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HomeMy WebLinkAboutContract 29954 CITY SEC RETAHY� CONTRACT NO . 04-12-0064 : 26 RCVD SUNTRUST LEASING CORPORATION MASTER AIRCRAFT LOAN AND SECURITY AGREEMENT LOAN NUMBER 023341 This MASTER AIRCRAFT LOAN AND SECURITY AGREEMENT(the"Agrmment"),dated as of December 10 , 2003 is made and entered into by and between SUNTRUST LEASING CORPORATION, a Virginia corporation, as Lender (the "Lender"), and CITY OF FORT WORTH, a political subdivision of the state of Texas,as Borrower("Borrower"). In consideration of the mutual cavenants herein contained,the parties hereto agree as foI lows. ARTICLE I. DEFINITIONS AND EXHIBITS Section I.I. Definitions. The Miowing terms have the meanings specitied below, "Acceptance Certificate" means each Acceptance Certificate delivered by Borrower as part of an Aircraft Schedule certifying as to the delivery, installation and acceptance of Ali-craft. "Agreement" means this Plaster Aircraft Loan and Security Agreement and a 1 Aircraft Schedules hereto- "Asrccment Date" means the date first written above. "Cade" means the Internal Revenue Code of 1986, as amended, together with Treasury Regulations promulguted from time tv time thereunder. "Aircraft"means all items of property described in Aircraft Schedules and subject to this Agreement. "Aircraft Group" oceans each group of Aircraft listed in a single Aimraft Schedule. "Aircraft Schedule" means each sequentially numbered schedule executed by Lender and Borrower with respect to an Aircraft Group. "Eseruw Account" means the aircraft acquisition account established by Lender and Borrower with the Escrow Agent pursuant to the Escrow Agreement,if applicable. "Escrow Agent" means, Ca Biz BANK N.A. dba COLORADO BUSINESS 1RANR a Colorado banking corporation, and any successor escrow agent under the Escrow Agreement "Escrow Agreement" means the Escrow Agreement, substantially in the form of Exhibit F hereto, if applicable, to be executed by Lender,Borrower and the Escrow Agent upon the first funding cfan Aircraft Schedule using the procedure described in Section 2.4. "Events of DefauiV means those events described in Section 12.1. "Fiscal Year"means each 12-month fiscal period of Borrower from October through Sepwrnber, "Funding Date" means, with respect to each Loan, the date Lender makes payment to the Vendcr(s) seamed in the related Aircraft Schedule or reimburses Borrower for the purchase price of the related Aircraft Group or, if the procedure described in Section 2.4 is utilized,the date Lender deposits funds equal to such pure hose price into the Hsrrow ACC*unt. "Installment Payment" means each payment of prineipai and interest due from Borrower to Lender on a Payrt7eat Date. "Interest" means the portion of a Installment Payment designated as and comprising ingest as pi,ovided in a Payment Schedule, "Loan" means, with respect to cads Aircraft Group, this Agreement and the Aircraft Schedule relating thereto, which togetter shall constitute a separate contract between 4ender and Borrower relating to such Aircraft Group. "Loan late" means,with respect to each Loan, the date so designated in the related Aircraft Schedule. "Loan Term" means, with respect to each Aircraft Group, the period during which the related Loan is in effect as specified in Section 3.1. ""Net proceeds" means any insurance proceeds or condemnation awards paid with respect to an 16A71 F�7�aa t4r;r 'afCsr aymen[ therefrom nfall expenses incurred in the collection thereof_ "Nan-Appropriation" means the failure of Borrower, BorrawcCs governing body,or, if applicable,I he gcrVcl �eNi,w fro n which Ain a9 Lmn-mc 2 Borrower obtains its operating and/or capital funds to appropriate money for any Fiscal Year sufficient for the continued performance by Borrower of all of Borrower's obligations under this Agreement, as evidenced by the passage of an ordinance or resolution specifically prohibiting Borrower from performing its obligations under this Agreement with respect to any Aircraft, and from using any moneys to pay any Installment Payments due under this Agreement for a designated Fiscal Year and all subsequent Fiscal Years. "Payment Date"means each date upon which a Installment Payment is due and payable as provided in a Payment Schedule. "Payment Schedule"means the schedule of Installment Payments attached to an Aircraft Schedule. "Principal"means the portion of any Installment Payment designated as and comprising principal as provided in a Payment Schedule. "Prepayment Amount" means the amount so designated and set forth opposite a Payment Date in a Payment Schedule indicating the amount due in connection with a prepayment of a Loan as of such Payment Date after making the Installment Payment due on such Payment Date. "Specifications" means the bid specifications and/or purchase order pursuant to which Borrower has ordered any Aircraft from a Vendor. "State"means the state or commonwealth in which Borrower is situated. "Vendor" means each of the manufacturers or vendors from which Borrower has ordered or with which Borrower has contracted for the manufacture,delivery and/or installation of the Aircraft. Section 1.2. Exhibits. Exhibit A: Aircraft Schedule including form of Acceptance Certificate and form of Payment Schedule. Fxhihit B-1: Tax Agreement and Arbitrage Certificate(Non-Escrow). Exhibit C-1: Resolution of the Governing Body of Borrower relating to each Loan(Non-Escrow). Fxhihit D: Incumbency Certificate as to each officer or representative of Borrower executing this Agreement or any Loan. Exhibit E: Opinion of Independent Counsel to Borrower. Exhibit f: Escrow Agreement with Exhibit A. Exhibit G-1: Confirmation of Outside Insurance. Exhibit G-2: Questionnaire for Self-Insurance and Addendum to Aircraft Schedule Relating to Self-Insurance. ARTICLE II. FINANCE OF AIRCRAFT Section 2.1. Acquisition of Aircraft. Prior to the addition of any Aircraft Group, Borrower shall provide Lender with a description of the aircraft proposed to be financed hereunder, including the cost and vendor of such aircraft, the expected delivery date and the desired Loan terms for such aircraft, and such other information as the Lender may require. If Lender, in its sole discretion, determines the proposed aircraft may be subject to finance hereunder, Lender shall furnish to Borrower a proposed Aircraft Schedule relating to the Aircraft Group for execution by Borrower and then Lender. By execution hereof, Lender has made no commitment to provide financing for the acquisition of any aircraft to Borrower. Section 2.2. Disbursement. Lender shall have no obligation to make any disbursement to a Vendor or reimburse Borrower for any payment made to a Vendor for an Aircraft Group (or, if the escrow procedure described in Section 2.4 hereof is utilized, consent to a disbursement by the Escrow Agent) until five (5) business days after Lender has received all of the following in form and substance satisfactory to Lender: (a) a completed Aircraft Schedule executed by Borrower; (b) an Acceptance Certificate in the form included with Exhibit A hereto; (c) a resolution or evidence of other official action taken by or on behalf of the Borrower to authorize the acquisition of the Aircraft Group on the terms provided in such Aircraft Schedule; (d) a Tax Agreement and Arbitrage Certificate in the form of Exhibit B-1 (as applicable) attached hereto; (e) evidence of insurance with respect to the Aircraft Group in compliance with Article VII of this Agreement;(f)Vendor invoice(s)and/or bill(s)of sale relating to the Aircraft Group, and if such invoices have been paid by Borrower, evidence of payment thereof and evidence of official intent to reimburse such payment as required by the Code; (g) financing statements naming Borrower as debtor and/or the original certificate of title or manufacturer's certificate of origin and title application, if any, for any Aircraft which is part of such Aircraft Group and is subject to certificate of title laws; (h) a completed and executed Form 8038-G or 8038-GC, as applicable, or evidence of filing thereof with the Secretary of Treasury; (i) an opinion of counsel to the Borrower substantially in the form of Exhibit E hereto;(j)two bills of sale for the Aircraft,each duly executed by the seller of the Aircraft in favor of Lender and dated the Commencement Date, one which shall be a Federal Aviation Administration (together with any and all successor agencies,the"FAA") form of Bill of Sale on AC Form 8050-2 (the "FAA Bill of Sale"), and the other of which shall be a warranty bill of sale(the"Warranty Bill of Sale") specifically referring to the engine and the airframe;(k) an effective Airworthiness Certificate duly and validly issued by the FAA covering the Aircraft; (1) an appraisal of the Aircraft; (m) evidence, satisfactory to Lender,that the Aircraft is free and clear of all Liens; including but not limited to an opinion of counsel satisfactory to Lender that Lender has or will have a first priority security interest in the Aircraft; (n) copies of Borrower's air transport license, air operator's certificates, and all other licenses, certificates and permits required by Borrower in relation to, or in connection with, the operation of the Aircraft; (o) evidence satisfactory to Lender of filing of all necessary documents with, and the Aircraft Loan-esc.doc/rev10/03:1213/2003 3 acceptance thereof by,the FAA; (p) evidence satisfactory to Lender of payment in full of all required fees and expenses by Borrower; (and(q)any other documents or items reasonably required by Lender. Section 2.3. Possession and Use. Borrower agrees that so long as any Installment Payments or other amounts due under this Agreement remain unpaid: (a) The Aircraft may be used and operated by Borrower and such possession, use and operation of the Aircraft shall be at the sole risk and expense of Borrower. Borrower agrees that the Aircraft will be used and operated in compliance with any and all statutes, laws, ordinances,regulations and standards or directives issued by any governmental agency applicable to the use or operation thereof, in compliance with any airworthiness certificate, license or registration relating to the Aircraft issued by any agency and in a manner that does not modify or impair any existing material warranties on the Aircraft or any part thereof. The Aircraft will, at all times be operated by duly qualified pilots holding at least a valid commercial airman certificate and instrument rating and any other certificate,rating,type rating or endorsement appropriate to the Aircraft,purpose of flight,condition of flight or as otherwise required by the Federal Aviation Regulations ("FAR"). Pilots shall be supplied by Borrower and shall meet the requirements established and specified by the insurance policies required hereunder and the FAA. The primary hangar location of the Aircraft shall be as stated in Section B of the Aircraft Schedule; (b)Borrower shall not use or locate the Aircraft,Frame or Engine, or suffer the Aircraft, Frame or Engine to be operated, used or located (i) in any area excluded from coverage by any insurance required by the terms of Article VII hereof, except in the case of a requisition by the Government of the United States where Borrower has obtained indemnity in lieu of such insurance from the Government of the United States against the risks and in the amounts required by Article VII hereof, (ii) in any jurisdiction other than the State, (iii) outside the United States and Canada in any recognized or, in Lender's reasonable judgment, threatened area of hostilities unless fully covered by war risk and allied perils insurance, or unless the Aircraft, airframe or such engine is operated or used under contract with the Government of the United States under which contract the Government of the United States assumes,to Lender's reasonable satisfaction, liability for any damages, loss, destruction or failure to return possession of the Aircraft, airframe or such engine at the end of the term of such contract or for injury to persons or damage to property of others arising out of such use, and Borrower shall have furnished Lender with satisfactory evidence of such contract; (c) Borrower shall not permit the Aircraft to be operated for more than 1500 hours per year;and(d)Borrower shall not permit the Engine to be used on any other Aircraft. Seetion 2.4. Escrow Procedure. If Lender and Borrower agree that the cost of an Aircraft Group is to be paid from an Escrow Account: (a)Lender and Borrower shall execute an Escrow Agreement substantially in the form of Exhibit F;(b)Lender and Borrower shall execute an Aircraft Schedule relating to such Aircraft Group; and (c) Lender shall deposit an amount equal to the cost of the Aircraft Group into the Escrow Account. All amounts deposited by Lender into the Escrow Account shall constitute a loan from Lender to Borrower which shall be repaid by the Installment Payments due under the related Loan. ARTICLE III. TERM Section 3.1. Term. This Agreement shall be in effect from the Agreement Date until the earliest of(a)termination under Section 3.2 or (b) termination under Section 12.2; provided, however, no Aircraft Schedules shall be executed after any Non-Appropriation or Event of Default. Each Loan with respect to an Aircraft Group shall be in effect for a Loan Term commencing upon the Loan Date and ending as provided in Section 3.4. Section 3.2. Termination by Borrower. In the sole event of Non-Appropriation, this Agreement and each Loan hereunder shall terminate, in whole, but not in part, as to all Aircraft effective upon the last day of the Fiscal Year for which funds were appropriated, in the manner and subject to the terms specified in this Article. Borrower may effect such termination by giving Lender a written notice of termination and by paying to Lender any Installment Payments and other amounts which are due and have not been paid at or before the end of its then current Fiscal Year. Borrower shall endeavor to give notice of such termination not less than ninety (90) days prior to the end of the Fiscal Year for which appropriations were made, and shall notify Lender of any anticipated termination. In the event of termination of this Agreement as provided in this Section, Borrower shall comply with the instructions received from Lender in accordance with Section 12.3. Section 3.3. Effect of Termination. Upon termination of this Agreement as provided in Section 3.2, Borrower shall not be responsible for the payment of any additional Installment Payments coming due in succeeding Fiscal Years, but if Borrower has not complied with the instructions received from Lender in accordance with Section 12.3, the termination shall nevertheless be effective, but Borrower shall be responsible for the payment of damages in an amount equal to the amount of the Installment Payments that would thereafter have come due if this Agreement had not been terminated and which are attributable to the number of days after which Borrower fails to comply with Lender's instructions and for any other loss suffered by Lender as a result of Borrower's failure to take such actions as required. Section 3.4. Termination of Loan Term. The Loan Term with respect to any Loan will terminate upon the occurrence of the first of the following events: (a) the termination of this Agreement by Borrower in accordance with Section 3.2; (b) the payment of the Prepayment Amount by Borrower pursuant to Article V; (c) an Event of Default by Borrower and Lender's election to terminate such Loan pursuant to Article XII; or(d)the payment by Borrower of all Installment Payments and all other amounts authorized or required to be paid by Borrower pursuant to such Loan. ARTICLE IV. INSTALLMENT PAYMENTS Section 4.1. Installment Payments. The Borrower agrees to pay the Installment Payments due as specified in the Payment Schedule in Exhibit A. A portion of each Installment Payment is paid as interest as specified in the Payment Schedule of each Loan,and the first Aircraft Loan-esc.doc/revl0/03:12/3/2003 4 Installment Payment will include Interest accruing from the Funding Date. All Installment Payments shall be paid to Lender, or to such assignee(s) Lender has assigned as stipulated in Article XI, at such places as Lender or such assignee(s) may from time to time designate by written notice to Borrower. Borrower shall pay the Installment Payments when due with lawful money of the United States of America from moneys legally available therefore Section 4.2. Current Expense. The obligations of Borrower, including its obligation to pay the Installment Payments due in any Fiscal Year of a Loan Term, shall constitute a current expense of Borrower for such Fiscal Year and shall not constitute an indebtedness of Borrower within the meaning of the Constitution and laws of the State. Nothing herein shall constitute a pledge by Borrower of any taxes or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of Borrower for this Agreement and the Net Proceeds of the Aircraft) to the payment of any Installment Payment or other amount coming due hereunder. Section 4.3. ITnconditional Installment Payments. The Borrower's obligation to make Installment Payments when due, from funds legally appropriated therefore, shall be absolute and unconditional in each Fiscal Year. Also, any other payments required hereunder shall be payable from funds legally appropriated therefore and shall be absolute and unconditional. Borrower shall make these payments when due and shall not withhold any of these payments pending final resolution of any disputes. The Borrower shall not assert any right of set-off or counterclaim against its obligation to make these payments. Borrower's obligation to make Installment Payments or other payments shall not be abated through accident, unforeseen circumstances, failure of the Aircraft to perform as desired,damage or destruction to the Aircraft, loss of possession of the Aircraft or obsolescence of the Aircraft. The Borrower shall be obligated to continue to make payments required of it by this Agreement if title to, or temporary use of,the Aircraft or any part thereof shall be taken under exercise of the power of eminent domain, but solely from the proceeds of awards for condemnation or eminent domain. ARTICLE V. OPTION TO PREPAY Section 5.1. Option to Prepay. Borrower shall have the option to prepay its obligations under any Loan in whole but not in part on any Payment Date for the then applicable Prepayment Amount (which shall include a prepayment fee) as set forth in the related Payment Schedule,provided there does not exist at such time an Event of Default that has not been cured. Section 5.2. Exercise of Option. Borrower shall give notice to Lender of its intention to exercise its option not less than thirty(30) days prior to the Payment Date on which the option will be exercised and shall pay to Lender not later than such Payment Date an amount equal to all Installment Payments and any other amounts then due or past due under the related Loan(including the Installment Payment due on the Payment Date on which the option shall be effective) and the applicable Prepayment Amount set forth in the related Payment Schedule. In the event that all such amounts are not received by Lender on such Payment Date, such notice by Borrower of exercise of option shall be void and the related Loan shall continue in full force and effect. Section 5.3. Release of Lender's interest. Upon receipt of the Prepayment Amount in good funds with respect to any Aircraft Group,the Loan with respect to such Aircraft Group shall terminate and Borrower shall become entitled to such Aircraft Group AS IS, WHERE IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY BORROWER, except that such Aircraft Group shall not be subject to any lien or encumbrance created by or arising through Lender. Upon receipt of such payment, Lender shall cause to be executed and delivered such documents as may be necessary to release its interest in the Aircraft Group. ARTICLE VI. REPRESENTATIONS,WARRANTIES AND COVENANTS Section 6.1. Representations and Warranties of Borrower. Borrower represents and warrants as of the Agreement Date and as of each Loan Date as follows: (a) Borrower is a state or political subdivision of the State within the meaning of Section 103(c)of the Code, duly organized and existing under the Constitution and laws of the State, and is authorized under the Constitution and laws of the State to enter into this Agreement, each Loan and the transactions contemplated hereby and thereby, and to perform all of its obligations under this Agreement and each Loan. (b) The execution and delivery of this Agreement and each Loan have been duly authorized by all necessary action of Borrower's governing body and such action is in compliance with all public bidding and other State and federal laws applicable to this Agreement, each Loan and the acquisition and financing of the Aircraft by Borrower. (c) This Agreement and each Loan have been duly executed and delivered by and constitutes the valid and binding obligation of Borrower,enforceable against Borrower in accordance with their respective terms. (d) The execution, delivery and performance of this Agreement and each Loan by Borrower does not and shall not(i)violate any State or federal law or local law or ordinance, or any order, writ, injunction, decree, or regulation of any court or other governmental agency or body applicable to Borrower, or (ii) conflict with or result in the breach or violation of any term or provision of, or constitute a default under, any note, bond, mortgage, indenture, agreement, deed of trust, Loan or other obligation to which Borrower is bound. (e) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best of Borrower's knowledge, threatened against or affecting Borrower, challenging Borrower's authority to enter into this Agreement or any Loan or any other action wherein an unfavorable ruling or finding would Aircraft Loan-esc.dodrevl0/03:12/3/20035 adversely affect the enforceability of this Agreement or any Loan. (f) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which Borrower has been a party at any time during the past ten(10)years,other than what has been disclosed to the Lender in writing prior to closing,has been terminated by Borrower as a result of insufficient funds being appropriated in any Fiscal Year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation which Borrower has issued during the past ten (10) years. (g) Borrower or Borrower's governing body has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all Installment Payments due and payable under this Agreement during the current Fiscal Year, and such moneys will be applied in payment of all Installment Payments due and payable under this Agreement during such current Fiscal Year. (h) Borrower has an immediate need for, and expects to make immediate use of, the Aircraft, which need is not temporary or expected to diminish during the applicable Loan Term. Borrower presently intends to continue each Loan hereunder for its entire Loan Term and to pay all Installment Payments relating thereto. (i) Lessee warrants that during each fiscal year during which this agreement is in effect, they will maintain and have available at all times sufficient funds to discharge City's insurance obligations under this Agreement. Section 6.2. Covenants of Borrower. Borrower agrees that so long as any Installment Payments or other amounts due under this Agreement remain unpaid: (a) Borrower shall not install, use, operate or maintain the Aircraft improperly, carelessly, in violation of any applicable law or regulation or in a manner contrary to that contemplated by this Agreement. Borrower shall obtain and maintain all permits and licenses necessary for the installation and operation of the Aircraft. Borrower shall not, without the prior written consent of Lender, affix or install any accessory equipment or device on any of the Aircraft if such addition would change or impair the originally intended functions,value or use of such Aircraft. (b) Borrower shall provide Lender access at all reasonable times to examine and inspect the Aircraft and provide Lender with such access to the Aircraft as may be reasonably necessary to perform maintenance on the Aircraft in the event of failure by Borrower to perform its obligations hereunder. (c) Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or other claim with respect to the Aircraft, other than the respective rights of Lender and Borrower as herein provided. Borrower shall promptly, at its own expense,take such actions as may be necessary duly to discharge or remove any such claim if the same shall arise at any time. Borrower shall reimburse Lender for any expense incurred by Lender in order to discharge or remove any such claim. (d) The person or entity in charge of preparing Borrower's budget will do all things lawfully within such person's power to include in the budget request for each Fiscal Year the Installment Payments to become due during such Fiscal Year, and will use all reasonable and lawful means available to secure the appropriation of money for such Fiscal Year sufficient to pay all Installment Payments coming due therein. (e) Borrower shall assure that its obligation to pay Installment Payments is not directly or indirectly secured by any interest in property, other than the Aircraft, and that the Installment Payments will not be directly or indirectly secured by or derived from any payments of any type or any fund other than Borrower's general purpose fund. (f) Upon Lender's request, Borrower shall provide Lender with current financial statements, budgets, and proof of appropriation for the ensuing Fiscal Year and such other financial information relating to the ability of Borrower to continue this Agreement and each Loan as may be reasonably requested by Lender. (g) Borrower shall promptly and duly execute and deliver to Lender such further documents, instruments and assurances and take such further action as Lender may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lender hereunder. (h) Borrower shall register and maintain the Aircraft in the name of Borrower under the U.S. Federal Aviation Act, and the Aircraft shall not be registered under the laws of any other country. (i) Borrower will provide,or will cause to be provided to,Lender the following in writing within the time periods specified in the following notices: (a) upon the request by Lender, copies of all information, logs, documents and records regarding or in respect to the Aircraft and its use, maintenance and/or condition,within ten(10) days of such request,provided that any such request shall not be made more frequently than once per quarter; (b) such information as may be required to enable Lender to file any reports required by any governmental authority as a result of Lender's ownership of the Aircraft, promptly upon request of Lender; (c) copies of manufacturer's maintenance service program contract for the airframe or engines, if any, promptly upon request by Lender; and (d) evidence of Borrower's compliance with FAA airworthiness directives and advisory circulars and of compliance with other maintenance provisions of Article VIII hereof and the return provisions of Section 12.3, upon request of Lender, provided that any such request shall not be made more frequently than once in any calendar year. Section 6.3. Tax Related Representations,Warranties and Covenants. Aircraft Loan-esc.doc/rev10/03:12/3/2003 6 (a) Incorporation of Tax Agreement and Arbitrage Certificate. As of each Loan Date and with respect each Loan, Borrower makes each of the representations, warranties and covenants contained in the Tax Agreement and Arbitrage Certificate delivered with respect to such Loan. By this reference each such Tax Agreement and Arbitrage Certificate is incorporated in and made a part of this Agreement. (b) Event of Taxability. If Lender either (i) receives notice, in any form, from the Internal Revenue Service or (ii) reasonably determines, based on an opinion of independent tax counsel selected by Lender from The Bond Buyer's Municipal Marketplace under the heading of Municipal Bond Attorneys,that Lender may not exclude any Interest paid under any Loan from its Federal gross income (each an "Event of Taxability"),the Borrower shall, subject to appropriation, pay to Lender upon demand (x) an amount which, with respect to Installment Payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the Interest due through the date of such event), will restore to Lender its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of Installment Payments and reinvestment at the after-tax yield rate) on the transaction evidenced by such Loan through the date of such event and (y) as additional Installment Payments to Lender on each succeeding Payment Date such amount as will maintain such after-tax yield to Lender. ARTICLE VII. INSURANCE AND RISK OF LOSS Section 7.1. Liability and Property Insurance. Requirements for liability and property insurance to be provided by Lessee for each Aircraft Group shall be set forth in Section 7.3 and the related Aircraft Schedule. Section 7.2. Workers' Compensation insurance. If required by State law, Borrower shall carry workers' compensation insurance covering all employees on, in, near or about the Aircraft, and upon request, shall furnish to Lender certificates evidencing such coverage throughout the Loan Term. Section 7.3. Insurance Requirements. (a) Insurance Policies. Borrower shall secure and maintain in effect at its own expense throughout the Loan Term hereof insurance against the hazards and for such risks set forth below. All insurance policies required by this Article shall be taken out and maintained with insurance companies acceptable to Lender and shall contain a provision that thirty(30) days prior to any change in the coverage the insurer must provide written notice to the insured parties. No insurance shall be subject to any co-insurance clause. All insurance shall name the Lender, as its interest shall appear, as loss payee and additional insured (without responsibility for premiums) and, to the extent available on a commercially reasonable basis from Borrower's insurers, (i) shall provide that any cancellation or substantial change in coverage shall not be effective as to the Lender for thirty (30) days after receipt by Lender of written notice from such insurer(s) of such cancellation or change, (ii) shall insure Lender's interest regardless of any breach or violation by Borrower of any warranties, declarations or conditions in such policies, (iii) shall operate in the same manner as if there were a separate policy covering each insured,(iv)shall waive any right of set-off,counterclaim,deduction against Borrower or Lender, (v) shall waive any rights of subrogation against Lender,(vi) shall insure Lender's interest regardless of(A)the use of the Aircraft for unauthorized purposes, (B) any foreclosure proceeding or notice of sale regarding the Aircraft or(C) any change in title or ownership of the Aircraft, (vii) shall provide that Lender's and Borrower's respective interests in the insurance policies are assignable and (viii) shall otherwise be reasonably satisfactory to Lender. Such insurance shall be primary,without right of contribution and not be subject to any offset by any other insurance carried by Lender or Borrower. Borrower shall provide to Lender an insurance certificate(in form and substance reasonably satisfactory to Lender) from Borrower's insurer evidencing the insurance coverages referenced herein on the date hereof and no less frequently than annually thereafter. All proceeds under such insurance policies in respect of any actual, compromised or constructive total loss shall be paid to the Lender to the extent of, and as a credit against Borrower's obligation to make payment of,the Prepayment Amount on the applicable Payment Date and any other amounts then due and owing hereunder. (b) Insurance Coverage. Borrower shall maintain (i) breach of warranty insurance, (ii) liability insurance covering public liability and property and environmental damage (as respects the Aircraft's operation), in amounts not less than twenty-five million U.S, dollars ($25,000,000)for any single occurrence, and(iii)all-risk aircraft hull and engine insurance(including,without limitation, foreign object damage insurance) in an amount which is not less than the Prepayment Amount, and (iv) war risk insurance, and confiscation insurance; provided that if the Aircraft is on the ground for a period greater than two months, Borrower may maintain, in lieu of the insurance required under(ii) above, insurance, including hangar keeper insurance, upon such terms and in such amounts as is customarily maintained while aircraft are grounded or being maintained or serviced (the "Alternative Insurance"); provided, however that in the event Borrower elects to maintain such Alternative Insurance, the Borrower shall thirty (30) days prior to any alteration or cancellation of (A) the insurance required under (ii) above or (B) Alternative Insurance maintained by Borrower in accordance with the preceding sentence, give Lender written notice of such alteration or cancellation and furnish or cause to be furnished to Lender an insurance certificate (in form or substance satisfactory to Lender) or other evidence satisfactory to Lender signed by an independent aircraft insurance broker certifying to Lender's satisfaction that Borrower has insurance in place with respect to the Aircraft which complies with the insurance requirements of this Loan. (c) Self Insurance. Borrower may self-insure the Aircraft by means of an adequate self-insurance fund set aside and maintained for that purpose which must be fully and accurately described in a letter delivered to Lender in form acceptable to Lender. (d) Evidence of Insurance. Borrower shall deliver to Lender upon acceptance of any Aircraft evidence of insurance which complies with this Article VII with respect to such Aircraft to the satisfaction of Lender, including,without limitation,the confirmation of insurance in the form of Exhibit G-I attached hereto together with Certificates of Insurance,when available,or the Questionnaire for Self-Insurance and Addendum to Aircraft Schedule Relating to Self-Insurance in the form of Exhibit G-2 attached hereto, as Aircraft Loan-ese.doc/rev10/03:12/3/2003 7 applicable. Prior to the expiration of any insurance coverage maintained pursuant to this Article VII, Borrower shall provide Lender evidence of all renewals or replacements thereof. Section 7.4. Risk of Loss. To the extent permitted by applicable laws of the State, as between Lender and Borrower, Borrower assumes all risks and liabilities from any cause whatsoever, whether or not covered by insurance, for loss or damage to any Aircraft and for injury to or death of any person or damage to any property. Whether or not covered by insurance, Borrower hereby assumes responsibility for and, to the extent permitted by law, agrees to indemnify Lender from all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses, including reasonable attorneys' fees, imposed on, incurred by or asserted against Lender that relate to or arise out of this Agreement, including but not limited to, (a) the selection, manufacture, purchase, acceptance or rejection of Aircraft or the ownership of the Aircraft, (b) the delivery, purchase, possession, maintenance, use, condition, return or operation of the Aircraft, (c)the condition of the Aircraft sold or otherwise disposed of after possession by Borrower, (d)the conduct of Borrower, its officers, employees and agents, (e) a breach of Borrower of any of its covenants or obligations hereunder, (f) any claim, loss, cost or expense involving alleged damage to the environment relating to the Aircraft, including, but not limited to investigation, removal, cleanup and remedial costs, and (g) any strict liability under the laws or judicial decisions of any state or the United States. This provision shall survive the termination of this Agreement. Section 7.5. Destruction of Aircraft. Borrower shall provide a complete written report to Lender immediately upon any loss,theft, damage or destruction of any Aircraft and of any accident involving any Aircraft. Lender may inspect the Aircraft at any time and from time to time during regular business hours..If all or any part of the Aircraft is stolen, lost, destroyed or damaged beyond repair ' ("Damaged Aircraft"), Borrower shall within-49114r plays after such event either: (a)replace the same at Borrower's sole expense with equipment having substantially similar Specifications and of equal or greater value to the Damaged Aircraft immediately prior to the time of the loss occurrence, such replacement equipment to be subject to Lender's approval, whereupon such replacement equipment shall be substituted in the applicable Loan and the other related documents by appropriate endorsement or amendment solely from net proceeds of insurance or other legally available funds; or(b) pay the applicable Prepayment Amount of the Damaged Aircraft determined as set forth in the related Aircraft Schedule solely from net proceeds of insurance or other legally available funds. Borrower shall notify Lender of which course of action it will take within fifteen(15) days after the loss occurrence. If,within forty- five(45) days of the loss occurrence,(a)Borrower fails to notify Lender;(b)Borrower and Lender fail to execute an amendment to the applicable Aircraft Schedule to delete the Damaged Aircraft and add the replacement equipment or(c) Borrower has failed to pay the applicable Prepayment Amount, then Lender may, at its sole discretion, declare the applicable Prepayment Amount of the Damaged Aircraft, to be immediately due and payable. The Net Proceeds of insurance with respect to the Damaged Aircraft shall be made available by Lender to be applied to discharge Borrower' obligation under this Section. ARTICLE VIII. OTHER OBLIGATIONS OF BORROWER Section 8.1. Maintenance of Aircraft. (a) Aircraft Location. Borrower shall notify Lender in writing prior to moving the principal hangar of the Aircraft to another address and shall otherwise keep the Aircraft at the address specified in the related Aircraft Schedule. Borrower shall, at its own expense, maintain the Aircraft in proper working order and shall make all necessary repairs and replacements to keep the Aircraft in such condition including compliance with State and federal laws. Any and all replacement parts must be free of encumbrances and liens. All such replacement parts and accessories shall be deemed to be incorporated immediately into and to constitute an integral portion of the Aircraft and as such,shall be subject to the terms of this Agreement. (b) Compliance with Law. Borrower agrees that the Aircraft will be maintained in compliance with any and all statutes, laws, ordinances, regulations and standards or directives issued by any governmental agency applicable to the maintenance thereof, in compliance with any airworthiness certificate, license or registration relating to the Aircraft issued by any agency, in accordance with the manufacturer's suggested maintenance standards and in a manner that does not materially modify or impair any existing warranties on the Aircraft or any part thereof. (c) Maintenance. Borrower shall maintain, inspect, service,repair, overhaul and test the Aircraft(including the engine of same), or shall cause the Aircraft to be maintained, inspected,serviced,repaired,overhauled and tested, in accordance with(i)all maintenance manuals initially furnished with the Aircraft, including any subsequent amendments or supplements to such manuals issued by the manufacturer from time to time, (ii) all mandatory "Service Bulletins" issued, supplied, or available by or through the manufacturer and/or the manufacturer of any engine or part with respect to the Aircraft and (iii) all airworthiness directives and advisory circulars issued by the FAA or similar regulatory agency having jurisdictional authority, and causing compliance with such directives or circulars to be completed through corrective modification or operating manual restrictions. Borrower shall maintain the Aircraft in good and safe working order and in the same condition as when originally delivered to Borrower hereunder, ordinary wear and tear excepted. Borrower shall cause the Aircraft to maintain an effective FAA Airworthiness Certificate at all times. Borrower shall maintain, or shall cause to be maintained, in the English language, all records, logs and other materials required by the manufacturer thereof for enforcement of any warranties or by the FAA. All maintenance procedures required hereby shall be undertaken and completed in accordance with the manufacturer's recommended procedures, and by properly trained, licensed, and certificated maintenance sources and maintenance personnel, so as to keep the Aircraft and the engine in as good operating condition as when delivered to Borrower hereunder, ordinary wear and tear excepted, and so as to keep the Aircraft in such operating condition as may be necessary to enable the airworthiness certification of such Aircraft to be maintained in good standing at all times under the FAA. Aircraft Loan-ese.dor/revl0/03:12/3/2003 8 Section 8.2. Taxes. Borrower shall pay all taxes and other charges which are assessed or levied against the Aircraft, the Installment Payments or any part thereof, or which become due during the Loan Term, whether assessed against Borrower or Lender, except as expressly limited by this Section. Borrower shall pay all utilities and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Aircraft, and all special assessments and charges lawfully made by any governmental body that may be secured by a lien on the Aircraft. Borrower shall not be required to pay any federal, state or local income, succession, transfer, franchise, profit, excess profit, capital stock, gross receipts, corporate, or other similar tax payable by Lender, its successors or assigns, unless such tax is made as a substitute for any tax, assessment or charge which is the obligation of Borrower under this Section. Section 8.3. Advances. If Borrower shall fail to perform any of its obligations under this Article, Lender may take such action to cure such failure, including the advancement of money, and Borrower shall be obligated to repay all such advances on demand, with interest at the rate of 12%per annum or the maximum rate permitted by law,whichever is less,from the date of the advance to the date of repayment. ARTICLE IX. TITLE Section 9.1. Title. During the Loan Term, ownership and legal title of the Aircraft and all replacements, substitutions, repairs and modification shall be in Borrower and Borrower shall take all action necessary to vest such ownership and title in Borrower. Lender does not own the Aircraft and by this Agreement and each Loan is merely financing the acquisition of such aircraft for Borrower. Lender has not been in the chain of title of the Aircraft, does not operate, control or have possession of the Aircraft and has no control over the Borrower or the Borrower's operation,use,storage or maintenance of the Aircraft. Section 9.2. Security Interest. Borrower hereby grants to Lender a continuing, first priority security interest in and to the Aircraft, all repairs, replacements, substitutions and modifications thereto and all proceeds thereof and in the Escrow Account(if any) in order to secure Borrower's payment of all Installment Payments and the performance of all other obligations. Borrower hereby authorizes Lender to prepare and file such financing statements and other such documents to establish and maintain Lender's valid first lien and perfected security interest.Borrower will join with Lender in executing documents and will perform such acts as Lender may request to establish and maintain Lender's valid first lien and perfected security interest. If requested by Lender,Borrower shall obtain a landlord and/or mortgagee's consent and waiver with respect to the Aircraft. If requested by Lender, Borrower shall conspicuously mark the Aircraft, and maintain such markings during the Loan Term, to clearly disclose Lender's security interest in the Aircraft. Upon termination of a Loan through exercise of Borrower's option to prepay pursuant to Article V or through payment by Borrower of all Installment Payments and other amounts due with respect to an Aircraft Group,Lender's security interest in such Aircraft Group shall terminate, and Lender shall execute and deliver to Borrower such documents as Borrower may reasonably request to evidence the termination of Lender's security interest in such Aircraft Group. Section 9.3. Modification of Aircraft. Borrower will not,without the prior written consent of Lender, affix or install any accessory equipment or device on any of the Aircraft if such addition will change or impair the originally intended value, function or use of the Aircraft. Borrower agrees that the Engine shall be used only on the Frame (each as described in Aircraft Schedule) and shall only be removed for maintenance in accordance with the provisions hereof. Section 9.4. Personal Property. The Aircraft is and shall at all times be and remain personal property and not fixtures. ARTICLE X. WARRANTIES Section 10.1. Selection of Aircraft. Each Vendor and all of the Aircraft have been selected by Borrower. Lender shall have no responsibility in connection with the selection of the Aircraft, the ordering of the Aircraft, its suitability for the use intended by Borrower, the acceptance by any Vendor or its sales representative of any order submitted, or any delay or failure by such Vendor or its sales representative to manufacture,deliver or install any Aircraft for use by Borrower. Section 10.2. Vendor's Warranties. Lender hereby assigns to Borrower for and during the related Loan Term, all of its interest, if any, in all Vendor's warranties, guarantees and patent indemnity protection, express or implied issued on or applicable to an Aircraft Group, and Borrower may obtain the customary services furnished in connection with such warranties and guarantees at Borrower's expense. Lender has no obligation to enforce any Vendor's warranties or obligations on behalf of itself or Borrower. Section 10.3. Disclaimer of Warranties. BORROWER ACKNOWLEDGES THAT THE AIRCRAFT IS OF A SIZE, DESIGN, CAPACITY, AND MANUFACTURE SELECTED BY BORROWER. BORROWER ACKNOWLEDGES THAT IT SELECTED THE AIRCRAFT WITHOUT ASSISTANCE OF LENDER, ITS AGENTS OR EMPLOYEES. LENDER IS NOT A MANUFACTURER OF THE AIRCRAFT OR A DEALER IN SIMILAR AIRCRAFT, AND DOES NOT INSPECT THE AIRCRAFT BEFORE DELIVERY TO BORROWER. LENDER MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, QUALITY, DURABILITY, SUITABILITY, MERCHANT-ABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY BORROWER OF THE AIRCRAFT, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT. IN NO EVENT SHALL LENDER BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE AIRCRAFT OR BORROWER'S USE OF THE AIRCRAFT. ARTICLE XI. ASSIGNMENT Aircraft Loan-esc.doc/revl 0/03:12/3/2003 9 Section 11.1. Assignment by Lender. Lender,without Borrower's consent, may assign and reassign all of Lender's right,title and/or interest in and to this Agreement or any Loan, including, but not limited to, the Installment Payments and other amounts payable by Borrower and Lender's interest in the Aircraft, in whole or in part to one or more assignees or subassignee(s) by Lender at any time. No such assignment shall be effective as against Borrower unless and until written notice of the assignment is provided to Borrower. When presented with a notice of assignment,Borrower will acknowledge in writing receipt of such notice for the benefit of Lender and any assignee. Borrower shall keep a complete and accurate record of all such assignments. Section 11.2. Assignment by Borrower. Neither this Agreement nor any Loan or any Aircraft may be assigned, sold, transferred, pledged or mortgaged by Borrower. ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events of Default Defined. The occurrence of any of the following events shall constitute an Event of Default under this Agreement and each Loan: (a) Borrower's failure to pay, within ten (10) days following the due date thereof, any Installment Payment or other amount required to be paid to Lender(other than by reason of Non-Appropriation). (b) Borrower's failure to maintain insurance as required by Article VII. (c) With the exception of the above clauses (a) & (b), Borrower's failure ("Event") to perform or abide by any condition, agreement or covenant for a period of thirty (30) days after written notice by Lender to Borrower specifying such failure and requesting that it be remedied, unless Lender shall consent in writing to an extension of time prior to its expiration, which consent shall not be unreasonably withheld, so long as Borrower is diligent in its efforts to remedy such cureable Event,and no other Event of Default exists. (d) Lender's determination that any representation or warranty made by Borrower in this Agreement was untrue in any material respect upon execution of this Agreement or any Aircraft Schedule. (e) The occurrence of an Event of Taxability. (f) The filing of a petition in bankruptcy by Borrower, or failure by Borrower promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Borrower to carry on its governmental functions or assignment by Borrower for the benefit of creditors, or the entry by Borrower into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of any adjustment of indebtedness of Borrower, or the dissolution or liquidation of Borrower. Section 12.2. Remedies on Default. Upon the occurrence of any Event of Default, Lender shall have the right, at its option and without any further demand or notice to one or more or all of the following remedies: (a) Lender, with or without terminating this Agreement or any Loan, may declare all Installment Payments due in such Fiscal Year immediately due and payable by Borrower, whereupon such Installment Payments due in such Fiscal Year shall be immediately due and payable,but only from appropriated funds. (b) Lender,with or without terminating this Agreement or any Loan, may repossess any or all of the Aircraft by giving Borrower written notice to deliver such Aircraft in the manner provided in Section 12.3; or in the event Borrower fails to do so within ten(10) days after receipt of such notice, Lender may enter upon Borrower's premises where such Aircraft is kept and take possession of such Aircraft and charge Borrower for costs incurred, including reasonable attorneys' fees. Borrower hereby expressly waives any damages occasioned by such repossession. If the Aircraft or any portion has been destroyed, Borrower shall pay the applicable Prepayment Amount of the destroyed Aircraft as set forth in the related Payment Schedule, but solely from net proceeds of insurance or other legally available funds. Regardless of the fact that Lender has taken possession of the Aircraft, Borrower shall continue to be responsible to the extent of lawful appropriations therefore,for the Installment Payments due during the Fiscal Year. Upon disposition of the aircraft, Lender may apply proceeds to Rental Payments and other amounts due herunder whether accelerated pursuant to Section 12.2(a)or otherwise. (c) If Lender terminates this Agreement and/or any Loan and, in its discretion,takes possession and disposes of any or all of the Aircraft, Lender shall apply the proceeds of any such disposition to pay the following items in the following order: (i) all costs (including, but not limited to, attorneys' fees) incurred in securing possession of the Aircraft; (ii) all expenses incurred in completing the disposition; (iii) any sales or transfer taxes; (iv)the applicable Prepayment Amounts of the Aircraft Groups; and (v)the balance of any Installment Payments owed by Borrower during the Fiscal Year then in effect. Any disposition proceeds remaining after the requirements of Clauses(i),(ii),(iii),(iv)and(v)have been met shall be paid to Borrower. (d) Lender may take any other remedy available, at law or in equity, with respect to such Event of Default, including those requiring Borrower to perform any of its obligations or to pay from lawfully appropriated funds any moneys due and payable to Lender and Borrower shall pay the reasonable attorneys' fees and expenses incurred by Lender in enforcing any remedy hereunder. (e) Each of the foregoing remedies is cumulative and may be enforced separately or concurrently. Section 12.3. Return of Aircraft• Release of Borrower's interest. Borrower agrees that upon the termination of any Loan prior to the payment of all related Installment Payments or the applicable Prepayment Amount (whether as result of Non-Appropriation or Event of Default),Borrower,at its own expense,shall return the Aircraft and shall deliver all logs,manuals and data,including without limitation, inspection, modification and overhaul records required to be maintained with respect thereto under this Loan or under the applicable rules and regulations of the FAA and under the manufacturer's recommended maintenance program, along with a currently effective FAA airworthiness certificate to Lender at a Lender-designated location in the continental United States. Borrower shall, Aircraft Loan-esc.doc/revl0/03:128/2003 10 upon request, assign to Lender any and all title to the Aircraft and all of its rights under any manufacturer's maintenance service contract or extended wwranty for the Aircraft, any engine or part thereof. All expenses for return of the Aircraft and delivery of the aforementioned logs, manuals and data shall be borne by Borrower, The Aircraft shall be returned in the condition in which the Aircraft is required to be maintained pursuant to Article VI[[ hereof. When returned,the Aircraft shall be capable of being immed late Iy operated by a qualified and certified third party and shall be free and clear of all liens,except those created by Lender or for the benefit of Lender. Additionally, the Borrower(i) shall have had completed within thirty(30)days Prior to return,the next required 200-hour inspection on the Aircraft, and the next periodic Inspection an the engine, (ii) shall assure that the engine, landing gear and any auxiliary power unit shall have available operating hours or cycles until the next scheduled i4hot section'° inspection of not less than 50% of the total hours or cycles available between such "hot section" inspections and shall have available operating hours or cycles until the next scheduled major overhaul of not less than 50% of the total operating hours or cycles available between such major overhauls; (iii) shall assure that the airframe shad] have at least: (m) one-half the available operating hours or cycles; and (bb)one-half the available operating months until the next scheduled major airframe inspection allowable between major airframe inspections; and (iv) if Borrower has made any change in the configuration (other than changes in configuration mandated by the FAA), appearance or ooioring of the Aircraft from that in effect at the time the Aircraft was accepted by Borrower hereunder, Borrower will notify Lender in writing of such change and at its own expense at Lender's tequest restore the Aircraft to the configuration, coloring or appearance in effect on the Fun dIng Date, or at Lender's option, pay Lender an arnount.equal to the reasu nab ie cast of such restoration. If Borrower refuses to return such Aircraft in the meaner designated, Lender may repossess the Aircraft without dein and or notice and without court order or legal process and charge Borrower the costs of such repossession. Upon termination of this Agreement in accordance with Article III or Article X11 hereof, at the election of Lender and upon bender's written notice to Borrower, full and unencumbered IeGai title and ownership of the Aircraft shall pass to Lender. Borrower shall have no further interest therein. Borrower shall execute and deliver to Lender such documen% as Lender may request to evidence the passage of legal title and ownership to Lendw- and termination of Borrower's interest in the Aircraft. 12.4 NN ec� tlnn. Borrower agrees that upon return of the Aircraft, Lender shall arrange for the inspection of the Aircraft and its records, including an engine run borescope flight,within sixty(60) days of return to determine if the Aircraft has been maintained and returned in accordance with the provisions hereof, Borrower shall be responsible for the cost of such inspection and shall pay Lender Such amount as additional Installment Payment within ten (10) days of demand for same. In the event that the results of such inspection indicate that the Aircraft, any engine thereto or part thereof, has not boen maintained or returned in accordance with the provisions hereof, Borrower shall pay to Lender within ten (10) days of demand,as liquidated damages,the estimatcd cost("Estimated Cost) of servicing or repairing the Aircraft, engine or part, The Estimated Cast shall bo determined by Lender by nlitainittg two quotes for such service or repair 'work and taking the average of same. Borrower shall bear the cost, if any, incurred by Lender in obtaining such quotes. 12.4 Failure to Rklurn Airernft. Borrower agrees that if Borrower fails to return the Aircraft on expiration of[he Loan Term or termination (wLether as result of Non-Appropriation or Event of Default), Lender shall be,entitled to damages equal to the Installment Payment for the Aircraft, pro-rated an a per diem basis, for each day the Aircraft is retained in violation of the provisions hereof Such damages for retention of the Aircraft after termination or expiration of the Loan Term shall not be interpreted as an extension or reinstatement of the Loan Terra. Seotinn 12.6 late Charge, Lender shall have the right to require late payment charge for each [nstaliment ar any other amoar_t clue hereunder which is not paid within 10 days of the date when due equal to the lesser of 5%of each late payment or the legal nnax imum. This Section is only applicable to the cxtent it does not affect the validity of this Agreement. ARTICLE X11111. MISCELLANEOUS PROVISIONS geefinn 13.1. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address specified heneath each party's signature, ar at such address as the pasty may provide to the other parties hereto in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered or certified form,with postage fully prepaid,or, if given by other means,when delivered at the address specified 1n this Sectifln 13.1. This Agreement and each Loan hereunder shall be binding upon and shall inure to the benefit of Lender and Borrower and their respective succe4sars and assigns. Specifically, as used herein the term"Lender"means any person or entity to whom Lender has assigned its right to receive Installment Payments under any Loan. In the event any provision ofthis agreement or any Loan shall be held invalid or unenforceable by any court of wnripetent jurisdiction,such holding shall not invalidate or render unenforceable any other provision hereof. This Agreement constitutes the entire agreement ofthe parties with respect to the subject matter hereof ail supersedes all prior and contemporaneous writings, understandings,agreements, solicitation documents and rcpresentations, express or implied. This Agreement may be amended or modified only by wriit1Uh authorized, executed and delivered by Lender and Borrower. + Sutton 13.5. .Ca to mans. The captions ar headiligs in this Agreement are for convenience only and in-rt6-waylde01-imi or describe the scope or intent of any provisions,Articles, Sections 4r Clauses hureo£ ': `•. Lender and Borrower airee_liat they-Viiltr-from t e to time, execute, ackno■vledgc and deliver, or cause to he executed, acknowledged and delivered, such supplemcros hereto'and uch further Aire riP.[wo =darhehX9+9M 3:7404 12 instruments as may reasonably be required for correcting any inadequate or incorrect description of the Aircraft hereby financed or intended so to be, or for otherwise carrying our the expressed intention of this Agreement Burrower hereby authorizes Lender to file any Financing staternent or supplements thereto as may be reasonably required for correcting any inadequate description of the Airarea hereby financed or intended so to be,or for utheMise carrying out the expressed intention of this Agreement ,ertinn 13.7. Governing L.aw. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Section 13.9_ Usorv, it is the intention of the parties hereto to comply with any applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary herein or in any Aircraft Schedule, in no event shall this Agreement or any Loan hereunder require the payment or permit the collection of Interest or any amount in the nature of interest or fees in excess of the maximum amount permitted by applicable law. Any such excess Interest or fees shall first be applied to reduce Principal,and when no Principal remains, refunded to Borrower. To the extent permitted by law, in determining whether the Interest paid ar payable exceeds the highest lawful rate, the total amount of Interest shall be spread through the applicable Loan Term so that the Interest is uniform through such term. Seef on 13.9. Eorrimar'e Peri'nrmance_A failure or delay c Lender to en farce any of the provisions of this Agreement or any Loan shall in no way be construed to be a waiver of such provision, .KneHan 13.10, Rxpentinn in Coonternarfs. This Agreement and any .Aircraft Schedule may be simultancausly executed in several counterparts,each of which shall be an original and all of which shall constitute but one and the same, [REMAINDER OF PAGE LEFT INTEN TONALLY BLANK] l •s 1±. .f. �r ;.qtr A i aeR Lcurx9c.do drerlQ4}3:13�2f2UC�3 �, EXECUTION PAGE OF AGREEMENT NUMBER 02334 IN WITNESS WHEREOF, L-ender has caused this Agreement to be executed in its corporare name by its duly authorized officer,and Borrower has caused this Agreement to be executed in its name by its duly authorized officer. CITY OF FORT WORTH, SUNTRUST LEASING CORPORATION, Borrower Lender 13y: By -Same:Jae Pan pa Name: Mic 1 , Powers Title Assista C) ana Title: Secretary Date.] f J Address; 1:000 Throckrnorton St Address: 29 W. Susquehanna Avenue,Suite 400 Ft. Worth TX 76102 Towson,MD 21204 Telcphone: (817) 871-6140 Telephone: 410/307-6644 Facsimile: (817)871-8436 Facsimile: 4101307-6702 INVOICE CONTACT: Susan Alanis E-MAIL ADDRESS: Sirsun_A1Raj-% f0rtW61rtLtgnn3:R Tlds iscoun"artNo.2 oft seriatly nurrborea,mmnually executed oounierpsrts of Ihisdccument. To thecxtent thUlhisLease Agrcerneni co-nstitutes cha.&J paper gi,dGr the I Inifnrni CDrnnwrial Code,a seeurity interiesl in this Leasc Aweerrtent niny he ercated Larough the nansWand possession gfCgtntcapartNo. Ionly, without the need to hunsfer Possession of any other original or coun"1-t or copy: artltis Lease Agmurnent or any criginai or count apart or copy or any CAN Is, Addenda,nhedales,ecrtiflcates,riders or othcrdecdraents and instruments eircoUW I ANT LEW TY: and delivered in ccrmcel ion with this Dense Agroemeut. r 4AP t _ (}ate Aircraft Loarm.da Unm IWO-1WrAW 13 — - EXHIBIT A r41RC RAFT SCH DTJ>;E NQ. at TO LOAN NO.02334 The fallowing Aircrat comprises an Aircraft Group which is the subject ofthe Master Aircraft Loan and Security Agrcement doled Decembcr 10 , 2003 (the "Agreement") between the uiWursig»t!d Lender and Borrower. The Agreement is incorporated herein in its entirety, and Borrower hereby reaff riis each of its mpresenla#ions, warranties and revenants contained in the Agreement. Borrower warrants that no Non-Appropriation and no Event of Default, or even whirl[, With the passage of time Dr the giving of nociCf, or both, ivuuid constitute ant L-VC311 Df Defulth, has Droned under the Agreenient_ An Acceptance Certificate and Payment Schedule are atiaclicd to 11tis Aircraft Schedule and by reference are made a part hereof. The leans capitalized in this Aircraft Schedule but not defined Herein shall have the meanings assigned to them in the Agrcelnenl. AIRf'RAF'f GIZ01JP A. Dgwripiinn of Aircraft.The cost of the Aircraft Group to be hinnded by BocTO►ver under this Loan is Ninr Hundred EigI].lX Sevrn '1'lrnussiud Eight Hundred Nincl.N Four and n9111}0 (j2NZ1f44=(1he "Acquisition Cosl'�. The AiTerall Group cottisisls of Ilne fo110w1:tg 1roperty whicIi Iia5 been Qr s11aII he p-.irc has ed frQin full NPIir-nPitET(chi-"V,Pnrinr'1 IDE,SCRIBE AIRCRAF-T FRAME AND ENGI ES]i 1. Gnc (1) NEW 2003 loch 20613-111 Helicopter bearing Registration Mark N26M and manufactm-cr's serial nWmbin-4375 (tire "Prrnnlc''); 2. Together with ]dolls Royce 250 C20J installed thereon, bearing manufacturer's serial No. CAE-270932, which is capable of producing 420 or more rntcd takeoff Iiorsepower or Ilse equivalent 11ierecf, ralor hub bearing Ilse manufacturer's serial inimber CAE-274932, blade beming the rrmanufacturrr's serial number CAE-274932 and the Marie beariry;r be 11-IM111llfa2`.11IT11-'4L c 1 11tji mhos CAF-2,709'2 (er,l1erriveII. ilie "Fn Iil�"l"]_ 3. 7 ngetller with all appliances, parts, instalments, appurtenances, accessories, filrnishings and other equipment or property ("Pails") incor)orated, installed in car ailachcd to Slid fraine and engine And all modifications and subsiitt[tiatts inClud'uig tivillnaEtt lin>ila,1 011 the fallau•illg: Avlonles: NAT ALMS-44 Intercom, Fast Swiiches ( Lincrnaster T-91-S)five(5)each Aft lent seat XMIT capable switched on co-pilot side ins[panel. Garmin GNC 420 with l 6 watt lransmi[ier, provide cyclic switchin¢offrequencies. Bendix,KingKY196A. Provide cyclic sMich Ing frequencies, BcndiXJKing KY76A trans#tcnder With atlletv',a 1KA-60. Blind Encoder. NAT pa system AA 217.160 Control PA 220-01 aaV T5 I MRA speakers. Techsonics TDFN4 618 radio. Avionics master switch. Avionics cooling system. Equilimeot: Digital FATIGAT gauge(Daviron 655-2). [tell 205 cyclic grip and elbow(grip provided by VWP1D], Relocale llOiir nlneter to instrument panLI. SX-I 6 Nite Sun with following provisions: Arro Pacific aft mount, Dove Tai-11, Pilot Cyclic directional controlifocw, Hand control mount as specified by customer. Wescam 12DS-204 infrared imager (Wescam unit provided by FWPD). Belly]mount, as far forward as pussible, Sony vide❑ recorder GV-D10D0E- initergrate w-lth Wescam. Intall Mobil. Vu monitor and cornpater(provided by FINPD). Fabrieate CPU inounting in rear A1C-Monitor/Keyboard in front. Air Comm air conditioning unit model 20{EC-241-3. Air Comin heater with tiviiidshield d:fa ;erfdcfroster. )caret oil filter kit. Wire Strike ProtecIinn System, Flight steps n Bell high skid gear. Tech'Fool Ieft passenger photo window- Tech Tool cabin floor protectors. Tech Tool pilodca-pilot vertical sliding windows. faint aircraft to FWPIp ape:-three color criston7 scheme. Diamond J recording lorque indicator. Litton recording TOT gauge. Noiar(4) 17avid Clark headsets as specified try FWPD. Slabilixcr swok Iighls A650RjPG HDACF 14128. q7 `{L y".J A;mrnn La ii-esr d vm-IYN INMU4 1 d. All instruments and documents of title,all aircraft lags and manuals and all data and records of inspection, flight engineer modification,maintenan ce and overhaul and component lists and manuals relating to the aircraft including Engines and Parts, All of items 1,2, 3, and 4 above are col lea ively referred to as the"Aircraft". S. Locatiitn. The AircraR is or will be principally hangored ("Principal Hangar" at the following location: _1400 Nixnn %(MQl_ Feet Wnrth,Texas 76102,with a mailing address of. 5AM 6 Borrower may not move the Principal Hangar location without the prior written consent of Lender. [REMAINDER OF PAGE LEF i INTENTIONALLY BLANK] .1 �i�crailLoan-sac.darhsxl9lOS:1Tl3+$06} ZrJ j - .' .,. I` EXECUTION FACE OF AIRCRAFT SCHEDULE NO. 01 TO AGREEMENT 02334 CITY OF FORT WORTH, SUNTRUST LE SING CORPORATION, Burrower Gender By. By: Name:.foe pa , gu Name.Michael . owers Title: Assist t Ci Mopager Title: Secretary Date: Date. / 7 Address: 350 W. Belknap Address: 29 W. Susquehanna Avenue, Suite 400 Ft. Worth, TX 76102 Towson, MD 21244 Telephone: (817) 871-6191 Telephole, 4101307-6644 Facsimile: (817) 871-6134 Facsimile: 410/307-6702 'Chia iscountcipart No.2 af2serially numbered,rnanuallycucund counlerr lls of this document• To the ax Gen#that this Lease Agreement constitutes chaucI paper under the VniformCommereial Code,a seeutity inicitstill this Lease Agre merit may he crcatcd thro.tgh t1.c transfer and possession of Counterpart No. I on]y, Kith❑ut the need to tran sfar possession of ony other Prig inal or cojntorpartvr Cagy of this Lease AAgreementar any origIna]or countuipurt Qr cupyefany exhibits, addenda,schedules,caertiEcates,riders or other docunnents and inFIrurwlts exeeul ed and dellvcrod in connection~pith this Lease Agreement. .C• li=alk Lorin-ma doLftcwl]Ak3.I x+]2003 Loan No.: 02334 Aircraft Schedule: 01 ACCEPTANCE CERTIFICATE I, the undersigned, hereby certify that I am the duly qualified and acting officer of the Borrower identified below and, with respect to the above referenced Aircraft Schedule and Loan,that: 1. The Aircraft described below has been delivered and installed in accordance with Borrower's specifications, is in good working order and is fully operational and has been fully accepted by Borrower on or before the date indicated below: [DESCRIBE AIRCRAFT FRAME AND ENGINES]: 1. One(1)(1)NEW 2003 Bell 206B-III Helicopter bearing Registration Mark NN .6FW and manufacturer's serial number 4575 (the"Frame"); 2. Together with Rolls Royce 250 C20J installed thereon,bearing manufacturer's serial No. CAE-270932,which is capable of producing 420 or more rated takeoff horsepower or the equivalent thereof, rotor hub bearing the manufacturer's serial number CAE-270932, blade bearing the manufacturer's serial number CAE-270932, and the blade bearing the man Ifa fir is serial number AF-270932(cols lectively,the"Engine").3. Together with all appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment or property ("Parts") incorporated, installed in or attached to said frame and engine and all modifications and substitutions including without limitation the following: Avionics: NAT AMS-44 Intercom,Foot Switches(Linemaster T-91-S)five(5)each Aft left seat XMIT capable switched on co-pilot side inst panel. Garmin GNC 420 with 16 watt transmitter, provide cyclic switching of frequencies. Bendix/King KY 196A. Provide cyclic switching frequencies. Bendix/King KY76A transponder with antenna KA-60.Blind Encoder. NAT pa system AA 20-160 Control PA 220-01 amp TS 100RA speakers. Techsonics TDFM 618 radio. Avionics master switch. Avionics cooling system. Equipment: Digital FAT/OAT gauge(Davtron 655-2). Bell 205 cyclic grip and elbow(grip provided by FWPD). Relocate hour meter to instrument panel. SX-16 Nite Sun with following provisions: Aero Pacific aft mount,Dove Tail,Pilot Cyclic directional control/focus, Hand control mount as specified by customer. Wescam 12DS-200 infrared imager(Wescam unit provided by FWPD). Belly mount,as far forward as possible. Sony video recorder GV-D 1000E- intergrate with Wescam. Intall Mobil Vu monitor and computer(provided by FWPD). Fabricate CPU mounting in rear A/C-Monitor/Keyboard in front. Air Comm air conditioning unit model 206EC-201-3. Air Comm heater with windshield defogger/defroster. Facet oil filter kit. Wire Strike Protection System. Flight steps on Bell high skid gear. Tech Tool left passenger photo window. Tech Tool cabin floor protectors. Tech Tool pilot/co-pilot vertical sliding windows. Paint aircraft to FWPD spec-three color custom scheme. Diamond J recording torque indicator. Litton recording TOT gauge. Four(4)David Clark headsets as specified by FWPD. Stabilizer strobe lights A650R/PG HDACFI4/28. 4. All instruments and documents of title,all aircraft logs and manuals and all data and records of inspection,flight engineer modification,maintenance and overhaul and component lists and manuals relating to the aircraft including Engines and Parts. All of items 1,2,3,and 4 above are collectively referred to as the"Aircraft". 2. Attached are (a) evidence of insurance with respect to the Aircraft in compliance with Article VII of the Agreement; (b) Vendor invoice(s) and/or bill(s) of sale relating to the Aircraft,and if such invoices have been paid by Borrower, evidence of payment thereof(evidence of official intent to reimburse such payment as required by the Code having been delivered separately by Borrower); and (c) financing statements executed by Borrower as debtor and/or the original certificate of title or manufacturer's certificate of origin and title application,if any,for any Aircraft which is subject to certificate of title laws. 3. Installment Payments shall be due and payable by Borrower on the dates and in the amounts indicated on the Payment Schedule attached to the Aircraft Schedule. Borrower has appropriated and/or taken other lawful actions necessary to provide moneys Aircraft Loan-esc.doc/revl0/03:12/10/2003 17 5. Final Acceptance Certificate. This Acceptance Certificate constitutes tmal acceptance of the Aircraft identified in the Aircraft Schedule described above. Borrower certifies that upon payment in accordance with paragraph 4 above, or direction to the Escrow Agent(if applicable)to make payment, Lender shall have fully and satisf ictarily performed all of its Mvenants and obligations under the Loan. [CHECK BOX IF APPLICABLE.] CITY Off'FORT WORTH, Borrower By; Name: rue Pa gu Title: Assista t Ci iVia a Date: `/ This is counterpart No,2 of 2 serially nw.nbered,manually executed counterparts of this document. Tc oic mitht Ileac 11ris Lease Agreermeet consdiures chattel paler under the Unifacrn Commercial Cade,a security interest in this Lease Agreament may he orated through the nanrfcr and Possession of Counterpart No. I an ly, witho ut the need to transfer piss essicm of any vthur on Oal or cuunterparl or copy oflNs Lease Agreementarail joriginal or counierpart or copy of tiny cxhibils, addenda,schcd u 1es,ceTL&tales,ridorsa-otherdocumenis and instruments exec uled and delivered in conncclian with this Lease ASteerncnt. kilsmn�aMeacaoerr tom9:tart�a¢3 18 Loan No.: 4234 Aircraft Schedule: O1 PAYMENT SCjgKDULE The Funding Date with respezt to the above referenced Aircraft Group shall be December 10 , 2003. The Annual lnterast Rate applicable to the Aircraft Group shall he 2X%, Borrower will make Installment PaymenI5 each consisting of Principal and Interest as set forth below for a term of live(5)years. The first Installment Payment is due on June 10,2004 and subsequent payments are due semi-annually on like date thereafter. Payment Payment Total Interest Principal: Prepayment Number bate PA rn"t ('pin VOFIe nt Oini onent Amount* 1 1Q-Jun-04 108,837.92 14,324.46 92,513.46 911,367.22 2 10-❑ec-04 1QU37.92 12,9$3.02 93,554AQ 814,437.55 3 10-Jun-05 106,837.92 11,622.12 95,215.80 716,436.58 4 10-floc-05 105,837.92 10,241.49 96,596.43 817,372.00 5 10-Jun-06 106,837.92 8,84OZ4 97,997.08 517,232.57 5 10-Dec-06 106,837,92 7,413.89 99,418.03 416,006.62 7 10-Jun-07 106,837.92 5,878.33 100,859.59 313,682.37 8 10-Dec-07 106,837,92 4,515,86 102,322,06 210,247,90 9 10-Jun-08 106,837.92 3,032.18 1x3,805,73 105,681.17 10 10-Dec-08 106,937.92 1,527.00 1x5,310.92 4.00 Grand Totals 1,069,379.20 50, 185.20 987,894.00 CM OF FORT WORTH, Burrower By; No= Jae Pa i g Title: {tu Date: #� 7 /0,3 + After payment of Installment Payment due on such date. This is counterpart No.2 of 2 sorially nvinberod,ma,wally executed counicipar s of this document, To the exkent that this 1.gasc Agncr-moni constitutes ch all el paper under th0llnir0rmCon7fl1UF 3l Code,a scaurity interest in tbib Cease Agreement may he crmW thrqugh the transfer and posscssioii or Counterpart No.lcnly, %vithnut the need to transfer passrssion of any ocher original or onunleipart or COPY' of this Lease Agrcenne r ar any orignal or wualeipan ar copy Aany exhibits, addetida,achcdulcs,ccrlificates,ridersor utfter documents nd instrumeniscxccutr3d and dslircted is connection with this Lease Agivemcnt. i � 'Ply Arcrall l.�n-esc.dsdreviWDS::}lSl3Ad3 1 ' .. r� t $`d F EXHIBIT B-1 [Escrow] Loan Number: 02334 Aircraft Schedule: 01 TAX AGREEMENT AND ARBITRAGE CERTIFICATE. This TAX AGREEMENT AND ARBITRAGE CERTIFICATE (this "Certificate") is issued by CITY OF FORT WORTH ("Borrower") in favor of SUNTRUST LEASING CORPORATION("Lender")in connection with that certain Master Aircraft Loan and Security Agreement dated as of December 10 , 2003 (the "Agreement"),by and between Lender and Borrower. The terms capitalized herein but not defined herein shall have the meanings assigned to them in the Agreement. Section 1. In General I.l. This Certificate is executed for the purpose of establishing the reasonable expectations of Borrower as to future events regarding the financing of certain aircraft (the "Aircraft") to be acquired by Borrower and financed by Lender pursuant to and in accordance with the Aircraft Schedule referenced above(the "Aircraft Schedule")executed under the Agreement(together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents, Lender shall apply Nine Hundred Eight), Seven Thousand Fight Hundred Ninety Four and 00/100 ($987,894,00) (the "Principal Amount") toward the acquisition of the Aircraft and Borrower shall make Installment Payments under the terms and conditions as set forth in the Financing Documents. 1.2. The individual executing this Certificate on behalf of Borrower is an officer of Borrower delegated with the responsibility of reviewing and executing the Financing Documents,pursuant to the resolution or other official action of Borrower adopted with respect to the Financing Documents,a copy of which has been delivered to Lender. 1.3. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring and equipping the Aircraft which is essential to the governmental functions of Borrower, which An"eraft is described in the Aircraft Schedule. The Principal Amount will be deposited in escrow by Lender on the date of issuance of the Financing Documents and held by CoBiz BANK N.A. dba COLORADO BUSINESS BANK, as escrow agent(the "Escrow Agent") pending acquisition of the Aircraft under the terns of that certain Escrow Agreement dated as of December 10,2003, (the "Escrow Agreement"),by and between Lender and Escrow Agent. 1.4. Borrower will timely file for each payment schedule issued under the Loan a Form 8038-G (or, if the invoice price of the Aircraft under such schedule is less than $100,000, a Form 8038-GC) relating to such Loan with the hnternal Revenue Service in accordance with Section 149(e)of the Internal Revenue Code of 1986,as amended(the"Code"). Section 2. Non-Arbitrage Certifications. 2.1. The Installment Payments due under tine Financing Documents will be made, subject to appropriation, with monies retained in Borrower's general operating fiord (or an account or subaccount therein). No sinking, debt service, reserve or similar fiord or account will be created or maintained for the payment of the Installment Payments due under the Financing Documents or pledged as security therefore. 2.2. There have been and will be issued no obligations by or on behalf of Borrower that would be deemed to be (i)issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a convnon plan of financing with the Financing Documents and(iii)paid out of substantially the same source of funds as,or deemed to have substantially the same claim to be paid out of substantially the same source of finds as,the Financing Documents. 2.3. Other than the Principal Amount held under the Escrow Agreement,Borrower does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Aircraft. 2.4. No portion of the Principal Amount is being used by Borrower to acquire investments which produce a yield materially higher than the yield realized by Lender from Installment Payments received under the Financing Documents. 2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such finds are expected to be needed and frilly expended for payment of the costs of acquiring and equipping the Aircraft. 2.6. Borrower does not expect to convey, assign or otherwise dispose of the Aircraft,in whole or in part, at a date which is earlier than the final Payment Date under the Financing Documents. Section 3. Disbursement of Funds• Reimbursement to Borrower. 3.1. It is contemplated that the entire Principal Amount deposited in escrow will be used to pay the acquisition cost of Aircraft to the vendors or manufacturers thereof, provided that, if applicable, a portion of the principal amount may be paid to Borrower as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied. 3.2. Borrower shall not request that it be reimbursed for Aircraft acquisition cost payments already made by it unless each of the following conditions have been satisfied: (a) Borrower- adopted a resolution or otherwise declared its official intent in accordance with Treasury Regulation § 1.150-2 (the "Declaration of Official Intent"), wherein Borrower expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Aircraft, which expenditure was paid to the Vendor not earlier than sixty(60) days before Borrower adopted the Declaration of Official Intent; Aircraft Loan-esc docirev 10'03 1%5.'2004 20 (b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen(18)months after the Aircraft to which such payment relates were placed in service; (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure,being a cost of a type properly chargeable to a capital account under general federal income tax principles;and (d) Borrower will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice or device under Treasury Regulation § 1.148-10 to avoid, in whole or in part, arbitrage yield restrictions or arbitrage rebate requirements. Section 4. Use and investment of Funds;Temporary Period. 4.1. Borrower has incurred or will incur,within six(6)months from the date of issuance of the Financing Documents,binding obligations to pay an amount equal to at least five percent(5%)of the Principal Amount toward the costs of the Aircraft. An obligation is not binding if it is subject to contingencies within Borrower's control. The ordering and acceptance of the Aircraft will proceed with due diligence to the date of final acceptance of the Aircraft. 4.2. An amount equal to at least eighty-five percent(85%)of the Principal Amount will be expended to pay the cost of the Aircraft by the end of the three-year period commencing on the date of this Certificate. No portion of the Principal Amount will be used to acquire investments that do not carry out the governmental purpose of the Financing Documents and that have a substantially guaranteed yield of four(4)years or more. 4.3. (a) Borrower covenants and agrees that it will rebate an amount equal to excess earnings on the Principal Amount deposited under the Escrow Agreement to the Internal Revenue Service if required by, and in accordance with, Section 148(0 of the Code, and make the annual determinations and maintain the records required by and otherwise comply with the regulations applicable thereto. Borrower reasonably expects to cause the Aircraft to be acquired by June 2005. (b) Borrower will provide evidence to Lender that the rebate amount has been calculated and paid to the Internal Revenue Service in accordance with Section 148(0 of the Code unless (i)the entire Principal Amount is expended on the Aircraft by the date that is the six- month anniversary of the Financing Documents or(ii)the Principal Amount is expended on the Aircraft in accordance with the following schedule: At least fifteen percent(15%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Aircraft within six months from the date of issuance of the Financing Documents;at least sixty percent(60%)of the Principal Amount and interest earnings thereon will be applied to the cost of the Aircraft within 12 months from the date of issuance of the Financing Documents; and one hundred percent (100%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Aircraft prior to eighteen(18)months from the date of issuance of the Financing Documents. (c) Borrower hereby covenants that (i) Borrower is a governmental unit with general tax powers; (ii) the Loan is not a"private activity bond" under Section 141 of the Code; and (iii) at least ninety-five percent(95%) of the Principal Amount is used for the governmental activities of Borrower. Section 5. Fscrow Account, The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the vendor(s)or manufacturer(s) of the Aircraft are due. Borrower will ensure that such investment will not result in Borrower's obligations under the Financing Documents being treated as an"arbitrage bond"within the meaning of Section 148(a)of the Internal Revenue Code of 1986,as amended(the"Code"), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such monies will be disbursed on or promptly after the date that Borrower accepts the Aircraft. Section 6. No Private fse;No Consumer Loan. 6.1. Borrower will not exceed the private use restrictions set forth in Section 141 of the Code. Specifically,Borrower will not permit more than 10% of the Principal Amount to be used for a Private Business Use(as defined herein) if, in addition,the payment of more than ten percent(10%)of the Principal Amount plus interest earned thereon is,directly or indirectly, secured by(i)any interest in property used or to be used for a Private Business Use or(ii)any interest in payments in respect of such property or derived from any payment in respect of property or borrowed money used or to be used for a Private Business Use. In addition, if both (A) more than five percent (5%) of the Principal Amount is used as described above with respect to Private Business Use and(B)more than five percent(5%)of the Principal Amount plus interest earned thereon is secured by Private Business Use property or payments as described above,then the excess over such five percent(5%)(the"Excess Private Use Portion")will be used for a Private Business Use related to the governmental use of the Aircraft. Any such Excess Private Use Portion of the Principal Amount will not exceed the portion of the Principal Amount used for the governmental use of the particular project to which such Excess Private Use Portion is related. For purposes of this paragraph 6.1, "Private Business Use" means use of bond proceeds or bond financed-property directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person,excluding,however,use by a state or local governmental unit and excluding use as a member of the general public. 6.2. No part of the Principal Amount or interest earned thereon will be used, directly or indirectly,to make or finance any loans to non- governmental entities or to any governmental agencies other than Borrower. Section 7. No Federal Guarantee. 7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed,in whole or in part,by the United States or an agency or instrumentality thereof. Aircraft Loan-esc.doc/rev10/03:12/3/2003 21 7.2. No portion of the Principal Amount or interest earned thereon shall be(i)used in making loans the payment of principal or interest of which are to be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof, or(ii) invested, directly or indirectly, in federally insured deposits or accounts if such investment would cause the financing under the Financing Documents to be "federally guaranteed"within the meaning of Section 149(b)of the Code. Section S. Miscellaneous. 8.1. Borrower shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form and substance satisfactory to comply with the registration requirements of Section 149(a) of the Code unless Lender or its assignee agrees to act as Borrower's agent for such purpose. 8.2. Borrower shall maintain complete and accurate records establishing the expenditure of the Principal Amount and interest earnings thereon for a period of five(5)years after payment in full under the Financing Documents. 8.3. To the best of the undersigned's knowledge, information and belief, the above expectations are reasonable and there are no other facts,estimates or circumstances that would materially change the expectations expressed herein. IN WITNESS WHEREOF, this Tax Agreement and Arbitrage Certificate has been executed on behalf of Borrower as of December 10,2003. CITY OF FORT WORTH, Borrower By: Name: Jo i g ssis Title: Assis i anager Date: Aircraft Loan-esc.doc/rev10/03:12/3/2003 22 '.. u r�-10-2663 11;24 SJJK1R1 1=tiT I_PAR I NU 410 367 5716 P.0" City of Foort Worth, Texas Mayor and Council Communication JUC)U Cil-ACTION: Approved nn 'tGUIS12001 DAYS: Tue8day, October 29,F2 003 REFERENCE NO-; "P-9874 LOG NAME: LeCIM PU chase I)f 1p&Ge uapertment Holrr:opter RECn �Vt=wo,a, Ohl: I� Is recomroanded that th0 a ty Cour 6117 AuthorLe a porehaao agreer~rtarrt for a Model 2068.3 hollooptor from Sul[ Rhilicapter; and 2. AVthorlas tha City Manager to pKecuta a c0njra4t with All Arr1e6can IrnrbotmOnt Group,i-l.(: (AAiG)fur lease-pufohsse 0naruIng tip to $1.1 n1illicrl to vund this purchase and neCesZary ruslorrrrza#4on,srtbecl lri naeotlating a mutually 2cck;ptat l Ieastpuraha uc; 9re9rnont. DISC ; t)uring the Crime �eptrol Ind Prevention Di3t6iA bud9at pr�parat;on for FYPolice oap funds were nppraved to acquire a halicopker qn a 1$eve-purchase basis fnr the Fort Worth Police ❑�pac"dLt. This holiceptar wiil replan a lwei modal hetlropter Itrnt Is currently in 01)rvice on reduced flight scYredukC dssa to the agirrg of the cqu1Rl' ent. FundiriD was bameA an a plydll tc 1e75r3-PUrcYaF398 the equipment-over 0 f1v6- year period with 10"mi-annuall payments. Thy helicopter i: yota-surca from p11 lrlciiavpter dUe to space canstrarrtits of#kr ex1stinI haItgr end the intenor spacci requiKtrlrlONS of the hhe11c4pter in arger to 11ok,Sn mecassary oqr)}PrnEM In addllion, due tO the long histury of the CRY of Fort Worth with 6pll Helica o r lthe poli DQpartrrienk is-slpnifitranilY 001PPed with#ao18 and spare pstrts desir and for use exelt1$lVOly I P 17ne negotiated price for tha helicopter is $914.610 that tncl0os a standard Visual Flight HUIDG Uonhgurntian and-the FanvWng oplianel occ=0r*W High Skids a 5.600 Rotor Braze 310.200 ocund Proofing $ 3,100 oual ControiW 9,300 Pdrticle Ceporotcr x,280 Flight Instnwrrarlts $2S,50a Standard Iraenortaorl inyl No Charge High Via'billly Ratan 91&des No ChargC In adelftlon, Pell Helicopier has offered $152,ON lade-in valua for the Crafl toal is boing rernov0d from saruiGe. This ercdit will bQ tak*r against the fnai putGhase prico,renultin9 In the fir�Dc"9 of $762.310 far kha he[iuoptar. � FaRe t of �L-3 DE+.-10-2003 11:25 SUNTRUST LEAS I NO 410 M7 6710 �,P soiiai�ing Olds fur the customiZ"UTL of the try �ddiGan #a tfris vOs , the pmrchasing Division Is currently siurniaatiCn i;, aritld'Ipnied to ba uR to reamerrt, A separsim Mayan end C0unGit $rieraft to i�clr3de$quipmefli irtistail8ti4n end �aar�t The goat of is ru $ ��,OQ4 than will he incorporated 'Into the finending a� 001rimunI,edition Will be ptosanted try&Ward tT19 conira�#rr r#ktii8 rdstamizatic A. thai have work0d with 6k. ant 3010Rod fir,arv,,ing rotas from vgriou9 comvo rid AAI The Polite peparlm er to find 0 e4mggtitIve rAta. The most 1au�rshla 1<errYts warA delivery a1 the HogCop�f In tyre prast n orG yy;th a rain 4f �•�� with s�rr�r-ann►�I Q�ymarris tyeginninq rso later ti�ai'. Six mant>1e a er iyellp#er to the eu5lorrilxCtioh vghd4r_ f,iRve an jAnnual Cost ttea eF stpmuatiGn.-nw tulst finar ainq c4st for this An agrBernerrt w + AAI fOr atartid i end the fi�alp tc crs,usl ian is e5t�mate 10 ears in order of $216,Ei6 Over fl+r years flap J t the aircraft ftrn the agr$amar,t is osli1mated at i32,643. The 2rnt9clpat useful�n��st iD lnrcrya is Y maximize trodo-In —iue ar►d mmLmiza mairiken�f� l$xDecL%L-&- r 31,20nA,in cWor to secure a 2.003 mart�imctuu�r to the custcmiz2tlnn vandor will occur 1} medal rxal't, auaidin9 the T�7'.100 .n ere aso in the base cost. RIO ADVERTiSCMENT-Sole 5nrrrt:e aal for MANBE sUbC4rgr3Gting mquiremcrits Wks requ ed by the Piyrsaurcrrq MNVBF- -A waiver of thu 9 rchose ctf goads or services is from *ourrea Divii:ion Find approved 4y The MMroE Dffioe t 0�au�e the au where%bcontractirI or sumlier oppart"Ve!' era negligrl)ie. Fj6C g)NtU 191 4ATM: P as a rc mated, of rho Finenos D+reew cediflas ihst funds ire $,r iialatir` in tlt9 gµrrent operating budget, pP p the Crima Gontroi and Prevention Distnr-t Fund. T �o e r �� F d H 4 ' L%- Joe panlagu8 (61-40) %& *i 3 e� Ralph tutivydara (0386) r'I Susan Alglits�dtj26 } Pir,•'7 r.F'7 DEC-10-2003 11125 SUNTRUST LE;51N] 410 307 57"0 P.04 ,TATL- OI-� TEXAS Cl DU NTI,ES i7F TAP RANT 0ENTCN AMID WlAF 1, SYLVIA CLOVER. Ass[tilanl Mty SuMlary of 1'nE' Mly of Fort wurth, TQxss do hereby cuMN that the above and foregoing i�; a trop and correct DOPY ❑l Mayor a„d Council ComrrunFr�tion No. P-0874, duly Pr �gntad end adopted by II)e Ciiy Council ai thu Qily of Fort Worth, TeMa9, al a rpgular mccting hekd on tl)n 20O' day of October, A. D. 20013, ptv� Hama appears of raoo rd in the Off Ice of tale City Smcratary. WITNESS MY HAND and the Of Cial Seal of the City w Fort Worth, "I'exub,this th$40 day ❑*Des'Prrber, A. L)- 2003. SylVl ldvCr, Asst City Sec Teary Cafiy ct Fort Worth,Tams TOTAL R.l�J4 Hli EXHIBIT D Loan No, 02334 Aircraft Schedule: 01 INCUMBENCY Y ( FATCFWA TE I do hereby certify that I am the duly appointed and acting City Secretaryof CITY OF FORT WORTH, a political subdivision duly urganized and existing under the laws of the state of Toxas; that I have custody of the records of such entity,and that, as of the date hereof, the individuals ranted below are the duly elected or appointed officers of such entity holding the offices set forth apposite their respective names. I further certify that (i)the signatures set apposite their respective name and titles are their true and whentic signatures and (ii) such Officers have the authority on behalf of such entity to enter into that certain Master Aircraft Loan and Security Agreement dated as of Decernber 14,2003 between such entity and 5UNTRUST LEASING CORIPO RATIO N. N_klfd Ina Pnningim Accirtant F in+ Mgnagffr + I IN WITNESS WHEREOF, I have duly exemitcd this certificate as of this ay of r 2403. By, Name: C I ria Pearson U Title; Board Secretary This is twniawn Na, l ot2 serially numbered,nionualfy ex=red counterparts of tltis document. To 0e ax ter,I that this Lease Agreement constitutes chattel paper undar the UM form Co-mmem aI Cade,a murky interest in rhia Lease Agreenrmi mPybecreated thmugh the transfer and possessionor(.launterpariho, ionly, wiilioul the need to transfer pns wssi on o r any olher arigi n p i or couni apart or Copy of this L-easc Agreemen t nr any arigi n n I or COUP Wrpart or copy of any exh i bi ts, addenda,schedules,certificates,riders or other doeunxnts and hstrUtncnts executw and delivered in connection with this Lease Agaccment. F--,--�Fil 0. 5- L Ahern Umu exc.dae2fa+raW:12-V2003 2 FORTWORTH November 19,2003 SUNTRUST LEASING CORPORATION 29 W. Susquehanna Avenue, Suite 400 Towson,Maryland 21204 Re: Master Aircraft Loan and Security Agreement dated December 10,2003 (the "Agreement") by and between SUNTRUST LEASING CORPORATION("Lender") and CITY OF FORT WORTH("Borrower") Ladies and Gentlemen: As City Attorney for the City of Fort Worth(the "Borrower"), I have acted as counsel to Borrower with respect to the Agreement described above and various related matters,and in this capacity have reviewed a duplicate original or certified copy thereof and Aircraft Schedule No. 01 executed pursuant thereto (together with the Agreement,the"Loan"). The terms capitalized in this opinion but not defined herein shall have the meanings assigned to them in the Loan.Based upon the examination of these and such other documents as I have deemed relevant, and subject to State law governing the Attorney-Client relationship and reiterating the that I am counsel to the City of Fort Worth and have no relationship to Lender or any of its affiliates,I am of the opinion that: 1. Borrower is a political subdivision of the state of TEXAS (the"State")within the meaning of Section 103(c)of the Internal Revenue Code of 1986, as amended, and is duly organized, existing and operating under the Constitution and laws of Texas. 2.Borrower is authorized and has the power under applicable law to enter into the Loan, and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Loan has been duly authorized;executed and delivered by and on behalf of Borrower, and is a legal,valid and binding obligation of Borrower enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors'rights generally and by general equitable principles. 4. The authorization and execution of the Loan and all other proceedings of Borrower relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting and public information acts of the State. 5. The execution of the Loan and the appropriation of moneys to pay the Installment Payments coming due thereunder do not and will not result in the violation of any constitutional, statutory or other limitation relating to the manner,form or amount of 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)871-8359 7. Mayor and Council Communication No.P-9874 of the governing body of Borrower was duly and validly adopted by such governing body on October 28, 2003, and such document has not been amended, modified,supplemented or repcaied and remains in full force and effect. To the extent authorized by Texas law,thi6 opinion may be relied upon by the addressee hereof and assignees of interests in the Loan, but only with regard to matters specifically set forth herein. Sincerely, David sett, City Attorney B}+ Hugh W. Davis Jr. Sr.Asst. City Atty. EXHIBIT F Loan No.: 02334 Aircraft Schedule: 01 ESCROW AGREEMENT This ESCROW AGREEMENT, made and entered into as of the Date shown on Schedule 1, by and among SUNTRUST LEASING CORPORA'T'ION,a Virginia corporation("Lender"), the Borrower named on Schedule 1, which is a political subdivision or public body pol itic and corporate of the State or Commonwealth shown on Schedule I ("Borrower"), and COBIZ BAND N.A, DJB.i COLDAADO BUSINESS BANK, a Colorado banking corporation, as Escrow Agent("Escrow Agent"). in consideration ofthe mutual covenants herein contained,the parties hereto agree as follows: ARTICLE I. DEFINITIONS AND RECITALS 5ec[insi 1.1. Dctl nitimut The terms defined in this Section 1.1 6al1, for all purposes of this Escrow Agreement, have the meanings specified below or on Schedule 1. ""Acquisition Costs" means, witl3 respect to the Aircraft,the contract price paid or to be paid to the person entitled to such payment upon aa9uisitian or delivery of any portion ofthe Aircraft in accordance with the purchase order or contract therefor. Acquisition Costs may include the administrative, engineering, legal, financial and other costs ineur od by Borrower in connection with the,acquisition, deIivery and financing ofthe Aircraft,if approved by Lender. "Aircraft" means the personal property described in the Acceptance Certificate executed pursuant to the Loan, together with any and all rnodifications,additions and alterations thereto, to be acquired from the moneys he]d in the Escrow Account. "Aircraft Schedule" means each sequentially numbered schedule executed by Lender and Borrower with respect to an Aircraft Group, "Fscrow Account" means the account by that name established and held by Escrow Agent pursuant to Article II of this Escrow Agreement. "Escrow Agent Pee" has the meaning set forth in Section 6,1 and the amount of such Escrow Agent Fee is shown on Schedule I, 'Es ero►w Agreement means this Escrow Agreement and any duly arithodzed and executed amendment or supplement hereto. "Initial Deposit Amount"means the amount shown as the Initial Deposit Amount en khcdule 1. "Loan" means the Loan and Security Agreement, together with the Aircraft Schedule identified on Schedule I, by and between 13orrower and Lender, and any duly authorized and oxmuted amendment or supplement thereto. "Payment bequest Dorm" meads the document substantially in the form attached hereto as Exhibit A to be executed by Borrower and Lender and submitted to Escrow Agent to authorize payment of Acquisition Costs. "Qualified Investments" means the: (a) direct obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by the United States of America, the guarantee of which constitutes the full faith and credit obligation of the United States of America("United States of America Obligations"); (b) bonds, debentures, pWicipatlon certificates or note9 issued by, or olAgations the prompt payment of principal and interest fnr which is guaranteed by,and of the following: 13ank for Cooperatives,Federal Financing Bank, federal Land Banks, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal National Mortgage Association,Export-Import Bank of the[United States,Student Loan MarkutingAssociatim,Farmers Home Administration,Federai Home Loan Mortgage Corporation or Government Nutional Mortgage Association, or any other agency or corporation that has been or may hereafter be created by or pursuant to an Act of Congress of the United Stated as an agency or instrutnen'a,lity thereof, (c) certifcates of deposit, time deposits, bank repurchase agreements or any other interest-bearing banking arrangements with any Nanking institution {including the F,scro w Agent of any bank with which the Escrow Agent is affiliated)that is fully insured by the Federal Deposit lnsurartce Corpo-ration, or any successor thereto, provided that such certificates of deposit or time dep4si epurekm� ren or other interest-bearing banking arrangements, Tnot fully insured by the Federal Deposit Insurance Cor Ora t(ft, Qr suclh.suo asSor;are either(i) issued by national or state banks having capital and surplus of at least S140,400,400 and a r irig 'A. ur :better by any nationally rnoglnized securities rating organization or(ii) fully secured by United States Government�bliga ons_ " Airaafl Looin sdancculG43:12131 M 1 ARTICLE II. APPOINTMENT OF ESCROW AGENT;AUTHORITY Section 2.1. Appointment of Escrow Agent. Lender and Borrower hereby appoint and employ Escrow Agent to receive, hold, invest and disburse the moneys to be paid to Escrow Agent pursuant to this Escrow Agreement and to perform certain other functions, all as hereinafter provided. By executing and delivering this Escrow Agreement, Escrow Agent accepts the duties and obligations of Escrow Agent hereunder. Escrow Agent undertakes to perform only such duties as are expressly set forth herein,and no additional duties or obligations shall be implied hereunder. In performing its duties under this Escrow Agreement, or upon the claimed failure to perform any of its duties hereunder,Escrow Agent shall not be liable to anyone for any damages, losses or expenses which may be incurred as a result of Escrow Agent so acting or failing to so act;provided, however, Escrow Agent shall not be relieved from liability for damages arising out of its proven gross negligence or willful misconduct under this Escrow Agreement. Escrow Agent shall in no event incur any liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of legal counsel,which may be counsel to any party hereto, given with respect to any question relating to the duties and responsibilities of Escrow Agent hereunder or (ii) any action taken or omitted to be taken in reliance upon any instrument delivered to Escrow Agent and believed by it to be genuine and to have been signed or presented by the proper party or parties. Escrow Agent shall not be bound in any way by any agreement or contract between Lender and Borrower, including the Loan, whether or not Escrow Agent has knowledge of any such agreement or contract. Section 2.2. Authority. Each of the parties has authority to enter into this Escrow Agreement, and has taken all actions necessary to authorize the execution of this Escrow Agreement by the representatives whose signatures are affixed hereto. ARTICLE III. ESCROW ACCOUNT Section 3.1. Equipment Acquisition Fund. Escrow Agent shall establish a special escrow account designated as the"Escrow Account" (the "Escrow Account"), shall keep such Escrow Account separate and apart from all other funds and moneys held by it and shall administer such Escrow Account as provided in this Escrow Agreement. Section 3.2. De osit. Upon execution of the Lease and delivery to Lender by Borrower of all documents required to be delivered thereunder, Lender shall deposit or cause to be deposited with Escrow Agent an amount equal to the Initial Deposit Amount. Escrow Agent shall credit such amount to the Escrow Account. The Initial Deposit Amount is to be sent by Lender to Escrow Agent by wire transfer as shown on Schedule I. Section 3.3. Disbursements. Escrow Agent shall use the moneys in the Escrow Account from time to time to pay the Acquisition Cost of each item of Aircraft, within a reasonable time of receipt with respect thereto of a Payment Request Form executed by Lender and Borrower. Upon receipt of a Payment Request Form executed by Lender and Borrower,an amount equal to the Acquisition Cost as shown therein shall be paid directly by Escrow Agent to the person or entity entitled to payment as specified therein. Although the Payment Request Form may have schedules,invoices and other supporting document attached to it,Lender will send to Escrow Agent only the page or pages showing the signatures of Lender and Borrower,the Acquisition Cost and related payment information,without such schedules, invoices or other supporting documentation. Escrow Agent may act and rely upon the signed Payment Request Form without the need to review or verify any such schedules,invoices or other supporting documentation. Section 3.4. Transfers IIpon Completion. Unless all of the funds deposited by Lender in the Escrow Account have been previously disbursed pursuant to Section 3.3paid to Lender pursuant to Section 3.5,on the Ending Date shown on Schedule I,Escrow Agent shall pay upon written direction all remaining moneys in the Escrow Account to Lender or its assignee for application as a prepayment of the unpaid Principal under the related Loan. Any amounts paid pursuant to this Section 3.4 shall be subject to a prepayment fee equal to two percent of such amount. Lender shall apply amounts received under this Section 3.4 first to unpaid fees, late charges and collection costs, if any, which have accrued or been incurred under the Loan,then to overdue Principal and Interest on the Loan and then, in the sole discretion of Lender,either(i)to Principal payments thereafter due under the Loan in the inverse order of their maturities or(ii)proportionately to each Principal payment thereafter due under the Loan. In the event that Lender elects to apply any such amounts in accordance with clause(i)of the preceding sentence, Borrower shall continue to make Rental Payments as scheduled in the applicable Payment Schedule. In the event that Lender elects to apply such amounts in accordance with clause(ii) of this Section 3.4, Lender shall provide Borrower with a revised Payment Schedule which shall reflect the revised Principal balance and reduced Rental Payments due under the Loan. Capitalized terms used in this Section 3.4, but not defined herein, shall have the meanings given to such terms in the Loan. Escrow Agent shall have no responsibility to see to the appropriate application of any moneys returned under this Section 3.4. Section 3.5. Liquidation. Upon receipt of written notice from Lender or Borrower that the Loan has been terminated pursuant to Sections 3.2 or 12.2 thereof,Escrow Agent shall liquidate all investments held in the Escrow Account and transfer the proceeds thereof and all other moneys held in the Escrow Account to Lender. ARTICLE IV. TRUST; INVESTMENT Section 4.1. Irrevocable Trust. The moneys and investments held by Escrow Agent under this Escrow Agreement are irrevocably held in trust for the benefit of Lender and Borrower, and such moneys,together with any income or interest earned, shall be expended only as provided in this Escrow Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of either Lender or Borrower(other than Lender's security interest granted hereunder). Aircraft Loan-esc.doc/revl0/03:12/3/20032 Escrow Agent shall have no responsibility at any time to ascertain whether or not any secu:ity interest exists in the Escrow Account or any part of the Escrow Account or to file any financing statement under the Uniform Commercial Code of any jurisdiction with respect to the Escrow Account or any part thereof fir.rtion d.2. _investment, Moneys held by Escrow Agent hereunder shall be invested and reinvested by Escrow Agent only in Qualified Investments. Such investments shaP be registered in the name of Escrow Agent and held by Escrow Agent for the benefit of]..,ender and Borrower. Escrow Agent may purchase or sell to itself or any affiliate, as principal ur agent, investments authorized by this Article IV. Such investments and re-investments shall be made giving full consideration for the time at which ands are required to be available. Any income received on such investments shall be crcdited to the Escrow Account and any lass on such investments shall ha charged to the Escrow Account. Escrow Agent shall not tae responsible or liable for any loss suffered in connection with any investment ofmoneys made by it in accordance with this Article IV. %Prtinn dj_ Uispositinn of,Tnvestmenk. Escrow Agent shall,without further direction from Lender or BxroiATr,sell such investmnts as and when required to make any payment from the Escrow Account. Sealan 4-4. Aecoui lno_ Escrow Agent shall keep toinplete and accurate records of alI moneys received and disbursed Lander this Escrow Agreement which shall be available for inspection by Lender or Borrower,or the agent of either afthcm,at any time during regular business hours upoii prior written request. Escrow Agent shall famish to Lender and Borrower no less than quarterly an accounting of all investments and interest and income therefrom, This Escrow Agreement shall terminate upon disbursement by Escrow Agent of all moneys held by it hereunder. Notwithstanding the foregoing, this Escrow Agreemem shall not be considered to be terminated until all fees, costs and expenses of Escrow Agent have been paid in full. Upon termination,Escrow Agent shall be discharged from all duties and responsibilities under this Escrow Agretunent. ARTICLE'V. ESCROW AGENT'S AUTHORI' ; INDEMNIFICATION Section 5.1. Val idftj+- Escrow Agent may act upon any writing or instrument or signature which it believes to be genuine,may assume the validity and accuracy of any statement or assertion cuntained in such a writing or instrument,and may assume that any person purporting to give any writing, notice, advice or instructions in connection with the provisions hereof has been duly authorized to do so, and Escrow Agent shall be under no duty to make any investigation ur inquiry as to any of the foregoing. Escrow Agent shall not be liable in any manner for the sufficiency or correctness m to form, manner and execution, or validity of any instrurent deposited with it, nor as to the identity,authority or right of any person executing the same. Escrow Agent shall be entitled to rely upon any statement, certificate, document or instrument presented to it by or on behalf of Borrower by any of the Borrower's ,Authorized Representatives shown on Schedule I and shall be entitled to rely upon any such statement, certificate, document or instrument presented to it by any other person who identifies himself or herself as an authorized repremntative of Borrower, Escrow Agent may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or reaeivers, Escrow Agent shall be entitled to advice of counsel concerning all andwrs of trust and its duties hereunder and shall be paid or reimbursed the reasonable fees and expenses of such counsel,as provided in Section 6.1. Escrow Agent shall out be answerable for the default or misconduct of Any sui;h attvrney, agent, or receiver selected by it with reasonable care. As an additional consideration far and as an inducement for Escrow Agent to net hereunder, it is understood and agreed that, in the event of any disagreement between the parties to this Escrow Agreement or among them or any other persons resulting in adverse clairrrs and demands being made in connection with or for any money or other property involved in or affected by this Escrow Agreement, Escrow Agent shall be entitled, at the optiort of Escrow Agent, to refitse to comply with the demands of such parties, or any of such parties, so long as such disagreement shall continue. In such event, Escrow Agent shall make na delivery or other dispositixan of the Escrow Account or any part of the Escrow Account. Anything herein to the contrary notwithstanding,Escrow gent shall not he nr beceme liable to Such parties ar any nfthem for the fal[tire of Escrow Agent to Comply with the conflicting or adverse demands ofsuch parties or any of such parties. Escrow Agent shall be entitled to continue to refrain and refuse to deliver or otherwise dispose of the Escrow Account or any part there of or to otherwise act hereunder,as stated shave,unless and until; 1. the rights of such parties have been finally settled by binding arbitration or duly adjudicated in a court having jurisdiction of the parties and the Escrow Account;or 2, the parties]cave reached an agreement resolving their differences and have notified Escrow Agent in writing of Such agreement and have provided escrow Agent with indemnity satisfactory to Escrow Agent against any liability, claims or damages resulting from camp Iiance by Ewrcw Agent with sui,h agreement. In the event of a disagreement between such parties as described above, Escrow Agent shail have the right, irk addition to the rights described above and at the option of ESerow Agent, to tender into the registry or custody of any court havingjurisdic#ion, all money and property comprising the Escrow Account and may take such other legal action as may be appropriate or necessary, in the opinion of Escrow agent. Upon such tender,the parties hereto agree that Escrow Agent shall a � urged fixtm all:bier duties and responsibilities under this Escrow Agreement; provided, holvever, that tha filing of any s li'Jd ,proceedings:.sha� nut deprive Escrow Agent of its compensation hereunder earned prior to such filing and discharg of`•7§6rowv Agent of its duties and Aircraft Lei n•cae dndmv I W3:I MOZO61 responsibilities hereunder. The parties hereto jointly and severally agree that, whether under this Section 5.3 or any other provisions of this Escrow Agreement, in the event any controversy arises under or in connection with this Escrow Agreement or the Escrow Account or in the event that Escrow Agent is made a party to or intervenes in any litigation pertaining to this Escrow Agreement or the Escrow Account, to pay to Escrow Agent reasonable additional compensation for its extraordinary services and to reimburse Escrow Agent for all reasonable costs and expenses associated with such controversy or litigation, including reasonable attorney's fees. Section 5.4. Limited Liability of Escrow AgmL To the extent permitted by law, Escrow Agent shall not be liable in connection with the performance or observation of its duties or obligations hereunder except for in the case of its proven gross negligence or willful misconduct. Escrow Agent shall have no obligation or liability to any of the other parties under this Escrow Agreement for the failure or refusal of any other party to perform any covenant or agreement made by such party hereunder or under the Loan,but shall be responsible solely for the performance of the duties and obligations expressly imposed upon it as Escrow Agent hereunder. Section 5.5. Indemnification. To the extent permitted by law, Escrow Agent shall have no obligation to take any legal action in connection with this Escrow Agreement or towards its enforcement,or to appear in,prosecute or defend any action or legal proceeding which would or might involve it in any cost, expense, loss or liability unless security and indemnity, as provided in this Section 5.5, shall be furnished. To the extent permitted by applicable law, Borrower agrees to indemnify Escrow Agent and it officers, directors, employees and agents and save Escrow Agent and its officers, directors, employees and agents harmless from and against any and all Claims (as hereinafter defined) and Losses (as hereinafter defined) which may be incurred by Escrow Agent or any of such officers, directors, employees or agents as a result of Claims asserted against Escrow Agent or any of such officers, directors, employees or agents as a result of or in connection with Escrow Agent's capacity as such under this Escrow Agreement by any person or entity. For the purposes hereof,the term"Claims"shall mean all claims, lawsuits, causes of action or other legal actions and proceedings of whatever nature brought against (whether by way of direct action, counterclaim, cross action or impleader) Escrow Agent or any such officer, director, employee or agent, even if groundless, false or fraudulent, so long as the claim, lawsuit, cause of action or other legal action or proceeding is alleged or determined,directly or indirectly,to arise out of,result from,relate to or be based upon,in whole or in part: (a)the acts or omissions of Lender or Borrower, (b)the appointment of Escrow Agent as escrow agent under this Escrow Agreement, or (c) the performance by Escrow Agent of its powers and duties under this Escrow Agreement; and the term "Losses" shall mean losses, costs,damages, expenses,judgments and liabilities of whatever nature(including but not limited to attorneys', accountants' and other professionals' fees, litigation and court costs and expenses and amounts paid in settlement), directly or indirectly resulting from, arising out of or relating to one or more Claims. Upon the written request of Escrow Agent or any such officer, director,employee or agent (each referred to hereinafter as an "Indemnified Party"), and to the extent permitted by law, Borrower agrees to assume the investigation and defense of any Claim, including the employment of counsel acceptable to the applicable Indemnified Party and the payment of all expenses related thereto and, notwithstanding any such assumption, the Indemnified Party shall have the right, and Borrower agrees to pay the cost and expense thereof, to employ separate counsel with respect to any such Claim and participate in the investigation and defense thereof in the event that such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to such Indemnified Party which are different from or additional to those available to either Lender or Borrower. Borrower hereby agrees that the indemnifications and protections afforded Escrow Agent in this Section 5.5 shall survive the termination of this Escrow Agreement. ARTICLE VI. COMPENSATION Section 6.1. Escrow Agent Fee. Escrow Agent shall be paid by Borrower the Escrow Agent Fee shown on Schedule I for the ordinary services to be rendered hereunder (the "Escrow Agent Fee"), and will be paid and/or reimbursed by Borrower upon request for all reasonable costs, expenses, disbursements and advances, such as reasonable attorney's fees and court costs, incurred or made by Escrow Agent in connection with carrying out its duties hereunder, including the costs, expenses, disbursements and advances described in Sections 5.2, 5.3 and 6.2. The Escrow Agent Fee and such other costs, expenses, disbursements and advances shall be payable from the interest earnings from the Escrow Account. In the event a shortfall occurs,said shortfall shall be the responsibility of Borrower and not the responsibility of Escrow Agent,Lender, or their agents or assigns. Such shortfall shall be paid by Borrower to Escrow Agent within 30 days following receipt by Borrower of a written statement setting forth such shortfall. Section 6.2. investment Fees. Escrow Agent shall be entitled to charge reasonable fees and commissions in connection with the investment by it of amounts held in the Escrow Account(the"Investment Fees"). Lender and Borrower hereby authorize Escrow Agent to periodically deduct the Investment Fees from investment earnings on the Escrow Account. Section 6.3. Security for Fees and Expenses. As security for all fees and expenses of Escrow Agent hereunder and any and all losses, claims, damages, liabilities and expenses incurred by Escrow Agent in connection with its acceptance of appointment hereunder or with the performance of its obligations under this Escrow Agreement and to secure the obligation of Borrower to indemnify Escrow Agent as set forth in Section 5.5, Escrow Agent is hereby granted a security interest in and a lien upon the Escrow Account, which security interest and lien shall be prior to all other security interests, liens or claims against the Escrow Account or any part thereof. ARTICLE VII. CHANGE OF ESCROW AGENT Section 7.1. Removal of Escrow Agent. Lender and Borrower, by written agreement, may by written request, at any time and for any reason, remove Escrow Agent and any successor thereto, and shall thereupon appoint a successor or successors thereto, but any such Aircraft Loan-esc.doc/revl 0/03:12/3/2003 4 successor shall have capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and be subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to statute or the requirements of any federal or state supervising or examining authority,then for the purposes of this Section 7.1, the combined capital and surplus of such bank or trust company may be conclusively established in its most recent report of condition so published. Section 7.2. Resignation of Escrow Agent. Escrow Agent may resign at any time from it obligations under this Escrow Agreement by providing written notice to the parties hereto. Such resignation shall be effective on the date set forth in such written notice which shall be no earlier than 30 days after such written notice has been given, unless an earlier resignation date and the appointment of a successor Escrow Agent shall have been approved by Lender and Borrower. In the event no successor escrow agent has been appointed on or prior to the date such resignation is to become effective, Escrow Agent shall be entitled to tender into the custody of a court of competent jurisdiction all assets then held by it hereunder and shall thereupon be relieved of all further duties and obligations under this Escrow Agreement. Escrow Agent shall have no responsibility for the appointment of a successor escrow agent hereunder. Section 7.3. Merger or Consolidation. Any entity into which Escrow Agent may be merged or converted, or with which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which Escrow Agent may sell or transfer all or substantially all of its corporate trust business(provided that such company shall be eligible under Section 7.1)shall be the successor to Escrow Agent without any execution or filing or further act. ARTICLE VIII. ADMINISTRATIVE PROVISIONS. Section 8.1. Notice. All written notices to be given under this Escrow Agreement shall be given by mail, by facsimile or by overnight courier to the party entitled thereto at its contact information specified on Schedule 1, or at such contact information as the party may provide to the other parties hereto in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered or certified form,with postage fully prepaid, or if given by other means,when delivered at the address or facsimile number specified in Schedule 1. Any notice given by any party shall be given to both other parties. Section 8.2. Assignment. Except as expressly herein provided to the contrary, the rights and duties of each of the parties under this Escrow Agreement shall not be assignable to any person or entity without the written consent of all of the other parties. Notwithstanding the above,Lender may freely assign all or any part of its interest in this Escrow Agreement and the Escrow Account in connection with an assignment by Lender of its rights under the Loan. Section 8.3. Binding Effect. This Escrow Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 8.4. Severabilitvy. In the event any provision of this Escrow Agreement shall be held invalid or unenforceable by any court of competent jurisdiction,such holding shall not invalidate or render unenforceable any other provision hereof. Section 8.5. Entire Agreement; Amendments. This Escrow Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous writings, understandings, agreements, solicitation documents and representations, express or implied. By execution of this Escrow Agreement, Escrow Agent shall not be deemed or considered to be a party to any other document,including the Loan. This Escrow Agreement may be amended, supplemented or modified only by written documents duly authorized, executed and delivered by each of the parties hereto. Section 8.6. Captions. The captions or headings in this Escrow Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions,Articles,Sections or clauses hereof. Section 8.7. Further Assurances and Corrective Instruments. Lender and Borrower agree that they will, from time to time,execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may be necessary or proper to carry out the intention or to facilitate the performance of the parties under this Escrow Agreement, and for better assuring and confirming the rights and benefits provided herein. Section 8.8. Governing La . This Escrow Agreement shall be construed and governed in accordance with the laws of the State of Texas. Section 8.9. Execution in Counterparts. This Escrow Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Escrow Agreement. Section 8.10. No Tax Reporting. Escrow Agent will not be responsible for tax reporting of any income on the Escrow Account. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] Aircraft Loan•esc.doc/revl0/03:12/3/2003 5 0 OR EXECUTION PACE OF ESCROW AGREEMENT IN W17NESS IVREREOFT the pardts have executed this Escrow Agreement as of the Date of Escrow Agrcement shown an Schedule 1. CaBix BANK N.A.dba COL RADO BUSINESS BANK, SUNTRUST LEASING CORPORATION, Escrow Agent Lender By B Name- Stscia B.Freimuth y Name: MichaeI 1. Po%yer5 Title: � Title: Secretary [SEAL] Cm OF Ff?RT H, }3 arrower Name: Jae ni ,a Title; Assis tCityanager ScltieduItI Infomdion to Complete Escrow Agreement l-xhibit A Payment Rtquest Foam ASP R O LEWM 1054 bV2 d 215474.005 ATTESTED BY 4' r �#Ct. Atfthrfseii � rfi„'1;ixPl � rt'vdaR Uan-eee,de Yrty i Rf93:1#f}f700G d'df> SidE3•lLSHANI N :dItiSM z�d 09T5 100Z,S0'hVH EXECUTION PAGE OF ESCROW AGREEMENT IN WITNli SS WHEREOF, the parties have executed this Escro%Y Agreement as of the Date of Escrow Agreement shown on Schedule I. COBiz BANK N.A.dba COLORADO BUSINESS BANK, SUNTRUST LEASING CORPORATION, row Agent Lender By - - By Name: Stacia S. Freirnuth Name: P:i00 Powers Title: Trust Of suer Title: Secretary [SEAL] CITY OF FORT WO DQrrower By: Name: Jae P ftCinaer Title: Assist Schedule r Information to Complom Escrow Agreement Exhibit A Payment Request Farm APA 10 ,D F , AWD LE:GALIT Y p' 3 Gty att Pate 1054496v2 215474,005 ATTESTED BY z), 10 44 Contract Authorizatio ArAitLM+tcdrlravld ;4 2047 6 J �� s:•. 4 ti Date I SCHEDULE I INFORMATION TO COMPLETE ESCROW AGREEMENT Loan Number: 02334 Aircraft Schedule: 001 Date of Escrow Agreement: December 10,2003 Name of Borrower: CITY OF FORT WORTH Borrower's State/Commonwealth: Texas Escrow Agent Fee: $ N/A Initial Deposit Amount: $ 981,894.00 Date of Loan: December 10,2003 Beneficiary Name for Fund: CITY OF FORT WORTH Ending Date: April 29,2004 Borrower's Address: 350 W.Belknap Ft. Worth,TX 76102 Attention: Joe Paniagua Borrower's Telephone: (817) 871-6191 Borrower's Facsimile: (817) 871-6134 Borrower's Taxpayer Identification Number: Borrower's Authorized Representatives A9515t d-r Lira M(-oP`>t- [name/title] [signature] [name/title] lu [signature] Escrow Agent's Address: COBIZ BANK N.A.DBA COLORADO BUSINESS BANK 821 17th Street Denver CO 80202 Attention: Stacia B Freimuth Escrow Agent's Telephone: 303-312-3415 Escrow Agent's Facsimile: 303-312-3495 Lender's Address: SunTrust Leasing Corporation 29 W. Susquehanna Avenue, Suite 400 Towson,Maryland 21204 Attention: Michael J.Powers Lender's Telephone: (410)307-6644 Lender's Facsimile: (410)307-6702 Lender's Taxpayer Identification Number: 54-0904325 APP OVED ANO F1KR,1M AND LEGALITY: 1054496x2 1 _ 215474.005 City Att ate Aircraft Loan-esc.doc/revl0/03:12/3/2003 7 EXHIBIT G-1 Goan No.; 02334 Aircraft Schedule: 01 DATE: Dene er �^ M o o f;�Y"t insurance Agent Name& Address Ph Dne-ltiltt nbor and Fax dumber Genticiuen CITY OF FORT WORTH has entered into a Master Aircraft Loan and Security Agreement dated $s of Daczmber 10 ,2003 with SUNTRUST LEASING CORPORATION (`Agreement''). In accordance with the Agreement, Borrower certifies that it has instructed the insurance agent named above to issue. a. All Disk Physical Damage Insurance on the financed Aircraft evidenced by a Cerlificute of Insurance a"d Long Farm Lass Payable Clause naming SunTrust Leasing Corporation and/or its Assigns as Logs Payee or a letter, in form and content acceptable to Lessor,describing Borrower's equivalentwif-insurance_ The Coverage Required is Prepayment Amount(as defined in the Agreement). b. Public Liability Irlsuranee evidenced by a Certificate of Insurance naming SunTrust leasing Corporation and/or its assigns as Additional Insured or a letter, in form and content acceptable to Lessor, &5eribing Borrower's equivalent self-insurance. The,fallowing minimum coverage is required; Liability Coverage: 525,000,000 per occurance PROPERTY; See Exhibit A LOCATION; See Exhibit A Upon issuance of the coverage nuftined above, please moil a certificate of insurance to SunTrust Leasing Corporation, 29 West Susquehanna Avenue,Suite 440,Towson,Maryland 21204, Attention: Geri Cobb. Your courtesy in issuing and forwarding the requested certificate at your earliest convenience will bu apprec iated. Very truly yours, CITY OF W R R, Dy: Name: d0 a u T111s is countcrpartNo.1 of 2serialt)�numbered,t�nuelly cxecdsod cg.rnt�partsfl Title: Assists t u lana�cr Ih3Y,dumument. To the extcnttFmt this Leaw Agreementco"Wuses eltatirl gaper a undertheUni(prn}C4mr -621 Code,asecufily iaterestin this LxaseAgrecntle1t Date: n-' ° may be created tk rnugh the transfer and pas9essim afCvunteagaft No. Ionly, mamat i'c n eed to transfer pomessi%of any other ut'iginal ur cuuntetpart or cuPy of this Lease Agmerrmt cr anY ckripusil or cotmterl'a-rt or copy of aTly exhibits, addenda,schedules,certiliutm,riders or other docutrrants and iristruTTrenrs executed and delivered in connculion with this Lease Ap-eement, A. Ai reran Lorrgwd[FVr-cy,1"3;:3r3rtU[n 26 Aviation Insurance Agency INCORPORATED 901 S.W.Martin Downs Boulevard Toll Free(800)422-2868 P. O. BOX 2260 Telephone(772)286-0626 Facsimile(800)572-0893 Palm City,Florida 34991 Facsimile (772)286-1108 www.avnins.com December 10,2003 Mr.Bill Piskuran Key and Piskuran Agency P. O.Box 13692 Arlington,TX 76094-0672 Re: City of Fort Worth Global Aerospace,Inc. Policy No. FHL 111718 Dear Bill: This will confirm that an additional helicopter has been added to the captioned Aircraft Liability Insurance policy as outlined in the attached binder. Please accept this binder as evidence of coverage until such time as the formal endorsement is issued. We trust you will find this in order. Please feel free to contact us if you have any questions. Thank you,we appreciate your business. Sincerely, AVIATION INSURANCE AGENCY,INC. Mary D'Alauro MXD/dp Attachment OVI Mc�rrllat�r r1r "97W RK EXHIBIT G-2 Loan No.: 02334 Aircraft Schedule: 41 QUESTIONNAIRE FOR SELF-INSURANCE TO (MASTER AIRCRAFT LOAN AND SECURITY AGREEMENT In connection with the Master Aircraft Loan and Security Agreement (the "Agreement"), dated as of Decemhrr 10,2403, made and entered into by and between SUNTRUST LEASING CORPORATION, as Lander (the "Lender"), and the Borrower identified below, as Borrower(the "Borrower"), Borrower warrants and reprascrnts to Lender the fallowing information. The terms. capitalized herein hat not defined herein shall have the meanings assigned to them in the Agreemant. 1. Froperiy Ins2f once. a. Borrower is self-insured damage or destruction to the Aircraft. YF}S INTO (circle one) if yes, the dollar arnotrnt limit for property damage to the Aircraft under the Borrower's self-insurance program is $kb ' un . b, The Borrower maintains an umbrella irlsurunce policy far claims in excess of Borrower's self insurance limits for property damage to the Air as indicated above. YES NO (circle one) Ifyes,the umbrella policy provides coverage for all risk property damage. YES NO (circle one) Ifyes,the dollar 11 m for property damage to the Aircraft under such umbrella policy is S 2. J.ir�hili�fnexrarrce, R, 130rroMr is self-insured for liability far injury or death of any persons or damage or loss of property arising out of or relating to the aondik' or operation of the Aircraft, YES No (circle one) If yes,the dollar limit for such liability clot s under the Borrower's self-insurance program is b_ The Borrower maintains an umbrella insurance policy for claims in excess of Borrower's self-insurance limits far liability including injury or death orpersons or damage to property as indicated above. YES (circle one) byes,the umbrella policy provides coverage for liabilities for injury and death to persons as well as damage or loss of property arising oaf of or relating to the condition or operation of the Aircraft, YES NO (circle one) If yes,the dollar amount of the umbrella policy's limits for such liability coverage is$ ';A SodrInwwronep Aunrl, a. Borrower maintains a self insurance fund. YES NO (,,kale one) If yes, please cornplete the ollowlna: Monies in the self-insurance fund are subjlrct to annual appropriation. P NO (circle one) The total amount maintained in thInsurance fund to cover Borrower's self-insurance liabilities is S-&M. apa i b. Amounts paid from the Borrower's self-t ce fund are subject to limitations for each claim. YES NO (circle one) IFyes,the dollar amount of limit per claim is S AL,v-4f.I wwos;AoWr v1943:1FJ WM 27 — - I IR. Nrs NP4C Tn.arriv rrra Fund a. If Borrower does not maintain a self-insurance fund, please complete the fallowing: Borrower obtains funds to pay claims for which it has self-insured from the following sources: 6 LA'0 J�+6L V- 11 0 e61,'h 0 P1 b" The Iimitations on the amounts payable for claims from the above sources are as fallows: rr 4. kothenrity. a. The following entity or officer has authority to authorize payment far claim:-TI -e stir'-� (AJ o t"'� b. In the event the entity or officer named in the prior response denies payment of a claim, does the claimant have recourse to another administrative o ency or the courts? YES N0 (circle one) ff yes, to whom oes the claimant have recourse? juoh'c1'a.( proe-e-s5 S_ Certificates nUnsurance. Attached hereto are copies of certificates of insurance with respect to policies maintained by Borrower. IN WITNESS WHEREOF, Borrower has caused this Questionnaire to be executed as a supplement to the representations of Borrower in the Agreement by its duly authorized offices'. CITY OF FORT WORTH, Borrower 8y; ZL TVamo: Jae Pant ua Title: Ass ista ityP4an ger Date: r' { `f to 3 Telephone: (8 17)871-6191 Facsimile: (817)871-6134 Attachineat This Is COUntcr�art No. 1 of a scoa:ly n;smbared,rt�tnually exe�cu�ed count+rpiirts of this document. To the extent chat this Lease Agreement constitutes chapel paper under the Un1fbrm Commercial Cade,a accurity interest in this Lease Agmornent may be created through the tronsfcrand possessicn nfCounterpartNo.]wily, 3vithoutthe treed to transfer possmsiDn of nyatherorigin@I a eounterpartor Mpy of this Lcas c Agrcc:ncd or any original or counterpart or copy of any exhibi is, addenda,schadules,corri f icaies,riders w other docurn is and instrumenis cxcculed and dcliYu od in cunnection with this Lcast Apeement. n lr'SiY }i L 28 n pp Ar rmtl I.0 in cw-d&?r 3 GV r ate:L2.1-MO SLINTRUST LEASING CORPORATION ADDENDUM TO AIRCRAFT SCHEDULE NO. 01 TO MASTER AIRCRAFT LOAN AND SECURITY AGREEMENT(LOAN NO.02334) RELATING TO SELF-INSURANCE THIS ADDENDUM is made as of December 10 ,2003, between S`NTRUST CEASING CORPORATION (the "Lender") and CITY OF FORT WORTH (the"Burrower"). Recitals A. Lender and Borrower have entered into a Master Aircraft Loan and Security Agreement dated as of December 10,2003 (the "Agrcement"). B. Borrower desires to purchase the aircraft described in Aircraft Schedule No.01 to the Agreement (the "Aircraft")and 00rrowor has requested that Lender finance the acquisition of such Aircraft by Borrower. C. With respect to Aircraft Schedule No. l}1,Borrower has requested that]gender permit it to provide self-insurance for liability claims and property damage, O. )render is will ing to grant Borrower's request subject to Ire follu■ving terms and conditions. NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein and in the Agreement, it is hereby agreed as follcws: 1. The terms capitalized in this Addendum but not defined herein shall have the meanings assigned to them in the Agreement. 2. Borrower hereby represents and warrants that all representations and warranties contained in the Agrcernent are true and correct as of the date hereof and that neither a Non-Appropriation nor any Event of Default or event which, with the passage of time or .giving of notice or bath, would constitute an Event of Default has occurred under the Agreement. 3. All other terms and conditions of the Agreement not specifically amended by this Addendum shall remain in full for:e and affect and are hereby ratified and confirmed by Borrower, 4. Borrower represents and warrants that all representations and warranties contained in the Questionnaire for Self- insurance W Master Aircraft Loan and Security Agreement{the"Questionnaire") are true and correct as of the date hereof. 5. Lender acknowledges receipt of the Questionnaire and, in reliance upon the information provided therein, agrees that Borrower may satisfy the requirements cfSections 7.1 through 7.3 of the Agreement with respect to Aircraft Schedule No. 01 through self-insurance. IN' WITNESS WHEREOF, the parties by their duly authorized officers have executed this Addendum as of the date and year first above written. CITY OF FORT WORTH, SUNTRUS, LEASING CORPORATION, Borrower Lender By: By: Name: doe Pa ag a Name: 14ticha�g Powers Title: Assist t O M a Title Secretary Date: t — ' t3 Date: Phis is cowitopart No, I aft serially numbered,manually exeouled cmnwpam of this dacu mcn L. To the exteast Chat this Cease Agrecmentconstimeschstlel rarer rr lnderthe 2rii form Commerci21 Code,a security interest in this UaseAgrecrn mt may besv atedthroughthctranssfcrandpomcssiaaof CourltcPar1 No. lonly, without the#lead to lrmsrcr possession of any other original or Counterpart or Copy of t[14 l ea se Agrccrnent c r any original o r coon to rpart o r copy of any exhibits, addenda,schedules,ocrtifioates,riders-or other dwurwnis a-A instrumentsexeotlLed and delivered in connsetion with this Lease,AgreMcM. A;KMAbR n�n.&dfcvI"3:1NJrbm 29 [PAGE TO BE REPLACED BY UCC FINANCING STATEMENT] Aircraft Loan-esc.doc/revl0/03:12/3/2003 30 SCHEDULE A TO FINANCING STATEMENT OF CITY OF FORT WORTH,AS DEBTOR,AND SUNTRUST LEASING CORPORATION,AS SECURED PARTY Continuation of Collateral Description The financing statement to which this Schedule A.is attached covers the types of property described on the face of such financing statement and all of the Debtor's right,title and interest in and to(collectively,the"Collateral"): HANGAR LOCATION: 1400 Nixon Street,Fort Worth,TX 76102 (a) the aircraft described in Aircraft Schedule No. 01 dated as of December 10,2003 (the"Aircraft Schedule")to the Master Aircraft Loan and Security Agreement dated as of December 10,2003 (the "Agreement," and together with the Aircraft Schedule,the "Loan") between Debtor, as Borrower, and Secured Party, as Lender, as such Loan may be amended, modified or supplemented from time to time together with all of Debtor's right,title and interest in and to the Escrow Account established in Debtor's name at CoBIZ BANK N.A. dba COLORADO BUSINESS BANK(the "Escrow Agent") pursuant to the Escrow Agreement dated as of December 10,2003 (the "Escrow Agreement")among Debtor, Secured Party and the Escrow Agent; (b) to the extent not included in the foregoing, all books, ledgers and records and all computer programs, tapes, discs,punch cards, data processing software,transaction files,master files and related property and rights(including computer and peripheral equipment)necessary or helpful in enforcing,identifying or establishing any item of Collateral;and (c) to the extent not included in the foregoing, all proceeds and products of any or all of the foregoing, whether existing on the date hereof or arising hereafter. Aircraft Loan-esc.dodrev10 103A 2n/2003 31 FORM APPROVED OMB No.2120-0042 UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION-MIKE MONRONEY AERONAUTICAL CENTER AIRCRAFT REGISTRATION APPLICATION CERT. ISSUE DATE UNITED STATES 26FW REGISTRATION NUMBER AIRCRAFT MANUFACTURER&MODEL Bell 206BIII AIRCRAFT SERIAL No. 4575 FOR FAA USE ONLY TYPE OF REGISTRATION(Check one box) ❑ 1. Individual ❑ 2. Partnership ❑ 3. Corporation ❑ 4. Co-owner [X5. Gov't. ❑ 8.Con-Citizen rporation NAME OF APPLICANT(Person(s)shown on evidence of ownership. If individual,give last name,first name,and middle initial.) City of Fort Worth TELEPHONE NUMBER:( 817 ) 871-8310 ADDRESS(Permanent mailing address for first applicant listed.) 1400 Nixon Street Number and street: Rural Route: P.O.Box: CITY Fort Worth STATE Texas Z���U2 ❑ CHECK HERE IF YOU ARE ONLY REPORTING A CHANGE OF ADDRESS ATTENTION! Read the following statement before signing this application. This portion MUST be completed. A false or dishonest answer to any question in this application may be grounds for punishment by fine and/or imprisonment (U.S.Code,Title 18,Sec. 1001). CERTIFICATION I/WE CERTIFY: (1)That the above aircraft is owned by the undersigned applicant,who is a citizen(including corporations) of the United States. (For voting trust,give name of trustee: ),or: CHECK ONE AS APPROPRIATE: a. ❑ A resident alien,with alien registration(Form 1-151 or Form 1-551)No. b.(]A non-citizen corporation organized and doing business under the laws of(state) and said aircraft is based and primarily used in the United States. Records or flight hours are available for inspection at (2)That the aircraft is not registered under the laws of any foreign country;and (3)That legal evidence of ownership is attached or has been filed with the Federal Aviation Administration. NOTE: If executed for co-ownership all applicants must sign. Use reverse side if necessary. TYPE OR PRINT NAME BELOW SIGNATURE SIGNATURE TITLE DATE rAFY 103 LLB? Joe P ni ua Asst City Manager OZ? SIGNA E TITLE DAT r ¢UZ ¢a w SIGNAT E IITTL � F4 TTTTD�71 m¢m NOTE Pending receipt of the Certificate of Aircraft Registration,the aircraft may be operated for a period not in excess of 90 days,during which time the PINK copy of this application must be carried in the aircraft. AC Form 8050-1 (12/90) (0052.00-628-9007) Supersedes Previous Edition Do ncn write in this block- fur FAA use only. BILL OF SALE t►ICROFILNI COIDE For and in consideration of $ 10.00&0.V,C, the undersigned owners)of the full legal 4C JC and beneficial title of the aircraft described as fuilews; AIRC ZAFr MAKE AND MODEL Bel]206D RECD PCHI) MANUFACTUREWS SERIAL NUMBER MATIONALnY A"FX-GISTRAMN NARF S Rderal Avj2iI4,- 4575 N26FW does this J f stay of 2t](}3, hereby sell,grant,transfer and deliver all rights,title,and interests in and such aircraft unto' NAME AND ADDRESS . (if individua4s),give last n8um,&dd midd to milial) is U City Of Fart worth R 1 D00 Thnxkrnorton Stre:A C Fart Worth, Texas 75102 H A S E R and to ITS executors,adrniiustrators,and assigns t❑have and to hold singularly the said aircraft:forever,and cartifies that same is nor sulj eot to any mortgage or other encumbrance. In testimony whereofl have set MY hand and sea[this 11th day of Dek-03 NAME OF SELLER BELL HELICOPTER TIIXTRON INC, BY(Sign in Ink) —Maw - - - Qt eaeouled for cu-"marAip,all must sign) TITLE Manager,Finance Admiaistradon (t(sigricd for a ccrpQratian,partnership.or ap:ut) ACKNOWLEDGEMENT State of TEXAS County of TAFL12ANT On this 11th day of December 2063 before me personally appeared the above named seller,to tyre known to bo the person described in and who executed the forgoing bill Cf sale and aclnowledge that he executed the same as his free aet and deed,and,if said bill of sale be that of oorporalion swore that be was authorized to exwwc the same. Given under my hand and official sezl the day and year written above. (SEAL) - My ComtnLmlon Expires Notary Puhlic 0 .. lrD .RU Notary pbbti State bf Texas Expires 06-70-2407 (CERTIFIED COPY-TO BE RETURNED)