RES-2015-273RESOLUTION NO. 2015 - 2 7 3
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ANAHEIM AUTHORIZING THE EXECUTION AND DELIVERY
OF A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
WITH BANC OF AMERICA PUBLIC CAPITAL CORP, AS
LESSOR, AND SEPARATE SCHEDULES THERETO FOR THE
ACQUISITION, PURCHASE, FINANCING AND LEASING OF
CERTAIN EQUIPMENT WITHIN THE TERMS HEREIN
PROVIDED; AUTHORIZING THE EXECUTION AND
DELIVERY OF OTHER DOCUMENTS REQUIRED IN
CONNECTION THEREWITH; AND AUTHORIZING ALL OTHER
ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION.
WHEREAS, the City of Anaheim (the "Lessee"), a municipal corporation, is authorized by
the laws of the State of California to purchase, acquire and lease personal property (tangible and
intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect
thereto; and
WHEREAS, the City Council has determined that a need exists for the acquisition, purchase
and financing of certain property consisting of mobile radio equipment related to the 800 Megahertz
(MHz) Countywide Coordinated Communications System (CCCS) (collectively, the "Equipment")
on the terms herein provided; and
WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that
certain Master Equipment Lease/Purchase Agreement (the "Agreement") with Banc of America
Public Capital Corp (or one of its affiliates), as lessor (the "Lessor"), substantially in the proposed
form presented to the City Council at this meeting, and separate Schedules thereto substantially in
the form attached to the Agreement; and
WHEREAS, the City Council deems it for the benefit of the Lessee and for the efficient and
effective administration thereof to enter into the Agreement and separate Schedules relating thereto
from time to time as provided in the Agreement for the purchase, acquisition, financing and leasing
of the Equipment to be therein described on the terms and conditions therein and herein provided;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anaheim
that:
Section 1. Findings and Determinations. It is hereby found and determined that
the terms of the Agreement (including the form of Schedule of Property and the form of Rental
Payment Schedule, both attached thereto), in the form presented to the City Council at this meeting,
are in the best interests of the Lessee for the acquisition, purchase, financing and leasing of the
Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Agreement
(including the form of Schedule of Property and the form of Rental Payment Schedule, both attached
thereto) are hereby approved in substantially the forms presented at this meeting, with such
insertions, omissions and changes as shall be approved by the Finance Director, City Clerk and City
Attorney of the Lessee (the "Authorized Officials") executing the same, the execution of such
documents being conclusive evidence of such approval. The Authorized Officials are each hereby
authorized and directed to sign and deliver on behalf of the Lessee the Agreement, each Schedule
thereto under which a separate Lease (as defined in the Agreement) is created, each Rental Payment
Schedule attached thereto and any related exhibits attached thereto if and when required; provided,
however, that, without further authorization from the City Council of the Lessee, (a) the aggregate
principal component of Rental Payments under all Leases entered into pursuant to the Agreement
shall not exceed $1,100,000.00; (b) the maximum tenn under any Lease entered into pursuant to the
Agreement shall not exceed ten (10) years; and (c) the maximum interest rate used to determine the
interest component of Rental Payments under each Lease shall not exceed the lesser ofthe maximum
rate permitted by law or five percent (5%) per annum. The Authorized Officials may sign and
deliver Leases to the Lessor on behalf of the Lessee pursuant to the Agreement on such terms and
conditions as they shall determine are in the best interests of the Lessee up to the maximum
aggregate principal component, maximum term and maximum interest rate provided above. The
foregoing authorization shall remain in effect for a period of two years from the date hereof during
which the Authorized Officials are authorized to sign and deliver Leases pursuant to the Agreement
on the terms and conditions herein provided and to be provided in each such Lease.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take
all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to
and consummate the transactions contemplated thereby (including the execution and delivery of
Final Acceptance Certificates, Escrow Agreements and any tax certificate and agreement, as
contemplated in the Agreement) and to take all action necessary in conformity therewith, including,
without limitation, the execution and delivery of any closing and other documents required to be
delivered in connection with the Agreement and each Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, any
Lease, any Escrow Agreement nor any other instrument shall be construed with respect to the Lessee
as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing
power, nor shall the breach of any agreement contained in this Resolution, the Agreement, any Lease,
any Escrow Agreement or any other instrument or document executed in connection therewith
impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its
taxing power, except to the extent that the Rental Payments payable under each Lease entered into
pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as
provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The Finance Director of
the Lessee is hereby designated to act as authorized representatives of the Lessee for purposes of
each Lease and the related Escrow Agreement until such time as the City Council of the Lessee shall
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designate any other or different authorized representative for purposes of the Agreement and any
Lease or Escrow Agreement.
Section 6. Severability. If any section, paragraph, clause or provision of this Resolution
shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
section, paragraph, clause or provision shall not affect any of the remaining provisions of this
Resolution.
Section 7. Effective Date. This Resolution shall be effective immediately upon its
approval and adoption.
THE FOREGOING RESOLUTION is approved and adopted by the City Council ofthe City
of Anaheim this 3ra day of November, 2015, by the following roll call vote:
AYES: Mayor Pro Tem Kring and Council Members Murray, Brandman,
and Vanderbilt
NOES: None
ABSENT: Mayor Tait
ABSTAIN: None
CITY OF ANAHEIM
By:
MAYOR OF THE CITY O AHEIM
ATTEST:
CITY CLERK OF THE CITY OFA AHEIM
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Bank of America
Merrill Lynch
Jill M Forsyth Banc of America Public Capital Corp
Senior Vice President AZ3-588-02-02
Government Finance Specialist 14648 N. Scottsdale Road, Suite 250
Scottsdale, AZ 85254
Email: jill.m.forsytb@baml.com
Tel: (480) 624-0369
Fax: (415) 796-1301
UPDATED SUMMARY OF TERMS AND CONDITIONS
Date: October 29, 2015
Lessee: City of Anaheim ("Lessee")
Lessor: Banc of America Public Capital Corp (`BAPCC") or Designee ( "Lessor")
Structure: Privately -Placed Lease Purchase Financing.
Amount: Approximately $1,100,000
Security: A security interest in the assets being financed will be provided.
Term: 10 Years
Interest Rate: 1.98%
The Interest Rate is calculated on a tax-exempt basis assuming equal semi-annual
payments
The rate quoted herein is for a funding that occurs on or prior to November 30,
2015. If the transaction does not fund by that time, the rate may need to be
modified if there is a change in market conditions.
Payments: Payments are assumed to be Semi-annually in arrears. Changes to this schedule
may be accommodated but may also impact the rate quoted herein.
Prepayment: Pre -payable in Full after Y2 of the term with a I% prepayment penalty
Governmental
Entity Lease: The Base Rent installments are calculated on the assumptions, and Lessee will
represent, that Lessee is a state or political subdivision of a state within the
meaning of Section 103(c) of the Internal Revenue Code (the "Code"), and that
this transaction will constitute an obligation of Lessee within the meaning of
"Bank of America Merrill Lynch" is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives,
leasing, equipment finance, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of
America, N.A., Member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of
America Corporation ("Investment Banking Affiliates"), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch
Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC and, in other jurisdictions, by locally registered entities. Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of
the NFA. BAPCC is not a municipal advisor and is not subject to the fiduciary duty established in Section 1511(c)(1) of the Securities Exchange Act of 1934, as amended,
with respect to any municipal financial product or issuance of municipal securities. The information provided in this document is not intended to be and should not be
construed as "advice" with the meaning Section 15B of the Securities Exchange Act of 1934 and the municipal advisor rules of the SEC. Investment products offered by
Investment Banking Affiliates: Are Not FDIC Insured - May Lose Value - Are Not Bank Guaranteed. ®2015 Bank of America Corporation
Section 143(a) of the Code, notwithstanding Section 143(b) of the Code. Lessee
shall provide Lessor with such evidence as Lessor may request to substantiate and
maintain such tax status. Lessee shall comply with the filing requirements of
Section 149(e) of the Code.
End of Term: At the expiration of the Lease Term, Lessee will own the equipment.
Opinion of Counsel: Lessee's counsel shall deliver a validity opinion to Lessor at closing in form and
substance satisfactory to Lessor. The opinion of counsel will cover that counsel
has examined, approved and attached the text of the enabling resolution of
Lessee's governing body authorizing Lessee to enter into the Lease.
Escrow Account: If desired, proceeds may be deposited into an escrow account acceptable to
Lessor, and disbursements made therefrom to pay for the equipment upon
execution and delivery of an acceptance certificate (and related documents) by
Lessee and approved by Lessor. The draw escrow period will be for 15 months.
Bank of America, National Association can provide the escrow services for the
Lessee if desired.
Documentation: Sample documents have been provided for review.
Credit: This transaction has been submitted to BAPCC's Credit Department for formal
review and approval.
Market
Disruption: Notwithstanding anything contained herein to the contrary, in the event any material
change shall occur in the financial markets after the date of this Proposal Letter,
including but not limited to any governmental action or other event which materially
adversely affects the extension of credit by banks, leasing companies or other
lending institutions, the Lessor may modify the indicative pricing described above.
The transaction described fn this document is an arm's length, commercial transaction between you and Banc ofdmMca Public Capital Corp ('BAPCC) to which. (I)BAPCC is
acting solely as o principal (i.e., as a lender or lessor) and for its awn interest • (ti) BAPCC is not acting= a municipal advisor or financial advisor to you; (til) BAPCC has no
fiduciary duty pursuant to Section 13B of the Securities ExchangeAet of 1934 to you with respect to this transaction and the discussions, undertakings and p ocedures leading
thereto (vrespective of whether BAPCC or any of its affiliates has provided other services or is currently providing other services to you on other matters); (iv) the only
obligations BAPCC has to you with respect to this transaction are setforth in the defnnitim transaction agreements between us. and (w) BAPCC is not recommending that you take
an action with respect to the transaction described in this document, and before taking any action with respect to the this transaction, you should discuss the it formation contained
herein with your own legal, accounting, tax, financial and other advisors, as you deem appropriate If you would like a municipal advisor in this transaction that has legal
fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity.
USA Patriot Act
Compliance: The Lessee acknowledges that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"),
the Lessor is required to obtain, verify and record information that identifies the
Lessee, which information includes the name and address of the Lessee and other
information that will allow the Lessor to identify the Lessee in accordance with the
Patriot Act.
Exceptions:
Due to the new Municipal Advisory rules, the 8038G form will need to be completed and
filed by the Lessee.
Proposal Expiration:This proposal will expire on November 15, 2015 and may be re -issued at
Lessor's discretion.
ACCEPTANCE: DATE:
This proposal is submitted in response to your Request for Proposals for Lease Purchase Financing of equipment, due October 5, 2015. The
contents of this proposal and any subsequent discussions between us, including any and all information, recommendations, opinions,
indicative pricing, quotations and analysis with respect to any municipal financial product or issuance of municipal securities, are provided to
you in reliance upon the exemption provided for responses to requests for proposals or qualifications under the municipal advisor rules (the
Rules' of the Securities and Exchange Commission (240 CFR 15Ba1-1 at seq.).
The Staff of the SECS Office of Municipal Securities has issued guidance which provides that in order for a request for proposals to be
consistent with this exemption, it must (a) identify a particular objective, (b) be open for not more than a reasonable period of time (up to sit
months being generally considered as reasonable), and (c) involve a competitive process (such as by being provided to at least three
reasonably competitive market participants) or by being publicly posted to your official website. In submitting this proposal, we have relied
upon your compliance with this guidance.
In submitting this proposal, we are not undertaking to act as a municipal advisor" to you or any other person within the meaning of the Rules.
In connection with this proposal and the transactions described herein, we are not subject to, and we hereby disclaim, any fiduciary duty to
you or to any other person. We understand that you will consult with and rely on the advice of your own municipal, financial, tax, legal and
other advisors as and to the extent you deem necessary in connection with your evaluation of this proposal and the transactions described
herein.
The transaction described in this document is an arm's length, commercial transaction between you and Banc ofAmerica Public Capital Corp ('BAPCC') in which: (i) BAPCC is
acting solely as a principal (t. e., as a lender or lessor) and for its own interest,r1i) BAPCC is not acting as a municipal advisor or financial advisor to you, Viii) BAPCC has no
fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to this transaction and the discussions, undertakings and procedures leading
thereto ('irrespective of whether BAPCC or any of & affiliates has provided other services or is currentlyproviding other services to you on other matters); (tv) the only
obligations BAPCC has to you with rasped to this transaction are set forth in the definitive transaction agreements between us; and (v) BAPCC is not recommending that you take
an action with respect to the transaction described in this document, and before taking any action with respect to the this transaction, you should discuss the information contained
herein with your own legal, accinatting, tax, financial and other advisors, as you deem appropriate, Ifyou would like a municipal advisor in this transaction that has legal
fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity.
MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement (the "Agreement ") dated as of
and entered into by and between Banc of America Public Capital
Corp, a Kansas corporation (`Lessor'), and a [city] [county]
[school district] [special district] [body corporate and politic] existing under the laws of the State
of ("Lessee').
WITNESSETH:
WHEREAS, Lessee desires to lease, purchase and acquire from Lessor certain Equipment
described in each Schedule (as each such term is defined herein), subject to the terms and
conditions of and for the purposes set forth in each Lease; and
WBEREAs, the relationship between the parties shall be a continuing one and items of
equipment and other personal property may be financed pursuant to one or more Leases entered
into from time to time in accordance with this Agreement by execution and delivery of additional
Schedules by the parties hereto, subject to the terms and conditions provided herein; and
WnmEAs, Lessee is authorized under the constitution and laws of the State to enter into
this Agreement and each Schedule for the purposes set forth herein and therein;
Now, TIIEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the premises hereinafter contained, the parties hereby
agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below
unless the context clearly requires otherwise:
"Acquisition Amount" means, with respect to each Lease, the amount specified in the
related Schedule and represented by Lessee to be sufficient, together with other funds (if any)
that are legally available for the purpose, to acquire and install the Equipment listed in such
Lease.
"Acquisition Period" means, with respect to each Lease for which an Escrow Fund is
established, that period identified in the related Schedule during which the Lease Proceeds
attributable to such Lease may be expended on Equipment Costs pursuant to the related Escrow
Agreement.
"Agreement" means this Master Equipment Lease/Purchase Agreement, including the
exhibits hereto, together with any amendments and modifications to the Agreement pursuant to
Section 13.04.
Standard MELPA BAPCC 415
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"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a
Section of the Code in this Agreement and a Lease shall be deemed to include the United States
Treasury Regulations proposed or in effect thereunder.
"Commencement Date" means, for each Lease, the date when Lessee's obligation to pay
rent commences under such Lease, which date shall be the earlier of (a) the date on which the
Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01,
and (b) the date on which sufficient moneys to acquire and install the Equipment listed in such
Lease are deposited for that purpose in an Escrow Fund.
"Contract Rate" means, with respect to each Lease, the rate identified as such in the
related Schedule.
"Equipment" means, with respect to each Lease, the property listed in the related
Schedule and all replacements, repairs, restorations, modifications and improvements thereof or
thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this
Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such
replacements, repairs, restorations, modifications and improvements of or to such Equipment.
"Equipment Costs" means, with respect to each Lease, the total cost of the Equipment
listed in the related Schedule, including related soft costs such as freight, installation and taxes
and other capitalizable costs, legal fees, financing costs and other costs necessary to vest full,
clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained
by Lessor as set forth in each Lease, and other costs incurred in connection with the financing
provided by the lease -purchase of the Equipment as provided in the related Lease; provided that
(a) any such soft costs on a cumulative basis shall not exceed a percentage approved by Lessor of
the total cost of the Equipment subject to such Lease and (b) in no event shall capitalizable
delivery costs, installation charges, taxes and similar capitalizable soft costs relating to such
Equipment be included without Lessor's prior consent.
"Escrow Agreement" means, with respect to each Lease for which an Escrow Fund is
established, an Escrow and Account Control Agreement in form and substance acceptable to and
executed by Lessee, Lessor and the Escrow Agent, pursuant to which an Escrow Fund is
established and administered.
"Escrow Agent" means, with respect to each Lease for which an Escrow Fund is
established, the Escrow Agent identified in the related Escrow Agreement, and its successors and
assigns.
"Escrow Fund" means, with respect to any Lease, the fund established and held by the
Escrow Agent pursuant to the related Escrow Agreement.
"Event ofDefault" means an Event of Default described in Section 12.01.
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"Event of Non -appropriation " means, with respect to a Lease, the failure of Lessee's
governing body to appropriate or otherwise make available funds to pay Rental Payments under
such Lease following the Original Term or then current Renewal Term sufficient for the
continued performance of such Lease by Lessee.
"Lease" means a Schedule and the terms and provisions of this Agreement which are
incorporated by reference into such Schedule.
"Lease Proceeds" means, with respect to each Lease for which an Escrow Fund is
established, the total amount of money to be paid by Lessor to the Escrow Agent for deposit and
application in accordance with such Lease and the related Escrow Agreement.
"Lease Term " means, with respect to each Lease, the Original Term and all Renewal
Terms provided in the related Schedule.
"Lessee" means the entity referred to as Lessee in the first paragraph of this Agreement.
"Lessor" means (a) the entity referred to as Lessor in the first paragraph of this
Agreement or (b) any assignee or transferee of any right, title or interest of Lessor in and to the
Equipment under a Lease or any Lease (including Rental Payments and other amounts due
thereunder) and any related Escrow Fund pursuant to Section 11.01, but does not include any
entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform
under a Lease.
"Material Adverse Change" means (a) any change in Lessee's creditworthiness that
could have a material adverse effect on (i) the financial condition or operations of Lessee, or
(ii) Lessee's ability to perform its obligations under this Agreement or any Lease or (b) a
downgrade in Lessee's external debt rating from the date of this Agreement of two or more
subgrades by either Moody's Investors Service, Inc, or Standard & Poor's Ratings Group or any
equivalent successor credit rating agency, or any downgrade by either such agency that would
cause Lessee's credit rating to be below investment grade, or, if any such rating agency no longer
publishes such ratings at the date of determination, any other nationally recognized statistical
rating organization that is selected by Lessee for purposes of such long-term general obligation
bond ratings and long-term general fund related bond ratings.
"Original Term " means, with respect to each Lease, the period from the Commencement
Date identified in the related Schedule until the end of the fiscal year of Lessee in effect at such
Commencement Date.
"Payment Schedule" means, with respect to each Lease, the Rental Payment Schedule
attached to and made a part of the related Schedule and substantially in the form of Exhibit B
attached to this Agreement.
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Standard MELPA BAPCC 415
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"Prepayment Price " means, with respect to each Lease, the amount that Lessee shall pay
to Lessor to prepay its obligations under such Lease as provided in Section 10.01 hereof.
"Renewal Terms" means, with respect to each Lease, the consecutive renewal terms of
such Lease as specified in the related Schedule, the first of which commences immediately after
the end of the Original Term and each having a duration of one year and a term coextensive with
each successive Lessee's fiscal year; provided that the final such renewal term shall commence
on the first day of the last fiscal year and end on the first business day after the last scheduled
Rental Payment Date.
"Rental Payment Date" means, with respect to each Lease, each date on which Lessee is
required to make a Rental Payment under such Lease as specified in the related Payment
Schedule.
"Rental Payments" means, with respect to each Lease, the basic rental payments payable
by Lessee on the Rental Payment Dates and in the amounts as specified in the related Payment
Schedule, consisting of a principal component and an interest component, and in all cases
sufficient to repay the principal component under such Lease and interest thereon at the
applicable Contract Rate (or Taxable Rate if then in effect).
"Schedule" means each separately numbered Schedule of Property, substantially in the
form of Exhibit A hereto, together with the related Payment Schedule and any Riders attached to
such Schedule of Property.
"State" means the State of
"Taxable Rate" means, with respect to each Lease, the rate identified as such in the
related Schedule.
"Vendor" means the manufacturer or supplier of the Equipment listed in a Schedule or
any other person as well as the agents or dealers of the manufacturer, installer or supplier with
whom Lessor arranged Lessee's acquisition, installation and financing of the Equipment
pursuant to the applicable Lease.
AprncLE II
Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and
warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each
Lease as follows:
(a) Lessee is [the State] [a 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], with full power and authority to enter into this
Agreement, each Lease, each Escrow Agreement and the transactions contemplated
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hereby and thereby and to perform all of its obligations hereunder and under each Lease
and each Escrow Agreement.
(b) Lessee has duly authorized the execution and delivery of this Agreement
and each Lease and related Escrow Agreement by proper action of its governing body at
a meeting duly called, regularly convened and attended throughout by the requisite
quorum of the members thereof, or by other appropriate official approval, and all
requirements have been met and procedures have occurred in order to ensure the validity
and enforceability of this Agreement and each Lease and related Escrow Agreement.
(c) No event or condition that constitutes, or with the giving of notice or the
lapse of time or both would constitute, an Event of Default exists at the date hereof. No
Event of Non -appropriation has occurred or is threatened with respect to any Lease.
(d) Lessee will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a [city] [county] [school district] [special
district] [body corporate and politic] of the State.
(e) Lessee has complied with such public bidding requirements as may be
applicable to this Agreement and each Lease and the acquisition and installation by
Lessee of the Equipment as provided in each Lease.
(f) During the Lease Term under each Lease, the Equipment will be used by
Lessee only for the purpose of performing essential governmental or proprietary
functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee
does not intend to sell or otherwise dispose of the Equipment or any interest therein prior
to the last Rental Payment (including all Renewal Terms) scheduled to be paid under the
related Lease.
(g) Lessee has kept, and throughout the Lease Term of each Lease shall keep,
its books and records in accordance with generally accepted accounting principles and
practices consistently applied, and shall deliver to Lessor (i) annual audited financial
statements (including (1) a balance sheet, (2) statement of revenues, expenses and
changes in fund balances for budget and actual, (3) statement of cash flows, and
(4) footnotes, schedules and attachments to the financial statements) within [210] 1 days
after the end of its fiscal year, (ii) such other financial statements and information as
Lessor may reasonably request, and (iii) upon Lessor's request, its annual budget for any
prior or current fiscal year or for the following fiscal year when approved but not later
than 30 days prior to the end of its current fiscal year. The financial statements described
in subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee's auditor.
Credit information relating to Lessee may be disseminated among Lessor and any of its
affiliates and any of their respective successors and assigns.
1 Note to draft: this may be extended at the request of Lessee up to 270 days without any further credit approval
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(h) Lessee has an immediate need for the Equipment listed on each Schedule
and expects to make immediate use of the Equipment listed on each Schedule. Lessee's
need for the Equipment is not temporary and Lessee does not expect the need for any
item of the Equipment to diminish during the related Lease Term.
(i) The payment of the Rental Payments or any portion thereof is not (under
the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured
by any interest in property used or to be used in any activity carried on by any person
other than a state or local governmental unit or payments in respect of such property; or
(y) on a present value basis, derived from payments (whether or not to Lessee) in respect
of property, or borrowed money, used or to be used in any activity carried on by any
person other than a state or local governmental unit. The Equipment will not be used,
directly or indirectly, in any activity carried on by any person other than a state or local
governmental unit. No portion of the Acquisition Amount relating to any Lease will be
used, directly or indirectly, to make or finance loans to any person other than Lessee.
Lessee has not entered into any management or other service contract with respect to the
use and operation of the Equipment.
0) There is no pending litigation, tax claim, proceeding or dispute that may
adversely affect Lessee's financial condition or impairs its ability to perform its
obligations under this Agreement, any Lease or any Escrow Agreement. Lessee will, at
its expense, maintain its legal existence and do any further act and execute, acknowledge,
deliver, file, register and record any further documents Lessor may reasonably request in
order to protect Lessor's security interest in the Equipment and the Escrow Fund and
Lessor's rights and benefits under each Lease and related Escrow Agreement.
(k) No lease, rental agreement, lease -purchase agreement, payment agreement
or contract for purchase to which Lessee has been a party at any time has been terminated
by Lessee 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 Lessee has issued during the past ten (10) years.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement,
Lessor agrees to provide the funds specified in each Lease to be provided by it for Lessee to
acquire the Equipment described in the related Schedule. Upon the execution and delivery of
each Lease, Lessor leases, sells and transfers to Lessee, and Lessee acquires, purchases and
leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms
thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the
end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the
maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of
each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed
to have exercised its option to continue each Lease for the next Renewal Term unless Lessee
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shall have terminated such Lease pursuant to Section 3,03 or Section 10.01. The terms and
conditions during any Renewal Term shall be the same as the terms and conditions during the
Original Term, except that the Rental Payments shall be as provided in the applicable Lease.
Each Schedule signed and delivered by Lessor and Lessee pursuant to this Agreement shall
constitute a separate and independent lease and installment purchase of the Equipment therein
described.
Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to
continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to
pay the Rental Payments thereunder. Lessee affirms that sufficient funds are legally available
for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all
Rental Payments during the entire Lease Term of each Lease can be obtained from legally
available funds of Lessee. Lessee further intends to do all things lawfully within its power to
obtain and maintain funds sufficient and available to discharge its obligation to make Rental
Payments due under each Lease, including making provision for such payments to the extent
necessary in each budget or appropriation request submitted and adopted in accordance with
applicable provisions of law.
Section 3.03. Nonappropriation. Lessee is obligated only to pay such Rental Payments
under each Lease as may lawfully be made during Lessee's then current fiscal year from funds
budgeted and appropriated for that purpose. Should. Lessee fail to budget, appropriate or
otherwise make available funds to pay Rental Payments under any Lease following the then
current Original Term or Renewal Term, such Lease or Leases shall be deemed terminated at the
end of the then current Original Term or Renewal Term thereunder. Lessee agrees to deliver
notice to Lessor of such termination promptly after any decision to non -appropriate is made, but
failure to give such notice shall not extend the term beyond such Original Term or Renewal
Term. If any Lease is terminated in accordance with this Section, Lessee agrees to cease use of
the Equipment thereunder and peaceably remove and deliver to Lessor, at Lessee's sole expense
(from legally available funds), such Equipment at the location(s) to be specified by Lessor;
provided, that Lessee shall pay month-to-month rent at the Contract Rate (or the Taxable Rate if
then in effect) set forth in the affected Lease for each month or part thereof that Lessee fails to
return the Equipment thereunder pursuant to this Section 3.03.
Section 3.04. Conditions to Lessor's Performance. (a) As a prerequisite to the
performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to
Lessor, in form and substance satisfactory to Lessor, the following:
(i) A fully completed Schedule, executed by Lessee;
(ii) If an Escrow Fund is to be established with respect to such Lease, an
Escrow Agreement substantially in the form set forth in Exhibit I hereto, executed by
Lessee and the Escrow Agent;
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(iii) A Certificate completed and executed by the Clerk or Secretary or other
comparable officer of Lessee, in substantially the form attached hereto as Exhibit C-1;
(iv) A copy, certified as full, true and correct by the Clerk or Secretary or other
comparable officer of Lessee, of a resolution, ordinance or other official action of
Lessee's governing body, in substantially the form attached hereto as Exhibit G2,
authorizing the execution and delivery of this Agreement and each Lease and related
Escrow Agreement entered into pursuant hereto and performance by Lessee of its
obligations under each Lease and related Escrow Agreement entered into pursuant hereto;
(v) An opinion of counsel to Lessee, in substantially the form attached hereto
as Exhibit D, respecting this Agreement and each Lease and Escrow Agreement entered
into pursuant hereto;
(vi) Evidence of insurance as required by Section 7.02 hereof;
(vii) All documents, including financing statements, affidavits, notices and
similar instruments, which Lessor deems necessary or appropriate at that time pursuant to
Section 6.02;
(viii) If Lessee has designated the Lease then being entered into as a "qualified
tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, a certificate
in substantially the form attached hereto as Exhibit G executed by an authorized official
of Lessee;
(ix) A copy of the Form 8038-G/GC with respect to the Lease then being
entered into, fully completed and executed by Lessee;
(x) In the event that Lessee is to be reimbursed for expenditures that it has
paid more than sixty days prior to the Commencement Date for the Lease then being
entered into, evidence of the adoption of a reimbursement resolution or other official
action covering the reimbursement from tax exempt proceeds of expenditures incurred
not more than 60 days prior to the date of such resolution;
(xi) If any items of Equipment are motor vehicles, properly completed
certificates of title or certificates of origin (or applications therefor) for such vehicles and
noting Lessor's interest thereon;
(xii) A waiver or waivers of interest in the Equipment from any mortgagee or
any other party having an interest in the real estate on which the Equipment will be
located and/or landlord of the real estate on which the Equipment will be located;
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(xiii) Original invoices (and proofs of payment of such invoices, if Lessee seeks
reimbursement) and bills of sale (if title to Equipment has passed to Lessee), to the extent
required by Section 5.01(b);
(xiv) Wire instructions for payments to be made to Vendors and Form W-9
from each such Vendor; and
(xv) Such other items, if any, as are set forth in the related Schedule or are
reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this
Section 3.04, the performance by Lessor of any of its obligations pursuant to any Lease and the
related Escrow Agreement shall be subject to: (i) no Material Adverse Change shall have
occurred since the dated date of this Agreement, (ii) no Event of Default shall have occurred and
then be continuing under any Lease then in effect, (iii) no Event of Non -appropriation under any
Lease then in effect shall be threatened and (iv) no Lease shall have been terminated as the result
of the occurrence of an Event of Default or an Event of Non -appropriation.
(c) Subject to satisfaction of the foregoing, (i) Lessor will pay the Acquisition Amount
for Equipment described in a Schedule to the Vendor or reimburse Lessee for its prior
expenditures with respect to such Equipment (subject to satisfaction of Section 3.04(a)(x)
hereof), upon receipt of the documents described in Sections 5.01(a) and (b); or (ii) if an Escrow
Fund is being established with respect to the related Lease, Lessor will deposit the Lease
Proceeds for Equipment described in the applicable Schedule with the Escrow Agent as provided
in the related Escrow Agreement.
(d) This Agreement is not a commitment by Lessor or Lessee to enter into any Lease
not currently in existence, and nothing in this Agreement shall be construed to impose any
obligation upon Lessor or Lessee to enter into any proposed Lease, it being understood that
whether Lessor or Lessee enters into any proposed Lease shall be a decision solely within their
respective discretion.
(e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease.
Without limiting the foregoing, Lessee will provide Lessor with any documentation or
information Lessor may request in connection with Lessor's review of any proposed Lease.
Such documentation may include, without limitation, documentation concerning the Equipment
and its contemplated use and location and documentation or information concerning the financial
status of Lessee and other matters related to Lessee.
(f) In the event of any conflict in terms between a Schedule and this Agreement, the
terms of the Schedule shall control in the interpretation of the Lease created thereby.
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ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay
Rental Payments, in lawful money of the United States of America, to Lessor on the Rental
Payment Dates and in such amounts as provided in each Lease. If any Rental Payment or other
amount payable hereunder is not paid within 10 days of its due date, Lessee shall pay an
administrative late charge of 5% of the amount not timely paid or the maximum amount
permitted by law, whichever is less. Lessee shall not permit the federal government to guarantee
any Rental Payments under any Lease. Rental Payments consist of principal and interest
components as more fully detailed on the Schedule for each Lease, the interest on which begins
to accrue as of the Commencement Date for each such Lease.
Section 4.02. Interest and Principal Components. A portion of each Rental Payment is
paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as,
and represents payment of, principal. Each Lease shall set forth the principal and interest
components of each Rental Payment payable thereunder during the applicable Lease Term.
Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and
Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each
Lease shall constitute a current expense of Lessee payable solely from its general fund or other
funds that are legally available for that purpose and shall not in any way be construed to be a
debt of Lessee in contravention of any applicable constitutional or statutory limitation or
requirement concerning the creation of indebtedness by Lessee, nor shall anything contained in
this Agreement or in any Lease constitute a pledge of the general tax revenues, funds or moneys
of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03,
the obligations of Lessee to make Rental Payments and to perform and observe the other
covenants and agreements contained in each Lease shall be absolute and unconditional in all
events without abatement, diminution, deduction, set-off or defense, for any reason, including
without limitation any failure of the Equipment, any defects, malfunctions, breakdowns or
infirmities in the Equipment, disputes with the Vendor of any Equipment or Lessor, any
accident, condemnation or unforeseen circumstances or failure of any Vendor to deliver any
Equipment or otherwise perform any of its obligations.
Section 4.05 Tax Covenants. Lessee agrees that it will not take any action that would
cause the interest component of Rental Payments to be or to become ineligible for the exclusion
from gross income of the owner or owners thereof for federal income tax purposes, nor will it
omit to take or cause to be taken, in a timely manner, any action, which omission would cause
the interest component of Rental Payments to be or to become ineligible for the exclusion from
gross income of the owner or owners thereof for federal income tax purposes. In connection
with the foregoing, Lessee hereby agrees that (a) so long as any Rental Payments under a Lease
remain unpaid, moneys on deposit in the Escrow Fund under any Escrow Agreement related to
such Lease shall not be used in a manner that will cause such Lease to be classified as an
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"arbitrage bond" within the meaning of Section 148(a) of the Code; and (b) Lessee shall rebate,
from funds legally available for the purpose, an amount equal to excess earnings on the Escrow
Fund under any Escrow Agreement to the federal government if required by, and in accordance
with, Section 148(f) of the Code, and make the determinations and maintain the records required
by the Code.
Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability with
respect to a Lease, the interest component of Rental Payments under such Lease and any charge
on Rental Payments or other amounts payable based on the Contract Rate shall have accrued and
be payable at the Taxable Rate applicable to such Lease retroactive to the date as of which the
interest component is determined by the Internal Revenue Service to be includible in the gross
income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such
additional amount as will result in the owner receiving the interest component at the Taxable
Rate identified in the related Lease.
For purposes of this Section, "Event of Taxability" means the circumstance of the interest
component of any Rental Payment paid or payable pursuant to a Lease becoming includible for
federal income tax purposes in an owner's gross income as a consequence of any act, omission
or event whatsoever, including but not limited to the matters described in the immediately
succeeding sentence, and regardless of whether the same was within or beyond the control of
Lessee. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by
Lessor or Lessee of an original or a copy of an Internal Revenue Service Technical Advice
Memorandum or Statutory Notice of Deficiency or other written correspondence which legally
holds that the interest component of any Rental Payment under such Lease is includable in the
gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal
Revenue Service that the interest component of any Rental Payment under such Lease is
includable in the gross income of the owner thereof; or (c) receipt by Lessor or Lessee of a
written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to
the tax-exempt status of interest on obligations issued by states and their political subdivisions,
selected by Lessor and acceptable to Lessee, to the effect that the interest component of any
Rental Payment under a Lease has become includable in the gross income of the owner thereof
for federal income tax purposes. For all purposes of this definition, an Event of Taxability shall
be deemed to occur on the date as of which the interest component of any Rental Payment is
deemed includable in the gross income of the owner thereof for federal income tax purposes.
Section 4.07. Mandatory Prepayment. If Lease Proceeds are deposited into an Escrow
Fund, any funds not applied to Equipment Costs and remaining in such Escrow Fund on the
earlier of (a) the expiration of the applicable Acquisition Period and (b) the date on which Lessee
delivers to the Escrow Agent the executed Disbursement Request to effect the final disbursement
to pay (or reimburse) Equipment Costs from such Escrow Fund shall be applied by Lessor on
each successive Rental Payment Date thereafter to pay all or a portion of the Rental Payment due
and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by
Lessor as prepayment to the unpaid principal balance of Rental Payments owing under the
related Lease in the inverse order of the Rental Payment Dates.
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ARTICLE V
Section 5.01. Acquisition, Delivery Installation and Acceptance of Equipment. (a) With
respect to each Lease, Lessee shall order the Equipment to be acquired and financed thereunder,
cause the Equipment to be delivered and installed at the location specified in such Lease and pay
any and all delivery and installation costs and other Equipment Costs in connection therewith.
When the Equipment listed in a Lease has been delivered and installed, Lessee shall promptly
accept such Equipment and evidence said acceptance by executing and delivering to Lessor a
Final Acceptance Certificate in the form attached hereto as Exhibit E; provided, however, that if
an Escrow Fund has been established with respect to such Lease as provided in Section 3.04
hereof, Lessee shall deliver Disbursement Requests to the Escrow Agent pursuant to the related
Escrow Agreement for the purpose of effecting disbursements from the Escrow Fund to pay (or
reimburse) Equipment Costs for the Equipment acquired and pursuant to such Lease.
(b) Lessee shall deliver to Lessor, or to an Escrow Agent if an Escrow Fund has been
established with respect to the related Lease, original invoices (and proof of payment of such
invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale (if title to such
Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With
respect to Equipment not purchased through an Escrow Fund, Lessor shall, upon receipt of the
Final Acceptance Certificate from Lessee, prepare a Schedule of Property and Rental Payment
Schedule in the forms attached hereto as Exhibits.4 and B, respectively. Lessee shall execute
and deliver to Lessor such Schedule of Property and Rental Payment Schedule as a Schedule
pursuant to Section 3.04(a)(i) within 5 business days of receipt, subject to satisfaction of the
conditions set forth in Section 3.04.
Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under
the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall
interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Term under
such Lease.
Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be
moved or relocated from the location (or the base location with respect to motor vehicles)
specified for it in the related Lease without Lessor's prior written consent, which consent shall
not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular
business hours to enter into and upon the property where the Equipment is located for the
purpose of inspecting the Equipment.
Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use,
operate or maintain the Equipment (or cause the Equipment to be installed, used, operated or
maintained) improperly, carelessly, in violation of any applicable law or in a manner contrary to
that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any,
necessary for the installation and operation of the Equipment. In addition, Lessee agrees to
comply in all respects with all applicable laws, regulations and rulings of any legislative,
executive, administrative or judicial body, including, without limitation, all anti -money laundering
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laws and regulations; provided that Lessee may contest in good faith the validity or application of
any such law, regulation or ruling in any reasonable manner that does not, in the opinion of
Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights
under the related Lease.
Lessee agrees that it will maintain, preserve and keep the Equipment in good repair and
working order, in a condition comparable to that recommended by the manufacturer. Lessor
shall have no responsibility to maintain, repair or make improvements or additions to the
Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to
re -certify the Equipment as eligible for manufacturer's maintenance upon the return of the
Equipment to Lessor as provided for herein.
Lessee shall not alter any item of Equipment or install any accessory, equipment or
device on an item of Equipment if that would impair any applicable warranty, the originally
intended function or the value of that Equipment. All repairs, parts, accessories, equipment and
devices famished, affixed to or installed on any Equipment, excluding temporary replacements,
shall thereupon become subject to the security interest of Lessor.
ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term under each Lease, and so
long as Lessee is not in default under Article XII hereof, all right, title and interest in and to each
item of the Equipment under the related Lease shall be vested in Lessee immediately upon its
acceptance of each item of Equipment, subject to the terms and conditions of the applicable
Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title in and to
the Equipment from and against all claims, liens and legal processes of its creditors, and keep all
Equipment free and clear of all such claims, liens and processes. Upon the occurrence of an
Event of Default under a Lease or upon termination of a Lease pursuant to Section 3.03 hereof,
full and unencumbered legal title to the Equipment shall, at Lessor's option, pass to Lessor, and
Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event
of Default or such termination, Lessee shall execute and deliver to Lessor such documents as
Lessor may request to evidence the passage of such legal title to Lessor and the termination of
Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment
to Lessor in accordance with Section 3.03 or 12.02, as applicable. Upon payment of all amounts
due and owing under a Lease in accordance with Section 10.01 (including upon payment of all
Rental Payments and other amounts payable under such Lease), Lessor's security interest or
other interest in the Equipment under such Lease shall terminate, and Lessor shall execute and
deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's
security interest in the Equipment subject to the related Lease.
Section 6.02. Security Interest. As additional security for the payment and performance
of all of Lessee's obligations under each Lease, upon the execution of such Lease, Lessee grants
to Lessor a first priority security interest constituting a first lien on (a) the Equipment subject to
such Lease, (b) moneys and investments held from time to time in any related Escrow Fund and
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(c) any and all proceeds of any of the foregoing. Upon the execution of each Lease, Lessee
authorizes Lessor to file (and Lessee agrees to execute, if applicable) such notices of assignment,
chattel mortgages, financing statements and other documents, in form satisfactory to Lessor,
which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest
in the Equipment subject to such Lease, any related Escrow Fund and the proceeds thereof,
including, without limitation, such financing statements with respect to personal property and
fixtures under Article 9 of the Uniform Commercial Code in effect in the State and treating such
Article 9 as applicable to entities such as Lessee.
Section 6.03. Personal Property; No Encumbrances. Lessee agrees that the Equipment is
deemed to be and will remain personal property and will not be deemed to be affixed to or a part
of the real estate on which it may be situated, notwithstanding that the Equipment or any part
thereof may be or hereafter become in any manner physically affixed or attached to real estate or
any building thereon. Lessee shall not create, incur, assume or permit to exist any mortgage,
pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on any of
the real estate where the Equipment under a Lease is or will be located or enter into any
agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate
without the prior written consent of Lessor; provided, that if Lessor is furnished with a waiver of
interest in the Equipment under such Lease acceptable to Lessor in its discretion from any party
taking an interest in any such real estate prior to such interest taking effect, such consent shall
not be unreasonably withheld.
ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee
shall keep the Equipment under each Lease free of all levies, liens, and encumbrances except
those created by such Lease. The parties to this Agreement contemplate that the Equipment
under each Lease will be used for a governmental or proprietary purpose of Lessee and that the
Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition
of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due
all taxes and governmental charges lawfully assessed or levied against or with respect to such
Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of
the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided
that, with respect to any such taxes or charges that may lawfully be paid in installments over a
period of years, Lessee shall be obligated to pay only such installments as accrue during the
Lease Term under the affected Lease. During the Lease Term under each Lease, Lessor will not
claim ownership of the Equipment thereunder for the purposes of any tax credits, benefits or
deductions with respect to such Equipment.
Section 7.02. Insurance. Lessee shall, during the Lease Term under each Lease, maintain
or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and
insuring the Equipment against loss or damage by fire and all other risks covered by the standard
extended coverage endorsement then in use in the State, and any other risks reasonably required
by Lessor, in an amount at least equal to the greater of (i) the then applicable Prepayment Price
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under such Lease or (ii) the replacement cost of the Equipment under such Lease; (b) liability
insurance naming Lessor and its assigns as additional insured that protects Lessor from liability
with limits of at least $5,000,000 for bodily injury and property damage coverage, or such other
minimum coverage amount as may be agreed upon between Lessor and Lessee in connection
with the execution and delivery of a Lease, in all events under clauses (a) and (b) issued in form
and amount satisfactory to Lessor and by an insurance company that is authorized to do business
in the State and having a financial strength rating by A.M. Best Company of "A-" or better; and
(c) worker's compensation coverage as required by the laws of the State. Notwithstanding the
foregoing, Lessee may self -insure against the risks described in clauses (a) and/or (b) through a
government pooling arrangement, self-funded loss reserves, risk retention program or other
self-insurance program, in each case with Lessor's prior written consent (which Lessor may
grant, withhold or deny in its sole discretion) and provided that Lessee has delivered to Lessor
such information as Lessor may request with respect to the adequacy of such self-insurance to
cover the risks proposed to be self-insured and otherwise in form and substance acceptable to
Lessor. In the event Lessee is permitted, at Lessor's sole discretion, to self -insure as provided in
this Section, Lessee shall provide to Lessor a self-insurance letter in substantially the form
attached hereto as Exhibit F. Lessee shall fizrnish to Lessor evidence of such insurance or
self-insurance coverage throughout the Lease Term under each Lease. Lessee shall not cancel or
modify such insurance or self-insurance coverage in any way that would affect the interests of
Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such
cancellation or modification.
Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee
hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any
persons or property arising from the Equipment under any Lease from any cause whatsoever, and
no such loss of or damage to or liability arising from the Equipment under any Lease shall
relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation
under any Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees
to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally
available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages
suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in
connection therewith (including, without limitation, counsel fees and expenses, and penalties
connected therewith imposed on interest received) arising out of or as a result of (a) entering into
of this Agreement or any Lease or any of the transactions contemplated hereby or thereby,
(b) the ordering, acquisition, ownership, use, operation, condition, purchase, delivery,
acceptance, rejection, storage or return of any item of the Equipment under any Lease, (c) any
accident in connection with the operation, use, condition, possession, storage or return of any
item of the Equipment under any Lease resulting in damage to property or injury to or death to
any person, and/or (d) the breach of any covenant of Lessee under or in connection with this
Agreement or any Lease or any material misrepresentation provided by Lessee under or in
connection with this Agreement or any Lease. The provisions of this paragraph shall continue in
full force and effect notwithstanding the full payment of all obligations under any or all Leases
or the termination of the Lease Term under any or all Leases for any reason.
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Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good
repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof,
Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and
maintain any such insurance coverages, as the case may be, and pay the cost thereof. All
amounts so advanced by Lessor shall constitute additional rent for the then current Original Term
or Renewal Term under the affected Lease, and Lessee covenants and agrees to pay such
amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal
to the Contract Rate (or the Taxable Rate if then in effect) plus 5% per annum or the maximum
amount permitted by law, whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the
Lease Term under the related Lease, (a) the Equipment or any portion thereof is destroyed, in
whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of,
the Equipment or any part thereof shall be taken under the exercise or threat of the power of
eminent domain by any governmental body or by any person, firm or corporation acting pursuant
to governmental authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance
claim or condemnation award or sale under threat of condemnation to be applied to the prompt
replacement, repair, restoration, modification or improvement of the Equipment or such part
thereof and any balance of the Net Proceeds remaining after such work has been completed shall
be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations under the
affected Lease in accordance with Section 10.01(b).
If Lessee elects to replace any item of the Equipment (the "Replaced Equipment')
pursuant to this Section, the replacement equipment (the "Replacement Equipment') shall be of
new or of a quality type, utility and condition at least as good as the Replaced Equipment and
shall be of equal or greater value than the Replaced Equipment. Lessee shall grant to Lessor a
first priority security interest in any such Replacement Equipment. Lessee shall represent,
warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all
claims, liens, security interests and encumbrances, excepting only those liens created by or
through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably
request in connection with the replacement, including, but not limited to, documentation in form
and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement
Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment
acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement
and the related Lease. Lessee shall complete the documentation of Replacement Equipment on
or before the next Rental Payment Date after the occurrence of a casualty event, or be required to
exercise its option to prepay the obligations under the related Lease with respect to the damaged
equipment in accordance with Section 10.01(b).
For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining
from the gross proceeds of any insurance claim or condemnation award or sale under threat of
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condemnation after deducting all expenses, including attorneys' fees, incurred in the collection
thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in
full the cost of any repair, restoration, modification or improvement referred to in Section 8.01,
Lessee shall either (a) complete such replacement, repair, restoration, modification or
improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay
or cause to be paid to Lessor the amount of the then applicable Prepayment Price under the
related Lease, and, upon such payment, the applicable Lease Term shall terminate and Lessor's
security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The
amount of the Net Proceeds, if any, remaining after completing such repair, restoration,
modification or improvement or after paying such Prepayment Price shall be retained by Lessee.
If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any
reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the
amounts payable under Article IV.
ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation,
either express or implied, as to the value, design, condition, merchantability or fitness for
particular purpose or fitness for use of any of the Equipment, or any other warranty or
representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of
the Equipment under each Lease shall be on an "as is" basis. In no event shall Lessor be liable
for any incidental, indirect, special or consequential damage in connection with or arising out of
this Agreement, any Lease, any Equipment or the existence, furnishing, functioning or Lessee's
use of any item, product or service provided for in this Agreement or any Lease.
Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent
and attomey-in-fact during the Lease Term under each Lease, so long as Lessee shall not be in
default under such Lease, to assert from time to time whatever claims and rights (including
without limitation warranties) relating to the Equipment that Lessor may have against a Vendor.
Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be
against the applicable Vendors of the Equipment and not against Lessor. Any such matter shall
not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease,
including the right to receive full and timely Rental Payments and other payments under each
Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or
warranties whatsoever as to the existence or the availability of such warranties relating to the
Equipment.
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ARTICLE X
Section 10.01. Prepayment Option. Lessee shall have the option to prepay all, but not less
than all, its obligations under a Lease, at the following times and upon the following terms:
(a) From and after the date specified (if any) in the applicable Schedule (the
"Prepayment Option Commencement Date'), on the Rental Payment Dates specified in
the related Payment Schedule, upon not less than 30 days' prior written notice, and upon
payment in full of the Rental Payments then due and all other amounts then owing under
the related Lease plus the then applicable Prepayment Price, which may include a
prepayment premium on the unpaid balance as set forth in such Payment Schedule; or
(b) In the event of substantial damage to or destruction or condemnation of
substantially all of the Equipment listed in a Lease, on the day specified in Lessee's
notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the
next Rental Payment Date or 60 days after the casualty event) upon payment in full to
Lessor of the sum of (i) any Rental Payment then due under such Lease plus (ii) the then
applicable Outstanding Balance plus (iii) all other amounts then owing hereunder or, in
the event such prepayment occurs on a date other than a Rental Payment date, the sum of
(x) the Outstanding Balance relating to the Rental Payment immediately prior to the date
of such prepayment plus (y) accrued interest on the Outstanding Balance relating to the
Rental Payment immediately prior to the date of such prepayment plus (z) all other
amounts then owing hereunder; or
(c) Upon the expiration of the Lease Term under a Lease, upon payment in
UI of all Rental Payments then due and all other amounts then owing under such Lease
to Lessor.
After payment of the applicable Prepayment Price and all other amounts owing under a
Lease, Lessor's security interests in and to the Equipment under such Lease will be terminated
and Lessee will own such Equipment free and clear of Lessor's security interest in such
Equipment.
ARTICLE XI
Section 11.01. Assignment by Lessor. (a) Lessor's right, title and interest in and to Rental
Payments and any other amounts payable by Lessee under any and all of the Leases and the
Escrow Agreement relating to any Lease and its security interest in the Equipment subject to the
related Lease and in any related Escrow Fund, and all proceeds therefrom, may be assigned and
reassigned by Lessor at any time, in whole or in part, to one or more assignees or subassignees
without the necessity of obtaining the consent of Lessee; provided, that any such assignment,
transfer or conveyance (i) shall be made only to investors each of whom Lessor reasonably
believes is a "qualified institutional buyer" as defined in Rule 144A(a)(1) promulgated under the
Securities Act of 1933, as amended, or an "accredited investor" as defined in Section 501(a)(1),
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(2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in
either case is purchasing a Lease (or any interest therein) for its own account with no present
intention to resell or distribute such Lease (or interest therein), subject to each investor's right at
any time to dispose of the related Lease or any interest therein as it determines to be in its best
interests, (ii) shall not result in more than 35 owners of Lessor's rights and interests under a
Lease or the creation of any interest in a Lease in an aggregate principal component that is less
than the lesser of $100,000 or the then aggregate unpaid principal component of such Lease and
(iii) shall not require Lessee to make Rental Payments, send notices or otherwise deal with
respect to matters arising under a Lease with or to more than one Lease Servicer (as such term is
defined below), and any trust agreement, participation agreement or custodial agreement under
which multiple ownership interests in a Lease are created shall provide the method by which the
owners of such interests shall establish the rights and duties of a single entity, trustee, owner,
servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as
the "Lease Servicer") to act on their behalf with respect to the rights and interests of Lessor
under the related Lease and Escrow Agreement, including with respect to the exercise of rights
and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or
an Event of Non -appropriation under the related Lease. Lessor and Lessee hereby acknowledge
and agree that the restrictions and limitations on transfer as provided in this Section 11.01 shall
apply to the first and subsequent assignees and sub -assignees of any of Lessor's right, title and
interest in, to and under a Lease (or any interest therein).
(b) Unless to an affiliate controlling, controlled by or under common control with
Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective
as against Lessee until Lessee shall have received a written notice of assignment that discloses
the name and address of each such assignee; provided, that if such assignment is made to a bank
or trust company as trustee or paying agent for owners of certificates of participation,
participation interests, trust certificates or partnership interests with respect to the Rental
Payments payable under a Lease, it shall thereafter be sufficient that Lessee receives notice of
the name and address of the bank, trust company or other entity that acts as the Lease Servicer
for such Lease. Notices of assignment provided pursuant to this Section 11.01(b) shall contain a
confirmation of compliance with the transfer requirements imposed by Section 11.01(a) hereof.
During the Lease Term under each Lease, Lessee shall keep, or cause to be kept, a complete and
accurate record of all such assignments in form necessary to comply with Section 149 of the
Code. Lessee shall retain all such notices as a register of all assignees and shall make all
payments to the assignee or assignees or Lease Servicer last designated in such register. Lessee
shall not have the right to and shall not assert against any assignee any claim, counterclaim or
other right Lessee may have against Lessor or a Vendor. Assignments in part may include,
without limitation, assignment of all of Lessor's security interest in and to the Equipment listed
in a particular Lease and all rights in, to and under the Lease related to such Equipment and all of
Lessor's security interest in and to the Escrow Fund, or all rights in, to and under the Escrow
Agreement. The option granted in this Section may be separately exercised from time to time
with respect to the Equipment listed in each Lease, but such option does not permit the
assignment of less than all of Lessor's interests in the Equipment listed in a single Lease.
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(c) If Lessor notifies Lessee of its intent to assign a Lease, Lessee agrees that it shall
execute and deliver to Lessor a Notice and Acknowledgement of Assignment with respect to
such Lease, substantially in the form of Exhibit H attached to this Agreement, within five (5)
business days after its receipt of such request.
Section 11.02. Assignment and Subleasing by Lessee. None of Lessee's right, title and
interest in, to and under any Lease or any portion of the Equipment, any Escrow
Agreement or the Escrow Fund relating thereto may be assigned, encumbered or subleased
by Lessee for any reason, and any purported assignment, encumbrance or sublease without
Lessor's prior written consent shall be null and void.
ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an
"Event of Default" under a Lease:
(a) Failure by Lessee to (i) pay any Rental Payment or other payment required
to be paid under any Lease within 10 days of the date when due as specified therein or
(ii) maintain insurance as required under such Lease (including Section 7.02 incorporated
therein);
(b) Failure by Lessee to observe and perform any covenant, condition or
agreement contained in this Agreement or such Lease on its part to be observed or
performed, other than as referred to in subparagraph (a) above, for a period of 30 days
after written notice specifying such failure and requesting that it be remedied is given to
Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior
to its expiration; provided that, if the failure stated in the notice cannot be corrected
within the applicable period, Lessor will not unreasonably withhold its consent to an
extension of such time if corrective action is instituted by Lessee within the applicable
period and diligently pursued until the default is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant
to any Lease or its execution, delivery or performance shall prove to have been false,
incorrect, misleading or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money, lease
financing of property or otherwise receiving credit under which Lessee is an obligor, if
such default (i) arises under any other agreement for borrowing money, lease financing of
property or provision of credit provided by Lessor or any affiliate of Lessor (including,
without limitation, the occurrence of any event of default under any other Lease), or
(ii) arises under any obligation under which there is outstanding, owing or committed an
aggregate amount in excess of $100,000;
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(e) Lessee shall (i) apply for or consent to the appointment of a receiver,
trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of
Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as
they become due, (iii) make a general assignment for the benefit of creditors, or (iv) file a
voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an
arrangement with creditors or taking advantage of any insolvency law or any answer
admitting the material allegations of a petition filed against Lessee in any bankruptcy,
reorganization or insolvency proceeding; or
(f) An order, judgment or decree shall be entered by any court of competent
jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator
for Lessee or of all or a substantial part of the assets of Lessee, in each case without its
application, approval or consent, and such order, judgment or decree shall continue
unstayed and in effect for any period of 30 consecutive days.
Section 12.02. Remedies on Default. Whenever any Event of Default exists under a Lease,
Lessor shall have the right, at its sole option without any fiuther demand or notice, to take one or
any combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments
payable by Lessee pursuant to such Lease and other amounts payable by Lessee under
such Lease to the end of the then current Original Term or Renewal Term to be due;
(b) With or without terminating the Lease Term under such Lease, Lessor
may enter the premises where the Equipment listed in such Lease is located and retake
possession of such Equipment or require Lessee at Lessee's expense to promptly return
any or all of such Equipment to the possession of Lessor at such place within the United
States as Lessor shall specify, and sell or lease such Equipment or, for the account of
Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from
legally available funds, for the difference between (i) the Rental Payments payable by
Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment
listed therein that are payable by Lessee to the end of the then current Original Term or
Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or
subleasing (after deducting all expenses of Lessor in exercising its remedies under such
Lease, including without limitation all expenses of taking possession, storing,
reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and
attorney's fees), subject, however, to the provisions of Section 3.03. The exercise of any
such remedies respecting any such Event of Default shall not relieve Lessee of any other
liabilities under any other Lease or with respect to the Equipment listed therein;
(c) Lessor may terminate the Escrow Agreement relating to such Lease and
apply any proceeds in the Escrow Fund thereunder to the Rental Payments due under
such Lease; and
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(d) Lessor may take whatever action at law or in equity may appear necessary
or desirable to enforce its rights under such Lease or the Escrow Agreement relating
thereto or as a secured party in any or all of the Equipment subject to such Lease or with
respect to the related Escrow Fund.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to
Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under a Lease now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any default shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right or power may
be exercised from time to time and as often as may be deemed expedient. In order to entitle
Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any
notice other than such notice as may be required in this Article.
Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy
under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting
all expenses of Lessor in exercising such remedies including without limitation all expenses of
taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage,
auctioneer's or attorney's fees), shall be applied as follows:
(a) If such remedy is exercised solely with respect to a single Lease,
Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to
such Lease and other amounts related to such Lease or such Equipment.
(b) If such remedy is exercised with respect to more than one Lease,
Equipment listed in more than one Lease or rights under more than one Lease, then to
amounts due pursuant to such Leases pro rata.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under any Lease
shall be sufficiently given and shall be deemed given when delivered or mailed by registered
mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with
electronic confirmation) to the parties hereto at the addresses immediately after the signatures to
this Agreement (or at such other address as either party hereto shall designate in writing to the
other for notices to such party) and to any assignee at its address as it appears on the registration
books maintained by Lessee.
Section 13.02. Binding Effect. Each Lease shall inure to the benefit of and shall be binding
upon Lessor and Lessee and their respective successors and assigns.
Section 13.03. Severability. In the event any provision of any Lease shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision thereof.
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Section 13.04. Amendments, Changes and Modifications. This Agreement and each Lease
may only be amended by Lessor and Lessee in writing.
Section 13.05. Execution in Counterparts. This Agreement and each Lease 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 instrument, provided that only Counterpart No. 1 of
each Lease (including the terms and provisions of this Agreement incorporated therein by
reference) shall constitute chattel paper for purposes of the applicable Uniform Commercial
Code.
Section 13.06. Applicable Law. This Agreement and each Lease shall be governed by and
construed in accordance with the laws of the State.
Section 13.07. Captions. The captions or headings in this Agreement and in each Lease
are for convenience only and in no way define, limit or describe the scope or intent of any
provisions or sections of this Agreement or any Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
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IN WMTESS WBEREOF, Lessor and Lessee have caused this Master Equipment
Lease/Purchase Agreement to be executed in their names by their duly authorized representatives
as of the date first above written.
Banc of America Public Capital Corp
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Administration
Fax No.: (415) 765-7373
Name:
Title:
LESSEE:
Attention:
Fax No..
By:
Name:
Title:
Signature Page to Master Equipment Lease/Purchase Agreement
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LIST of EXHIBITS
Exhibit A
— Form of Schedule of Property
Exhibit B
— Form of Rental Payment Schedule
Exhibit C-1
— Form of Incumbency and Authorization Certificate
Exhibit C-2
— Form of Authorizing Resolution
Exhibit D
— Form of Opinion of Lessee's Counsel
Exhibit E
— Form of Final Acceptance Certificate
Exhibit F
— Form of Self -Insurance Certificate
Exhibit G
— Form of Bank Qualification Designation
Exhibit H
— Form of Notice and Acknowledgement of Assignment
Exhibit I
— Form of Escrow and Account Control Agreement
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Ex IT A
FORM OF SCHEDULE OF PROPERTY NO.
Re: Master Equipment Lease/Purchase Agreement, dated as of
between Banc of America Public Capital Corp, as Lessor, and
'as Lessee
1. Defined Terms. All terms used herein have the meanings ascribed to them in the
above -referenced Master Equipment Lease/Purchase Agreement (the "Agreement').
2. Equipment. For purposes of the Lease created hereby, the following items of
Equipment are hereby included under this Schedule together with all attachments, additions,
accessions, parts, repairs, improvements, replacements and substitutions thereto as provided in
the Agreement.
QUANTITY DESCRIPTION SERIAL NO. MODEL NO. LOCATION
3. Payment Schedule.
(a) Rental Payments; Commencement Date. The Rental Payments shall be in such
amounts and payable on such Rental Payment Dates as set forth in the Rental Payment Schedule
attached to this Schedule as Exhibit B and incorporated herein by this reference, subject to
adjustment upon the occurrence of an Event of Taxability as provided in Section 4.06 of the
Agreement. Lessee's obligation to pay Rental Payments under the Lease created hereby shall
commence on the earlier of (i) the date on which the Equipment listed in this Schedule is
accepted by Lessee in the manner described in Section 5.01 of the Agreement, as evidenced by
the Final Acceptance Certificate executed by Lessee and substantially in the form of Exhibit E
attached to the Agreement, and (ii) the date on which sufficient moneys to acquire and install the
Equipment listed in this Schedule are deposited for that purpose with an Escrow Agent pursuant
to Section 3,04(c) of the Agreement (the earlier of such two dates being herein referred to as the
"Commencement Date').
(b) Prepayment Price Schedule. The Prepayment Price on each Rental Payment Date
shall be the amount set forth for such Rental Payment Date in the "Prepayment Price" column of
the Rental Payment Schedule attached to this Schedule. The Prepayment Price is in addition to
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all Rental Payments then due under this Schedule (including the Rental Payment shown on the
same line in the Rental Payment Schedule).
4. Representations, Warranties and Covenants. Lessee hereby represents, warrants
and covenants that its representations, warranties and covenants set forth in the Agreement
(particularly Section 2.01 thereof) are true and correct as though made on the Commencement
Date. Lessee further represents and warrants that (a) no Material Adverse Change has occurred
since the dated date of the Agreement; (b) no Event of Default has occurred and is continuing
under any Lease currently in effect; (c) no Event of Non -appropriation under any Lease currently
in effect is threatened; (d) no Lease has been terminated as the result of the occurrence of an
Event of Default or an Event of Non -appropriation; (e) the governing body of Lessee has
authorized the execution and delivery of the Agreement and the Leases pursuant to [Resolution
No. ] [Ordinance No. ], approved on
20_; (f) the Equipment listed in this Schedule is essential to the functions of Lessee or to the
services Lessee provides its citizens; (g) Lessee has an immediate need for, and expects to make
immediate use of, substantially all such Equipment, which will be used by Lessee only for the
purpose of performing one or more of Lessee's governmental or proprietary functions consistent
with the permissible scope of its authority; and (h) Lessee expects and anticipates adequate funds
to be available for all future payments or rent due after the current budgetary period.
5. The Lease. The terms and provisions of the Agreement (other than to the extent that
they relate solely to other Schedules or Equipment listed on other Schedules) are hereby
incorporated into this Schedule by reference and made a part hereof.
[OPTION: IF ESCROW AGREEMENT IS USED:
6. Lease Proceeds. The Lease Proceeds that Lessor shall pay to the Escrow Agent in
connection with this Schedule is $ , which $ is for deposit into the
Escrow Fund. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date
of this Schedule No. , Lessee will have taken possession of all items of Equipment shown
above and that the Lessee's final Disbursement Request pursuant to the Escrow Agreement will
be signed by Lessee, approved by Lessor and delivered to the Escrow Agent on or before [six
(6)] [twelve (12)] [eighteen (18)] months from the date of this Schedule.
OR IF VENDOR PAID DIRECTLY USE:
6. Acquisition Amount. The Acquisition Amount for the Equipment listed in this
Schedule to be paid to the Vendor (or reimbursed to Lessee) is $ .]
[OPTION: IF ESCROW AGREEMENT IS USED:
7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end at
the conclusion of the month following the date hereof.]
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[7] [8]. Lease Term. The Lease Term shall
consecutive Renewal Terms, with the final Renewal
earlier termination pursuant to the Agreement.
consist of the Original Term and
Term ending on , subject to
[8] [9]. Prepayment Option Commencement Date. For purposes of Section 10.01 of the
Agreement, the Prepayment Option Commencement Date is
[9][10]. Contract Rate; Taxable Rate. The Contract Rate for this Schedule is %
per annum. The Taxable Rate for this Schedule is % per annum.
[OPTION: IF MOTOR VEHICLES ARE BEING FINANCED:
[10][111. Registration. Any Equipment that is a motor vehicle is to be registered and titled as
follows:
Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a) Registered Owner:
(b) Lienholder:
Banc of America Public Capital Corp
Northeast Center Building
2059 Northlake Parkway
Tucker, GA 30084-5321
Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will
cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files
throughout the Lease Term of the Lease created hereby.
[OPTION: IF EQUIPMENT BEING FINANCED MAY CONSTITUTE FIXTURES:
[11][12]. Lessee hereby represents and warrants for the benefit of Lessor that Lessee is the
fee owner of the real estate where the Equipment is and will be located and has good and
marketable title thereto, and there exists no mortgage, pledge, lien, security interest, charge or
other encumbrance of any nature whatsoever on or with respect to'such real estate.
Dated:
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LESSOR:
Banc of America Public Capital Corp
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Administration
Name:
Title:
LESSEE:
Attention:
By:
Name:
Title:
Counterpart No. of manually executed and serially numbered counterparts.
To the extent that the Lease created hereby constitutes chattel paper (as defined in the applicable
Uniform Commercial Code), no security or ownership interest herein may be created through the
transfer or possession of any Counterpart other than Counterpart No. 1.
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Exmrr B
FORM OF RENTAL PAYMENT SCBEDULE
RENTAL RENTAL
PAYMENT PAYMENT INTEREST PRINCIPAL OUTSTANDING
DATE AMOUNT PORTION PORTION BALANCE
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PREPAYMENT
PRICE
[including
prepayment
premium]
Exmrr C-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting
[Secretary] [City Clerk] [County Clerk] of (`Lessee') certifies
as follows:
A. The following listed persons are duly elected or appointed and acting officials of
Lessee (the "Ofcials') in the capacity set forth opposite their respective names below and that
the facsimile signatures are true and correct as of the date hereof; and
B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and
deliver the Master Equipment Lease/Purchase Agreement dated as of
(the "Agreement') and separate Schedules relating thereto from time to time as provided in the
Agreement (collectively, the "Schedules'), each between Lessee and Banc of America Public
Capital Corp ("Lessor"), the Escrow and Account Control Agreement dated as of
among Lessor, Lessee and as Escrow Agent, and all documents related thereto and
delivered in connection therewith (collectively, the "Operative Agreements'), and the Operative
Agreements are binding and authorized agreements of Lessee, enforceable in all respects in
accordance with their terms.
Dated:
NAME OF OFFICIAL TITLE SIGNATURE
Name:
Title:
(The signer of this Certificate cannot be listed above as authorized to execute the Operative
Agreements.)
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ExmiT C-2
FORM of AUTHORIZING RESOLUTION
A RESOLUTION OF THE GOVERNING BODY OF
AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF
AMERICA PUBLIC CAPITAL CORP, AS LESSOR, AND SEPARATE
SCHEDULES THERETO FOR THE ACQUISITION, PURCHASE, FINANCING
AND LEASING OF CERTAIN EQUIPMENT WITHIN THE TERMS HEREIN
PROVIDED; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER
DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND
AUTHORIZING ALL OTHER ACTIONS NECESSARY TO THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
RESOLUTION.
WHEREAS, (the `Lessee'), a [city] [county] [school district]
[special district] [body corporate and politic] duly organized and existing under the laws of the
State/Commonwealth of , is authorized by the laws of the State/Commonwealth of
to purchase, acquire and lease personal property (tangible and intangible) for the
benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and
WHEREAS, the governing body of the Lessee (the "Board') has determined that a need
exists for the acquisition, purchase and financing of certain property consisting of
[insert general description, such as public works equipment, office
equipment, public safety vehicles, communications] (collectively, the "Equipment") on the
terms herein provided; and
WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that
certain Master Equipment Lease/Purchase Agreement (the "Agreement") with Banc of America
Public Capital Corp (or one of its affiliates), as lessor (the `Lessor'), substantially in the
proposed form presented to the Board at this meeting, and separate Schedules thereto
substantially in the form attached to the Agreement; and
WHEREAS, the Board deems it for the benefit of the Lessee and for the efficient and
effective administration thereof to enter into the Agreement and separate Schedules relating
thereto from time to time as provided in the Agreement for the purchase, acquisition, financing
and leasing of the Equipment to be therein described on the terms and conditions therein and
herein provided;
Now, THEREFORE, BE IT AND IT Is HEREBY RESOLVED by the governing body of the
Lessee as follows:
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Section 1. Findings and Determinations. It is hereby found and determined that the
terms of the Agreement (including the form of Schedule of Property and the form of Rental
Payment Schedule, both attached thereto), in the form presented to the Board at this meeting, are
in the best interests of the Lessee for the acquisition, purchase, financing and leasing of the
Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Agreement
(including the form of Schedule of Property and the form of Rental Payment Schedule, both
attached thereto) are hereby approved in substantially the forms presented at this meeting, with
such insertions, omissions and changes as shall be approved by [insert
title of officials] of the Lessee (the "Authorized Officials') executing the same, the execution of
such documents being conclusive evidence of such approval. The Authorized Officials are each
hereby authorized and directed to sign and deliver on behalf of the Lessee the Agreement, each
Schedule thereto under which a separate Lease (as defined in the Agreement) is created, each
Rental Payment Schedule attached thereto and any related exhibits attached thereto if and when
required; provided, however, that, without further authorization from the governing body of the
Lessee, (a) the aggregate principal component of Rental Payments under all Leases entered into
pursuant to the Agreement shall not exceed $ ; (b) the maximum term under any
Lease entered into pursuant to the Agreement shall not exceed [seven] years; and (c) the
maximum interest rate used to determine the interest component of Rental Payments under each
Lease shall not exceed the lesser of the maximum rate permitted by law or [ten percent (10%)]
per annum. The Authorized Officials may sign and deliver Leases to the Lessor on behalf of the
Lessee pursuant to the Agreement on such terms and conditions as they shall determine are in the
best interests of the Lessee up to the maximum aggregate principal component, maximum term
and maximum interest rate provided above. The foregoing authorization shall remain in effect
for a period of [two] years from the date hereof during which the Authorized Officials are
authorized to sign and deliver Leases pursuant to the Agreement on the terms and conditions
herein provided and to be provided in each such Lease.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall
take all action necessary or reasonably required by the parties to the Agreement to carry out, give
effect to and consummate the transactions contemplated thereby (including the execution and
delivery of Final Acceptance Certificates, Escrow Agreements and any tax certificate and
agreement, as contemplated in the Agreement) and to take all action necessary in conformity
therewith, including, without limitation, the execution and delivery of any closing and other
documents required to be delivered in connection with the Agreement and each Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Agreement,
any Lease, any Escrow Agreement nor any other instrument shall be construed with respect to
the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or
against its taxing power, nor shall the breach of any agreement contained in this Resolution, the
Agreement, any Lease, any Escrow Agreement or any other instrument or document executed in
connection therewith impose any pecuniary liability upon the Lessee or any charge upon its
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general credit or against its taxing power, except to the extent that the Rental Payments payable
under each Lease entered into pursuant to the Agreement are limited obligations of the Lessee,
subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The
and of the Lessee are each hereby
designated to act as authorized representatives of the Lessee for purposes of each Lease and the
related Escrow Agreement until such time as the governing body of the Lessee shall designate
any other or different authorized representative for purposes of the Agreement and any Lease or
Escrow Agreement.
Section 6. Severability. If any section, paragraph, clause or provision of this
Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Resolution.
Section 7. Effective Date. This Resolution shall be effective immediately upon its
approval and adoption.
The undersigned, a duly elected or appointed and acting
[Secretary] [City Clerk] [County Clerk] of the Lessee identified in the above Resolution No. _
(the "Resolution'), hereby certifies that the Resolution is a full, true and correct copy of such
Resolution as adopted by the governing body of the Lessee on , 20—. The
Resolution is in full force and effect on the date hereof and has not been amended, modified or
otherwise changed by the governing body of the Lessee since the date of adoption of the
Resolution.
DATED this day of , 20_.
Name:
Title:
C-2-3
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EaMHrT D
FORM OF OPINION OF LESSEE'S COUNSEL
(to be typed on letterhead of counsel)
Banc of America Public Capital Corp
555 California Street, 4th Floor
San Francisco, California 94104
Re: Schedule of Property No. , dated to Master
Equipment Lease/Purchase Agreement, dated as of
between Banc of America Public Capital Corp, as Lessor, and
, as Lessee
Ladies and Gentlemen:
As legal counsel to ("Lessee'), I have examined (a) an executed
counterpart of that certain Master Equipment Lease/Purchase Agreement, dated as of
(the "Agreement") and Exhibits thereto, between Banc of America
Public Capital Corp, as lessor ("Lessor'), and Lessee; (b) an executed counterpart of Schedule
of Property No. , dated , between Lessor and Lessee, which incorporates
by reference the terms and provisions of the Agreement (such Schedule together with such
incorporated terms and provisions are herein referred to collectively as the "Original
Schedule'), has attached the Rental Payment Schedule with respect thereto (the "Original Rental
Payment Schedule ") executed by Lessee, and provides for the lease of certain property listed in
the Original Schedule (the "Equipment"); (c) an executed counterpart of that certain Escrow and
Account Control Agreement dated as of (the "Escrow Agreement'), among
Lessor, Lessee and , as Escrow Agent; (d) a certified copy of the ordinances or
resolutions of the governing body of Lessee which, among other things, authorize Lessee to
execute the Agreement, the Original Schedule, the Original Rental Payment Schedule, the
Escrow Agreement and all additional Schedules of Property and related rental payment schedules
to be entered into pursuant to the Agreement (each of which is herein referred to as an
"Additional Schedule') and to be executed and delivered by the same authorized officers on
behalf of Lessee in substantially the same manner and in substantially the same form as the
Original Schedule; and (e) such other opinions, documents and matters of law as I have deemed
necessary in connection with the following opinions. The Original Schedule, including the terms
and provisions of the Agreement incorporated therein by reference, and the related Original
Rental Payment Schedule are herein collectively referred to as the "Lease. " Any Additional
Schedule, which incorporates by reference the terms and conditions of the Agreement, and the
related rental payment schedule are herein collectively referred to as an "Additional Lease. "
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Based on the foregoing, I am of the following opinions:
1. Lessee is a [city] [county] [school district] [special district] [body
corporate and politic] duly organized and existing under the laws of the State, and [has a
substantial amount of the following sovereign powers: (a) the power to tax, (b) the power
of eminent domain, and (c) police power] [is a political subdivision of a state within the
meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the
"Code') and the obligations of Lessee under the Lease constitute, and under each
Additional Lease will constitute, an obligation of Lessee within the meaning of
Section 103(a) of the Code, notwithstanding Section 103(b) of the Code].
2. Lessee has the requisite power and authority to lease, purchase and acquire
the Equipment and to execute and deliver the Lease, the Escrow Agreement and each
Additional Lease and to perform its obligations under the Lease, the Escrow Agreement
and each Additional Lease.
3. The Lease, the Escrow Agreement and each Additional Lease have been
duly authorized and approved and have been or, with respect to each Additional Lease,
will be, duly executed and delivered by and on behalf of Lessee. Assuming due
authorization, execution and delivery thereof by Lessor, each of the Lease and the
Escrow Agreement constitutes, and each Additional Lease will constitute, the legal, valid
and binding obligation of Lessee, enforceable against Lessee in accordance with their
respective terms, except to the extent limited by State and federal law affecting creditor's
remedies and by bankruptcy, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors' rights.
4. The authorization, approval, execution and delivery of the Lease, the
Escrow Agreement and the Additional Leases and all other proceedings of Lessee
relating to the transactions contemplated thereby have been performed in accordance with
all open meeting laws, public bidding laws and all other applicable state or federal laws.
5. There is no proceeding pending or threatened in any court or before any
governmental authority or arbitration board or tribunal that, if adversely determined,
would adversely affect the transactions contemplated by the Agreement, the Lease, the
Escrow Agreement or any Additional Lease or the security interest of Lessor or its
assigns, as the case may be, in the Equipment under the Lease or any Additional Lease or
other collateral thereunder.
[6. The portion of rentals designated as and constituting interest paid by
Lessee and received by Lessor is excluded from Lessor's gross income for federal
income tax purposes under Section 103 of the Code and is exempt from State of
personal income taxes; and such interest is not a specific item of tax
preference or other collateral for purposes of the federal individual or corporate
alternative minimum taxes.]
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All capitalized terms herein shall have the same meanings as in the Agreement, the Lease
or the Escrow Agreement, unless otherwise provided herein. Lessor and its successors and
assigns with respect to any Lease or Additional Lease, and any counsel rendering an opinion on
the tax-exempt status of the interest components of the Rental Payments under the Lease or any
Additional Lease, are entitled to rely on this opinion.
Printed Name:
Firm:
Address:
Telephone No.:
Standard MELPA BAPCC 415
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Signature:
Dated:
D-3
Ex Brr E
FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
555 California Street, 4th Floor
San Francisco, California 94104
Re: Schedule of Property No. , dated , to Master
Equipment Lease/Purchase Agreement, dated as of
between Banc of America Public Capital Corp, as Lessor, and
, as Lessee
Ladies and Gentlemen:
In accordance with the Master Equipment Lease/Purchase Agreement described above
(the "Agreement'), the undersigned Lessee hereby certifies and represents to, and agrees with,
Lessor as follows:
1. All of the Equipment listed in the above -referenced Schedule of Property
(the "Schedule') has been delivered, installed and accepted on the date hereof.
2. Lessee has conducted such inspection and/or testing of the Equipment
listed in the Schedule as it deems necessary and appropriate and hereby acknowledges
that it accepts the Equipment for all purposes.
3. Lessee is currently maintaining the insurance coverage required by
Section 7.02 of the Agreement.
4. Lessee hereby reaffirms that the representations, warranties and covenants
contained in the Agreement and incorporated into the Schedule by reference are true and
correct as of the date hereof.
5. (a) No event or condition that constitutes, or with notice or lapse of time,
or both, would constitute, an Event of Default exists at the date hereof under any Lease
currently in effect; (b) no Material Adverse Change has occurred since the dated date of
the Agreement; (c) no Event of Non -appropriation under any Lease currently in effect has
been threatened; and (d) no Lease has been terminated as the result of the occurrence of
an Event of Default or an Event of Non -appropriation.
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Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have
the same meanings as when such terms are used in the Agreement.
Date:
LESSEE:
.0
Name:
Title:
E-2
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Master Equipment Lease Purchase Agreement (govt) 2
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ExmBIT F
FORM OF SELF-INSURANCE CERTIFICATE
Banc of America Public Capital Corp
555 California Street, 4th Floor
San Francisco, California 94104
Re: Schedule of Property No. , dated , to Master
Equipment Lease/Purchase Agreement, dated as of ,
between Banc of America Public Capital Corp, as Lessor, and
. as Lessee
In connection with the above -referenced Schedule of Property (the "Schedule'),
(the `Lessee') hereby warrants and represents to Banc of
America Public Capital Corp the following information. The terms capitalized herein but not
defined herein shall have the meanings assigned to them in the Agreement incorporated in the
Schedule by reference.
1. The Lessee is self-insured for damage or destruction to the Equipment listed in the
Schedule (herein, the "Equipment"). The dollar amount limit for property damage to the
Equipment under such self-insurance program is $ . [The Lessee maintains
an umbrella insurance policy for claims in excess of Lessee's self-insurance limits for property
damage to the Equipment which policy has a dollar limit for property damage to the Equipment
under such policy of $ ,]
2. The Lessee is self-insured for liability for injury or death of any person or damage
or loss of property arising out of or relating to the condition or operation of the Equipment. The
dollar limit for such liability claims under the Lessee's self-insurance program is
$ . [The Lessee maintains an umbrella insurance policy for claims in excess
of Lessee's self-insurance limits for liability which policy has a dollar limit for liabilities for
injury and death to persons as well as damage or loss of property arising out of or relating to the
condition or operation of the Equipment in the amount of $
[3]. The Lessee maintains a self-insurance fund. Monies in the self-insurance fund
[are/are not] subject to annual appropriation. The total amount maintained in the self-insurance
fund to cover Lessee's self-insurance liabilities is $ . [Amounts paid from
the Lessee's self-insurance fund are subject to a dollar per claim of $ ]
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[3]. The Lessee does not maintain a self-insurance fund. The Lessee obtains funds to
pay claims for which it has self-insured from the following sources:
Amounts payable for claims from the such sources are limited as follows:
4. Attached hereto are copies of certificates of insurance with respect to policies
maintained by Lessee.
LESSEE:
F-2
F-2
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Master Equipment Lease Purchase Agreement (govt) 2
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Name:
Title:
EXMIT G
FORM OF BANK QUALIFICATION DESIGNATION
The undersigned, a duly authorized official of (the
"Lessee') certifies in connection with Schedule of Property No. , dated
which incorporates by reference the terms and provisions of that certain Master Equipment
Lease/Purchase Agreement dated as of (such Schedule of Property and
incorporated terms and provisions are herein referred to as the `Lease'), each between Banc of
America Public Capital Corp and Lessee, as follows:
1. The obligations evidenced by the Lease are not "private activity bonds" as defined
in Section 141 of the Internal Revenue Code of 1986, as amended (the "Code');
2. The Lessee hereby designates the principal components of the Rental Payments
payable under the Lease as "qualified tax-exempt obligations" for purposes of Section 265(b)(3)
of the Code;
3. The reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will
be issued by the Lessee (and all entities treated as one issuer with the Lessee, and all subordinate
entities whose obligations are treated as issued by the Lessee) during the current calendar year
will not exceed $10,000,000; and
4. Not more than $10,000,000 of obligations issued by the Lessee during the current
calendar year have been designated for purposes of Section 265(b)(3) of the Code.
DATE:
LESSEE:
Name:
Title:
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Master Equipment Lease Purchase Agreement (govt) 2
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EXHIBIT H
FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated
BANC OF AMERICA PUBLIC CAPITAL CORP ( "Assignor') hereby gives notice that, as of
, 20___, it has assigned and sold to ("Assignee') all of
Assignor's right, title and interest in, to and under Schedule of Property No. , dated
(including the Rental Payment Schedule attached thereto the
"Schedule'), which incorporates by reference the terms and provisions of that certain Master
Equipment Lease/Purchase Agreement dated as of (the "Agreement'), each
between Assignor and ("Lessee's, together with all exhibits, schedules,
riders, addenda and attachments related thereto, and all certifications and other documents
delivered in connection therewith, the Rental Payments and other amounts due under the Lease
(as such term is hereinafter defined), all of Assignor's right, title and interest in the Equipment
listed in the Schedule and all of Assignor's right, title and interest in, to and under the Escrow
and Account Control Agreement dated as of , 20 (the "Escrow Agreement'),
among Lessee, Assignor and Deutsche Bank Trust Company Americas, as Escrow Agent,
together with the Escrow Fund related thereto (collectively, the "Assigned Property').
For purposes of this Notice and Acknowledgment of Assignment (the
"Acknowledgment'), "Lease" means collectively the Schedule and the terms and provisions of
the Agreement incorporated therein by reference, together with all exhibits, schedules, riders,
addenda and attachments related thereto, and all certifications and other documents delivered in
connection therewith. The term "Lease" specifically excludes all other Schedules of Property
entered into under the Agreement and rental payments other than with respect to the Schedule.
Each capitalized term used but not defined herein has the meaning set forth in the Agreement.
1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property
and absolutely and unconditionally agrees to deliver to Assignee all Rental Payments and other
amounts coming due under the Lease in accordance with the terms thereof on and after the date
of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the
Lease and all related documents, including, but not limited to, the rights to issue or receive all
notices and reports, to give all consents or agreements to modifications thereto, to receive title to
the Equipment in accordance with the terms of the Lease, to declare a default and to exercise all
rights and remedies thereunder in connection with the occurrence of an Event of
Non -appropriation or an Event of Default; and (ii) except as provided in Section 3.03 of the
Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the
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other covenants and agreements contained in the Lease shall be absolute and unconditional in all
events without abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Acknowledgment, the following
information about the Lease is true, accurate and complete:
Number of Rental Payments Remaining
Amount of Each Rental Payment
Total Amount of Rents Remaining
Frequency of Rental Payments
Next Rental Payment Due
Funds Remaining in Escrow Fund
4. The Lease remains in full force and effect, has not been amended and no event of
default (or event which with the passage of time or the giving of notice or both would constitute
a default) or threatened non -appropriation has occurred thereunder.
5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of
the Agreement and confirms that the assignment to Assignee has been made in accordance with
the provisions of that Section.
6. Any inquiries of Lessee related to the Lease and any requests for disbursements
from the Escrow Fund, if applicable, and all Rental Payments and other amounts coming due
pursuant to the Lease on and after the date of this Acknowledgment should be remitted to
Assignee at the following address (or such other address as provided to Lessee in writing from
time to time by Assignee):
H-2
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ACKNOWLEDGED AND AGREED:
LESSEE:
TOR EXHIBIT PURPOSES ONLY]
Lo
Name:
Title:
ASSIGNOR: BANG OF AMERICA PUBLIC CAPITAL CORP
TOR EXHIBIT PURPOSES ONLYI
Lo
Name:
Title:
H-3
Standard MELPA BAPCC 415
Master Equipment Lease Purchase Agreement (govt) 2
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Exmsrr I
ESCROW AND ACCOUNT CONTROL AGREEMENT
I-1
Standard MELPA BAPCC 415
[Form of] Escrow and Account Control Agreement
This Escrow and Account Control Agreement (this "Agreement"), dated as of
by and among Banc of America Public Capital Corp, a Kansas
corporation (together with its successors and assigns, hereinafter referred to as "Lessor"),
a political subdivision of the State of (hereinafter
referred to as "Lessee") and Bank of America, National Association, a national banking
association organized under the laws of the United States of America "Escrow Agent").
Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as
of between Lessor and Lessee (hereinafter referred to as the "Lease"),
covering the acquisition and lease of certain Equipment described therein (the "Equipment'). It
is a requirement of the Lease that the Acquisition Amount ($ ) be deposited
into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully
funding the Lease, and providing a mechanism for the application of such amounts to the
purchase of and payment for the Equipment.
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Creation of Escrow Account.
(a) There is hereby created an escrow fund to be known as the
to Escrow Account' (the "Escrow Account') to be held by the Escrow
Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed
and returned in accordance with the terms hereof.
(b) Lessee may, from time to time, provide written instructions for Escrow
Agent to use any available cash in the Escrow Account to purchase any money market fund or
liquid deposit investment vehicle that Escrow Agent from time to time makes available to the
parties hereto. Such written instructions shall be provided via delivery to Escrow Agent of a
signed and completed Escrow Account Investment Selection Form (such form available from
Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in
such short-term investments shall be deemed to be part of the Escrow Account and subject to all
the terms and conditions of this Agreement. If any cash is received for the Escrow Account after
the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold
such cash uninvested until the next Business Day. In the absence of written instructions
designating a short-term investment for cash, cash in the Escrow Account shall remain
uninvested. Escrow Agent shall have no obligation to pay interest on cash in respect of any
period during which it remains uninvested. Lessee shall be solely responsible for ascertaining
that all proposed investments and reinvestments are Qualified Investments and that they comply
with federal, state and local laws, regulations and ordinances governing investment of such funds
and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing
investment. Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any
liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to
the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow
1
Standard-BOA-EA-BAPCC-815
Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any
such liability, cost, expenses, loss or claim. Interest on the Escrow Account shall become part of
the Escrow Account, and gains and losses on the investment of the moneys on deposit in the
Escrow Account shall be bome by the Escrow Account. The Escrow Agent shall have no
discretion whatsoever with respect to the management, disposition or investment of the Escrow
Account. The Escrow Agent shall not be responsible for any market decline in the value of the
Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take
any action with respect to the Escrow Account, except upon specific written instructions stated
herein. For purposes of this agreement, "Qualified Investments" means any investments which
meet the requirements of [state law citation].
(c) Unless the Escrow Account is earlier terminated in accordance with the
provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the
Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written
instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the
Escrow Account are insufficient to pay such amounts, Lessee shall deposit into the Escrow
Account any funds needed to complete the acquisition of the Equipment. Any moneys
remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition
Period and (ii) the date on which Lessee executes an Acceptance Certificate shall be applied as
provided in Section 4 hereof.
(d) The Escrow Account shall be terminated at the earliest of (i) the final
distribution of amounts in the Escrow Account or (ii) written notice given by Lessor of the
occurrence of a default or termination of the Lease due to non -appropriation.
(e) The Escrow Agent may act in reliance upon any writing or instrument or
signature which it, in good faith, believes to be genuine and may assume the validity and
accuracy of any statement or assertion contained in such a writing or instrument. The Escrow
Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of
execution, or validity of any instrument nor as to the identity, authority, or right of any person
executing the same; and its duties hereunder shall be limited to the receipt of such moneys,
instruments or other documents received by it as the Escrow Agent, and for the disposition of the
same in accordance herewith. Notwithstanding and without limiting the generality of the
foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively,
shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee)
and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow
Agent is authorized to comply with and rely, upon any notices, instructions or other
communications believed by it to have been sent or given by the parties or by a person or persons
authorized by the parties. The Escrow Agent specifically allows for receiving direction by
written or electronic transmission from an authorized representative with the following caveat,
Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all
claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable
attorneys' fees) (collectively, "Losses") incurred or sustained by the Escrow Agent as a result of
or in connection with the Escrow Agent's reliance upon and compliance with instructions or
directions given by written or electronic transmission given by each, respectively, provided,
however, that such Losses have not arisen from the gross negligence or willful misconduct of the
2
Standard-BOA-EA-BAPCC-815
Escrow Agent, it being understood that forbearance on the part of the Escrow Agent to verify or
confirm that the person giving the instructions or directions, is, in fact, an authorized person shall
not be deemed to constitute gross negligence or willful misconduct.
In the event conflicting instructions as to the disposition of all or any portion of
the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide
by the instructions or entitlement orders given by Lessor without consent of the Lessee.
(f) Unless the Escrow Agent is guilty of gross negligence or willful
misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and
indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any
character or nature, which it may incur or with which it may be threatened by reason of its acting
as Escrow Agent under this agreement; and in connection therewith, does to the extent permitted
by law indemnify the Escrow Agent against any and all expenses; including reasonable
attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of
the Lease, or about the rights and obligations, or the propriety of any action contemplated by the
Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate
civil action including an interpleader action to resolve the disagreement. The Escrow Agent
shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in connection
with such civil action, and shall be fully protected in suspending all or part of its activities under
the Lease until a final judgment in such action is received.
(h) The Escrow Agent may consult with counsel of its own choice and shall
have full and complete authorization and protection with the opinion of such counsel. The
Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for
any acts or omissions of any kind unless caused by its willful misconduct.
(i) Lessee shall reimburse the Escrow Agent for all reasonable costs and
expenses, including those of the Escrow Agent's attorneys, agents and employees incurred for
non -routine administration of the Escrow Account and the performance of the Escrow Agent's
powers and duties hereunder in connection with any Event of Default under the Lease, or in
connection with any dispute between Lessor and Lessee concerning the Escrow Account.
0) The Escrow Agent or any successor may at any time resign by giving
mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of
resignation ("the Effective Date"), which shall be a date not less than 60 days after such notice is
delivered to an express carrier, charges prepaid, unless an earlier resignation date and the
appointment of a successor shall have been approved by the Lessee and Lessor. After the
Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow
Account in accordance with the terms of this Agreement, pending receipt of written instructions
from Lessor regarding further disposition of the Escrow Account.
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Standard-BOA-EA-BAPCC-S 15
(k) The Escrow Agent shall have no responsibilities, obligations or duties
other than those expressly set forth in this Agreement and no implied duties responsibilities or
obligations shall be read into this Agreement.
2. Acquisition of Property.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for,
or cause to be supervised and provided for, the acquisition of the Equipment, with moneys
available in the Escrow Account. Lessee represents the estimated costs of the Equipment are
within the funds estimated to be available therefor, and Lessor makes no warranty or
representation with respect thereto. Lessor shall have no liability under any of the acquisition or
construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the
acquisition, equipping and installation of the Equipment, and the operation and maintenance
thereof. Escrow Agent shall have no duty to monitor or enforce Lessee's compliance with the
foregoing covenant.
(b) Authorized Escrow Account Disbursements. It is agreed as between
Lessee and Lessor that Disbursements from the Escrow Account shall be made for the purpose of
paying (including the reimbursement to Lessee for advances from its own funds to accomplish
the purposes hereinafter described) the cost of acquiring the Equipment.
(c) Requisition Procedure. No disbursement from the Escrow Account shall
be made unless and until Lessor has approved such requisition. Prior to disbursement from the
Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the
form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and
the name of the person, firm or corporation to whom payment thereof is due and the manner of
disbursement (check or wire). The Escrow Agent is authorized to obtain and rely on
confirmation of such Disbursement Request and payment instructions by telephone call-back to
the person or persons designated for verifying such requests on Exhibit A-2 (such person
verifying the request shall be different than the person initiating the request). The Lessor and
Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement
instruction before release, shall be made to Lessor only and Escrow Agent shall have no
obligation to call-back Lessee.
Each such requisition shall be signed by an authorized representative of Lessee
(an "Authorized Representative") and by Lessor, and shall be subject to the following conditions,
which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition
executed by Lessee and Lessor is delivered to it:
Delivery to Lessor of an executed Disbursement Request in the form
attached hereto as Schedule 1 certifying that:
(i) an obligation in the stated amount has been incurred by Lessee, and that
the same is a proper charge against the Escrow Account for costs relating
to the Equipment identified in the Lease, and has not been paid (or has
been paid by Lessee and Lessee requests reimbursement thereon; (ii) the
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Authorized Representative has no notice of any vendor's, mechanic's or
other liens or rights to liens, chattel mortgages, conditional sales contracts
or security interest which should be satisfied or discharged before such
payment is made; (iii) such requisition contains no item representing
payment on account, or any retained percentages which Lessee is, at the
date of such certificate, entitled to retain (except to the extent such
amounts represent a reimbursement to Lessee); (iv) the Equipment is
insured in accordance with the Lease; (v) no Event of Default (nor any
event which, with notice or lapse of time or both, would become an Event
of Default) has occurred and is continuing; (vi) such disbursement shall
occur during the Acquisition Period; (vii) the representations, warranties
and covenants of Lessee set forth in the Lease are true and correct as of
the date hereof; and (viii) no Material Adverse Change has occurred since
the date of the execution and delivery of the Lease.
2. Delivery to Lessor invoices (and proofs of payment of such invoices, if
Lessee seeks reimbursement) and bills of sale (if title to such Equipment
has passed to Lessee) therefor as required by Section 3.04 of the Lease and
any additional documentation reasonably requested by Lessor; and
3. The disbursement shall occur during the Acquisition Period.
Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1
and delivery of the executed form to Escrow Agent confirms that all of the requirements and
conditions with respect to disbursements set forth in this Section 2 have been satisfied.
3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in
Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the
Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of
amounts available therefor in the Escrow Account.
4. Excessive Escrow Account. Upon receipt of written instructions from Lessor
including a representation that one of the following conditions has been satisfied (upon which
representation Escrow Agent shall conclusively rely, any funds remaining in the Escrow Account
on or after the earlier of (a) the expiration of the Acquisition Period and (b) the date on which
Lessee executes an Acceptance Certificate, or upon a termination of the Escrow Account as
otherwise provided herein, shall be distributed by the Escrow Agent to the Lessor in order for the
Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with
Section 4.07 of the Lease.
5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the
Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or
return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security
interest in the Escrow Account, and all proceeds thereof, and all investments made with any
amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to
investments as set forth in this agreement, such investments shall be made in the name of Escrow
Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that
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Lessor is deemed to have possession of such investments for the purpose of perfecting its
security interest.
6. Control of Acquisition Account. In order to perfect Lessor's security interest by
means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements,
investment property and other financial assets now or hereafter credited to the Escrow Account,
(iii) all of Lessee's rights in respect of the Escrow Account, such securities entitlements,
investment property and other financial assets, and (iv) all products, proceeds and revenues of
and from any of the foregoing personal property (collectively, the "Collateral"), Lessor, Lessee
and Escrow Agent further agree as follows:
(a) All terms used in this Section 6 which are defined in the Commercial
Code of the state of 1 ("Commercial Code") but are not otherwise
defined herein shall have the meanings assigned to such terms in the Commercial Code, as in
effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor
with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee.
(c) Provided that account investments shall be held in the name of the Escrow
Agent, Escrow Agent hereby represents and warrants (a) that the records of Escrow Agent show
that Lessee is the sole owner of the Collateral, (b) that Escrow Agent has not been served with
any notice of levy or received any notice of any security interest in or other claim to the
Collateral, or any portion of the Collateral, other than Lessor's claim pursuant to this Agreement,
and (c) that Escrow Agent is not presently obligated to accept any entitlement order from any
person with respect to the Collateral, except for entitlement orders that Escrow Agent is
obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent,
subject to the provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Escrow Agent will not enter
into any agreement by which Escrow Agent agrees to comply with any entitlement order of any
person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with
respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any
person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to
assert a lien, encumbrance or adverse claim against any portion or all of the Collateral.
(e) Except as otherwise provided in this paragraph (e) and subject to
Section 1(b) hereof, Lessee may affect sales, trades, transfers and exchanges of Collateral within
the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any
Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right,
by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals
(including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or
exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees
to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has
1 State where lessee is located.
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had a reasonable opportunity to comply therewith) and has no obligation to, and will not,
investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to
Lessor, the validity of any of Lessor's claims against or agreements with Lessee, the existence of
any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all
instructions and entitlement orders delivered by Lessor to Escrow Agent.
(g) Escrow Agent will not attempt to assert control, and does not claim and
will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will
not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise
charge or deduct from the Collateral any amount whatsoever.
(h) Escrow Agent and Lessee hereby agree that any property held in the
Escrow Account shall be treated as a financial asset under such section of the Commercial Code
as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any
contrary provision of any other agreement to which Escrow Agent may be a party.
(i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to
send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to
Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or
sent to Lessee with respect to the Escrow Account.
7. Information Required Under USA PATRIOT ACT The parties acknowledge
that in order to help the United States government fight the funding of terrorism and money
laundering activities, pursuant to Federal regulations that became effective on October 1, 2003
(Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify,
record and update information that identifies each person establishing a relationship or opening
an account. The parties to this Agreement agree that they will provide to the Escrow Agent such
information as it may request, from time to time, in order for the Escrow Agent to satisfy the
requirements of the USA PATRIOT Act, including but not limited to the name, address, tax
identification number and other information that will allow it to identify the individual or entity
who is establishing the relationship or opening the account and may also ask for formation
documents such as articles of incorporation or other identifying documents to be provided.
8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Lease. This agreement may not be amended except in writing
signed by all parties hereto. This agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original instrument and each shall have the force and effect of
an original and all of which together constitute, and shall be deemed to constitute, one and the
same instrument. Notices hereunder shall be made in writing and shall be deemed to have been
duly given when personally delivered or when deposited in the mail, first class postage prepaid,
or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic
confirmation, addressed to each party at its address below.
Notices and other communications hereunder may be delivered or furnished by electronic
mail provided that any formal notice be attached to an email message in PDF format and
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provided further that any notice or other communication sent to an e-mail address shall be
deemed received upon and only upon the sender's receipt of affirmative acknowledgement or
receipt from the intended recipient. For purposes hereof no acknowledgement of receipt
generated on an automated basis shall be deemed sufficient for any purpose hereunder or
admissible as evidence of receipt.
If to Lessor: Banc of America Public Capital Corp
555 California Street, 0 Floor
CA5-705-04-01
San Francisco, CA 94104
Attn: Contract Administration
Fax: (415) 765-7373
If to Lessee:
If to Escrow Agent
Attn:
Fax:
Bank of America, National Association
Global Custody and Agency Services
135 S. LaSalle Street
ILA -135-18-51
Chicago, Illinois 60603
Attention: Alice M. Wolan
Telephone: (312) 992-9782
Fax: (312) 453-4443
Email: alice.m.wolan@baml.com
9. Lessee and Lessor understand and agree that they are required to provide the
Escrow Agent with a properly completed and signed Tax Certification (as defined below) and
that the Escrow Agent may not perform its duties hereunder without having been provided with
such Tax Certification. As used herein "Tax Certification" shall mean an IRS form W-9 or W-8
as described above. The Escrow Agent will comply with any U.S. tax withholding or backup
withholding and reporting requirements that are required by law. With respect to earnings
allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and
report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS
Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt
from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable
law. With respect to earnings allocable to a United States person, the Escrow Agent will report
such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms
1099 and/or 1042-S shall show the Escrow Agent as payor and [Lessee] as payee.
Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to
prepare and file information reports under Code Section 6041, and the Treasury regulations
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thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code
Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting
such imputed interest.
10. This Agreement shall be governed by and construed in accordance with the laws
of the State of [ ] and the parties hereto consent to jurisdiction in the State of [
] and venue in any state or Federal court located in the City of [ ].
11. Any bank or corporation into which the Escrow Agent may be merged or with
which it may be consolidated, or any bank or corporation to whom the Escrow Agent may
transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent
without the execution or filing of any paper or any further act on the part of any of the parties,
anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor
may be merged or with which it may be consolidated, or any bank or corporation to whom the
Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor
without the execution or filing of any paper or any further act on the part of any of the parties,
anything herein to the contrary notwithstanding.
12. This Agreement may be amended, modified, and/or supplemented only by an
instrument in writing executed by all parties hereto.
13. No party hereto shall assign its rights hereunder until its assignee has submitted to
the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that
on the basis of such materials it may accept such assignee as a customer and (ii) assignee has
delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow
Agent has determined to have been properly signed and completed.
14. Escrow Agent will treat information related to this Agreement as confidential but,
unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any
information relating to the Agreement to and between the subsidiaries, officers, affiliates and
other representatives and advisors of Escrow Agent and third parties selected by any of them,
wherever situated, for confidential use in the ordinary course of business, and further
acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may
transfer or disclose any such information as required by any law, court, regulator or legal
process.
Lessor will treat information related to this Agreement as confidential but, unless prohibited by
law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to
the Agreement to and between the subsidiaries, officers, affiliates, other representatives and
advisors of Lessor and debt and equity sources and third parties selected by any of them, and to
their prospective assignees wherever situated, for confidential use in the ordinary course of
business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt
and equity source or third party or prospective assignee may transfer or disclose any such
information as required by any law, court, regulator or legal process.
Lessee will treat the terms of this Agreement as confidential except on a "need to know" basis to
persons within or outside Lessee's organization (including affiliates of such party), such as
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attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party
and its affiliates, except as required by any law, court, regulator or legal process and except
pursuant to the express prior written consent of the other parties, which consent shall not be
unreasonably withheld;
In Witness Whereof, the parties have executed this Escrow and Account Control
Agreement as of the date first above written.
Banc of America Public Capital Corp
as Lessor
as Lessee
By: By:
Name: Name:
Title: Title:
Bank of America, National Association
As Escrow Agent
LO
Name:
Title:
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SCHEDULE 1
to the Escrow and Account Control Agreement
FORM OF DISBURSEMENT REQUEST
Re: Master Equipment Lease/Purchase Agreement dated as of
by and between Banc of America Public Capital Corp, as Lessor and
as Lessee (the "Lease") (Capitalized terms not otherwise defined
herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of
(the "Escrow Account and Account Control Agreement") by
and among Banc of America Public Capital Corp ("Lessor"),
("Lessee") and Bank of America, National Association, (the "Escrow Agent"), the undersigned
hereby requests the Escrow Agent pay the following persons the following amounts from the
Escrow Account created under the Escrow Account and Account Control Agreement for the
following purposes:
Disbursement Amounts:
Payee's Name and Address
(if disbursement via wire,
must include wire transfer
instructions)
Invoice Number
Dollar Amount
Purpose
(i) (a) Each obligation specified in the table herein titled as "Disbursement Amounts"
has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the
Escrow Account for costs relating to the Equipment identified in the Lease, and (c) has not been
paid (or has been paid by Lessee and Lessee requests reimbursement thereof).
Standard-BOA-EA-BAPCC-815
(ii) Each item of Equipment relating to an obligation specified in the table herein
titled as "Disbursement Amounts" has been delivered, installed and accepted by Lessee.
Attached hereto is the original invoice with respect to such obligation.
(iii) The undersigned, as Authorized Representative, has no notice of any vendor's,
mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or
security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any
retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent
such amounts represent a reimbursement to Lessee).
(v) The Equipment is insured in accordance with the Lease.
(vi) No Event of Default, and no event which with notice or lapse of time, or both,
would become an Event of Default, under the Lease has occurred and is continuing at the date
hereof.
(vii) The disbursement shall occur during the Acquisition Period.
(viii) The representations, warranties and covenants of Lessee set forth in the Lease are
true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and
delivery of the Lease.
Dated:
By:
Name:
Title:
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized
BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:
Name:
Title:
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[AN `EXHIBIT A-] " MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting
[Secretary] [City Clerk] [County Clerk] of ( `Lessee')
certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of
Lessee (the "Officials') in the capacity set forth opposite their respective names below and that
the facsimile signatures are true and correct as of the date hereof;
B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and
deliver the Master Equipment Lease/Purchase Agreement dated as of
by and between Lessee and Banc of America Public Capital Corp ("Lessor"), the Escrow and
Account Control Agreement dated as of among Lessor, Lessee and Bank
of America, National Association, as Escrow Agent, and all documents related thereto and
delivered in connection therewith (collectively, the "Agreements'), and the Agreements each are
the binding and authorized agreements of Lessee, enforceable in all respects in accordance with
their respective terms.
Dated:
Name of Official Title Signature
By:
Name:
Title:
(The signer of this Certificate cannot be listed above as authorized to execute the Agreements.)
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[AN "EXHIBIT A-2" MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-2
Escrow and Account Control Agreement dated as of by and among
[designate parties]
Certificate of Authorized Representatives — [Lessor]
Name: Eileen Harwell Name: Augustine Reichenbach
Title: Authorized Agent Title: Authorized Agent
Phone: 415-765-1897 Phone: 415-765-1873
Facsimile: 415-343-0531
Facsimile: 904-312-6101
E-mail: Eileen.harwell@baml.com E-mail: Augustine.reichenbachAbaml.com
Signature: Signature:
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
Name: Bridgett Arnold
Title: Authorized Agent
Phone: 415-765-1867
Facsimile: 415-343-0533
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
Name: Elizabeth Castillo
Title: Authorized Agent
Phone: 415-765-7351
Facsimile: 415-343-0533
E-mail: Bridgett.arnoldAbaml.com E-mail: elizabeth.castillo(&baml.com
Signature:
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
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Signature:
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
Name: Yvette Montalvo Baron
Title: Authorized Agent
Phone: 415-765-7371
Facsimile: 415-343-0533
E-mail: Yvette.m.montalvo baron@baml.com
Signature:
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
Name:
Title:
Phone:
Facsimile:
E-mail:
Signature:
Fund Transfer / Disbursement Authority Level:
❑ Initiate
❑ Verify transactions initiated by others
The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other
communications believed by it to have been sent or given by the person or persons identified above
including without limitation, to initiate and verify funds transfers as indicated.
Banc of America Public Capital Corp
By:
Name:
Title:
Date:
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