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HomeMy WebLinkAboutResolution - 2004-R0584 - Contract For Master Municipal Lease_Purchase Agreement - Frost Leasing - 12_16_2004Resolution No. 2004—RO584 December 16, 2004 Item No. 25 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Contract for Master Municipal Lease/Purchase Agreement, by and between the City of Lubbock and Frost Leasing of Addison, Texas, and related documents. Said Contract is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this ATTEST: Reb ca Garza, City Secretary APPROVED AS TO CONTENT: 16th day of c Victor Kilr4anflurchasing Manager APPROVED AS TO FORM: City Attorney ccdocs/resolutions/Contract-Frost Leasing December 15, 2004 December .2004. Resolution No. 2004-RO584 December 16, 2004 MASTER LEASE AGREEMENT Item No. 25 THIS MASTER LEASE AGREEMENT is made, as of December 16, 2004, between Frost Leasing ("Lessor") and the City of Lubbock, Texas ("City or Lessee"). The City desires to enter into arrangements for the lease purchase of various equipment. Lessor desires to provide for the financing of such equipment by leasing such equipment to the City and the City desires to lease such equipment from the Lessor. The City and the Lessor, for the consideration specified, agree as follows: I — DEFINITIONS 1.1 Acquisition Period: means the period commencing upon execution of this Agreement and continuing through September 2005 or until the date when the aggregate amount of payments made by the Lessor pursuant to Section 4.2 equals $7 million, whichever is earlier, unless the Acquisition Period is extended as provided in Section 3.2. All Appendices received by the Lessor during the Acquisition Period up to the limits of this Agreement shall be governed by the terms and conditions of this Agreement. The City reserves the right to extend the Acquisition Period for two (2) consecutive twelve-month periods. 1.2 Agreement: means this Agreement as the same may be amended and supplemented from time to time in accordance with its terms. 1.3 Appendix: means each Equipment List and Payment Schedule submitted by the Lessee substantially in the form attached hereto. 1.4 Contract Documents: consist of this Agreement, Exhibit A (Statement of Essential Use), Exhibit B (Statement of Insurance Coverages), Exhibit C (Certificate of Counsel), Exhibit "D" (Form Appendix) and each Appendix consisting of Part 1 (Equipment List) and Part 2 (Payment Schedule), and Invitation to Bid Number 04-178-VK. Where the terms and provisions of the Agreement vary from the terms and provisions of the other Contract Documents, the terms and provisions of the Agreement shall prevail over the other Contract Documents. 1.5 Equipment: means the items of new or reconditioned personal property leased to Lessee for a term not exceeding the useful life of the item pursuant to this Agreement and listed in an applicable Appendix. 1.6 Financing Request Date: means the date on which an Appendix is mailed via overnight delivery to the Lessor. 1.7 Index: The most recent weekly average of the current annualized interest rate on three, five, seven or ten year maturities of Treasury Note adjusted to constant maturities as reported by the Federal Reserve (H-15) in the calendar week of the Financing Request Date. Interest will be calculated on the basis of a year with 360 days consisting of twelve 30-day months. Financing for equipment on a three-year term will use the three-year Treasury Note as the relevant index. Financing for equipment on a five-year term will use the five-year Treasury Note as the relevant index. Financing for equipment on a seven-year term will use the seven-year Treasury Note as the relevant index. Financing for equipment on a ten-year term will use the ten-year Treasury Note as the relevant index. The rate of interest to be charged for each equipment purchase, or groups of equipment purchases, will be determined and fixed as of the Financing Request Date. 1.8 Lease Payment: means a payment made by the City to the Lessor as specified herein. 1.9 Lessor Payment Date: means each date on which a payment is made by the Lessor pursuant to Section 4.2. 1.10 Payment Schedule: means the document substantially in the form of Part 2 of the Appendix establishing the repayment schedule for an Appendix. 1.11 Percentage Bid: means the percentage bid by the Lessor that is to be applied to the Index in the calculation of the Lease Payments in an Appendix. 1.12 Term or Term of this Agreement: means the period beginning with the execution of the Agreement by both parties and ending on the date when the final Lease Payment has been paid. II — GENERAL 2.1 The purpose of this Agreement is to provide for the terms of the lease of the Equipment by the Lessor to the City. Payment obligations of the City with respect to Equipment acquired under this Agreement begin when the City executes an Appendix, as set forth on Exhibit "D" attached hereto. . 2.2 The obligation of the Lessee to make Lease Payments under this Agreement will be subject to annual appropriation by the City Council. NEITHER THE CITY'S FULL FAITH AND CREDIT NOR ITS TAXING POWER IS PLEDGED BY VIRTUE OF THIS AGREEMENT. THIS OBLIGATION SHALL NOT CONSTITUTE DEBT OF THE CITY WITHIN THE MEANING OF THE CONSTITUTION AND LAWS OF THE STATE OF TEXAS. 2.3 The Lessor agrees to lease to the City the Equipment described in the Part I of each properly executed Appendix (Equipment List) for the consideration indicated in Part 2 of the Appendix (Payment Schedule) and the City agrees to lease such Equipment from the Lessor. The City shall be entitled to retain possession of the Equipment as long as the City is not in default under this Agreement. 2.4 No Equipment items shall be acquired on behalf of Lessee under this Agreement by the Lessor or will be paid for by Lessor, until the Lessor has been provided an Appendix signed by the City. III — TERM 3.1 The term of each Appendix entered into pursuant to this Agreement shall be for a period of three (3), five (5), seven (7) or ten (10) years, as determined by the City, and as shown in each applicable Appendix, beginning on the applicable Lessor Payment Date of the applicable Appendix and will be terminated, except as otherwise provided in this Agreement, on the last payment date described in Part 2 of the applicable Appendix. 3.2 The term of the Acquisition Period may be extended for two additional periods of twelve (12) months each beyond the initial term of the Acquisition Period. Such extension or extensions will be upon mutual agreement of the City and the Lessor, and will be accomplished by a document extending the Acquisition Period, duly executed by the City and Lessor prior to September 30, 2005, and if mutually agreed to further extend the Acquisition Period one additional annual period, on or before September 30, 2006. IV — PAYMENT 4.1 Amount and Times of Payment by Lessee: The total purchase price for Equipment indicated in each Appendix shall be financed on behalf of the City by the Lessor and the City shall pay the Lessor the Lease Payments in the amounts and on the dates indicated in each Appendix. The interest component of the initial Lease Payment with respect to each Appendix shall include accrued interest from the date the Lessor advances funds to pay the vendor or seller of Equipment being acquired. All interest payments including payments for partial months and accrued interest shall be calculated on the basis of a year with 360 days consisting of twelve 30-day months. A fixed rate of interest will be established by executing of an Appendix as set forth on the Appendix, _ Part _2. Using the terms of the Appendix, the rate will be determined by multiplying the Percentage Bid times the applicable Index published in the week of the Financing Request Date for the term. The net effective interest rate may not exceed the net effective interest rate of which public securities may be issued in accordance with Chapter 1204 of the Texas Government Code. In the event the net effective interest rate does so exceed such rate, the net effective interest rate in such instance, for all purposes hereof, shall be the net effective interest rate at which public securities may be issued in accordance with Chapter 1204 of the Texas Government Code. Invoices shall be submitted by the Lessor directly to the City at the City's address shown on the Appendix not less than 15 days before the due date of each Lease Payment. All invoices shall show the Appendix number and the federal employer identification number of the Lessor. Subject to Section 4.3, all Lease Payments will be made upon city's receipt of an accurate invoice meeting the requirements of this Agreement. If paid by wire transfer, the date of the City's wire transfer shall be deemed to be the date of payment by the City to the Lessor. Subject to Section 4.3, there will be no abatement or reduction of Lease Payments by the Lessee for any reason, including but not limited to, any defense, recoupment, set off, counterclaim, or any claim arising out of or related to any defects, damages, malfunctions, breakdowns or insuitability of the Equipment. 4.2 Amount and Times of PWnenent by Lessor: At the delivery of the Equipment, or any part thereof, City shall inspect such Equipment for compliance with specifications and promptly notify the Lessor of the receipt of such Equipment and whether it is acceptable to the City. Payment by Lessor must be made to the vendor of the Equipment at the direction of the City within ten (10) business days of the Financing Request Date of an Appendix, as evidenced in writing and receipt of the documents described in Section 5.5(a). The amount of payment will be stated in the Appendix covering such Equipment. The date of the Lessor's wire transfer shall be deemed to be the Lessor Payment Date. 4.3 Appropriation of Payments: Notwithstanding any provision in this Agreement to the contrary, all funds for payment by the Lessee under this Agreement, including all Lease Payments, are subject to the availability of an annual appropriation for this purpose by the City Council of the Lessee. While recognizing that it is not empowered to make any binding commitment beyond the current fiscal year of the Lessee, it is the current intention of the Lessee to make sufficient annual appropriations during the Term of this Agreement to pay all Lease Payments and other amounts required to be paid by the Lessee under this Agreement. Failure to make any payments hereunder as a result of non -appropriation shall not be deemed to be an Event of Default, but such failure shall entitle the Lessor to exercise the remedies set forth in Section 4.6. 4.4 Events of Default by Lessee: Any of the following events shall constitute an Event of Default by the Lessee under this Agreement, provided that no such default shall constitute an Event of Default unless it is not cured within thirty (30) days after the receipt by the Lessee of written notice, as provided herein, thereof from the Lessor to the Lessee: (a) The nonpayment of any Lease Payment required hereunder, or the default by the Lessee in the performance of. any of the obligations, covenants, terms and provisions contained or referred to in this Agreement; provided, however, that failure to make any payments as a result of nonappropriation by the City Council shall not constitute an Event of Default but shall entitle the Lessor to exercise the remedies set forth in Section 4.6. (b) Any warranty, representation, or statement of Lessee contained in this Agreement proves to have been false in any material respect when made or furnished. (c) Loss, theft, substantial damage, destruction, except as provided in Section 5.7, sale or encumbrance, subject to Section 5.4 and Section 7.1, of or to any of the Equipment, or the making on any levy, seizure or attachment thereof or thereon provided that the Lessee is not taking reasonable steps to replace, repair, or remove any encumbrances from such Equipment. 4.5 Events of Default by Lessor: Any of the following events shall constitute an Event of Default by Lessor under this Agreement: (a) Late payment by Lessor for Equipment to be acquired following timely notification and documentation from the City with respect to such Equipment as per Section 4.2. (b) Lessor's failure to observe any of the covenants and requirements of this Agreement. (c) Any warranty, representation, or statement of Lessor contained in this Agreement proves to have been false in any material respect when made or furnished. 4.6 Remedies of Lessor: Upon the occurrence of an Event of Default by the Lessee, then Lessor may, as its option, take any one or more of the following actions with respect to the Appendix wherein such Event of Default or non - appropriation has occurred: (a) Declare the entire amount of unpaid Lease Payments due under this Appendix wherein the Event of Default or non -appropriation has occurred to be immediately due and payable, without further notice. (b) Repossess the Equipment or sell or lease the Equipment in a commercially reasonable manner, and in accordance with Chapter 9 of the Texas Business and Commerce Code, through public or private transaction after giving Lessee reasonable prior written notice with or without having the Equipment at any such sale or leasing. Lessor may purchase all or part of the Equipment at any such sale or leasing. The proceeds of any sale or leasing will be applied to the payment of the unpaid balance of Lessee's obligations under this Agreement and Lessor shall have no further rights or recourse under this Agreement against Lessee with respect to such repossessed Equipment except to recover any amounts then appropriated and unexpended by Lessee to make Lease Payments under this Agreement. To the extent the proceeds of any such sale or leasing exceed the amount required to pay the unpaid balance of Lessee's obligations under this Agreement, such excess shall be paid to Lessee. Or (c) Terminate this Agreement as to and only as to the Appendix wherein the Event of Default or non - appropriation has occurred. Lessor's attempt to exercise any of the remedies herein entitles Lessee to prepay all amounts due under this Agreement, without notice to Lessor, as provided in Section 7.1 and Section 7.2 herein, notwithstanding any provisions to the contrary contained herein. 4.7 Remedies of Lessee: Upon the occurrence of an Event of Default by Lessor, the Lessee may, at its option, take any one or more of the following actions: (a) Should Lessor not make the entire payment requested in any Appendix on or before then (10) business days after the Financing Request Date as described in Section 4.2, Lessee may require payment of liquidated damages at the rate of one percent (1%) per day of the requested amount as designated in the related Appendix. The amount of the damages will be paid by Lessor to Lessee. (b) Institute any or all remedies available to Lessee as allowed by law, contract, equity or otherwise. (c) Terminate this Agreement as to all or any part of the Equipment, provided that the Lessee prepays its obligations in accordance with Section 7.1 with respect to any Equipment for which this Agreement will be terminated. V — RESPONSILIBITIES OF LESSEE 5.1 Care and Use of Equipment: The Lessee shall use the Equipment or cause the Equipment to be used in a proper manner, in compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any material part of the Equipment as may from time to time become worn out, lost, stolen, destroyed, damaged or unfit for use. Any and all additions to or replacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shall be subject to all the terms and conditions of this Agreement and included in the term "Equipment" as used in this Agreement. 5.2 Inspection: Subject to security regulations, laws, policies, and ordinances and other applicable laws, regulations, ordinances and policies, Lessee will allow Lessor, with reasonable prior notice to Lessee, to enter premises where the Equipment is located during normal business hours for the purposes of inspecting the Equipment and observing whether Lessee is in compliance with its responsibilities under this Agreement. 5.3 Taxes and Licenses: It is the Lessee's good faith belief that the items acquired by it pursuant to this Agreement should be exempt from the payment of Federal excise taxes and from all State and Local taxes imposed by the State of Texas or its political subdivisions. 5.4 Assignment or Delegation of Lessee: Lessee may not assign all or any part of its rights and obligations under this Agreement or in the Equipment to another party. 5.5 Delivery of Related Documents: (a) For each item of Equipment, Lessee shall execute or deliver, as appropriate, the following documents: (i) An Appendix in substantially the form attached. (ii) To the extent required and as prepared by Lessor, financing statements or other documents to evidence Lessor's security interest provided that such statements shall not impose liabilities and/or responsibilities inconsistent with this Agreement. (iii) A copy of IRS form 8038-G; original to Internal Revenue Service. (iv) A certificate in substantially the form of Exhibit A relating to the essentiality of the Equipment. (b) For each item of Equipment, Lessee shall provide upon written request of the Lessor City's maintenance contract of the Equipment, if applicable. (c) Upon the execution of this Agreement by Lessee, Lessee will provide a Certification of Counsel in the form attached hereto as Exhibit C. 5.6 Liability and Property Insurance: During the term of this Agreement, the Lessee agrees to provide the following' insurance coverages under Lessee's self insurance program or through its purchased commercial property insurance policies: (a) Insurance or self insurance in the amount of the full replacement cost of the Equipment against the risk of any direct physical loss of or damage to the Equipment. (b) Comprehensive general liability insurance or self insurance against liability for death or bodily injury and for damage to property, arising out of the ownership, maintenance or use of the Equipment, which insurance coverage shall not be circumscribed by any endorsements limiting the breadth of coverage (limited only as may be provided in the standard form for such coverage at the time in use in Texas). The proceeds of such insurance coverage shall be applied to satisfaction of the liability. Lessee shall furnish to the Lessor evidence of the above coverages prior or contemporaneous to execution of the Contract Documents. 5.7 Damage to or Destruction of Equipment: It after delivery of any Equipment to Lessee all or any material part of the Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee shall as soon as practicable after such event either: (a) replace the same at Lessee's sole cost and expense with Equipment of equal or greater value to the Equipment immediately prior to the time of the loss occurrence, such replacement Equipment to be subject to Lessor's reasonable approval, whereupon such replacement Equipment shall be substituted in this Agreement and other related documents by appropriate endorsement or amendment; or (b) pay the applicable prepayment price (as set forth in Section 7.2 hereof) of the Appendix to which such Equipment belongs. Lessee shall notify Lessor of which course of action it will take within thirty (30) days after the loss occurrence. In the event Lessor shall replace or repair the Equipment, as described above, it shall be deemed that no Event of Default hereunder has occurred. Upon payment of the prepayment price as set forth in Section 7.1 hereof with respect to any Appendix, this Agreement shall terminate with respect to the relative Equipment and Lessee thereupon shall become entitled to such Equipment on an AS IS, WHERE IS basis and Lessor makes no warranties or representations of any type as to the Equipment, except that such Equipment shall not be subject to any lien or encumbrance created by or arising through Lessor. 5.8 Risk of Loss: Unless Section 6.9 of this Agreement is applicable, all risk of loss to the Equipment arising out of the ownership, possession or use of the Equipment shall be bome by Lessee. 5.9 Application of Funds: All funds authorized or appropriated for payments under this Agreement shall be applied by the City to such payment requirements to the extent required by this Agreement. VI — EQUIPMENT 6.1 Title: Title to Equipment listed in an Appendix shall pass to the Lessee upon acceptance thereof. Title will revert to Lessor upon the occurrence of the Event of Default, and expiration of the notice and cure period, under Section 4.4, or upon non -appropriation of payments due regarding such Equipment listed in the applicable Appendix under this Agreement. 6.2 Security Interest: The Lessee grants to Lessor and Lessor retains a purchase money security interest in the Equipment. Lessee will not change or remove any insignia or lettering, which Lessor may place on the Equipment to indicate its interest therein until all Lease Payments are made. Until all Lease Payments are made or prepayment is complete, Lessee shall keep the Equipment free from any lien, encumbrance or legal process, which would conflict with this security interest. 6.3 Filine: Subject to the provisions of Section 5.5.a.ii, Lessee authorizes Lessor to make Lessor's security interest a matter of public record by filings of any standard documents necessary for that purpose. Lessee agrees to sign or execute such documents, if required, to evidence its consent to the filing. Lessee will provide sixty (60) days written notice to Lessor that Equipment is being relocated to insure that Lessor may perfect additional filings as necessary. 6.4 Personal Property: The Equipment shall remain the personal property as defined in V.T.C.A, Local Government Code, Subchapter A of Chapter 271, as amended, of the Lessee and shall not be deemed to have become real property regardless of the manner in which it is affixed to real property. 6.5 Alternations, Additions, Attachments: Lessor hereby agrees to allow the Lessee to add and attach to the Equipment such additional equipment, facilities or fixtures as the Lessee may subsequently acquire (exclusive of repair, service replacement parts, which do not constitute new equipment, but shall become part of the Equipment) notwithstanding the form of financing that the Lessee might use, which additional equipment, facilities or fixtures shall not be a part of or subject to this Agreement, unless by express written amendment. 6.6 Removal of Alterations. Additions, Attachments: In the event title to the Equipment reverts to Lessor, Lessee, at its own expense, will remove all alterations, additions and attachments and repair the Equipment as necessary so as to return the Equipment to the condition in which it was furnished, reasonable wear and tear excepted. Lessee will not be responsible for any maintenance repairs if the Equipment has been under a continuous maintenance agreement since it was put into service and accepted by the City. 6.7 Return of Equipment: In the event title to the Equipment reverts to Lessor, as specified herein, for the Equipment listed in any Appendix, Lessee shall deliver possession of the Equipment to Lessor at the premises of Lessee in the condition in which the Equipment is required to be maintained according to this Agreement. 6.8 Ouiet Enioyment: The Lessee shall be entitled to possess and use the Equipment during the term of this Agreement without interruption by the Lessor, provided that the Lessee has duly performed its obligations under this Agreement. Any Equipment acquired under terms of this Agreement may be operated at any time at the convenience of the Lessee (exclusive of time required for preventive maintenance, remedial maintenance and/or approved engineering changes). There shall be no restrictions as to consecutive hours, length of personnel shifts, etc., unless such restrictions are specifically incorporated in an Appendix. Lessee may make Equipment available to other users, provided that such use is supervised by the City, such Equipment is used by other governmental units, and Lessor has consented in writing to such use by a substitute user, such consent to not be unreasonably withheld. 6.9 Liability of Lessor: Notwithstanding Section 11.2 of this Agreement, in the event that the Lessor is required to perform work at the Lessee's location and such work is performed by Lessor, its agents, employees, contractors or assigns the Lessor shall (1) maintain such bodily injury and property damage liability insurance as necessary to protect itself from claims arising out of performance of this Agreement, and (2) indemnify and hold harmless the City, its elected and appointed officers, officials, agents, employees and designated representatives from and against any and all claims, suits, actions, liabilities, and costs of any kind, including attorney's fees for bodily injury and damage to real or personal property arising from or related to acts or omissions of the Lessor, its agents, officers, employees, contractors or assigns. VII — PREPAYMENT 7.1 Prepayment: Lessee shall have the right, exercisable as of any date following the first interest payment date of an Appendix, to prepay the principal amount outstanding under such Appendix in whole or in part, plus accrued but unpaid interest to the prepayment date. Lessee's right hereunder shall be exercised by: (a) Lessee advising Lessor, at least thirty (30) days in advance in writing, of its intention to prepay its obligations under any Appendix, the principal amount, the Equipment to which the prepayment is applicable, and the effective date of that payment (Prepayment Date); and (b) Lessee paying Lessor the outstanding principal balance as of the Prepayment Date together with accrued but unpaid interest from the most recent Payment Date to and including the Prepayment Date. 7.2 Lessee's Rights on Prepayment or Payment in Full: Upon (1) Lessee's exercise of its right of prepayment in accordance with the preceding subsection; or (2) Lessee's having satisfied all of its monetary obligations hereunder, Lessor shall deliver to Lessee, at its expense, all documents necessary to evidence the termination of Lessor's interest of any kind in the Equipment or portion of the Equipment to which the prepayment or payment applies and to confirm such Equipment is free and clear of any claim or lien arising through Lessor. VIII — ASSIGNMENT BY LESSOR 8.1 Right of Assignment: This Agreement shall be binding upon and inure to benefit of the Lessor and Lessee. This Agreement, Lessor's rights hereunder, or the obligation hereby described is not assignable by Lessor. IX — WARRANTIES AND REPRESENTATIONS 9.1 Warranties and Representations of Lessee: The Lessee represents and warrants to the Lessor that Lessee is duly organized and validly existing and has the power and authority to enter into this Agreement and to carry out the terms hereof including authority expressly conferred by V.T.C.A., Local Government Code, Subchapter A of Chapter 271. The Lessee's obligations to make Lease Payments hereunder, as described in Section 2.2, are subject to annual appropriation of sufficient funds each year by the City Council. The Lessee represents and agrees that it will not submit any Appendix that requests a payment period longer than the useful life of the Equipment to be leased. The Lessee shall not use, permit the use of, or omit to use the Equipment acquired under this Agreement in a manner which if made or omitted, respectively, would cause the interest portion of a Lease Payment to become includable in the gross income, as defined in section 61 of the Code, of the Lessor for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Lessee receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Lease Payment, the Lessee shall comply with covenants, representations and warranties contained herein. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the Lessee shall at all times exclusively operate and possess all Equipment the acquisition of which is to be financed directly or indirectly under this Agreement, and not use or permit the use of such Equipment in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government. The Lessee shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. 9.2 Warranties and Representations of Lessor: Lessor represents and warrants to Lessee that: (a) Lessor is a corporation or other entity in good standing under the applicable laws of the State of Texas and has the power and authority to enter into this Agreement and to carry out the terms hereof. (b) Contract Documents executed by Lessor have been duly authorized, approved, executed and delivered by its authorized representatives and constitute legal, valid and binding obligations of Lessor enforceable against Lessor in accordance with their respective terms. X — MISCELLANEOUS PROVISIONS 10.1 Waiver: No delay or omission by Lessor or Lessee in exercising any right in any of the Contract Documents shall operate as a waiver of that or any other right and no single or partial exercise of any right shall preclude Lessor or Lessee from any further exercise of any right or remedy. Lessor or Lessee may itself cure any Event of Default of the defaulting party without waiving the Event of Default and such cure shall not constitute a waiver of any prior or subsequent Event of Default of the defaulting party. 10.2 Headings: All section headings contained herein are for convenience of reference only and are not intended to limit the scope of any provisions of this Agreement. 10.3 Severability: In the event any portion of this Agreement shall be finally determined by any court of competent jurisdiction to be invalid or unenforceable, such provision shall be stricken and this Agreement, as modified, shall continue in full force and effect. 10.4 Implementation: This Agreement shall be implemented by its execution or execution of Appendices hereto. For purposes of construing a transaction as an integrated contract and for the purposes of the provisions of Section 8, the following shall be considered a single transaction or legal binding agreement: (a) This Agreement, which provides basic terms and conditions; and (b) An executed Appendix, which provides for the description of the Equipment to be purchased, the payments from Lessee to Lessor for the purchase of such Equipment and prepayment amounts. 10.5 Amendment: Neither this Agreement nor any of the other Contract Documents may be amended unless in writing, signed by the parties hereto, and approved as to form by the City Attorney. 10.6 Contractual Records: All contractual books, records and other documents related to matters under this Agreement shall be maintained and made available by Lessor to Lessee and its designated agents for a period of five (5) years after final payment for purposes of audit and examination. 10.7 No Waiver: Nothing contained in this Agreement shall be deemed or be construed to be an express or implied waiver of the sovereign immunity of the City of Lubbock or its officials, officers and employees, or a pledge of the full faith and credit of the City. 10.8 Entire Agreement: This Agreement, the Contract Documents identified in Section 1.4, and the Appendices as may be hereafter executed, constitute the entire Agreement between the parties hereto. All prior negotiations, representations and additional or inconsistent oral or written statements are superseded, null and void. 10.9 Counterparts: This Agreement may be executed in several counterparts each of which shall be an original and all of which together shall constitute but one and the same instrument. XI — DISCLAIMER OF WARRANTIES 11.1 LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, RELATING TO THE EQUIPMENT; AND LESSOR HAS EXPRESSLY MADE NO WARRANTY AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE EQUIPMENT. 11.2 Lessor shall not be liable to Lessee for any liabilities, loss or damage caused, directly or indirectly, by the Equipment or by any inadequacies thereof or deficiency therein, by any incident whatsoever in connection therewith or in any way related to or arising out of the Equipment. The Lessee shall be entitled to the benefit of any applicable manufacturer's, dealer's or any other party's warranties. Lessor agrees to execute and deliver such instruments as may be necessary or advisable, in the reasonable opinion of the Lessee, to enable it to enforce such warranties and obtain the warranties and service furnished for the Equipment by the manufacturer. XII — NOTICES All notices made or required to be given pursuant to this Agreement shall be in writing and shall be deemed duly served if and when mailed, unless otherwise specified, certified mail, postage prepaid, return receipt requested, to the other party at its address set forth below or at such address as such party shall hereafter designate in writing. If to the Lessor, address to: Frost Leasing 15455 North Dallas Parkway, Suite 100 Addison, Texas 75001 ATTN: Zane Burgess, Territory Director If to the Lessee, address to: City of Lubbock 1625 13' Street Lubbock, Texas 79401 ATTN: Lee Ann Dumbauld, Chief Financial Officer XIII — EMPLOYMENT DISCRIMINATION BY LESSOR PROHIBITED During the performance of this Agreement, the Lessor agrees as follows: A. The Lessor will not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, or national origin. The Lessor agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. B. The Lessor, in all solicitations or advertisements for employees placed by or on behalf of the Lessor, will state that such Lessor is an Equal Opportunity Employer. C. Notices, advertisements and solicitations placed in accordance with federal law, rule, or regulation shall be deemed sufficient for the purpose of meeting the requirements of this section. D. The Lessor will comply with the provisions of the Americans with Disabilities Act of 1990 which prohibits discrimination against individuals with disabilities in employment and mandates their full participation in both publicly and privately provided services and activities. XIV — INDEMNIFICATION The Lessor covenants to save, defend, hold harmless, and indemnify the City, and all of its elected officials, officers, departments, agencies, agents, and employees (collectively the "City") from and against any and all claims, losses, damages, injuries, fines, penalties, costs (including court costs and allomey's fees), charges, liabilities, or exposure, however caused, resulting from, arising out of, related to or in any way connected with the Lessor's intentional, negligent, or grossly negligent acts or omissions in the performance or nonperformance of its duties and obligations provided or required for by this Agreement and/or Contract Documents. This indemnification shall survive the termination of the Agreement. XV — ETHICS IN PUBLIC CONTRACTING The Agreement incorporates by reference local, state and federal law related to ethics, conflicts of interest, or bribery, including by way of illustration and not limitation, the Texas Local Government Code, Texas Government Code and Texas Penal Code. The Lessor certifies that its offer is made without collusion or fraud and that is has not offered or received any kickbacks or inducements from any other bidder or subcontractor and that it has not conferred on any public employee having official responsibility for this purchase or activity any payment, loan, subscription, advance, deposit of money, services, present or promised, unless consideration of substantially equal or greater value was exchanged. XVI — APPLICABLE LAW This Agreement and the obligations hereunder shall be governed in all respects by the laws of the State of Texas and the venue for any litigation with respect thereto, this Agreement and the Contract Documents, being performable at least in part in Lubbock County, Texas, shall exclusively lie in Lubbock County, Texas. The Lessor shall comply with applicable federal, state and local laws, regulations and ordinances. XVII - RELATION TO CITY The Lessor shall be considered as an independent contractor of the City and neither the Lessor nor its employees will, under any circumstances, be considered servants or agents of the City. The City will not be legally responsible for any negligence or other wrongdoing of any kind, or type, of the Lessor, its servants, employees, agents, or contractors. The City will not withhold payments to the Lessor for any federal or state unemployment taxes, federal or state income taxes, Social Security tax, or any other amounts for benefits to the Lessor. Further, the City will not provide to the Lessor any insurance coverage or other benefits, including Worker's Compensation, normally provided by the City for its employees. XVIII — ARBITRATION It is expressly agreed that nothing under this Agreement shall be subject to arbitration, and any references to arbitration are expressly deleted from this Agreement. XIX — CONFIDENTIALITY AND RETURN OF RECORDS The Lessor agrees that all findings, memoranda, correspondence, documents or records of any type, whether written or oral, and all documents generated by the Lessor as a result of the City's request for services under this Agreement (the "Records"), may be confidential, and neither the Records nor their contents shall be released, nor their contents disclosed, to any person other than the City or its designee, except as may be required by law. The Lessor agrees that all oral or written inquiries from any person or entity regarding the status of any Record generated as a result of the existence of this Agreement shall be referred to the City or designee for response. At the City's request, the Lessor shall deliver all Records to the City, including "hard copies" of computer records. The Lessor agrees to include the provisions of this section as part of any Contract or Agreement the Lessor enters into with subcontractors or other third parties for work related to work pursuant to this Agreement. No termination of this Agreement shall have the effect of rescinding, terminating or otherwise invalidating this section. XX — REQUIREMENTS CONTRACT (ESTIMATED QUANTITIES) The Lessor understands and agrees that the City is under no obligation under this Agreement to request financing from the Lessor if it deems that financing is not required or that other financing, including but not limited to other lease -purchase agreements, is more advantageous to the City. The projection of financing requirements not to exceed $21 million for a 36 month Acquisition Period are the present expectations of those who are planning for the City for the period of this Agreement. The amount is only an estimate and the Lessor understands and agrees that the City is under no obligation to the Lessor to request financing for any amount as a result of having provided this estimate or of having had any normal or otherwise measurable requirement in the past. Resolution No. 2004-RO584 December 16, 2004 EXHIBIT A Item No. 25 APPENDIX NUMBER ESSENTIAL USE CERTIFICATE TO: (Lessor) Reference is made to the City of Lubbock Master Lease Agreement, dated 1 2004, (the "Agreement") between Frost Leasing and the City of Lubbock, Texas (the "City"). This confirms that the items described in Appendix to the Agreement (Equipment) are essential to the functions of the City and the services provided to the citizens of the City. Further, the City has an immediate need for, and expects to make immediate use of, substantially all of the Equipment, which need is not temporary or expected to diminish in the foreseeable future. The Equipment will be used by the City only for the purpose of performing one or more of our governmental or proprietary functions consistent with the permissible scope of the City's authority. CITY OF LUBBOCK, TEXAS (Title) Date: EXHIBIT B APPENDIX NUMBER INSURANCE COVERAGES TO: (Lessor) Resolution No. 2004-RO584 December 16, 2004 Item No. 25 Pursuant to Section 5.6 of the Master Lease Agreement, dated 2004, (the "Agreement") between Frost Leasing and the City of Lubbock, Texas (City), the City is insured through commercial property insurance policies or through self insurance for all risk, physical damage and public liability with respect to the Equipment (as defined in the Agreement) and will provide proof of such coverage if coverage is provided through policies other than self insurance. CITY OF LUBBOCK, TEXAS ul (Title) Date: Resolution No. 2004-RO584 December 16, 2004 Item No. 25 EXHIBIT C CERTIFICATE OF COUNSEL I am City Attorney for the City of Lubbock, Texas and, in that capacity, I have examined the Master Lease Agreement, dated , 2004 (the "Agreement") between the City of Lubbock (the "City") and Frost Leasing (the "Lessor"). As a result of my examination of the Agreement, I have advised the City as follows: (a) The City is a political subdivision of the State of Texas and is authorized by resolution of the City Council, adopted December 16, 2004, to enter into the transactions contemplated by the Agreement and, to extent funds are appropriated for the Agreement, as provided therein, to carry out the City's obligations under the Agreement. (b) The obligation of the City to make payments under the Agreement is enforceable only if and to the extent that funds for such purpose are appropriated by the City Council of the City of Lubbock, Texas. (c) The Agreement is a legal, valid and binding obligation of the City, enforceable against the City according to its terms. 2. I express no opinion as to any of the following matters: (a) The title of any party to, the accuracy or adequacy of the description of, or the priority of any security interest or lien in, the Equipment, as defined in the Agreement. (b) The laws of any jurisdiction that may be applicable to the Agreement other than those of the State of Texas. 3. For the purposes of this Certificate, I have assumed that all signatures by parties other than those by or on behalf of the City are genuine; all documents that have been submitted to me as originals are authentic; and all documents submitted to me as certified, conformed or photostatic copies conform to authentic, original documents. City Attorney Resolution No. 2004-RO584 December 16, 2004 Item No. 25 EXHIBIT D MASTER LEASE AGREEMENT APPENDIX PART 1 EQUIPMENT LIST The undersigned, under the Master Lease Agreement, dated (the "Agreement"), between Frost Leasing (Lessor), and the City of Lubbock, Texas (City), negotiated for the purpose of acquiring the Equipment in this Appendix and any other Appendices to the Agreement, hereby certifies that all the Equipment described below has been installed and is operational to the satisfaction of the City. ITEM DESCRIPTION QUANTITY UNIT PRICE TOTAL COST TERM GRAND TOTAL ALL ITEMS LISTED ON APPENDIX Installation address: and other official City buildings within the City of Lubbock, Texas Relocation: The City may relocate equipment within the City of Lubbock, Texas. All expenses associated with relocation will be bome by the City. These expenses include but are not limited to installation, de -installation, casualty insurance and shipment. LESSEE: CITY OF LUBBOCK, TEXAS M LESSOR: Name: Name: Title: Financing Request Date: Address for Invoices: Date of Approval: Resolution No. 2004-RO584 December 16, 2004 Item No. 25 MASTER LEASE AGREEMENT APPENDIX PART 2 PAYMENT SCHEDULE The principal amount to be financed for the Equipment shown on Appendix - Part 1 is $ . The amount of interest to be paid for the Equipment shown on Appendix - Part 1 is $ The rental payments the Equipment shown on Appendix - Part I will be due in accord with the following payment schedule: DATE PRINCIPAL INTEREST TOTAL TOTAL The interest on this Appendix will accrue from the Lessor Payment Date of at a rate per annum of for the term of months. This rate is based on a fixed interest rate using a percentage of the most recent weekly average of the year Treasury Note adjusted to constant maturities as reported by the Federal Reserve (H-15)(www.federaireserve.gov/releases/bl5/updates. Interest will be calculated on the basis of a 360-day year with twelve 30-day months. Interest will never exceed the maximum lawful rate of interest applicable. PAYMENT SCHEDULE LESSEE: CITY OF LUBBOC& TEXAS MASTER LEASE AGREEMENT APPENDIX PART 2 (continued) 0 Name: Name: Title: Title: Date: Date: LESSOR: Resolution No. 2004-R0584 December 16, 2004 Item No. 25 Resolution No. 2004-RO584 December 16, 2004 Item No. 25 ATTACHMENT "A" Notwithstanding the provisions in Article VII of this Agreement, in the event lessee exercises its prepayment option in the Agreement, such prepayment price shall be computed as follows: EARLY TERMINATION. Lessee shall not be entitled to terminate the Lease prior to the end of its scheduled initial term except in accordance with the following: Lessee shall have the right to terminate the Lease in whole, but not in part, in advance of such scheduled term only if (i) such termination is accompanied by full payment of the unpaid outstanding balance of the amount advanced by Lessor to purchase the Equipment, all accrued but unpaid interest thereon, and unpaid fees, costs, and taxes, (ii) Lessee shall provide written notice to Lessor not less than thirty (30) days prior to the date of such termination, and (iii) Lessee shall pay to Lessor an early termination premium in accordance with the following: Lessee agrees that if Lessee terminates the Lease in advance of its scheduled initial term, Lessee shall pay, in addition to all accrued but unpaid interest on the amount advanced by Lessor to purchase the Equipment, an early termination premium equal to the product of (x) the outstanding principal balance of the amount advanced by Lessor to purchase the Equipment times (y) the Early Termination Factor times (z) the number of months remaining from the early termination date to the scheduled date for payment of the final rental payment under the Lease (with any fraction of a month counted as a whole month), discounted to net present value at the Discount Rate on a monthly basis. "Early Termination Factor" means A minus B divided by 12, where A = The sum of (i) the Treasury Rate for the Determination Date plus (ii) one half of one percent (t/2%); and B = The Treasury Rate for the early termination date. "H.15" means "Statistical Release H.15, Selected Interest Rates" of the Board of Governors of the Federal Reserve System, or any successor publication; "Treasury Rate" means, for any date, the Treasury constant maturity yield value displayed for the date in question in H.15 for the maturity closest in length to the term of this Lease; "Determination Date" means the date of the Lease; "Discount Rate" means the Treasury Rate for the early termination date. Lessor shall deliver to Lessee a statement setting forth the amount and manner of determining such early termination premium, which statement shall be conclusive and binding upon Lessee for all purposes, absent manifest error. Subject to the appropriation conditions contained within this Agreement, including without limitations, the immediately following paragraph, Lessee agrees to pay such early termination premium to Lessor within three (3) calendar days after receipt of such statement. If no Treasury Rate is displayed in H.15 for the Determination Date or the early termination date, Lessor shall use the Treasury Rate for the next preceding date for which it is displayed. If, in the case of any early termination, Lessor determines that B in the Early Termination Factor equals or exceeds A, the early termination premium will be determined but will not exceed 2% of the outstanding balance of the amount advanced by Lessor to purchase the equipment. Failure by Lessor to collect or demand such a premium at the time of early termination shall not be deemed a waiver of Lessor's right to such premium. Notwithstanding anything to the contrary in this Agreement, in no event shall any prepayment be made by Lessee hereunder, unless said prepayment amount was appropriated by Lessee in the current fiscal year. WITNESS these signatures: LESSEE: ATTEST: e ec a Garza, City Secretary COMPLETE ADDRESS: P.O. Box 2000 Lubbock, Texas 79457 Phone: (806)775-2167 Fax: (806)775-2164 APPROVED AS TO CONTENT: Aw '6zx—t� Lee Ann Dum auld, Chief Financial Officer 4P2R D AS %m- Ci orney LESSOR: FROST LEASING: TITLE:A�1��lis...1 L0y✓/bJ A TES : " orporate Secretary COMPLETE ADDRESS: 15455 North Dallas Parkway, Suite 100 Addison, Texas 75001 Phone: (214) 515-4809 Fax: (214)515-4810