04-621Council File # O • _ `��'
Green Sheet # ol �a�5
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
Presented By
Referred To
Committee: Date
�O
AUTHORIZING THE EXECUTION OF A MASTER LEASE
TO MEET ONGOING NEEDS FOR CAPITAL EQUIPIVIENT FINANCING
WHEREAS, the Office of Financial Services (OFS) has determined that various City of Saint
Paul departments will need to replace essential capital equipment over the next five yeazs to maintain a
high level of service to citizens and that t� exempt lease financing is one potential financing option for
such equipment; and
WHEREAS, OFS has solicited proposals for a Master Lease to provide tax-exempt lease
financing and the Banc of America has proposed the most favorable terms; and
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WHEREAS, a Master Equipment Lease-Purchase Agreement (the "Lease-Purchase
Agreement") by and between Bank of America as lessar (the "Lessor"), and the City as lessee has been
prepared and is before this meeting; and
WHEREAS, Equipment (as defined in the Lease-Purchase Agreement) will be leased pursuant
to separate Leases (as defined in the Lease- Purchase Agreement) consisting of a Schedule of specific
Equipment with a sspecific schedule of rental payments (as defined in the Lease-Purchase Agreement;
and "
WHEREAS, in entering into the Lease-Purchase Agreement, the City is exercising powers
under its home rule charter and powers granted by Minnesota Statues, Section 465.71; and
WHEREAS, the Lease -Purchase Agreement and Leases are subject to annual non-
appropriation, and the City has the right to terminate the Lease-Purchase Agreement at the end of any
fiscal year during its terxn; and
WHEREAS, the Lease-Purchase Agreement will be used on an as-needed basis, and the various
departments replacing the equipment will budget funds for making the payments on the Leases enterint
into pursuant to the Lease-Purchase Agreement:
NOW, TF3EREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota
as follows:
1. Master Lease-Purchase Atreement. The Lease-Purchase Agreement is hereby approved in
substantially the form submitted, with such deletions, completions, and changes therein as are
necessary and appropriate and approved by the City Attorney. The Mayor or Executive Assistant to the
Mayor and ihe Director of the Office of Financial Services aze hereby authorized and directed to
execute the Lease-Purchase Agreement, any Leases , and such other docuxnents as are contemplated
thereby or necessary in connection therewith.
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The Director of the Office of Financial Services shall be responsible for the ongoing
adininistration and monitoring of the Lease- Purchase Agreement and shall determine the type and
scope of equipment to be acquired through Leases entered into pursuant to the Lease-Purchase
Agreement.
2. ose.. T1ie Lease-Purchase Agreement shall provide funds for the acquisition of essential
capital equipment and Leases as may be needed by the various City departments and offices to provide
services to Saint Paul citizens.
3. Prepayment; Purchase. The Lease-Purchase Agreement shall be subject to prepayment at the
option of the City. The City shall have the option to purchase any equipment acquired pursuant to the
Lease-Purchase Agreement and Leases for $1.00 at the end of the full term for each equipment Lease.
4. Reeistration; Transfer. The Treasurer of the City is hereby appointed the registrar with
respect to the Leases entered into pursuant to the Lease-Purchase Agreement. The City will cause to be
kept a register in which the registraz shall provide for the registration of the L,eases and the registration
of transfers of the Leases.
The Leases shall be registered in the name of the payee on the books of the registrar inifially and
when notice of any transfer or assignment is received. The City and registrar may treat the registered
owner of the Lease as the person exclusively entitled to exercise a11 the rights and powers of the owner.
The registrar may require payment of a sum sufficient to cover any tas or other governmental
chazge payable in connection with the transfer of the Lease..
5. Treahnent of Reeistered Owner. The City and registrar may treat the person in whose name
the Lease is registered as the owner of the Lease for the purpose of receiving payments thereon and for
all other purposes whatsoever, and neither the City nor the registrar shall be affected by notice to the
contrary.
6. No Funds; Arbitraee. Until expended on a Lease, the proceeds of the Lease- Purchase
Agreement shall be held in the custody of the Lessor pursuant to an Escrow Agreement. Payments on
the Lease-Purchase Agreement shall be made from annual appropriations, and moneys to make such
payment shall not be segregated in any special fund. Moneys to make payments on the Lease-Purchase
Agreement shall be provided by the various departments acquiring the Equipment.
No portion of the proceeds of the Lease-Purchase Agreement shall be used directly or indirectly
to acquire higher yielding investments or to replace funds which were used direcUy or indirectly to
acquire higher yielding inveshnents, except (1) for a reasonable temporary period until such proceeds
are needed for the purpose for which the Lease is entered into, and (2) in addition to the above in an
amount not greater than $100,000. To this effect, any proceeds of the Lease-Purchase Agreement and
any sums from time to tune held in any City account which will be used to make payments on the
Lease-Purchase Agreement in excess of amounts which under then-applicable federal azbitrage
regulations may be invested without regards to yield shall not be invested at a yield in excess of the
applicable yield restriciions imposted by said arbitrage regulations on such investments after taking into
account any applicable temporary periods" or "minor portion" made available under the federal
arbitrage regulations. In addition, the proceeds of the Lease-purchase agreement shall not be invested
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3 in obligaflons or deposits issued by, guaranteed by or insured by the United States or any agency or
4 instrumentality thereof if and to the extent that such investment would cause the Lease-Purchase
5 Agreement to be "federally guaranteed" within the meaning of Section 149 (b) of the federal Internal
6 Revenue Code of 1986, as amended (the "Code").
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7. No General Obli�ation Pledge: Initial Appronriation. The Lease-Purchase Agreement and
Leases aze not general obligations of the City but rather are payable from amounts to be annually
appropriated, and the full faith, credit and taxing powers of the City shall not be and aze not pledged.
Payment amounts and frequency of the Leases for any and all equipment shall be established in
individual L,eases.
8. Records and Certificates. The officers of the City are hereby authorized and directed to
prepare and fumish to the Lessor, and to the attorneys approving the legality of the Lease-Purchase
Agreement and Leases, certified copies of all proceedings and records of the City relating to the Lease-
Purchase Agreement and Leases and to the financial condition and affairs of the City, and such other
affidavits, certificates and information as are required to show the facts relating to the legality and
mazketability of the Lease-Purchase Agreement and Leases as the same appeaz from the books and
records under their custody and control or as otherwise lrnown to them and all such certified copies,
certificates, and affidavits, including any heretofore fiuvished shall be deemed representations of the
City as to the facts recited therein.
9. NeEative Covenants as to Use of Proceeds. And Equipment The City hereby covenants not to
use the proceeds of the Lease-Purchase Agreement and Leases or the Equipment and Leases or to cause
or perxnit them to be used, or to enter into any deferred payment arrangements for the cost of the
equipment in such a manner as to cause the Lease-Purchase Agreement or Leasest o be "ptivate
activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. The City
reasonably expects that no actions will be taken over the term of the Lease Purchase Agreement or
Leases that would cause them to be private activity bonds, and the average term of the Lease-Purchase
Agreement and Leases is not longer than reasonably necessary for the governmental purpose of the
Lease-Purchase Agreement. The City hereby covenants not to use the proceeds of the Lease-Purchase
Agreement and Leases in such a manner as to cause the Lease-Purchase Agreement or Leases to be
"hedge bonds" within the meaning of Section 149 (g) of the Code.
10. Tax-Exempt Status of the Lease-Purchase Aereement and Leases; Rebate; Elections. The
City shall comply with the requirements necessary under the Code to establish and maintain the
exclusion from gross income under Section 103 of the Code of the interest on the Lease-Purchase
Agreement and Leases, including without limitation requirements relating to temporary periods for
investments, limitations on amounts invested at a yield greater than yield on the appropriate Lease, and
the rebate of excess investment eaxnings to the United States.
If any elections are available now or hereafter with respect to azbitrage or rebate matters relating
to the Lease Purchase Agreement and Leases, the Mayar City Clerk, Treasurer, and Director of the
Office of Financial Services, or any of them, are hereby authorized and directed to make such elections
as they deem necessary, appropriate or desirable in connection with the Lease- Purchase Agreement and
Leases and all such elecrions shall be, and sha11 be deemed and treated as, elections of the City.
11. No Designation as Oualified Tax-Exempt Obli ations. The Lease-Purchase Agreement and
Leases , together with other obligations issued by the City in 2004 and other yeazs, are expected to,
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3 exceed in amount those which may be qualified as "qualified tax-exempt obligations" within the
4 meaning of Section 265 (b)(3) of the Code, and hence aze not designated for such purpose.
6 12. Severabilitv. If any section, pazagraph or provision of this resolution shall be held to be
7 invalid or uneforceable for any reason, the invalidity or unenforceability of such section, pazagraph, or
8 provision shall not affect any of the remaining provisions of this resolution.
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10 13. Headines. Headings in this resolution aze included for convenience of reference only and are
11 not a part hereof, and shall not limit ar define the meaning of any provision hereto.
Adopted by Council: Date �s,l
Adoption Certified by Council Secretary
By: /Y/i��� ,��«�.�
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Requested b• Office of Financial Services
By:
Form Approved by City Attorney
o�-f- `�-I
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
Departmentloffice/council: Date Initiated:
Fs -F�,��.��i� „�,�N-� Green Sheet NO: 3018275
Contact Person & Phone:
LINDA J CAMP
68920
Must Be on Councii Aqen
� Deoarhnent SentTa Person InitiaUDate
0 i ancial ervices I t�
A55igi1 1 'uancial rvices De arlmentDi�ecf r ✓
Number I y i Atto e Lisa Veith ✓
For
Routing 3 or's Office Ma orJAssistant ✓
Order 4 ouncil
5 i Clerk Ci C7erk
Total # of Signature Pages _(Ciip All LocatioM for Signature)
RELATED DOCUMENTS.
Recommendations: Approve (A) or Reject (R):
Planning Commission
CIB Committee
. Civil Service Commission
Personal Service Contracts MustAnswerthe Following Questions:
1. Has this person/firm ever worked under a contract for this department?
Yes No
2. Has this personffirm ever 6een a city employee?
Yes No
3. Dces this person�rm possess a skill not normalry possessed by any
current city employee?
Yes No
Explain all yes answers on separate sheet antl attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why): ��
MASTER LEASE AGREEMENT WILL BE AVAILABLE FOR VARIOUS CITY DEPARTMENTS TO ACQi.JIRE CAPITAL
BQUIPMENT. RJITIAL USE WILL BE BY POLICE DEPARTMENT TO LEASE 50 SQUAD CARS IN 2004 AND ADDITIONAL 50
SQUAD CARS IN 2005. LEASING WILL HELP POLICE ACCdMPLISH SPENDING REDUCTIONS IN 2004 AND 2005.
Advanpges If Approved:
Disadvantaqes If Approved:
DisadvanWges If Not Approved:
ToqlAmountof 170000
Trensaction:
Fundinn Source:
Pi nancial I nformation:
(Explain)
. �����Yt� �e��i�f
JU� 15 2664
CosURevenue Budgeted: �'
Activity Number:
4
Andrew F. Parker
Associate
Commeraal Markets
Banko#QEneric �'�
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May 14, 2004
City of Saint Paul
Contract and Analysis Services
Attn: Linda J. Camp
280 City Hall/Court House Bldg
15 W. Kellogg Blvd.
Saint Paul, MN 55102
Tax-Exempt Lease Purchase Financing Proposal
NO. A-24045-1
Deaz Review Committee:
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Bank ot America
leasing & Capital Group
CAS705-04-01
555 Cal'rfornia Street, 4�^ Floor
San Francisco, CA 94104
Tel 415.7&5.1892
Fax 415.765.7322
andrew.oarkerlo)bankofamerica.com
Banc of America Leasing & Capital, LLC ("Lessor") is pleased to submit our lease financing proposal (the
"Pzoposed Transaction") described in the attached Summary of Terms and Conditions (the "Term Sheet").
Please review the Term Sheet and contact me at (415)765-1892 if you have any questions.
We received a copy ofAddendum #1 "Responses to Questions".
This proposal letter and the Term Sheet include only a brief description of the principal terms of the Proposed
Transaction. Please understand thaf this proposal is not a commitment or offer to lease, and does not create any
obligarion for Lessor. Lessor will not be responsibte or liable for any damages, consequenrial or otherwise, that
may be incurred or alleged by any person or entity, including Lessee, as a result of this proposal letter. L,essor
will notify you in writing of its decision if Lessor agrees to proceed with the Proposed Transaction after
completing iu review and analysis.
To accept this proposal, please sign the enclosed copy of this letter and return it, by no later than May 31, 2004,
to:
Banc of America Leasing & Capital, LLC
Attn: Andrew Parker
555 California Street 4` Floor
San Francisco, CA 94104
We appreciate this opportuniry to present Bank of America.
Very truly yours,
BANC OF ERICA LEASING & CAPITAL, LLC
���
By: Andrew F. Parker
Title: Associate
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Tax-Exempt Lease Purchase Financing Proposal
NO. A-24045-1
The undersigned, by its authorized representative below, accepts the above proposal, a�ees to fumish Lessor, its
successors and assia s, any informarion relating to the business or financial condition of Lessee or iu affiliates,
and authorizes Lessor, Bank of America, NA and their affitiates to disclose to, discuss with and distribute such
informarion (and any informarion they may already have) to any other �liates or proposed assignees or
successors of Lessor.
City of Saint Paul, MN
C��
Title:
Date:
Please provide Federa] ID I3o.:
Insnrance Infom�ation:
Carrier:
Contact:
Telephone No.
CiTy of Samt Paul
May 14, 2W4
America Leasing & Capirnl, LLC
Page 2 of 8
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SUMMARY OF TERMS AND CONDITIONS
Date- May 14, 2004
Lessees
Lessor•
City of Saint Pau7, MN ("Lessee")
Banc of America Leasina & Capital LLC or its designee ("Lessor")
Eauiument: Master Tax-Exempt Lease Agreement to finance public safety and parks mazntenance
equipment, and other essenrial use equipment, mutually acceptable to Lessor and Lessee
(individually "UniP' and collectively "EquipmenY').
Lease
Structure;
Lease terms:
Tax Exempt
Interest Rates
Maximum Purchase Price: $4,000,000 per .fiscal year, which may, with Lessor's prior
written consent include soft costs, such as freight, installarion and taxes paid up front by
Lessor not exceeding 20% of the Lessor's cost, but may not exceed the fair market value of the
Equipment. Minimum Schedule Amount: $50,000.
This Lease is a lease intended as security transaction; all tae benefits will remain with Lessee;
the lease will be a net 6nancial lease, and all expenses, including (but not limited to) insurance,
maintenance, and tases, will be for the account of Lessee.
Three (3), four (4), five (5), seven (7), and ten (10) yeazs.
W eek Ending Treasury
Constant Maturities as
Published in the Federal
Reserve H.15 Statistical Tax-Exempt
Term Release x 0.65 +/- Spread = Lease Rate
3 years: 2.96 x 0.65 + Q.72 = 2.6440%
4 yeazs: 335 x 0.65 + Q.72 = 2.8975%
5 years: 3.74 x 0.65 + 0.67 = 3.1010%
7 yeazs: 4.21 x 4.65 + 0.80 = 3.5365%
10 years: 4.62 x 0.65 + 1.04 = 4.0430%
Payments aze quarterly in arreazs. The interest rates wiIl be adjusted one week before funding according
to the formulas above.
NOTE: These rates are applicable whether Lessee is Bank Qualified or Non-Bank Qualified.
Index: The index and fixed interest rate calculauon will be set in conjunction with the 3, 4, 5, 7, and
10 Yeaz H.15 Treasury Constant Maturities, which were 2.46%, 335%, i.74°/a, 421%, and
4.62% as of May 1Q 2004. The interest rates used in the forznula may be obtained from the
Federal Reserve H.15 Statisucal Release through the Federat Reserve Website
http://www.federalreserve. eov,�releases/H 15/.
City of Saint Paul Bane of America f.easing & Capitat, LLC
May 14, 2004
Page 3 of 8
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End of
Term Ontion: At the expiraYion of the Lease Term, Lessee will ptuchase all (but not less than all) the Equipment
for $1.00 ("P�schase Price").
Utilization Period
Exniration Date: The latest date for any funding will be twelve (12} months from Lease execution date.
With mutual written consent, the Master Lease Agreement may be zenewed for four (4)
additional one (1) year periods under the same terms and conditions.
Governmental
Entitv Lease: The Base Rent installments are calculated on the assumprions, and Lessee will represent, that
Lessee is a state or political subdivision of a state within the meaning of Section 103(c} of the
Intemal Revenue Code (the "Code"), that this transaction will constitute an obligation of
Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of
the Code. Lessee shall provide Lessor with such evidence as Lessor may request to
substanriate and maintain such tax status. Lessee will indemnify Lessor, on an after-tax basis,
against any loss of Federai income taY exemption of the interest portion of the rentals and
against any penalties and interest imposed by the Intemal Revenue Service on Lessor in
connection therewith on a lump-sum basis.
Non-Appropriation
Termination: Lessee affixms that funds aze available for the current fiscal year and reasonably believes that
sufficient funds can be obtained to make all rental paymems during each subsequent fiscal
yeaz. Lessee will regulazly budget for and otherwise use iu best efforts to obtain funds for the
continuation of the rentals in this transacfion.
Insurance•
Early
Termination:
Exoenses•
Lease
Documents
Lessee will provide, at its expense, casuaity insurance (with such deductibles as Lessor may
approve).
Lessee may on any rentai payment date, upon 30 days nofice, prepay in full all amounts then
ouutanding under the Lease, including accrued interest, principal balance, other unpaid charges,
and an amount equal to 0.5% of the then outstanding principal balance.
Lessee and Lessor will each be responsible for its own expenses incurred in connec6on with
the prepazarion, negotiafion and closing of the lease documentation.
Lease.documents in form and substance satisfactory to Lessor and its tocal counsel must be
executed and delivered. Tf Lessor requests, Lessee will also furnish duly executed landlord and
mortgage waivers and snpporting informarion. Lessee will also provide boazd resolutions,
incumbency certificates and other documentation reGuued by Lessor.
Ciry of Saint Paul Banc of America Leasing & Capital, LLC
May 14, 2004
Page 4 of 8
Q�k � (���
Escrow
Account
Opinion of
Counsel:
Assignment by
Lessor•
If Lessee so desires, subject to compliance with applicable regularions mmder the Tntemal
Revenue Code, including, but not limited to azbitraae regutations, the proceeds of the Lease
may be deposited in an escrow acceptable to Lessor, and disbursemenu made therefrom to pay
for Equipment upon the execution and delivery of an acceptance certificate (and related
documents) by Lessee and approved by I,essor.
Lessee's commsel shall deIiver an opinion to Lessor at closing in form and substance
satisfactory to Lessor concerning the due authorization, execurion, delivery, and enforceability
of the lease.
The Lessor shall be enritled to assign its right, title and interest in the Lease to a trustee for the
purpose of issuing certificates of participation or other forms of certificates evidencing an
undivided interest in such Lease, provided such certificates aze sold only on a private
placement basis (and not pursuant to any "public offering") to a purchaser (s) who represent
that (i) such puzchaser has sufficient lrnowledge and experience in Fmancial and business
matters to be able to evaluate the risks and merits of the investment (ii) such piuchaser
understands neither the lease or certificates will be registered under the Securities Act of 1933,
(iii) such purchaser is either an"accredited investor" within the meaning of Regulation D
under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Ruie
144A, and (iv) that it is the intention of such purchaser to acquire such certificates (A) for the
investrnent for its own account or (B) fox resale in a transaction exempt from regisu ation under
the Securities Act of 1933.
Credit Due
Dili�ence: In order to complete its credit due diligence, BankAmerica Leasing Credit Administration will
need you to provide:
- Three yeazs of most recent fmancial statements;
- Most recent fiscal yeaz's Budget; ,
- Insurance Certificate.
There aze no origination, underwriring, or escrow service fees associated wich this proposal.
Ciry of Saint Paul Banc of America Leasing & Capital, LLC
May 14, 2004
Page 5 of 8
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Companv Back2round:
Banc of America Leasing and Capital, LLC (BALC), a wholiy-owned subsidiary of Bank of
America NA, the 3` largest bank financial institution in the United States ($600+ billion in
assets), has been in existence for over 35 yeass and owns or manages in excess of $40 billion
in equipment cost consisting of a broad range of ta��able and ta�t-exempt financings and
equipment categories. BALC, headquartered in San Francisco, California, has sales offices
worldwide. With over 400 employees, we maintain the syndications, credit, legal, contracts,
and accounting expertise and mechanisms to be a nationwide leader in the taY-exempt azena.
Bank of America maintains in excess of 4,500 govemment relationships with all types of
political subdivisions and not-for-profit entities in 22 states.
In the tax-exempt equipment leasing area, BALC's staff of mazketing, credit, legal and
administrative professionals bring a depth and breadth of experience to this mazket that is
unsurpassed. The Tax-Exempt Crroup currently maintains a tax-exempt portfolio in excess of
$750 million, consisting of equipment in all asset categories, on lease to both political
subdivisions as weli as 501(c)3 entities. In 2003, BALC's Tax-Exempt Leasing Group closed
in excess of $400 million of business, including several master lease facilities in excess of $25
miilion.
CiTy of Sau�[ Paul Banc of America Leasing & Capital, LLC
May 14, 2004
Page 6 of 8
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References
Banc of America Leasing & Capital, LLC
State of Delaware (Master Lease)
820 Silver Lake Bivd., 2�" Floor
Dover, DE 19904
Contact: Blaine Herrick, Contract Administrator
Telephone: (302)739-5587
Fax: (302)739-3779
Frederick County, MD (Lease Purchase Agreement)
12 East Church Street
Frederick, MA 217Q1
Contact: Anne Wright, Director of Finance
Telephone: (301)644-1115
Fa7c: (301)631-2302
Commonwealth of Virginia (Master Lease for State Agencies)
Office of Bazbara J. Layman
3ames Monroe Building
101 N 14`" Street, 3� Floor
Richmond, VA 23219
Contact: Evelyn WhiUey, Debt Manager
Telephone:(804) 371-6006
FaJC: (804)225-3187
Montgomery County School District, Maryland (Master Lease)
Procurement Department
850 Hungerford Drive
Room 164
Rockville, MD 20854-1744
Comact: Robert Aoody
Telephone: (301) 279-3115
Fas: (301) 279-3031
Brick Township Board of Education (Lease Agreement and Refinancin�
101 Hendrickson Avenue
Brick, NJ 08724
Contact: Nick Puleio
Telephone: (732)785-3000
City of Saint Paul Banc of America L.easing & Capi[al, LLC
May 14, 2004
Page 7 of 8
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Banc of America's Tax-Exempt Leasing Group
ANDREW F. PARKER— Marketing Associate
Mr. Parker joined Banc of America's Tax-Exempt Leasing Group in 2001 and
covers the eastern United States. Ae earned an M.B.A. from the University
of Southern California and a BSFS from Georgetown University wich
concentrations in internatianal economics and finance. (415)765-1892.
ART E. HYMAN — Senior Vice President/Nationai Sales & Marketing Manager of
Tax-Exempt Leasing
Mr. Ayman has been with Banc of Amexica Leasing & Capital Group ior 13
years, having held titles of Senior Credit Manager, and Commercial Regional
Marketing Manaqer for the southern United States. For the past 4 years Art
has assumed responsibilities for all Tax-Exempt financing for BankAmerica
Leasing. During that time, his group has qrown to cumulative revenue in
excess of $1 Billion, and annual revenue in excess of $350 million,
comprising of simple to hiqhly structured, highly complex capital raising
solutions in all segments of the tax-exempt market, including governmental,
education, and healthcare financing. Art oversees a nationwide group
comprised o£ eighteen leasing professionals. {415)765-"l383.
GAIL SMEDAL — Vice President & Operations Manager
Ms. Smedal manages the Sax Exempt Unit in Contracts Administration. She
has over 26 yeaxs o£ experience in the leasinq business with exposure in
al1 areas including commercial markets, international, wholesale, and tax
exempt. Ms. Smedal with her Lease Administration team, support the initial
documentation process and the day-to-day contact with the Lessee, in
processing the lease, £unding equipment, insurance and documentary
requests. She earned a B.A. from the University of Washington in Business
Education. (415)765-7390.
IOSEPH SCHUBERT—Assistant General Counsei
Mr. Schubert has over 18 years of experience as legal counsel for Banc of
America Leasinq and other major bank and non-bank leasing companies. Mr.
Schubert is the leasing group's primary in-house resource for tax-exempt
leases. He is a graduate of Princeton University and the Yale Law School.
(415)765-7355.
City of Sauit Paul
May 14, 2004
Ba� of
Page 8 of 8
a� � �IJ�"�
Appendix B - Proposal Forms
Required Iaformafion
Please base responses on the equipment estimates in Appendix A, and other requiremeats
in this RFP.
Option I-'I'ag Exempt, Capital Lease Tinanciag
Provide a detailed description of the financing and how it will work. Auach copies of any
relevant materials, including the lease agreement. Explain clearly, any and aIi obligations of
the Cicy under the agreement, including penalties extra services, requirements for legal
opinions, eta Describe any other costs the City will be expected to pay that are not covered by
the response to quesrion 2 below.
2. Financing Rates and Payments
Police vehicles
� 24-month term with 1 annual payment
Amortizarion schedule:( Detail interest portion, Principal portion, Lease payment, total over
]ease period , Prepayment Penalties)
�24-month term with 2 payments per year
Amortization schedule:( Detail interest portion, Principal portion, Lease payment, total ovez
-- ]ease period, Prepayment penalties)
�24-month term with 4 payments per year
Amortization scheduIe:( Dettil interest partion, Principal portion, Lease payment, total over
lease period, Prepayment penalties)
�36-month term with 1 annual payment
Amorkization schedule:( Detail interest pozrion, Principat portion, Lease payment, total over
lease period, Prepaytnent Penalties)
�36-monYh term with 2 payments pez year .
Amortization scheduie:( Detail interest portion, Principal poztion, Lease payment, total over
lease periad, Prepaymem penalties)
13
_' ___ "_ .i i ne..nr �.nrav rv vJu
0�' �a�
fl 36-month term with 4 paymenu per year �/3, 83 Y. 4 0
Amortizarion schedvle:( Detail interest portion, Principal portioa, Lease payment, total over
lease period, Prepayment Penalties)
Parks Maintenance Eauipment '
�j 36-month te�m, with 1 annual payment
Amortization schedule:( DetaiI interest portion, Principal portion, Lease payment, toral over
lease period, Prepayment Penalties)
�36-month term with 2 payments per yeaz
Amorti2arion schedule:( Defail interest portion, Principal portion, Lease payment, total over
iease peziod, Prepayment Penalties)
c) 36-month term wit6 4 payments per year 2�. �3 �• g 6
Amortizatian schedule:( Detail interest porhon, Principal portion, Lease payment, total over
lease period), Prepayment Penalties)
�60-month tecm with i anaual payment
Amoziizarion schedule:( Detail interest portion, Pzincipal portion, Lease paymeat, total over
lease period, Prepayment Penalties)
60-month term witEt 2 payments per year
orti2arion schedule;( Detail interest portion, Principal portion, Lease payment, total over
Ierxse period, Prepayment Penalties)
fl 60-month Yerm wifh 4 payments per year /3, 3 8'(. z9
Amoztizatian schedule:( Detail interest portion, Principal por[ion, Lease payment, totai over
lease period, Prepayment Penalties)
3. Please explain the method by which proposer will detemune the interest zate to be chazged
during the course of the Master Lease. What is the benchmark that you wiIl use? See {�� 3
4. Will tlie proposed rates change if the specific mix or amount of equipment varies fiom the
samgle given? If yes, explain how the method in 3 above wiIl change for specific dollar
thresholds or equipment. �
5. Is your company a part of or affiliated with one or more equipment suppliers, distributors, oz
rnanufacturers?
Yes X No
6. If yes, please identify the company(s) and ezcplain the relationship.
14
--- -- --. _ ,., �,,,.� .�� ��� �,-� Ab:�i b00Z i2 add
o� - coa`
If your company is af�Iiated wiih an equipment supplier, disixibutor, or manufacttuer, will
provide financzng for equipment other than that sold by the affiliaxeci company?
Yes No �//
8. If yes, will the proposed interest rate be applicable? If aat, explain
Option ZI - Operating Lease Financing
base your response on the equipment information included in Appendix A.
1. Assum`i,�ig tt�e leveI of financing for Saint Paul's 2004 PC repiacement program is $600,000,
please id�tify the rate factor that you will apply for a 36-month lease as follows:
36-month lease�th moizthiy gaymen4s - Rate Factor.
36-month lease wirh q erly payments - Rate Factor
36-month lease with two pa ents per year - Rate Factor
2. Please complete the chart below usi the above assumptions and apply the stated rate factor.
(Note: Saint Paul pays State Sales Tax t the rate of $.065.)
3C� Months. Monihiv Pavments (Idenrify
and sales tax amounts sepazately.)
Initia] Payment Amount Monthly Amount
36 Montl�s, Quarterlv Pavments
Initial Payment Amount Monthly Amount
36 Months, Two Yeazly Payments
Initial Payment Amount Monthly Amount
Taz
Sales Tax
Sales Tas
Total For Lease Periad
Total Ror Lease Period
Total For L�ae Peaiod
3. Explain for what period the quoted rates will be effective and what factors will cause the rate
to change during the Master Lease period.
15
o�- c�a��
BankAmerica Leasing & Capital Group
MUNI Equivalent
Amortization Schedule
debt
service
Date number
Sun-0I-04 0
Sep-01-04 I
Dec-01-04 . 2
Maz-01-OS 3
Jun-01-OS 4
Sep-01-OS 5
Dec-01-OS 6
Maz-Ol-06 ?
Jun-01-06 8
Sep-01-06 9
Deo-01.06 10
Mar-01-07 11
Jun-01-07 12
TOTAL
interes[
2.640D0%
3,32723
3,059.88
2,790.�7
2,519.88
2,247.20
1,972.73
1,696.44
1,41833
1,13838
856.59
572.94
287.41
principal
40,507.17
40,774.52
41,043.63
41,314.52
41,587.19
41,861.67
42,131.96
42,416.07
42,696.01
42,977.81
43,261.46
43,546.99
debt
service
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
43,834.40
21,887.76 504,125.00 526,012.76
balance
soa,iu.00
463,617.83
422,84331
381,799.68
34Q485.16
298,897.96
25�,03629
214,89834
1�2,482.27
129,78626
86,808.45
43,546.99
0.00
SuperlRilblP 8.60 financial model Page 1 Ivory Consulting Corporation
BankAmerica Leasing & Capital Group
MUNI Equivalent
Amortization Scheduie
debt
service
Date number
Jun-0I-04 0
Sep-01-04 1
Dec-01-04 2
Mar-OS-0S 3
7w-0]-OS 4
Sep-01-OS 5
Dec-01-05 6
Maz-01-06 7
Jun-01-06 8
Sep-01-06 9
Dec-Ol-06 10
Maz-01-07 I1
Jun-01-07 12
interest
2.64000%
1,650.00
I,517.42
1,383.97
1,249.63
1,114.41
978.29
54128
70336
564.53
424.79
284.12
142.53
principal
debt
setvice
batance
25Q000.00
229,912.14
2D9,691.70
189,337.80
168,849.57
148,226.12
127,466.55
106,569.97
55,535.47
64,362.74
43,049.07
21,595.33
0.00
TOTAL
20,087.86
2o,zzo.aa
20,353.90
20,48823
20,623.45
20,759.57
20,896.SS
21,034.50
21,173.33
Z I,313.07
21,453.74
21,595.33
21,73�.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
21,737.86
1U,85433 250,000.00 26Q,S5433
�� / ��\
SuperTRL1MP 8.60 fina�cial model page 1 Ivory ConsWting Corporation
c
BankAmerica Leasing & Capital Group
MUNI Equivaleut
Amortization ScLedule
debt
service
Date number
Iun-01-04 0
Sep-01-04 ]
Dec-01-04 2
Maz-01-OS 3
Jun•O1-OS 4
Sep-01-05 5
Ilec-01-OS 6
Mar-01-06 7
Jun-01-06 8
Sep-01-06 9
Dec-01-06 10
Maz-01-07 I 1
rw-oi-o� iz
Sep-01-07 13
Dec-01-07 14
Mar-0lA8 15
7un-01-08 16
Sep-01-OS 17
Dec-01-OS 18
Mar-01-09 19
Jun-01-09 20
TOTAL
interes[
2.64000%
1,650.00
1,572.55
1,494.60
1,416.12
1,337.13
1,257.62
1,177.59
1,097.02
1,015.93
934.30
852.13
'I69.41
686.16
60235
517.99
433.07
347.59
?b1.55
174.94
87.76
principal
11,73429
11,811J4
11,889.69
11,968.1�
12,047.16
12,126.67
12,206.�0
12,28�.27
12,368.3b
12,449.99
12,532.16
12,614.88
12,695.13
12,781.94
12,86630
12,951.22
13,036.70
13,122.74
13,20935
13,296.53
debt
service
13
13,38429
13,38424
13,384.29
13,384.29
13,38429
13,38429
13,384.29
13,38429
13,38429
13,384.29
13,38429
13,38429
13,384.29
13,384.29
13,384.29
13,38429
13,384.29
13,384.29
13,38429
17,685.80 250,000.00 267,685.80
balance
250,000.00
238,265.71
226,453.97
214,56418
202,596.11
19Q548.96
178,42229
166,215.59
153,928.32
141,559.96
129,109.97
116,5�7.80
103,962.92
91,264.79
78,452.85
65,616.54
52,665.32
39,625.62
2b,505.88
13,296.53
0.00
�- �a�
SuperTRllMp 8.60 financial mode] Page 1 Ivory Consulting Corporation
o� - �a�
MASTER E� QUIPMENT LEASE/Pi3RCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement (the "Agreement") dated as of
, and entered into between Banc of America Leasing & Capital,
LLC, a Delawaze limited liability company ("Lessor'�, and
,a
body corporate and poliric e�sting under the laws of the State of ("Lessee'�.
WITNESSETH:
WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described
in each Schedule (as each such term is defined herein), subject to the terms and conditions of and
for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule
prevail; and
WHEREAS, the relationship between the parties shall be a continuing one and items of
equipment may be added to the Equipment from time to fime by execution of additional
Schedules by the parties hereto and as otherwise provided herein; and
WHEREAS, Lessee is authorized under the consritution and laws of the State to enter into
this Agreement and the Schedules hereto for the purposes set forth herein; and
�
WHEREAS, the governing body of Lessee has authorized the execution and delivery of
this Agreement and the L,eases pursuant to [Resolution No. _� [Ordinance No.
_�, approved on 20_,
NoW, T�IEREFORE, for good and valuable consideration, receipt of wlvch is hereby
acknowledged, and in consideration of the premises hereinafter contained, the parties hereby
agree as follows:
ARTICLE I
Section 1.01. Defznitions. The following terms will have the meanings indicated below
unless the contea�t cleazly requires othenvise:
`flcquisition Amount" means the amount specified in each Lease and represented by
Lessee to be sufficient to acquire the Equipment listed in such Lease, which amount shall be not
less than $100,000 for each Lease.
`Acquisition Fund" means, with respect to any Lease, the fund established and held by
the Acquisition Fund Custodian pursuant to tt�e related Acquisition Fund Agreement, if any.
`Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund
Agteement, substantially in the form of E�ibit A attached hereto, in form and substance
acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to
which an Acquisition Fund is established and administered.
#219845v11 (Godt Entity Master Lease)
� � � �,
"Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any
Acquisition Fund Agreement, and its successors and assigns.
"Acquisition Period" means, with respect to each Lease, that period stated in the
Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be
expended on Equipment Costs.
`Agreement" means this Master Equipment Lease/Purchase Agreement, including the
e�ibits hereto, together with any amendments and modifications to the Agreement pursuant to
Section 13.05.
"Code" means the Intemal Revenue Code of 1986, as amended. Each reference to a
Section of the Code herein sha11 be deemed to include the United States Treasury Regulations
proposed or in effect thereunder.
"Commencement Date" means, foz each Lease, the date when Lessee's obligation to pay
rent commences under such Lease, which date shall be the earlier of (i) the date on which the
Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01,
and (ii) the date on which sufficient moneys to purchase the Equipment listed in such Lease are
deposited for that purpose with an Acquisition Fund Custodian.
"Equipment" means the proper[y listed in each of the Leases and all replacements,
repairs, restorations, modifications and 'unprovements thereof or thereto made pursuant to
Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in
a Lease, such reference shall be deemed to include a11 such replacements, repairs, restorations,
modifications and improvements of or to such Equipment.
"Equipment Costs" means the total cost of the Equipment listed in each Lease, including
all delivery charges, installation chazges, capitalizable consulting and training fees approved by
Lessor, legal fees, financing costs, and other costs necessary to vest full, clear legal titfe to the
Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set forth
in each Lease, and otherwise incurred in connection with the financing provided by the lease-
purchase of the Equipment as prbvided in each Lease; provided that in no event shall approved
consulting and training fees or other non-capitalizable "soft" costs relating to the Equipment
listed in any L,ease which aze to be financed by Lessor hereunder exceed Z% of the total cost of
such Equipment as deternuned by Lessor; and provided further, that in no event shall
capitalizable delivery charges, installation charges, ta7:es and similar capitalizable "soft costs"
relating to such Equipment be included without Lessor's prior consent.
["Expense Fund" means, with respect to any Lease, the fund established and held bp the
Acquisition Fund Custodian pursuant to the_related Acquisition Fund Agreement, if any.] I
"Event of DefaulY' means an Event of Default described in Section 12.01.
I Add only if needed.
#219845v11 (Godt Entity Master Lease)
��c �a`
"Lease" means a Schedule and the terms of this Agreement which aze incorporated by
reference into such Schedule. Each Schedule shaIl constitute a sepazate and independent Lease.
"Lease Proceeds" means, with respect to each Lease, the total amount of money to be
paid by L,essor to the Acquisition Fund Custodian for deposit and application in accordance with
such Lease and the Acquisition Fund Agzeement.
"Lease Term ° for each Lease means the Original Term and all Renewal Terxns therein
provided and far this Agreement means the period from the date hereof until this Agreement is
terminated.
"Lessee " means the entity refened to as I,essee in the first pazagraph of this Agreement.
"Lessor" means (a) the entity referred to as Lessor in the first pazagraph of this Agree-
ment or (b) any assignee or transferee of any right, title or interest of Lessor in and to the
Equipment under a I,ease or any Lease (including Rental Payments thereunder) pursuant to
Section 11.01, but does not include any entity sole�y by reason of that entity retaining or
assuming any obligation of Lessor to perform under a Lease.
� "Maximum Equipment Cost" means
"Original Term" means the period from the Commencement Date for each Lease until
the end of the fiscal yeaz of Lessee in effect at such Commencement Date.
"Purchase Price" meaus, with respect to the Equipment listed on a Lease, the amount
that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease.
"Renewal Terms" means the renewal terxns of each Lease, each hauing a duration of one
yeaz and a term coea�tensive with Lessee's fiscal year, as specified in the Schedule applicable
thereto.
"Rental Payments" means the basic rental payments payable by Lessee under each Lease
pursuant to Section 4.01, in each case consisting of a principal component and an intezest
component.
"Schedule" means each separately numbered Schadule of Property substantially in the
form of E�ibit B-1 hereto together with a Rental Payment Schedule attached thereto
substantially in the form of Exhibit B-2 hereto.
"State" means the State of
"Utilization Period" means the date, with respect to each Lease not funded under an
Acquisirion Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the
Equipment under such Lease as indicated in Section 3.04(b).
"T/endor" means the manufacturer or supplier of the Equipment or any other person as
well as the agents or dealers of the manufacturer or supplier from whom Lessor arranged
Lessee's acquisition and financing of the Equipment pursuant to the applicable Lease.
#219845v11 (Godt Enrity Master Lease) 3
o� �at
ARTICLE II
Section 2.01,- Representations and Covenants of Lessee. Lessee represents, covenants
and warrants for the benefit of I,essor on the date hereof and as of the Commencement Date of
each Lease as follows:
(a) Lessee is [Yhe State] [a political subdivision of the State withiu the meaning of
Section 103(c) of the Code, duly organized and existing under the constirirtion and laws of the
State}, with full power and authority to enter into this Agreement and each Lease and the
transactions contemplated hereby and to perform all of its obligations hereunder and under each
Lease.
(b) Lessee has duly authorized the execurion and delivery of this Agreement and each
I,ease by propex action of its governing body at a meeting duly called, regularly convened and
attended throughout by the requisite quorum of the members thereof, or by other appropriate
official approval, and all requirements haue been met and procedures have occurred in order to
ensure the validity and enforceability of this Agreement and each Lease.
(c) No event or condition that constitutes, or with the giving of nofice or the lapse of
time or both would constitute, an Event of Default exists at the date hereof.
(d) Lessee will do or cause to be done ail things necessary to preserve and keep in full
force and effect its e�stence as a body corporate and politic.
(e) L,essee has complied with such public bidding requirements as may be applicable
to this Agreement and each Lease and the acquisition by Lessee of the Equipment as provided in
each Lease.
(� During the Lease Term, the Equipment will be used by Lessee only for the
purpose of perfornung essential govemmental or proprietary functions of Lessee consistent with
the permissible scope of Lessee's autharity. Lessee does not intend to sell or otherwise dispose
of the Equipment or any interest therein prior to the last Rental Payxnent (including all Renewal
Terms) scheduled to be paid under each Lease.
(g) [Lessee has kept, and throughout the Lease Term of any Lease shall keep, its
books and records in accordance with generally accepted accounting principles and practices
consistendy applied,] and shall deliver to Lessor (i) annual audited financial statements
(including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances
for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments
to the financial statements) within 180 days of its fiscal year end, (ii) such other financaal
statements and informarion as Lessor may reasonably request, and (iii) its annual budget for the
following fiscal year within 90 days of the current fiscal year end. The financial statements
described in subsection (i) shall be accompanied by an unqualified opinion of Lessee's auditor.
2 Aitemate language: [Lessee shall report its financial resulu on an annual basis in accordance with accounring
principles and practices generally accepted in the United States of America applicable to govemmental entiries,
and the standards contained in Government Auditing Standards, issued by the Comptroller General of the United
States,]
#219845v11 (Gov't Entity Master Lease)
�� � ���
Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates
and any of their respective successors and assigns.
(h) Lessee has an immediate need for the Equipment listed on each Schedule and
eacpects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the
Equipment is not temporary and Lessee does not expect the need for any item of the Equipment
to diminish during the Lease Term to such item.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms
of any Lease or any underiying an•augement) directly or indirectly (x) secured by any interest in
properry used or to be used in any activity carried o� by any person other than a state or local
governmental unit or payments in respect of such property; or (y) on a present value basis,
derived from payments (whether or not to Lessee) in respect of properiy, 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 gerson other than a state or local governmental unit. No portion of the Equipment
Costs for the Equipment will be used, directly or indirectly, to make or fmance 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.
(j) There is no pending litigation, taY claim, proceeding or dispute that may adverse�y
affect Lessee's financial condition or impairs its ability to perform its obligations hereunder.
Lessee will, at its expense, maintain its legal existence in good standing and do any fiirther act
and execute, aclmowledge, deliver, file, register and record any fiirther documents Lessor may
reasonabiy request in order to protect Lessor's security interest in the Equipment and Lessor's
rights and benefits under this Lease.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor
agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment,
up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease,
Lessor demises, leases, lransfers and lets to Lessee, and Lessee acquires, rents and leases from
Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The
Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the
Original Tersn or any Renewal Term for the next succeeding Renewal Term up to the maYimuxn
Lease Term set forfh in such Lease. At the end of the Original Term and at the end of each
Renewal Term until the maatimum Lease Term has been compieted, Lessee shall be deemed to
have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall
have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions
during any Renewal Term shall be the same as the tertns and conditions during the Original
Term, except that the Rental Payments shall be as provided in the appiicable Lease.
_ Section 3.02. Continuation of Lease Term. Lessee intends, subject to 5ection 3.03, to
continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to
pay the Rental Payments thereunder. Lessee affirms that su�cient funds are available for the
current fiscal yeaz, and Lessee reasonably believes that an amount su�cient to make all Rental
#219845v11 (GodtEntityMasterLease) 5
� c�a`
Payments d�zring the entire Lease Term of each L,ease can be obtained from legally available
fixuds of Lessee. I,essee further intends to do atl things lawfully within its power to obtain and
maintain funds sufficient and auailable to discharge its obligation to make Rental Payments due
hereunder, including maldng provision for such payments to the extent necessary in each budget
or appropriation request submitted and adopted in accordance with applicable provisions of law,
to have such portion of the budget or appropriation request approved and to e�aust all available
reviews and appeats in the event such portion of the budget or appropriation request is not
approved.
Section 3.03. Nonappropriation. Lessee is obligated only to pay such Rental Payments
under each Lease as may lawfully be made from funds budgeted and appropriated for that
purpose during Lessee's then current fiscal year. Should Lessee fail to budget, appropriaie or
otherwise make available funds to pay Rental Payments under any Lease following the then
current Origival Term or Renewal Term, such Lease or Leases shal] be deemed terminated at the
end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to
Lessor of such ternuna6on at least 90 days prior to the end of the then current Original Term or
Renewal Term, but failure to give such notice shall not extend the term beyond such Original
Term or Renewal Term. If any Lease is terminated in accordance with this Section, Lessee
agrees to peaceably deliver the Equipment to Lessor at the locauon(s) to be specified by Lessor.
Section 3.04. Conditions to Lessor's Performance.
(a) As a prerequisite to the performance by Lessor of any of its obligations pursuant
to any Lease, Lessee sha11 deliver to Lessor the fallowing:
(i} A fully compieted Schedule, executed by I,essee;
(ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition
Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the
V endor upon execution of the Lease;
(iii) A Certificate executed by the Clerk or Secretary or other comparable
officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the
satisfaction of Lessor;
(iv) A certified copy of a resolution, ordinance or other official action of
Lessee's goveming body authorizing the execution and delivery of this Lease and
performance by Lessee of its obligations hereunder;
(v) An opinion of counsel to Lessee in substantially the fozm attached hereto
as E�ibit D respecting such Lease and otherwise satisfactory to Lessor;
(vi) Evidence of irisurance as required by Secrion 7.02 hereof;
(vii) All docuxnents, including financing statements, affidavits, notices and
similar instnunents, in form satisfactory to Lessor, which Lessor deems necessary or
appropriate at that time pursuant to Section 6.02;
#219845v11 (Gov't Entity Master Lease) 6
o � - �a��
(vui) A copy of a fuily completed and executed Form 8038-G;
(ix) An Bssential UselSoutce of Funds Certificate in substantially the form
attached as E�ibit E; and
(x) Such other items, if any, as aze set forth in such Lease or aze reasonably
required by Lessor.
(b) In addition, the perFormance by I,essor of any of its obiigations pursuant to any
Lease shall be subject to: (i) no material adverse change in the financiai condition of Lessee since
the date of this Lease, (ii) no Event of Default having occurred, and (iii) if no Acquisition Fund
has been established, the Equipment must be accepted by Lessee no later than
(the "Utilization Period").
(c} Subjeet to satisfaction of the foregoing, Lessor will pay the Acquisition Amount
for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing
body, will reimbuzse Lessee for the prior payment of any such Acquisition Axnounts by I,essee to
the Vendor, upon receipt of the documents described in Sections 5.01(a) and (b); or if an
Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor will
deposit the Acquisition Amount for Equipment described in the Schedule with the Acquisition
Fund Custodian.
(d) This Agreement is not a commihnent by Lessor to enter into any Lease not
currently in existence, and nothing in this Agreement shall be construed to impose any obligafion
upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into
any proposed Lease shall be a decision solely within Lessor's discretion.
(e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease.
Without limiting the foregoing, Lessee will provide Lessor with any documentation or
information Lessor may request in connection with Lessor's review of any proposed Lease. Such
documentation may include, without limitation, documentation concerning the Equipment and its
contemplated use and location and documentation or information conceming the financial status
of Lessee and other matters related to Lessee.
[Section 3.05. Nonsubstitution. If Lessor terminates a Lease pursuant to Section 12.02 or
Lessee teiminates a Lease pursuant to Section 3.03, Lessee agrees, to the extent not prohibited by
law, not to purchase, lease, rent or otherwise acquire equipment performing functions similaz to
those performed by the Equipment described in such Lease or obtain from any source the
services or information that the Equipment described in sueh Lease was to perform or provide, in
each case far a period equal to the shorter of (a) the longest period (if any) permitted by State law
for such purpose or (b) 360 days after such termination or occurrence.]
3 Do not use in Arkansas, Florida, North Cazolina or Oregon, or if local counset advises against including it.
#219845v11 (Gov't Entity Master Lease)
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ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.�3, Lessee shall promptly pay
Rental Payments, in lawfitl money of the United States of America, to Lessor on the dates and in
such amounts as provided in each Lease. Lessee shail pay Lessor a charge on any Rental
Payment not paid on the date such payment is due at the rate of [_%] [i2%] per annum or
the maximum amount permitted by law, whichever is less, from such date. Lessee shall not
permit _the federal government to guazantee any Rentai Payments under any Lease. Rental
Payments consist of principal and interest payments as more fully detailed on each Schedule, the
interest on which begins to accrue as of the Commencement Date for each such Schedule.
Section 4.02. Interest and Principal Components. A portion of each Rental Payment is
paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as,
and represents payment of, principal. Each Lease shail set forth the principal and interest
components of each Rental Payment payable thereunder during the Lease Terxn.
Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and
Lessee understand and intend that the obligation of Lessee to pay Rentai Payments under each
Lease shall constitute a current expense of Lessee payable solely from its general fund or other
funds that are legally available for that purpose and sha11 not in any way be conshued to be a debt
of Lessee in contravention of any applicable constitutional or statutory limitation or requirement
concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a
Lease constitute a pledge of the generai tax revenues, funds or moneys of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03,
the obligations of Lessee to make RenYal Payments and to perform and observe the other
covenants and agreements contained in each Lease sha11 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, after it has been accepted by Lessee, any defects,
malfuncrions, breakdowns or infirmities in the Equipment or any accident, condemnation or
unforeseen circumstances.
Secfion 4.05. Tax Covenants.
(a) Lessee agrees that it will not take any action that would cause the interest
component of Rental Payxnents to be or to become ineligible for the exclusion from gross income
of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause
to be taken, in timely manner, any action, which omission would cause the interest component of
Rental Payenents to be or to become ineligible for the exciusion from gross income of the owner
or owners thereof for federal income tax purposes.
(b) 7n the event that Lessee doas not spend the moneys in the Acquisition Fund within
six (6) months of the date the deposit is made pursuant to Section 3.04(c), Lessee will, if required
by section 148(fl of the Code to pay rebate: (i) establish a Rebate Account and deposit the Rebate
Amount (as defined in Section 1148-3(b) of the Federal Income Tax Regulations) not less
frequenfly than once per year after the applicable CommencemenY Date; and (ii) rebate to the
United States, not less frequently than once every five (5) years after the applicable
Commencement Date, an amount equal to at least 90% of the Rebate Amount and within 60 days
#219845v11 (GodTEntity Master Lease) 8
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after payment of aIl Rental Payments or the Purchase Price as provided in Section 10.01(a)
hereof, 100°l0 of the Rebate Amount, as required by the Code and any r8gulations promulgated
thereunder. Lessee shall deternuue the Rebate Amount, if any, at least every year and upon
payment of all Rental Payments or the Purchase Price and shali 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 Purchase Price.
Section 4.06. Event of Taxability. Upon the occurrence of an Event of T�ability, the
interest component shall be at a Tasable Rate retroactive to the date as of which the interest
component is deternuned by the Internal Revenue Service to be includible in the gross income of
the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional
amount as will result in the owner receiving the interest component at the T�able Rate identified
in the related Lease.
For p�xrposes of this Section, "Event of TazabiTiry" means a determination that the
interest component is includible for federal income tas purposes in the gross income of the
owner thereof due to Lessee's action or failure to take any action. `�
Section 4.07. Mandatory Prepayment. If the Lease Proceeds are deposited into an
Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition
Period and not applied to Equipment Costs, shall be applied by Lessor on the next Rental
Payment date, pro rata to the prepayment of the principal component of the outstanding Rental
Payments due under the applicable Schedule.
ARTICLE V
Section 5.01. Delivery, InstalZation andAcceptance ofEquipment.
(a) Lessee shall order the Equipment, cause the Equipment to be delivered and
installed at the location specified in the Leases and pay any and a11 delivery and installation costs
and other Equipment Costs in connection therewith. When the Equipment listed in any Lease
has been delivered and instalied, Lessee shall promptly accept such Equipment and evidence said
acceptance by executing and delivering to Lessor an Acceptance Certificate in the form attached
hereto as E�ibit F.
(b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such
Equipment has passed to Lessee) relating to each item of Equipment accepted bp Lessee. With
respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of
an Acceptance Certificate from Lessee, prepare a Schedule of Properry and Rental Pa}�ment
Alternate language: [For purposes of this Section, "Event of Taxabiliry" means (i) a final determination of the
Intemal Revenue Service or other agency or entity having lawful jurisdicrion over the matter, after any and all
applicable appeals rigpts within such agency have been eachausted or after the Lessee chooses not to appeal such
determination, or (ii) a determination by a court havina lawful jurisdiction over the matter, which determination is
not subject to appeal or which the Lessor in iu sole discretion chooses not to appeal, thatthe interest component is
includible far federal income tax purposes in the gross income af the owner thereof due to Lessee's action or
failure to take any action.j
#219845v11 (Gov't Entity Master Lease)
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Schedule in the forms attached hereto as E�ibits B-1 and B-2. I,essee shall execute and deliver
such Schedules to Lessor within 5 business days of receip�
Secfion 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under
the related Lease, neither Lessor nor any entity claiining by, through or under L,essor, shall
interfere with Lessee's quiet use and enjoyment of the Equipment during the I.ease Term. ,
Section 5.03. Location; Inspection. Once installed, no item of the Equipment wiil be
relocated &om the base location specified for it in the Lease on which such item is listed without
Lessor's consent, which consent shall not be unreasonably withheld. Lessor shali have the right
at all reasonabie times during regular business hours to enter into and upon the property of
Lessee for the purpose of inspecting the Equipment.
Section S. D4. Use and Maintenance of the Equipment. Lessee will not install, use,
operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or
in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits
and licenses, if any, necessary for the instatlation and operation of the Equipment. In addition,
Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any
legislative, executive, admiiustrative, or judicial body; provided that L,essee may contest in good
faith the vaIidity or application of any,such law, regulation or ruling in any reasonable manner
that does not, in the opnuon of Lessor, adversely affect the interest (including the reversionary
interest) of Lessor in and to the Equipment or its interest or rights under the Lease.
Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and
working order, in accordance with manufacturer's recommendations. Lessor sha11 have no
responsibility to maintain, repair or make improvements or additions to the Equipment. If
commerciaily available, Lessee wili maintain in force a standazd maintenance contract with the
manufacturer of the Equipment, and upon request wiil provide Lessor with a copy of that
contract. Upon the prior written consent of Lessor, which consent shall not be unreasonably
withheld, Lessee may use another third party maintenance provider provided the maintenance
contract between Lessee and such third party requires the third party to maintain the Equipment
at the manufacturer's then current release, revision and engineering change levels, including
hardware, software enhancements and microcode leveis. Tn a11 cases, Lessee agrees to pay any
costs necessary for the manufacturer to re-certify the Equipment as eligible for manufacturer's
maintenance upon the return of the Equipment to Lessor as provided for herein.
Lessee shall not alter any item of Equipment or install any accessory, equipment or device
on an item of Equipment if that would impair any applicable warranty, the originally intended
function or the value of that Equipment. All repairs, parts, accessories, equipment and devices
furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall
thereupon become subject to the security interest of Lessor.
ARTTCLE VI
Section 6.01. TitZe to the Equipment. During each Lease Term, and so long as Lessee is
not in default under Article XII hereof, all right, tifle and interest in and to each item of the
Equipment sha11 be vested in Lessee immediately upon its acceptance of each item of Equipment,
#219845v11 (Gov't Entity Master Lease) 10
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sub}ect to the terms and condifions of the applicable Lease. Lessee shall at all times protect and
defend, at its own cost and eacpense, its title in and to the Equipment from and against all claims,
liens and legal processes of its creditors, and keep a11 Equipment free and cieaz of all such claims,
liens and processes. Upon the occurrence of an Event of Default or upon termination of a Lease
pursuant to Section 3.03 hereof, futl and unencumbered legal tide to the Equipment shali pass to
Lessor, and Lessee shall have no fiuther intezest therein. In addition, upon the occurrence of
such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such
documents as Lessor may request to evidence the passage of such legal title to Lessor and the
ternunafion of Lessee's interest therein, and upon request by Lessor shall deliver possession of
the Equipment to Lessor in accordance with Section 12.02. Upon purchase of the Equipment
under a Lease by Lessee pursuant to Section 10.01, I,essor's security interest or other interest in
the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as
Lessee may request to evidence the termination of Lessor's security interest in the Equipment
subject to the related I.ease.
Section 6.02. Security Interest. To secure the payment of all of Lessee's obligations
under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest
constituting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and invest-
ments held from time to time in the Acquisition Fund and (c) any and all proceeds of any of the
foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assignment,
chattel mortgages, financing statements and other documents, in form satisfactory to Lessor,
which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest
in the Equipment, the Acqnisition Fund and the proceeds thereof.
Section 6.03. Personal Property. The Equipment is and will remain personai property
and will not be deemed to be affixed to or a part of the real estate on which it may be situated,
notwithstanding that the Equipment or any part thereof may be or hereafter become in any
manner physically affixed or attached to real estate or any building thereon. Upon the request of
Lessor, Lessee will, at Lessee's expense, fiunish a waiver of any interest in the Equipment from
any pariy having an interest in any such real estate or building.
ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee
shatl keep the Equipment free of a111evies, liens, and encumbrances except those created by each
Lease. The parties to this Agreement contemplate that the Equipment will be used for a govern-
mental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all
properky taa�es. If the use, possession or acquisition of any Equipment is nevertheless determined
to be subject to taYation, Lessee shall pay when due all taxes and governmental charges lawfully
assessed or levied against or with. respect to such Equipment. Lessee shatl pay all utility and
other charges incurred in the use and maintenance of the Bquipment. Lessee shall pay such taxes
ar charges as the same may become due; provided that, with respect to any such taxes or charges
that may lawfully be paid in installments over a period of yeazs, Lessee shall be obligated to pay
only such installxnents as accrue during each Lease Term.
Section 7.02. Insurance. Lessee shall during each Lease Term maintain or cause to be
maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the
#219845v11 (Gov't Entity Master Lease) 11
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Equipment against loss or damage by fire and all other risks covered by the standard ea�tended
coverage endorsement then in use in the State, and any other risks reasonably required by Lessor,
in an amount at least equal to the then applicable Purchase Price of the Equipment; (b) liability _
insurance naming Lessor as additional insured 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 fiunish to L,essor 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 norice thereof to Lessor at least 30 days in advance of such
cancellation or modificafion. Whether or not Lessee provides self-insurance, Lessee hereby
affirms that it assumes all risk of loss of, or damage to and liability related to injury or damage to
persons or property arising from the Equipment from any cause whatsoever, and no such loss of
or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to
make the Rental Payxnents ar to perform any other obligation under this Lease.
Section 7.03. 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 cost thereof. All amounts so advanced by Lessor shall constitute
additional rent for the then current Original Term or Renewal Term and Lessee covenants and
agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until
paid at the rate of �%] [12%] per annum or the maYimum amount permitted by law,
whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have
exercised its option to purchase the EquipmenY by making payment of the Purchase Price as
provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the
Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other
casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken
under the exercise or threat of the power of eminent domain by any governmental body or by any
person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor wili
cause the Net Proceeds of any insurance claim or condemnation awazd or sale under threat of
condemnation to be applied to the prompt replacement, repair, restoration, modification or
improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has
been completed shall be paid to Lessee.
If Lessee elects to replace any item of the Equipment (the "Replaced Equipment")
puxsuant to this Section, the replacement equipment (the "Replacement Equipment") shall be of
similar type, utility and condition to the Replaced Bquipment and shall be of equal or grea#er
value than the Repiaced Equipment. Lessor shall receive a first priority security interest in any
such Replacement Equipment. Lessee shail represent, warrant and covenant to Lessor that eadh
item of Repiacement Equipment is free and clear of all clauns, liens, security interests and
encumbrances, excepting only those liens created by or through Lessor, and shall provide to
Lessor any and all docuxnents as Lessor may reasonably request in connection with the
#219845v11 (Gov'tEntityMasterLease) 12
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replacement, including, but not limited to, documentation in form and substance sarisfactory to
Lessor evidencing Lessor's security interest in the Replacement Equipment. I,essor and Lessee
hereby aclaiowledge and agree that any Replacement Equipment acquired pursuant to this
paragraph shall constitute "EquipmenP' for purposes of this Agreement and the related Lease.
I,essee shall complete the documentation of Replacement Equipxnent on or before the next
Rental Payment date after the occurrence of a casualty event, or be required to exercise the
Purchase Option with respect to the damaged equipment.
, For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining
from the gross proceeds of any insnrance claim or condemnation awazd ar sale under threat of
condemnation after deducting all expenses, including attorneys' fees, incurred in the collection
thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in
full the cost of any repair, restoration, modification or improvement referred to in Section S.Ol,
Lessee shall either (a) complete such replacement, repair, restoration, modification or
improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or
cause to be paid to Lessor the aznount of the then applicable Purchase Price for the Equipment,
and, upon such payment, the applicable Lease Term shall terminate and Lessor's security interest
in the Equipment shall ternvnate as provided in Section 6.01 hereof. The amount of the Net
Proceeds, if any, remaining after completing such repair, restoration, modification or
improvement or after purchasing such Equipment and such other Equipment sha11 be retained by
Lessee. If Lessee sha11 make any payments pursuant to this Section, Lessee shall not be entitled
to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the
amounts payable under Article IV.
ARTICLE IX
Section 9.01. Disctaimer of YYarranties. Lessor makes no warranty or representation,
either express or impiied, as to the value, design, condition, merchantability or fimess for
particular purpose or fitness for use of the Equipment, or any other warranty or representafion,
express or implied, with respect thereto and, as to Lessor; Lessee's acquisition of the Equipment
shall be on an "as is" basis. In no event shall Lessor be liable for any incidental, indirect, special
or consequential damage in connection with or arising out of this Agreement, any Lease, the
Equipment or the existence, fixrnishing, functioning or Lessee's use of any item, product or
service provided for in this Agreement or any Lease.
Section 9.02. Vendor's LYarranties. Lessor hereby irrevocably appoints Lessee its agent
and attorney-in-fact during each Lease Term, so long as Lessee shali not be in default under the
related Lease, to assert from time to time whaYever ciaims and rights (including without
limitation warrauties) relating to the Equipment that Lessor may have against Vendor. Lessee's
sole remedy for the breach of such warranty, indemtiification or representation shall be against
Vendor of the Equipment, and not against Lessar. Any such matter shall not have any effect
whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right
to receive full and timely payxnents under a Lease. Lessee expressiy acknowledges that L,essor
makes, and has made, no representations or warranties whatsoever as to the existence or the
availability of such warranties relating to the Equipment.
#219845v11 (Godt Entity Master Lease) 13
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ARTICLE X
Secfion 10.01. Purchase Option. Lessee shall have the option to purchase all of the
Equipment listed in a Lease, at the following times and upon the following terms:
[(a)] From and after the date specified in the related Schedule {the "Purchase Option
Commencement Date "), on the Rental Payment daxes specified in each Lease, upon not less than
30 days' pzior written notice, and upon payment in full of the Rental Payments then due under
such Lease plus the then applicable Purchase Price; which may include a prepayment premium
on the unpaid balance as set forth in the applicable Schedule; or]
[(a)][(b)] In the event of substantiat damage to or destruction or condemnation of
substantially all of the Equipment listed in a Lease, on the day specified an Lessee's notice to
Lessor of ats exercise of the purchase option (which shall be the earlier of the next Rental
Payment date or 60 days after the casuaity event) upon payment in full to Lessor of the Rental
Payments then due under such Lease plus the then applicable Purchase Price; or
[(b)) ((c)] Upon the expiration of the Lease Tezm, upon payment in full of al] Rental
Payments then due and all otfier amounts then owing under the Lease, and the payment of $1.00
to Lessar.
After payment of the appiicable Purchase Price, Lessee will own the related Equipment,
and Lessor's security interests in and to such Equipment will be terminated.
ARTICLE XI
Section 11.01. Assignment by Lessor.
(a) Lessor's right, title and interest in and to Rental Payments and any other amounts
payable by Lessee under any and all of the Leases, its security interest in the Equipment subject
to each such Lease, and all proceeds therefrom may be assigned and reassi�ed in whole or in
part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the
consent of Lessee; provided, that any such assignment, transfer or conveyance to a trustee far the
benefit of owners of certificates of participation shall be made in a manner that conforms to any
applicable State law. Nothing in this Section i 1.01 shall be construed, however, to prevent
Lessor from executing any such assignment, transfer or conveyance that does not invoive funding
through the use of certificates of participation within the meaning of appiicable State law,
including any such assignment, transfer or conveyance as part of a multiple asset pool to a
partnership or hvst; provided such certificates are sold only on a private placement basis (and not
pursuant to any "public ofFering") to a purchaser(s) who represent that (i) such purchaser has
sufficient knowledge and experience in financial and business matters to be able to evaluate the
risks and merits of the inveshnent, (ii) such purchaser understands neither the Lease nor
certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an
"accredited investor" within the meaning of Regulation D under the Securities Act of 1933, or a
5 Optional -- delete if no eazly termination is allowed.
#219845v1 I(Gov't Entity Master Lease) 14
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qualified institutional buyer within the meaning of Rule 144A, and (iv) it is the intention of such
purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a
transaction exempt from registration under the Securrties Act of 1933; provided further, that in
any event, Lessee sha11 not be required to make Rental Payments, to send notices or to otherwise
deal with respect to matters arising under a Lease with or to more than one individual or entity.
(b) No assignment, transfer or conveyance permitted by this Section 11.01 shall be
effecrive until Lessee shall have received a written notice of assignment that discloses the name
and address of each such assignee; prouided, that if such assignment is made to a bank or trust
company as trustee or paying agent for owners of certificates of participation, trust certificates or
partnership interests with zespect to the Rental Payments payable under a Lease, it sha11 thereafter
be sufficient that Lessee receives notice of the name and address of the bank or trust company as
trustee or paying agent. During each Lease Term, Lessee shall keep, or cause to be kept, a
complete and accurate record of a11 such assignxnents in forsn necessary to comply with
Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and
shall make all payments to the assignee or assignees designated in such register. Lessee shall not
have the right to and shall not assert against any assignee any claim, counterciaim or other right
Lessee may have against"Lessor or the Vendor. Assignments in part may include without
limitation assignment of all of Lessor's security interest in and to the Equipment listed in a
particular Lease and all rights in, to and under the Lease related to such Equipment. The option
granted in this Section may be sepazately exercised from time to time with respect to the
Equipment listed in each Lease, but such option does not pexmit the assignment of less than all of
Lessor's interests in the Equipment listed in a single Lease.
(c) If Lessor notifies Lessee of its intent to assign the Lease, Lessee agrees that it shall
execute and deliver to Lessor a Notice and Acknowledgement of Assigzunent substantially in the
form of E�ibit G attached to this Lease within five (5) business days after its receipt of such
request.
Section 11.02. Assignment and Subleasing by Lessee. None of L.essee's right, title, and
interest in, to and under any Lease or any portion of the Equipment may be assigned or encum-
bered by Lessee for any reason.
ARTICLE XII
Section 12. DI. Events of Default Def ned. Any of the following events shall constitute an
"Event ofDefault" under a Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid
under any Lease at the time specified herein;
(b) Failure by Lessee to observe and perform any covenant, condition or a�eement
on its part to be obseroed or performed, other than as refened to in subparagraph (a) above, for a
period of 30 days after written notice specifying such failure and requesting that it be remedied is
given to Lessee by Lessor, unless Lessor shall agree in wrifing to an extension of such time prior
to its expiration; provided that, if the failure stated in the notice cannot be conected within the
applicable period, Lessor will not unreasonably withhold its consent to an extension of such time
#219845v11 (Gov't Entiry Master Lease) IS
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if corrective action is instituted by Lessee within the applicable period and diligently pursued
until the defauit is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant to any
Lease or its execution, delivery or performance shall prove to have been false, incorrect,
misleading, or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money or receiving
credit under wtrich Lessee may be obligated as borrower, if such default consists of (i) the failure
to pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder
and gives the holder of the indebtedness the right to accelerate the indebtedness;
(e) Lessee_ shall (i) apply for or consent to the appoinhnent of a receiver, hvstee,
custodian or liquidator of Lessee, or of all or a substantial part of the assets of I,essee, (ii) be
unable, fail or admit in writing its inability generally to pay its debts as they become due,
(iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered
against it under applicable federal banlauptcy law, or (v) file a voluntary petition in baulauptcy
or a petition or an answer seeking reorganization or an arrangement with creditors or taking
advantage of any insolvency law or any answer admitCing the material allegations of a petition
filed against Lessee in any bankiuptcy, reorganization or insolvency proceeding; or
(fl An order, }udgment or decree sha11 be entered by any court of competent
jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or
Lessee oz of all or a substantial part of the assets of Lessee, in each case without its application,
approval or consent, and such order, judgment or decree shall continue unstayed and in effect for
any period of 30 consecutive days.
Section I2.02. Remedies on Default. Whenever any Event of Default exists, Lessor sha11
have the right, at its sole option without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare ail Rental Payments payable by
Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end
of the then cutrent Original Term or Renewal Term to be due;
(b) With or wifhout terxninating the Lease Term under such Lease, Lessor map enter
the premises where the Equipment listed in such Lease is located and retake possession of such
Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment
to the possession of Lessor at such place within the United States as Lessor shall specify, and sell
or lease such Equipment or, for the account of Lessee, sublease"such Equipment, continuing to
hold Lessee liabie, but solely from legally available funds, for the difference between (i) the
Rental Payments payable by I,essee pursuant to such Lease and other amounts related to such
Lease or the Equipment listed therein that aze payable by Lessee to the end of the then cunent
Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale,
leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under
such Lease, including without lunitation all expenses of taking possession, storing,
reconditioning and selling or leasing such Equipment and ail brokerage, auctioneer's and
attomey's fees), subject, however, to fhe provisions of Section 3.03. The exercise of any such
#219845vi1 (GodtEnutyMasterLease) 16
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remedies respecting any such Event of Default shail nnt relieve Lessee of any other liabilities
under any other Lease or the Equipment listed therein; and
(c) Lessor may take whatever action at law or in equity may appeaz necessary or
desirable to enforce its rights under such Lease or as a secured party in any or all of the
Equipment subject to such Zease.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to
Lessor is intended to be exciusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under a Lease now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any defauit shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right or power may
be exercised from time to time and as often as may be deemed expedient. In order to entitle
Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any
notice other than such norice as may be required in this Article.
Section 12.04. Application of Moneys. Any net proceeds from the exercise of any
remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after
deducting a11 expenses of Lessor in exercising such remedies including without limitation all
expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all
brokerage, auctioneer's or attomey's fees), shail be applied as follows:
(a) Tf such remedy is exercised solely with respect to a singie Lease, Equipment listed
in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other
amounts related to such Lease or such Ec�uipment.
(b) If such remedy is exercised with respect to more than one Lease, Equipment listed
in more than one Lease or rights under more than one Lease, then to amounts due pursuant to
such Leases pro rata.
���1! I
Section 13.01. Notices. Ali notices, certificates or other communications under any
Lease shatl be sufficiently given and shall be deemed given when delivered or mailed by
registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile
transmission (with electronic confirmation) to the parties hereta at the addresses unmediately
after the signatures to this Agreement (or at such other address as either party. heretQ shall
designate in writing to the other for notices to such party) and to any assignee at its address as it
appears on the registration books maintained by Lessee.
Section 13.02. Release and Indemn�cation. To the extent permitted by law, but only
from legally available funds, Lessee shall indemnify, protect, hold hazmless, save and keep
haiviless L,essor from and against any and a11 liability, obligation, loss, claun, t� and damage
whatsoever, regardless of cause thereof, and all expenses in connection therewith (including,
without limitation, counsei fees and expenses, and penalties connected therewith imposed on
interest received) arising out of or as a result of (a) the entering into of this Agreement ox any
Lease, (b) the ownership of any item of the Equipment, (c) the ardering, acquisition, use,
#219845v11 (Gov't Entity Master Lease) 17
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operation, condition, purchase, delivery, rejection, storage or rehun of any item of the Equip-
ment, (d) any accident in connection with the operation, use, condition, possession, storage or
rehun of any item of the Equipment resulting in damage to property or injury to or death to any
person, and/or (e) fhe breach of any covenant in a Lease or any material miszepresentation
contained in a I,ease. The indenuiification arising under this pazagraph shall continue in fuil
force and effect notwithstanding the full payment of all obligarions under a11 Leases or the
tennination of the Lease Term under all L,eases for any reason.
Section 13.03. Binding Effect. Each Lease shail inure to the benefit of and shall be
binding upon I.essoz and Lessee and their respective successors and assigns.
Section 13.04. Severability. In the event any provision of any Lease shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shali not invalidate or
render unenforceable any other provision hereof.
Section 13.05. Amendments, Changes and Modifzcations. This Agreement and each
I,ease may only be amended by Lessor and Lessee in writing.
Section 13.06.- Execution in Counterparts. Thas Agreement and each Lease may be
simultaneously executed in several counteiparts, each of which shall be an original and all of
which shall constihxte but one and the same insri�mnent.
Section 13.07. Applicable Law. This Agreement and each Lease shall be governed by
and construed in accordance with the laws of the State.
Section 13.08. Captions. The captions or headings in this Agreement and in each Lease
are for convenience only and in no way define, limit or describe the scope or intent of any
provisions or secfions of this Agreement or any Lease.
#219845v11 (Gov't Entity Master Lease) 18
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IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in
their names by their duly authorized representatives as of the date first above written.
LESSOR:
Banc of America I,easing & Capitai, LLC
555 California Street, 4fh Floor
San Francisco, Califomia 94104
Attention: Contract Adininistration
Fas No.: (415) 765-7373
By:
Name:
Tifle:
List of E�ibits
E�ibit A --
E�ibit B-1 --
E�ibit B-2 --
E�ibit C --
E�ibit D --
E�ibit E --
E�ibit F --
E�ibit G --
LESSEE:
Attention:
F� No.:
By: _
Name:
Titie:
(Seal)
Attest:
By:
Name:
Tide: .
Acquisition Fund Agreement
Schedule of Property
Rental Payxnent Schedule
Certificate
Opinion of Counsel Form
Essential Use/Source ofFunds Certificate
Acceptance Certificate
Notice and Acknowledgement of Assignment
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ACQULSITTON FUND AGREEMENT
#219845v11 (Godt Entity Master Lease) A-1
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SCHEDULE OF PROPERTY NO.
Re: Master Equipment Lease/Purchase Agreement, dated as of
, between Banc of America Leasing & Capital, LLC, as
Lessor, and , as Lessee
1. Defined Terms. Atl terms used herein have the meanings ascribed to them in the
above-referenced Master Equipment I,easelPurchase Agreement (the "Master Equipment
Lease ").
2. Eguipment. The following items of Equipment are hereby included under this
Schedule of the NYaster Equipment Lease.
Quantity Description Serial No. Model No. Location
3. Payment Schedule.
(a) Rental Payments. T'he Rental Payments shall be in such amounts and
payable on such dates as set forth in the Rental Payment Schedute attached to this Schedule as
Exhibit . Rental Payments shall commence on the date on which the Equipment listed in
this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the
form of Exhibit F to the Master Equipment Lease or the date on which sufficient moneys to
purchase the Equipment aze deposited for that purpose with an Acquisition Fund Custodian,
whichever is eazlier.
(b) Purchase Price Schedule. The Purchase Price on each Rental Payment
date for the Equipment listed in this Schedule shall be the amount set forth for such Rental
Payment date in the "Purchase Price" column of the Rental Paymenf Schedule attached to this
Schedule. The Purchase Price is in addition to all Rental Payxnents then due under this Schedule
(including the Rental Payment shown on the same line in the Rental Payment Schedule).
4. Representations, YYarranties and Covenants. Lessee hereby represents, warrants
and covenants that its representations, warranties and covenants set forth in the Master
Equipment Lease are hue and correct as though made on the date of commencement of Rental
Payments on this Schedule. Lessee further represents and warrants that no material adverse
change in Lessee's fmancial condition has occurred since the date of the Master Equipment
Lease.
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5. The Lease. The terms and provisions of the Master Equipment Lease (other than
to the estent that they relate solely to other Schedules or Equipment listed on other Schedules)
aze hereby incorporated into this Schedule by reference and made a part hereof.
[OPTTON: IF ACQUISITION FUND AGREEMENT IS USED:
6. Lease Proceeds. The Lease Proceeds which Lessor shali pay to the Acquisition
Fund Custodian in connection with this Schedule is $ of which $
is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. Tt is
expected that by [six (6)] (twelve (12)j [eighteen (18)] months from the date of this Schedule No.
, Lessee will have taken possession of a11 items of Equipment shown above and that
a Lessee's Acceptance Certificate, or Acceptance Certificates, will be signed by Lessee and
delivered to Lessor on or before [six (6)) (twelve (12)) [eighteen (18)] months from the date of
this Schedule No.
OR Ik' VENDOR PAID DIRECTLY USE:
6. Acquisition Amount. The Acquisition Amount for the Equipment described in this
Schedule to be paid to the Vendor is $' .}
[OPTION: IF ACQUISITION Fi7ND AGREEMENT IS U5ED:
7. Acquisifion Period. The Acquisition Period applicable to this Schedule sha11 end
at the conclusion of the _ month following the date hereof.]
[7][8]. Lease Term. The Lease Term shall consist of the Original Term and �
consecutive Renewal Terms, with the final Renewal Term ending on
[8][9]. Purchase Option Commencement Date. For putposes of Section 10A1 o�the
Lease, the Purchase Oprion Commencement Date is
#219845vi I(Gov't Enrity Master Lease) B-1-2
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Datea:
LESSOR: LESSEE:
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Adminish�ation Attention:
By:
Naxne:
Titie:
By:
Nazne:
Tifle:
(Seat)
Attest:
By:
Name:
Title:
Counterpart No. of manually executed and serialiy numbered countexparts.
To the extent that this Lease constitutes chartel paper (as defined in the Uniform Commercial
Code), no security interest herein may be czeated through the transfer or possession of any
Counterpart other than Counterpart No. 1.
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RENTAL PAYMENT SCFIEDULE
Rental Rental jnterest Principal Purchase
Payment Payxnent portion Portion Price
Date Amount
Prepayment Premium for purposes of Section 10A1(a) is
For purposes of this Lease, "Tccxable Rate, " with respect to the interest component of
Rental Payments, means an annual rate of interest equal to %.
LESSEE:
By:
Narue:
Tifle:
#219845v11 (Gov't Entity Master Lease) B-2-1
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CERTIFICAT'E
T'he undersigned, a duly elected and acting
Clerk] [County Clerk] of
A. The following listed persons aze duly elected and acting officials of Lessee (the
"Offtcials "} in the capacity set forth opposite their respective names below and that the facsunile
signatures are true and correct as of the date hereof;
EXEIIBTT C
[Secretary] (City
( "Lessee ") certifies as follows:
B. The Officials aze duly authorized, on behalf of Lessee, to negotiate, execute and
deliver the Master Equipment I.easelPurchase Agreement dated as of and the
Schedule(s) thereunder and all future Schedule(s) (the `Agreements") by and between Lessee
and Banc of America Leasing & Capitai, LLC and these Agreements aze binding and authorized
Agreements of Lessee, enforceable in all respects in accordance with their terms.
Name of Official
Title
S'laTk'LtUTe
Dated:
�
Title:
(The signer of this Certificate cannot be listed above as authorized to execute the Agreements.)
#219845v1I (Gov't Enrity Master Lease) GI
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OPINION OF COUNSEL TO LESSEE
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
San Francisco, Califomia 94104
Re: Schedule of Property No. , dated
to Master Equipment LeaseiPnrchase Agreement, dated as of
, between Banc ofAmerica Leasing & Capitai, LLC,
as Lessor, and , as Lessee
Ladies and Gentlemen:
As legal counsel to (`Zessee"), I have examined (a) an executed
counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of ,
and Ea�hibits thereto by and between Banc of America Leasing & Capital, LLC (`Zessor'� and
Lessee (the Agreement") and an executed counterpart of Schedule of Properiy No.
, dated , bp and between Lessor and Lessee (the "Schedule "),
which, among other things, provides for the lease of certain property listed in the Schedule (the
"Equipment") and a certaui Acquisiflon Fund Agreement among Lessor, Lessee, and
as Acquisition Fund Custodian, dated
(b) an executed counterpart of the ordinances or resolutions of Lessee
which, among other things, authorize Lessee to execute the Agreement and the Schedule and
(c) such other opinions, documents and matters of law as I have deemed necessary in connection
with the following opinions. The Schedule and the terxns and provisions of the Agreement
incorporated therein by reference together with the Rental Payment Schedule attached to the
Schedule are herein referred to collectively as the "Lease", and the Lease and the Acquisition
Pund Agreement aze referred to collectively as the "Transaction Documents."
Based on the foregoing, I am of the following opinions:
1. Lessee is a public body corporate and politic, duly organized and existing under
the laws of the State, and [has a substantiat amount of the foliowing sovereign powers: (a) the
power to tax, (b) the power of eminent domain, and (c) police power] [is a political subdivision of
a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended
(The "Code") and the obligations of Lessee under the Agreement will constitute an obligation of
Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the
Code].
2. Lessee has the requisite power and authority to lease and acquire the Equipment
and to execute and deliver the Transaction Documents and to perform its obliga6ons under the
Lease.
#219845vll (Godt Entity Master Lease) D-1
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3. The Lease has been duly autfiorized, approved, executed and delivered by and on
behalf of L,essee and the Transaction Documents are valid and binding obligations of Lessee
enforceable in aceordance with their respective terms.
4. The authorization, approval, execufion and delivery of the Transacrion Documents
and a11 other proceedings of Lessee relating to the transactions contemplated thereby have been
performed in accordance with all open meeting laws, public bidding laws and all other applicable
state or federal laws; and
5. There is no proceeding pending or threatened in any court or before any
govemmental authority or azbitration boazd or hibunal that, if adversely detenniued, would
adversely affect the transactions contemplated by the Transaction Documents or the security
interest of Lessor or its assigns, as the case may be, in the Equipment or other collatera7
thereunder.
[6. The portion of rentals designated as and constituting interest paid by Lessee and
received by Lessor is excluded from Lessor's gross income for federal income tax purposes
under Secfion 103 of the Code and is exempt from State of personal income
taxes; and such interest is not a specific item of tax preference or other collateral for purposes of
the €ederal individual or corporate alternative minimuxn tases.]
All capitalized terms herein shall have the same meanings as in the Transaction
Documents unless otherwise provided herein. Lessor and its successors and assigns, and any
counsel rendering an opinion on the tas-exempt status of the interest components of the Rental
Payments, are entitled to rely on this opuuon.
Printed Name:
Fum:
Signature:
Dated:
Address:
Telephone No.:
#219845v11 (Godt Entity Master Lease) D-Z
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ESSENTIAL USE/SOURCE OF FUNDS CERTIF'ICATE
Banc of America Leasing & Capital, LLC
555 California Street, 4th Fioor
San Franciscq Califomia 94104
Re: Master Equipment Lease/Purchase Agreement dated
between Banc of America Leasing & Capital, LLC and
("Lessee ") and Schedule of Properiy No.
dated
This certificate confirms and affirms that the Equipment described in the Agreement
referenced above is essential to the functions of L,essee or to the services Lessee provides its
citizens. Further, Lessee has an immediate need for, and expects to make immediate use of,
substanrially all such Equipment, which need is not temporary or expected to dixnanish in the
foreseeable future. Such Equipment will be used by Lessee only for the purpose of perfornvng
one or more of Lessee's governmental or proprietary functions consistent with the permissible
scope of its authority.
Lessee expects and anticipates adequate funds to be auailable for all future payments or
rent due after the current budgetary period.
Signature:
Name:
Title:
#219845v11 (GodtEntityMasterLease) E-1
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ACCEPTANCE CEBTIFTCATE
Banc of Axnerica Leasing & Capitai, LLC
555 California Street, 4th Floor
San Franciscq Califoruia 94104
Re: Schedule of Property No. , dated
to Master Equipment Lease/Purchase Agreement, dated as of
, between Banc of America Leasing & Capital, LLC,
as Lessor, and
as Lessee.
I,adies and Gentlemen:
In accordance with the Master Equipment Lease/Purchase Agreement (the `Agreement"),
the undersigned L,essee hereby certifies and represents to, and agrees with Izssor as follows:
1. All o£ the Equipment (as such term is defined in the Agreement) listed in the
above-referenced Schedule of Property (the "Schedule ") has been delivered, installed and
accepted on the date hereaf.
2. Lessee has conducted such inspection andlor testing of the Equipment listed in tiae
Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the
Equipment for all purposes.
3. Lessee is-currently maintaining tYie insuxance coverage required by Section 7.02 of
the Agreement.
4. No event ar condition that constitutes, or with notice ar lapse of time, oz both,
would constitute, an Event of Default (as defined in the Agreement) exists at the date hereo£
Date:
LESSEE:
1► •�iLai
Title:
(Seal)
#219845v11 (Godt Entity Master Lease) F-I
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NOTICE AND ACKNOWLE�GEMENT OF ASSIGNMENT
DATED
BAI�iC OF AMERICA LEASII3G & CAPITAL, LLC ("Asszgnor") hereby gives notice
that it has assigned and sold to � �( Assignee ") all of Assignor's
right, tifle and interest in, to and under [Schedule of Property] No. ��, dated
( )(the "Lease'� to the Equipment Lease Agreement ("Equipment
Lease") dated as of [ � , between Assignor and
( "Lessee ").
For purposes of this Notice and Acknowledgment of Assignment (the
"Acknowledgment"), "Lease" means collectively the Lease identified above, together with all
e�ibits, schedules, addenda and attachments related thereto, and all certifications and other
documents delivered in connection therewith. The term "Lease" specifically excludes all other
[Schedules of Property] entered into under the Equipment Lease and rentai payments other than
with respect to the [Schedule of Proper[y] identified above. Each capitalized term used but not
defined herein has the meaning set forth in the Equipment Lease described above.
1. Pursuant to the authority of Resolution
adopted on
Lessee hereby [consents to and] acknowledges the effect of the
assignment of the Lease and absolutely and unconditionally agrees to deliver to Assignee a11
rental payxnents and other amounts coming due under the Lease in accordance with the terms
thereof on and after the date of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have a11 the nights of Lessor under
the Lease and all related documents, inciuding, but not limited to, the rights to issue or receive all
notices and reports, to give all consents or agreements to modifications thereto, to receive title to
the equipment in accordanae with the terms of the Lease, to declaze a default and to exercise all
remedies thereunder; and (ii) except as provided in Secfion [ � of the Lease, the obligations
of Lessee to make rental payxnents and to perform and observe the other covenants and
agreements contained in the Lease sha11 be absolute and unconditional in all events without
abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Acknowledgment, the following
information about the Lease is true, accuzate and complete:
Number of Rental Payments Remaining —
Amount of Each Rental Payment —
Total Amount of Rents Remaining —
6 Include the consent langua�e only if Lessee has the ri�t to consent to the assignment pursuant to the Master
Lease.
#219845v11 (Gov'tEnrityMasterLease) G-1
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Frequency of Rental Payments —
Next Rental Payment Due —
Funds Remaining in Escrow Fund —
4. The Lease remains in full force and effect, has not been atnended and no
nonappropriation or event of default (or event which with the passage of time or the giving of
norice or both would consritute a default) has occurred thereunder.
5. Any inquiries of Lessee related to the Lease and any requests for escrow
disbursements, if applicable, and all rental payments and other amounts coming due pursuant to
the I,ease on and after the date of this Acknowledgment should be remitted to Assignee at the
following address (or such other address as pzovided to Lessee in writing from time to time by
Assignee): -
ACKNOWLEDGED AND AGREED:
LESSEE:
(FOR EXHIBIT PURPOSES ONLY]
By:
Name:
Title:
ASSIGNOR: BANC OF AMERICr� LEASING & CAPITAL, LLC
(FOR EXHIBIT PURPOSES ONLY]
.
. �4'
T1t1E:
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