R-04-09-09-11C1 - 9/9/2004 RESOLUTION NO. R-04-09-09-11C1
WHEREAS, the City of Round Rock has duly advertised for bids to
lease/purchase various equipment for use by the City, and
WHEREAS, Wells Fargo Brokerage Services, L.L.C. has submitted the
lowest and best bid to lease/purchase said equipment to the City, and
WHEREAS, the City Council wishes to accept the bid of Wells Fargo
Brokerage Services, L.L. C. , Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City, a financing program agreement with Wells Fargo
Brokerage Services, L.L.C. , to lease/purchase various equipment, a copy
of same being attached hereto as Exhibit "A" and incorporated herein.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 9th day of September, 2004 .
E WE Mayor
AST: City of Round Rock, Texas
(Mal/
CHRISTINE R. MARTINEZ, City Secr tart'
@PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R40909C1.WPD/sc
Wells Fargo Brokerage Services,LLC SUPPLEMENT TO MASTER LEASE
1740 Broadway, MAC C7300-011
Denver,Colorado 80274
Name and address of Lessee: Supplement#1349-003
City of Round Rock,Texas
221 East Main Street
Round Rock,Texas 78664
This is a Supplement to the Governmental Lease-Purchase Master Agreement dated September 27, 2001 and
between Lessor and Lessee (the "Master Lease"). Upon the execution and delivery by Lessor and Lessee of this
Supplement, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the Property
described below upon the terms and conditions of this Supplement and the Master Lease.
PROPERTY DESCRIPTION
Quantit Serial Number
Vehicles&Equipment
Location of Property(if different from Lessee's address) SCHEDULE OF RENT PAYMENTS
Basic Rental I Number ofAdvance
Payments Payments Payments
Rent commencement date: September 27, 2004 $100,394.91 6 -0-
Term in months from rent commencement Interest Rate First Payment Final Purchase
36
Date Option Price
(May not exceed 299 months)
Rental payment period(check one) 2.69% March 27,2005 $1.00
❑Monthly El Annually FINANCE AMOUNT $575,000.00
❑Quarterly ❑Other-see additional
®Semi-annually provisions TOTAL RENT $602,369.46
Additional Provisions:
Lessor: Wells Fargo Brokerage Services, LLC Lessee: City of Round Rock, Texas
By By
Its Vice President Its
Date:_ September 27 2004 Date:_ September 27 2004
Full Payout-Tax Backed Lease City of Round Rock
Exhibit A
Costs Funded Payment Rate E2.690%
ents Level Payment Closing Fees Average Life
$575,000.00 2.69% ear $100,394.91 9/27/2005 1.77 years
Rate Fctr=.174600 21.2 months
Commencement: Sep 27,2004
.Closing Date:Sep 27,2004
Total Payment Interest Principal After Payment After Payment
Pmt Principal TerminationMSep2
Due
Due Payment Due Payment Due
Balance Value
$0.00 $0.00 $575,000.00 ,2004
1 $100,394.91 $7,733.75 $92,661.16 $482,338.84 $486,183.37 ,2005
2 $100,394.91 $6,487.46 $93,907.45 $388,431.39 $391,014.93 2005
3 $100,394.91 $5,224.40 $95,170.51 $293,260.88 $294,823.43 2006
4 $100,394.91 $3,944.36 $96,450.55 $196,810.33 $197,597.88 2006
5 $100,394.91 $2,647.10 $97,747.81 $99,062.52 $99,327.14 2007
6 $100,394.91 $1,332.39 $99,062.52 $0.00 $1.00 2007
By:
Its:
Date:
09/01/2004 17:27 FAX 5123413301 CITY OF ROUND ROCK FINAN 005
GOVERNMENTAL LEASE - PURCHASE
MASTER AGREEMENT
Name and Address of Lessee: Lessor:
City of Round Rock Wells Fargo Brokerage Services,LLC
221 East Main Street Public Finance Division
Round Rock, Texas 78664 1740 Broadway,MAC C7322-026
Denver, Colorado 80274
1. LEASE. Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the personal property
described in a Supplement or Supplements to this Master Lease from time to time signed by Lessor and Lessee upon the
terms and conditions set forth in the related Supplement (such property together with all replacements, repairs and
additions incorporated therein or affixed thereto being referred to herein as 'Equipment"). The lease of the items described
in a particular Supplement shall be considered a separate lease pursuant to the terms of the Master Lease and the
Supplement the same as if a single lease agreement containing such terms had been executed covering such items. The
execution by Lessee of each Supplement shall evidence a determination by the Lessee that the Equipment covered thereby is
essential to its proper,efficient and economic operation and desires to enter into that Supplement for the acquisition of that
Equipment under the terms hereof, that the Equipment is necessary for the governmental functions of Lessee, and that
Lessor is neither the manufacturer nor a dealer or merchant of said Equipment, but has agreed to provide the funding for
and on behalf of Lessee for the acquisition of said Equipment under the terms hereof at the specific request of Lessee.
2.DELIVERY AND ACCEPTANCE.Lessee will evidence its acceptance of the Equipment by executing and delivering to
Lessor a Delivery and Acceptance Certificate(herein so called)in the form to be provided by Lessor.
3. TERM. The term of this Lease shall begin on the date it is accepted by Lessee as indicated on the Delivery and
Acceptance Certificate and shall continue from the rent commencement date shown in the related Supplement unless earlier
terminated as provided herein. The rent commencement date is the Acceptance Date as recorded on the Acceptance
Certificate;provided however,the term of this Lease shall not exceed twenty-five(25)years.
4.RENT.Lessee shall pay as basic rent for the full term of this Lease the amount shown in the related Supplement as Total
Rent,and a portion of each rent payment is paid as,and represents the payment of interest, and Exhibit "A"attached to the
related Supplement sets forth the interest component of each rent payment during the term. The Total Rent shall be payable
in installments each in the amount of the basic rental payment set forth in the related Supplement plus any applicable sales
and use tax thereon. Lessee shall pay rent in installments as shown in the Related Supplement. Except as specifically
provided in Section 5 hereof;the rental payments will be absolute and unconditional in all events and will not be subject to
any set-off,defense,counter claim or recoupment for any reason whatsoever. The net effective interest rate under this Lease
shall not exceed the net effective interest at which public securities may be issued in accordance with Tex. Rev. Civ. Stat.
Ann.Art.717k-2.
5. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the
benefit of the Agreement, and the Interest and Sinking Fund shall be established and maintained by the City at an official
depository bank of the City. The Interest and Sinking Funds shall be kept separate and apart from all other funds and
accounts of the City, and shall be used only for paying the interest on, and principal of, the Agreement. All ad valorem
taxes levied and collected for and on account of the Agreement shall be deposited, as collected,to the credit of the Interest
and Sinking Fund. During each year while the Agreement or interest thereon are outstanding and unpaid, the governing
body of the City shall compute and ascertain a rate and amount of ad valorem tax money required to pay the interest on the
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Agreement as such interest become due, and to provide and maintain a sinking fund adquate to pay the principal of the
Agreement as such principal comes due (but never less than 2% each year), and said tax shall be based on the latest
approved tax rolls of the Lessee,with full allowance made for tax delinquencies and the cost of tax collection.
6.REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants and, so long as this Lease is
in effect or any part of Lessee's obligations to Lessor remain unfulfilled,shall continue to warrant at all times,that:
(a) Lessee is a State, a Territory or a possession of the United States, the District of Columbia, or a political
subdivision of any of the foregoing within the meaning of Section 103(a) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulations and Rulings related thereto.If Lessee is incorporated, it is duly organized and existing
under the Constitution and laws of its jurisdiction of incorporation and will do or cause to be done all things necessary to
preserve and keep such organization and existence in full force and effect.
(b)Lessee has been duly authorized by the Constitution and laws of the applicable jurisdiction and by a resolution
of its governing body (which resolution, if requested by Lessor, is attached hereto) to execute and deliver this Lease and
each Supplement and to carry out its obligations hereunder.
(c)All requirements applicable to the Lessee have been met, and procedures have occurred in order to insure the
enforceability of this Lease,and Lessee has complied with such public bidding requirements, if any,as may be applicable to
the transactions contemplated by this Lease.
(d) The Equipment will be used by Lessee only for the purpose of performing one or more governmental or
proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or
business of any person or entity other than Lessee.
(e)This Lease constitutes a valid, legal and binding obligation of Lessee enforceable against Lessee in accordance
with the respective terms hereof.
(f) This Lease is not an arbitrage bond for purposes of Section 148 of the Internal Revenue Code of 1986, as
amended, and Lessor and its assigns are entitled to treat the interest portion of the payments to be made hereunder as
exempt from federal income taxes under Section 103(a)of the Internal Revenue Code of 1986,as amended.
(g) The Lessor, as agent for the Lessee, shall maintain records relating to the holder of the Lease, including the
Lessor and its assigns, sufficient to comply with the registration requirements of Section 149(a) of the Internal Revenue
Code of 1986,as amended.
(h) This Lease is not and shall not become a "private activity bond" within the meaning of Section 141 of the
Internal Revenue Code of 1986,as amended.
(i)Lessee shall comply with all provisions of the Internal Revenue Code of 1986 which are necessary to preserve
the tax exempt status of the interest component of the payments made and to be made under this Lease,including,without
limitation,the investment and rebate provisions of Section 148,the prohibition against federal guaranties under Section 149
(b)and the information reporting requirements of Section 149(e).
7. WARRANTIES. Lessee agrees that it has selected each item of Equipment based upon its own judgment and disclaims
any reliance upon any statements or representations made by Lessor. LESSOR MAKES NO WARRANTY WITH
RESPECT TO THE EQUIPMENT, EXPRESSED OR IMPLIED, AND LESSOR SPECIFICALLY DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE AND ANY LIABILITY
FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR THE INABILITY TO USE THE
EQUIPMENT. Lessee agrees to make rental and other payments required hereunder without regard to the condition of the
Equipment and to look only to persons other than Lessor such as the manufacturer, vendor or carrier thereof should any
item of Equipment for any reason be defective. So long as no Event of Default has occurred and is continuing, Lessor
agrees, to the extent they are assignable, to assign to Lessee, without any recourse to Lessor, any warranty received by
Lessor.
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8. TITLE. Upon acceptance of the Equipment by Lessee hereunder, title to the Equipment will vest in the Lessee. For as
long as title to the Equipment vests in Lessee,Lessee at its expense shall protect and defend the title and keep it free of all
claims and liens other than the rights of Lessee hereunder and claims and liens created by or arising through Lessor. The
Equipment shall remain personal property regardless of its attachment to realty,and Lessee agrees to take such action at its
expense as may be necessary to prevent any third party from acquiring any interest in the Equipment as a result of its
attachment to realty.
9. SECURITY AGREEMENT; FURTHER ASSURANCES. To secure the performance of all Lessee's obligations
hereunder. Lessee agrees to execute or deliver such additional documents, including, without limitation, opinions of
counsel, notices and similar instruments, in form satisfactory to Lessor, which Lessbr deems necessary or appropriate to
establish and maintain the confirmation or perfection of this Lease and Lessor's rights hereunder provided that the terms
and provisions of any such document are reasonable and the document is reasonably requested; and provided further that
the execution of any such document shall be subject to the discretion and judgement of the officers and governing body of
the Lessee.
10.LAWS AND TAXES.Lessee shall comply with all laws and regulations relating to the Equipment and its use and shall
promptly pay when due all sales,use,property,excise and other taxes and all license and registration fees now or hereafter
imposed by any governmental body or agency upon the Equipment or its use or the rentals hereunder excluding, however,
any taxes on or measured by Lessor's net income. Upon request by Lessor, Lessee shall prepare and file all tax returns
relating to taxes for which Lessee is responsible hereunder which Lessee is permitted to file under the laws of the applicable
taxing jurisdiction. Notwithstanding anything to the contrary in this Master Lease, the Lessee and Lessor agree the
Equipment is exempt from taxation in accordance with Texas law, and that Lessee or Lessor shall have the full right to
administratively or judicially challenge any tax or assessment levied or attempted to be levied on the Equipment. Save and
except to the extent necessary to pay any tax or assessment to protect the property and security interests of the Lessee and
Lessor,the Lessee may,in its sole discretion,elect not to pay any tax or assessment until such time as the tax or assessment
is determined to be due and owing on the Equipment by a final judgement issued by a court of competent jurisdiction.
11. INDEMNITY. To the extend allowed by law, Lessee hereby indemnifies and agrees to save Lessor harmless from any
and all liability and expense arising out of the ordering,ownership, use, condition or operation of each item of Equipment
during the term of this Lease, including liability for death or injury to persons,damage to property,strict liability under the
laws or judicial decisions of any state or the United States, and legal expenses in defending any claim brought to enforce
any such liability or expense,but excluding any liability for which Lessee is not responsible under Section 10.
12. ASSIGNMENT. Without Lessor's .prior written consent, Lessee will not sell, assign, sublet, pledge, or otherwise
encumber or permit a lien arising through Lessee to exist on or against any interest in this Lease or the Equipment or
remove the Equipment from its location referred to above.With Lessee's consent, not to be unreasonably withheld, Lessor
may assign its interest in this Lease and the equipment.
13.INSPECTION.Lessor may inspect the Equipment at anytime and from time to time during regular business hours.
14. REPAIRS. Lessee will use the Equipment with due care and for the purpose for which it is intended. Lessee will
maintain the Equipment in good repair, condition and working order and will furnish all parts and services required
therefore,all at its expense. All such parts when furnished shall immediately become the property of Lessor and part of the
Equipment for all purposes hereof.
15. LOSS OR DAMAGE.In the event any item of Equipment shall become lost, stolen, destroyed,damaged beyond repair
or rendered permanently unfit for use for any reason,or in the event of condemnation or seizure of any item of Equipment,
Lessee shall promptly pay Lessor(a)the amount of all rent and other amounts payable by Lessee hereunder with respect to
such item due but unpaid at the date of such payment plus(b)the amount stated in the Supplement or an exhibit thereto as
the Termination Balance included in Exhibit "A", plus(c)an amount equal to the applicable final purchase price set forth
in the Supplement or any exhibit thereto, less (d) any unaccrued interest. Upon payment of such amount to Lessor, such
item shall become the property of Lessee,Lessor will transfer to Lessee,without recourse or warranty, all of Lessor's right,
title and interest therein,the rent with respect to such item shall terminate,and the basic rental payments on the remaining
items shall be reduced accordingly. Lessee shall pay any sales and use taxes due on such transfer. Any insurance or
condemnation proceeds received shall be credited to Lessee's obligation under this paragraph and Lessee shall be entitled to
any surplus.
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16. INSURANCE. Lessee shall obtain and maintain on or with respect to the Equipment at its own expense (a) liability
insurance against liability for bodily injury and property damage with a minimum limit of$500,000 combined single limit
and (b) physical damage insurance insuring against loss or damage to the Equipment in an amount not less than the full
replacement value of the Equipment or the amount stated in the Supplement or an exhibit thereto as the Termination
Balance.Lessee shall furnish Lessor with certificate of insurance evidencing the issuance of a policy or policies to Lessee in
at least the minimum amounts required herein. Each such policy shall be in such form and with such insurers as may be
satisfactory to Lessor,and shall contain a clause requiring the insurer to give to Lessor at:lea§t 10 days prior written notice
of any alteration in the terms of such policy or the cancellation thereof, and a clause specifying that no action or
misrepresentation by Lessee shall invalidate such policy. Lessor shall be under no duty to ascertain the existence of or to
examine any such policy or to advise Lessee in the event any such policy shall not comply with the requirement thereof. In
the event that Lessee has been permitted to self-insure,Lessee will furnish Lessor with a letter or certificate to such effect.
Lessee may obtain and provide coverage by municipal risk pool agreement, in lieu of providing any insurance required by
this Master Lease. In this Master Lease,the word"insurance"shall mean and include risk pool coverage.
17. ADDITIONAL ACTION. Lessee will promptly execute and deliver to Lessor such further documents and take such
further action as Lessor may reasonably request in order to more effectively carry out the intent and purpose of this Lease..
Lessee will furnish,from time to time on request,a copy of Lessee's latest annual balance sheet and income statement.
18.LATE CHARGES.If any installment of basic rent is not paid when due or within 5 days thereafter,Lessor may impose
a late charge of up to 5% of the amount of the installment but in any event not more than permitted by applicable law.
Payments thereafter received shall be applied first to delinquent installments and then to current installments.
19. DEFAULT. Each of the following events shall constitute an "Event of Default" hereunder (a) Lessee shall fail to pay
when due any installment on basic rent after receiving 10 days notice from Lessor and an opportunity to cure; (b) Lessee
shall fail to observe or perform any other agreement to be observed or performed by Lessee hereunder and the continuance
thereof for 30 calendar days following written notice thereof by Lessor to Lessee; (c) any warranty, representation or
statement made or furnished to Lessor by or on behalf of Lessee proves to have been false or misleading in any material
respect; or(d)Lessee shall voluntarily file, or have filed against it involuntarily, a petition for liquidation, reorganization,
adjustment of debt,or similar relief under the federal or state Bankruptcy Code or any other present or future federal or state
bankruptcy or insolvency law, or a trustee, receiver, or liquidator shall be appointed of it or all of a substantial part of its
assets.
20.REMEDIES.Lessor and Lessee agree that Lessor's damages suffered by reason of an Event of Default are uncertain and
not capable of exact measurement at the time this Lease is executed because the value of the Equipment at the expiration of
this Lease is uncertain, and therefore they agree that for purposes of this Section 20 "Lessor's Loss" as of any date shall be
the sum of the following: (1) the amount of all rent and other amounts payable by Lessee hereunder due but unpaid as of
such date,plus(2)the amount stated in the Supplement or an exhibit thereto as the Termination Balance, less(4)unaccrued
interest.
Upon the occurrence of an Event of Default and at any time thereafter,Lessor may exercise any one or more of the remedies
listed in this Section as Lessor in its sole discretion may lawfully elect; provided, however, that upon the occurrence of an
Event of Default specified in Section 19 (d), an amount equal to Lessor's Loss as of the date of such occurrence shall
automatically be and become immediately due and payable without notice or demand of any kind. Lessor must attempt to
mitigate Lessor's Loss and damages.
A.Lessor may,by written notice to Lessee,terminate this Lease and declare an amount equal to Lessor's Loss as of the date
of such notice to be immediately due and payable, and the same shall thereupon be and become immediately due and
payable without further notice or demand,and all rights of Lessee to use the Equipment shall terminate but Lessee shall be
and remain liable as provided in this Section 20.Lessee shall at its expense promptly deliver the Equipment to Lessor at a
location or locations within the continental United States designated by Lessor. Lessor may also enter upon the premises
where the Equipment is located and take immediate possession of and remove the same with or without instituting legal
proceedings.
B. Lessor may proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this
Lease or to recover, for breach of this Lease, Lessor's Loss as of the date Lessor's Loss is declared due and payable
hereunder; provided, however, that upon recovery of Lessor's Loss from Lessee in any such action without having to
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repossess and dispose of the Equipment,Lessor shall transfer the Equipment to Lessee at its then location upon payment of
any additional amount due under clause(C,D,E)below.
C. In the event Lessor repossesses the Equipment, Lessor shall either retain the Equipment in full satisfaction of Lessee's
obligation hereunder or sell or lease each item of Equipment in such a manner and upon such terms as Lessor may in its
sole discretion determine. The proceeds of such sale or lease shall be applied to reimburse Lessor for Lessor's Loss and any
additional amount due under clause(D,E)below. Lessor shall be entitled to any surplus-and Lessee shall remain liable for
any deficiency. For purposes of this subparagraph, the proceeds of any lease of all or any part of the Equipment by Lessor
shall be the amount reasonably assigned by Lessor as the cost of such Equipment in determining the rent under such Lease.
D.Lessor may recover interest on the unpaid balance of Lessor's Loss from date it becomes payable until fully paid at a rate
of 8%per annum,but in any event not more than permitted by applicable law.
E.Lessor may exercise any other right or remedy available to it by law or by agreement,and may in any event recover legal
fees and other expenses incurred by reason of an Event of Default or to the exercise of any remedy hereunder, including
expenses of repossession,repair,storage,transportation,and disposition of the Equipment.
No remedy given in this section is intended to be exclusive,and each shall be cumulative but only to the extent necessary to
permit Lessor to recover amounts for which Lessee is liable hereunder.No express or implied waiver by Lessor of any Event
of Default shall constitute a waiver of any other Event of Default.
21. NOTICES.Any written notice hereunder shall be deemed to have been given when delivered personally or deposited in
the United States mail, by certified mail, return receipt requested, addressed to the party's address set forth above or at the
party's last known address.
22. NET LEASE AND UNCONDITIONAL OBLIGATION. This Lease is a completely net lease and Lessee's obligation to
pay the rent and amounts payable by Lessee under Sections 15 and 20 is unconditional and not subject to any abatement,
reduction,setoff or defense of any kind except as expressly provided herein.
23. PREPAYMENT. This lease and any related supplement may be prepaid in whole, but not in part, with forty-five(45)
days written notice to Lessor, upon payment of the amount set forth as Termination Value on the Exhibit A attached to said
Supplement.
24.NON-CANCELLABLE LEASE.This Lease cannot be canceled or terminated except as expressly provided herein.
25. SURVIVAL OF INDEMNITIES. Lessee's obligations under Sections 10 and i l shall survive termination of this Lease
to the extent the obligations arose before termination.
26. MISCELLANEOUS. Any provision of this Lease which is unenforceable in any jurisdiction shall, as to jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the remaining provisions of this lease, and any such
unenforceability in any jurisdiction shall not render unenforceable such provision in any other jurisdiction.This Lease shall
in all respects be governed by, and construed in accordance with, the substantive laws of the state in which the Lessee is
located.
27. VENUE. This Lease is governed by the laws of the State of Texas and all obligations of the parties under this contract
are performable in Williamson County,Texas.
28. USURY SAVINGS CLAUSE. This Lease is intended to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof or the application thereof to any person or circumstances
shall, for any reason and to the extent, be invalid or unenforceable, neither the application of such provision to any other
person or circumstance nor the remainder of the instrument in which such provision is contained shall be affected thereby
and shall be enforced to the greatest extent permitted by law. It is expressly stipulated and agreed to be the intent of the
Lessor to at all times comply with the usury and other applicable laws now or hereafter governing the interest payable on
this Lease. If the applicable law is ever revised,repealed or judicially interpreted so as to render usurious any amount caller
for under this Lease or contracted for, charged, taken, reserved or received with respect to the indebtedness evidenced by
this Lease, or if Lessor's exercise of the option to accelerate the maturity of this Lease, or if any prepayment by Lessee
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results in Lessee having paid any interest in excess of that permitted by law, then it is the express intent of Lessee and
Lessor that all excess amounts theretofore collected by Lessor be credited on the principal balance of this Lease(or, if this
Lease has been paid in full,refunded to Lessee), and the provisions of this Lease immediately be deemed reformed and the
amounts thereafter collectable hereunder and thereunder reduced, without the necessity of the execution of any new
document,as to comply with the then applicable law,but so as to permit the recovery of the fullest amount otherwise called
for hereunder or thereunder. All sums paid or agreed to be paid, by Lessee for the use, forbearance, detention, taking,
charging, receiving or reserving of the indebtedness of Lessee to Lessor under this Lease shall, to the maximum extent
permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such indebtedness does not exceed the usury ceiling
from time to time in effect and applicable to such indebtedness for so long as such indebtedness is outstanding.
Additionally,to the maximum extent permitted by applicable law now or hereafter in effect, Lessor may, at its option and
from time to time implement any other method of computing the Maximum Rate under TEX. REV. CIV. STAT. ANN.
Article 5069-1.04, as amended, or under other applicable law by giving notice, if required, to Lessee as provided by
applicable law now or hereafter in effect. Notwithstanding anything to the contrary contained, it is not the intention of
Lessor to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
30. SEVERABILITY. If any one or more of the terms,provisions or conditions contained in this Master Lease shall for any
reason be held to be invalid, illegal or unenforceable in any respect under Texas law, such invalidity, illegality or
unenforceability shall not effect any other provisiion of this Master Lease, but this Master Lease shall be construed as if
such invalid, illegal or unenforeable provision had not been contained herein. However, if Lessee's obligation to pay the
Rent payments is determined herein. However, if Lessee's obligation to pay the Rent payments is determined to be invalid
or unenforceable,this Lease at the option of Lessor shall terminate.
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[Signature Page to Master Agreement]
Executed and effective as of the 13 day of September, 2001.
Less . Ci of Ro n Rock, Texas
By.
Its: �Q�J
Lessor: Wells Fargo Brokerage Services,LLC
By: —w�
Its: Vice President
7
INCUMBENCY CERTIFICATE
Ido hereby certify that I am the duly elected or
appointed and acting Secretary/Clerk of City of Round Rock, Texas a political subdivision or
agency duly organized and existing under the laws of the State of Texas that I have custody of the
records of such entity, and that, as of the date hereof, the individuals named below are the duly
elected or appointed officers of such entity holding the offices set forth opposite their respective
names. I further certify that (I) the signatures set opposite their respective names and titles are
their true and authentic signatures and(II) such officers have the authority on behalf of such entity
to enter into that certain Governmental Lease-Purchase Master Agreement dated September 27,
2001 and Supplement dated September 27, 2004 between such entity and Wells Fargo Brokerage
Services, LLC (Lessor).
NAME TITLE SIGNATURE
IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such
entity hereto this day of 2004.
SECRETARY/CLERK
DELIVERY AND ACCEPTANCE CERTIFICATE
TO: WELLS FARGO BROKERAGE SERVICES, LLC
RE: GOVERNMENTAL LEASE-PURCHASE MASTER AGREEMENT DATED
SEPTEMBER 27, 2001 AND SUPPLEMENT DATED SEPTEMBER 27, 2004
FOR: VEHICLES & EQUIPMENT
We hereby accept the property described in the above LEASE (the "Property") and agree
that it is now subject to LEASE. The Acceptance Date below is also the Rent Commencement
Date in the related Supplement to the Master Lease.
LESSEE: City of Round Rock, Texas,
BY:
September 27 2004 (Title)
(Acceptance Date)
(Must be date lease funds)
Sheets & Crossfield, P.c.,
ATTORNEYS AT LAW
309 East Main Street•Round Rock,TX 78664-5246
phone 512-255-8877•fax 512-255-8986
September 27,2004
Wells Fargo Brokerage Services, LLC
Public Finance Division
1740 Broadway, MAC C7300-011
Denver,Colorado 80274
Re: Governmental Lease-Purchase Master Agreement dated as of September
27, 2001, by and between Wells Fargo Brokerage Services, LLC ("Lessor")
and City of Round Rock,Texas("Lessee")
Ladies and Gentlemen:
I have acted as counsel to Lessee with respect to the Governmental Lease-Purchase
Master Agreement described above and various related matters, and in this capacity have
reviewed a duplicate original or certified copy thereof and Supplement attached thereto and
executed pursuant thereto(together, the"Lease"). Based upon the examination of these and such
other documents as I deem relevant, it is my opinion that:
1. Lessee is a political subdivision of the State of Texas (the "State"), duly
organized,existing and operating under the Constitution and laws of the State.
2. Lessee is authorized and has power under applicable law to enter into the Lease,
and to carry out its obligations thereunder and the transactions contemplated
thereby.
3. The Lease has been duly authorized, approved, executed and delivered by and on
behalf of Lessee, and is a legal, valid and binding contract of Lessee enforceable
in accordance with its terms, except to the extent limited by State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of
general application relating to or affecting the enforcement of creditors' rights.
4. The Lease represents a valid, deferred payment obligation for the amounts and in
the manner those amounts are to be paid as set forth therein.
5. No approval, consent or withholding of objection is required from any
governmental body or authority or any other person, firm or corporation with
respect to the entering into or performance by Lessee of the terms of the Lease
and the transaction contemplated thereby, or if any such approval is
required, it has been obtained.
6. The authorization, approval and execution of the Lease and all other proceedings
of Lessee relating to the transactions contemplated thereby have been performed
in accordance with all applicable open meeting, public records, public bidding
and all other laws,rules,and regulations of the State.
00072316
7. The execution of the Lease will not result in the violation of any constitutional,
statutory or other limitation relating to the manner, form, or amount of
indebtedness which may be incurred by Lessee. The Lease is a general obligation
and debt of Lessee that complies with all applicable debt limitation and
referendum requirements. The Lease will not result in any breach of, or
constitute a default under, or result in the creation of any lien, charge, security
interest or other encumbrance upon any assets of Lessee, or on the Equipment
pursuant to any indenture,mortgage, deed of trust, bank loan or credit agreement
or other instrument to which Lessee is a party, or by which it or its assets may be
bound.
8. There are no actions, suits or proceedings pending or to the knowledge of Lessee
or the undersigned, threatened against or affecting Lessee in any court or before
any governmental commission, board or authority which, if adversely
determined, will have a materially adverse effect on the ability of Lessee to
perform its obligations under the Lease.
9. Under existing regulations of the Internal Revenue Code, the indebtedness of
Lessee is not an arbitrage bond within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended.
10. The Lease is not a private activity bond within the meaning of Section 141 of the
Internal Revenue Code of 1986 and the Lease has been designated by Lessee as a
qualified tax exempt obligation for purposes of Section 265(b)(3) of the Internal
Revenue Code of 1986.
Sincerely,
Stephan L. Sheets
City Attorney
DELIVERY AND ACCEPTANCE CERTIFICATE
TO: WELLS FARGO BROKERAGE SERVICES, LLC
RE: GOVERNMENTAL LEASE-PURCHASE MASTER AGREEMENT DATED
SEPTEMBER 27, 2001 AND SUPPLEMENT DATED SEPTEMBER 27, 2004
FOR: VEHICLES & EQUIPMENT
While not all of the property described in the above LEASE (the "Property") has been
delivered to us, we hereby request funding for the LEASE so that partial payments can be made
to the Property vendor(s) and Property deliveries or installations completed. We hereby accept
the Property pursuant to the LEASE, agree to have the LEASE commence, and acknowledge that
all the terms of the LEASE are in full force and effect. We understand that, Section 6(g) of the
LEASE notwithstanding, if the funding proceeds, $575,000.00, are not completely disbursed by
March 27, 2005, the LEASE may become subject to the investment and rebate (i.e., arbitrage)
provisions of IRS Code Section 148 and we will comply with all reporting and, if applicable,
rebate requirements thereto.
LESSEE: City of Round Rock, Texas,
BY:
(Title)
September 27, 2004
(Acceptance Date)
(Must be date lease funds)
INVOICING PROCEDURES
Re: Municipal Lease No. 1349-003
with
City of Round Rock,Texas
Please provide us with the name, address, and phone number of the appropriate personnel
we can contact regarding invoicing and payments:
i
(Name of Contact) . I s-3 V-�
(Address)
(Phone)
(Fax) � 3 Y/-3 3 D f
Ferro 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev.November 2000) No.Under Internal Revenue Code section 149(e)
Department of the Treasury ►See separate instructions. OMB No.1545.0720
Internal Revenue service Caution:Use Form 8038-GC if the issue price of the issue is under$100,000.
Part I Reporting Authority If Amended Return,check here►❑
1 Issuer's name 2 Issuer's employer identification number
City of Round Rock,Texas
3 Number and street(or P.O.box if mail is not delivered to street address) Room/suite
4. Report number
/
221 East Main Street G-
5 City,town,or post office,state and ZIP code 6 Date of Issue
Round Rock,Texas 78664 September 27,2004
7 Name of issue 8 CUSIP Number
Governmental Lease Purchase Option Agreement N/A
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative
Howard Baker 512-218-5455
Part II Type of Issue check applicable box es and enter the issue rice See instructions and attach schedule
11 ❑ Education 11 $
12 ❑ Health and hospital 12
13 ❑ Transportation 13
14 ❑ Public safety 14 $575,000.00
15 ❑ Environment(including sewage bonds) 15
16 ❑ Housing 16
17 ❑ Utilities 17
18 ® Other. Describe lo. 18
19 If obligations are TANS or RANs,check box Poo.❑ If obligations are BANS,check box lo�❑
20 If obligations are in the form of a lease or installment sale,check box 11.122
Part III Description of Obligations. Complete for the entire issue for which this form is beingfiled.
a Final matunty date b issue pnce c Stated redemption 2rice at matun d Weighted average maturity a Yield
21 1 September 27, 2007 $575,000.00 1.77 years 2.150%
Part IV Uses of Proceeds of Bond Issue(including underwriters'discount
22 Proceeds used for accrued interest 22
23 Issue price of entire issue(enter amount from line 21,column[b]) 23 $575,000.00
24 Proceeds used for bond issuance costs(including underwriters'discount) 24
25 Proceeds used for credit enhancement Y5
26 Proceeds allocated to reasonably required reserve or replacement fund 26
27 Proceeds used to currently refund prior issues 27
28 Proceeds used to advance refund prior issues 28
29 Total(add lines 24 through 28) P29
30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30
Part V Description of Refunded Bonds(Complete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded Years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded years
33 Enter the last date on which the refunded bonds will be called
34 Enter the date(s)the refunded bonds were issued Poo.
Part VI Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a
b Enter the final maturity date of the guaranteed investment contract 11P.
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a
37 b If this issue is a loan made from the proceeds of another tax-exempt issue,check box❑and enter the name of the b issuer
lo� and the date of the issue Jo.
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(Ill)(small issuer exception),check box 111101
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box 1111�❑
39 If the issuer has identified a hedge,check box Ill.
FI
Please Under penalties of perjury,I declare that I hav areturn and accompanying schedules and statements,and to the best of my knowledge and belief,they are true,
Sign correct,a plet
Here mined
NvLE MAXIOCU, imAvoR-,
n re of suer's authonz representative Date Type or print name and title
Form 8038-G(rev.5-99)
DATE: September 3, 2004
SUBJECT: City Council Meeting - September 9, 2004
ITEM: 11.C.1. Consider a resolution authorizing the Mayor to execute a Financing
Program Agreement with Wells Fargo Brokerage Services, L.L.C., to
lease/purchase various equipment.
Department: Finance
Staff Person: David Kautz, Assistant City Manager/Chief Financial Officer
Cindy Demers, Finance Director
Justification:
Each year the City acquires a portion of its heavy equipment and rolling stock through a tax-
exempt leasing program. The financing program for the current year totals $575,000, financed
at an effective interest rate of 2.69%, has a three-year amortization and is outlined in the
operating budget. The first year repayment is included in the proposed operating budget.
Funding:
Cost: Interest cost at 2.69%
Source of funds: General Debt Service
Outside Resources: N/A
Background Information:
With a three-year payback, the impact on any one operating budget is minimized. Additionally,
the tax-exempt lease rates offer a very favorable cost of capital to the City. This program
permits scheduled replacement of worn equipment on a revolving basis.
Public Comment: N/A
EXECUTED
DOCUMENT
FOLLOWS
Wells Fargo Brokerage Services,LLC SUPPLEMENT TO MASTER LEASE
1740 Broadway,MAC C7300-011
Denver,Colorado 80274
Name and address of Lessee: Supplement#1349-003
City of Round Rock,Texas
221 East Main Street
Round Rock,Texas 78664
This is a Supplement to the Governmental Lease-Purchase Master Agreement dated September 27, 2001 and
between Lessor and Lessee (the "Master Lease"). Upon the execution and delivery by Lessor and Lessee of this
Supplement, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the Property
described below upon the terms and conditions of this Supplement and the Master Lease.
PROPERTY DESCRIPTION
Quantity Serial Number
Vehicles& Equipment
Location of Property(if different from Lessee's address) SCHEDULE OF RENT PAYMENTS
Basic Rental Number of Advance
Payments Payments Payments
$100,394.91 6 -0-
Rent commencement date: September 27,2004
Term in months from rent commencement Interest Rate First Payment Final Purchase
Date Option Price
36
(May not exceed 299 months)
2.69% March 27,2005 $1.00
Rental payment period(check one)
FINANCE AMOUNT $575,000.00
❑Monthly El Annually
❑Quarterly ❑Other-see additional
®Semi-annually provisions TOTAL RENT $602,369.46
Additional Provisions:
Lessor: Wells Fargo Brokerage Services,LLC Lessee: City of R d Rock,Texas
By By
Its Vice President Its
Date: September 27,2004 Date: September 27,2004
I�- G14 - cri - cci - I ( c, i
Full Payout-Tax Backed Lease City of Round Rock Exhibit A
Costs Funded Payment Rate 6 Payments Level Payment Closing Fees Average Life
$575,000.00 2.69% 2 per year $100,394.91 9/27/2005 1.77 years
2.690%Rate lFctr=.174600 21.2 months
Commencement: Sep 27,2004
Closing Date: Sep 27,2004
After Payment After Payment
Pmt Total Payment Interest Principal principal Termination Payment Due
Due Payment Due Payment Due Date
Balance Value
$0.00 $0.00 $575,000.00 Sep 27,2004
1 $100,394.91 $7,733.75 $92,661.16 $482,338.84 $486,183.37 Mar 27,2005
2 $100,394.91 $6,487.46 $93,907.45 $388,431.39 $391,014.93 Sep 27,2005
3 $100,394.91 $5,224.40 $95,170.51 $293,260.88 $294,823.43 Mar 27,2006
4 $100,394.91 $3,944.36 $96,450.55 $196,810.33 $197,597.88 Sep 27,2006
5 $100,394.91 $2,647.10 $97,747.81 $99,062.52 $99,327.14 Mar 27,2007
6 $ , 94.9 17,332.3 $99,062.52 1 $0.00 1 $1.00 1 Sep 27,2007
By:
Its:
0LL
Date: St�tern b G
09/01/2004 17:27 FAX 5123413301 CITY OF ROUND ROCK FINAN Q005
GOVERNMENTAL LEASE - PURCHASE
MASTER AGREEMENT
Name and Address of Lessee: Lessor.
City of Round Rock Wells Fargo Brokerage Services,LLC
221 East Main Street Public Finance Division
Round Rock, Texas 78664 1740 Broadway, MAC C7322-026
Denver, Colorado 80274
1. LEASE. Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the personal property
described in a Supplement or Supplements to this Master Lease from time to time signed by Lessor and Lessee upon the
terms and conditions set forth in the related Supplement (such property together with all replacements, repairs and
additions incorporated therein or affixed thereto being referred to herein as "Equipment"). The lease of the items described
in a particular Supplement shall be considered a separate lease pursuant to the terms of the Master Lease and the
Supplement the same as if a single lease agreement containing such terms had been executed covering such items. The
execution by Lessee of each Supplement shall evidence a determination by the Lessee that the Equipment covered thereby is
essential to its proper,efficient and economic operation and desires to enter into that Supplement for the acquisition of that
Equipment under the terms hereof, that the Equipment is necessary for the governmental functions of Lessee, and that
Lessor is neither the manufacturer nor a dealer or merchant of said Equipment, but has agreed to provide the funding for
and on behalf of Lessee for the acquisition of said Equipment under the terms hereof at the specific request of Lessee.
2.DELIVERY AND ACCEPTANCE.Lessee will evidence its acceptance of the Equipment by executing and delivering to
Lessor a Delivery and Acceptance Certificate(herein so called)in the form to be provided by Lessor.
3. TERM. The term of this Lease shall begin on the date it is accepted by Lessee as indicated on the Delivery and
Acceptance Certificate and shall continue from the rent commencement date shown in the related Supplement unless earlier
terminated as provided herein. The rent commencement date is the Acceptance Date as recorded on the Acceptance
Certificate;provided however,the term of this Lease shall not exceed twenty-five(25)years.
4.RENT.Lessee shall pay as basic rent for the full term of this Lease the amount shown in the related Supplement as Total
Rent,and a portion of each rent payment is paid as,and represents the payment of interest,and Exhibit"A"attached to the
related Supplement sets forth the interest component of each rent payment during the term.The Total Rent shall be payable
in installments each in the amount of the basic rental payment set forth in the related Supplement plus any applicable sales
and use tax thereon. Lessee shall pay rent in installments as shown in the Related Supplement. Except as specifically
provided in Section 5 hereof,the rental payments will be absolute and unconditional in all events and will not be subject to
any set-off,defense,counter claim or recoupment for any reason whatsoever. The net effective interest rate under this Lease
shall not exceed the net effective interest at which public securities may be issued in accordance with Tex. Rev. Civ. Stat.
Ann.Art.717k-2.
5. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the
benefit of the Agreement, and the Interest and Sinking Fund shall be established and maintained by the City at an official
depository bank of the City. The Interest and Sinking Funds shall be kept separate and apart from all other funds and
accounts of the City, and shall be used only for paying the interest on, and principal of, the Agreement. All ad valorem
taxes levied and collected for and on account of the Agreement shall be deposited, as collected, to the credit of the Interest
and Sinking Fund. During each year while the Agreement or interest thereon are outstanding and unpaid, the governing
body of the City shall compute and ascertain a rate and amount of ad valorem tax money required to pay the interest on the
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09/01/2004 17:28 FAX 5123413301 CITY OF ROUND ROCK FINAN 0 006
Agreement as such interest become due, and to provide and maintain a sinking fund adquate to pay the principal of the
Agreement as such principal comes due (but never less than 2% each year), and said tax shall be based on the latest
approved tax roils of the Lessee,with full allowance made for tax delinquencies and the cost of tax collection.
6.REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants and,so long as this Lease is
in effect or any part of Lessee's obligations to Lessor remain unfulfilled,shall continue to warrant at all times,that;
(a) Lessee is a State, a Territory or a possession of the United States, the District of Columbia, or a political
subdivision of any of the foregoing within the meaning of Section 103(a) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulations and Rulings related thereto.If Lessee is incorporated, it is duly organized and existing
under the Constitution and laws of its jurisdiction of incorporation and will do or cause to be done all things necessary to
preserve and keep such organization and existence in full force and effect.
(b)Lessee has been duly authorized by the Constitution and laws of the applicable jurisdiction and by a resolution
of its governing body (which resolution, if requested by Lessor, is attached hereto) to execute and deliver this Lease and
each Supplement and to carry out its obligations hereunder.
(c)All requirements applicable to the Lessee have been met, and procedures have occurred in order to insure the
enforceability of this Lease,and Lessee has complied with such public bidding requirements, if any,as may be applicable to
the transactions contemplated by this Lease.
(d) The Equipment will be used by Lessee only for the purpose of performing one or more governmental or
proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or
business of any person or entity other than Lessee.
(e)This Lease constitutes a valid, legal and binding obligation of Lessee enforceable against Lessee in accordance
with the respective terms hereof.
(f) This Lease is not an arbitrage bond for purposes of Section 148 of the Internal Revenue Code of 1986, as
amended, and Lessor and its assigns are entitled to treat the interest portion of the payments to be made hereunder as
exempt from federal income taxes under Section 103(a)of the Internal Revenue Code of 1986,as amended.
(g) The Lessor, as agent for the Lessee, shall maintain records relating to the holder of the Lease, including the
Lessor and its assigns, sufficient to comply with the registration requirements of Section 149(a) of the Internal Revenue
Code of 1986,as amended.
(h) This Lease is not and shall not become a "private activity bond" within the meaning of Section 141 of the
Internal Revenue Code of 1986,as amended.
(i)Lessee shall comply with all provisions of the Internal Revenue Code of 1986 which are necessary to preserve
the tax exempt status of the interest component of the payments made and to be made under this Lease, including,without
limitation,the investment and rebate provisions of Section 148,the prohibition against federal guaranties under Section 149
(b)and the information reporting requirements of Section 149(e).
7. WARRANTIES. Lessee agrees that it has selected each item of Equipment based upon its own judgment and disclaims
any reliance upon any statements or representations made by Lessor. LESSOR MAKES NO WARRANTY WITH
RESPECT TO THE EQUIPMENT, EXPRESSED OR IMPLIED, AND LESSOR SPECIFICALLY DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE AND ANY LIABILITY
FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR THE INABILITY TO USE THE
EQUIPMENT. Lessee agrees to make rental and other payments required hereunder without regard to the condition of the
Equipment and to look only to persons other than Lessor such as the manufacturer, vendor or carrier thereof should any
item of Equipment for any reason be defective. So long as no Event of Default has occurred and is continuing, Lessor
agrees, to the extent they are assignable, to assign to Lessee, without any recourse to Lessor, any warranty received by
Lessor.
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09/01/2004 17:28 FAX 5123413301 CITY OF ROUND ROCK FINAN Q007
8. TITLE. Upon acceptance of the Equipment by Lessee hereunder, title to the Equipment will vest in the Lessee. For as
long as title to the Equipment vests in Lessee,Lessee at its expense shall protect and defend the title and keep it free of all
claims and liens other than the rights of Lessee hereunder and claims and liens created by or arising through Lessor. The
Equipment shall remain personal property regardless of its attachment to realty,and Lessee agrees to take such action at its
expense as may be necessary to prevent any third party from acquiring any interest in the Equipment as a result of its
attachment to realty.
9. SECURITY AGREEMENT; FURTHER ASSURANCES. To secure the performance of all Lessee's obligations
hereunder. Lessee agrees to execute or deliver such additional documents, including, without limitation, opinions of
counsel, notices and similar instruments, in form satisfactory to Lessor, which Lessbr deems necessary or appropriate to
establish and maintain the confirmation or perfection of this Lease and Lessor's rights hereunder provided that the terms
and provisions of any such document are reasonable and the document is reasonably requested; and provided further that
the execution of any such document shall be subject to the discretion and judgement of the officers and governing body of
the Lessee.
10.LAWS AND TAXES.Lessee shall comply with all laws and regulations relating to the Equipment and its use and shall
promptly pay when due all sales,use,property, excise and other taxes and all license and registration fees now or hereafter
imposed by any governmental body or agency upon the Equipment or its use or the rentals hereunder excluding, however,
any taxes on or measured by Lessor's net income. Upon request by Lessor, Lessee shall prepare and file all tax returns
relating to taxes for which Lessee is responsible hereunder which Lessee is permitted to file under the laws of the applicable
taxing jurisdiction. Notwithstanding anything to the contrary in this Master Lease, the Lessee and Lessor agree the
Equipment is exempt from taxation in accordance with Texas law, and that Lessee or Lessor shall have the full right to
administratively or judicially challenge any tax or assessment levied or attempted to be levied on the Equipment. Save and
except to the extent necessary to pay any tax or assessment to protect the property and security interests of the Lessee and
Lessor,the Lessee may,in its sole discretion,elect not to pay any tax or assessment until such time as the tax or assessment
is determined to be due and owing on the Equipment by a final judgement issued by a court of competent jurisdiction.
11. INDEMNITY. To the extend allowed by law,Lessee hereby indemnifies and agrees to save Lessor harmless from any
and all liability and expense arising out of the ordering,ownership,use,condition or operation of each item of Equipment
during the term of this Lease, including liability for death or injury to persons,damage to property,strict liability under the
laws or judicial decisions of any state or the United States, and legal expenses in defending any claim brought to enforce
any such liability or expense,but excluding any liability for which Lessee is not responsible under Section 10.
12. ASSIGNMENT. Without Lessor's .prior written consent, Lessee will not sell, assign, sublet, pledge, or otherwise
encumber or permit a lien arising through Lessee to exist on or against any interest in this Lease or the Equipment or
remove the Equipment from its location referred to above.With Lessee's consent, not to be unreasonably withheld, Lessor
may assign its interest in this Lease and the equipment.
13.INSPECTION.Lessor may inspect the Equipment at anytime and from time to time during regular business hours.
14. REPAIRS. Lessee will use the Equipment with due care and for the purpose for which it is intended. Lessee will
maintain the Equipment in good repair, condition and working order and will furnish all parts and services required
therefore,all at its expense.All such parts when furnished shall immediately become the property of Lessor and part of the
Equipment for all purposes hereof.
15. LOSS OR DAMAGE.In the event any item of Equipment shall become lost,stolen,destroyed,damaged beyond repair
or rendered permanently unfit for use for any reason,or in the event of condemnation or seizure of any item of Equipment,
Lessee shall promptly pay Lessor(a)the amount of all rent and other amounts payable by Lessee hereunder with respect to
such item due but unpaid at the date of such payment plus(b)the amount stated in the Supplement or an exhibit thereto as
the Termination Balance included in Exhibit "A",plus(c)an amount equal to the applicable final purchase price set forth
in the Supplement or any exhibit thereto, less (d) any unaccrued interest. Upon payment of such amount to Lessor, such
item shall become the property of Lessee,Lessor will transfer to Lessee, without recourse or warranty, all of Lessor's right,
title and interest therein,the rent with respect to such item shall terminate,and the basic rental payments on the remaining
items shall be reduced accordingly. Lessee shall pay any sales and use taxes due on such transfer. Any insurance or
condemnation proceeds received shall be credited to Lessee's obligation under this paragraph and Lessee shall be entitled to
any surplus.
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09/01/2004 17:28 FAX 5123413301 CITY OF ROUND ROCK FINAN 0008
16. INSURANCE. Lessee shall obtain and maintain on or with respect to the Equipment at its own expense (a) liability
insurance against liability for bodily injury and property damage with a minimum limit of$500,000 combined single limit
and (b) physical damage insurance insuring against loss or damage to the Equipment in an amount not less than the full
replacement value of the Equipment or the amount stated in the Supplement or an exhibit thereto as the Termination
Balance.Lessee shall furnish Lessor with certificate of insurance evidencing the issuance of a policy or policies to Lessee in
at least the minimum amounts required herein. Each such policy shall be in such form and with such insurers as may be
satisfactory to Lessor,and shall contain a clause requiring the insurer to give to Lessor at:lea§t 10 days prior written notice
of any alteration in the terms of such policy or the cancellation thereof, and a clause specifying that no action or
misrepresentation by Lessee shall invalidate such policy. Lessor shall be under no duty to ascertain the existence of or to
examine any such policy or to advise Lessee in the event any such policy shall not comply with the requirement thereof. In
the event that Lessee has been permitted to self-insure,Lessee will furnish Lessor with a letter or certificate to such effect.
Lessee may obtain and provide coverage by municipal risk pool agreement, in lieu of providing any insurance required by
this Master Lease. In this Master Lease,the word"insurance"shall mean and include risk pool coverage.
17. ADDITIONAL ACTION. Lessee will promptly execute and deliver to Lessor such further documents and take such
further action as Lessor may reasonably request in order to more effectively carry out the intent and purpose of this Lease..
Lessee will furnish,from time to time on request,a copy of Lessee's latest annual balance sheet and income statement.
18. LATE CHARGES.If any installment of basic rent is not paid when due or within 5 days thereafter,Lessor may impose
a late charge of up to 5% of the amount of the installment but in any event not more than permitted by applicable law.
Payments thereafter received shall be applied first to delinquent installments and then to current installments.
19. DEFAULT. Each of the following events shall constitute an "Event of Default" hereunder (a) Lessee shall fail to pay
when due any installment on basic rent after receiving 10 days notice from Lessor and an opportunity to cure; (b) Lessee
shall fail to observe or perform any other agreement to be observed or performed by Lessee hereunder and the continuance
thereof for 30 calendar days following written notice thereof by Lessor to Lessee; (c) any warranty, representation or
statement made or furnished to Lessor by or on behalf of Lessee proves to have been false or misleading in any material
respect;or(d)Lessee shall voluntarily file, or have filed against it involuntarily, a petition for liquidation, reorganization,
adjustment of debt,or similar relief under the federal or state Bankruptcy Code or any other present or future federal or state
bankruptcy or insolvency law,or a trustee, receiver, or liquidator shall be appointed of it or all of a substantial part of its
assets.
20.REMEDIES.Lessor and Lessee agree that Lessor's damages suffered by reason of an Event of Default are uncertain and
not capable of exact measurement at the time this Lease is executed because the value of the Equipment at the expiration of
this Lease is uncertain, and therefore they agree that for purposes of this Section 20 "Lessor's Loss" as of any date shall be
the sum of the following: (1) the amount of all rent and other amounts payable by Lessee hereunder due but unpaid as of
such date,plus(2)the amount stated in the Supplement or an exhibit thereto as the Termination Balance, less(4)unaccrued
interest.
Upon the occurrence of an Event of Default and at any time thereafter,Lessor may exercise any one or more of the remedies
listed in this Section as Lessor in its sole discretion may lawfully elect; provided, however, that upon the occurrence of an
Event of Default specified in Section 19 (d), an amount equal to Lessor's Loss as of the date of such occurrence shall
automatically be and become immediately due and payable without notice or demand of any kind. Lessor must attempt to
mitigate Lessor's Loss and damages.
A.Lessor may,by written notice to Lessee,terminate this Lease and declare an amount equal to Lessor's Loss as of the date
of such notice to be immediately due and payable, and the same shall thereupon be and become immediately due and
payable without further notice or demand,and all rights of Lessee to use the Equipment shall terminate but Lessee shall be
and remain liable as provided in this Section 20. Lessee shall at its expense promptly deliver the Equipment to Lessor at a
location or locations within the continental United States designated by Lessor. Lessor may also enter upon the premises
where the Equipment is located and take immediate possession of and remove the same with or without instituting legal
proceedings.
B. Lessor may proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this
Lease or to recover, for breach of this Lease, Lessor's Loss as of the date Lessor's Loss is declared due and payable
hereunder; provided, however, that upon recovery of Lessor's Loss from Lessee in any such action without having to
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09/01/2004 17:29 FAX 5123413301 CITY OF ROUND ROCK FINAN Q009
repossess and dispose of the Equipment,Lessor shall transfer the Equipment to Lessee at its then location upon payment of
any additional amount due under clause(C,D,E)below.
C. In the event Lessor repossesses the Equipment, Lessor shall either retain the Equipment in full satisfaction of Lessee's
obligation hereunder or sell or lease each item of Equipment in such a manner and upon such terms as Lessor may in its
sole discretion determine. The proceeds of such sale or lease shall be applied to reimburse Lessor for Lessor's Loss and any
additional amount due under clause(D,E)below.Lessor shall be entitled to any surplus-and Lessee shall remain liable for
any deficiency. For purposes of this subparagraph, the proceeds of any lease of all or any part of the Equipment by Lessor
shall be the amount reasonably assigned by Lessor as the cost of such Equipment in determining the rent under such Lease.
D.Lessor may recover interest on the unpaid balance of Lessor's Loss from date it becomes payable until fully paid at a rate
of-8%per annum,but in any event not more than permitted by applicable law.
E.Lessor may exercise any other right or remedy available to it by law or by agreement,and may in any event recover legal
fees and other expenses incurred by reason of an Event of Default or to the exercise of any remedy hereunder, including
expenses of repossession,repair,storage,transportation,and disposition of the Equipment.
No remedy given in this section is intended to be exclusive,and each shall be cumulative but only to the extent necessary to
permit Lessor to recover amounts for which Lessee is liable hereunder.No express or implied waiver by Lessor of any Event
of Default shall constitute a waiver of any other Event of Default.
21.NOTICES.Any written notice hereunder shall be deemed to have been given when delivered personally or deposited in
the United States mail,by certified mail, return receipt requested,addressed to the party's address set forth above or at the
party's last known address.
22.NET LEASE AND UNCONDITIONAL OBLIGATION.This Lease is a completely net lease and Lessee's obligation to
pay the rent and amounts payable by Lessee under Sections 15 and 20 is unconditional and not subject to any abatement,
reduction,setoff or defense of any kind except as expressly provided herein.
23. PREPAYMENT. This lease and any related supplement may be prepaid in whole,but not in part, with forty-five(45)
days written notice to Lessor,upon payment of the amount set forth as Termination Value on the Exhibit A attached to said
Supplement.
24.NON-CANCELLABLE LEASE.This Lease cannot be canceled or terminated except as expressly provided herein.
25. SURVIVAL OF INDEMNITIES.Lessee's obligations under Sections 10 and 11 shall survive termination of this Lease
to the extent the obligations arose before termination.
26. MISCELLANEOUS.Any provision of this Lease which is unenforceable in any jurisdiction shall,as to jurisdiction,be
ineffective to the extent of such unenforceability without invalidating the remaining provisions of this lease, and any such
unenforceability in any jurisdiction shall not render unenforceable such provision in any other jurisdiction.This Lease shall
in all respects be governed by, and construed in accordance with, the substantive laws of the state in which the Lessee is
located.
27. VENUE. This Lease is governed by the laws of the State of Texas and all obligations of the parties under this contract
are performable in Williamson County,Texas.
28. USURY SAVINGS CLAUSE. This Lease is intended to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof or the application thereof to any person or circumstances
shall, for any reason and to the extent, be invalid or unenforceable, neither the application of such provision to any other
person or circumstance nor the remainder of the instrument in which such provision is contained shall be affected thereby
and shall be enforced to the greatest extent permitted by law. It is expressly stipulated and agreed to be the intent of the
Lessor to at all times comply with the usury and other applicable laws now or hereafter governing the interest payable on
this Lease. If the applicable law is ever revised,repealed or judicially interpreted so as to render usurious any amount caller
for under this Lease or contracted for, charged, taken, reserved or received with respect to the indebtedness evidenced by
this Lease, or if Lessor's exercise of the option to accelerate the maturity of this Lease, or if any prepayment by Lessee
5
09/01/2004 17:29 FAX 5123413301 CITY OF ROUND ROCK FINAN 0 010
results in Lessee having paid any interest in excess of that permitted by law, then it is the express intent of Lessee and
Lessor that all excess amounts theretofore collected by Lessor be credited on the principal balance of this Lease(or, if this
Lease has been paid in full,refunded to Lessee),and the provisions of this Lease immediately be deemed reformed and the
amounts thereafter collectable hereunder and thereunder reduced, without the necessity of the execution of any new
document,as to comply with the then applicable law,but so as to permit the recovery of the fullest amount otherwise called
for hereunder or thereunder. All sums paid or agreed to be paid, by Lessee for the use, forbearance, detention, taking,
charging, receiving or reserving of the indebtedness of Lessee to Lessor under this Lease-shall, to the maximum extent
permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such indebtedness does not exceed the usury ceiling
from time to time in effect and applicable to such indebtedness for so long as such indebtedness is outstanding.
Additionally,to the maximum extent permitted by applicable law now or hereafter in effect, Lessor may, at its option and
from time to time implement any other method of computing the Maximum Rate under TEX. REV. CIV. STAT. ANN.
Article 5069-1.04, as amended, or under other applicable law by giving notice, if required, to Lessee as provided by
applicable law now or hereafter in effect. Notwithstanding anything to the contrary contained, it is not the intention of
Lessor to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
30. SEVERABILITY. If any one or more of the terms,provisions or conditions contained in this Master Lease shall for any
reason be held to be invalid, illegal or unenforceable in any respect under Texas law, such invalidity, illegality or
unenforceability shall not effect any other provisiion of this Master Lease, but this Master Lease shall be construed as if
such invalid, illegal or unenforeable provision had not been contained herein. However, if Lessee's obligation to pay the
Rent payments is determined herein. However, if Lessee's obligation to pay the Rent payments is determined to be invalid
or unenforceable,this Lease at the option of Lessor shall terminate.
6
09/01/2004 17:29 FAX 5123413301 CITY OF ROUND ROCK FINAN oil
[Signature Page to Master Agreement]
Executed and effective as of the i3 day of September, 2001.
Less Ci of Ron Rock,Texas
By.
--a
Its: !� RV �
Lessor: Wells Fargo Brokerage Services,LLC
By: � -
Its: Vice President
7
INCUMBENCY CERTIFICATE
I, C�-II�IS�II�E R- AfifT gxlo hereby certify that I am the duly elected or
appointed and acting Secretary/Clerk of City of Round Rock, Texas a political subdivision or
agency duly organized and existing under the laws of the State of Texas that I have custody of the
records of such entity, and that, as of the date hereof, the individuals named below are the duly
elected or appointed officers of such entity holding the offices set forth opposite their respective
names. I further certify that (I) the signatures set opposite their respective names and titles are
their true and authentic signatures and (II) such officers have the authority on behalf of such entity
to enter into that certain Governmental Lease-Purchase Master Agreement dated September 27,
2001 and Supplement dated September 27, 2004 between such entity and Wells Fargo Brokerage
Services, LLC (Lessor).
NAME TITLE ATURE
NQ11L., masotie iI I�''1a- AD
IN WITNESS VEREOF,A have duly executed this certificate and affixed the seal of such
entity hereto this day of 2004.
�Tj/ SECRETARY
DELIVERY AND ACCEPTANCE CERTIFICATE
TO: WELLS FARGO BROKERAGE SERVICES, LLC
RE: GOVERNMENTAL LEASE-PURCHASE MASTER AGREEMENT DATED
SEPTEMBER 27, 2001 AND SUPPLEMENT DATED SEPTEMBER 27, 2004
FOR: VEHICLES & EQUIPMENT
We hereby accept the property described in the above LEASE (the "Property") and agree
that it is now subject to LEASE. The Acceptance Date below is also the Rent Commencement
Date in the related Supplement to the Master Lease.
LESSEE: City of Round Rock, Te
BY:
(Title
eeDotember 27, 2004
(Acceptance Date)
(Must be date lease funds)
Sheets & Crossfield, P.c.
ATTORNEYS AT LAW
309 East Main Street• Round Rock,TX 78664-5246
phone 512-255-8877•fax 512-255-8986
September 27, 2004
Wells Fargo Brokerage Services, LLC
Public Finance Division
1740 Broadway,MAC C7300-011
Denver, Colorado 80274
Re: Governmental Lease-Purchase Master Agreement dated as of September
27, 2001, by and between Wells Fargo Brokerage Services, LLC ("Lessor")
and City of Round Rock,Texas("Lessee")
Ladies and Gentlemen:
I have acted as counsel to Lessee with respect to the Governmental Lease-Purchase
Master Agreement described above and various related matters, and in this capacity have
reviewed a duplicate original or certified copy thereof and Supplement attached thereto and
executed pursuant thereto (together, the"Lease"). Based upon the examination of these and such
other documents as I deem relevant, it is my opinion that:
1. Lessee is a political subdivision of the State of Texas (the "State"), duly
organized,existing and operating under the Constitution and laws of the State.
2. Lessee is authorized and has power under applicable law to enter into the Lease,
and to carry out its obligations thereunder and the transactions contemplated
thereby.
3. The Lease has been duly authorized, approved,executed and delivered by and on
behalf of Lessee, and is a legal, valid and binding contract of Lessee enforceable
in accordance with its terms, except to the extent limited by State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of
general application relating to or affecting the enforcement of creditors' rights.
4. The Lease represents a valid, deferred payment obligation for the amounts and in
the manner those amounts are to be paid as set forth therein.
5. No approval, consent or withholding of objection is required from any
governmental body or authority or any other person, firm or corporation with
respect to the entering into or performance by Lessee of the terms of the Lease
and the transaction contemplated thereby, or if any such approval is
required, it has been obtained.
6. The authorization, approval and execution of the Lease and all other proceedings
of Lessee relating to the transactions contemplated thereby have been performed
in accordance with all applicable open meeting, public records, public bidding
and all other laws, rules, and regulations of the State.
00072316
7. The execution of the Lease will not result in the violation of any constitutional,
statutory or other limitation relating to the manner, form, or amount of
indebtedness which may be incurred by Lessee. The Lease is a general obligation
and debt of Lessee that complies with all applicable debt limitation and
referendum requirements. The Lease will not result in any breach of, or
constitute a default under, or result in the creation of any lien, charge, security
interest or other encumbrance upon any assets of Lessee, or on the Equipment
pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement
or other instrument to which Lessee is a party, or by which it or its assets may be
bound.
8. There are no actions, suits or proceedings pending or to the knowledge of Lessee
or the undersigned, threatened against or affecting Lessee in any court or before
any governmental commission, board or authority which, if adversely
determined, will have a materially adverse effect on the ability of Lessee to
perform its obligations under the Lease.
9. Under existing regulations of the Internal Revenue Code, the indebtedness of
Lessee is not an arbitrage bond within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended.
10. The Lease is not a private activity bond within the meaning of Section 141 of the
Internal Revenue Code of 1986 and the Lease has been designated by Lessee as a
qualified tax exempt obligation for purposes of Section 265(b)(3) of the Internal
Revenue Code of 1986.
Sincerely,
Stephan L. Sheets
City Attorney
DELIVERY AND ACCEPTANCE CERTIFICATE
TO: WELLS FARGO BROKERAGE SERVICES, LLC
RE: GOVERNMENTAL LEASE-PURCHASE MASTER AGREEMENT DATED
SEPTEMBER 27, 2001 AND SUPPLEMENT DATED SEPTEMBER 27, 2004
FOR: VEHICLES & EQUIPMENT
While not all of the property described in the above LEASE (the "Property") has been
delivered to us, we hereby request funding for the LEASE so that partial payments can be made
to the Property vendor(s) and Property deliveries or installations completed. We hereby accept
the Property pursuant to the LEASE, agree to have the LEASE commence, and acknowledge that
all the terms of the LEASE are in full force and effect. We understand that, Section 6(g) of the
LEASE notwithstanding, if the funding proceeds, $575,000.00, are not completely disbursed by
March 27, 2005, the LEASE may become subject to the investment and rebate (i.e., arbitrage)
provisions of IRS Code Section 148 and we will comply with all reporting and, if applicable,
rebate requirements thereto.
LESSEE: City of Round Rock, Texas,
BY: M 04L r—
(Title)(Title) ;J
September 27, 2004
(Acceptance Date)
(Must be date lease funds)
INVOICING PROCEDURES
Re: Municipal Lease No. 1349-003
with
City of Round Rock,Texas
Please provide us with the name, address, and phone number of the appropriate personnel
we can contact regarding invoicing and payments:
(Name of Contact) �� +�e S • 5
(Address) `x
P-0 ,U ��L . --7V&&�
(Phone)
(Fax) �S��'� -Mkf&- 3 Y! 3 3 0 1
Forth 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev.November 2000) (►Under Internal Revenue Code section 149(e)
Department of the Treasury 10-See separate instructions. OMB No.1545.0720
Internal Revenue Service Caution:Use Form 8038-GC if the issue price of the issue is under$100,000.
Part I Reporting Authority If Amended Return,check here►❑
1 Issuer's name 2 Issuer's employer identification number
City of Round Rock,Texas —
Roomisuite 4. Report number
3 Number and street(or P.O.box if mail is not delivered to street address)
221 East Main Street G- -
5 City,town,or post office,state and ZIP code 6 Date of Issue
Round Rock,Texas 78664 September 27,2004
7 Name of issue 8 CUSIP Number
Governmental Lease Purchase Option Agreement N/A
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative
Howard Baker 1 512-218-5455
Part II Type of Issue check applicable box es and enter the issue rice See instructions and attach schedule
11 ❑ Education 11 $
12 ❑ Health and hospital 12
13 ❑ Transportation 13
14 ❑ Public safety 14 $575,000.00
15 ❑ Environment(including sewage bonds) 15
16 ❑ Housing 16
17 ❑ Utilities 17
18 ® Other. Describe jo. 18
19 If obligations are TANS or RANs,check box I►❑ If obligations are BANS,check box Ilia.❑
20 If obligations are in the form of a lease or installment sale,check box 10.
Part ill Description of Obligations.. Com lete for the entire issue for which this form is being filed.
a Final maturity date b issue price c Stated redemption Price at maturity d Weighted average maturity a Yield
21 1 September 27,2007 $575,000.00 1.77 years 2.150%
Part IV Uses of Proceeds of Bond Issue(including underwriters'discount
22 Proceeds used for accrued interest 22
23 Issue price of entire issue(enter amount from line 21,column[b]) 23 $575,000.00
24 Proceeds used for bond issuance costs(including underwriters'discount) 24
25 Proceeds used for credit enhancement 25
26 Proceeds allocated to reasonably required reserve or replacement fund 26
27 Proceeds used to currently refund prior issues 27
28 Proceeds used to advance refund prior issues 28
29 Total(add lines 24 through 28) 29
30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30
Part V Description of Refunded Bonds(Complete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded 101. years
33 Enter the last date on which the refunded bonds will be called 1111.
34 Enter the date(s)the refunded bonds were issued jo.
Part VI Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a
b Enter the final maturity date of the guaranteed investment contract Poo. M MUM
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a
37 b If this issue is a loan made from the proceeds of another tax-exempt issue,check box❑and enter the name of the b issuer
and the date of the issue jo.
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(Ill)(small issuer exception),check box 10.
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box ►❑
39 If the issuer has identified a hedge,check box 10.0
Please Under penalties of perjury,I deciaLe that ha amined thereturn an accompanying schedules and statements,and to the best of my knowledge and belief,they are true,
Sign correct,and c Ve,�
Here
Sig re suer's authorize Date lo, pe or print name and title
Form 8038-G(rev.5-99)