R-05-09-22-14E2 - 9/22/2005RESOLUTION NO. R -05-09-22-14E2
WHEREAS, the City of Round Rock, Texas ("Lessee") proposes to
enter into a Master Equipment Lease/Purchase Agreement with Bank of
America Leasing & Capital, LLC, as lessor ("Lessor") and Lessee, as
lessee (the "Master Lease") and proposes to enter into Schedule A No.
1 thereunder to enable Lessee to finance the lease/purchase acquisition
of up to $600,000 principal amount of Equipment (as defined in Schedule
A No. 1 with the intent that the interest portion of the Rental
Payments (as defined in the Master Lease) therefor, in an amount not to
exceed 3.36% per annum, be excluded from gross income for federal
income tax purposes and, as security for such Rental Payments, Lessee
has agreed to pledge its ad valorem taxes, and to make payments, as set
forth in Schedule A No. 1, sufficient to pay both the principal and
interest portion of the Rental Payments under the Master Lease and
Schedule A No. 1.
WHEREAS, the Master Lease and Schedule A No. 1 have been
presented to this meeting, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
Section 1. The City Council agrees to enter into the Master Lease
and Schedule A No. 1 pursuant to the Master Lease in order to finance
acquisition of the Equipment in a principal amount of up to $600,000 at
an interest rate not to exceed 3.36% per annum and, in order to secure
the Master Lease and Schedule A No. 1, to pledge its ad valorem taxes,
in accordance with said Master Lease and Schedule A No. 1.
Section 2. That the Mayor is authorized to execute, acknowledge
and deliver inthe name and on behalf of Lessee to Lessor the Master
Lease and Schedule A No. 1 to the Master Lease including all
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attachments, financing statements and schedules thereto, such Master
Lease and Schedule A No. 1 to be in substantially the form presented to
this meeting with such changes as the signing officer shall determine
to be advisable. Further, said Mayor is authorized to execute,
acknowledge and deliver in the name and on behalf of the Lessee any
other agreement, instrument, certificate, representation and document,
and to take any other action as may be advisable, convenient or
necessary to enter into such Master Lease and Schedule A No. 1; the
execution thereof by the Mayor shall be conclusive as to such
determination.
Section 3. That there is hereby authorized the continuing
execution and delivery by the Mayor in the name of and on behalf of
Lessee the Schedule A No. 1 and Attachments in substantially the form
presented to this meeting with such changes as the Mayor shall
determine advisable, and the execution thereof shall be conclusive as
to such determination.
Section 4. The Lease of the Equipment which is described in or
incorporated by reference in the Schedule A No. 1 to the Agreement is
hereby approved by the City Council. The City, Manager shall be
authorized to make replacements or otherwise substitute other similar
equipment for any of the items so described or incorporated if
necessary due to inability of the Vendor to deliver an item of
equipment, so long as such substitution of any item of equipment does
not frustrate the purpose of the Lessee for which the Equipment is
being leased or result in an increase in the amount required to be paid
by Lessee for the Equipment, as provided in Section 1 hereof.
Section 5. That this Resolution shall take effect immediately.
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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 22nd day of September, 2005.
ATTST:
V
-Fbr CHRISTINE R. MARTINEZ, City Secretary
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MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
By and Between
BANC OF AMERICA LEASING & CAPITAL, LLC
as Lessor,
and
CITY OF ROUND ROCK TEXAS
as Lessee
Dated as of September 30, 2005
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MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
THIS MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT (the "Agreement"), dated as of
September 30, 2005, is by and between BANC OF AMERICA LEASING & CAPITAL, LLC ("Lessor"), and
CITY OF ROUND ROCK, TEXAS ("Lessee").
WITNESSETH:
WHEREAS, Lessee is Texas home rule city, and is authorized and empowered under the laws of the
State, particularly the Public Property Finance Act, Texas Loc. Gov't. Code Ann. § 271.001 et seq. (the "Act") to
lease, as lessee, to purchase and receive, and to control and dispose of personal property, whether movable or fixed,
considered by the City Council of Lessee to be necessary, useful or appropriate to one or more governmental
purposes of Lessee.
WHEREAS, the parties hereto desire that Lessee from time to time lease from Lessor Equipment (defined
below) to be identified by Lessee on the terms and conditions set forth below, which Equipment the City Council of
Lessee shall determine is necessary, useful and appropriate to one or more governmental purposes of Lessee and
shall be specifically identified in any Schedule A (as hereinafter defined) attached hereto and made a part hereof;
and
WHEREAS, Lessee shall make Rental Payments (as hereinafter defined) and certain other payments
directly to Lessor for the possession, use and ownership of the Equipment; and
WHEREAS, as security for the payment of all of Lessee's obligations under this Agreement Lessee shall
pledge its ad valorem taxes;
NOW, THEREFORE, for and in consideration of the premises and of the covenants hereinafter contained,
and other valuable considerations, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
For the purposes of this Agreement and related documents, the following definitions will apply:
1.1 Acceptance Certificate. A Certificate of the Lessee, in substantially the form set forth on
Attachment A to Schedule A hereunder by which Lessee accepts delivery of the Equipment and authorizes Lessor to
disburse funds for said Equipment.
1.2 Acceptance Date. Unless otherwise agreed to by the prior written consent of Lessor, the date on
which the Acceptance Certificate is executed and delivered by the Lessee to the Lessor pursuant to the terms of this
Agreement.
1.3 Additional Rents. The amounts, other than Rental Payments, payable by Lessee pursuant to the
provisions of this Agreement, as set forth in Section 4.7 hereof.
1.4 Authorized Officer. (i) In the case of Lessor, any President or Vice President, and when used in
reference to an act or document of Lessor, also means any other person authorized to perform the act or sign the
document, and (ii) in the case of Lessee, the Mayor , or any other person authorized by the City Council of the
Lessee.
1.5 Closing. The date of delivery of all executed documents related to this Agreement and any
Schedule A hereunder as required under this Agreement and such related Schedule A.
1.6 Contract Price. The all-inclusive price of an item of Equipment, including the cost of
installation, freight, taxes and training (such costs not to exceed 20% of the total cost of the Equipment), but
excluding the cost of any service contract, as set forth in the applicable Purchase Agreement.
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1.7 Determination of Taxability. One of the following determinations, made in regard to
section 103 of the Code (as defined herein) to the effect that by reason of any action or inaction by the Lessee or any
violation by the Lessee of any of its covenants or representations in this Agreement or any misrepresentation in any
certificate furnished in connection with any Schedule A hereunder, the interest payable on such Schedule A is
includable in the gross income of owner of such obligation: (i) a final determination, decision or decree by the
Commissioner or any District Director of Internal Revenue, or by any court of competent jurisdiction, which is not
subject to further review, or (ii) an opinion of a nationally recognized bond counsel furnished by the Lessor to the
Lessee.
1.8 Equipment. The goods enumerated on each Schedule A that is now or may hereafter from time
to time become attached hereto and incorporated herein by reference, together and with any and all additions,
modifications, attachments, replacements and parts thereof.
1.9 Equipment Acquisition Account. The account so designated and established by the Lessee with
the Lessor pursuant to Section 14.2 hereof.
1.10 Lease Proceeds. With respect to any Schedule A, the total amount of money or other
consideration to be paid or provided by Lessor, in no event to exceed the Maximum Contract Amount, for
application in accordance with such Schedule A and Section 14 hereof, including (a) the Contract Price of each item
of Equipment set forth on such Schedule A payable to the Vendor thereof upon acceptance by Lessee and (b) the
amount, if any, paid by Lessor and applied to the reasonable costs of issuance of such Schedule A.
1.11 Lease Term. With respect to this Agreement and any Schedule A hereunder, the term specified in
the applicable Schedule A in accordance with Section 3 hereof.
1.12 Lease Term Commencement Date. The date as set forth on each Schedule A hereto.
1.13 Lease Term Interest Rate. The interest rate per annum on the Lease Proceeds as set forth on
each Schedule A hereto as adjusted pursuant to the provisions of Section 4.4 hereof.
1.14 Maximum Amount. The amount as set forth on each Schedule A hereto.
1.15 Permitted Investments. Any investment authorized pursuant to the Public Funds Investment
Act, V.T.C.A. Government Code §2256.001 et seq. and the written investment policy of the Lessee.
1.16 Purchase Agreement or Purchase Agreements. Each of the purchase agreements between
Lessee and the Vendors of the Equipment.
1.17 Purchase Price. The amount which Lessee may from time to time pay or cause to be paid to
Lessor in order to purchase the Equipment, as provided in Section 5 hereof, such amount being set forth in the
Schedule A relating to such Equipment, plus all other amounts then owed hereunder by Lessee as Additional Rents
or otherwise.
1.18 Rebate Account. The account so designated by Lessee if so established pursuant to this
Agreement.
1.19 Rental Payments. The scheduled payments (but excluding indemnifications and reimbursements
and Additional Rents payable to Lessor hereunder) payable by Lessee pursuant to the provisions of this Agreement
and each Schedule A.
1.20 Schedule A. The document(s) now or hereafter from time to time attached hereto and
incorporated herein by reference and signed by the parties which, among other things, describes the equipment to be
leased by the Lessor to the Lessee, describes the Lease Term for the Equipment listed thereon and Lessee's
obligations with respect to payment and which shall be numbered consequentially from No. 1 upward.
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1.21 State. The State of Texas.
1.22 Taxable Rate. The interest rate representing the equivalent yield to the Lessor of the Lease Term
Interest Rate if the interest component of the Rental Payments is included in the gross income of the Lessor under
the Code.
1.23 Total Contract Price. The amount as set forth in each Schedule A hereto.
1.24 UCC. The State's Uniform Commercial Code.
1.25 Vendor or Vendors. The manufacturer or manufacturers of an item of Equipment, as well as the
agents or dealers of the manufacturer, from whom Lessor has purchased or is purchasing items of Equipment.
SECTION 2. LEASE OF EQUIPMENT
2.1 Acquisition of Equipment; Conditions Precedent.
(a) Lessee either has ordered or shall order the Equipment pursuant to one or more Purchase
Agreements from one or more Vendors. Lessee shall remain liable to each such Vendor with respect to its duties
and obligations in accordance with the Purchase Agreement, and as among Lessor and Lessee, Lessee shall bear the
risk of loss with respect to any loss or claim relating to any item of Equipment covered by any Purchase Agreement.
(b) The obligation of Lessor to purchase, pay or provide other consideration for, or provide
an item of Equipment is subject to the receipt by Lessor of the following documents and the satisfaction of the
following conditions, all of which shall be satisfactory to Lessor in form and substance:
(i) Lessee shall have accepted the Equipment by delivery to Lessor of an
Acceptance Certificate, whereupon the item of Equipment shall immediately become subject to and
governed by the provisions of this Agreement and the related Schedule A;
(ii) There shall exist no Event of Default (as defined in Section 12.1 hereof) under
this Agreement or any Schedule A hereunder, or any condition, event or act which with notice or lapse of
time, or both, would become an Event of Default thereunder which has not been remedied or waived;
(iii) There shall exist no material adverse change in the financial condition of Lessee;
(iv) This Agreement, the applicable Schedule A (including all attachments) duly
executed by Lessee;
(v) Evidence of insurance as required under Section 6.7 hereof; and
(vi) Financial information and such other documents, instruments or other items as
may be reasonably required by Lessor.
2.2 Lease of Equipment. Upon execution of each Schedule A, Lessor shall provide the consideration
specified in such Schedule A to be provided by it to acquire the Equipment and to lease to Lessee, and Lessee shall
lease from Lessor the Equipment, all in accordance with the provisions of this Agreement and the related
Schedule A, to have and to hold for the Lease Term. The execution and delivery of this Agreement and any
Schedule A hereunder shall not obligate Lessor to execute and deliver any Schedule A or to provide any funds or
other consideration with respect to any Schedule A unless and until such Schedule A has been executed and
delivered by all other parties thereto and all conditions set forth in this Agreement and such Schedule A have been
satisfied.
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HOU:2494916.1
SECTION 3. LEASE TERM
3.1 Lease Term. The Lease Term applicable to any Schedule A shall commence on the Lease Term
Commencement Date and shall terminate on the date set forth on such Schedule A unless terminated earlier pursuant
to Section 3.2 hereof.
3.2 Termination of Lease Term. The Lease Term applicable to any Schedule A will terminate upon
the earliest to occur of any of the following events:
(a) The expiration of the Lease Term with respect to all items of Equipment described in a
Schedule A and the non -renewal thereof in accordance with the terms and conditions of this Agreement; or
(b) The exercise by Lessee of the option granted under the provisions of Sections 5.1 or 6.8
hereof to purchase the Equipment identified in such Schedule A; or
(c) Lessor's election to terminate this Agreement under Section 12.2 or Section 12 hereof due
to Lessee's default hereunder; or
(d) The payment by Lessee of all Rental Payments in accordance with this Agreement with
respect to such Schedule A and any Additional Rents required to be paid by Lessee hereunder.
SECTION 4. RENTAL PAYMENTS
4.1 Rental Payments; Tax Levy. .
A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the
benefit of this 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 Fund 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, this Agreement.
All ad valorem taxes levied and collected for and on account of this Agreement shall be deposited, as collected, to
the credit of the Interest and Sinking Fund. During each year while this Agreement or interest thereon are
outstanding and unpaid, the governing body of the Lessee shall compute and ascertain a rate and amount of ad
valorem tax money required to pay the interest on this Agreement as such interest comes due, and to provide and
maintain a sinking fund adequate to pay the principal of this 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.
4.2 Amount and Times of Payment. As rental for the Equipment, Lessee hereby agrees to pay
Lessor the amounts specified in each Schedule A at the times and in the manner set forth therein.
4.3 Allocation of Interest. A portion of each Rental Payment shall be allocated to interest in
accordance with the amortization schedule attached to the Schedule A and its corresponding Acceptance Certificate.
4.4 Lease Term Interest Rate. The Rental Payments shall bear interest during the Lease Term at the
rate set forth in each Schedule A; provided, however, in the event of a Determination of Taxability, such interest rate
set forth in each Schedule A shall automatically increase to the Taxable Rate retroactive to the date of the
occurrence of the Determination of Taxability and Lessee will pay such additional amount as will result in the
Lessor receiving the interest component of the Rental Payments at the Taxable Rate; provided, further, that such
interest rate set forth in each Schedule A or such interest rate set forth in each Schedule A as increased by the terms
hereof, respectively, shall never exceed the then maximum interest rate allowed for similar governmental obligations
pursuant to Chapter 1204, Texas Government Code, as amended, or other applicable laws in effect as of the date of
such Schedule A or as of the date of any increase to such interest rate, respectively.
4.5 Place of Payments. All payments required to be made to Lessor hereunder shall be made at
Lessor's principal office or as may be otherwise directed by Lessor or its assignee.
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4.6 Late Payment. Should Lessee fail to pay any part of the Rental Payments or any other sum
required to be paid by Lessor on or before the due date thereof, such unpaid amount shall continue to accrue interest
at the maximum rate allowed under Texas law until paid.
4.7 Additional Rents. Lessee shall pay to Lessor, as additional rents (the "Additional Rents")
hereunder, in addition to the Rental Payments payable by Lessee, such amounts in each year as shall be required by
Lessor in payment of any reasonable costs and expenses, incurred by Lessor in connection with the execution,
performance or enforcement of this Agreement, the lease of the Equipment to Lessee including but not limited to
payment of all reasonable fees, costs and expenses and all reasonable administrative costs of Lessor in connection
with the Equipment, reasonable expenses (including, without limitation, attorneys' fees and disbursements),
reasonable fees of auditors, insurance premiums not otherwise paid hereunder and all other reasonable, direct and
necessary administrative costs of Lessor or charges required to be paid by it in order to comply with the terms of, or
to enforce its rights under, this Agreement and any Schedule A hereunder; provided, however, it is expressly
understood and agreed by Lessor and Lessee, that any Additional Rents payable hereunder shall be limited to such
costs and expenses related to or associated with any default by Lessee under the terms of this Agreement or any
Schedule A hereunder and nothing herein shall be construed as authorizing Lessor to charge Lessee for any expenses
incurred by Lessor in the normal course of business in the administration of this Agreement and any Schedule A
hereunder. Such Additional Rents shall be billed to Lessee by Lessor from time to time, together with a statement
certifying that the amount so billed has been paid by Lessor for one or more of the items described, or that such
amount is then payable by Lessor for such items. Undisputed amounts so billed shall be due and payable by Lessee
within thirty days after receipt of the bill by Lessee.
4.8 Abatement of Payments. There will be no abatement or reduction of payments by Lessee for any
reason, including but not limited to, any defense, recoupment, setoff, counterclaim, or any claim (real or imaginary)
arising out of or related to any defects, damages, malfunctions, breakdowns or infirmities of the Equipment. Lessee
assumes and shall bear the entire risk of loss and damage to the Equipment from any cause whatsoever, it being the
intention of the parties that the Rental Payments shall be made in all events unless the obligation to make Rental
Payments is terminated as otherwise provided herein.
4.9 Rental Payments to Be Unconditional. The obligations of Lessee to make payment of the
Rental Payments and all other payments and fees due hereunder, as well as to perform and observe all other
covenants hereunder, shall be absolute and unconditional in all events, without abatement, diminution, deduction,
set-off or defense for any reason, including without limitation any failure of the Equipment to be delivered or
installed, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation,
destruction or unforeseen circumstances. Notwithstanding any dispute between Lessee and Lessor, any vendor or
any other person, Lessee shall make all Rental Payments when due and shall not withhold any Rental Payments
pending final resolution of such dispute, nor shall Lessee assert any right of set-off or counterclaim against its
obligation to make such payments required under this Agreement.
4.10 Appointment of Servicer. Lessor shall have the right to designate an entity to act as the
"Servicer" for the collection of Rental Payments payable by Lessee, the enforcement of remedies or the distribution
of funds to one or more holders of interests in this Agreement, all as provided herein. Any Servicer appointed under
this Section shall be a trust company or a bank having the powers of a trust company, having a capital and surplus of
not less than $25,000,000. Any such Servicer shall notify Lessee and Lessor of its acceptance of the appointment
and, upon giving such notice, shall become Servicer, vested with all the property, rights and powers of the Servicer
hereunder, without any further act or conveyance. Such Servicer shall execute, deliver, record and file such
instruments as are required to confirm or perfect its acceptance hereunder and set forth its duties hereunder.
SECTION 5. PREPAYMENT; PURCHASE
5.1 Reserved.
5.2 Optional Prepayment. Lessee shall have the right to prepay the outstanding principal balance of
each Schedule A hereunder, in full at any time or in part from time to time, provided, that as conditions precedent to
Lessee's right to make, and Lessor's obligation to accept, any such prepayment: (i) Lessor shall have actually
received the notice required in Section 5.1(b) above providing the amount of principal which will be prepaid (the
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"Prepaid Principal") and the date (the "Prepayment Date") on which the prepayment will be made; (ii) each
prepayment of principal shall be in the amount of $100,000.00 or a larger integral multiple of $5,000.00 (unless the
prepayment retires the outstanding balance of such Schedule A in full); and (iii) each such prepayment shall be in
the amount of 100% of the principal amount to be prepaid, plus accrued unpaid interest thereon to the Prepayment
Date, plus the amount equal to one percent (1%) of the remaining Rental Payments, and plus any other sums
which have become due to Lessor under such Schedule A on or before the Prepayment Date but have not been paid,
provided, however, in no event shall any prepayment cause the interest rate on any Schedule A to exceed the
maximum interest rate allowed for similar governmental obligations pursuant to Chapter 1204, Texas Government
Code, as amended, or other applicable laws in effect as of the date of such Schedule A. All prepayments of
principal shall be applied to principal in inverse order of maturity.
53 Reserved.
5.4 Mandatory Prepayment. Subject to Section 13.1, all or substantially all of the assets of Lessee,
including Lessee's interest in this Agreement and the Equipment, may be acquired in any manner by another entity,
subject to the opinion of counsel acceptable to Lessor as to the continued exclusion from gross income of the interest
component of the Rental Payments. However, if all or substantially all of the assets of Lessee, including Lessee's
interest in this Agreement and the Equipment, are acquired in any manner by another entity, Lessee may be required,
at the direction of Lessor to prepay in whole the Purchase Price.
5.5 Eminent Domain by Lessee. Lessee expressly agrees that in connection with any exercise of its
eminent domain powers, the fair market value of the Equipment shall be the sum of all remaining Rental Payments.
SECTION 6. RESPONSIBILITIES OF LESSEE
6.1 Care and Use of Equipment. Lessee shall use the Equipment in a careful and proper manner, in
compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the
Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes
intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time
become worn out, lost, stolen, destroyed or damaged or is unit for use. Subject to the terms of Section 6.5 hereof,
any and all such additions to or replacements of the Equipment and all parts thereof shall constitute accessions to the
Equipment and shall be subject to all the terms and conditions of this Agreement and included in the term
"Equipment" as used in this Agreement or in any Schedule A hereunder. If requested by Lessor, Lessee shall enter
into or cause to be entered into, and maintained in full force and effect during the term of this Agreement, standard
maintenance contracts satisfactory to Lessor covering the Equipment and shall comply with all its obligations
thereunder. Lessee shall furnish evidence to Lessor of such signed maintenance agreement at or prior to the date of
this Agreement and the payment of all charges and premiums therefor. Substitute maintenance may be used if
necessary and if first approved by Lessor in writing. Upon the early termination of this Agreement pursuant to
Section 12.2, Lessee shall return the Equipment at its sole expense to Lessor at a place designated by Lessor in the
same condition as originally received, ordinary wear and tear excepted, and in a condition which will permit the
Lessor to be eligible for such standard maintenance contract without incurring any expense to repair or rehabilitate
the Equipment.
6.2 Inspection. Lessor shall have the right upon reasonable prior notice to Lessee to enter onto and
upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal
business hours.
6.3 Utilities. Lessee shall pay all charges for gas, water, steam, electricity, light, heat or power,
telephone or other utility service furnished to or used on or connection with the Equipment during the Lease Term.
There shall be no abatement of Rental Payments on account of interruption of any such services.
6.4 Taxes. Lessee agrees to pay when due any and all taxes relating to the Equipment and Lessee's
obligations hereunder, including but not limited to, all license or registration fees, gross receipts tax, sales and use
tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise
taxes, and all other taxes licenses and charges imposed on the ownership, possession or use of the Equipment by any
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governmental body or agency, together with any interest and penalties, whether the taxes assessed are assessed
against Lessor or Lessee, other than taxes on or measured by the net income of Lessor.
6.5 Alterations. Without the prior written consent of Lessor, which consent shall not be unreasonably
withheld, Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be
removed without materially damaging the functional capabilities or economic value of the Equipment. Upon return
of the Equipment and at Lessor's request, Lessee at its sole cost and expense, will remove all alterations, additions
and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was
furnished, ordinary wear and tear excepted.
6.6 Transportation and Installation Charges. Lessee shall be responsible for all charges relating to
the transportation of the Equipment to Lessee's location and the installation at such location. Lessor may at its
option either prepay such charges and invoice Lessee or forward invoices to Lessee as they are received and Lessee
shall remit payment within ten (10) days upon Lessee's receipt of same.
6.7 Insurance. Lessee shall during each Lease Term maintain or cause to be maintained (a) casualty
insurance naming the Lessor and its assigns as additional insured and loss payee and insuring the Equipment against
loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the
State, and any other risks reasonably required by Lessor, in an amount at least equal to the Purchase Price of the
Equipment and with such deductibles as Lessor may require in its sole discretion; (b) liability insurance that protects
Lessor from liability in all events in form and amount satisfactory to Lessor; and (c) worker's compensation
coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may
self -insure against the risks described in clause (a). Lessee shall furnish to Lessor evidence of such insurance or
self-insurance coverage throughout each Lease Term. Lessee shall not cancel or modify such insurance or
self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice
thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.
6.8 Risk of Loss. Lessee shall bear all risk of loss to the Equipment, after delivery of the Equipment
to Lessee, and in the event of loss or damage thereto, Lessee shall as its option either (i) continue to make the Rental
Payments due hereunder and repair or replace the Equipment as mutually agreed between Lessee and Lessor, or (ii)
purchase the Equipment for the Purchase Price.
6.9 Performance by Lessor of Lessee's Responsibilities. Any performance required of Lessee or
any payments required to be made by Lessee may, if not timely performed or paid, be performed or paid by Lessor,
and in that event, Lessor shall be immediately reimbursed as Additional Rents payable under Section 4.7 by Lessee
for such payments and for any costs and expense, legal or otherwise associated with the payments or other
performance by Lessor, with interest per annum thereon at the maximum rate for governmental obligations under
Chapter 1204, Texas Government Code, as amended, or other applicable laws in effect as of the date such
Additional Rents are incurred.
6.10 Financial Statements. Lessee shall keep its books and records in accordance with generally
accepted accounting principles. Lessee agrees that it will furnish Lessor: (a) Lessee's current audited financial
statements within 180 days of each fiscal year end including (i) a balance sheet, (ii) statement of revenues, expenses
and changes in fund balances, (iii) statement of cash flows, (iv) operating fund budget analysis, and (v) appropriate
notes, schedules and attachments to the financial statements; (b) within 90 days of each fiscal year end a copy of the
annual budget for the then current fiscal year; and (c) such other financial information relating to the ability of the
Lessee to continue performing hereunder (as submitted or approved) and permit Lessor or its agents and
representatives to inspect Lessee's books and records and make extracts therefrom. Lessee represents and warrants
to Lessor that all financial statements which have been delivered to Lessor fairly and accurately reflect Lessee's
financial condition and there has been no material adverse change in Lessee's financial condition as reflected in the
statements since the date thereof.
6.11 No Pledge or Sale of Assets; Contingent Liabilities. During the term of this Agreement and any
Schedule A hereunder, Lessee shall not (a) pledge or mortgage any of Lessee's assets without the prior written
consent of Lessor; (b) sell assets of more than $100,000 per fiscal year outside the ordinary course of Lessee's
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business without the prior written consent of Lessor; and (c) within fifteen (15) days of actual knowledge shall
inform Lessor in writing of actual or potential contingent liabilities in excess of $100,000.
6.12 Payment of Expenses. Lessee shall be obligated to pay all legal and recording expenses of
Lessor associated with the preparation and enforcement of this Agreement and any Schedule A hereunder and the
expenses of any other professionals as Lessor may require in connection therewith.
6.13 Purchase Agreement; Installation Contract. Lessee shall provide to Lessor a copy of any
Purchase Agreement, installation contract and the projected installation schedule and any amendments thereto
entered into for the Equipment being financed pursuant to this Agreement.
6.14 Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order,
Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the costs thereof. All
amounts so advanced by Lessor shall constitute Additional Rent for the Lease Term and Lessee agrees to pay such
amounts so advanced by Lessor with interest thereon from the date of the advance until paid at the maximum
interest rate allowed under Chapter 1204, Texas Government Code, as amended.
6.15 Rates and Charges. Lessee will, at all times while this Agreement and any Schedule A issued
hereunder are outstanding, establish, fix, prescribe and collect rates and charges for the services produced or
furnished by Lessee which are reasonably expected to yield income sufficient to satisfy the Rental Payments due
thereunder.
SECTION 7. RESERVED
SECTION 8. TITLE TO EQUIPMENT
8.1 Title. During the Lease Term, legal title to the Equipment governed by Schedule A shall, so long
as Lessee is not in default under such Schedule A and hereunder, be in Lessee. The Equipment shall be registered in
the name of Lessee and, if applicable, title thereto shall be evidenced by a certificate of title, or such other
instrument as may be required by or utilized by the laws of the State to demonstrate ownership. The Equipment is
and shall remain personal property.
8.2 Reserved.
8.3 Personal Property. The Equipment is, and shall at all times be and remain, personal property
notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or
attached to, or embedded in, or permanently resting upon, real property or any building thereon or any fixtures, or
attached in any manner to what is permanent by any means of cement, plaster, nails, bolts, screws or otherwise.
Upon request of Lessor, Lessee shall obtain, as to any place where the Equipment is located, a waiver from the
landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment of the rights of
levy or distraint thereon.
8.4 Reserved.
8.5 Inspection, Acceptance and Written Notice of Defects. Immediately, or as soon as practicable
to provide time for testing, upon receipt and installation of the Equipment, Lessee shall inspect the Equipment.
Unless Lessee gives Lessor written notice of each defect or other proper objection to the Equipment before the
execution of the Acceptance Certificate, it shall be conclusively presumed, as between Lessor and Lessee, that the
Lessee has fully inspected and acknowledged that the Equipment is in good condition and repair, has been properly
installed and is performing satisfactorily, and that the Lessee is satisfied with and has accepted the Equipment in
such good condition and repair. Lessor shall not make or provide payment to any Vendor (or reimbursement to
Lessee pursuant to the requirements of Section 9.2(0 hereof) of the Total Contract Price, or any portion thereof, for
the Equipment, or any portion thereof, until Lessor shall have received a duly executed Acceptance Certificate of
lessee in accordance with Section 14.3 hereof.
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HOU:2494916.1
8.6 Change in Name, Corporate Structure or Principal Place of Business. Lessee shall maintain
its existence as a Texas home rule city and Lessee shall provide to Lessor written notice of any change in its name,
structure, or principal place of business thirty (30) days in advance of the date that such change is planned to take
effect. This Section shall also apply to any of Lessee's assignees or subassignees permitted under Section 13.1
hereof.
8.7 Location. The Equipment shall be located in the place(s) designated in the related Schedule A
pertaining thereto.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE
9.1 Lessee's Representations, Warranties and Covenants. Lessee warrants and represents to
Lessor (all such representations and warranties being continuing), as follows:
(a) Lessee has or will budget and appropriate for the initial fiscal year during the Lease Term
of this Agreement unobligated funds in an amount equal to the sum of the Rental Payments due during such initial
fiscal year and any other amounts due under this Agreement;
(b) Lessee is a state or a duly organized and validly existing body corporate and politic and a
political subdivision or agency thereof within the meaning of section 103 of the Internal Revenue Code of 1986, as
amended, and the related regulations and rulings thereunder (the "Code");
(c) Lessee will exercise its best efforts to preserve and keep in full force and effect its
existence as a body corporate and politic;
(d) Lessee is authorized under the Act and laws of the State to enter into this Agreement and
the transactions contemplated hereby and to perform all of its obligations hereunder;
(e) Lessee has duly authorized the execution and delivery of this Agreement under the terms
and provisions of the resolution of its City Council or by other appropriate official approval, and further represents,
covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the
enforceability of this Agreement against Lessee, and that this Agreement is a legal, valid and binding obligation of
Lessee, enforceable in accordance with its terms, except to the extent limited by bankruptcy, reorganization or other
laws of general application relating to effecting the enforcement of creditors' rights; and that Lessee has complied
with any applicable public bidding/proposal requirements with respect to this Agreement and the Equipment;
(f) Lessee is not in breach of or in default under any constitutional provision, applicable law
or administrative rule or regulation of the State, the United States, or of any department, division, agency or
instrumentality of either thereof or any applicable court or administrative decree or order, or any loan agreement,
note, ordinance, resolution, indenture, contract, agreement or other instrument to which the Lessee is a party or to
which the Lessee or any property or assets of the Lessee is otherwise subject or bound which in any material way,
directly or indirectly, affects the Lessee's entering into this Agreement, or the validity thereof, the validity or
adoption of the resolution authorizing Lessee to enter into this Agreement, -the execution and delivery of this
Agreement or other instruments contemplated thereby to which the Lessee is a party, and compliance with the
provisions of each thereof will not conflict with or constitute a breach of or default under any constitutional
provision, applicable law or administrative rule or regulation of the State, the United States, or of any department,
division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order, or any
loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument to which the Lessee
is a party or to which the Lessee or any of the property or assets of the Lessee is otherwise subject or bound;
(g) Lessee shall cause to be executed and delivered in connection with each Schedule A an
opinion of its counsel and an applicable IRS Form 8038-G (or, if the Total Contract Price of the Equipment is less
than $100,000 an IRS Form 8038 -GC) in form and substance satisfactory to Lessor and its counsel; provided,
however, that Lessor shall have the sole responsibility to cause such IRS Form 8038-G (or, if applicable, IRS
Form 8038 -GC) to be filed with the Internal Revenue Service not later than the fifteenth (15th) day of the second
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HOU:2494916.1
month following the end of the calendar quarter during which this Agreement and any Schedule A hereunder was
issued;
(h) The Equipment is, and during the period this Agreement is in force will remain, personal
property and, when subjected to use by Lessee hereunder, will not be or become fixtures;
(i) During the Lease Term, except as otherwise permitted by this Agreement, the Equipment
shall be used by Lessee only for the purpose of performing services related to its status as a political subdivision of
the State, and consistent with the permissible scope of Lessee's authority and will not be used in an unrelated trade
or business of Lessee or in the trade or business of any person or entity other than Lessee;
(j) Lessee assumes full responsibility for the safety and any consequences of lack of safety
with respect to the operation and maintenance of the Equipment while Lessee has the right to possession or control
of the Equipment;
(k) Lessee acknowledges that Lessor is acting as a financing source only with respect to the
Equipment which has been selected, and the related specifications developed, by Lessee;
(1) Lessee shall promptly and duly execute and deliver to Lessor such further documents,
instruments and assurances and take such further action as Lessor may from time to time reasonably request in order
to carry out the intent and purpose of this Agreement and any Schedule A hereunder and to establish and protect the
rights and remedies created or intended to be created in favor of Lessor hereunder. Lessor will prepare at Lessee's
expense such documents or instruments for execution by Lessee;
(m) The payment of the Rental Payments or any portion thereof is not (under the terms of any
lease or any underlying arrangement) directly or indirectly (i) secured by any interest in property used or to be used
in any activity carried on by any person other than a state or local government unit or payments in respect of such
property; or (ii) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or
borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental
unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a
state or local government unit. No portion of the Contract Price for the Equipment will be used, directly or
indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or
other service contract with respect to the use and operation of the Equipment; and
(n) The representations above shall be deemed to be made on and as of the beginning date of
the Lease Term of each Schedule A hereunder.
9.2 Tax Matters.
(a) It is the intention of the parties hereto that the interest portion of the Rental Payments
received by Lessor under this Agreement and any Schedule A hereunder be and remain excludable from gross
income for purposes of federal income taxation.
(b) The Lessee covenants that, with respect to the law of federal income taxation, it will not
intentionally perform any act that shall have the effect of terminating such exclusion from gross income of the
interest portion of the Rental Payments for federal income tax purposes.
(c) Intentionally Omitted
(d) It is the intention of the parties hereto that during the term of this Agreement, Lessee be
the sole beneficial and legal owner of the Equipment, and will report on such basis for financial accounting, federal
income tax, and all other purposes. Lessor shall not take any action inconsistent with Lessee's ownership of the
Equipment for federal income tax purposes except pursuant to the exercise of remedies under Section 12.2 hereof.
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HOU:2494916.1
(e) The weighted average maturity (defined in accordance with the Code) of any Schedule A
will not exceed one hundred twenty percent (120%) of the weighted average reasonably expected economic life in
the hands of the Lessee of the Equipment financed by Lease Proceeds derived from such Schedule A.
(f) Lessee will not use the proceeds of any Schedule A under this Agreement to reimburse
expenditures previously paid by Lessee, except in compliance with the requirements of Treas. Reg. 1.150-2.
(g) Lessee will assure that the proceeds of any Schedule A under this Agreement are not so
used as to cause this Agreement and any Schedule A hereunder to satisfy the private loan financing test of
section 141(c) of the Code.
(h) Lessee will not take or permit or suffer to be taken any action to be taken if the result of
the same would be to cause this Agreement and any Schedule A hereunder to be 'federally guaranteed" within the
meaning of section 149(b) of the Code.
(i) Lessee will not take, or permit or suffer to be taken, any action with respect to the Lease
Proceeds which, if such action had reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the date of this Agreement would have caused this Agreement and any Schedule A hereunder
to be an "arbitrage bond" within the meaning of section 148 of the Code.
(j) If the Lease Proceeds of any Schedule under this Agreement (i) have all been expended
on the date hereof for the purpose set forth herein, or (ii) do not exceed $1,000,000.00, Lessee shall not be required
to provide an issuer's certification pursuant to Treasury Regulation 1.148-2(b)(2)(ii)(A) or (B), respectively.
(k) In the event that Lessee does not spend the moneys in the Equipment Acquisition
Account within six (6) months of the date the deposit is made pursuant to Section 14.2 hereof, Lessee will, if
required by section 148(0 of the Code to pay rebate: (i) establish a Rebate Account and deposit the Rebate Amount
(as defined in Section 1.148-3(b) of the Federal Income Tax Regulations) not less frequently than once per year after
the Lease Commencement Date; (ii) shall rebate to the United States, not less frequently than once every five
(5) years after the Lease Commencement Date, an amount equal to at least 90% of the Rebate Amount and within
60 days after payment of all Rental Payments or the optional prepayment price calculated pursuant to Section 5.2
hereof (the "Optional Prepayment Price') 100% of the Rebate Amount, as required by the Code and any regulations
promulgated thereunder. Lessee shall determine the Rebate Amount, if any, at least every year and upon payment of
all Rental Payments or the Optional Prepayment Price and shall maintain such determination, together with any
supporting documentation required to calculate the Rebate Amount, until six (6) years after the date of the final
payment of the Rental Payments or the Optional Prepayment Price.
(1) The representations above shall be deemed to be made on and as of the beginning date of
the Lease Term of each Schedule A hereunder.
SECTION 10. INDEMNIFICATION
TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF THE STATE, LESSEE HEREBY
AGREES TO INDEMNIFY, PROTECT, AND SAVE LESSOR HARMLESS FROM ALL LIABILITY,
OBLIGATIONS, LOSSES, CLAIMS, DAMAGES, ACTIONS, SUITS, PROCEEDINGS, COSTS AND
EXPENSES, INCLUDING REASONABLE ATTORNEY'S FEES, ARISING OUT OF, CONNECTED WITH, OR
RESULTING DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT AND THE EQUIPMENT,
INCLUDING WITHOUT LIMITATION, THE MANUFACTURE, SELECTION, DELIVERY, POSSESSION,
CONDITION, LEASE, USE, OPERATION OR RETURN OF THE EQUIPMENT. NOTWITHSTANDING
ANYTHING STATED IN SECTION 3 HEREOF OR IN ANY OTHER PROVISION HEREOF, THE
INDEMNIFICATION ARISING UNDER THIS SECTION SHALL CONTINUE IN FULL FORCE AND EFFECT
NOTWITHSTANDING THE FULL PAYMENT OF ALL OBLIGATIONS UNDER THIS AGREEMENT OR
ANY SCHEDULE A HEREUNDER.
HOU:2494916.1
SECTION 11. DISCLAIMER OF WARRANTIES
11.1 Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENT, TITLE OR FITNESS FOR USE OF THE EQUIPMENT, OR ANY COMPONENT THEREOF
OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT
THERETO AND, AS TO LESSOR, LESSEE'S LEASE AND PURCHASE OF THE EQUIPMENT SHALL BE ON
AN "AS IS" BASIS. All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without limiting the
foregoing Lessor shall have no responsibility or liability to Lessee or any other person with respect to any of the
following: (i) any liability, loss or damage caused or alleged to be caused directly or indirectly by the Equipment,
any inadequacy thereof, any deficiency or defect (latent or otherwise) therein, or any other circumstances in
connection therewith; (ii) the use, operation or performance of the Equipment or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits or consequential damages; or (iv) the delivery,
operation, servicing, maintenance, repair, improvement or replacement of the Equipment. If, and so long as, no
default exists under this Agreement and the related Schedule A, Lessee shall be, and hereby is, authorized during the
term of such Schedule A to assert and enforce, at Lessee's sole cost and expense, from time to time, in the name of
and for the account of Lessor and/or Lessee, as their interests may appear, whatever claims and rights Lessee or
Lessor may have against the Vendor or any prior title holder or possessor of the Equipment. In no event shall
Lessor be liable for any loss or damage m connection with or arising out of this Agreement, any Schedule A, the
Equipment, or the existence, furnishing, functioning or Lessee's use of any item or products or services provided for
in this Agreement.
11.2 Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact
during the Lease Term, so long as Lessee shall not be in default hereunder, to assert from time to time whatever
claims and rights including warranties of the Equipment which Lessor may have against the Vendor. Lessee's sole
remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the
Equipment and any other entities involved in the chain of production and distribution of the Equipment, and not
against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect
to this Agreement, including the right to receive full and timely payments under this Agreement. LESSEE
EXPRESSLY ACKNOWLEDGES THAT IN LESSOR'S CAPACITY AS LESSOR HEREUNDER, LESSOR
MAKES, AND HAS MADE HEREUNDER, NO REPRESENTATION OR WARRANTY WHATSOEVER
AS TO THE EXISTENCE OR AVAILABILITY OF SUCH WARRANTIES OF THE VENDOR OF THE
EQUIPMENT.
SECTION 12. DEFAULT AND REMEDIES
12.1 Definition of Default. Lessee shall be deemed to be in default hereunder upon the happening of
any of the following events of default ("Events of Default"):
(a) Lessee shall fail to make any Rental Payment or any other sum when due or within ten
(10) days thereafter or shall fail to perform or observe any term or condition or covenant of this Agreement or any
Schedule A hereto; or
(b) Proceedings under any bankruptcy, insolvency, reorganization or similar legislation shall
be instituted by or against Lessee, or a receiver, custodian or similar officer shall be appointed for Lessee or any of
its property, and such proceedings or appointments shall not be vacated, or fully stayed, within twenty (20) days
after the institution or occurrence thereof; or
(c) Any representation, warranty or covenant made by Lessee is found to be incorrect or
misleading in any material respect on the date made; or
(d) Lessee sells, assigns, subleases, or otherwise transfers or encumbers all or any part of its
interest in this Agreement or the Equipment without Lessor's prior written consent; or
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HOU:2494916.1
(e) Lessee permits a change in ownership or management control of Lessee without the prior
written consent of Lessor that Lessor in good faith deems disadvantageous to Lessor; or
(f) Lessee shall fail to satisfy any of Lessee's bond indebtedness or other material credit
obligation when required under the instruments evidencing such obligations unless Lessee demonstrates in writing
an adequate justification for its failure to satisfy the bond indebtedness or other material credit obligation.
12.2 Remedies on Default. Upon the occurrence of any Event of Default, Lessor may exercise any
one or more of the following remedies as Lessor in its sole discretion shall elect:
(a) To declare the entire amount of Rental Payments hereunder immediately past due and
payable as to any or all items of Equipment without any further notice or demand to Lessee;
(b) Proceed by appropriate court action to enforce performance by Lessee of the applicable
covenants of this Agreement or to recover for the breach thereof including the payment of Rental Payments due or to
become due hereunder or any deficiency thereof following disposition of the Equipment;
(c) Terminate this Agreement as to all or any part of the Equipment;
(d) Proceed by appropriate court action to enforce performance by Lessee of the applicable
covenants of this Agreement or to recover for the breach thereof, including the payment of all amounts due from
Lessee, in which event Lessee shall pay or repay to Lessor all costs of such action or court action including without
limitation, reasonable attorneys' fees and expenses; and/or
(e) Take whatever action at law or in equity may appear necessary or desirable to enforce its
rights with respect to the Equipment, in which event Lessee shall pay or repay to Lessor all costs of such action or
court action, including, without limitation, reasonable attorneys' fees and disbursements.
12.3 Further Remedies; No Remedy Exclusive. A termination hereunder shall occur only upon
notice by Lessor to Lessee and only with respect to such part of the Equipment as Lessor specifically elects to
terminate in such notice. Except as to those parts of the Equipment with respect to which there is a termination, this
Agreement shall remain in full force and effect and Lessee shall be and remain liable for the full performance of all
its obligations hereunder. All remedies of the Lessor are cumulative and may be exercised concurrently or
separately and shall survive the termination of this Agreement. The exercise of any one remedy shall not be deemed
an election of such remedy or preclude the exercise of any other remedy.
SECTION 13. ASSIGNMENT, SUBLEASING AND SELLING
13.1 No Sale, Assignment or Subleasing by Lessee. Lessee agrees not to sell, assign, lease, sublease,
pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Agreement or the
Equipment or to remove the Equipment from its place of installation without Lessor's prior written consent which
shall not be unreasonably withheld.
13.2 Assignment by Lessor. Lessor may assign its interest in this Agreement to an affiliate of Lessor
without the written consent of Lessee provided Lessee is advised of said assignment before such assignment is
made, which consent shall not be unreasonably withheld.
SECTION 14. (INTENTIONALLY LEFT BLANK)
SECTION 15. RESERVED
SECTION 16. MISCELLANEOUS
16.1 Waiver. No covenant or condition of this Agreement can be waived except by the written consent
of Lessor. Any failure of Lessor to require strict performance by Lessee or any waiver by Lessor of any terms,
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HOU:2494916.1
covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other
term, covenant or agreement herein.
16.2 Severability. In the event any portion of this Agreement shall be determined to be invalid under
any applicable law, such provision shall be deemed void and the remainder of this Agreement shall continue in full
force and effect.
16.3 Governing Law and Venue. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State. Venue for any legal proceeding relating to this Agreement shall lie in
Williamson County, Texas.
16.4 Notice. All notices made or required to be given pursuant to this Agreement shall be in writing
and shall be deemed duly served if and when mailed, certified or registered mail, postage prepaid, return receipt
requested, to the other party at its address set forth in each related Schedule A hereunder or at such other address as
such party shall hereafter designate in writing.
16.5 Section Headings. All section headings contained herein are for convenience of reference only
and are not intended to define or limit the scope of any provision of this Agreement.
16.6 Entire Agreement. This Agreement, together with the schedules hereto, constitutes the entire
agreement between the parties and this Agreement shall not be modified, amended, altered or changed except by
written agreement signed by the parties.
16.7 Binding Effect. Subject to the specific provisions of this Agreement, this Agreement shall be
binding upon and inure to the benefit of the parties and their respective successors and assigns.
16.8 Time. Time is of the essence of this Agreement and each and all of its schedules and provisions.
16.9 Notice of Final Agreement. THIS WRITTEN AGREEMENT AND ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NOT UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signatures begin on next page]
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HOU:2494916.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.
LESSEE:
LESSOR:
CITY OF ROUND ROCK, TEXAS BANC OF AMERICA LEASING & CAPITAL,
LLC /n� �
By:// B tit
Y t�
Name: N / xwell Name: �9�AAY A4,01/4/09A
Title: a ,or Title: / 5/.STAAff V/ (.6 — /, 5( IOW -
ATTEST;
By: •'�L ,Ti
Name: Bl/1fl1gnroe)
Title: A -SS+ , C i 5•e_ C 1'e_LGA
y
(SEAL)
HOU:2494916.1
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EXHIBIT A TO MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
SCHEDULE A No. 1
TO MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
by and between
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
and
CITY OF ROUND ROCK, TEXAS
as Lessee
Dated as of September 30, 2005
THIS SCHEDULE A No. 1 ("Schedule A ") to the MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT identified above (the "Master Lease") is entered into as of this September 30, 2005, by and among
BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and CITY OF ROUND ROCK,
TEXAS, as lessee ("Lessee"). All of the provisions of the Master Lease are incorporated herein by reference and
capitalized terms used herein and not defined shall have the meanings assigned them in the Master Lease.
1. The Master Lease and this Schedule A No. 1] jointly constitute an Agreement (this "Agreement"). Lessor
hereby leases and lets to Lessee, Lessee leases and hires from Lessor, subject to the provisions of the
Agreement, the Equipment identified below:
Item (Quantity)
Description, Make, Model Total Contract Price
[see attached]
2. Lessee hereby certifies that the description of the Equipment set forth above is accurate and reasonably
identifies it for UCC purposes. The Equipment identified in item 1 above shall be located at:
221 East Main Street
Street Address
Round Rock, Williamson Texas, 78554
City County State Zip Code
3. The following terms are applicable to the Lease/purchase of the Equipment set forth in this Schedule A No.
1:
(a) Lease Term Commencement Date: The date of execution and delivery of this
Schedule A No. 1, including all attachments thereto, and the satisfaction of all conditions of the Master Lease.
(b) Lease Term: The period beginning with the Lease Term Commencement Date and
ending with the date of the final payment as set forth in the Amortization Schedule in paragraph 5 below.
(b) Lease Term Interest Rate: 3.36% (computed on the 30/360 basis)
(c) Lessee's Fiscal Year End: September 30.
(d) Maximum Amount: The amount equal to $600,000.00.
4. Intentionally Omitted.
5. Interest on the Lease Proceeds shall accrue from the date hereof and the payment dates and Rental Payment
amounts (including the principal and interest components thereof) are as follows:
Exhibit A to Master Equipment Lease Purchase Agreement
Schedule A Page 1
HOU:2494916.1
AMORTIZATION SCHEDULE
(see attached)
6. Until Lessee receives written notification to the contrary, all payments due under the Master Lease and this
Schedule A No. 1, including but not limited to Rental Payments, are to be paid to and all notices are to be
sent to the following respective addresses:
The address for notices is:
The address for payments is:
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
San Francisco, CA 94104
Attention: Contract Administration
Mail Code: CA5-705-04-01
City of Round Rock
221 East Main Street
Round Rock, TX 78554
Attention: Howard Baker
Banc of America Leasing & Capital, LLC
P.O. Box 31682
Tampa, FL 33631-3682
7. Lessee further represents, covenants and warrants that it will not take, cause to be taken or fail to take any
action which will cause the interest component of any Rental Payments to be or become subject to federal
income taxation under the Code and that all of its representations, covenants and warranties of Lessee
contained in the Master Lease were true and accurate as of the date made, remain true and accurate as of
the date of this Schedule A No. 1 and are hereby reaffirmed.
8. Lessee shall deliver or cause to be delivered an opinion of counsel concurrently with the execution and
delivery of each Schedule A in the form of Attachment F to Exhibit A of the Master Lease and execute an
IRS Form 8038-G (or, IRS Form 8038 -GC if the Total Contract Price of the Equipment is less than
$100,000) prepared by Lessor and concurrently presented to Lessee with the execution and delivery of each
Schedule A substantially in the form of Attachment J to Exhibit A of the Master Lease. Lessor shall
deliver or cause to be delivered an opinion of counsel concurrently with the execution and delivery of each
Schedule A in the form of Attachment G to Exhibit A of the Master Lease.
9. Lessee shall deliver or cause to be delivered concurrently with the execution and delivery of each
Schedule A documents in the respective forms of Attachments B through G and I through L to Exhibit A of
the Master Lease, along with invoices, MSO's and applications for titles for any vehicles to be acquired
with proceeds of the applicable Schedule A. Lessee shall deliver its Acceptance Certificate, or Acceptance
Certificates, in the form of Attachment A to Exhibit A of the Master Lease in accordance with the terms
hereof.
10. Attached hereto as Attachment A and incorporated herein by reference is an original Lessee's Acceptance
Certificate, executed by an Authorized Officer of Lessee, with respect to the Equipment identified in item 1
above. Provided, however, Lessee may deliver one or more Acceptance Certificates which shall authorize
the Lessor to pay the Purchase Price for the Equipment shown on each such Acceptance Certificate.
11. Attached hereto as Attachment B and incorporated herein by reference is an original Essential Use
Certificate, executed by an Authorized Officer of Lessee certifying the essential use of the Equipment
identified in item 1 above.
12. Attached hereto as Attachment C and incorporated herein by reference is an original Certificate of
Appropriation executed by an Authorized Officer of Lessee.
Exhibit A to Master Equipment Lease Purchase Agreement
Schedule A Page 2
HOU:24949 t 6.
13. Attached hereto as Attachment D and incorporated herein by reference is an original General Certificate,
executed by Authorized Officers of Lessee.
14. Attached hereto as Attachment E and incorporated herein by reference is an original Signature and
No -Litigation Certificate, executed by Authorized Officers of Lessee.
15. Attached hereto as Attachment F and incorporated herein by reference is an original opinion of legal
counsel to Lessee relating to the Agreement and this Schedule A No. 1. Lessor may, in its sole discretion,
waive this requirement.
16. Attached hereto as Attachment G is an original opinion of counsel to Lessor relating to the Master Lease
and tax treatment thereof.
17. Attached hereto as Attachment H is a certified copy of the resolution of Lessee's City Council authorizing
the Master Lease and this Schedule A No. 1.
18. Attached hereto as Attachment J is an IRS Form 8038-G (or IRS Form 8038 -GC if the Total Contract Price
of the Equipment is less than $100,000) of Lessee.
19. Attached hereto as Attachment K is an original Cross -Receipt executed by an Authorized Officer of Lessee
and Lessor.
20. Attached hereto as Attachment L is an original No Arbitrage Certificate executed by an Authorized Officer
of Lessee.
IN WITNESS WHEREOF, the parties hereunto affix their signatures to this Schedule A No. 1 as of the
day and year first written above.
ATTEST. ^;
By: .
Name:
Title:
(SEAL)
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
By:
Name:
Title:
S-6 4.5 V/C., - AL"Ur
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
Name:
Title: Mayor
Exhibit A to Master Equipment Lease Purchase Agreement
Schedule A Page 3
HOU:2494916.1
well
EQUIPMENT/VEHICLE LIST, CITY OF ROUND ROCK
SEPTEMBER 2005
DESCRIPTION
2006 Ford
2006 Ford
2005 Ford
2005 Ford
2005 Ford
2005 Ford
2006 Ford
2005 Ford
2005 Ford
Expedition
Escape
F-150 Reg. Cab LWB 4.6L
F-150 S/Cab SWB 4.6L
F-150 Reg. Cab LWB 4.2L
F-150 Reg. Cab LWB 4.2L
F-250 Reg. Cab LWB 5.4L
Crown Vic. Police Interceptor
Crown Vic. Police Interceptor
3 ea @ $16,913
2 ea @ $12,654
7 ea @ $14,588
3 ea @ $15,956
9 ea @ $30,023
2 ea @ $32,919
COST
$ 21,755
50,739
25,308
102,116
11,477
11,197
47,868
270,207
65,838
Total $606,505
EXHIBIT A TO
SCHEDULE A NO. 1
AMORTIZATION SCHEDULE
Rental Rental Rental Interest Principal
Payment Payment Payment Portion Portion *Purchase
Date Number Amount 3.36% Price
Sep -30-05 0 600,000.00
Mar -30-06 1 105,961.62 10,079.99 95,881.62 504,118.38
Sep -30-06 2 105,961.62 8,469.18 97,492.44 406,625.94
Mar -30-07 3 105,961.62 6,831.31 99,130.31 307,495.63
Sep -30-07 4 105,961.62 5,165.92 100,795.69 206,699.94
Mar -30-08 5 105,961.62 3,472.56 102,489.06 104,210.88
Sep -30-08 6 105,961.62 1,750.74 104,210.88 0
*Lessee may on any rental payment date, upon 30 days notice, prepay in full all
amounts then outstanding under the Lease, including accrued interest, principal balance, other
unpaid charges, and an amount equal to 1% of the then outstanding principal balance.
For purposes of this Lease, "Taxable Rate," with respect to the interest component of
Rental Payments, means an annual rate of interest equal to 5.2416%
LESSEE:
CITY OF ' O i RO
By
Title
cul r
After payment of the applicable Purchase Price, plus any applicable premium, Lessee
will own the related Equipment, free and clear of any obligations under the related Lease.
Schedule A
Attachment G
HOU:2494916.1
ATTACHMENT G TO SCHEDULE A NO. 1
(INTENTIONALLY OMITTED)
Page 1
ATTACHMENT H TO SCHEDULE A NO. 1
CERTIFIED COPY OF RESOLUTION ADOPTED
BY LESSEE'S CITY COUNCIL
CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK §
I, the undersigned Mayor of the City of Round Rock, Texas, hereby certify as follows:
(/
1. The City Council of the Lessee convened in regular meeting on ( —app, , 200at the
designated meeting place, and the roll was called of the duly constituted officers and members of said City Council,
to wit:
Nyle Maxwell
Rufus Honeycutt
Alan McGraw
Joe Clifford
Carlos Salinas
Scott Rhode
Vacant
Mayor
Councilmember Place 1
Councilmember, Place 2
Councilmember, Place 3
Councilmember, Place 4
Councilmember, Place 5
Councilmember, Place 6
and all of said persons were present, except the following absentees: N d In eJ , thus constituting a
quorum. Whereupon, among other business, the following was transacted at said Meeting: a written
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS APPROVING
LEASING OF CERTAIN EQUIPMENT AND RELATED MATTERS
was duly introduced for the consideration of said City Council. It was then duly moved and seconded that said
Resolution be adopted; and, after due discussion, said motion carrying with it the adoption of said Resolution,
prevailed and carried by the following vote:
AYES: All members of the City Council shown present above voted "Aye" except as shown below.
NOES:
ABSTAIN:
2. That a true, full and correct copy of the aforesaid Resolution adopted at the Meeting described in
the above and foregoing paragraph is attached to and follows this Certificate; that said Resolution has been duly
recorded in said City Council minutes of said Meeting; that the above and foregoing paragraph is a true, full and
correct excerpt from said City Council minutes of said Meeting pertaining to the adoption of said Resolution; that
the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and
members of said City Council as indicated therein; that each of the officers and members of said City Council was
duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid
Meeting, and that said Resolution would be introduced and considered for adoption at said Meeting, and that said
Meeting was open to the public and public notice of the time, place and purpose of said Meeting was given, all as
required by Chapter 551, Texas Government Code.
3. That the Mayor of the City of Round Rock has approved and hereby approves the aforesaid
Resolution; that the Mayor and the City Secretary of said Lessee have duly signed said Resolution; and that the
Schedule A
Attachment H
HOU:2494916.1
Page 1
Mayor and the City Secretary of said Lessee hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of said Resolution for all purposes.
SIGNED AND SEALED the Q02 day of Se, 2005
j r Christine Martinez, lCity Secretary
/9ssl
(SEAL)
Schedule A
Attachment H
HOU:2494916.1
Page 2
Schedule A
Attachment I
HOU:2494916.1
ATTACHMENT I TO SCHEDULE A NO. [_]
Reserved
Page 1
•
ATTACHMENT A TO SCHEDULE A NO. 1
LESSEE'S ACCEPTANCE CERTIFICATE
Part I:
THE CITY OF ROUND ROCK, TEXAS ("Lessee"), as lessee under that certain MASTER
EQUIPMENT LEASE/PURCHASE AGREEMENT dated as of September 30, 2005, and under Schedule A. No.
1 thereto dated as of September 30, 2005 (collectively, the "Agreement"), with BANC OF AMERICA LEASING
& CAPITAL, LLC, as lessor ("Lessor") hereby acknowledges receipt in good condition of all of the Equipment
described in Part II below (the "Equipment"), hereby accepts such Equipment and hereby certifies:
Part II:
(a) That Lessor has fully and satisfactorily performed all covenants and conditions to be
performed by it under the Agreement with regard to such Equipment; provided, however, that this
certification does not constitute a waiver by Lessee of any rights against third parties, including the
Vendor(s) under the Purchase Agreement(s) (as such terms are defined in the Agreement) with respect to
such Equipment, which exist at the date hereof or which may subsequently come into being; and
(b) That such Equipment is fully insured in accordance with Section 6 of the Agreement.
The Equipment which is governed by the Agreement identified in Part I above is as follows:
Item (Quantity)
Description, Make, Model Total Contract Price
DATED: q — , 20Q
Attachment A
Schedule A
HOU:2494916.1
[see attached]
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
Na ax ' ell
Title: Mayor
Page 1
ATTACHMENT B TO SCHEDULE A NO. 1
ESSENTIAL USE CERTIFICATE
I, the undersigned Mayor of the CITY OF ROUND ROCK, TEXAS, acting in capacity as such, hereby
certify with respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of September
30, 2005 by and between Lessee, as lessee, and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor
("Lessor") and Schedule A No. 1, dated as of September 30, 2005, issued thereunder ("Schedule A "), that the
Equipment referenced in Schedule A shall be used for the following purpose:
Equipment to be used in normal course of day to day operations of the City's business
The undersigned hereby further certify and represent that the use of the Equipment is essential to the
proper, efficient and economic operation of the Lessee.
Dated ci— p� o�. , 205
ATTEST:
B
Name:
Title:
Schedule A
Attachment B
HOU:2494916.1
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
Na � Ma
Ti e: ayor
Page 1
ATTACHMENT C TO SCHEDULE A NO. 1
CERTIFICATE OF APPROPRIATION
I, the undersigned Mayor of the CITY OF ROUND ROCK, TEXAS, ("Lessee"), hereby certify that all
Rental Payments (as defined in the Agreement) presently due under that certain MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT ("Agreement") dated as of September 30, 2005, between the Lessee and
BANC OF AMERICA LEASING & CAPITAL, LLC ("Lessor"), and Schedule A No. 1, dated as of September
30, 2005 thereunder ("Schedule A ") for the fiscal year ending September 30, 2005 are available, unexhausted,
unencumbered appropriation of unobligated funds for Lessee, representing the sum of its Rental Payment
obligations owing under the Agreement and Schedule A during such fiscal year.
IN WITNESS WHEREOF, I have set my hand this - 22 , 20 C )
ATTEST:
By:
Name: C.., 1,1 er
Title: S S'f
Schedule A
Attachment C
HOU:2494916.1
Mort► -e}
�Se C reick_r
CITY OF ROUND ROCK, TEXAS,
Page 1
ATTACHMENT D TO SCHEDULE A NO. 1
GENERAL CERTIFICATE
OF
CITY OF ROUND ROCK, TEXAS
I, the undersigned Mayor of the CITY OF ROUND ROCK, TEXAS, ("Lessee") acting in my official
capacity as such, hereby certify with respect to the MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT, dated as of September 30, 2005, (the "Master Lease") by and between Lessee, as lessee, and
BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor") and Schedule A No. 1 issued
thereunder (the Master Lease and Schedule A No. 1 collectively referred to as the "Agreement"), as follows:
1. The assessed value of all taxable property (net of exemptions) located in the Lessee's jurisdiction,
as shown by the tax rolls for the year 2005, which have been duly approved and are the latest official assessment of
taxable property in the Lessee's jurisdiction is $Sbb%6,godThe most recent maintenance tax rate of the Lessee is
$DO,2ogA;
2. That the Lessee is a body corporate and politic, and was validly created and exists under the laws
and the Constitution of the State of Texas and is a political subdivision or governmental agency thereof.
3. That as of the date of approval of the Master Lease and Schedule A No. 1, the following named
persons constitute the members of the City Council of Lessee:
NAME TITLE
Nyle Maxwell Mayor
Rufus Honeycutt Councilmember, Place 1
Alan McGraw Councilmember, Place 2
Joe Clifford Councilmember, Place 3
Carlos Salinas Councilmember, Place 4
Scott Rhode Councilmember, Place 5
Vacant Councilmember, Place 6
4. The City Council of the Lessee duly adopted by a majority vote the Resolution Regarding
Leasing Certain Equipment (the "Resolution ") authorizing and approving the entering into the Master Lease and
Schedule A No. 1 to the Master Lease, at a duly called public meeting, at which a quorum was present and acting
throughout; the Resolution is in full force and effect and has not been altered, amended or repealed as of the date
hereof; that said meeting was duly called and open to the public in accordance with the laws of the State of Texas.
5. The following described instruments (collectively, the "Instruments"), as executed and delivered
or authorized by the Lessee, are in substantially the same form and text as copies of such Instruments which were
presented to and approved or ratified by the City Council of the Lessee, and which the officers of the Lessee were
authorized to execute and deliver for and on behalf of the Lessee:
(a) Master Lease; and
(b) Schedule A No. 1 (including Attachments A through G and I through L thereto).
6. To the best knowledge of the undersigned, on the date hereof, the Lessee is not in default in the
performance or observance of any of the covenants, conditions, agreements or provisions of the Instruments.
Schedule A
Attachment D
HOU:2494916.1
Page 1
7. The representations and warranties of the Lessee contained in the Instruments are correct on and
as of the date hereof as though made on and as of such date.
IN WITNESS WHEREOF, we have duly executed this certificate this 0 - _-P---' , 200.
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
ATTEST:
By.
Name:
Title:
Schedule A
Attachment D
HOU:2494916.1
yle
Mayor
Page 2
ATTACHMENT E TO SCHEDULE A NO. 1
SIGNATURE AND NO -LITIGATION CERTIFICATE
I, the undersigned Mayor of the CITY OF ROUND ROCK, TEXAS, ("Lessee"), acting
in my official capacity as such, hereby certify with respect to the MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT, dated as of September 30, 2005 (the "Master Lease") by
and between Lessee, as lessee, and BANC OF AMERICA LEASING & CAPITAL, LLC, as
lessor ("Lessor") and Schedule A No. 1, dated as of September 30, 2005 issued thereunder (the
Master Lease and Schedule A No. 1 collectively referred to as the "Agreement") as follows:
1. The Master Lease and Schedule A No. 1 have been duly and officially executed by the
undersigned with manual or facsimile signatures in the same manner appearing thereon, and the undersigned hereby
adopt and ratify his respective signatures in the manner appearing on each side of the Master Lease and Schedule A
No. 1 whether in manual or facsimile form, as the case may be, as their true, genuine, and official signature.
2. That on the date of Schedule A No. 1 and on the date hereof, I was and am the duly qualified and
acting officer indicated therein and authorized to execute the same.
3. The legally adopted proper and official corporate seal of the Lessee is impressed or imprinted on
the Master Lease and Schedule A No. 1 and impressed on this certificate.
4. No litigation of any nature is now pending before any federal or state court, or administrative
body, or to my knowledge threatened, seeking to restrain or enjoin the issuance or delivery of the Master Lease or
Schedule A No. 1, the authority or action of the City Council of the Lessee relating to the issuance or delivery of
the Master Lease or Schedule A No. 1, the collection of the revenues of the Lessee or the imposition of rates and
charges with respect to the Lessee, pledged to pay the Rental Payments on Schedule A No. 1, or that would
otherwise adversely affect in a material manner the financial condition of the Lessee to pay the Rental Payments on
the Schedule A No. 1; and that neither the corporate existence or boundaries of the Lessee nor the right to hold
office of any member of the City Council of the Lessee or any other elected or appointed official of the Lessee is
being contested or otherwise questioned.
5. That no petition or other request has been filed with or presented to any official of the Lessee
requesting any proceeding authorizing the issuance of the Master Lease or the Schedule A No. 1 adopted by the City
Council of the Lessee be submitted to a referendum or other election; no authority or proceeding for the issuance,
sale, or delivery of the Master Lease or the Schedule A No. 1, passed and adopted by the City Council of the
Lessee, has been amended, repealed, revoked, rescinded, or otherwise modified since the date of passage thereof,
and all such proceedings and authority relating to the issuance and delivery of the Master Lease or Schedule A No. 1
remain in full force and effect as of the date of this certificate.
Schedule A
Attachment E
HOU :2494916.1
Page 1
(SEAL)
EXECUTED AND DELIVERED as of g - o, 2005
SIGNATURE OFFICIAL TITLE
Mayor
BEFORE ME, on this day personally appeared the foregoing individual, known to me to be the person
whose name is subscribed to the foregoing instrument. jj�
GIVEN UNDER MY HAND AND SEAL of office, thiso?o2day of 5e k 4'20
(NOTARY SEAL)
',7cl k(,J1COE
Notary Public, State of Texas
My Commission Expires
MAY 7, 2007
Schedule A
Attachment E
HOU:2494916.1
Notary Public, State of Texas
Page 2
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 30, 2005
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
San Francisco, California 94104
Re: MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT dated as of
September 30, 2005 and that certain Schedule A No. 1 dated as of September 30,
2005 (collectively, the "Agreement"), by and between CITY OF ROUND
ROCK, TEXAS, as lessee ("Lessee"), and BANC OF AMERICA LEASING &
CAPITAL, LLC, as lessor ("Lessor")
Gentlemen:
As counsel for Lessee, we have examined duly executed originals of the Agreement and
the ratified proceedings of the City Council of Lessee authorizing execution and delivery of the
Agreement, and certain other security instruments and documents with respect to the Equipment
to be financed with Lease Proceeds of the Agreement. Based upon the examination and upon
such otherexamination as we have deemed necessary or appropriate, we are of the opinion that:
Lessee is a public body corporate and politic, legally existing under the
laws of, and is a political subdivision or agency of, the State of Texas.
Lessee is authorized and has the power under Texas law to enter into the
Agreement and to carry out its obligations thereunder.
The execution, delivery and performance by Lessee of the Agreement
have been duly authorized by all necessary action on the part of Lessee and,
assuming the due and proper authorization, execution and delivery thereof by the
Lessor, constitutes a legal, valid and binding obligation of Lessee, enforceable in
accordance with its terms, except to the extent limited by bankruptcy,
reorganization or other laws of general application relating to effecting the
enforcement of creditors' rights.
The entering into and performance of the Agreement will not violate any
judgment, order, law or regulation applicable to Lessee or result in any breach of,
or constitute a default under, any instrument of which we have knowledge by
which Lessee is affected.
No action, suit, proceeding, inquiry or investigation at law or in equity
before or by any judicial or administrative court or agency, is pending or, to the
best of our knowledge, threatened, against or affecting Lessee or its properties
ATTACHMENT K TO SCHEDULE A NO. 1
CROSS -RECEIPT
With respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of
September 30, 2005 (the "Master Lease") by and between BANC OF AMERICA LEASING & CAPITAL, LLC,
as lessor ("Lessor") and CITY OF ROUND ROCK, TEXAS, as lessee ("Lessee") and Schedule A No. 1, dated as
of September 30, 2005 to the Master Lease:
Lessor hereby acknowledges the lease to the Lessee of the Equipment listed on Schedule A No. 1 to the
Master Lease and receipt from Lessee of Schedule A No. 1 to the Master Lease dated as of the date hereof.
Lessee hereby acknowledges the lease of the Equipment pursuant to the Master Lease and Schedule A No.
1 to the Master Lease.
Dated:�. - oZo� , 2005
Schedule A
Attachment K
HOU:2494916.1
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
By:
Name:
Title:
taneh a
ill A, AJ JOft
As -S is/d $J U! -10/26 it
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
Name• .' ax
Title: ayor
Page 1
ATTACHMENT L TO SCHEDULE A NO. 1
NO -ARBITRAGE CERTIFICATE
I, the undersigned Authorized Officer of the City of Round Rock, Texas (the "Lessee"), make this
certification for the benefit of all persons interested in the exclusion from gross income for federal income tax
purposes of the interest component of the Rental Payments under that certain MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT, dated as of September 30, 2005, by and between Lessee and Lessor, and
under Schedule A No. 1 thereto, dated as of September 30, 2005 (collectively the "Agreement"), between Lessee, as
lessee and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor").
1. Responsible Officer. I am the duly chosen, qualified and acting City Manager of the Lessee for
the office shown below my signature. As such, I am familiar with the facts herein certified and I am duly authorized
to execute and deliver this certificate on behalf of the Lessee. I am the officer of the Lessee charged, along with
other officers of the Lessee, with the responsibility for issuing the Agreement.
2. Purpose. This certificate is being executed and delivered pursuant to Sections 1.148-0 through
1.148-11, 1.149(d)(1), 1.149(g)-1, 1.150-1 and 1.150-2 of the Treasury Regulations (the "Regulations").
3. Definitions. The capitalized terms used in this certificate (unless otherwise defined) that are
defined in the Agreement shall for all purposes hereof have the meanings therein specified. All such terms defined
in the Internal Revenue Code of 1986, as amended (the "Code") or Regulations shall for all purposes hereof have the
meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise.
4. Reasonable Expectations. The facts and estimates that are set forth in this certificate are
accurate; and the expectations set forth herein are reasonable in light of such facts and estimates. The undersigned is
aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of
such facts, estimates or expectations.
5. Description of Governmental Purpose and Size. The Lessee is entering into the Agreement for
the purposes of funding the acquisition of the Equipment and the costs related to the issuance of the Agreement.
(a) The Equipment will be owned, operated, and maintained by the Lessee and the Lessor
has not contracted in any manner with any company, firm or other person or entity to
operate or maintain the Equipment or any part thereof for and on behalf of the Lessee.
(b) There is not, and as of the date hereof, the Lessee does not anticipate entering into, any
lease, contract or other understanding or arrangement, such as a take -or -pay contract or
output contract, with any person other than a State or local governmental unit, pursuant to
which the Lessee expects that the proceeds of the Agreement, or the Equipment financed
therewith or any part thereof, will be used in the trade or business of such person
(including all activities of such persons who are not individuals).
(c) The amounts received from the Agreement, when added to the amounts expected to be
received from the investment thereof, do not exceed the amounts required to pay the costs
of the Equipment, including payment of the Total Contract Price, and the costs of issuing
the Agreement.
(d) No other obligations of the Lessee payable from the same source of funds were sold or
delivered within fifteen (15) days from the date hereof.
6. Amount and Use of Proceeds of the Agreement. The proceeds of the Agreement are
$600,000.00. There is no accrued interest on the Agreement. The Lessee will pay from its own funds any other cost
of issuance. No proceeds will be used to pay, refund, retire or replace any governmental obligations previously
issued.
Schedule A
Attachment L
HOU:2494916.1
Page 1
7. No Replacement Proceeds. Lessee has not pledged or otherwise restricted and does not expect to
pledge or restrict any other funds or property which as a result of the pledge or restriction could be reasonably
assured to be available to pay, directly or indirectly, principal or interest on the Agreement, even if Lessee
encounters financial difficulty.
8. Interest and Sinking Fund. Pursuant to the Agreement, the Lessee has created a special
Interest and Sinking Fund (the "Interest and Sinking Fund") and the proceeds of all taxes levied, assessed and
collected for and on account of any Schedule A under the Agreement are to be deposited in such Interest and
Sinking Fund. The Lessee expects that taxes levied, assessed and collected for and on account of the Agreement
will be sufficient each year to pay the Rental Payments due thereunder.
9. Rebate. Lessee does not expect to be required to make any rebate payments to the United
States pursuant to section 148(f) of the Code because the Lessee expects that the gross proceeds of the
Agreement (within the meaning of section 148(1)(4)(B) of the Code) will be expended for the governmental
purpose for which the Agreement is entered into no later than a date which is six (6) months from the date
hereof. Lessee has covenanted, however, in the Agreement that in the event that Lessee should be required to make
rebate payments to the United States pursuant to section 148(f) of the Code, Lessee will make such payments as and
when provided in the Agreement.
10. No Artifice or Device. In connection with the issuance of the Agreement, Lessee has not (a)
employed any abusive arbitrage device, or (b) over -burdened the market for tax-exempt obligations.
11. Agreement Not Hedge Bonds. Lessee expects to expend within three (3) years from the date
hereof, in addition to the costs of issuance of the Agreement, an amount of proceeds of the Agreement equal to not
less than 85% of the net proceeds of the Agreement. No proceeds of the Agreement have been or will be invested
in nonpurpose investments which have substantially guaranteed yield for four (4) years or more.
12. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected
that the gross proceeds of the Agreement will not be used in a manner that would cause any obligation to be an
"arbitrage bond" within the meaning of section 148 of the Code and the Regulations.
WITNESS MY HAND, this
Schedule A
Attachment L
HOU:2494916.1
G-22 ,2005
CITY OF ROUND ROCK, TEXAS,
as Lessee
By:
Name: mes Nuse
Tit1Ci Manager
Page 2
RESOLUTION NO. R -04-10-26-15E3
WHEREAS, the City of Round Rock, Texas (the "Issuer") is a home -
rule City of the State of Texas, and
WHEREAS, the Issuer expects to pay expenditures in connection
with acquiring certain vehicles and equipment (the "Property") prior to
the issuance of obligations to finance the Property, and
WHEREAS, the Issuer finds, considers, and declares that the
reimbursement of the Issuer for the payment of such expenditures will
be appropriate and consistent with the lawful objectives of the Issuer
and, as such, chooses to declare its intention, in accordance with the
provisions of Section 1.150-2 of the Treasury Regulations, to reimburse
itself for such payments at such time as it issues obligations to
finance the Property, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
I.
That the Issuer reasonably expects to incur debt, as one or more
.separate series of various types of obligations, with an aggregate
maximum principal amount equal to $600,000 for the purpose of paying
the costs of the Property.
H.
That all costs to be reimbursed pursuant hereto will be capital
expenditures. No tax-exempt obligations will be issued by the Issuer in
furtherance of this Resolution after a date which is later than 18
months after the later of (1) the date the expenditures are paid or (2)
the date on which the property, with respect to which such expenditures
were made, is placed in service.
@PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R41026E3.WPD/sc
III.
The foregoing notwithstanding, no tax-exempt obligation will be
issued pursuant to this Resolution more than three years after the date
any expenditure which is to be reimbursed is paid.
IV.
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 26th day of October, 2004.
L, May
City of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secreta
2.
Form 8038-6
(Rev. November 2000)
Department of the Treasury
Internal Revenue Service
Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Code section 149(e)
► See separate Instructions.
Caution: If the issue price is under $100,000, use Form 8038 -GC.
OMB N( 1',45
Part I
Reporting Authorit
If Amended Return, check here P. LJ
1 Issuer' name
71 f Xoc/r,d/%Cie
2 Issuer's employer identification number
75( td/71cPS
3 Number end stree�t (or P.O. box if mail is delivered to street address)
AA) .r.._aS - �cL2.i /vca.'h'
Room/suite
4 Report number
31'_-
5 City, wn, or pos ffice, state, and ZIP code �
gv/ri Lcsf -TX '7deFroo 7
6 Date of issue
g7 -O-S-
7 Name of issue
i.si
8 CUSIP number
9 Name and title of off,er or legal re res tative whom the IRS may call for more information
evca. ar^
10 Telephone number of officer or legal representative
(./a ) ./e.,- s"s/s-"
Part II
11
12
13
14
15
16
17
18
19
20
Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule
9 Education
❑ Health and hospital
❑ Transportation
9 Public. safety
❑ Environment (including sewage bonds)
❑ Housing
❑ Utilities
rig-tiher. Describe ► caa✓s..a—
If obligations are TANs or RANs, check box ► ❑ If obligations are BANs, check
If obligations are in the form of a lease or installment sale, check box
box ►��////�/
11
12
13
14
15
16
T-
17
OP-.c'
Part 111
Description of Oblii ations. Complete for the entire issue for which
(a) Final maturity date
(b) Issue price
21 . $$ilrrs
Part iV X55
$ 0200 oce. na'
(c) Stated redemption
price at
matt ity
$ 4/7
this form is being filed.
(d) Weighted
average maturity
y
U;;es of Proceeds of Bond Issue (including undriters' discount) /1-',1
le) 'eul
22 Proceeds used for accrued interest
23 Issue price of entire issue (enter amount from line 21, column (b))
24 Proceeds used for bond issuance costs (including underwriters' discount)
25 Proceeds used for credit enhancement
26 Proceeds allocated to reasonably required reserve or replacement fund
27 Proceeds used to currently refund prior issues
28 Proceeds used to advance refund prior issues
29 Total (add lines 24 through 28)
30 Nonrefundingproceeds of the issue (subtract line 29 from line 23 and enter amount here) .
Descri'tion of Refunded Bonds (Complete this part only for refunding bonds.)
24
22
23
25
26
27
28
Part V
31 Enter the remaining weighted average maturity of the bonds to be currently refunded OD -
32
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ►
33 Enter the last date on which the refunded bonds will be called 110-
34 34
Enter the date(s) the refunded bonds were issued ►
Part VI
29
30
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 ►
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units
b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► L J and enter lilt �i ,n•.
issuer II- and the date of the issue 110.
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ►
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► L 1
40 If the issuer has identified a hedge, check box ► L1
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.
r
137a
Sign
Here
S. na re of issuer's authorized representative Date
s
Type or print name and title
For Paperwork edtion Act Notice, see page 2 of the Instructions.
Lr�
Cat. No. 63773S Form 8038-G )Rev 11-20001
DATE: September 16, 2005
SUBJECT: City Council Meeting - September 22, 2005
ITEM: 14.E.2. Consider a resolution authorizing the Mayor to execute a Financing
Program Agreement with Bank of America to lease/purchase various
equipment.
Department: Finance Department
Staff Person: 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 $600,000, financed at an
effective interest rate of 3.36%, 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 costs at 3.36% ($35,769.71 total interest)
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