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HomeMy WebLinkAboutContract 40565CITY SECRETARY CONTRACT NO. 4 MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT By and Between BANC OF AMERICA LEASING & CAPITAL, LLC as Lessor, CITY OF FORT WORTH, TEXAS as Lessee Dated as of December 20, 2002 CLOSING INDEX 1. Master Equipment Lease/Purchase Agreement 2. Schedule A No. I 3. Acceptance Certificate 4. Essential Use Certificate 5. Revenue and Expense Certificate 6. General Certificate 7. Signature and No -Litigation Certiftcate 8. Opinion of Counsel to Lessee 9. Opinion of Counsel to Lessor 10. Resolution of Lessee 11. Financing Statement(s) 12, Information Report on Form 8038-G (or 8038-GC) 13, Cross -Receipt 14. No -Arbitrage Certificate 15. I Acquisition Fund Agreement OFFICIAL +RECORD CITY SECRETARY FT. WORTH, TX . j MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT By and Between BANC OF AMERICA LEASING &CAPITAL, LLC as Lessor, and CITY OF FORT WORTH, TEXAS as Lessee Dated as of December 20, 2002 MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT THIS MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT (the "Agreement's, dated as of December 20, 2002, is by and between BANC OF AMERICA LEASING & CAPITAL, LLC ("Lessor'), and CITY OF FORT WORTH, TEXAS ("Lessee'). WITNESSETH: WHEREAS, Lessee is a political subdivision of the State of Texas, and is authorized and empowered under the laws of the State, particularly the Public Property Finance Act, Subchapter A. Chapter 271, Texas Loc, Gov't. Code Ann. (the "Act') to lease, as lessee, to purchase and receive, and to control and dispose of personal property, whether movable or fixed, considered by the City Council of Lessee to be necessary, useful or appropriate to one or more governmental purposes of Lessee. WHEREAS, the parties hereto desire that Lessee from time to time lease from Lessor Equipment (defined below) to be identified by Lessee on the terms and conditions set forth below, which Equipment the City Council of Lessee shall determine is necessary, useful and appropriate to one or more governmental purposes of Lessee and shall be specifically identified in any Schedule A (as hereinafter defined) attached hereto and made a part hereof, and WHEREAS, Lessee. shall make Rental Payments (as hereinafter defined) and certain other payments directly to Lessor for the possession, use and ownership of the Equipment; and WHEREAS, neither this Agreement nor any of Lessee's obligations hereunder or under any documents executed in connection herewith shall constitute a debt or liability obligation of the State (as hereinafter defined) or Lessee or any political subdivision of the State, or a pledge of the faith and credit or taxing power of the State, or Lessee, or any political subdivision of the State, but shall be special obligations secured solely from the Surplus Net Revenues (as hereinafter defined) of Lessee and the Equipment in accordance with the provisions hereof; and WHEREAS, as security for the payment of all of Lessee's obligations under this Agreement Lessee shall assign to Lessor a first priority perfected security interest in the Equipment; NOW, THEREFORE, for and in consideration of the premises and of the covenants hereinafter contained, and other valuable considerations, the parties hereto agree as follows: SECTION 1. DEFINITIONS For the purposes of this Agreement and related documents, the following definitions will apply: 1.1 Acceptance Certificate. A Certificate of the Lessee, in substantially the form set forth on Attachment A to Schedule A hereunder by which Lessee accepts delivery of the Equipment and authorizes Lessor to disburse funds for said Equipment. 1.2 Acceptance Date. Unless otherwise agreed to by the prior written consent of Lessor, the date on which the Acceptance Certificate is executed and delivered by the Lessee to the Lessor pursuant to the terms of this Agreement. 1.3 Additional Rents. The amounts, other than Rental Payments, payable by Lessee pursuant to the provisions of this Agreement, as set forth in Section 4.7 hereof. 1.4 Authorized Officer. (i) In the case of Lessor, any President or Vice President, and when used in reference to an act or document of Lessor, also means any other person authorized to perform the act or sign the document, and (ii) in the case of Lessee, the City Manager, the Assistant City Manager or the Director of Finance, or any other person authorized by the City Council of the Lessee. 1 1.5 Closing. The date of delivery of all executed documents related to this Agreement and any Schedule A hereunder as required under this Agreement and such related Schedule A. 1.6 Contract Price. The ail -inclusive price of an item of Equipment, including the cost of installation, freight, taxes and training (such costs not to exceed 20% of the total cost of the Equipment), but excluding the cost of any service contract, as set forth in the applicable Purchase Agreement. i.i Determination of Taxability. One of the following determinations, made in regard to section 103 of the Code (as defined herein) to the effect that by reason of any action or inaction by the Lessee or any violation by the Lessee of any of its covenants or representations in this Agreement or any misrepresentation in any certificate furnished in connection with any Schedule A hereunder, the interest payable on such Schedule A is includable in the gross income of owner of such obligation: (i) a final determination, decision or decree by the Commissioner or any District Director of Internal Revenue, or by any court of competent jurisdiction, which is not subject to further review, or (n) an opinion of Lessee's bond counsel furnished to the Lessee. 1.8 Equipment. The goods enumerated on each Schedule A that is now or may hereafter from time to time become attached hereto and incorporated herein by reference, together and with any and all additions, modifications, attachments, replacements and parts thereof. 1.9 Equipment Acquisition Account. The account so designated and established by the Lessee with the Lessor pursuant to Section 14.2 hereof. 1.10 Lease Proceeds. With respect to any Schedule A, the total amount of money or other consideration to be paid or provided by Lessor, in no event to exceed the Maximum Contract Amount, for application in accordance with such Schedule A and Section 14 hereof, including (a) the. Contract Price of each item of Equipment set forth on such Schedule A payable to the Vendor thereof upon acceptance by Lessee and (b) the amount, if any, paid by Lessor and applied to the reasonable costs of issuance of such Schedule A. 1.11 Lease Term. With respect to this Agreement and any Schedule A hereunder, the term specified in the applicable Schedule A in accordance with Section 3 hereof. 1.12 .Lease Term Commencement Date. The date as set forth on each Schedule A hereto. 1.13 Lease Term Interest Rate. The interest rate per annum on the Lease Proceeds as set forth on each Schedule A hereto as adjusted pursuant to the provisions of Section 4.4 hereof. 1.14 Maximum Amount. The amount as set forth on each Schedule A hereto. 1.15 Operation and Maintenance Expenses. All actual operation and maintenance expenses of the Lessee incurred by the Lessee in any particular fiscal year or period to which the Lease Term is applicable or charges made therefor during that fiscal year or period, but only if such charges are made in conformity with generally accepted accounting principles, including amounts reasonably required under generally accepted accounting principles to be set aside in reserves for items of operation and maintenance expenses the payment of which is not then immediately required. Operation and maintenance expenses fees do not include any items for any capital project, depreciation or obsolescence charges or reserves therefor, amortization of intangibles or other bookkeeping entries of a similar nature, principal amortization or interest expense, costs or charges made for capital additions, replacements, betterments, extensions or improvements to or retirements from the Equipment which under generally accepted accounting principles are not properly chargeable to the capital account or the reserve for depreciation, and do not include losses from the sale, abandonment, reclassification, revaluation or other disposition of any properties of the Lessee or such property items, including taxes, which are capitalized pursuant to the then existing accounting practice of the Lessee. 1.16 Permitted Investments. Any investment authorized pursuant to the Public Funds Investment Act, V.T.C.A. Government Code .§2256.001 etand the written investment policy of the Lessee. -2- 1917 Purchase Agreement or Purchase Agreements. Each of the purchase agreements between Lessee and the Vendors of the Equipment. 1.18 Purchase Price. The amount which Lessee may from time to time pay or cause to be paid to Lessor in order to purchase the Equipment, as provided in Section 5 hereof, such amount being set forth in the Schedule A relating to such Equipment, plus all other amounts then owed hereunder by Lessee as Additional Rents or otherwise. 1.19 Rebate Account. The account so designated by Lessee if so established pursuant to this Agreement. 1.20 Rental Payments. The scheduled payments (but excluding indemnifications and reimbursements and Additional Rents payable to Lessor hereunder) payable by Lessee pursuant to the provisions of this Agreement and each Schedule A. 1.21 Revenues. Ail revenues, income and receipts of the Lessee from solid waste fund revenues. 1.22 Schedule A. The documents} now or hereafter from time to time attached hereto and incorporated herein by reference and signed by the parties which, among other things, describes the equipment to be leased by the Lessor to the Lessee, describes the Lease Term for the Equipment listed thereon and Lessee's obligations with respect to payment and which shall be numbered consequentially from No. I upward. 1.23 State. The State of Texas. 1.24 Surplus Net Revenues. The Revenues of the Lessee available after deducting from Revenues the sum of the Operation and Maintenance Expenses and all other obligations of the Lessee lawfully payable from Revenues and senior in priority to the Lessee's pledge of Surplus Net Revenues hereunder. 1.25 Taxable Rate. The interest rate representing the equivalent yield to the Lessor of the Lease Term Interest Rate if the interest component of the Rental Payments is included in the gross income of the Lessor under the Code, provided however, in no event shall the taxable rate exceed the maximum rate permitted by law as set forth in Section 4.4 hereof 1.26 Total Contract Price. The amount as set forth in each Schedule A hereto. 1.27 UCC. The State's Uniform Commercial Code. 1.28 Vendor or Vendors. The manufacturer or manufacturers of an item of Equipment, as well as the agents or dealers of the manufacturer, from whom Lessor has purchased or is purchasing items of Equipment. .SECTION 2. LEASE OF EQUIPMENT 2.1 Acquisition of Equipment; Conditions Precedent. (a) Lessee either has ordered or. shall order the Equipment pursuant to one or -more Purchase Agreements from one or more Vendors. Lessee shall remain liable to each such Vendor with respect to its duties and obligations in accordance with the Purchase Agreement, and as among Lessor and Lessee, Lessee shall bear the risk of loss with.respect to any loss or claim relating to any item of Equipment covered by any Purchase Agreement. (b) The obligation of Lessor to purchase, pay or provide other consideration for, or provide an item of Equipment is subject to the receipt by Lessor of the following documents and the satisfaction of the following conditions, all of which shall be satisfactory to Lessor in form and substance: -3- (i) Lessee shall have accepted the Equipment by delivery to Lessor of an Acceptance Certificate, whereupon the item of Equipment shall immediately become subject to and governed by the provisions of this Agreement and the related Schedule A; (ii) There shall exist no Event of Default (as defined in Section 12.1 hereof) under this Agreement or any Schedule A hereunder, or any condition, event or act which with notice or lapse of time, or both, would become an Event of Default thereunder which has not been remedied or waived; There shall exist no III adverse change in the financial condition of Lessee; (iv) This Agreement, the applicable. Schedule A (including all attachments) and an acquisition fund agreement duly executed by Lessee; (v) Evidence of insurance as required under Section 6.7 hereof; and (vi) Financial information and such other documents, instruments or other items as may be reasonably required by Lessor. 2.2 Lease of Equipment. Upon execution of each Schedule A, Lessor shall provide the consideration specified in such Schedule A to be provided by it to acquire the Equipment and to lease to Lessee, and Lessee shall lease from Lessor the Equipment, all in accordance with the provisions of this Agreement and the related Schedule A, to have and to hold for the Lease Term. Lessee hereby acknowledges and agrees that Lessor shall retain a perfected first priority security interest in the Equipment in accordance with this Agreement. The execution and delivery of this Agreement and any Schedule A hereunder shall not obligate Lessor to execute and deliver any Schedule A or to provide any funds or other consideration with respect to any Schedule A unless and until such Schedule A has been executed and delivered by all other parties thereto and all conditions set forth in this Agreement and such Schedule A have been satisfied. SECTION 3. LEASE TERM 3.1 Lease Term. The Lease Term applicable to any Schedule A shall commence on the Lease Term Commencement Date and shall terminate on the date set forth on such Schedule A unless terminated earlier pursuant to Section 3.2 hereof. 3.2 Termination of Lease Term. The Lease Term applicable to any Schedule A will terminate upon the earliest to occur of any of the following events: (a) The expiration of the Lease Term with respect to all items of Equipment. described in a Schedule A and the non -renewal thereof in accordance with the terms and conditions of this Agreement; or (b) The exercise by Lessee of the option granted under the provisions of Sections 5.1 or 6.8 hereof to purchase the Equipment identified in such Schedule A; or (c) Lessor's election to terminate this Agreement under Section 12.2, or Section 12 hereof due to Lessee`s default hereunder; or (d) The payment by Lessee of all Rental Payments in accordance with this Agreement with respect to such Schedule A and any Additional Rents required to be paid by Lessee hereunder. SECTION 4. RENTAL PAYMENTS of Rental Payments Secured Solely from Surplus Net Revenues of Lessee and the Equipment. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments, Additional Rents or any other amounts due hereunder, including, without limitation, amounts due under Section 7.2, or upon any acceleration, and under any Schedule A shall be secured solely from Surplus Net Revenues and the Equipment and -4- shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything construed herein constitute a pledge of the general tax revenues, funds or moneys of Lessee. No provision, covenant or agreement contained in this Agreement or any obligation herein imposed on Lessee, or the breach thereof, shall constitute or give rise to or impose upon Lessee a pecuniary liability, a charge upon its general credit or taxing powers, (if any), or a pledge of its general revenues and Lessor acknowledges that Lessor shall never have the right to demand payment of any amounts due under this Agreement or any documents executed in connection herewith, out of any funds raised or to be raised by taxation, or from any source other than Surplus Net Revenues. In making the provisions, covenants and agreements set forth in this Agreement, Lessee has not obligated itself except with respect to the Equipment and the application of Rental Payments to be paid by Lessee hereunder. 4.2 Amount and Times of Payment. As rental for the Equipment, Lessee hereby agrees to pay Lessor the amounts specified in each Schedule A at the times and in the manner set forth therein. 4.3 Allocation of Interest. A portion of each Rental Payment shall be allocated to interest in accordance with the amortization schedule attached to the Schedule A and its corresponding Acceptance Certificate. 4A Lease Term Interest Rate, The Rental Payments shall bear interest during the Lease Term at the rate set forth in each Schedule A; provided, however, in the event of a Determination of Taxability, such interest rate set forth in each Schedule A shall automatically increase to the Taxable Rate retroactive to the date of the occurrence of the Determination of Taxability and Lessee will pay such additional amount as will result in the Lessor receiving the interest component of the Rental Payments at the Taxable Rate; provided, further, that such interest rate set forth in each Schedule A or such interest rate set forth in each Schedule A as increased by the terms hereof, respectively, shall never exceed the then maximum interest rate allowed for similar governmental obligations pursuant to Chapter 1204, Texas Government Code, as amended, or other applicable laws in effect as of the date of such Schedule A or as of the date of any increase to such interest rate, respectively. 4.5 Place of Payments. All payments required to be made to Lessor hereunder shall be made at Lessor's principal office or as may be otherwise directed by Lessor or its assignee. 4.6 Late Payment. Should Lessee fail to pay any part,of the Rental Payments or any other sum required to be paid by Lessor on or before the due date thereof, such unpaid amount shall continue to accrue interest at the maximum rate allowed under Texas law until paid. 4.7 Additional Rents. Lessee shall pay to Lessor, as additional rents (the "Additional Rents' hereunder, in addition to the Rental Payments payable by Lessee, such amounts in each year as shall be required by Lessor in payment of any reasonable costs and expenses, incurred by Lessor in connection with the execution, performance or enforcement of this Agreement, the lease of the Equipment to Lessee including but not limited to payment of all reasonable fees, costs and expenses and all reasonable administrative costs of Lessor inconnection with the Equipment, reasonable expenses (including, without limitation, reasonable attorneys' fees and disbursements), reasonable fees of auditors, insurance premiums not otherwise paid hereunder and all other reasonable, direct and necessary administrative costs of Lessor or charges required to be paid by it in order to comply with the terms of, or to enforce its rights under, this Agreement and any Schedule A hereunder; provided, however, it is expressly understood and agreed by Lessor and Lessee, that any Additional Rents payable hereunder shall be limited to such costs and expenses related to or associated with the execution and delivery of any Schedule A or any default by Lessee under the terms of this Agreement or any Schedule A hereunder and nothing herein shall be construed as authorizing Lessor to charge Lessee for any expenses incurred by Lessor in the normal course of business in the administration of this Agreement and any Schedule A hereunder. Such Additional Rents shall be billed to Lessee by Lessor from time to time, together with a statement certifying that the amount so billed has been paid by Lessor for one or more of the items described, or that such amount is then payable by Lessor for such items. Undisputed, amounts so billed shall be due and payable by Lessee within sixty days after receipt of the bill by Lessee. 4.8 Abatement of Payments. 'There will be no abatement or reduction of payments by Lessee for any reason, including but not limited to, any defense, recoupment, setoff, counterclaim, or any claim (real or imaginary) arising out of or related to any defects, damages, malfunctions, breakdowns or till of the Equipment. Lessee - 5 - assumes and shall bear the entire risk of loss and damage to the Equipment from any cause whatsoever, it being the intention of the parties that the Rental Payments shall be made in all events unless the obligation to make Rental Payments is terminated as otherwise provided herein. 4.9 Rental Payments to Be Unconditional. The obligations of Lessee to make payment of the Rental Payments and all other payments and fees due hereunder, as well as to perform and observe all other covenants hereunder, shall be absolute and unconditional in all events, without abatement, diminution, deduction, set-off or defense for any failure of the Equipment to be delivered or installed, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation, destruction or unforeseen circumstances. Notwithstanding any dispute between Lessee and Lessor, any vendor or any other person, Lessee shall make all Rental Payments when due and shall not withhold any Rental Payments pending final resolution of such dispute, nor shall Lessee assert any right of set-off or counterclaim against its obligation to make such payments required under this Agreement. 4.10 Appointment of Servicer. Lessor shall have the right to designate an entity to act as the "Servicer" for the collection of Rental Payments payable by Lessee, the enforcement of remedies or the distribution of funds to one or more holders of interests in this Agreement, all as provided herein. Any Servicer appointed under this Section shall be a trust company or a bank having the powers of a trust company, having a capital and surplus of not less than $25,000,000. Any such Servicer shall notify Lessee and Lessor of its acceptance of the appointment and, upon giving such notice, shall become Servicer, vested with all the property, rights and powers of the Servicer hereunder, without any further act or conveyance. Such Servicer shall execute, deliver, record and file such instruments as are required to confirm or perfect its acceptance hereunder and set forth its duties hereunder. SECTION 5. PREPAYMENT; PURCHASE 5.1 Purchase Rights. Lessee shall be entitled to full title and all ownership interests in the Equipment identified on a particular Schedule A, and Lessor's security interest therein shall be terminated: (a) Upon payment in full of all Rental Payments of the applicable Schedule A and all other amounts due under this Agreement, with respect to such Schedule A; or (b) Upon written notice by Lessee delivered at least thirty (30) days in advance of any date on which a Rental Payment is due, and upon the payment on such date of the Rental Payments due and the Purchase Price. 5.2 Optional Prepayment, From and after 60 months from the Lease Term Commencement Date, Lessee shall have the right to prepay the outstanding principal balance of each Schedule A hereunder, in full at ariy time or in part from time to time, provided, that as conditions precedent to Lessee's right to make, and Lessor's obligation to accept, any such prepayment: (i) Lessor shall have actually received the notice required in Section 5.1(b) above providing the amount of principal which will be prepaid (the "Prepaid Principal') and the date the "Prepayment Date') on which the prepayment will be made; (ii) each prepayment of principal shall be in the amount of $100,000.00 or a larger integral multiple of $5,000.00 (unless the prepayment retires the outstanding balance of such Schedule A in full); and (iii) each such prepayment shall be in the amount of 100% of the principal amount to be prepaid, plus accrued unpaid interest thereon to the Prepayment Date, and plus any other sums which have become due to Lessor under such Schedule A on or before the Prepayment Date but have not been paid, provided, however, in no event shall any prepayment cause the interest rate on any Schedule A to exceed the maximum interest rate allowed for similar governmental obligations pursuant to Chapter 1204, Texas Government Code, as amended, or other applicable laws in effect as of the date of such Schedule A. All prepayments of principal shall be applied to principal in inverse order of maturity. 593 Consummation of Purchase. Lessor's security interest in the Equipment identified in a particular Schedule A shall be terminated and released automatically in conjunction with the receipt of the full Purchase Price or the final Rental Payment due thereunder unless an Event of Default hereunder shall have occurred and be continuing as of such date. Such date may at the discretion of Lessor be extended for such additional period as Lessor's counsel reasonably determines to be necessary to reflect the impact of, and avoid the risks related to, bankruptcy -related laws. On such date, Lessor shall deliver to Lessee such deeds, termination statements, bills of - 6 - sale and other documents and instruments as Lessee shall reasonably require to evidence the transfer of all right, title and interest of Lessor in such Equipment to Lessee free and clear of all liens and encumbrances created by or arising, directly or indirectly, through Lessor. S.4 Mandatory Prepayment. Subject to Section 13.1, all or substantially all of the assets of Lessee, including Lessee's interest in this Agreement and the Equipment, may be acquired in any manner by another entity, subject to the opinion of counsel acceptable to Lessor as to the continued exclusion from gross income of the interest component of the Rental Payments. However, if all or substantially all of the assets of Lessee, including Lessee's interest in this Agreement and the Equipment, are acquired in any manner by another entity, Lessee may be required, at the direction of Lessor to prepay in whole the Purchase Price, 5.5 Eminent Domain by Lessee. Lessee expressly agrees that in connection with any exercise by Lessee of its eminent domain powers, to the extent permitted by law, the fair market value of the Equipment shall be the sum of all remaining Rental Payments. SECTION 6. RESPONSIBILITIES OF LESSEE 6.1 Care and Use of Equipment. Lessee shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unit for use. Subject to the terms of Section 6.5 hereof, any and all such additions to or replacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shall be subject to all the terms and conditions of this Agreement and included in the term "Equipment" as used in this Agreement or in any Schedule A hereunder. If requested by Lessor, Lessee shall enter into or cause to be entered into, and maintained in full force and effect during the term of this Agreement, standard maintenance contracts satisfactory to Lessor covering the Equipment and shall comply with all its obligations thereunder. - Lessee shall furnish evidence to Lessor of such signed maintenance agreement at or prior to the date of this Agreement and the payment of all charges and premiums therefor. Substitute maintenance may be used if necessary and if first approved by Lessor in writing. Upon the early termination of this Agreement pursuant to Section 12.2, Lessee shall return the Equipment at its sole expense to Lessor at a place designated by Lessor in the same condition as originally received, ordinary wear and tear excepted, and in a condition which will permit,the Lessor to. be eligible for such standard maintenance contract without incurring any expense to repair or rehabilitate the Equipment. 6.2 Inspection. Lessor shall have the right upon reasonable prior notice to Lessee to enter onto and upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal business hours. 6.3 Utilities. Lessee shall pay all charges for gas, water, steam, electricity, light, heat or power, telephone or other utility service furnished to or used on or connection with the Equipment during the Lease Term. There shall be no abatement of Rental Payments on account of interruption of any such services. 6.4 Taxes. Lessee agrees to pay when due any and all taxes relating to the Equipment and Lessee's obligations hereunder, including but not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes licenses and charges imposed on the ownership, possession or use of the Equipment by any governmental body or agency, together with any interest and penalties, whether the taxes assessed are assessed against Lessor or Lessee, other than taxes on or measured by the net income of Lessor. 6.5 Alterations. Without the prior written consent of Lessor, which consent shall not be unreasonably withheld, Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be removed without materially damaging the functional capabilities or economic value of the Equipment. Upon return of the Equipment and at Lessor's request, Lessee at its sole cost and expense, will remove all alterations, additions and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was furnished, ordinary wear and tear excepted. 6.6 Transportation and Installation Charges. Lessee shall be responsible for all charges relating to the transportation of the Equipment to Lessee's location and the installation at such location. Lessor may at its option either prepay such charges and invoice Lessee or forward invoices to Lessee as they are received and Lessee shall remit payment within ten (10) days upon Lessee's receipt of same. 6.7 Insurance. Lessee shall, to the extent not covered or addressed by any self-insurance program of Lessee, during each Lease Term maintain or cause to be maintained (a) casualty insurance naming the Lessor and its assigns as additional insured and loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the Purchase Price of the Equipment and with such deductibles as Lessor may require in its sole discretion; (b) liability insurance that protects Lessor from liability in all events in form and amount satisfactory to Lessor; and (c) worker's compensation coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may self -insure against the risks described in clause (a). Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout each Lease Term. Lessee. shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation or modification. 6.8 Risk of Loss. Lessee shall bear all risk of loss to the Equipment, after delivery of the Equipment to Lessee, and in the event of loss or damage thereto, Lessee shall as its option either (i) continue to make the Rental Payments due hereunder and repair or replace the Equipment as mutually agreed between Lessee and Lessor, or (ii) purchase the Equipment for the Purchase Price. 6.9 Performance by Lessor of Lessee's Responsibilities. Any performance required of Lessee or any payments required to be made by Lessee may, if not timely performed or paid, be performed or paid by Lessor, and in that event, Lessor shall be immediately reimbursed as Additional Rents payable under Section 4.7 by Lessee for such payments and for any costs and expense, legal or otherwise associated with the payments or other performance by Lessor, with interest per annum thereon at the Lease Term Interest Rate plus 3%. 6.10 Financial Statements. Lessee shall keep its books and records in accordance with generally accepted accounting principles. Lessee agrees that it will furnish Lessor: (a) Lessee's current audited fmancial statements within 180 days of each fiscal year end including (i) a balance sheet, (ii) statement of revenues, expenses and changes in fund balances, (iii) statement of cash flows, (iv) operating fund budget analysis, and (v) appropriate notes, schedules and attachments to the financial statements; (b) within 90 days of each fiscal year end a copy of the annual budget for the then current fiscal year; and (c) such other financial information relating to the ability of the Lessee to continue performing hereunder (as submitted or approved) and permit Lessor or its agents and representatives to inspect Lessee's books and records and make extracts therefrom. Lessee represents and warrants to Lessor that all financial statements which have been delivered to Lessor fairly and accurately reflect Lessee's financial condition and there has been no material adverse change in Lessee's financial condition as reflected in the statements since the date thereof. 6.11 Sale of Equipment; Contingent Liabilities. During the term of this Agreement and any Schedule A hereunder, Lessee shall (a) not sell the Equipment; and (b) within fifteen (15) days of actual knowledge inform Lessor in writing of actual or potential contingent liabilities in excess of $100,0000 6.12 Payment of Expenses. Lessee shall be obligated to pay all legal and recording expenses of Lessor associated with the preparation and enforcement of this Agreement and any Schedule A hereunder and the expenses of any other professionals as Lessor may require in connection therewith. 6.13 Purchase Agreement; Installation Contract. Lessee shall provide to Lessor a copy of any Purchase Agreement, installation contract and the projected installation schedule and any amendments thereto entered into for the Equipment being financed pursuant to this Agreement. 6.14 Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the costs thereof.' All amounts so advanced by Lessor shall constitute Additional Rent for the Lease Term and Lessee agrees to pay such -8- amounts so advanced by Lessor with interest thereon from the date of the advance until paid at the Lease Term Interest Rate plus 3%. 6.15 Rates and Charges. Lessee will, at all times while this Agreement and any Schedule A issued hereunder are outstanding, establish, fix, prescribe and collect rates and charges for the services produced or furnished by Lessee which are reasonably expected to yield Surplus Net Revenues sufficient to satisfy the Rental Payments due thereunder. SECTION 7. DAMAGE, DESTRUCTION AND CONDEMNATION 7.1 Damage, Destruction and Condemnation. Unless the Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in this Agreement and the related Schedule A, 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 will cause the Net Proceeds (as hereinafter defined) of any insurance claim or condemnation award 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. Notwithstanding the foregoing, Lessee may elect to replace the Equipment. If the Lessee elects to replace any item of the Equipment (the "Replaced Equipment') pursuant to this Section, the replacement equipment (the "Replacement Equipment') shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. The Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through the Lessor, and shall provide to the Lessor any and all documents as the Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. The Lessor and the Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Schedule A. Lessee shall notify Lessor as soon as possible of its election to replace Equipment in accordance with the foregoing, and in any event, Lessee shall complete the documentation of Replacement Equipment 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 Section, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. 71 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 7.1, 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 the Lessor the amount of the Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall terminate and the Lessor's security interest in the Equipment shall terminate as provided in Section 3 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 shall be retained by Lessee. If Lessee shall 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 Section 4 hereof. SECTION 8. TITLE TO EQUIPMENT; SECURITY INTEREST 8.1 Title. During the Lease Term, legal title to the Equipment governed by Schedule A shall, so long as Lessee is not in default under such Schedule A and hereunder, be in Lessee. The Equipment shall be registered in the name of Lessee and, if applicable, title thereto shall be evidenced by a certiftcate of title, or such other -9- instrument as may be required by or utilized by the laws of the State to demonstrate ownership. Such certificate shall be held at all times during the term of this Agreement by Lessor and shall expressly state thereon that (a) Lessor holds a lien on the Equipment (Lessor's name and address shall appear on such certificate as "Banc of America Leasing & Capital, LLC, 2059 Northlake Parkway, 4th Floor, Tucker, GA 30084"), (b) Lessee's possession of the Equipment is subject to this Agreement, and (c) any other information required by applicable law and that may be necessary or convenient, as determined by Lessor, to establish Lessor's rights, title and interest as the first secured lienholder of the Equipment. Lessee shall at all times protect and defend, at its own cost and expense, its title to the Equipment from and against all claims, liens and legal processes of creditors of Lessee, and keep all Equipment free and clear of all such claims, liens and processes. The Equipment is and shall remain personal property. Upon the occurrence of an Event of Default under this Agreement or upon the termination of this Agreement, other than pursuant to Sections 3.2(b), 3.2(d) or 6.8 hereof, and Lessor's termination thereof (i) full and unencumbered legal title to the Equipment shall pass and revert to Lessor and Lessee shall have no further interest therein; (ii) Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of Lessee's title and interest therein; and (iii) upon request by Lessor, Lessee shall deliver possession of the Equipment to Lessor. Upon termination pursuant to Sections 3.2(b), 3.2(d) or 6.8 hereof, full and unconditional title to the applicable Equipment shall pass to Lessee, and Lessor's security interest in the applicable 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 or other interest in such Equipment. 8.2 Security A>;reement. Anything in Section 8.1 hereof to the contrary notwithstanding, Lessee hereby grants to Lessor, as security for all of the obligations of Lessee hereunder, a security interest in any and all of Lessee's right, title and interests in and to this Agreement the Equipment, all additions, attachments, accessions, substitutions and replacements thereto, and Rental Payments due or to become due hereunder, and any and all proceeds thereof, including without limitation, the proceeds of insurance thereon. The Lessee agrees to execute and deliver all documents, instruments and financing statements necessary or appropriate to perfect or maintain the security interest granted hereby. It is the intention of the parties hereto that the relationship between such parties created herein is that the Lessor be the equivalent of a secured party under Article 9 of the UCC as in effect from time to time and that the Lessor be the equivalent of a debtor under such Article 9. To that end, the parties hereto agree that this Agreement shall be governed by Article 9 as if such Article 9 were applicable hereto and that the Lessor and Lessee have the rights and obligations of a secured party and debtor, respectively, under such Article 9. 8.3 Personal Property. The Equipment is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to, or embedded in, or permanently resting upon, real property or any building thereon or any fixtures, or attached in any manner to what is permanent by any means of cement, plaster, nails, bolts, screws or otherwise. Upon request of Lessor, Lessee shall obtain, as to any place where the Equipment, in Lessee's possession, is located, a waiver from the landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment of the rights of levy or distraint thereon. 8.4 Liens. Lessee shall not directly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Equipment or any interest therein, except for the lien and security interest of Lessor therein. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time. 8.5 Inspection, Acceptance and Written Notice of Defects. Immediately, or as soon as practicable to provide time for testing, upon receipt and installation of the Equipment, Lessee shall inspect the Equipment. Unless Lessee gives Lessor written notice of each defect or other proper objection to the Equipment before the execution of the Acceptance Certificate, it shall be conclusively presumed, as between Lessor and Lessee, that the Lessee has fully inspected and acknowledged that the Equipment is in good condition and repair, has been properly. installed and is performing satisfactorily, and that the Lessee is satisfied with and has accepted the Equipment in such good condition and repair. Lessor shall not make or provide payment to any Vendor (or reimbursement to Lessee pursuant to the requirements of Section 9.2(f) hereof) of the Total Contract Price, or any portion thereof, for the Equipment, or any portion thereof, until Lessor shall have received a duly executed Acceptance Certificate of lessee in accordance with Section 14.3 hereof. - 10- i 8.6 Change in Name, Corporate Structure or Principal Place of Business. Lessee shall maintain its existence as a political subdivision of the State and Lessee shall provide to Lessor written notice of any change in its name, structure, or principal place of business thirty (30) days in advance of the date that such change is planned to take effect. This Section shall also apply to any of Lessee's assignees or subassignees permitted under Section 13.1 hereof. 8. i Location. While in the Lessee's possession, the Equipment shall be located in the places) designated in the related Schedule A pertaining thereto. SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE 9.1 Lessee's Representations, Warranties and Covenants. Lessee warrants and represents to Lessor (all such representations and warranties being continuing), as follows: (a) Lessee is a state or a duly organized and validly existing body corporate and politic and a political subdivision or agency thereof within the meaning of section 103 of the Internal Revenue Code of 1986, as amended, and the related regulations and rulings thereunder (the "Code'); (b) Lessee will exercise its best efforts to preserve and keep in full -force and effect its existence as a body corporate and politic; (c) Lessee is authorized under the Act and laws of the State to enter into this Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder; (d) Lessee has duly authorized the execution and delivery of this Agreement under the terms and provisions of the resolution of its City Council or by other appropriate official approval, and further represents, covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the enforceability of this Agreement against Lessee, and that this Agreement is a legal, valid and binding obligation of Lessee, enforceable in accordance with its terms, except to the extent limited by bankruptcy, reorganization or other laws of general application relating to effecting the enforcement of creditors' rights, and acknowledges that Lessee has granted to Lessor a security interest in the Equipment; and that Lessee has complied with any applicable public bidding/proposal requirements with respect to this Agreement and the Equipment; (e) Lessee is not in breach of or in default under any constitutional provision, applicable law or administrative rule or regulation of the State, the United States, or of any department, division, agency or instrumentality of either thereof or any applicable court or administrative decree or order, or any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument to which the Lessee is a party or to which the Lessee or any property or assets of the Lessee is otherwise subject or bound which in any material way, directly or indirectly, affects the Lessee's entering into this Agreement, or the validity thereof, the validity or adoption of the resolution authorizing Lessee to enter into this Agreement, the execution and delivery of this Agreement or other instruments contemplated thereby to which the Lessee is a party, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any constitutional provision, applicable law or administrative rule or regulation of the State, the United States, or of any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order, or any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument to which the Lessee is a party or to which the Lessee or any of the property or assets of the Lessee is otherwise subject or bound; (f) Lessee shall cause to be executed and delivered in connection with each Schedule A an opinion of its counsel and an applicable IRS Form 8038-G (or, if the Total Contract Price of the Equipment is less than $100,000 an IRS Form 8038-GC) in form and substance satisfactory to Lessor and its counsel; provided, however, that Lessor shall have the sole responsibility to cause such IRS Form 8038-G (or, if applicable, IRS Form 8038-GC) to be filed with the Internal Revenue Service not later than the fifteenth (15th) day of the second. month following the end of the calendar quarter during which this Agreement and any Schedule A hereunder was issued; -11- (g) Lessee has been fully authorized to execute and deliver this Agreement under the resolution of its City Council, and by any other appropriate official approval, and further represents, warrants and covenants that all requirements have been met, and all procedures have taken place, in order to ensure the enforceability of this Agreement, has complied with all applicable public bidding/proposal requirements, if any, with respect to this Agreement, including the lease and the acquisition by Lessee of the Equipment hereunder; (fi) The Equipment is, and during the period this Agreement is in .force will remain, personal property and, when subjected to use by Lessee hereunder, will not be or become fixtures; (i) During the Lease Term, except as otherwise permitted by this Agreement, the Equipment shall be used by Lessee only for the purpose of performing services related to its status as a political subdivision of the Sate, and consistent with the permissible scope of Lessee's authority and will not be used in an unrelated trade or business of Lessee or in the trade or business of any person or entity other than Lessee; (j) Lessee assumes full responsibility for the safety and any consequences of lack of safety with respect to the operation and maintenance of the Equipment while Lessee has the right to possession or control of the Equipment; (k) Lessee acknowledges that Lessor is acting as a financing source only with respect to the Equipment which has been selected, and the related specifications developed, by Lessee; (1) Lessee shall promptly and duly execute and deliver to Lessor such further documents, instruments and assurances and take such further action as Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and any Schedule A hereunder and to establish and protect the rights and remedies created or intended to be created in favor of Lessor hereunder. Lessor will prepare at Lessee's expense such documents or instruments for execution by Lessee; • (m) The payment of the Rental Payments or any portion thereof is not (under the terms of any lease or any underlying arrangement) directly or indirectly {i) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local government unit or payments in respect of such property; or (ii) on a present value basis, derived from payments (whether. or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit: The equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local government unit. No portion of the Contract Price for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment; and (n) The representations above shall be deemed to be made on and as of the beginning date of the Lease Term Commencement Date of each Schedule A hereunder. 9.2 Tax Matters. (a) It is the intention of the parties hereto that the interest portion of the Rental Payments received by Lessor under this Agreement and any Schedule A hereunder be and remain excludable from gross income for purposes of federal income taxation. (b) The Lessee covenants that, with respect to the law of federal income taxation, it will not intentionally perform any act that shall have the effect of terminating such exclusion from gross income of the interest portion of the Rental Payments for federal income tax purposes. (c) It is the intention of the parties hereto that during the term of this Agreement, Lessee be the sole beneficial and legal owner of the Equipment, and will report on such basis for financial accounting, federal income tax, and all other purposes. Lessor shall not take any action inconsistent with Lessee's ownership of.the Equipment for federal income tax purposes except pursuant to the exercise of remedies under Section 12.2 hereof. -12- (d) The weighted average maturity (defined in accordance with the Code) of any Schedule A will not exceed one hundred twenty percent (120%) of the weighted average reasonably expected economic life in the hands of the Lessee of the Equipment financed by Lease Proceeds derived from such Schedule A. (e) Lessee will not use the proceeds of any Schedule A under this Agreement to reimburse expenditures previously paid by Lessee, except in compliance with the requirements of Treas. Reg. 1.150-2. (f) Lessee will assure -that the proceeds of any Schedule A under this Agreement are not so used as to cause this Agreement and any Schedule A hereunder to satisfy the private loan financing test of section 141(c) of the Code. (g) Lessee will not take or permit or suffer to be taken any action to be taken if the result of the same would be to cause this Agreement and any Schedule A hereunder to be 'federally guaranteed" within the meaning of section 149(b) of the Code. (h) Lessee will not take, or permit or suffer to be taken, any action with respect to the Lease Proceeds which, if such action had reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of this Agreement would have caused this Agreement and any Schedule A hereunder to be an "arbitrage bond" within the meaning of section 148 of the Code. (i) If the Lease Proceeds of any Schedule under this Agreement (i) have all been expended on the date hereof for the purpose set forth herein, or (ii) do not exceed $1,000,000.00, Lessee shall not be required to provide an issuer's certification pursuant to Treasury Regulation 1.148-2(b)(2)(ii)(A) or (B), respectively. 0) In the event that Lessee does not spend the moneys in the Equipment Acquisition Account within six (6) months of the date the deposit is made pursuant to Section 14.2 hereof, Lessee will, if required by section 148(f) of the Code to pay rebate: (i) establish a Rebate Account and deposit the Rebate Amount (as defined in Section 1.148-3(b) of the Federal Income Tax Regulations) not less frequently than once per year after the Lease Commencement Date; (ii) shall rebate to the United States, not less frequently than once every five (5) years after the Lease Commencement Date, an amount equal to at least 90% of the Rebate Amount and within 60 days after payment of all Rental Payments or the optional prepayment price calculated pursuant to Section 5.2 hereof (the "Optional Prepayment Price'D 100% of the Rebate Amount, as required by the Code and any regulations promulgated thereunder. Lessee shall determine the Rebate Amount, if any, at least every year.and upon payment of all Rental Payments or the Optional Prepayment Price and shall maintain such determination, together with any supporting documentation required to calculate the Rebate Amount, until six (6) years after the date of the final payment of the Rental Payments or the Optional Prepayment Price. (k) The representations above shall be deemed to be made on and as of the beginning date of the Lease Term Commencement Date of each Schedule A hereunder. SECTION 10. INDEMNIFICATION TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF THE STATE, LESSEE HEREBY AGREES TO INDEMNIFY, PROTECT, AND SAVE LESSOR HARMLESS FROM ALL LIABILITY, OBLIGATIONS, LOSSES, CLAIMS, DAMAGES, ACTIONS, SUITS, PROCEEDINGS, COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEY'S FEES, ARISING OUT OF, CONNECTED WITH, OR RESULTING DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT AND THE EQUIPMENT, INCLUDING WITHOUT LIMITATION; THE MANUFACTURE, SELECTION, DELIVERY, POSSESSION, CONDITION, LEASE, USE, OPERATION OR RETURN OF THE EQUIPMENT. NOTWITHSTANDING ANYTHING STATED IN SECTION 3 HEREOF OR IN ANY OTHER PROVISION HEREOF, THE INDEMNIFICATION ARISING UNDER THIS SECTION SHALL CONTINUE IN FULL FORCE AND EFFECT NOTWITHSTANDING THE FULL PAYMENT OF ALL OBLIGATIONS UNDER THIS AGREEMENT OR ANY SCHEDULE A HEREUNDER. -13- SECTION 11. DISCLAIMER OF WARRANTIES 11.1 Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, TITLE OR FITNESS FOR USE OF THE EQUIPMENT, OR ANY COMPONENT THEREOF OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO AND, AS TO LESSOR, LESSEE'S LEASE AND PURCHASE OF THE EQUIPMENT SHALL BE ON AN "AS IS" BASIS. All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without limiting the foregoing Lessor shall have no responsibility or liability to Lessee or any other person with respect to any of the following: (i) any liability, loss or damage caused or alleged to be caused directly or indirectly by the Equipment, any inadequacy thereof, any deficiency or defect (latent or otherwise) therein, or any other circumstances in connection therewith; (ii) the use, operation or performance of the Equipment or any risks relating thereto; (iii) any interruption of service, loss of business or anticipated profits or consequential damages; or (iv) the delivery, operation, servicing, maintenance, repair, improvement or replacement of the Equipment. If, and so long as, no default exists under this Agreement and the related Schedule A, Lessee shall be, and hereby is, authorized during the tern of such Schedule A to assert and enforce, at Lessee's sole cost and expense, from time to time, in the name of and for the account of Lessor and/or Lessee, as their interests may appear, whatever claims and rights Lessee or Lessor may have against the Vendor or any prior title holder or possessor of the Equipment. In no event shall Lessor be liable for any loss or damage in connection with or arising out of this Agreement, any Schedule A, the Equipment, or the existence, fumishing, functioning or Lessee's use of any item or products or services provided for in this Agreement. 11.2 Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney -in -fact during the Lease Term, so long as Lessee shall not be in default hereunder, to assert from time to time whatever claims and rights including warranties of the Equipment which Lessor may have against the Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Equipment and any other entities involved in the chain of production and distribution of the Equipment, and not against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely payments under this Agreement. LESSEE EXPRESSLY ACKNOWLEDGES THAT IN LESSOR'S CAPACITY AS LESSOR HEREUNDER, LESSOR MAKES, AND HAS MADE HEREUNDER, NO REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE EXISTENCE OR AVAILABILITY OF SUCH WARRANTIES OF THE VENDOR OF THE EQUIPMENT. SECTION 12. DEFAULT AND REMEDIES 12.1 Definition of Default. Lessee shall be deemed to be in default hereunder upon the happening of any of the following events of default ("Events of Default'�r (a) Lessee shall fail to make any Rental Payment or any other sum when.due or shall fail to perform or observe any term or condition or covenant of this Agreement or any Schedule A hereto; or (b) Proceedings under any bankruptcy, insolvency, reorganization or similar legislation shall be instituted by or against Lessee, or a receiver, custodian or similar officer shall be appointed for Lessee or any of its property, and such proceedings or appointments shall not be vacated, or fully stayed, within twenty (20) days after the institution or occurrence thereof; or (c) Any representation, warranty or covenant made by Lessee is found to be incorrect or misleading in any material respect on the date made; or (d) An attachment, levy or execution is levied upon or against the Equipment; or - 14- (e) Any insurance carrier cancels any insurance on the Equipment without Lessee fast providing replacement coverage; or (f) The Equipment or any part thereof is abused, illegally used, misused, lost, destroyed or damaged beyond repair; or (g) Lessee sells, assigns, subleases, or otherwise transfers or encumbers all or any part of its interest in this Agreement or the Equipment without Lessor's prior written consent; or (h) Lessee permits a change in ownership or management control of Lessee without the prior written consent of Lessor that Lessor in good faith deems disadvantageous to Lessor; or (i) Lessee shall fail to satisfy any of Lessee's bond indebtedness or other material credit obligation when required under the instruments evidencing such obligations unless Lessee demonstrates in writing an adequate justification for its failure to satisfy, the bond indebtedness or other material credit obligation. 12.2 Remedies on Default. Upon the occurrence of any Event of Default, Lessor may exercise any one or more of the following remedies as Lessor in its sole discretion shall elect: (a) To declare the entire amount of Rental Payments hereunder immediately past due and payable as to any or all items of Equipment without any further notice or demand to Lessee; (b) Proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this Agreement or to recover for the breach thereof including the payment of Rental Payments due or to become due hereunder or any deficiency thereof following disposition of the Equipment; (c) With or without terminating this Agreement, enter and take possession of the Equipment wherever situated, without any court order or other process of law and without liability for entering the premises, and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of Lessee, and apply the proceeds of any such sale, lease, sublease, or other disposition, after deducting all costs and expenses, including court costs and attorney's fees, incurred with the recovery, repair, storage and other sale, lease, sublease or other disposition costs, toward the balance due under this Agreement; (d) Terminate this Agreement as to all or any part of the Equipment and use, operate, lease or hold the Equipment as Lessor in its sole discretion may decide; (e) Require Lessee to deliver or assemble the Equipment at a place reasonably convenient to Lessee and use or operate the Equipment for the purpose of preserving it; (f) Proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this Agreement or to recover for the breach thereof, including the payment. of all amounts due from Lessee, in which event Lessee shall pay or repay to Lessor all costs of such action or court action including without limitation, reasonable attorneys' fees and expenses; and/or (g) Take whatever action at law or in equity may appear necessary or desirable to enforce its rights with respect to the Equipment, in which event Lessee shall pay or repay. to Lessor all costs of such action or court action, including, without limitation, reasonable attorneysfees and disbursements. 12.3 Further Remedies; No Remedy Exclusive. A termination hereunder shall occur only upon notice by Lessor to Lessee and only with respect to such part of the Equipment as Lessor specifically elects to terminate in such notice. Except as to those parts of the Equipment with respect to which there is a termination, this Agreement shall remain in full force and effect and Lessee shall be and remain liable for the full performance of all its obligations hereunder. All remedies of the Lessor are cumulative and may be exercised concurrently or separately and shall survive the termination of this Agreement. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. -15- 12.4 Return of Equipment. If an Event of Default has occurred and is continuing, Lessee shall allow Lessor to recover the Equipment at a place reasonably convenient to Lessor at Lessee's sole cost and expense, including, without limitation, all costs of transportation. The cost of all transportation of Equipment of any nature prior to the expiration or prior termination of an Agreement will be at Lessee's sole expense. In the event that Lessee makes modifications to a site after any Equipment has been installed therein and such modifications impede the removal of the Equipment, the cost of removing the impediments and restoring the site shall be the sole expense of Lessee. SECTION 13. ASSIGNMENT, SUBLEASING AND SELLING 13.1 No Sale, Assignment or Subleasing by Lessee. Lessee agrees not to sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Agreement or the Equipment (except for the lien and security interest of Lessor therein) or to remove the Equipment from its place of installation without Lessor's prior written consent which shall not be unreasonably withheld. [Need to discuss use by residents.] 13.2 Assignment by Lessor. Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under this Agreement and any Schedule A, its security interest in the Equipment subject to each such Schedule A, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees by Lessor, without the necessity of obtaining the consent of Lessee; provided, however, that any such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made with notice to Lessee and in a manner that conforms to any applicable State law. Nothing in this Section shall be construed, however, to prevent Lessor from executing any such assignment, transfer, or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust, interests in which are offered and sold in a private placement or limited offering only to investors whom Lessor reasonably believes are qualified institutional buyers or accredited investors within the meaning of the applicable federal securities law; provided further, however, that in any event, Lessee shall 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. No assignment, transfer or conveyance permitted by this Section shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, however, 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 respect to the Rental Payments payable under this Agreement and any Schedule A, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank or trust company as trustee or paying agent. During the Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form 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, counterclaim 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 Schedule A and all rights in, to and under the Schedule A related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Schedule A, but such option does not permit the assignment of less than all of Lessor's interests in the Equipment listed►n a single Schedule A. SECTION 14. APPLICATION OF LEASE PROCEEDS; ACCEPTANCE 14.1 Application of Lease Proceeds. At the Closing of each Schedule A hereunder, Lessor shall pay or provide the Lease Proceeds in the amount and to Ehe Lessee for deposit into the Equipment Acquisition Account. 14.2 Equipment Acquisition Account. Lessor and Lessee agree that in order to ensure that moneys sufficient to pay the Total Contract Price of the Equipment under any Schedule A hereto will be available for the purpose of acquiring such Equipment when required, on or before the Lease Term Commencement Date, Lessor shall deposit or cause to be deposited into the Equipment Acquisition Account hereby established by Lessee, or established pursuant to the Acquisition Fund Agreement executed in connection herewith the sum set forth on such Schedule A. The moneys on hand from time to time in the Equipment Acquisition Account shall be held by the -16- Lessor in trust for the benefit of Lessee and Lessor. Pending payment of the Total Contract Frice or any portion thereof, such moneys held in the Equipment Acquisition Account may be invested by Lessor at the written direction of Lessee in Permitted Investments. Any balance remaining in the Equipment Acquisition Account after disbursement of the Total Contract Price shall be applied as a prepayment to the Rental Payments. 14.3 Completion of Acquisition of the Equipment. Lessee shall cause the Equipment to be acquired and installed free of any liens or claims of others except for this Agreement.. Completion of the acquisition and installation of the Equipment identified by a particular Schedule A shall be evidenced by Lessee's filing with Lessor an Acceptance Certificate. Lessor shall and is hereby directed by Lessee to disburse Lease Proceeds from the Equipment Acquisition Account to pay the Vendor the purchase price, or any portion thereof, for the Equipment, or any portion thereof, only upon the receipt by Lessor of a fully executed Acceptance Certificate of Lessee. At such time, Lessee and Lessor shall execute and deliver such documents or assurances, including UCC filings or amendments thereto, as may be necessary to reflect accurately the items of Equipment financed by the Lease Proceeds derived from such Schedule A. SECTION 1S. MISCELLANEOUS 15.1 Waiver. No covenant or condition ofthis Agreement can be waived except by the written consent of Lessor. Any failure of Lessor to require strict performance by Lessee or any waiver by Lessor of any terms, covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other term, covenant or agreement herein. 15.2 Severability. [n the event any portion of this Agreement shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Agreement shall continue in full force and effect. 15.3 Governing Law and Venue. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State. Venue for any legal proceeding relating to this Agreement shall lie in Tarrant County, Texas. 15.4 Notice. All notices made or required to be given pursuant to this Agreement shall be in writing and sha1C be deemed duly served if and when mailed, certified or registered mail, postage prepaid, return receipt requested, to the other party at its address set forth in each related Schedule A hereunder or at such other address as such party shall hereafter designate in writing. . 15.5 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision ofthis Agreement. 15.6 Entire Agreement. This Agreement, together with the schedules hereto, constitutes the entire agreement between the parties and this Agreement shall not be modified, amended, altered or changed except by written agreement signed by the parties. 15.7 Binding Effect. Subject to the specific provisions of this Agreement, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 15.8 Time. Time is of the essence of this Agreement and each and all of its schedules and provisions. 15.9 Notice of Final Agreement. THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. [Signatures begin on next page] -17- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. LESSEE: CTTY OF FART WORTH, TEXAS Name. Title:_ ATTEST: By: Nar Tid APPROVED: By: . Name: Title: ,f ity Attorney - 18- LESSOR: BANC OF AMERICA LEASING &CAPITAL, LLC SCHEDULE A No. i TO MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT by and between BANC OF AMERICA LEASING & CAPITAL, LLC, as Lessor and CITY OF FORT WORTH, TEXAS as Lessee Dated as of December 20, 2002 THIS SCHEDULE A No. 1 ("Schedule A'� to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT identified above (the "Master Lease') is entered into as of this December 20, 2002, by and among BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and CITY OF FORT WORTH, TEXAS, as lessee ("Lessee'). All of the provisions of the Master Lease are incorporated herein by reference and capitalized terms used herein and not defined shall have the meanings assigned them in the Master Lease. 1. The Master Lease and this Schedule A No. i jointly constitute an Agreement (this "Agreement'?. Lessor hereby leases and lets to Lessee, Lessee leases and hires from Lessor, subject to the provisions of the Agreement, the Equipment identified below: Item (Quantity) Description, Make, Model 300,000 Toter EVR Universal Waste Carts Models # 76532, 765649 79264 & 76596 Total Contract Price $10,000,000.00 As of the date of this Schedule A No. 1, Lessee has not taken possession of any of the Equipment shown above. Garbage and Recycling services.are to be phased in beginning April 1, 2002. Delivery of the carts will occur based on the phase in schedule. It is expected that by ten (10) months from the date of this Schedule No. 1, Lessee will have taken possession of all items shown above and that a Lessee's Acceptance Certificate, or Acceptance Certificates, will be signed by Lessee and delivered to Lessor on or before ten (10) months from the date of this Schedule No. 1. 2. Lessee hereby certifies that the description of the Equipment set forth above is accurate and reasonably identifies it for UCC purposes. The Equipment identified in item 1 above shall be located at: City of Fort Worth, Department of Environmental Management, 1000 Throckmorton, Fort Worth, Texas 76102. 3. The following terms are applicable to the lease/purchase of the Equipment set forth in this,Schedule A No. 1: (a) Lease Term Commencement Date: The date of execution and delivery of this Schedule A No. i, including all attachments thereto, and the satisfaction of all conditions of the Master Lease. (b) Lease Term: The period beginning with the Lease Term Commencement Date and ending eight (8) years from such date; provided, however, after five (5}years from such date and subject to BALC review Lessor may extend the Lease Term by two (2) additional years. (c) HOUSTON_1\61838212 23388-14 12/18/2002 Lease Term Interest Rate: 3.454% Lessee's Fiscal Year End: September 30 (d) Maximum Amount: The amount equal to $10,000,000. 4: The Lease Proceeds which Lessor shall pay or provide to Lessee in connection with this Schedule A No. 1 is $10,000,000 of which $0 is for payment of the .costs of issuing this Schedule A No. 1. Such Lease Proceeds shall be deposited into the Equipment Acquisition Account and disbursed for payments of the Total Contract Price of the Equipment, or portions thereof, upon receipt by Lessor of an Acceptance Certificate, or Acceptance Certificates, executed by Lessee. 5. Interest on the Lease Proceeds shall accrue from the date hereof and. the payment dates and Rental Payment amounts (including the principal and interest components thereof) are as follows: AMORTIZATION SCHEDULE Payment Payment Principal No. Date Component 0 0 Interest Component NOTE: Amortization Schedule may be attached as Exhibit A to final Schedule A No. 1. Total Rental Payment 6. ilntii Lessee receives written notification to the contrary, all payments due under the Master Lease and this Schedule A No. 1, including but not limited to Rental Payments, are to be paid to and all notices are to be sent to the following respective addresses: The address for notices The address for payments is: Banc of America Leasing &Capital, LLC 555 California Street, 4th Floor San Francisco, CA 94104 Attention: Contract Administration Mail Code: CA5-705-04-01 CITY OF FORT WORTH; TEXAS 000 Throckmorton Fort Worth, Texas 76102 Attention: Director of Finance Banc of America Leasing &Capital, LLC P.O. Box 31682 Tampa, FL 33631-3682 7. Lessee further represents, covenants and warrants that it will not take, cause to be taken or fail to take any action which will cause -the interest component of any Rental Payments to be or become subject to federal income taxation under the Code and that all of its representations, covenants and warranties of Lessee contained in the Master Lease were true and accurate as of the date made, remain true and accurate as of the date of this Schedule A No. I and are hereby reaffirmed. 8. Lessee shall deliver or cause to be delivered an opinion of counsel concurrently with the execution and delivery of each Schedule A in the form of Attachment F to Exhibit A of the Master Lease and execute an IRS Form 8038-G (or, IRS Form 803&GC if the Total Contract Price of the Equipment is less than $100,000) prepared by Lessor and concurrently presented to Lessee with the execution and delivery of each Schedule A substantially in the form of Attachment J to Exhibit A of the Master Lease. Lessor shall 2 HOUSTON_i\618382�2 23388-14 12/18/2002 deliver or cause to be delivered an opinion of counsel concurrently with the execution and delivery of each Schedule A in the form of Attachment G to Exhibit A of the Master Lease. 9. Lessee shall deliver or cause to be delivered concurrently with the execution and delivery of each Schedule A documents in the respective forms of Attachments B through G and I through L to Exhibit A of the Master Lease, along with invoices, MSO's and applications for titles for any vehicles to be acquired with proceeds of the applicable Schedule A. Lessee shall deliver its Acceptance Certificate, or Acceptance Certificates, in the form of Attachment A to Exhibit A of the Master Lease in accordance with the terms hereof. 10. Attached hereto as Attachment A and incorporated herein by reference is an original Lessee's Acceptance Certificate, executed by an Authorized Officer of Lessee, with respect to the Equipment identified in item I above. Provided, however, Lessee may deliver one or more Acceptance Certificates which shall authorize the Lessor to pay the Purchase Price for the Equipment shown on each such Acceptance Certificate. I i . Attached hereto as Attachment B and incorporated herein by reference is an original Essential Use Certificate, executed by an Authorized Officer of Lessee certifying the essential use of the Equipment identified in item 1 above. 12. Attached hereto as Attachment C and incorporated herein by reference is an original Revenue and Expense Certificate executed by an Authorized Officer of Lessee. 13. Attached hereto as Attachment D and incorporated herein by reference is an original General Certificate, executed by Authorized Officers of Lessee. 14. Attached hereto as Attachment E and incorporated herein by reference is an original Signature and No -Litigation Certificate, executed by Authorized Officers of Lessee. I S. Attached hereto as Attachment F and incorporated herein by reference is an original opinion of legal counsel to Lessee relating to the Agreement and this Schedule A No. I. Lessor may, in its sole discretion, waive this requirement. 16. Attached hereto as Attachment G is an original opinion of counsel to Lessor relating to the Master Lease and tax treatment thereof. 17. Attached hereto as Attachment H is a certified copy of the resolution of Lessee's City Council authorizing the Master Lease and this Schedule A No. 1. 18. Attached hereto as Attachment I are copies of an executed and filed financing statement(s) evidencing Lessor's security interest in the Equipment. Provided, however, Lessee may deliver one or more financing statement(s), or amended financing statement(s) evidencing Lessor's security interest in the Equipment as reflected on each Acceptance Certificate. 19. Attached hereto as Attachment J is an IRS Form 8038-G (or IRS Form 8038-GC if the Total Contract Price of the Equipment is less than $100,000) of Lessee. 20_ Attached hereto as Attachment K is an original Cross -Receipt executed by an Authorized Officer of Lessee and Lessor. 21. Attached hereto as Attachment L is an original No Arbitrage Certificate executed by an Authorized Officer of Lessee. 3 HOUS I'ON 1\618382\2 23388-14 l2/18/2002 IN WITNESS WHEREOF, the parties hereunto affix their signatures to this Schedule A No. 1 as of the day and year fast written above. BANC OF AMERICA LEASING &CAPITAL, LLC, as Lessor CITY OF FORT WORTH, TEXAS, ATTEST: By: Nam Title HOUSTON_ I\618382\2 23388-14 12/ 18l2002 Renta! Rental Payment Payment Date Number Dec-20-02 0 RENTAL PAYMENT SCHEDULE CITY OF FORT WORTH, TEXAS Rental Interest Payment Portion Amount 3.4540% Jun-20-03 1 596, 644.97 172, 700.00 Dec-20-03 2 596,644.97 165,378.47 Jun-20-04 3 596,644.97 157,930.50 Dec-20-04 4 596,644097. 150,353.90 Jun-20-05 5 596,644.97 142,646.45 Dec-20-05 6 596,644.97 134,805.90 Jun-20-06 7. 596,644.97 126,829.94 Dec-20-06 ' 8 596,644.97 118,716.23 Jun-20-07 9 596,644.97 110,462.40 Dec-20-07 10 596,644.97 102,066.03 Jun-20-08 11 596,AAA .97 93,524.65 Dec-20-08 12 596,644.97 84,835.76 Jun-20-09 13 596,644.97 75,996.82 Dec-20-09 14 596,644.97 6i,005.22 Jun-20-10 15 Dec-20-10 16 Principal Portion 10,000,000.00 423,944.97 9,576,055.03 4311266050 9,144,788.53 438,714.47 8,706,074.06 446,291 w07 8,259,782.99 453,998.52 7,$05,784.48 461.1839.07 7,343,945.41 469, 815.03 477,928.74 486,182.57 494, 578.94 6,874,130.38 6,396,201.64 5;910,019.07 5,415,440.13 503,120.32 4,912,319.82 511,809.21 4,400,510.61 520,648.15 3,879,862.46 529,639.74 3,350,222.72 596,644.97 57,858.35 538;786.62 2,811,436.10 2,859,989.60 48,553.50 2,811,436.10 0 ATTACHMENT B TO SCHEDULE A NO. 1 ESSENTIAL USE CERTIFICATE We, the undersigned Authorized Officers of the City Council of CITY OF FORT WORTH, TEXAS acting in our capacities as such; hereby certify with respect to the MASTER EQUIPMENT LEASEXURCHASE AGREEMENT, dated as of December 20, 2002 by and between Lessee, as lessee, and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and Schedule A No. 1, dated as of December 20, 2002, issued thereunder ("Schedule A'), that the Equipment referenced in Schedule A shall be used for the following purpose: Carts to be purchased will be distributed to residential households in the City of Fort Worth for use in placing garbage and recycling items on the curb on their collection day. The undersigned hereby further certify and represent that the use of the Equipment is essential to the proper, efficient and economic operation of the Lessee. Dated December 20, 2002. ATTEST: By: Nar Tit] Schedule A Attachment B HOUSTON I\61838212 2338B-14 l2/18/2002 CITY OF FORT WORTH, TEXAS, as Lessee Page 1 OFFiCIAl. RECCR® CITY SECRETARI� FI WORTH, TX ATTACHMENT C TO SCHEDULE A NO. 1 REVENUE AND EXPENSE CERTIFICATE We, the undersigned of the CITY OF FORT WORTH, TEXAS ("Lessee's, acting in our official capacities as such, hereby certify with respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of December 20, 2002 (the "Master Lease') by and between Lessee, as lessee, and BANK OF AMERICA, N.A., as lessor ("Lessor') and Schedule A No. 1 issued thereunder, dated as of December 20, 2002 the Master Lease and Schedule A No. 1 collectively referred to as the "Agreement') as follows: 1. The Revenues (as defined in the Master Lease) and Operation and Maintenance Expenses (as defined in the Master Lease) relating to the Lessee's fiscal years 1999-2000 through 2001-2002 are as follows: 2001-2002 est 2000-2001 1999-2000 Revenues $26,218,000 $23,539,000 $22,248,000 Operation and Maintenance Expenses $25,526,000 $23,219,000 $2254757000 Surplus Net Revenues $ 692,000 $ 320,000 $ (227,000) 2. The Lessee has available sufficient Surplus Net Revenues (as defined in the Master Lease) to pay the Rental Payment (as defined in the Master Lease) on June 20, 2003, IN WITNESS WHEREOF, we have duly executed this certificate and affixed the seal of such entity this December 20, 2002. CITY OF FORT WORTH, TEXAS By: Nac Titl ATTEST: Schedule A Attachment C HOUSTON_ 1\61838212 23388-14 12/18/2002 OFFICIAL RECORD CITY SECRETARY FT WORTH; TX ATTACHMENT D TO SCHEDULE A NO. I GENERAL CERTIFICATE OF CITY OF FORT WORTH, TEXAS We, the undersigned Authorized Officers of the City Council of CITY OF FORT WORTH, TEXAS "Lessee') acting in our official capacities as such, hereby certify with respect to the MASTER EQUIPMENT LEASVPURCHASE AGREEMENT, dated as of December 20, 2002, (the "Master Lease') by and between Lessee, as lessee, and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and Schedule A No. I issued thereunder (the Master Lease and Schedule A No. I collectively referred to as the "Agreement'), as follows: I . That the Lessee is a body corporate and politic, and was validly created and exists under the laws and the Constitution of the State of Texas and is a political subdivision or governmental agency thereof. 2. That as of the date of approval of the Master Lease and Schedule A No. 1, the following named persons constitute the members of the City Council of Lessee:. NAME TITLE Kenneth L. Barr Mayor, Place 1 Jim Lane COUnelhnembVI) Place 2 Chuck Silcox Councilmember, Place 3 Becky Haskin Councilmember, Place 4 Franklin D. Moss Councilmember, Place 5 Clyde Picht Councilmember, Place 6 Jeff Wentworth Councilmember, Place 7 Ralph McCloud Mayor Pro Tem, Place 8 Wendy Davis Councilmember, Place 9 3.. The City Council of the Lessee duly adopted by a majority vote the Resolution Regarding Leasing Certain Equipment (the "Resolution's authorizing and approving the entering into the Master Lease and Schedule A No. 1 to the Master Lease, at a duly called public meeting, at which a quorum was present and acting throughout; the Resolution is in full force and effect and has not been altered, amended or repealed as of the date hereof; that said meeting was duly called and open to the public in accordance with the laws of the State of Texas. 4. The following described instruments (collectively, the "Instruments', as executed and delivered or authorized by the Lessee, are iri substantially the same form and text as copies of such Instruments which were before and were approved or ratified by the City Council of the Lessee, and which the officers of the Lessee were authorized to execute and deliver for and on behalf of the Lessee: (a) Master Lease; and (b) Schedule A No. 1 (including Attachments A through G and I through L thereto). 5. To the best knowledge of the undersigned, on the. date hereof, the Lessee is not in default in the performance or observance of any of the covenants, conditions, agreements or provisions of the Instruments. 6. The representations and warranties of the Lessee contained in the Instruments are correct on and as of the date hereof as though made on and as of such date. Schedule A Attachment D Page 1 FiOUSTON_I\618382\2 23388-F4 F2/t8/2002 IN WITNESS WHEREOF, we have duly executed this certificate this ► rCemSE(Z 20 , 20aZ CITY OF FORT WORTH, TEXAS, as Lessee Name Title: ATTEST: By: Nam Title OFF(ClR� RECOR® CITY SECRETARY FT WORTH, TX J Schedule A Attachment D Page 2 ATTACHMENT E TO SCHEDULE A NO.1 FORM OF SIGNATURE AND NO -LITIGATION CERTIFICATE We, the undersigned Authorized Officers of the City Council of CITY OF FORT WORTH, TEXAS ("Lessee's, acting in our official capacities as such, hereby certify with respect to the MASTER EQUIPMENT LEASEIPURCHASE AGREEMENT, dated as of December 20, 2002 (the "Master Lease') by and between Lessee,. as lessee, and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and Schedule A No. I., dated as of December 20, 2002 issued thereunder (the Master Lease and Schedule A No. 1. collectively referred to as the "Agreement') as follows: 1. The Master Lease and Schedule A No. L have been duly and officially executed by the undersigned with their manual or facsimile signatures in the same manner appearing thereon, and the undersigned hereby adopt and ratify their respective signatures in the manner appearing on each side of the Master Lease and Schedule A No. 1. whether in manual or facsimile form, as the case may be, as their true, genuine, and official signature. 2. .That on the date of Schedule A No. 1. and on the date hereof, we were and are the duly qualified and acting officers indicated therein and authorized to execute the same. , 3. The legally adopted proper and official corporate seal of the Lessee is impressed or imprinted on the Master Lease and Schedule A No. 1. and impressed on this certificate. 4. No Iitigarion of any nature is now pending before any federal or state court, or administrarive body, or to our knowledge threatened, seeking to restrain or enjoin the issuance or delivery of the Master Lease or Schedule A No 1. the authority or action of the City Council of the Lessee relating to the issuance or delivery of the Master Lease or Schedule A No. I., the collection of the revenues of the Lessee or the imposition of rates and charges with respect to the Lessee, pledged to pay the Rental Payments on Schedule A No. 1., or that would otherwise adversely affect in a material manner the financial condition of the Lessee to pay the Rental Payments on the Schedule A No 1. and that neither the corporate existence or boundaries of the Lessee not the right to hold office of any member of the City Council of the Lessee or any other elected or appointed official of the Lessee is being contested or otherwise questioned. 5. That no petition or other request has been (sled with or presented to any official of the Lessee requesting any proceeding authorizing the issuance of the Master Lease or the Schedule A No. 1. adopted by the City Council of the Lessee be submitted to a referendum or other election; no authority or proceeding for the issuance, sale, or delivery of the Master Lease or the Schedule A No. I., passed and adopted by the City Council of the Lessee, has been amended, repealed, revoked, rescinded, or otherwise modified since the date of passage thereof, and all such proceedings and authority relating to the issuance and delivery of the Master Lease or Schedule A No. I . remain in full force and effect as of the date of this certificate. . Schedule A Attachment E Page 1 (SEAL) EXECUTED AND DELIVERED as of December 18, 2002 OFFICIAL TITLE Libby Watsop Assistant City Manager James R. Keyes . Finance Director Brian Boerner Environmental Management Director BEFORE ME, on this day personally appeared the foregoing individuals, known to me to be the persons whose names are subscribed to the foregoing instrument. GIVEN UNDER MY HAND AND SEAL of office, this 1.0. day of CPin�xi--, zv( (NOTARY SEAL) ��r RONALD P. GONZALES * � : Notary Rb!!c STATE OF TEXAS � My Comm. EVa 05/17/2004 ATTEST: By: Name Titl Schedule A Attachment E Public, State of ATTACHMENT F TO SCHEDULE A OPINION OF COUNSEL TO LESSEE December 18, 2002 Banc of America Leasing &Capital, LLC 555 California Street, 4th Floor San Francisco, California 94104 Winstead Sechrest & Minick P.C. 910 Travis Street, Suite 2400 Houston, Texas 77002 Re: MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT dated as of December 20, 2002 and that certain Schedule A. No. 1 dated as of December 20, 2002 (collectively, the 'Agreement'), by and between CITY OF FORT WORTH, TEXAS, as lessee ("Lessee'), and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor's Gentlemen: As counsel for Lessee, we have examined duly executed originals of the Agreement and the ratified proceedings of the City Council of Lessee authorizing execution and delivery of the Agreement, and certain other security instruments and documents with respect to the Equipment to be financed with Lease Proceeds of the Agreement. Based upon the examination and upon such other examination as we have deemed necessary or appropriate, we are of the opinion that. Lessee .is a public body corporate and politic, legally existing under the laws of, and is a political subdivision or agency of, the State of Texas. David L. Yett, City Attorney OFFICE OF THE CITY ATTORNEY The City of Fort Worth * 1000 Throckmorton Street *Fort Worth, Texas 76102 (817) 871-7600 *FAX (817) 871-8354 Lessee is authorized and has the power under I exas to enter into the Agreement and to carry out its obligations thereunder. The execution, delivery and performance by Lessee of the Agreement have been duly authorized by all necessary action on the part of Lessee and, assuming the due and proper authorization, execution and delivery thereof by the Lessor, constitutes a legal, valid and binding 'obligation of Lessee, enforceable in accordance with its terms, except to the extent limited by bankruptcy, reorganization or other laws of general application relating to effecting the enforcement of creditors' rights. The entering into and performance of the Agreement will not violate any judgment, order, law or regulation applicable to Lessee or result in any breach of, or constitute a default under, any instrument of which we have knowledge by which Lessee is affected. No action, suit, proceeding, inquiry or investigation at law or in equity before or by any judicial or administrative court or agency, is pending or, to the best of our knowledge, threatened, against or affecting Lessee or its properties wherein any unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the Agreement or materially and adversely affect the financial condition, business, or properties of Lessee. We have inquired of the appropriate officers of Lessee whether they know of any such matters, and they have informed us that they know of none. Our opinion that the Agreement is enforceable in accordance with its terms is qualified to the extent that enforcement of the rights and remedies created hereby is subject to (i) general principles of equity, (ii) applicable bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors' rights in general, and (iii) laws concerning recourse by creditors to security in the absence of notice and hearing. Respectfully submitted, David L. Yett City Attorney City of Fort W By: City Attorney David L. Yett, City Attorney OFFICE OF THE CITY ATTORNEY The City of Fort Worth * 1000 Throclanorton Street *Fort Worth, Texas 76102 (817) 871-7600 *FAX (8l7) 871-8359 "ANSTEAD December 20, 2002 Banc of America Leasing &Capital, LLC 555 California Street, 4th Floor San Francisco, California 94104 City of Fort Worth, Texas 1000 Throckmorton Fort Worth, Texas 76102 We have acted as counsel to BANC OF AMERICA LEASING &CAPITAL, LLC ("Lessor's in connection with the execution and delivery by CITY OF FORT WORTH, TEXAS ("Lessee') of the Master Equipment Lease/Purchase Agreement (the "Master Lease') dated as of December 20, 2002 between Lessor, as lessor, and Lessee, and Schedule A No. 1 thereto, dated as of December 20, 2002. The Master Lease, Schedule A No. 1 and the attachments and exhibits related thereto are referred to herein as the "Agreement. " We have examined the law and such certified proceedings, the Agreement and other papers as deemed necessary to render,this opinion. As to questions of fact material to our opinion we have relied upon representations of Lessee contained in the Agreement, the certified proceedings and other certifications of public officials furnished to us, and certifications by officials of the Lessee without undertaking to verify the same by independent investigation. Lessee has in the Agreement agreed to pay the principal and interest components of the Rental Payments due thereunder (the "Rental Payments'. Lessee's obligations under the Agreement are secured solely from a pledge of Lessee's Surplus Net Revenues and the Equipment. In rendering the opinions set forth as 1 and 2 below, we have relied upon an opinion of even date of Hugh Davis, Assistant City Attorney, addressed to Banc of America Leasing &Capital, LLC and Winstead Sechrest & Minick P.C., with respect to, among other matters, the corporate existence of Lessee, the power of Lessee to enter into and perform the Agreement, the authorization, execution and delivery of the Agreement by Lessee, and the extent to which the Agreement is binding and enforceable upon Lessee. We express no opinion with respect to compliance by Lessee with applicable legal requirements in connection with the operation of the Equipment (as defined in the Master Lease). Based on our examination, we are of the opinion, as of the date hereof and under existing law, as follows: 1. Lessee is a duly created and validly existing body corporate and politic and a public instrumentality of the State of Texas with the power to enter into and perform the Agreement. 2. The Agreement has been duly authorized, executed and delivered by Lessee and is a_ valid, binding and enforceable special obligation by Lessee, secured solely from a pledge of Lessee's Surplus Net Revenues and the Equipment. F'il:}:L foi_CORD CITY SECRETARY 2400 BANK ONE CENTER I PH 713.650.8400 I WIN STBADSECHREST&MWICK 910 TRAMS STREET FAX 713.650.2400 Attorneys and CouruelnrJ HOUSTON,TEXAS 77002 WINSTEAD.COM AProfessionnlCor[�oration Austin, Dallas, Fort Worth, Houston, Mexico City, The Woodlands, lY/ashington DC 3. Under existing law, assuming the accuracy of certifications made by Lite Lessor and the Lessee and the continuing compliance by the Lessor and the Lessee with the requirement of federal tax laws, the interest component of the Rental Payments (the "interest component") payable under the Agreement is excluded from the gross income of Lessor for federal income tax purposes under section 103 of the Internal Revenue Code of 1986, as amended (the "Code"). In addition, such interest will not be included as an alternative minimum tax preference item for individuals and corporations under section 57(a)(5) of the Code, except that such interest will be included in the "adjusted current earnings" of certain corporations for purposes of computing the alternative minimum tax imposed on corporations by section 55 of the Code. The interest component of Rental Payments payable to certain foreign corporations may be subject to the branch profits tax imposed by the Code. Lessee has covenanted in the Master Lease to take all lawful action necessary under the Code to ensure that the interest component will remain excluded from the gross income of Lessor for federal income tax purposes and to refrain from taking any action which would cause the interest component to become included in such gross income. Failure to comply with federal tax requirements could cause the interest component to be included in gross income for federal tax purposes retroactive to issuance of the Agreement. We express no opinion regarding any other federal tax consequences arising with respect to the lease transaction pursuant to the Agreement. It is to be understood that the terms of the Agreement are subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, WINSTEAD SECHREST & MINICK P.C. OFFIClA� RECORD CITY SECRETARY T. WORTH, TIC HOUSTON_1\618455\1 23388-14 12/18/2002 WNSTEAD December 19, 2002 direct dial: 713.650.2745 hvu@winstead.com VIA FEDERAL EXPRESS Larry Anonuevo Senior Operations Analyst Banc of America Leasing & Capital LLC CAS-705-04-01 555 California Street, 4th Floor San Francisco, CA 94104 Re: $10,000,000 Master Equipment Lease Purchase Agreement and Schedule A No. 1 - City of Fort Worth Dear Larry: Enclosed please find two originals of our signed opinion letter in connection with the above -referenced transaction. Once you have received all of the executed originals, please forward to us a copy of the documents for our files. Thank you and it was a pleasure working with you on this matter. Very truly yo/u/rs, 6y 4� Hoang T. Vu HTV:hIw Enclosure HOUSTON_1\618871\1 23388-14 12/19/2002 2400 BANK ONE CENTER I PH 713.650.8400 I WINSTGAD SECI�RESI'dcMINICK 910 TRAVIS STREET PAX 713.650.2400 Attorneys and Couruelorc HOUSTON, TEXAS 77002 WINSTEAD.COM AYrofersional Corporation C.ITY . WORTH, ORT!{j , 1.( Auttin, Dollar, Fort Worth, Haurtorz, Mexico City, The Woodlands, l4aJhirzgtorz DC DATE i City of Fort Worth, Texas Mayor and Council Communication C-19336 LOG NAME 52CARTS PAGE SUBJECT AUTHORIZATION TO EXECUTE A CONTRACT WITH TOTER, INC. TO SELL, I DELIVER, MAINTAIN AND FINANCE RECYCLING AND GARBAGE CARTS RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to negotiate and execute a contract with Toter, Inc. for the sale, delivery, maintenance and financing of recycling and garbage carts; and 2. Authorize this contract to begin November 1, 2002, and expire March 31, 2013; and 3. Authorize the City Manager to execute a contract with Bank of America for lease -purchase financing to fund this purchase, subject to negotiating a mutually acceptable lease -purchase agreement. DISCUSSION: On June 27, 2002, the City received proposals from five prospective contractors in response to a Request for Proposal (RFP) to sell recycling and garbage carts to the City, to deliver these carts to all residential customers of the City, to maintain these carts for a period of 10 years, and to provide options to the City on financing the purchase of these carts. Following initial. proposal evaluations, the evaluation committee comprised of five representatives from the M/WBE Office, the Environmental Management Department, and the Law Department, with significant input from the consulting firm of Gershman, Brickner and Bratton, selected three firms for interviews, presentations and negotiations. At the completion each interview, best and final offers from these three firms were requested. After an in-depth evaluation of these best and final offers, Toter, Inc. is recommended as awardee for these recycling and garbage cart services based on evaluation factors enumerated on the attached RFP proposal evaluation matrix. The scope of work for these services provides for the delivery of either 150,000 or 300,000 recycling and garbage carts, at the direction of the City Council, to residential customers within the City, to provide third -party financing to the City to purchase these carts, and to maintain the carts through March 31, 2013. Public forums inviting citizen and provider comments were held on March 4 and 5, 2002. An RFP .was ..advertised on May 15, 2002. The Environmental Management Department solicited proposals from all known cart manufactures, including those in the purchasing system database, Internet searches, and those known through cart comparison articles in solid waste trade magazines. A pre -proposal conference was conducted on May 30, 2002, with representatives from nine firms that either manufacture carts or provide services associated with cart systems in attendance. A total of six responses were received, one of which was a "no -bid". PROPOSAL EVALUATION -See attached evaluation matrix. City of Fort Worth, Texas Mayor and Council Communication 11 /5/02 C-19336 52CARTS 2of2 SUBJECT AUTHORIZATION TO EXECUTE A CONTRACT WITH TOTER, INC. TO SELL, DELIVER, MAINTAIN AND FINANCE RECYCLING AND GARBAGE CARTS M/VVBE - Toter, Inc. is in compliance with the City's M/VUBE Ordinance by committing to a minimum of 25% M/WBE participation. The City's goal on this project is 25%. Subject to negotiating a mutually acceptable agreement, lease -purchase financing to purchase the carts will be obtained through Bank of America. The payout will be over a ten-year period, at an estimated cost of $984,603 per year, and at an annual rate of 3.22%. Charges for delivery of the carts are estimated at $675,000 and will be paid from current funds as billings are received. The estimated cost for cart repair and maintenance for FY2002-2003 is $232,650. The estimated cost of the cart maintenance over the ten-year contract term is $4,653,000. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that funds are available in the current operating budget, as appropriated, of the Solid Waste Fund, and that subsequent year operating costs will be budgeted. CB:k Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) Charles Boswell 6183 Brian Boerner 8079 (from) APPROVED 11/OS/02 Brian Boerner 8079 COUNTIES OF TARRANT AND DENTON § I, SYLVIA GLOVER, Assistant City Secretary of the City of Fort Worth, Texas do hereby certify that the above and foregoing is a true and correct copy of Mayor and Council Communication No. C-19336, duly presented and adopted by the City Council of the City of Fort Worth, Texas, at a regular session held on the 5'h day of November, A. D. 2002, as same appears of record in the Office of the City Secretary. WITNESS MY HAND and the Official Seal of the City of Fort Worth, Texas, this the 18t' day of December, A. D. 2002. Sylv Glover, Asst. City Secretary City of Fort Worth, Texas OFFICIR� REC®R� CITY SECRETARY F7: WORTH, TX ATTACHMENT J TO SCHEDULE A No. 1 IRS Form 8038-G or IRS Form 8038-GC (if less than $1009000) (IRS FORM 8038-G OR IRS FORM 8038-GC FOLLOi3� [See Attached] Schedule A Attachment J HOUSTON_l \618382\2 23388-14 l2/I 8/2002 OFFfCi�ai, RE`C®RD CITY SECRETARY FT WORTH, TX Farm®3�-G Information Return for Tax•Exempt Goverrlrnental Obligations ► Under Internal Revenue Code section 149(e) OMB No. 1545.0720 (Rev. November 2000) ► See separate Instructions. r� atd Caution: If the issue price Is under $100,000 use Form 8038-GC. Re ortin Authorit If Amended Return, check here ► ❑ 1 . Issuer's name 2 IssueYs employer identification number City of Fort Worth, Texas 75 ; 6000528 3 Number and street (or P.O. box if mail Is not delivered to street address) Room/sulte 4 Report number 1000 Throckmorton 3 .98 5 city, town, or post office, state, and ZIP code 6 Date of issue Fort Worth, Texas 76102 December 20, 2002 7 Name of Issue 8 CUSIP number $10,000,000 Master Equip Lease/Purchase Agreement & Schedule A No. 1 None 9 Name and title of officer or legal representative whom the IRS may call for more information 10 Teleplvne number of officer or legal representative James R. Keyes, Finance Director ( 817 ) 871-8517 Tvue of Issue (check aDolicable boxes) and enter the issue Drice) See instructions and attach schedule 11 El Education 12 ❑ Health and hospital 13 ❑ Transportation 14 ❑ Public safety. . 15 ❑ Environment (including sewage bonds) . 16 ❑ Housing 17 0 Utilities 18 ❑ Other, Describe ► 19 If obligations are TANs or RANs, check box ► El if obligations are BANs, check box POP❑ 20 If obligations are In the form of a lease or installment sale, check box ► Description of Obligations. Complete for the entire issue for which this form is t (a) Final maturity date (b) Issue price (c) stated redemption (d) Weighted :1 price at maturity average maturity 21 December 20, 2010 $ 101000,000 $ 10,000,000 8 ea 120 am Uses of Proceeds of Bond Issue (ncludin underwriters' discount 22 Proceeds used for accrued Interest . . . . . . . . . . . . . . . . . . 23 Issue price of entire issue (enter amount from,line 21, column (b)) . . . . . . . 0 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 25 Proceeds used for credit enhancement . . . . . . . 25 0 26 Proceeds allocated to reasonably required reserve or replacement fund 26 0 27 Proceeds used to currently refund prior issues 27 0 28 Proceeds used to advance refund prior issues 28 0 29 Total (add lines 24 through 28) . . . . . . . . . . 30 . Nonrefundina Droceeds of the issue.fsubtract line 29 from line 23 and enter amount here) . 17 18 23 (e) Yield ;FMAY( Description of Refunded Bonds (Complete this part only for refunding bonds.) 31 Enter the remaining Weighted average maturity of the bonds to be currently refunded , ► n!a years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . ► n�a years 33 Enter the last date on which the refunded bonds will be called . . ► n!a 34 Enter the date(s) the refunded bonds were issued ►. We 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 rile 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a rile b Enter the final maturity date of the guaranteed Investment contract ► 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a nla b If this issue is a loan made from the proceeds of another tax-exempt Issue, check box ► ❑ and enter the name of the issuer ► and the date of the issue ► 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► ❑ 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑ 40 If the issuer has identified a hedge, check box ► ❑ Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knoviledge and belle ,they are [Ne, correct complete. Sign Here ' /.t /�. aL ' Ifrv4Ncl= �rRccnr,� St ture of issuer's authorized repre tive Date Type or print name and title For Paperwork uction Act Notice, see e 2 of the instructions. cat. No. 63773S Form 8038-G (Rev. 11-2000) i:l i Y SECRE iARY FT WORTH_ TY � ATTACHMENT K TO SCHEDULE A NO. T CROSS -RECEIPT With respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of December 20, 2002 (the "Master Lease') by and between BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor') and CITY OF FORT WORTH, TEXAS, as lessee ("Lessee') and Schedule A No. 1, dated as of December 20, 2002 to the Master Lease: Lessor hereby acknowledges the lease to the Lessee of the Equipment listed on Schedule A 'No. 1 to the Master Lease and receipt from Lessee of Schedule A No. 1 to the Master Lease dated as of the date hereof. Lessee hereby acknowledges the lease of the Equipment pursuant to the Master Lease and Schedule A No. 1 to the Master Lease, Dated: December 20, 2002 Schedule A Attachment K HOUSTON_ t \618382\2 23388-14 12l18/2002 BANC OF AMERICA LEASING &CAPITAL, LLC, as Lessor CITY OF FORT WORTH, TEXAS, as Lessor Page 1 m CfTY 5ECKidm- . 16 FT. WORTH,. TX. ATTACHMENT L TO SCHEDULE A NO. 1 NO -ARBITRAGE CERTIFICATE I, the undersigned Authorized Officer of CITY OF FORT WORTH, TEXAS (the "Lessee', make this certification for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest component of the Rental Payments under that certain MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of December 20, 2002, by and between Lessee and Lessor, and under Schedule A No. I thereto, dated as of December 20, 2002 (collectively the 'Agreement'D, between Lessee, as lessee and BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor's. 1. Responsible Officer. I am the duly chosen, qualified and acting officer of the Lessee for the office shown below my signature. As such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Lessee. I am the officer of the Lessee charged, along with other officers of the Lessee, with the responsibility for issuing the Agreement. 2. Purpose. This certificate is being executed and delivered pursuant to Sections 1.148-0 through 1.148-11, 1.149(d)(I), 1,149(g)-1, 1.150-1 and 1.150-2 of the Treasury Regulations (the "Regulations"). 3. Definitions. The capitalized terms used in this certificate (unless otherwise defined) that are defined in the Agreement shall for all purposes hereof have the meanings therein specified. All such terms defined in the Internal Revenue Code of 1986, as amended (the "Code") or Regulations shall for all purposes hereof have the meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise. 4. Reasonable Expectations. The facts and estimates that are set forth in this certificate are accurate; and the expectations set forth herein are reasonable in light of such facts and estimates. The undersigned is aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of such facts, estimates or expectations. 5. Description of Governmental Purpose and Size. The Lessee is entering into the Agreement for the purposes of funding the acquisition of the Equipment and the costs related to the issuance of the Agreement. (a) The Equipment will be owned, operated, and maintained by the Lessee and the Lessor has not contracted in any manner -with any company, fu-m or other person or entity to operate or maintain the Equipment or any part thereof for and on behalf of the Lessee. (b) There is not, and as of the date hereof, the Lessee does not anticipate entering_ into, any lease, contract or other understanding or arrangement, such as a take -or -pay contractor output contract, with any person other than a State or local governmental unit, pursuant to which the Lessee expects that the proceeds of the Agreement, or the Equipment financed therewith or any part thereof, will be used in the trade or business of such person (including all activities of such persons who are not individuals). The amounts received from the Agreement, when added to the amounts expected to be received from the investment thereof, do not exceed the amounts required to pay the costs of the Equipment, including payment of the Total Contract Price, and the costs of issuing the Agreement. (c) No other obligations of the Lessee payable from the same source of funds were sold or delivered within fifteen (15) days from the date hereof. Schedule A Attachment L HOUSTON_I\618382\2 23388-14 ]2/18/2002 Page 1 � OFFICIRL REC�''` 6. Amount and Use of Proceeds of the Agreement. The proceeds of the Agreement are $10,000,000 of which of $0 is for payment of the costs of issuance. There is no accrued interest on the Agreement. The Lessee will pay from its own funds any other cost of issuance. No proceeds will be used to pay, refund, retire or replace any governmental obligations previously issued. The proceeds will be used as follows: (a) The amount of $10,000,000 will be deposited into the Equipment Acquisition Account and is expected to be disbursed to pay or reimburse the costs of acquisition of the Equipment. The aggregate amount of the costs of acquisition of the Equipment is . anticipated to be not less than such amount. Any costs of the Equipment not financed out of the proceeds of the Agreement, or investment proceeds thereof, will be financed out of the Lessee's available funds. No portion of the amount deposited into the Equipment Acquisition Account will be disbursed to reimburse the Lessee for any expenditures made by the Lessee, unless (i) prior to the date that is 60 days before the date hereof or the date that is 60 days prior to the date the Lessee adopted or expressed its official intent to reimburse such expenditures meeting the requirements of Section 1.150-2(e)(1) of the Regulations; (ii) the expenditure is a capital expenditure, a cost of issuance of the Agreement, an extraordinary working capital item or grant; and (iii) the reimbursement is made not later than 18 months after the later of (A) the date of the expenditure or (B) the date the Equipment was placed into service or abandoned but not more than three (3) years after the date of expenditure. (b) The amount of $0 will be used to pay the costs of issuance of the Agreement. 7. Use of Investment Proceeds. The best estimate of the Lessee is that investment proceeds resulting from the investment of any of the proceeds of the Agreement pending expenditure of such proceeds for costs of acquiring the Equipment will be retained in the Equipment Acquisition Account and used to pay or reimburse the Total Contract Price of the Equipment in addition to those described in Paragraph 6 above. 8. No Replacement Proceeds. Lessee has not established and does not expect to establish any sinking fund, debt service fund, redemption fund, reserve fund, replacement fund or similar fund to be used to pay, directly or indirectly, principal or interest on the Agreement. Lessee has not pledged or otherwise restricted and does not expect to pledge or restrict any other funds or property which as a result of the pledge or restriction could be reasonably assured to be available to pay, directly or indirectly, principal or interest on the Agreement, even if Lessee encounters financial difficulty. 9. Debt Service Fund. Pursuant to the. Agreement, the Lessee has created a new debt service fund designated the "CITY OF FORT WORTH, TEXAS Equipment Lease/Purchase Agreement Fund" (the "Debt Service Fund') and the proceeds of all revenues collected for and on account of any Schedule A under the Agreement are to be deposited in such Debt Service Fund, The Lessee expects that revenues collected for and on account of the Agreement will be sufficient each year to pay the Rental Payments due thereunder. All amounts which will be depleted at least once each bond year, except for a reasonable carryover amount not in excess of the greater of the earnings on such portion of the Debt Service Fund for the immediately preceding bond year or one -twelfth of the principal component and interest component of the Rental Payments for the preceding bond year, will constitute a bona fide debt service fund component of the Debt Service Fund (the "Bona Fide Portion'). Such Bona Fide Portion of the Debt Service Fund will be used primarily to achieve a proper matching of revenues and the principal component and interest component of the Rental Payments within each bond year. Amounts on deposit in the Bona Fide Portion of the Debt Service Fund may be invested at an unrestricted yield because such amounts will be expended within 13 months of the date such amounts are received. Schedule A Attachment L HOUSTON_I \618382\2 23388-14 12/18/2002 10. Rebate. Lessee does not expect to be required to make any rebate payments to the United States pursuant to section 148(f) of the Code because the Lessee expects that the gross proceeds of the Agreement (within the meaning of section 148(f)(4)(B) of the Code) will be expended for the governmental purpose for which the Agreement is entered into no later than a date which is six (6) months from the date hereof. Lessee has covenanted, however, in the Agreement that in the event that Lessee should be required to make rebate payments to the United States pursuant to section 148(f) of the Code, Lessee will make such payments as and when provided in the Agreement. 11. No Artifice or Device. In connection with the issuance of the Agreement, Lessee has not (a) employed any abusive arbitrage device, or (b) over -burdened the market for tax-exempt obligations. 12. A>:reement Not Hedge Bonds. Lessee expects to expend within three (3) years from the date hereof, in addition to the costs of issuance of the Agreement, an amount of proceeds of the Agreement equal to not less than 85% of the net proceeds of the Agreement. No proceeds of the Agreement have been or will be invested in nonpurpose investments which have substantially guaranteed yield for four (4) years or more. 13. No -Arbitrage -Certificate May be Relied Upon. Lessee has not been notified of the listing or proposed listing of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon. 14. No Arbitra¢e. On the basis of the foregoing facts, estimates and circumstances, it is reasonably expected that the gross proceeds of the Agreement will not be used in a manner that would cause any obligation to be an "arbitrage bond" within the meaning of section 148 of the Code and the Regulations. WITNESS MY HAND, this December 20, 2002. Schedule A Attachment L HOUSTON 11618382�2 23388-14 l2/18/2002 CITY OF FORT WORTH, TEXAS, as Lessee Page 3 OF�ICIA� RECORQ CITY SECRETARY T. WORTH, TX ACQUISITION FUND AGREEMENT This ACQUISITION FUND AGREEMENT, dated as of December 20, 2002, is entered into by and among BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited liability company (hereinafter referred to as "Lessor"), CITY OF FORT WORTH, TEXAS, a political subdivision of the State of Texas (hereinafter referred to as "Lessee") and BANK OF AMERICA, N.A., a national banking association (hereinafter referred to as "Acquisition Fund Custodian"), Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as of December 20, 2002 between Lessor and Lessee (hereinafter referred to as the "Lease"), covering the acquisition and lease of certain equipment described therein (the "Equipment"). It is a requirement of the Lease that the purchase price of the Equipment be deposited into an escrow under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment. The parties agree as follows: 1. Creation of Acquisition Fund. (a) There is hereby created a special trust account to be known as the "Bank of America, Agent for City of Fort Worth, Texas Acquisition Fund" Account number 004770723325 (the "Acquisition Fund") to be held in trust by the Acquisition Fund Custodian for the purposes stated herein, for the benefit of the Lessor and the Lessee, to be held, disbursed and returned in accordance with the terms hereof (b) The Acquisition Fund Custodian shall invest and reinvest moneys on deposit in the Acquisition Fund in Permitted Investments in accordance with written instructions received from the Lessee. The Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Permitted Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Acquisition Fund Custodian for the reinvestment of any maturing investment. Accordingly, neither the Acquisition Fund Custodian nor the Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Acquisition Fund, and the Lessee agrees to and does hereby release the Acquisition Fund Custodian and the Lessor from any such liability, cost, expenses, loss or claim. Interest on the Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the investment of the moneys on deposit in the Acquisition Fund shall be borne by the Acquisition Fund. (c) Unless the Acquisition Fund is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of written authorization(s) from the Lessor, as is more fully described in Section 2 hereof. If the amounts in the Acquisition Fund are insufficient to pay such amounts, the Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Acquisition Fund after disbursement of the Total Contract Price shall be applied as provided in Section 4 hereof. (d) The Acquisition Fund shall be terminated at the earliest of (i) the final distribution of amounts in the Acquisition Fund, (ii) written notice given by the Lessor of the occurrence of an Event of Default or termination oI the Lease due to non -appropriation or (iii) six (6) months from the date hereof. (e) The Acquisition Fund Custodian may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Acquisition Fund Custodian shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Acquisition Fund Custodian, and for the disposition of the same in accordance herewith. (f) Unless the Acquisition Fund Custodian is guilty of gross negligence or willful misconduct with regard to its duties hereunder, only to the extent permitted by Texas law, the Lessee agrees to and does hereby release and indemnify the Acquisition Fund Custodian and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened. by reason of its acting as Acquisition Fund Custodian under this agreement; and in connection therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian against any and all expenses; including reasonable attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim. The Acquisition Fund Custodian shall be vested with a lien on and is hereby granted a security interest in all property deposited hereunder, for indemnification, for reasonable attorneys' fees, court costs, for any suit, interpleader or otherwise, or any other expense, fees or charges of any character or nature, which may be incurred by the Acquisition Fund Custodian by reason of disputes arising between the Lessee and the Lessor as to the correct interpretation of the Lease and instructions given to the Acquisition Fund Custodian hereunder, or otherwise, with the right of Acquisition Fund Custodian, regardless of the instructions aforesaid, to hold the said property until and unless said additional expenses, fees and charges shall be fully paid. (g) If the Lessee and the Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund Custodian shall be reimbursed by the Lessee for all costs, including reasonable attorneys' fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Acquisition Fund Custodian may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Acquisition Fund Custodian shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its gross negligence or willful misconduct. (i) The Lessee shall reimburse the Acquisition Fund Custodian for alI reasonable costs and expenses, including those of the Acquisition Fund Custodian's attorneys, agents and employees incurred for extraordinary administration of the Acquisition Fund and the performance of the Acquisition Fund Custodian's powers and duties hereunder in connection with any Event of Default under the Lease, or in connection with any dispute between Lessor and Lessee concerning the Acquisition Fund. 2. Acquisition of Property. (a) Acquisition Contracts. The Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Acquisition Fund. The Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and the Lessor makes no warranty or representation with respect thereto. The Lessor shall have no liability under any of the acquisition or construction contracts. The Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. (b) Authorized Acquisition Fund Disbursements. Disbursements from the Acquisition Fund shalt be made for the purpose of paying (including the reimbursement to the Lessee for advancesfrom its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. Prior to disbursement from the Acquisition Fund there shall be filed with the Acquisition Fund Custodian a requisition for such payment in the form of the Disbursement Request attached hereto as Exhibit A. stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. No disbursement from the Acquisition Fund shall be made unless and until the Lessor has approved such requisition. Each such requisition shall be signed by an authorized representative of the Lessee (an "Authorized Representative") and by Lessor, and shall be subject to the following: Delivery to Lessor of a certificate of the Lessee to the effect that: 2 (i) an obligation in the stated amount has been incurred by the Lessee, and that the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid; (ii). the Authorized Representative has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made; (iii) such requisition contains no item representing payment on account, or any retained percentages which the Lessee is, .at the date of such certificate, entitled to retain; and (iv) the Equipment is insured in accordance with the Lease. (2) Delivery to Lessor of an Acceptance Certificate, in the form attached hereto as Exhibit B, executed by Lessee, together with any purchase agreement, assignment or bill of sale and invoice therefor; (3) There shall exist no Event of Default (nor any event which, with notice or lapse of time or both, would become an Event of Default); and (4) No material adverse change in Lessee's financial condition shall have occurred since the date of the Lease. 3. _Deposit to Acquisition Fund. Upon satisfaction of the conditions precedent specified in the Lease, Lessor will cause the Lease Proceeds to be deposited in the Acquisition Fund. The Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Acquisition Fund. 4. Excessive Acquisition Fund. Following the final disbursement from the Acquisition Fund or termination of the Acquisition Fund as otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the Acquisition Fund to the Lessor for application to amounts owed under the Lease. 5. Security Interest. The Acquisition Fund Custodian and Lessee acknowledge and agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any part thereof, is converted to investments as set forth in this agreement, such investments shall be made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest. 6. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This agreement -may not be amended except in writing signed by all parties hereto. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below: If to the Lessor: Banc of America Leasing &Capital, LLC 555 California Street, 4th Floor Mail Code: CA5-705-04-01 San Francisco, CA 94104 Attention: Contract Administration Fax: (415)765-7373 3 If to the Lessee: If to the Acquisition Fund Custodian: City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 Attention: Director of Finance Fax: (817) 8714966 Bank of America, N.A. TX 1497=02-04 500 West 7t' Street Fort Worth, Texas 76102 Attn: Glenda Beasley Fax: (817) 390=6452 7. Entire Agreement. THIS AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO, 8. Governing Law and Venue. This Agreement shall be governed by Texas .law. Venue for any legal proceedings relating to this Agreement shall lie in Tarrant County, Texas. In Witness Whereof, the parties have executed this Acquisition Fund Agreement as of the date first above written. BANC OF AMERICA LEASING &CAPITAL, LLC Lessor By: �.�ll x �° Name: Gsil SmeM Title: Vice President BANK OF AMERICA, N. A. Acquisition Fund Custodian CITY OF FORT WORTH, TEXAS Lessee By: Name: avh�S a F.S Title: Directa►r of ua$ ATTEST: By: By: Name: Nan Title: Titl( Contract Authorization II'S/ 02 Date 0 If to the Lessee If to the Acquisition Fund Custodian: City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 Attention: Director of Finance Fax: (817) 871-8966. Bank of America, N.A. TX 1497m02m04 500 West 7'h Street Fort Worth, Texas 76102 Attu: Glenda Beasley Fax: (817) 390-6452 7. _Entire Agreement. THIS AGREEMENT EMBODIES THE- FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO, THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. 8. Governing Law and Venue. This Agreement shall be governed by Texas ]aw. Venue for any legal proceedings relating to this Agreement shall he in Tarrant County, Texas. In 117 Whereof, the parties have executed this Acquisition Fund Agreement as of the date first above written. BANC OF AMERICA LEASING &CAPITAL, LLC Lessor By: Name: Title: BANK OF AMERICA, N. A. Acquisition Fund Custodian By: Name: Title: CITY OF FORT WORTH, TEXAS Lessee By: _ Name: Title: ATTEST: By: _ Name: Title: OFFICIAL RECORD CITY SECRETARY FT. WORTH. TX tv DISBURSEMENT REQUEST NO. Re: Master Equipment Lease/Purchase Agreement dated as of December 209 2002 by and between Banc of America Leasing & Capital, LLC, as Lessor and City of Fort Worth, Texas, as Lessee (the "Lease") In accordance with fhe terms of the Acquisition Fund Agreement, dated as of December 2Q 2002 (the "Acquisition Fund Agreement") by and among Banc of America Leasing & Capital, LLC ("Lessor"), City of Fort Worth, Texas ("Lessee") and Bank of America, N.A. (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund Agreement (the "Acquisition Fund") for the following purposes. Pa ee's Name and Address Invoice Number Dollar Amount se The undersigned hereby certifies as follows: obligation in the stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authorized Representative, has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease. (v) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. . \2 )§) \� E aRa / 0 , @ / . (PD� —/CD .; / k00 $ ■ 7 ( \CD . k R e . . . , . CD CA _ ® J as E Ono E >Oil too i 0 \ 0 Zhu 7 ; q # coo . � . . . / n � ƒ \ . . . � .. n ` . % City of Fort Worth, Texas M, jAyar and Council Communication DATE SUBJECT REFERENCE NUMBER LOG NAME PAGE C=19336 52CARTS AUTHORIZATION TO EXECUTE A CONTRACT WITH TOTER, INC. TO SELL, DELIVER, MAINTAIN AND FINANCE RECYCLING AND GARBAGE CARTS RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to negotiate and execute a contract with Toter, Inc. for the sale, delivery, maintenance and financing of recycling and garbage carts; and 2. Authorize this contract to begin November 1, 2002, and expire March 31, 2013; and 3. Authorize the City Manager to execute a contract with Bank of America for lease -purchase financing to fund this purchase, subject to negotiating a mutually acceptable lease -purchase agreement. DISCUSSION: On June 27, 2002, the City received proposals from five prospective contractors in response to a Request for Proposal (RFP) to sell recycling and garbage carts to the City, to deliver these carts to all residential customers of the City, to maintain these carts for a period of 10 years, and to provide options to the City on financing the purchase of these carts. Following initial proposal evaluations, the evaluation committee comprised of five representatives from the M/WBE Office, the Environmental Management Department, and the Law Department, with significant input from the consulting firm of Gershman, Brickner and Bratton, selected three firms for interviews, presentations and negotiations. At the completion each interview, best and final offers from these three firms were requested. After an in-depth evaluation of these best and final offers, Toter, Inc. is recommended as awardee for these recycling and garbage cart services based on evaluation factors enumerated on the attached RFP proposal evaluation matrix. The scope of work for these services provides for the delivery of either 150,000 or 300,000 recycling and garbage carts, at the direction of the City Council, to residential customers within the City, to provide third -party financing to the City to purchase these carts, and to maintain the carts through March 31, 2013. Public forums inviting citizen and provider comments were held on March 4 and 5, 2002. An RFP was advertised on May 15, 2002. The Environmental Management Department solicited proposals from all known cart manufactures, including those in the purchasing system database, Internet searches, and those known through cart comparison articles in solid waste trade magazines. A pre -proposal conference was conducted on May 30, 2002, either manufacture carts or provide services associated with responses were received, one of which was a "no -bid". PROPOSAL EVALUATION -See attached evaluation matrix. with representatives from nine firms that cart systems in attendance. A total of six DATE City of Fort Worth, Texas M,��or and counei! Communication 11 /5/02 SUBJECT REFERENCE NUMBER LOG NAME I PAGE C=19336 52CARTS 2of2 AUTHORIZATION TO EXECUTE A CONTRACT WITH TOTER, INC. TO SELL, DELIVER, MAINTAIN AND FINANCE RECYCLING AND GARBAGE CARTS M/WBE -Toter, Inc. is in compliance with the City's M/WBE Ordinance by commng to a minimum of 25% M/WBE participation. The City's goal on this project is 25%. Subject to negotiating a mutually acceptable agreement, lease -purchase financing to purchase the carts will be obtained through Bank of America. The payout will be over a ten-year period, at an estimated cost of $984,603 per year, and at an annual rate of 3.22%. Charges for delivery of the carts are estimated at $675,000 and will be paid from current funds as billings are received. The estimated cost for cart repair and maintenance for FY2002-2003 is $232,650. The estimated cost of the cart maintenance over the ten-year contract term is $4,653,000. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that funds are available in the current operating budget, as appropriated, of the Solid Waste Fund, and that subsequent year operating costs will be budgeted. CB:k Submitted for City Manager's Office by: Charles Boswell Originating Department Head: Brian Boerner Additional Information Contact: Brian Boerner FUND (to) 6183 8079 (from) PE64 PE64 PE64 8079 ACCOUNT 524010 539120 539120 CENTER 0525002 0525002 0525002 AMOUNT $984,603.00 $232,650.00 $675,000.00 CITY SECRETARY APPROVED 11/OS/02