HomeMy WebLinkAboutR-2003-002 Banc of America Purchase Computers Lease agreement Florida League RESOLUTION NO. 2003-002
A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA,
AUTHORIZING CITY OFFICIALS TO ENTER INTO A
COMPUTER LEASE FINANCING AGREEMENT WITH BANC
OF AMERICA LEASING & CAPITAL, LLC UNDER THE
FLORIDA LEAGUE OF CITIES MASTER LEASE PURCHASE
PROGRAM FOR THE FUNDING OF A LEASE OF
COMPUTERS; PROVIDING FOR CONFLICTS; FURTHER,
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Manager has determined that it is necessary to purchase
computer equipment from Dell Marketing, L.P., for computer equipment over a 36 month
period; and
WHEREAS, Resolution No. 2003-001 authorized the City to enter into a lease
agreement with Dell Marketing, L.P., for the purchase of computer equipment for a total
price not to exceed $55,000, and
WHEREAS, Banc of America Leasing & Capital, LLC under the Florida League of
Cities' Master Lease Purchase Program has quoted an interest rate of 3.05%, which rate
is valid until February 5, 2003 for a three-year lease program;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF DANIA BEACH, FLORIDA:
Section 1. That the City is authorized to enter into a computer lease financing
agreement and related documentation with Banc of America Leasing & Capital, LLC
under the Florida League of Cities' Master Lease Purchase Program for a 36 month
lease with a fixed interest rate not to exceed 3.05%;
1 RESOLUTION NO. 2003-002
• Section 2. That the City Manager and City Attorney are authorized to make
revisions to such Lease Financing Agreement and related documentation as are
deemed necessary and proper for the best interests of the City.
Section 3. That all resolutions or parts of resolutions in conflict with this
resolution shall be repealed to the extent of such conflict.
Section 4. That this resolution shall be in force and take effect immediately
upon its passage and adoption.
PASSED and ADOPTED o IMAYROB
003.
RT H. CHUNN, JR.
R — COMMISSIONER
ATTEST: ROLL CALL:
COMMISSIONER BERTINO - YES
A4At��� COMMISSIONER MCELYEA - YES
CHARLENE JO SON COMMISSIONER MIKES - YES
CITY CLERK VICE-MAYOR FLURY - YES
MAYOR CHUNN - YES
APPROVED AS TO FORM AND CORRECTNESS:
BY:
TH A J. A BRO
CITY ATTORNEY
•
2 RESOLUTION NO. 2003-002
Agenda Request Form
City of Dania Beach
AltAgenda Item: •
Date of Commission meeting: 1/14/2003
Description of Agenda Item: Purchase of computers under the Florida League of Cities Leasing Program
Commission action being requested:
Adopt Resolution or Ordinance ® Expenditure ❑ Award BID/RFP ❑
Presentation ❑ General approval of item ❑ Continued from meeting
Ot er(Please expila�n}
, , W
Summary explanation and background
The City Commission approved the purchase of computers through financing in the FY 2003 budget.
Bid were requested from different banking institutions for a three year term with fixed interest rate. The
. three quotes that the City received is from SunTrust, Community Bank and the Florida League Leasing Program
while California Leasing indicated that they cannot provide a competitive rate at this time. The rate comparison
is addressed at the staff memo.
Attachedexhibrtsand additional backup matena s(Please list)
Staff memo, Resolution
For purchasing requests ONLY
Department: Amount:
Fund: General: ❑ Water: ❑ Sewer: ❑ Stormwater: ❑ Grants: ❑ Capital: ❑
Account Name: Account Number:
Submitted by: Patricia Varney Date: 1/6/2003
Department Director: Date:
Admin. Services Director: Date:
• Finance Director: Patricia Varney Date: 1/7/2003
City Manager: IPato Date: 1/7/2003
CITE' OF ➢)ANIA BEACH
• DEPARTMENT OF FINANCE
MEMORANDUM
TO: Ivan Pato, City Manager ) Memo: DF-03-008
FROM: Patricia Varney, Director of Finance
1
DATE: January 6, 2003
SUBJECT: Financing option for the purchase of computers
Purpose
Request approval for the financing of the purchase of computers.
Background
The City Commission approved at the FY 2003 budget the purchase of computers in the amount
of$60,000. The Information Services Manager obtained a quote from DELL for this purchase in
the amount of$54,377. A request for quote of a 3 year term at fixed interest rate was sent to
• different banking institutions. The City received three quotes: SunTrust Bank, Bank of America
under the Florida League Leasing Program and Community Bank. California Leasing indicated
that they cannot provide a competitive quote as this time. The breakdown of the three quotes are
as follows:
a) SunTrust—4.9%
b) Florida League Leasing Program (Bank of America)—3.05%. Rate is only good for
thirty days, expires on February 5, 2003. Otherwise, rate will be recalculated at the
percent of the 3-year Treasury quoted under the Florida League of Cities
Master/Leasing Program for the month in which funding occurs.
c) Community Bank— 3.75%. Rate is good until funding occurs (even sixty to ninety
days).
Recommendation
Staff is recommending that the City Manager is authorized to execute a leasing agreement with
Bank of America under the Florida League Leasing Program for an interest rate not to exceed
3.05%.
•
BankofAmerica.
ATTACHED ARE YOUR COPIES OF DOCUMENTS
REQUESTED FROM BANC OF AMERICA LEASING & CAPITAL, LLC
PERTAINING TO THE FLORIDA LEAGUE OF CITIES, INC.
LEASE/PURCHASE PROGRAM.
SHOULD YOU HAVE ANY QUESTIONS REGARDING THESE DOCUMENTS,
PLEASE FEEL FREE TO CONTACT YOUR SALES ASSOCIATE.
YOUR INTEREST IN BANC OF AMERICA LEASING & CAPITAL, LLC IS
APPRECIATED!
USA
CNNI(o
Master Equipment Lease/Purchase Agreement
(Standard Program)
This Master Equipment Lease/Purchase Agreement (this "Agreement") dated as of
January 16, 2003, and entered into among Banc of America Leasing & Capital, LLC, a Delaware
limited liability company ("Lessor"), Florida League of Cities, Inc., a Florida not-for-profit
corporation ("Sponsor") and City of Dania Beach, a body corporate and politic/municipality
existing under the laws of the State of Florida ("Lessee").
WITNEswrH:
WHEREAS, Lessor has established, and the Sponsor is sponsoring, a Master
Lease/Purchase Program Agreement to provide political subdivisions in the State of Florida with
low-cost, tax-exempt equipment financing alternatives; and
WHEREAS, Lessee desires to lease and acquire from Lessor certain equipment described
in each Schedule (as each such term is defined herein), subject to the terms and conditions of and
for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule
prevail; and
WHEREAS, the relationship between the parties shall be a continuing one and items of
equipment may be added to the Equipment from time to time by execution of additional Schedules
by the parties hereto and as otherwise provided herein; and
WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into
this Agreement and the Schedules hereto for the purposes set forth herein;
NOW, THEREFORE, 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 the amount specified in each Lease and represented by the
Lessee to be sufficient to acquire the Equipment listed in such Lease, which amount shall be not
less than $50,000 per Lease.
"Acquisition Fund " means, with respect to any Lease, the fund established and held by
the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any.
"Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund
Agreement in form and substance acceptable to and executed by the Lessee, the Lessor and the
• Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and
administered.
"Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any
004.237866.6
Acquisition Fund Agreement, and its successors and assigns.
"Acquisition Period" means, with respect to each Lease, that period stated in such Lease,
commencing on the date of execution thereof and ending not later than three years thereafter,
during which the Lease Proceeds attributable to such Lease may be expended on Equipment
Costs.
"Act" means, collectively, Chapter 166, Florida Statutes, the Constitution of the State, and
other applicable provisions of law.
"Agreement" means this Master Equipment Lease/Purchase Agreement, including the
exhibits hereto, together with any amendments and modifications to the Agreement pursuant to
Section 12.07.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a
Section of the Code herein 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
Rental Payments commences under such Lease, which date shall be the earlier of(i) the date on
which the Equipment listed in such Lease is accepted by Lessee in the manner described in
Section 5.01, or (ii) the date on which sufficient moneys to purchase the Equipment listed in such
Lease are deposited for that purpose with an Acquisition Fund Custodian.
• "Equipment" means the property listed in each of the Leases 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, to the extent permitted by the Act, the total cost of the
Equipment listed in each Lease, including all delivery charges, installation charges, capitalizable
consulting and training fees approved by Lessor, legal fees, financing costs, motor vehicle
registration fees, recording and filing fees, and other costs necessary to vest full, clear legal title
to the Equipment in Lessee, subject to the interest granted to and retained by Lessor as set forth in
each Lease, and otherwise incurred in connection with the financing provided by the lease-
purchase of the Equipment as provided in each Lease; provided that in no event shall capitalizable
delivery charges, installation charges, taxes and similar capitalizable "soft costs" relating to such
Equipment exceed 20% of the total cost of such Equipment as determined by Lessor.
"Expense Fund" means, with respect to any Lease, the fund established and held by the
Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement.
"Event of Default" means an Event of Default described in Section 11.01.
• "Funding Expiration Date" means January 16, 2006.
"Lease" means a Schedule and the terms of this Agreement which are incorporated by
reference into such Schedule. Each Schedule with the incorporated terms of this Agreement shall
004.237866.6 -2
constitute a separate and independent Lease.
"Lease Proceeds" means, with respect to each Lease, the total amount of money to be
paid by the Lessor to the Acquisition Fund Custodian for deposit and application in accordance
with such Lease and the Acquisition Fund Agreement.
"Lease Term" for each Lease means the Original Term and all Renewal Terms therein
provided and for this Agreement means the period from the date hereof until this Agreement is
terminated.
"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 thereunder) pursuant to
Section 10.01, but does not include any entity solely by reason of that entity retaining or assuming
any obligation of Lessor to perform under a Lease.
"Original Term" means the period from the Commencement Date for each Lease until the
end of the fiscal year of Lessee in effect at such Commencement Date.
"Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that
Lessee may pay to Lessor to purchase such Equipment as provided in such Lease.
• "Renewal Terms" means the renewal terms of each Lease, each having a duration of one
year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable
thereto.
"Rental Payments" means the basic rental payments payable by Lessee under each Lease
pursuant to Section 4.01, in each case consisting of a principal component and an interest
component.
"Schedule" means each separately numbered Schedule of Property substantially in the
form of Exhibit A hereto together with a Rental Payment Schedule attached thereto substantially
in the form of Exhibit A-1 hereto.
"Sponsor" means Florida League of Cities, Inc., a Florida not for profit corporation.
"State" means the State of Florida.
"Vendor" means the manufacturer or supplier of the Equipment or any other person as
well as the agents or dealers of the manufacturer or supplier from whom Lessor arranged Lessee's
acquisition and financing of the Equipment pursuant to the applicable Lease.
ARTICLE II.
. Section 2.01. Representations and Covenants of Lessee. This Section 2.01 sets forth
facts and estimates upon which Lessor and its counsel, and Sponsor and its counsel, may rely
regarding the exclusion of the interest portion of the Rental Payments from the gross income of
the Lessor, and the facts and estimates upon which Lessee bases its reasonable expectation that
004.237866.6 3
the obligation to make Rental Payments pursuant to the Leases does not create an arbitrage bond
under Section 148 of the Internal Revenue Code of 1986, as amended, and applicable Treasury
Regulations.
Lessee represents, covenants and warrants for the benefit of Lessor and Sponsor on the
date hereof and as of the Commencement Date of each Lease as follows:
(a) Lessee is 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, including the Act, with full power and authority to enter into this Agreement and
each Lease and the transactions contemplated hereby, and to perform all of its obligations
hereunder and under each Lease.
(b) Lessee has duly authorized the execution and delivery of this Agreement
and each Lease 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.
(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.
Lessee is not in default under any indenture, mortgage, deed of trust, bank loan, credit
• agreement or other material instrument to which Lessee is a party.
(d) The entering into and performance of each Lease by the Lessee will not
violate any judgment, order, or regulation applicable to Lessee, and except as otherwise
expressly provided in this Agreement, result in the creation of any lien, charge, security
interest, or other encumbrance upon any assets of Lessee pursuant to any indenture,
mortgage, deed of trust, bank loans, credit agreement or other instrument to which Lessee
is a party or by which it or its assets may be bound.
(e) There are no actions, suits, proceedings or tax claims pending or, to the
knowledge of Lessee, threatened against or affecting Lessee in any court or before any
governmental commission, board or authority, which, if adversely determined, will have a
material adverse effect on the ability on the Lessee to perform its obligations under this
Agreement or any Lease.
(f) Lessee has complied and will comply with Sections 218.38, 218.385(2) and
218.385(3), Florida Statutes, with respect to each Lease.
(g) The interest rate for the interest portion of the Rental Payments, on the first
date interest begins to accrue, does not exceed a rate of interest permitted by Section
215.84, Florida Statutes.
(h) Lessee will do or cause to be done all things necessary to preserve and keep
in full force and effect its existence as a political subdivision within the meaning of Section
103(c) of the Code.
004.237866.6 _4
(i) Lessee has complied and will comply with such open meeting laws and
public bidding requirements as may be applicable to this Agreement and each Lease and
the acquisition by Lessee of the Equipment as provided in each Lease or, in the case of
public bidding requirements, has otherwise complied and will comply with Section
218.385(1), Florida Statutes, in connection with each Lease.
0) During the Lease Term, the Equipment will be used by Lessee only for the
purpose of performing essential governmental or proprietary functions of Lessee permitted
under the Act. 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 each Lease.
(k) Lessee has kept and throughout the Lease Term 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 a balance sheet, statement of revenues, expenses and changes in fund balances
for budget and actual, statement of cash flows and notes, and schedules and attachments
to the financial statements) within 180 days of its fiscal year end, (ii) quarterly financial
statements (including a balance sheet, statement of revenues, expenses and changes in
fund balances for budget and actual and statement of cash flows and notes) upon the
request of Lessor, within 60 days of the end of the fiscal quarter for which such
information has been requested, (iii) such other financial statements and information as
Lessor may reasonably request, and (iv) its annual budget for the following fiscal year
• within 90 days of the adoption of such budget. Such statements in clause (i) above shall be
accompanied by an unqualified opinion of the 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) 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 Lease Term of such item. The use of the
Equipment is essential to Lessee's proper and efficient operation.
(m) The original proceeds of each Lease, and the interest to be earned thereon,
do not and will not exceed the amount necessary for the purpose for which such Lease is
executed.
(n) No sinking fund is expected to be created by Lessee with respect to any
Lease or the Rental Payments.
(o) No other governmental obligations of Lessee are being issued at
substantially the same time and sold pursuant to a common plan of financing which will be
paid out of (or have substantially the same claim to be paid out of) substantially the same
• source of funds as each Lease.
004.237866.6 5
(p) No portion of the amounts received pursuant to each Lease will be used as a
substitute for other funds which were otherwise to be used as a source of financing for any
portion of the costs of Equipment and which have been and will be used to acquire,
directly or indirectly, obligations producing a yield in excess of the yield on each Lease.
(q) In connection with the execution and delivery of each Lease, no action has
or will be taken which attempts to circumvent the provisions of Section 148 of the Code
and the regulations promulgated thereunder by (i) enabling Lessee to exploit the difference
between tax-exempt and taxable interest rates to gain a material financial advantage and
(ii) over burdening the tax-exempt bond market.
(r) Lessee will not directly or indirectly use or permit the use of any proceeds
of a Lease, or take or omit to take any action, that would cause the Rental Payments to be
"federally guaranteed" within the meaning of Section 149(b) of the Code.
(s) Lessee will submit to the Secretary of the Treasury information reporting
statements and other information related to each Lease at the times and in the forms
required by the Code.
(t) To the best of the knowledge and belief of the Lessee, the expectations of
Lessee, as set forth in this Section 2.01, are reasonable, and there are no present facts,
estimates and circumstances which would change the expectations contained therein.
(u) Lessee will, at its expense, maintain its legal existence in good standing 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 interest in the
Equipment and Lessor's rights and benefits under this Lease.
(v) 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 (1) 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
(2) 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 Equipment Costs for the Equipment will be used,
directly or indirectly, to make or finance loans to any person other than Lessee. Lessee
has not entered into any management or other service contract with respect to the use and
operation of the Equipment.
(w) Lessee has reviewed and will review Internal Revenue Service Form 8038-
G or 8038-GC to be filed in connection with the execution and delivery of each Lease, and
all of the information contained therein is, and will be, to the best of Lessee's knowledge,
true and correct, and Lessee will cause such Form 8038-G or 8038-GC to be filed not later
0 than 30 days after the execution and delivery of each Lease.
004.237866.6 _6
(x) Lessee reasonably expects that at least 85% of the proceeds of each Lease
• will be expended for the governmental purpose of the Lease within 3 years of the initial
date of the Lease term, and less than 50% of the proceeds of each Lease will be invested
in investment securities with a substantially guaranteed yield for 4 years or longer.
ARTICLE III.
Section 3.0.1. Lease of Equipment. Subject to the terms of this Master Lease, the Lessor
agrees to provide the funds specified as the "Acquisition Amount" in each Lease to acquire the
Equipment. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to
Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such
Lease and in accordance with the terms thereof. The latest date for any funding under this
Agreement is the Funding Expiration Date; provided that within 90 days prior to the then
applicable Funding Expiration Date, the Lessee may request in writing a one-year extension of the
Funding Expiration Date, which the Lessor may grant in its sole discretion after its credit review
and approval process. Lessee shall be limited to three such extensions.
Section 3.02. Continuation of the Lease Term. 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 terminates such Lease pursuant to Section 3.03 or
Section 9.01. 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.
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 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. Subject to Section 3.03,
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 hereunder,
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, to
have such portion of the budget or appropriation request approved and to exhaust all available
reviews and appeals in the event such portion of the budget or appropriation request is not
approved.
Section 3.03. Nonappropriation. Lessee is obligated only to pay such Rental Payments
under each Lease as may lawfully be made from funds budgeted and appropriated for that purpose
during Lessee's then current fiscal year. Should Lessee fail to budget, 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. Lessee agrees to deliver notice to Lessor of such
termination at least 90 days prior to the end of the then current Original Term or Renewal Term,
but failure to give such notice shall not extend the term beyond such Original Term or Renewal
-7-
nn4 237866.6
Term. If any Lease is terminated in accordance with this Section, Lessee agrees to peaceably
deliver the Equipment to Lessor at the location(s) to be specified by Lessor.
Section 3.04. Substitution. Lessee reserves the right to substitute Equipment of the
same quantity and general type with the approximate equal value, utility and remaining useful life
as the Equipment so replaced. Such substitution is subject to Lessor's prior written consent,
which consent shall not be unreasonably withheld, and shall be reflected in an amendment to the
appropriate Schedule.
Section 3.05. Conditions to Lessor's Performance Under Any Lease.
(a) As a prerequisite to the performance by Lessor of any of its obligations
pursuant to any Lease, Lessee shall deliver to Lessor the following:
(i) A fully completed Schedule, executed by Lessee;
(ii) An Acquisition Fund Agreement, executed by Lessee and the
Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount
directly to the Vendor (or to the Lessee in reimbursement for payments to the
Vendor) upon execution of the Lease;
(iii) A Certificate executed by the Clerk or Secretary or other
comparable officer of Lessee, in substantially the form attached hereto as Exhibit
® C, completed to the satisfaction of Lessor.
(iv) A certified copy of a resolution or other official action of Lessee's
governing body authorizing the execution and delivery of the Lease and
performance by Lessee of its obligations thereunder.
(v) An opinion of counsel to Lessee in substantially the form attached
hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor,
with the opinion in paragraph 6 to be provided by outside counsel to Lessee;
provided, however, that if the Acquisition Amount for a particular Lease is
$1,000,000 or less, the opinion in paragraph 6 of Exhibit D may be provided by
internal counsel to Lessee.
(vi) An executed Essential Use/Source of Funds Certificate in
substantially the form attached hereto as Exhibit E.
(vii) Evidence of insurance as required by Section 7.02 hereof.
(viii) All other closing documents reasonably required by Lessor,
including certificates, notices and similar instruments, in form satisfactory to
Lessor.
. (ix) A copy of a fully completed and executed Form 8038-G or 8038-
GC.
(b) In addition, the entering into by Lessor of any Lease shall be subject to (i)
annual review and approval by the Lessor's credit administration, (ii) no material adverse
004.237866.6 _g
change in the financial condition of Lessee since the date of this Agreement, (iii) no Event
• of Default having occurred, (iv) no event of non-appropriation with respect to any Lease
under this Agreement shall have occurred and (v) if no Acquisition Fund has been
established, the Equipment must be accepted by Lessee no later than the funding date.
(c) This Agreement is not a commitment by Lessor to enter into any Lease not
currently in existence, and nothing in this Agreement shall be construed to impose any
obligation upon Lessor to enter into any proposed Lease, it being understood that whether
Lessor enters into any proposed Lease shall be a decision solely within Lessor's
discretion.
(d) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount
for Equipment described in a Schedule to the Vendor (or to reimburse the Lessee for
payments to the Vendor) upon receipt of the documents described in Section 5.01; or if an
Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor
will deposit the Acquisition Amount for Equipment described in the Schedule with the
Acquisition Fund Custodian.
(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.
ARTICLE IV.
Section 4.0I. 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 dates and in
such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental
Payment not paid on the date such payment is due at the rate of 16% per annum or the maximum
amount permitted by law, whichever is less, from such date. Rental Payments consist of principal
and interest payments as more fully detailed on each Schedule, the interest on which begins to
accrue as of the Commencement Date for each such Schedule. The interest component of Rental
Payments shall be computed on the basis of a 360-day year of twelve 30-day months.
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 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. THE RENTAL PAYMENTS ARE TO BE
MADE ONLY FROM THE LESSEE'S LEGALLY AVAILABLE REVENUES
APPROPRIATED ON AN ANNUAL BASIS, AND NEITHER THE LESSEE, THE STATE,
004.237866.6 -9
NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED
TO PAY ANY SUMS DUE UNDER A LEASE FROM THE COMPELLED LEVY OF AD
VALOREM OR OTHER TAXES EXCEPT FROM THOSE LEGALLY AVAILABLE
REVENUES APPROPRIATED BY THE LESSEE ON AN ANNUAL BASIS, AND NEITHER
THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE LESSEE, THE
STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF ARE PLEDGED FOR
PAYMENT OF SUCH SUMS DUE UNDER A LEASE.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.02
and 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, after it has been accepted by Lessee, any defects,
malfunctions, breakdowns or infirmities in the equipment or any accident, condemnation or
unforeseen circumstances.
Section 4.05. Tax Covenant. 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, and will not
fail to take in a timely manner, any action necessary to maintain the exclusion from gross income
of the owner or owners thereof for federal income tax purposes, including, without limitation, the
calculation and payment of any rebate required to preserve such exclusion. Subject to Lessee's
right to terminate the Lease as provided herein, the foregoing covenant shall remain in effect until
the date on which all obligations of Lessee in fulfilling the above covenant under the Code have
been met.
Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the
interest component shall be at a taxable rate 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. Lessee will also pay any penalties and interest charged to Lessor by the
Internal Revenue Service in connection with an Event of Taxability.
For purposes of this section, "Event of Taxability" means a determination that the interest
component is includible for federal income tax purposes in the gross income of the owner thereof
due to Lessee's action or failure to take any action.
Section 4.07. Mandatory Prepayment. If the Lease Proceeds are deposited into an
Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition Period
and not applied to Equipment Costs, shall be applied by Lessor on the next Rental Payment date,
pro rata to the prepayment of the principal component of the outstanding Rental Payments due
under the applicable Schedule.
Section 4.08. Annual Fees to Sponsor. Lessee agrees to pay the Sponsor an annual fee
of 10 basis points of the outstanding loan amount for providing the lease purchase program
represented by this Agreement. The fee payable to the Sponsor may be financed as part of a
Lease or paid as an up-front payment based on the present value of the total fee for the life of the
004.237866.6 -10-
Lease. The fee amount will be remitted by Lessee to Lessor and Lessor shall provide all funds so
collected to the Sponsor within 30 days after receiving such funds from the Lessee.
Notwithstanding anything herein to the contrary, Lessor shall not in any event be responsible for
the payment of any fees payable to the Sponsor by Lessee except to the extent Lessor has
collected such fees from Lessee; and Lessor shall be required only to use its reasonable best
efforts to cause the Lessee to pay such fees to Lessor on behalf of the Sponsor.
ARTICLE V.
Section 5.01. Delivery, Installation and Acceptance of Equipment.
(a) Lessee shall order the Equipment, cause the Equipment to be delivered and
installed at the location specified in the Leases, and pay any and all delivery and
installation costs and other Equipment Costs in connection therewith. When the
Equipment listed in any Lease has been delivered and installed, Lessee shall promptly
accept such Equipment and evidence said acceptance by executing and delivering to Lessor
an acceptance certificate in the form attached hereto as Exhibit B (the "Acceptance
Certificate").
(b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such
Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee.
With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon
receipt of an Acceptance Certificate from Lessee, prepare a Schedule of Property and a
Rental Payment Schedule. Lessee shall execute and deliver such Schedules to Lessor
within 5 business days of receipt.
Section 5.02. Enjoyment of Equipment. Lessor shall provide Lessee with quiet use and
enjoyment of the Equipment during the Lease Term, and Lessee shall peaceably and quietly have,
hold and enjoy the Equipment during the Lease Term, without suit, trouble or hindrance from
Lessor, except as otherwise expressly set forth in the related Lease. Lessor shall not interfere
with such quiet use and enjoyment during the Lease Term so long as Lessee is not in default
under the related Lease.
Section 5.03. Location and Inspection of the Equipment. Once installed, Lessee will not
move any item of the Equipment from the location specified for it in the Lease on which such
item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor
shall have the right at all reasonable times during regular business hours to enter into and upon
the property of Lessee for the purpose of inspecting the Equipment. Lessee shall promptly
provide any information about the Equipment or a Lease that may be reasonably requested by
Lessor.
Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use,
operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or
in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits
and licenses, if any, necessary for the 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; 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 (including the reversionary
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004.237866.6
interest) of Lessor in and to the Equipment or its interest or rights under the Lease.
• Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and
working order, in accordance with manufacturer's recommendations. Lessor shall have no
responsibility to maintain, repair or make improvements or additions to the Equipment. If
commercially available, Lessee will maintain in force a standard maintenance contract with the
manufacturer of the Equipment, and upon request will provide Lessor with a copy of that
contract. Upon the prior written consent of Lessor, which consent shall not be unreasonably
withheld, Lessee may use another third party maintenance provider provided the maintenance
contract between Lessee and such third party requires the third party to maintain the Equipment at
the manufacturer's then current release, revision and engineering change levels, including
hardware, software enhancements and microcode levels. 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
furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall
thereupon become subject to the interest of Lessor.
ARTICLE VI.
® Section 6.01. Title to the Equipment. During each Lease Term, and so long as the
Lessee is not in default under Article XI hereof, all right, title and interest in and to each item of
the Equipment 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 or upon
termination of a Lease pursuant to Section 3.03 hereof, unless the Lessee has elected not to return
the Equipment and to purchase it pursuant to Section 9.01(a), full and unencumbered legal title to
the Equipment shall be conveyed by Lessee to Lessor within 10 days of such occurrence or
termination, and upon such conveyance, Lessee shall have no further interest therein (except to
the extent provided in Section 11.02(c) and Section 11.04). 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 conveyance 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 11.02. Upon purchase of the Equipment under a
Lease by Lessee pursuant to Section 9.01, Lessor's interest in the Equipment shall terminate, and
Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the
termination of Lessor's interest in Equipment subject to the related Lease.
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004.237866.6
Section 6.02. Personal Property. The Equipment is 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. Upon the request of Lessor,
Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party
having an interest in any such real estate or building.
ARTICLE VII.
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee
shall keep the Equipment free of all levies, liens, and encumbrances except those created.by each
Lease. The parties to this Agreement contemplate that the Equipment will be used for a
governmental, municipal or public purpose or function 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 each
Lease Term. In the event that the installation of any component of any item of Equipment could
be deemed to require a performance and payment bond under Section 255.05, Florida Statutes, or
be deemed subject to the mechanic's lien provisions of Chapter 713, Florida Statutes, or any
successor statute to each, as they may be amended from time to time, Lessee shall require such
bonds, post such notices and do all other things provided for under such laws in order to keep the
Equipment free of and exempt from all liens.
Section 7.02. Insurance. Lessee shall during each Lease Term maintain or cause to be
maintained (a) casualty insurance (with such deductibles as Lessor may approve) naming the
Lessor and its assigns as additional insured and loss payee and insuring the Equipment against loss
or damage by fire and all other risks covered by the standard extended coverage endorsement then
in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal
to the then applicable Purchase Price of the Equipment; (b) liability insurance that protects Lessor
from liability in all events in form and amount satisfactory to Lessor; and (c) worker's
compensation coverage as required by the laws of the State; provided that, with Lessor's prior
written consent, Lessee may self-insure against the risks described in clause (a). Lessee shall
furnish to Lessor evidence of such insurance or self-insurance coverage throughout each Lease
Term. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way
that would affect the interests of Lessor without first giving written notice thereof to Lessor at
least 30 days in advance of such cancellation or modification. Except to the extent self-insurance
is permitted, all insurance policies required by this Section 7.02 shall be taken out and maintained
with responsible insurance companies qualified to do business in the State and shall contain a
provision that the insurer shall not cancel or revise coverage thereunder without giving written
notice to the insured parties at least 30 days before the cancellation or revision becomes effective.
Section 7.03. Advances. In the event Lessee shall fail to keep the Equipment in good
repair and working order, Lessor may, but shall be under no obligation to, maintain and repair
the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute
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004.237866.6
additional rent for the then current Original Term or Renewal Term and Lessee covenants and
agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until
paid at the rate of 16% per annum or the maximum amount permitted by law, whichever is less.
ARTICLE VIII.
Section 8.0.1. Damage, Destruction and Condemnation. Unless the Lessee shall have
exercised its option to purchase the Equipment by making payment of the Purchase Price as
provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the
Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other
casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken
under the exercise or threat of the power of eminent domain by any governmental body or by any
person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor 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. Any balance of the Net Proceeds remaining after such work has
been completed shall be paid to Lessee.
If the Lessee elects to replace any item of the Equipment (the "Replaced Equipment")
pursuant to this Section, the replacement equipment (the "Replacement Equipment") shall be of
similar type, utility and condition to the Replaced Equipment and shall be of equal or greater
value than the Replaced Equipment. The Lessee shall represent, warrant and covenant to Lessor
that each item of Replacement Equipment is free and clear of all claims, liens, security interests
• and encumbrances, excepting only those liens created by or through the Lessor, and shall provide
to the Lessor any and all documents as the Lessor may reasonably request in connection with the
replacement, including, but not limited to, documentation in form and substance satisfactory to
Lessor evidencing Lessor's interest in the Replacement Equipment. The Lessor and the Lessee
hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this
paragraph shall constitute "Equipment" for purposes of this Master Equipment Lease 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
the Purchase Option with respect to the damaged equipment.
For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining
from the gross proceeds of any insurance claim or condemnation award or sale under threat of
condemnation after deducting all expenses, including attorneys' fees, incurred in the collection
thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay
in full the cost of any replacement, 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 the Lessor the amount of the then applicable Purchase Price for the
Equipment, and, upon such payment, the applicable Lease Term shall terminate and the Lessor's
. interest in the Equipment shall terminate as provided in Article VI hereof. The amount of the Net
Proceeds, if any, remaining after completing such repair, restoration, modification or
improvement or after purchasing such Equipment and such other Equipment shall be retained by
Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled
004.237866.6 -14-
to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the
• amounts payable under Article IV.
Section 8.03. 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 the Equipment, or any other warranty or representation,
express or implied, with respect thereto and, as to the Lessor, the Lessee's acquisition of the
Equipment shall be on an "as is" basis. In no event shall Lessor be liable for any incidental,
indirect, special or consequential damage in connection with or arising out of this Agreement, any
Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item,
product or service provided for in this Agreement or any Lease.
Section 8.04. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent
and attorney-in-fact during each Lease Term, so long as Lessee shall not be in default under the
related Lease, to assert from time to time whatever claims and rights (including without limitation
warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy
for the breach of such warranty, indemnification or representation shall be against Vendor 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 payments under a 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 by Lessor of the Equipment.
• ARTICLE IX.
Section 9.01. Purchase Option. Lessee shall have the option to purchase all of the
Equipment listed in a Lease, upon giving written notice to Lessor at least 30, but not more than
120, days before the date of purchase, at the following times and upon the following terms:
(a) From and after the date specified in the related Schedule (the "Purchase
Option Commencement Date"), on the Rental Payment dates specified in each Lease, upon
payment in full of the Rental Payments then due under such Lease plus the then applicable
Purchase Price, as set forth in the applicable 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 Purchase Option upon payment in full to Lessor of the
Rental Payments then due under such Lease plus the then applicable Purchase Price.
Lessee shall have the option to purchase all of the Equipment listed in a Lease upon the
expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other
amounts then owing under the Lease, and the payment of$1.00 to Lessor.
ARTICLE X.
• Section .10.01. Assignment by Lessor. 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 all
proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees
or subassignees by Lessor, without the necessity of obtaining the consent of Lessee; provided,
004.237866.6 -15-
however, that any such assignment, transfer or conveyance to a trustee for the benefit of owners
of certificates of participation shall be made in a manner that conforms to any applicable State
law. Nothing in this Section 10.01 shall be construed, however, to prevent Lessor from executing
any such assignment, transfer or conveyance that does not involve funding through the use of
certificates of participation within the meaning of applicable State law, including any such
assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust,
interests in which are offered and sold in a private placement or limited offering only to investors
whom Lessor reasonably believes are qualified institutional buyers or accredited investors within
the meaning of the applicable federal securities law; provided further, however, that in any event,
Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with
respect to matters arising under a Lease with or to more than one individual or entity. No
assignment, transfer or conveyance permitted by this Section 10.01 shall be effective until Lessee
shall have received a written notice of assignment that discloses the name and address of each
such assignee; provided, however, that if such assignment is made to a bank or trust company as
trustee or paying agent for owners of certificates of participation, trust certificates or partnership
interests with respect to the Rental Payments payable under a Lease, it shall thereafter be
sufficient that Lessee receives notice of the name and address of the bank or trust company as
trustee or paying agent. During the term of 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 designated in such register. Lessee shall not have the
right to and shall not assert against any assignee any claim, counterclaim or other right Lessee
• may have against Lessor or the Vendor. Assignments in part may include without limitation
assignment of all of Lessor's rights in, to and under the Lease related to the Equipment listed in a
particular Lease. 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.
Section 10.02. 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 may be assigned or
encumbered by Lessee without prior written consent of Lessor.
ARTICLE XI.
Section 11.01. Events of Default Defined. Any of the following events shall constitute an
"Event of Default" under a Lease, subject to Section 3.03:
(a) Failure by Lessee to pay any Rental Payment or other payment required to
be paid under any Lease at the time specified herein;
(b) Failure by Lessee to observe and perform any covenant, condition or
agreement 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
004.237866.6 -16-
corrected;
• (c) Any statement, representation or warranty made by Lessee in or pursuant to
any Lease,or its execution, delivery or performance shall prove to have been false,
incorrect, misleading, or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money or
receiving credit under which the Lessee may be obligated as borrower, if such default
consists of(i) the failure to pay any indebtedness of$50,000 or more when due or (ii) the
failure to perform any other obligation thereunder that gives the holder of the indebtedness
the right to accelerate the indebtedness if such indebtedness is $50,000 or more; provided,
however, that if the Lessee defaults under any other agreement for borrowing money or
receiving credit and the default consists of(i) the failure to pay any indebtedness when due
or (ii) the failure to perform any other obligation thereunder that gives the holder of the
indebtedness the right to accelerate the indebtedness, the Lessee shall notify the Lessor in
writing of its failure to pay such indebtedness or perform such obligation.
(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, (iv) have an order for
relief entered against it under applicable federal bankruptcy law, or (v) 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;
(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
or 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; or
(g) Lessee shall consolidate, merge or otherwise combine with any other entity, or
sell, lease or dispose of all or a substantial portion of its assets.
Section 11.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall
have the right, at its sole option without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor may by notice in writing to Lessee terminate the Lease, whereupon all
rights of Lessee to use the Equipment shall cease and terminate;
(b) By written notice to Lessee, Lessor may demand that Lessee pay, as liquidated
damages for loss of a bargain and not as a penalty, all unpaid 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;
(c) With or without terminating the Lease Term under such Lease, Lessor may
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004.237866.6
request that Lessee at Lessee's expense promptly return any or all of such Equipment to
the possession of Lessor at such place within the United States as Lessor shall specify. In
such event, Lessor shall use its best efforts to sell or lease such Equipment or, for the
account of Lessee, sublease such Equipment. If Lessee returns the Equipment and Lessor
sells, leases or otherwise disposes of any or.all of the Equipment, Lessor shall apply the
proceeds of such sale, lease or other disposition as described in Section 11.04. Lessee
shall not be liable for any deficiency after sale, lease or other disposition of the
Equipment. If Lessee elects not to return the Equipment, Lessor is entitled to payment of
unpaid Rental Payments through the date of Lessor's request to return the Equipment plus
the then applicable Purchase Price, as set forth in the applicable Schedule for such
Equipment. 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 the Equipment listed
therein; and
(d) Lessor may take whatever action at law or in equity may appear necessary or
desirable to enforce its rights under such Lease.
Section 11.03. 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 .71.04. Application of Moneys. Any net proceeds from the exercise of any
remedy under this Agreement shall be applied in the following order of priority: FIRST, to pay
all of Lessor's costs, charges and expenses incurred in taking, holding, repairing, selling, leasing
or otherwise disposing of Equipment, then SECOND, to the extent not previously paid by Lessee,
to pay Lessor all Rental Payments under the applicable Lease through the termination date, then
THIRD, to pay the Purchase Price applicable as of the end of the then current Original Term or
Renewal Term, as set forth in the Schedule for such Equipment, then FOURTH to pay any
remainder to Lessee; provided that 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 application of moneys pro rata among the Leases or Equipment, as
the case may be.
ARTICLE XII.
Section 12.01. No Fees Paid by Lessor. Lessor hereby certifies that it has not paid or has
not promised to pay, directly or indirectly, a fee to any person not regularly employed by Lessor
to act as an intermediary between Lessee and Lessor for the purpose of influencing any
transaction in connection with this Agreement or any Lease.
Section 11.02. Sponsor Not Liable. Sponsor's responsibilities under this Agreement are
limited to sponsorship of the Master Lease/Purchase program and facilitation of communication
between Lessor and Lessee in connection with the initial execution of this Agreement. Sponsor
004.237866.6 -1 g
shall have no ongoing responsibilities under this Agreement or with respect to any Lease, and
0 shall have no liability for actions taken by any party under this Agreement.
Section .12.03. 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 12.04. Release and Indemnification. To the extent permitted.by law, but only
from legally available funds, Lessee shall indemnify, protect, hold harmless, save and keep
harmless Lessor from and against any and all liability, obligation, loss, claim, tax and damage
whatsoever, regardless of cause thereof, and all expenses in connection therewith (including,
without limitation, reasonable counsel fees and expenses, penalties connected therewith imposed
on interest received) arising out of or as a result of: (a) the entering into of this Agreement or any
Lease, (b) the ownership of any item of the Equipment, (c) the ordering, acquisition, use,
operation, condition, purchase, delivery, rejection, storage or return of any item of the
Equipment, (d) any accident in connection with the operation, use, condition, possession, storage
or return of any item of the Equipment resulting in damage to property or injury to or death to
any person, and/or (e) the breach of any covenant in a Lease or any material misrepresentation
® contained in a Lease. The indemnification arising under this paragraph shall continue in full force
and effect notwithstanding the full payment of all obligations under all Leases or the termination
of the Lease Term under all Leases for any reason.
Section 12.05. 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 12.06. 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 hereof. Any provisions in this Lease which are in
conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to
conform thereto.
Section .12.07. Amendments, Changes and Modifications. Each Lease may only be
amended by Lessor and Lessee in writing with written notice to Sponsor containing a copy of any
such amendments.
Section 12.08. Execution in Counterparts. 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.
Section .12.09. Applicable Law. Each Lease shall be governed by and construed in
accordance with the laws of the State.
-19-
004.237866.6
Section 12.10. 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.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed
in their names by their duly authorized representatives as of the date first above written.
Lessor: Lessee:
Banc of America Leasing & Capital, LLC City of Dania Beach
2059 Northlake Parkway, 4th Floor 100 W. Dania Beach Boulevard
Tucker, Georgia 30084 Dania Beach, Florida 33004
Attention: Contract Administration Attention: City Clerk
By: By :-
Title: !r,PWA Title``
" (Seal)
1� r�Fli �''„'`
Attest:
By:
Title:
Sponsor:
Florida-Leavve of Cities, Inc.
� a
By
004.237866.6 -20
Exhibit A
Schedule of Property No. 001
P y
Re: Master Equipment Lease/Purchase Agreement, dated as of January 16, 2003,
between Banc of America Leasing & Capital, LLC, as Lessor, and City of Dania
Beach, 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 "Master Equipment Lease").
2. Equipment. The following items of Equipment are hereby included under this
Schedule of the Master Equipment Lease.
Quantity Description Serial No. Model No. Location
Computer Equipment: TBD TBD Dania Beach, FL
28 GX260S (Low-end Workstations),
3 Dimensions 8250 (High-end Workstations),
3 Inspiron 4150 Laptops,
1 Inspiron 8200 Laptops, and
® 1 PowerVault 725N - NAS
3. Payment Schedule.
Rental Payments. The Rental Payments shall be in such amounts and payable on
such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-1.
Rental Payments shall commence on the date on which the Equipment listed in this Schedule is
accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit
B to the Master Equipment Lease or the date on which sufficient moneys to purchase the
Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is
earlier.
Purchase Price Schedule. The Purchase Price on each Rental Payment date for the
Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in
the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The
Purchase Price is in addition to 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 as follows:
(a) That its representations, warranties and covenants set forth in the Master
Equipment Lease are true and correct as though made on the date of commencement of Rental
.
Payments on this Schedule. Lessee further represents and warrants that no material adverse
change in Lessee's financial condition has occurred since the date of the Master Equipment Lease.
004.237866.6 A-1
5. The Lease. The terms and provisions of the Master Equipment Lease (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. The maximum Lease
Term, subject to quarterly appropriation, is thirty-six (36) months.
6. Acquisition Amount. The Acquisition Amount for the Equipment described in this
Schedule to be paid to the Vendor is $54,364.97.
1 CS
Dated: ,
Lessor: Lessee:
Banc of America Leasing & Capital, LLC City of Dania Beach
2059 Northlake Parkway, 4th Floor 100 W. Dania Beach Boulevard
Tucker, Georgia 30084 Dania Beach, Florida 33004
Attention: Contract Administration Attention: City Clerk
By: 7 By: - -�
Title sOICHA L .Title: Ui"'/ /�,%�j1, '> r i
�'� � . F~ _SiD F-.NaT (Seal)
Attest:
Title: �' '1
•
004.237866.6 A-2
Exhibit A-1
Rental Payment Schedule
Rental Rental Payment Principal
Payment Date Amount Interest Portion Portion Purchase Price*
Feb-04-03 4,722.07 4,722.07 49,642.90
May-04-03 4,722.07 378.53 4,343.55 45,299.35
Aug-04-03 4,722.07 345.41 4,376.67 40,922.68
Nov-04-03 4,722.07 312.03 4,410.04 36,512.65
Feb-04-04 4,722.07 278.41 4,443.66 32,068.98
May-04-04 4,722.07 244.53 4,477.55 27,591.43
Aug-04-04 4,722.07 210.38 4,511.69 23,079.74
Nov-04-04 4,722.07 175.98 4,546.09 18,533.65
Feb-04-05 4,722.07 141.32 4,580.75 13,952.90
May-04-05 4,722.07 106.39 4,615.68 9,337.22
Aug-04-05 4,722.07 71.20 4,650.88 4,686.34
Nov-04-05 4,722.07 35.73 4,686.34 0.00
Feb-04-06 0.00 0.00 0.00 0.00
® *The Purchase Option Commencement Date shall be February 4, 2003. The Purchase Price
payable (i) on any Rental Payment date is the amount equal to the aggregate principal portion of
the remaining Rental Payments after payment of the Rental Payment payable on such Rental
Payment Date, and (ii) on any date other than a Rental Payment date is the amount equal to the
aggregate principal portion of the remaining Rental Payments plus an amount equal to the interest
portion of such Rental Payments accrued thereon to such date.
For purposes of this Lease, "Taxable Rate," with respect to the interest component of
Rental Payments, means an annual rate of interest equal to 4.7787
Lessee:
City of Dania Beach
By:
Tjtle:
After payment of the applicable Purchase Price, Lessee will own the related Equipment, free and
clear of any obligations under the related Lease.
•
004.237866.6 A-3
Exhibit B
0 Acceptance Certificate
Banc of America Leasing & Capital, LLC
2059 Northlake Parkway, 4th Floor
Tucker, Georgia 30084
Re: Schedule of Property No. 001, dated co to Master
Equipment Lease/Purchase Agreement, dated as of January 16,
2003, between Banc of America Leasing & Capital, LLC, as
Lessor, and City of Dania Beach, as Lessee.
Ladies and Gentlemen:
In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"),
the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows:
1 All of the Equipment (as such term is defined in the Agreement) listed in the
above-referenced Schedule of Property (the "Schedule") has been delivered, installed and
accepted on the date 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. No event or condition that constitutes, or with notice or lapse of time, or both,
would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof.
Date: >;
Lessee
City of Dania Beach
[Seal] Title:
004.237866.6 B-1
Exhibit C
Clerk Certificate
The undersigned, a duly elected and acting Clerk of City of Dania Beach (the
"Lessee") certifies as follows:
A. The following listed persons are duly elected and acting officials of the Lessee (the
"Officials") in the capacity set forth opposite their respective names below and that the signatures
set opposite thereto are the genuine signatures of such persons;
B. The Officials are duly authorized, on behalf of the Lessee, to negotiate, execute and
deliver the Master Equipment Lease/Purchase Agreement dated as of January 16, 2003 and the
Schedule(s) thereunder and all future Schedule(s) (the "Agreements") by and between the City of
Dania Beach and Banc of America Leasing & Capital, LLC and these Agreements are binding and
authorized Agreements of the Lessee, enforceable in all respects in accordance with their terms.
Name of Official Title Si nature
Robert H . Chunn, Jr. Mayor ?
Patricia Flury Vice Mayor —_� ' -4-
John Bertino Commissioner
• C.K. McElyea Commissioner '_Robert Mikes Commissioner '
Dated: f 30 , By:
Title:
(The signer of this Certificate cannot be listed above as authorized to execute the
Agreements.)
s
004.237866.6 C-1
WEISS SEROTA HELFMAN
PASTORIZA & GUEDES, P.A.
• ATTORNEYS AT LAW
NINA L. BONISKE BROWARD OFFICE JOHN R. HERIN,JR.
JAMIE ALAN COLE 3107 STIRLING ROAD, SUITE 300 CHRISTOPHER F. KURTZ
EDWARD G. GUEDES FORT LAUDERDALE, FLORIDA 33312 PETER A. LICHTMAN
STEPHEN J. HELFMAN KAREN LIEBERMAN*
GILBERTO PASTORIZA MATTHEW H. MANDEL
JOSEPH H. SEROTA JAMIE ALAN COLE BERNARD S. MANDLER'
RICHARD JAY WEISS MANAGING SHARE HOLDER-B ROWARD OFFICE ALEXANDER L. PALENZUELA-MAURI
DAVID M. WOLPIN ANTHONY L. RECIO
STEVEN W. ZELKOWITZ GARY I. RESNICK*
TELEPHONE (954) 763-4242 NANCY RUBIN'
TELECOPIER (954) 764-7770 DANA S. SCHWARTZ
THOMAS J. ANSBRO' WWW.WSH-FLALAW.COM GAIL D. SEROTA'
LILLIAN ARANGO DE LA HOZ' ARI C. SHAPIRO
ALISON S. BIELER MIAMI-DADE OFFICE JEFFREY P. SHEFFEL
MITCHELL A. BIERMAN 2665 SOUTH BAYSHORE DRIVE • SUITE 420 FRANCINE THOMAS STEELMAN
MITCHELL J. BURNSTEIN MIAMI, FLORIDA 33133 NANCY E. STROUD'
ELAINE M. COHEN TELEPHONE (305) 854-0800 • TELECOPIER (305)854-2323 SUSAN L. TREVARTHEN
DOUGLAS R. GONZALES CARMEN I. TUGENDER
GERALD T. HEFFERNAN* 'OF COUNSEL DANIEL A. WEISS'
February 3, 2003
Banc of America Leasing & Capital, LLC
2059 Northlake Parkway, 4th Floor
Tucker, Georgia 30084
® Re: Schedule of Property No. 001 to Master Equipment Lease/Purchase
Agreement, Dated as of January 16, 2003, Between Banc of America
Leasing & Capital, LLC, as Lessor, and City of Dania Beach, as
Lessee
Ladies and Gentlemen:
As legal counsel to the City of Dania Beach (the "Lessee"), I have examined (a) an executed
counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of January 16,
2003, and Exhibits thereto by and between Banc of America Leasing & Capital, LLC (the "Lessor")
and the Lessee (the "Agreement"), and an executed counterpart of Schedule of Property No. 001,
dated January 31, 2003, by and between Lessor and Lessee (the "Schedule"), which, among other
things, provides for the lease of certain property listed in the Schedule (the "Equipment"), (b) an
executed counterpart of the ordinances or resolutions of Lessee which, among other things,
authorizes Lessee to execute the Agreement and the Schedule and (c) such other opinions,
documents and matters of law as I have deemed necessary in connection with the following
opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by
reference together with the Rental Payment Schedule attached to the Schedule are herein referred to
collectively as the "Lease".
Based on the foregoing, I am of the following opinions:
1. The Lessee is a public body corporate and politic, and it is a duly organized
municipality duly created and existing under the laws of the State of Florida, and it has a substantial
amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain,
Banc of America
February 3, 2003
Page 2 of Z
and (c) police power and is a political subdivision of the state within the meaning of Section 103(c)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the obligations of Lessee
under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of
the Code, notwithstanding Section 103(b) of the Code.
2. Lessee has the requisite power and authority to lease and acquire the Equipment and
to execute and deliver the Lease and to perform its obligations under the Lease;
3. The Lease has been duly authorized, approved, executed and delivered by and on
behalf of Lessee and the Lease is a valid and binding obligation of Lessee enforceable in
accordance with its terns;
4. The authorization, approval, execution and delivery of the Lease 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 Lease or the interest of Lessor or its assigns,
as the case may be, in the Equipment thereunder; and
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 such interest is not a specific item for purposes of the federal
individual or corporate alternative minimum taxes.
All capitalized terms herein shall have the same meanings as in the Lease unless otherwise
provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the
tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this
opinion.
Very truly yours,
Thomas J. Ansbro, Esq.
City Attorney for
City of Dania Beach, Florida
566.028
TJA:sIw
•
W E I S S S E R O T A H E L F M A N
PASTORIZA & GUEDES, P.A.
Exhibit E
• Essential Use/Source of Funds Certificate
Banc of America Leasing & Capital, LLC
2059 Northlake Parkway, 4th Floor
Tucker, Georgia 30084
Re: Master Equipment Lease/Purchase Agreement dated January 16, 2003,
Schedule of Property No.001 dated J,.,
This certificate confirms and affirms that the Equipment described in the Agreement
referenced above is essential to the governmental, municipal or public purposes or functions of
the Lessee or to the services Lessee provides its citizens. Further, Lessee has an immediate need
for, and expects to make immediate use of, substantially all such Equipment, which need is not
temporary or expected to diminish in the foreseeable future. Such Equipment will be used by
Lessee only for the purpose of performing one or more of Lessee's governmental or proprietary
functions permitted under the Act (as defined in the Agreement referenced above).
Lessee expects and anticipates adequate funds to be available for all future payments or
rent due after the current budgetary period, subject to annual appropriation.
City of Dania Beach
® ("Lessee")
By:,,"
Title: ICJ
Please return this certificate with complete copies of your two most recent audited
financial statements so we may begin our credit review process. Thank you.
004.237866.6 E-1