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HomeMy WebLinkAboutLeaseLAG-21-007 Form 8038-GC Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales Under Internal Revenue Code section 149(e) Caution:If the issue price of the issue is $100,000 or more, use Form 8038-G. (Rev. January 2012) Department of the Treasury Internal Revenue Service OMB No. 1545-0720 Part I Reporting Authority Check box if Amended Return 1 Issuer’s name 2 Issuer’s employer identification number 3 Number and street (or P.O. box if mail is not delivered to street address)Room/suite 4 City, town, or post office, state, and ZIP code 5 Report number (For IRS Use Only) 6 Name and title of officer or other employee of issuer or designated contact person whom the IRS may call for more information 7 Telephone number of officer or legal representative Part II Description of Obligations Check one: a single issue or a consolidated return 8a Issue price of obligation(s) (see instructions) . . . . . . . . b Issue date (single issue) or calendar date (consolidated). Enter date in mm/dd/yyyy format (for example, 01/01/2009) (see instructions) 9 Amount of the reported obligation(s) on line 8a that is: a For leases for vehicles . . . . . . . . . . . . . . . . . . . . . . . . . b For leases for office equipment . . . . . . . . . . . . . . . . . . . . . . . c For leases for real property . . . . . . . . . . . . . . . . . . . . . . . . d For leases for other (see instructions) . . . . . . . . . . . . . . . . . . . . . e For bank loans for vehicles . . . . . . . . . . . . . . . . . . . . . . . . f For bank loans for office equipment . . . . . . . . . . . . . . . . . . . . . g For bank loans for real property. . . . . . . . . . . . . . . . . . . . . . . h For bank loans for other (see instructions) . . . . . . . . . . . . . . . . . . . i Used to refund prior issue(s) . . . . . . . . . . . . . . . . . . . . . . . j Representing a loan from the proceeds of another tax-exempt obligation (for example, bond bank) . . k Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 If the issuer has designated any issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check this box . . . . 11 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check this box (see instructions) . . . . . . . 12 Vendor’s or bank’s name:Pitney Bowes Inc. 13 Vendor’s or bank’s employer identification number:06 0495050 8a 9a 9b 9c 9d 9e 9f 9g 9h 9i 9j 9k Signature and Consent Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process this return, to the person(s) that I have authorized above. Signature of issuer’s authorized representative Date Type or print name and title Paid Preparer Use Only Print/Type preparer’s name Preparer's signature Date Check if self-employed PTIN Firm’s name Firm's address Firm's EIN Phone no. General Instructions Who Must File Section references are to the Internal Revenue Code unless otherwise noted What's New The IRS has created a page on IRS.gov for information about the Form 8038 series and its instructions, at www.irs.gov/form8038. Information about any future developments affecting the Form 8038 series (such as legislation enacted after we release it) will be posted on that page. Purpose of Form Form 8038-GC is used by the issuers of tax- exempt governmental obligations to provide the IRS with the information required by section 149(e) and to monitor the requirements of sections 141 through 150. Issuers of tax-exempt governmental obligations with issue prices of less than $100,000 must file Form 8038-GC. Issuers of a tax-exempt governmental obligation with an issue price of $100,000 or more must file Form 8038-G, Information Return for Tax-Exempt Governmental Obligations. Filing a separate return for a single issue. Issuers have the option to file a separate Form 8038-GC for any tax-exempt governmental obligation with an issue price of less than $100,000. An issuer of a tax-exempt bond used to finance construction expenditures must file a separate Form 8038-GC for each issue to give notice to the IRS that an election was made to pay a penalty in lieu of arbitrage rebate (see the line 11 instructions). Filing a consolidated return for multiple issues. For all tax-exempt governmental obligations with issue prices of less than $100,000 that are not reported on a separate Form 8038-GC, an issuer must file a consolidated information return including all such issues issued within the calendar year. Thus, an issuer may file a separate Form 8038-GC for each of a number of small issues and report the remainder of small issues issued during the calendar year on one consolidated Form 8038-GC. However, if the issue is a construction issue, a separate Form 8038-GC must be filed to give the IRS notice of the election to pay a penalty in lieu of arbitrage rebate. Cat. No. 64108B Form 8038-GC (Rev. 1-2012) CITY OF RENTON PRINT/MAIL SVCS 1055 S GRADY WAY FLP2 RENTON WA 98057-3232 [[SertifiSignature_1]]          When To File Form 8038-GC (Rev. 1-2012) To file a separate return for a single issue, file Form 8038-GC on or before the 15th day of the second calendar month after the close of the calendar quarter in which the issue is issued. To file a consolidated return for multiple issues, file Form 8038-GC on or before February 15th of the calendar year following the year in which the issue is issued. Late filing. An issuer may be granted an extension of time to file Form 8038-GC under section 3 of Rev. Proc. 2002-48, 2002-37 I.R.B. 531, if it is determined that the failure to file on time is not due to willful neglect. Type or print at the top of the form, “Request for Relief under section 3 of Rev. Proc. 2002-48.” Attach to the Form 8038-GC a letter briefly stating why the form was not submitted to the IRS on time. Also indicate whether the obligation in question is under examination by the IRS. Do not submit copies of any bond documents, leases, or installment sale documents See Where To File next. Where To File File Form 8038-GC, and any attachments, with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201. Private delivery services. You can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. These private delivery services include only the following: • DHL Express (DHL): DHL Same Day Service. • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express. The private delivery service can tell you how to get written proof of the mailing date. Other Forms That May Be Required For rebating arbitrage (or paying a penalty in lieu of arbitrage rebate) to the Federal Government, use Form 8038-T, Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate. For private activity bonds, use Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues. For a tax-exempt governmental obligation with an issue price of $100,000 or more, use Form 8038-G. Rounding to Whole Dollars You may show the money items on this return as whole-dollar amounts. To do so, drop any amount less than 50 cents and increase any amount from 50 to 99 cents to the next higher dollar Definitions Obligations. This refers to a single tax- exempt governmental obligation if Form 8038-GC is used for separate reporting or to multiple tax-exempt governmental obligations if the form is used for consolidated reporting. Tax-exempt obligation. This is any obligation including a bond, installment purchase agreement, or financial lease, on which the interest is excluded from income under section 103. Tax-exempt governmental obligation. A tax exempt obligation that is not a private activity bond (see below) is a tax-exempt governmental obligation. This includes a bond issued by a qualified volunteer fire department under section 150(e). Private activity bond. This includes an obligation issued as part of an issue in which: • More than 10% of the proceeds are to be used for any private activity business use, and • More than 10% of the payment of principal or interest of the issue is either (a) secured by an interest in property to be used for a private business use (or payments for such property) or (b) to be derived from payments for property (or borrowed money) used for a private business use. It also includes a bond, the proceeds of which (a) are to be used to make or finance loans (other than loans described in section 141(c)(2)) to persons other than governmental units and (b) exceeds the lesser of 5% of the proceeds or $5 million. Issue. Generally, obligations are treated as part of the same issue only if they are issued by the same issuer, on the same date, and as part of a single transaction, or a series of related transactions. However, obligations issued during the same calendar year (a) under a loan agreement under which amounts are to be advanced periodically (a “draw-down loan”) or (b) with a term not exceeding 270 days, may be treated as part of the same issue if the obligations are equally and ratably secured under a single indenture or loan agreement and are issued under a common financing arrangement (for example, under the same official statement periodically updated to reflect changing factual circumstances). Also, for obligations issued under a draw-down loan that meets the requirements of the preceding sentence, obligations issued during different calendar years may be treated as part of the same issue if all of the amounts to be advanced under the draw-down loan are reasonably expected to be advanced within 3 years of the date of issue of the first obligation. Likewise, obligations (other than private activity bonds) issued under a single agreement that is in the form of a lease or installment sale may be treated as part of the same issue if all of the property covered by that agreement is reasonably expected to be delivered within 3 years of the date of issue of the first obligation. Arbitrage rebate. Generally, interest on a state or local bond is not tax-exempt unless the issuer of the bond rebates to the United States arbitrage profits earned from investing proceeds of the bond in higher yielding nonpurpose investments.See section 148(f). Construction issue. This is an issue of tax- exempt bonds that meets both of the following conditions: 1. At least 75% of the available construction proceeds of the issue are to be used for construction expenditures with respect to property to be owned by a governmental unit or a 501(c)(3) organization, and 2. All of the bonds that are part of the issue are qualified 501(c)(3) bonds, bonds that are not private activity bonds, or private activity bonds issued to finance property to be owned by a governmental unit or a 501(c)(3) organization. In lieu of rebating any arbitrage that may be owed to the United States, the issuer of a construction issue may make an irrevocable election to pay a penalty. The penalty is equal to 1-1/2% of the amount of construction proceeds that do not meet certain spending requirements. See section 148(f)(4)(C) and the Instructions for Form 8038-T. Specific Instructions In general, a Form 8038-GC must be completed on the basis of available information and reasonable expectations as of the date of issue. However, forms that are filed on a consolidated basis may be completed on the basis of information readily available to the issuer at the close of the calendar year to which the form relates, supplemented by estimates made in good faith. Part I—Reporting Authority Amended return. An issuer may file an amended return to change or add to the information reported on a previously filed return for the same date of issue. If you are filing to correct errors or change a previously filed return, check the “Amended Return” box in the heading of the form. The amended return must provide all the information reported on the original return, in addition to the new corrected information. Attach an explanation of the reason for the amended return and write across the top "Amended Return Explanation." Line 1. The issuer’s name is the name of the entity issuing the obligations, not the name of the entity receiving the benefit of the financing. In the case of a lease or installment sale, the issuer is the lessee or purchaser. Line 2. An issuer that does not have an employer identification number (EIN) should apply for one on Form SS-4, Application for Employer Identification Number. You can get this form on the IRS website at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). You may receive an EIN by telephone by following the instructions for Form SS-4. Lines 3 and 4. Enter the issuer’s address or the address of the designated contact person listed on line 6. If the issuer wishes to use its own address and the issuer receives its mail in care of a third party authorized representative (such as an accountant or attorney), enter on the street address line “C/O” followed by the third party's name and street address or P.O. box. Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and the issuer has a P.O. box, show the box number instead of the          Form 8038-GC (Rev. 1-2012)Page 3 street address. If a change in address occurs after the return is filed, use Form 8822, Change of Address, to notify the IRS of the new address. Lines 9i and 9J. For line 9i, enter the amount of the proceeds that will be used to pay principal, interest, or call premium on any other issue of bonds, including proceeds that will be used to fund an escrow account for this purpose. Several lines may apply to a particular obligation. For example, report on lines 9i and 9j obligations used to refund prior issues which represent loans from the proceeds of another tax-exempt obligation. If an authorized representative of the issuer filled in its return, the paid preparer’s space should remain blank. Anyone who prepares the return but does not charge the organization should not sign the return. Certain others who prepare the return should not sign. For example, a regular, full-time employee of the issuer, such as a clerk, secretary, etc., should not sign.Lines 9k. Enter on line 9k the amount on line 8a that does not represent an obligation described on lines 9a through 9j Note. The address entered on lines 3 and 4 is the address the IRS will use for all written communications regarding the processing of this return, including any notices. By authorizing a person other than an authorized officer or other employee of the issuer to communicate with the IRS and whom the IRS may contact about this return, the issuer authorizes the IRS to communicate directly with the individual listed on line 6, whose address is entered on lines 3 and 4 and consents to disclose the issuer's return information to that individual, as necessary, to process this return. Line 5. This line is for IRS use only. Do not make any entries in this box. Part II—Description of Obligations Check the appropriate box designating this as a return on a single issue basis or a consolidated return basis. Line 8a. The issue price of obligations is generally determined under Regulations section 1.148-1(b). Thus, when issued for cash, the issue price is the price at which a substantial amount of the obligations are sold to the public. To determine the issue price of an obligation issued for property, see sections 1273 and 1274 and the related regulations. Line 8b. For a single issue, enter the date of issue (for example, 03/15/2010 for a single issue issued on March 15, 2010), generally the date on which the issuer physically exchanges the bonds that are part of the issue for the underwriter’s (or other purchaser’s) funds; for a lease or installment sale, enter the date interest starts to accrue. For issues reported on a consolidated basis, enter the first day of the calendar year during which the obligations were issued (for example, for calendar year 2010, enter 01/01/2010). Lines 9a through 9h. Complete this section if property other than cash is exchanged for the obligation, for example, acquiring a police car, a fire truck, or telephone equipment through a series of monthly payments. (This type of obligation is sometimes referred to as a “municipal lease.”) Also complete this section if real property is directly acquired in exchange for an obligation to make periodic payments of interest and principal. Do not complete lines 9a through 9d if the proceeds of an obligation are received in the form of cash even if the term “lease” is used in the title of the issue. For lines 9a through 9d, enter the amount on the appropriate line that represents a lease or installment purchase. For line 9d, enter the type of item that is leased. For lines 9e through 9h, enter the amount on the appropriate line that represents a bank loan. For line 9h, enter the type of bank loan. Line 10. Check this box if the issuer has designated any issue as a “small issuer exception” under section 265(b)(3)(B)(i)(III). Line 11. Check this box if the issue is a construction issue and an irrevocable election to pay a penalty in lieu of arbitrage rebate has been made on or before the date the bonds were issued. The penalty is payable with a Form 8038-T for each 6-month period after the date the bonds are issued. Do not make any payment of penalty in lieu of rebate with Form 8038-GC. See Rev. Proc. 92-22, 1992-1 C.B. 736, for rules regarding the “election document.” Line 12. Enter the name of the vendor or bank who is a party to the installment purchase agreement, loan, or financial lease. If there are multiple vendors or banks, the issuer should attach a schedule. Line 13. Enter the employer identification number of the vendor or bank who is a party to the installment purchase agreement, loan, or financial lease. If there are multiple vendors or banks, the issuer should attach a schedule. Signature and Consent An authorized representative of the issuer must sign Form 8038-GC and any applicable certification. Also print the name and title of the person signing Form 8038-GC. The authorized representative of the issuer signing this form must have the authority to consent to the disclosure of the issuer's return information, as necessary to process this return, to the person(s) that has been designated in this form. Note. If the issuer authorizes in line 6 the IRS to communicate with a person other than an officer or other employee of the issuer, (such authorization shall include contact both in writing regardless of the address entered in lines 3 and 4, and by telephone) by signing this form, the issuer's authorized representative consents to the disclosure of the issuer's return information, as necessary to process this return, to such person. Paid Preparer Generally, anyone who is paid to prepare a return must sign it and fill in the other blanks in the Paid Preparer Use Only area of the return. A paid preparer cannot use a social security number in the.Paid Preparer Use Only box. The paid preparer must use a preparer tax identification number (PTIN). If the paid preparer is self-employed, the preparer should enter his or her address in the box. The paid preparer must: • Sign the return in the space provided for the preparer’s signature, and • Give a copy of the return to the issuer. Paperwork Reduction Act Notice We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Learning about the law or the form . . . . 4 hr., 46 min. Preparing the form . . . . 2 hr., 22 min. Copying, assembling, and sending the form to the IRS . 2 hr., 34 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:M:S, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the form to this address. Instead, see Where To File.          NASPO Valuepoint Term Rental (Installment Purchase) LTOP Lease Agreement Rev. 7/19 ©2019 Pitney Bowes Inc. All rights reserved. Pitney Bowes Purchase Power and ValueMAX are trademarks of Pitney Bowes Inc. or a subsidiary. OPTION A -- NASPO VALUEPOINT TERM RENTAL (INSTALLMENT PURCHASE) LEASE TERMS AND CONDITIONS:Attachment B.1 Pricing Plan for the NASPO ValuePoint Term Rental (Installment Purchase) Lease Terms and Conditions is as follows: Monthly Rate Factors: Term: Lease Rate: 36 .0326 48 .0257 60 .0216 Total Value of the Order multiplied by the applicable Monthly Rate Factor = (Monthly Equipment Lease Payment, plus applicable monthly Equipment rental, Meter Services, and value based service fees, plus the monthly cost of service maintenance for years 2 thru end of initial term, plus any applicable taxes multiplied by three (3) months = equals the Quarterly payment. For further clarification a 36 month lease based on a $10,000 equipment order the Quarterly payment would equal a $326.00 monthly equipment lease payment multiplied by 3 months equaling a $978 Quarterly lease payment. Applicable quarterly cost of service maintenance for years 2 thru end of initial term, quarterly Equipment rental, Meter Services, and value based services fees, plus any taxes, if applicable, would be added to the Quarterly payment. L1. DEFINITIONS L1.1 The following terms mean: “Agreement” - the Order, your State’s Participating Addendum, the NASPO ValuePoint Master Agreement ADSPO16-169897, these terms and conditions, and any attached exhibits. “Bank”- The Pitney Bowes Bank, Inc. “Consumable Supplies”- ink, ink rollers, printheads, toner and drum cartridges, ribbons and similar items. Product-specific consumable supplies are identified in the product operator guide. “Covered Equipment” - the equipment rented or sold to you from PBGFS or PBI that is covered by the SLA as stated on the Order. Covered Equipment does not include any Meter, Usage-based Equipment, or any standalone software, and SendKit equipment. “Delivery Date” - the date the Equipment or other item is delivered to your location. “Effective Date” - the date the Order is received by us. “Equipment” - the equipment listed on the Order, excluding any Meter, and any standalone software and SendKit equipment. “Initial Term” - the lease period listed on the Order “Install Date” - the date the Equipment or other item is installed at your location. “Meter” - any postage meter supplied by PBI under the Order, including (i) in the case of a Connect+™ or SendPro™ P or C series mailing system, the postal security device that accounts for and enables postage to be purchased and printed (“PSD”)and (ii) in the case of all other mailing systems, the PSD, the user interface or keyboard and display and the print engine. “Meter Services” means access to the PSD to download, account for, and enable printing of postage within a PBI Postage Evidencing System as defined in Title 39, Part 501 of the Code of Federal Regulations (“CFR”); USPS mandated processes associated with the PSD, including registration, usage reporting and withdrawal; repair or replacement of the PSD as described in Section 2.6 of the Equipment Rental and Meter Services Terms and Conditions; and the Softguard Program outlined in Section 2.5 of the Equipment Rental and Meter Services Terms and Conditions. “Lease” – the Order and this NASPO ValuePoint Term Rental (Installment Purchase) Lease Terms and Conditions. “Maintenance Service”- the maintenance service for the Covered Equipment selected by you on the Order, excluding software maintenance. “Master Agreement” – NASPO ValuePoint Master Agreement ADSPO16-169897 Mail Room Equipment, Services and Maintenance contract administered by the State of Arizona and shall consist of: the solicitation as amended, any requests for clarifications and/or best and final offers, the proposal submitted by us, our responses to any requests for clarifications and/or our best and final offer. “NASPO ValuePoint” – NASPO ValuePoint Cooperative Purchasing Organization LLC, a wholly owned subsidiary of National Association of State Procurement Officials (NASPO). “Order” - the executed agreement between the applicable Pitney Bowes company and you for the Equipment. “PBGFS” - Pitney Bowes Global Financial Services LLC or a wholly- owned subsidiary of Pitney Bowes Inc. “PBI” - Pitney Bowes Inc. “Pitney Bowes” – PBI, PBGFS and their respective subsidiaries. “Postage Equipment Rental and Meter Services Agreement”–an agreement governing Equipment rental and Meter Services you enter into with us. “SLA” - the Service Level Agreement. “SLMA” – a Software License and Maintenance Agreement you enter into with us “SOW” – a Statement of Work you enter into with us. “State Participating Addendum” the bilateral agreement executed by us and your participating state incorporating the Master Agreement. “Usage-based Equipment” - equipment for which charges are based on volume of use “USPS” – the United States Postal Service. “We,” “Our,” or “Us” – the Pitney Bowes company with whom you’ve entered into the Order. “You,” “Your,” “Lessee”, or “Customer” – the entity identified on the Order. L2. AGREEMENT L2.1 You are leasing the Equipment listed on the Order. L2.2 You may not cancel this Lease for any reason except as expressly set forth in Section L10 below, all payment obligations are unconditional. L2.3 If you do not pay the fees when due or you do not comply with the Agreement and fail to cure the same within thirty (30) days of receipt of written notice thereof, we may disable the Meter, terminate the Agreement, retake the Equipment and Meter, and collect from you all fees due for the remainder of the Initial Term, or if after the Initial Term, all fees then due, plus interest at the lesser of 18% per year or the maximum allowed by law. L2.4 You authorize us to file a Uniform Commercial Code financing statement naming you as debtor/lessee with respect to the Equipment. Page 1 of 3 Pitney Bowes Global Financial Services LLC will serve as a sub-contractor under ADSPO16-169897 and will be the Lessor under this Term Rental (Installment Purchase) Lease Terms and Condition Agreement. PBGFS does not warrant, service or otherwise support the equipment. Those services are provided by Pitney Bowes Inc. (PBI). Due to federal regulations, only PBI can own a Meter. This Agreement cannot be used for Production Equipment Categories (Production Ink Jet Envelope Addressing System, Production Tabbers, Inserter Production, Production Folder-Inserter, Pre-Sorting Equipment) awarded under ADSPO16-00006328- to Pitney Bowes Inc.          NASPO ValuePoint Term Rental (Installment Purchase) LTOP Lease Agreement Rev. 7/19 ©2019 Pitney Bowes Inc. All rights reserved. Pitney Bowes Purchase Power and ValueMAX are trademarks of Pitney Bowes Inc. or a subsidiary. L3. PAYMENT TERMS L3.1 We will invoice you in arrears each month for all payments on the Order (each, a “Quarterly Payment”), except as provided in any SOW attached to this Order. You will make each Quarterly Payment by the due date shown on our invoice. L3.2 Your Quarterly Payment may include an origination fee, amounts carried over from a previous unexpired lease, SLMA fees and other charges. L3.3 Any Meter Services fees, SLA fees, and subscription fees (collectively “PBI Payments”), will be included with your Quarterly Payment and begin with the start of the Lease Term (as defined below). After the Initial Term, your Quarterly Payment will increase if your PBI Payments increase. L3.4 Your obligations, including your obligation to pay the Quarterly Payments due in any fiscal year during the term of this Agreement, shall constitute a current expense for such fiscal year and shall not constitute indebtedness within the meaning of the constitution and laws of the state in which you are located. Nothing herein shall constitute a pledge by you of any taxes or other moneys (other than moneys lawfully appropriated from time to time by or for your benefit for this Agreement) to the payment of any Total Payment due under this Agreement. L4. EQUIPMENT OWNERSHIP L4.1 PBI owns any Meter. Title to the Equipment shall pass to you upon installation. However, you and we agree that title shall automatically revert to us in the event of default, or termination due to your non- appropriation under Section L10. L5. TERM L5.1 This Agreement shall commence on the date of delivery and shall continue until the earlier of (i) termination at our option upon the occurrence of an event of default, or (ii) the occurrence of an event of a non-appropriation under Section L10, or (iii) the expiration of the Term and your payment of all Quarterly Payments and other sums due and your fulfillment of all other obligations under this Agreement. L6. SURRENDER OF EQUIPMENT L6.1 If you default, or terminate this Agreement by non-appropriation under Section L10, you, at your expense, shall return all Equipment by delivering it to us in the same condition as when delivered to you, reasonable wear and tear excepted, to such place or on board such carrier, packed for shipping, as we may specify. Until the Equipment is returned as required above, all terms of this Agreement remain in effect including, without limitation, your obligations to make payments relating to your continued use of the Equipment and to insure the Equipment. L7. WARRANTY AND LIMITATION OF LIABILITY L7.1 PBGFS AND THE BANK MAKE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM INTERFERENCE OR INFRINGEMENT. L7.2 PBGFS AND THE BANK ARE NOT LIABLE FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES), OR EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY THE EQUIPMENT. L7.3 PBI provides you with the warranty as provided in the Master Agreement and as follows: (a) PBI warrants that the Equipment will be free from defects in material and workmanship and will perform according to the equipment user guide for a period of one year (360) days from the date of acceptance (the “Warranty Period”). (b) PBI warrants that the Maintenance Service provided will be performed in a professional and workmanlike manner. (c) Your remedy in the event of any warranty claim is as provided within the Master Agreement. (d) A “defect” does not include the failure of rates within a rate update to conform to published rates. (e) There is no warranty for Equipment requiring repair or replacement because of your negligence, usage which exceeds PBI’s recommendations, damage in transit, virus contamination or loss of data, misuse, external forces, loss or fluctuation of power, fire, flood, or other natural causes, or service by anyone other than PBI. There is no warranty for Equipment arising from the use of third party supplies (such as ink) that results in: (i) damage to PBI Equipment; (ii) poor indicia, text, or image print quality; (iii) indicia readability failures; or (iv) a failure to print indicia, text, or images. (f) The print engine(s), print engine components, structural components and printed circuit board assemblies supplied with the PBI Equipment may be reclaimed, reconditioned or remanufactured. Any such item is warranted to perform according to the same standards as the equivalent new item. (g) The warranty does not cover Consumable Supplies. L8. EQUIPMENT OBLIGATIONS L8.1 Condition and Repairs. You will keep the Equipment free from liens and in good repair, condition, and working order. L8.2 Inspection.We may inspect the Equipment and related maintenance records. L8.3 Location. You may not move the Equipment from the location specified on the Order without our prior written consent which will not be unreasonably withheld. L9. RISK OF LOSS L9.1 Risk of Loss. (a) You bear the entire risk of loss to the Equipment from the date of delivery by PBI until the Equipment is returned to, and received by, us, regardless of cause, ordinary wear and tear excepted (“Loss”). (b) No Loss will relieve you of any of your obligations under this Lease. You must immediately notify us in writing of any Loss. (c) To protect the equipment from loss, you will either (i) keep the Equipment insured against Loss for its full replacement value under a comprehensive policy of insurance or other arrangement with an insurer of your choice, provided that it is reasonably satisfactory to us (“Insurance”) (d) YOU MUST CALL US AT 1-800-732-7222 AND PROVIDE US WITH EVIDENCE OF INSURANCE. L10. NON-APPROPRIATION L10. See Master Agreement - Section 7.2 State of Arizona Uniform Terms and Conditions, Par 4.4. Availability of Funds for the Next State fiscal year and Par 4.5. Availability of Funds for the current State fiscal year. L11. REPRESENTATIONS L11.1 You hereby represent and warrant that (a) you are a state or political subdivision thereof within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”); and (b) you have the power and authority under applicable law to enter into this Agreement and you have been duly authorized to execute and deliver this Agreement and carry out your obligations hereunder. You acknowledge that a portion of each Quarterly Payment you shall pay includes interest and that this Agreement is entered into based on the assumption that the interest portion of each Quarterly Payment is not includible in gross income of the owner thereof for Federal income tax purposes under Section 103(a) of the Code. You shall, at all times, do and perform all acts and things necessary and within your control in order to assure that such interest component shall be so excluded. If any interest is determined not to be excludible from gross income, your Quarterly Payment shall be adjusted in an amount sufficient to maintain our original after tax yield utilizing our consolidated marginal tax rate, which adjusted Quarterly Payments you agree to pay as provided in this Agreement, subject to Section L10. The rate at which the interest portion of Quarterly Payments is calculated is not intended to exceed the maximum rate or amount of interest permitted by applicable law. If such interest portion exceeds such maximum, then at our option, if permitted by law, the interest portion will be reduced to the legally permitted maximum amount of interest, and any excess will be used to reduce the principal amount of your obligation or be refunded to you. You shall not do (or cause to be done) any act which will cause, or by omission of any act allow, this Agreement to be an “arbitrage bond” within the meaning of Section 148(a) of the Code or a “private activity bond” within the meaning of Section 141(a) of the Code. At the time of your execution of this Agreement, you shall provide us with a properly prepared and executed copy of the appropriate US Treasury Form 8038-G or 8038-GC and you appoint us as your agent for the purpose of maintaining a registration system as required by Section 149(a) of the Code. This Section shall survive the termination of this Agreement. Page 2 of 3          NASPO ValuePoint Term Rental (Installment Purchase) LTOP Lease Agreement Rev. 7/19 ©2019 Pitney Bowes Inc. All rights reserved. Pitney Bowes Purchase Power and ValueMAX are trademarks of Pitney Bowes Inc. or a subsidiary. L12. MISCELLANEOUS L12.1 If more than one lessee is named in this Lease, liability is joint and several. L12.2 YOU MAY NOT ASSIGN OR SUBLET THE EQUIPMENT, THE METER OR THIS LEASE WITHOUT OUR PRIOR WRITTEN CONSENT, WHICH WILL NOT BE UNREASONABLY WITHHELD. L12.3 We may sell, or assign all or any part of this Lease or the Equipment. Any sale or assignment will not affect your rights or obligations under this Agreement. L12.4 All applicable taxes required to be collected by us will be shown on the invoice. L12.5 Any Meter used by you under this Agreement is subject to the applicable USPS regulations and meter terms and conditions as may be provided by PBI L12.6 Our Equipment may contain embedded software. You agree: (i) that PBI and its licensors own the copyrights and other intellectual property in and to the embedded software; (ii) that you do not acquire any right, title or interest in or to the embedded software; (iii) only to use the embedded software with our Equipment in which the embedded software resides; (iv) that you may not copy the embedded software; (v) that you may neither modify nor create derivative works of the embedded software (vi) that you may neither distribute nor disclose the embedded software (or any portion thereof) to any other person; (vii) that you may not translate, de-compile, disassemble, or otherwise attempt to unbundle, reverse engineer or create derivative works of the embedded software, except as permitted by applicable law; and (viii) that you may not export the embedded software in contravention of applicable export control laws. The embedded software contains third party software. Notwithstanding the above, this section does not modify any terms that may accompany such third party software. L12.7 If there is a conflict between any of the terms and conditions in this Agreement, your State’s Participating Addendum and the Master Agreement ADSPO16-169897, this Agreement shall prevail. L 12.8 The Connect+ and SendPro P or C Series mailing system may use an internet access point (e.g., wireless router) provided by us. You may only use this access point for connectivity between the Connect+ and SendPro P or C Series mailing system and the internet and for no other purpose. You agree to pay all costs associated with use of the access point in violation of this restriction L12.9 We will provide you with a welcome letter by email. Page 3 of 3