19 15-Jul-15 $5,325.53 $1,319.35 $4,006.18 $668,395.25 20 15-Aug-15 $5,325.53 $1,311.44 $4,014.09 $664,128.01 pan 15-Sep-15 $5,325.53 $1,303.54 $4,022.02 $659,854.02 22 15-Oct-15 $5,325.53 $1,295.57 $4,029.96 $655,573.26 23 15-Nov-15 $5,325.53 $4,287.61 $4,037.92 $651,285.72 24 = 15-Dec-15 $5,325.53 $1,279.64 $4,045.89 $646,991.39 25 25-Jan-16 $5,325.53 $1,271.65 $4,053.88 $642,690.26 26 15-Feb-16 $5,325.53 $1,263.64 $4,061.89 $638,382.32 27 15-Mar-16 $5,325.53 $1,255.62 $4,069.91 $634,067.56 28 15-Apr-16 $5,325.53 $1,247.58 $4,077.95 $629,745.97 29 = 15-May-16 $5,325.53 $1,239.53 $4,086.00 $625,417.54 30 15-Jun-16 $5,325.53 $1,231.46 $4,094.07 $621,082.25 31 15-Jul-16 $5,325.53 $1,223.37 $4,102.16 $616,740.10 32 15-Aug-16 $5,325.53 $1,215.27 $4,110.26 $612,391.08 33 15-Sep-16 $5,325.53 $1,207.15 $4,118.38 $608,035.17 34 15-Oct-16 $5,325.53 $1,199.02 $4,126.51 $603,672.36 35 = 15-Nov-16 $5,325.53 $1,190.87 $4,134.66 $599,302.64 36 =: 15-Dec-16 $5,325.53 $1,182.70 $4,142.83 $594,926.01 37 15-Jan-17 $595,868.00 $1,174.52 $594,693.48 $0.00 Okaloosa County Board of Commissioners Signature Printed Name and Title *Assumes all Contract Payments due to date are paid Schedule (02 EXHIBIT C CERTIFICATE OF ACCEPTANCE RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan (Obligee) and Okaloosa County Board of Commissioners (Obligor) }, the undersigned, hereby certify that | am a duly qualified representative of Obligor and that | have been given the authority by the Governing Body of Obligor to sign this Certificate of Acceptance with respect to the above referenced Contract. | hereby certify that: 1, The Equipment described on Exhibit A has been delivered and installed in accordance with Obligor’s specifications. 2. Obligor has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Obligor has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay ail Contract Payments required to be paid under the Contract during the current Budget Year of Obligor, and such moneys will be applied in payment of all Contract Payments due and payable during such current Budget Year. 4. Obligor has obtained insurance coverage as required under the Contract from an insurer qualified to do business in the State. 5. No event or condition that constitutes or would constitute an Event of Default exists as of the date hereof. 6. The governing body of Obligor has approved the authorization, execution and delivery of this Contract on its behalf by the authorized __ representative of Obligor who signed the Contract. 7, Please list the Source of Funds (Fund Item in Budget) for the Contract Payments that come due under Exhibit B of this Contract. Source of Funds: _ General By signing below, Obligor hereby authorizes the General Fund of the Obligor as a backup source of funds from which the Contract Payments can be made. Okaloosa County Board of Commissioners Signature Printed Name and Title Schedule (02 EXHIBIT D OBLIGOR RESOLUTION RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan {Obligee) and Okaicosa County Board of Commissioners (Obligor) At a duly called meeting of the Governing Body of the Obligor (as defined in the Contract) held on the following resolution was introduced and adopted: SE IT RESOLVED by the Governing Body of Obligor as follows: 1. Determination of Need. The Governing Body of Obligor has determined that a true and very real need exists for the acquisition of the Equipment described on Exhibit A of the Lease with Option to Purchase Agreement dated as of August 19, 2013, between Okaloosa County Board of Commissioners (Obligor} and Kansas State Bank of Manhattan (Obligee). 2. Approval and Authorization. The Governing Body of Obligor has determined that the Contract, substantially in the form presented to this meeting, is in the best interests of the Obligor for the acquisition of such Equipment, and the Governing Body hereby approves the entering into of the Contract by the Obligor and hereby designates and authorizes the following person(s} to execute and deliver the Contract on Obligor’s behalf with such changes thereto as such person(s) deem(s}) appropriate, and any related documents, including any Escrow Agreement, necessary to the consummation of the transaction contemplated by the Contract. Authorized Individual(s}: {Printed or Printed Name and Title of individual(s) authorized to execute the Contract) 3. Adoption of Resolution. The signatures below from the designated individuals from the Governing Body of the Obligor evidence the adoption by the Governing Body of this Resolution. Signature: {Signature of Secretary, Board Chairman or other member of the Governing Body) Printed Name & Title: [Printed Name and Title of individual who signed directly above) Attested By: (Signature of one additiona! person who can witness the passage of this Resolution) Printed Name & Title: {Printed Name of individual who signed directly above} Schedule (02 EXHIBIT E BANK QUALIFIED CERTIFICATE RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan {Obligee) and Okaloosa County 8oard of Commissioners (Obligor) Whereas, Obligor hereby represents that it is a “Bank Qualified” Issuer for the calendar year in which this Contract is executed by making the foltowing designations with respect to Section 265 of the Internal Revenue Code. (A “Bank Qualified Issuer” is an issuer that issues less than ten million ($10,000,000) dollars of tax-exempt obligations during the calendar year). Now, therefor, Obligor hereby designates this Contract as follows: 1. Designation as Qualified Tax-Exempt Obligation. Pursuant to Section 265(b}{3){B}{i) of the Internal Revenue Code of 1986 as amended (the “Code”), the Obligor hereby specifically designates the Contract as a “qualified tax-exempt obligation” for purposes of Section 265(b}{3) of the Code. in compliance with Section 265(b){3}(D) of the Code, the Obligor hereby represents that the Obligor will not designate more than $10,000,000 of obligations issued by the Obligor in the calendar year during which the Contract is executed and delivered as such “qualified tax-exempt obligations”. 2. Issuance Limitation. in compliance with the requirements of Section 265(b)(3)(C) of the Code, the Obligor hereby represents that the Obligor (including all subordinate entities of the Obligor within the meaning of Section 265(b}{3){E) of the Code} reasonably anticipates not to issue in the calendar year during which the Contract is executed and delivered, obligations bearing interest exempt from federal income taxation under Section 103 of the Code (other than “private activity bonds” as defined in Section 141 of the Code} in an amount greater than $10,000,000. Okaloosa County Board of Commissioners Signature Printed Name and Title OPINION OF COUNSEL {Must be Re-typed onto attorney's letterhead} (Date, must be on or after the meeting date listed on Exhibit D, Obligor Resolution) Kansas State Bank of Manhattan 1010 Westloop; P.O. Box 69 Manhattan, Kansas 66505-0069 RE: Lease with Option to Purchase Agreement dated as of August 19, 2013, between Kansas State Bank of Manhattan {Obligee) and Okaloosa County Board of Commissioners (Obligor) Ladies and Gentlemen: As legal counsel to Obligor, | have examined the foregoing Contract and such other opinions, documents and matters of law as } have deemed necessary in connection with this Contract. Based on the foregoing, 1 am of the following opinions: 1. Obligor is a political subdivision of the State of Florida, or a constituted authority authorized to issue obligations on behalf of a political subdivision of the State. 2. Obligor has the requisite power and authority to purchase the Equipment and to execute and deliver the Contract.and to perform its obligations under the Contract. The Contract and the other documents either attached hereto or required herein have been duly authorized, approved and executed by and on behalf of Obligor, and the Contract is a legal, valid and binding obligation of Obligor enforceable in accordance with its terms, 3. The authorization, approval and execution of the Contract and all other proceedings of Obligor relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state and federal laws. 4. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body that challenges the authority of the Obligor or any of the Obligor’s officers or employees to enter into the Contracts. 5. The above opinion is for the sole benefit of the Obligee listed above and can only be relied upon by the Obligee or any permitted assignee or subassignee or successor of Obiigee under the Contract. Signature of Legal Counse} INSURANCE REQUIREMENTS Pursuant to Article V of the Lease with Option to Purchase Agreement, you have agreed to provide us evidence of insurance covering the Equipment. A Certificate of Insurance listing the information stated below should be sent to us no later than the date on which the equipment is delivered. insured: Certificate Holder: Okaloosa County Board of Commissioners Kansas State Bank of Manhattan 302 N. Wilson Street, Suite 203 1010 Westloop, P.O. Box 69 Crestview, Florida 32536 Manhattan, Kansas 66505-0069 1. Equipment Description @ Four (4) Volvo G930B Motor Graders, SN: 576117, 576118, 576119, 576120 @ = Please include all applicable VIN’s, serial numbers, etc. 2. Physical Damage @ = Allrisk coverage to guarantee proceeds of at least $740,263.00. 3. © Liability ¢# Minimum Combined Single Limit of $1,000,000.00 combined single-limit on bodily injury and property damage. 4. Additional Insured and Loss Payee @ Kansas State Bank and/or Sts Assigns MUST be listed as additional insured and loss payee. Please forward certificate as soon as possible to: Fax: (785) 587-4016 or Email: jpaavola@ksstatebank.com Piease complete the information below and return this form along with the Contract. Okaloosa County Board of Commissioners Insurance Company: Agent’s Name: Telephone #: Fax #: Address: City, State Zip: Email: *PREFERRED* *As an additional payment option for Obligor, we are now providing the option of ACH (Automatic Clearing House). By completing this form, Obligor is authorizing Obligee to withdraw said payrnent amount on said date. DEBIT AUTHORIZATION | hereby authorize Kansas State Bank Government Finance Department to initiate debit entries, and, if necessary, to reinitiate returned entries up to two additional times, to the account indicated below at the financial institution named below and to debit the same to such account for: Contract Number Payment Amount Frequency of Payments 3345088 $5,325.53 Monthly Beginning Day of Month (please choose one) Month Year ro s° Ty 18°C] 20°C] i acknowledge that the origination of ACH transactions to this account must comply with the provisions of U.S. law. Financial Institution Name Branch Address City State Zip Routing Number Account Number Type of Account [7 checking (savings This authority is to remain in full force and effect until Kansas State Bank has received written notification from any authorized signer of the account of its termination in such time and manner as to afford Kansas State Bank a reasonable opportunity to act on it. Obligor Name on Contract Okaloosa County Board of Commissioners Signature Printed Name and Title Tax ID Number Date 59-6000765 PLEASE ATTACH COPY OF A VOIDED CHECK TO THIS FORM! USA Patriot Act USA Patriot Act requires identity verification for all new accounts. This means that we may require information from you to allow us to make a proper identification. INVOICE BILL TO: Okaloosa County Board of Commissioners INVOICE DATE: November 22, 2013 Attn: Accounts Payable CONTRACT NUMBER: 3345088 302 N. Wilson Street, Suite 203 PAYMENT AMOUNT: $5,325.53 Crestview, Florida 32536 PAYMENT DUE DATE: At Closing DESCRIPTION AMOUNT Contract Payment $5,325.53 Lease with Option to Purchase Agreement Dated as of August 19, 2013 for Four (4) Volvo G930B Motor Graders, SN: 576117, 576118, 576119, 576120 Additional interest will be assessed on any payment received after the due date. $5,325.53 TOTAL DUE Please remit paymentto: Kansas State Bank Government Finance Dept. P.O. Box 69 Manhattan, KS 66505-0069 For inquiries: (877) 587-4054 INVOICE BILL TO: Okaloosa County Board of Commissioners INVOICE DATE: November 22, 2013 Attn: Accounts Payable CONTRACT NUMBER: 3345088 302 N. Wilson Street, Suite 203 PAYMENT AMOUNT: $5,325.53 Crestview, Florida 32536 PAYMENT DUE DATE: February 15, 2014 DESCRIPTION AMOUNT Contract Payment $5,325.53 Lease with Option to Purchase Agreement Dated as of August 19, 2013 for Four (4) Volvo G930B Motor Graders, SN: 576117, 576118, 576119, 576120 Additional interest will be assessed on any payment received after the due date. $5,325.53 Please remit paymentto: Kansas State Bank Government Finance Dept. P.O. Box 69 Manhattan, KS 66505-0069 For inquiries: (877) 587-4054 8038 REVIEW FORM The 8038 form attached hereto is an important part of the documentation package and must be properly filled out and submitted to the Department of the Treasury in order for you to receive the lower tax-exempt rate. Unless you instruct us otherwise, we have engaged a Paid Preparer to assist in the filling out of this form. The Paid Preparer has filled out the relevant portions of this form based on the current understanding of what is required by the Department of the Treasury. The responses on this 8038 form are based on the dates and amounts which you have requested (structure of the transaction) and which are on the Payment Schedule. 1. Please review our responses for accuracy. !f anything is inaccurate, please contact our office so that we can make proper revisions. 2. if the information provided to you on this form is accurate, please sign where indicated and return with the document package. 3. ‘if there are any changes to the structure of the transaction that occur prior to funding which require a change to the 8038 form, we will make such changes and provide notification to you. 4. Wewill return to you a copy of the 8038 form that was mailed to the Department of the Treasury. Important Note: The IRS is now requesting information regarding tax-exempt issuers’ and borrowers’ written policies and procedures designed to monitor post- issuance compliance with the federal tax rules applicable to tax-exempt obligations (boxes 43 and 44). Do not check items 43 and 44 on the 8038 form unless you have established written procedures in accordance with the instructions referenced directly below. If you choose to “check” items 43 and/or 44, please be prepared to provide copies of such written procedures to the Paid Preparer or any representatives of the IRS upon request. Written procedures should contain certain key characteristics, including making provisions for: © Due diligence review at regular intervals; » Identifying the official or employee responsible for review; * Training of the responsible official/employee; « Retention of adequate records to substantiate compliance (e.g., records relating to expenditure of proceeds); * Procedures reasonably expected to timely identify noncompliance; and * Procedures ensuring that the issuer will take steps to timely correct noncompliance. For additional guidance on this 8038 form, you can refer to the Documentation Instructions located on the following government website: http://www. irs.gov/app/picklist/list/formsinstructions.html, or contact your local IRS office. rom 8038-G Information Return for Tax-Exempt Governmental Obligations (Rev. September 2011) > Under Internal Revenue Code section 149(e) OMB No. 1545-0720 Department of the Treasury| » See separate instructions. Internal Revenue Service Caution: /f the issue price is under $100,000, use Form 8038-GC. Reporting Authority if Amended Return, check here » [1] 1 Issuer's name 2 Issuers employer identification number (EIN) Okaloosa County Board of Commissioners 59-6000765 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)| 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) Reonysuite & Report number (For IRS Use Only) 302 N. Wilson Street, Suite 203 Ls | | 6 City, town, or post office, state, and ZIP code 7 ~~ Date of issue Crestview, Florida 32536 01/15/2014 8 Name ofissue , 9 CUSIP number Lease with Option to Purchase Agreement None 10a Name and title of officer or other employee of the issuer whom the IRS may cail for more information (seq 10b Telephone number of officer or other instructions) employee shown on 10a Type of issue (enter the issue price). See the instructions and attach schedule. 44 Education 2 2 ee Ed 12 Healthandhospital ....... ee ee 12 13. Transportation 2... 1 2 ee ee 1 14 Publicsafety 2.2 2]. eb‘ 18 Environment (including sewage bonds} | ee ee LS 16 Housing... 2... ee ee ee LB 17° «(Utilities 2. LAF 18 Other. Describe ® Four (4) Volvo G930B Motor Graders, SN: 576117, 576118, 576119, 576120 18 743,161 | 48 19 = ‘If obligations are TANs or RANs, check onlybox19a 2. 2 1... > O If obligations are BANs, check only box 19b . . . . woe >» O 20 ‘If obligations are in the form of a lease or installment sale, check box >» wi Description of Obligations. Complete for the entire issue for which this form is being filed. (a) Final maturity date (b) issue price (e) eae a eeemeyen an ane otesty {e) Yield 21 01/15/2017 $ 743,161.48 $ NIA 3.080 years 2.370 % Uses of Proceeds of Bond Issue (including underwriters’ discount) 22 Proceeds used for accrued interest... . . ee ee eee £22 23 _ Issue price of entire issue (enter amount from line 21, colurnn (b)) Se ee 23 24 Proceeds used for bond issuance costs (including underwriters’ discount) . . . . | 24 25 Proceeds used forcreditenhancement ............... -. . | 28 26 ~=Proceeds allocated to reasonably required reserve or or replacement fund 2.2... 26 27 ~—~ Proceeds used to currently refund priorissues 5. 2. . . £27 28 Proceeds used to advance refund prierissues 2 2 2... So ee . £28 29 =Total (add lines 24 through 28) © 6 ww woe ee ee ee 28 30 _Nonrefunding proceeds of the issue (subtract ine 29 from line 23 and enter amount here) wee 30 Description of Refunded Bonds. Complete this part only for refunding bonds. 34 Enter the remaining weighted average maturity of the bonds to be currentlyrefunded © 2. 2. 1 2 years 32 ~~ Enter the remaining weighted average maturity of the bonds tobe advance refunded .. 2... 2 1. 1. years 33 ~~ Enter the last date on which the refunded bonds willbe called (MM/DD/YYYY) . 2... 2... 34 Enter the date(s) the refunded bonds were issued » (MM/DD/YYYY) we For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 9-2011) Form 8038-G (Rev. 9-2011) Page 2 Pi Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 144(b)(5) 2 2 2 2 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . 2... Coe ee be wee wee ee | 868 Enter the final maturity date of the GIC » c¢ Enter the name of the GIC provider > 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units 2 2. 2. 2 eee : soe eee toe .| 37 38a__ If this issue is a loan made from the proceeds of another tax-exempt issue, check box ® [] and enter the following information: b Enter the date of the master pool obligation > Enter the EIN of the issuer of the master pool obligation >» d= Enter the name of the issuer of the master pool obligation > 39 If the issuer has designated the issue under section 265(b)(3)(B)(i (Ill) (small issuer exception), checkbox. . 2... 2. OM 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, checkbox... 2... 2... 7. eee ee ee eee > 6h 41a if the issuer has identified a hedge, check here » [] and enter the following information: Name of hedge provider » Type of hedge > d= Term of hedge » 42 ‘if the issuer has superintegrated the hedge, checkbox. . . . . . . . rrr » 43 if the issuer has established written procedures to ensure that all nonqualified b bonds of this i issue are remediated according to the requirements under the Code and Regulations (see instructions), check box 6 2. 2 > 44 If the issuer has established written procedures to monitor the requirements of section 148, check box >» O 45a if some portion of the proceeds was used to reimburse expenditures, check here » {J and enter the amount ofreimbursement. . 2 2. 2... b Enter the date the official intent was adopted > [onder penalties of perjury, | declare that | have examined this return and accompanying schedules and statements, and to the best of my knowledge Signature ind belief, they are true, correct, and complete, ! further declare that | consent to the IRS’s disclosure of the issuer's return information, as necessary to and process this retum, to the person that i have authorized above. Consent | p> > Signature of issuers authorized representative Date Type or print name and title PrintType preparers name Preparer's signature Date PTIN Paid dd: £, SFE eeserenpeeuen Cheek [J it Preparer H. Evan Howe Rowe ieee 1412212013 self-employed P01438994 Use Only Firm's Name» Baystone Financial LLC Firm's EIN > 48-1223987 Firm's Address » 5350 College Blvd., Overland Park, KS 66211 Phone ne. {800) 752-3562 Form 8038-G (Rev. 9-2011))