HomeMy Public PortalAboutResolution Authorizing the Lease-Purchase of Two Multi-Function Student Activity Buses by the Watertown School Department TOWN OF
1630 WATERTOWN
_ r .i�•
• Office of the Town Manager
Administration Building
149 Main Street
Watertown,MA 02472
Phone:617-972-6465
Michael J. Driscoll www.watertown-ma.gov
townmgr@watertown-ma.gov
Town Manager
To: Honorable Town Council
From: Michael J. Driscoll, Town Manager
Date: February 21, 2019
RE: Agenda Item—A Resolution Authorizing the Lease-Purchase of Two Multi-Function
Student Activity Buses by the Watertown School Department
Attached please find correspondence from Heidi Perkins, Director of Finance & Operations on
behalf of Dr. Deanne Galdston, Superintendent of Schools regarding the lease-purchase of two
Multi-Function Student Activity Buses (MFSABs). As stated in Ms. Perkins' correspondence, as
happens in many school districts with one or more MFSABs,the District would use the buses to
transport students to athletic events, field trips, and other programs such as student leadership events,
Robotics competitions and the like. The use of MFSABs would decrease the per-trip expense
incurred for vendor busing and allow the District to offer more transportation opportunities that we
have been unable to offer in the past.
As a follow-up to the above and as indicated in Ms. Perkins' correspondence,please be advised
Mark Reich, KP Law, has reviewed the form of the Master Installment Purchase Agreement
provided to the School Department by Mercedes-Benz Financial Services USA LLC. As indicated
in the attached email correspondence from Mr. Reich,the provisions of G.L. c. 44, sec. 21 C indicate
that a lease purchase financing agreement acts in the manner of a debt obligation of the Town and
therefore requires authorization by a two thirds majority vote of the Town Council based upon the
recommendation of the Town Manager. For background purposes, I have enclosed a copy of the
relevant statute.
Therefore, given all of the above, I respectfully request the attached Resolution authorizing the
lease-purchase of two Multi-Function Student Activity Buses by the Watertown School Department
be placed on the February 26, 2019 Town Council Agenda.
Thank you for your consideration in this matter.
cc: Honorable School Committee
Dr.Deanne Galdston, Superintendent of Schools
Heidi Perkins,Director of Finance&Operations
Steven Magoon, Community Development and Planning Director/Assistant Town Manager
Thomas J. Tracy,Town Auditor/Asst. Town Manager for Finance
Katherine Morrison,Assistant Treasurer/Collector
Mark R.Reich,Esquire,KP Law
RESOLUTION# R-2019-
A Resolution Authorizing the Lease-Purchase of Two Multi-Function Student Activity
Buses by the Watertown School Department
RESOLVED:
WHEREAS, the Watertown School Department has determined that two Multi-Function
Student Activity Buses are required for transportation of students to athletic events, field trips,
and other programs; and
WHEREAS, the Watertown School Department has determined that a three year lease purchase
of the buses would be in the Department's and Town's best interest; and
WHEREAS, the Watertown School Department sought bids for these buses to include a three
year lease purchase financing agreement; and
WHEREAS, the successful bid for these buses included a Master Installment Purchase
Agreement provided by Mercedes-Benz Financial Services USA LLC, which sets forth the terms
of a three year lease purchase, after which period the Watertown School Department would take
ownership of the buses; and
WHEREAS, pursuant to the provisions of G.L. c. 44, sec. 21 C, the Town may by a two-thirds
vote of its legislative body, if recommended by its chief executive officer, authorize any
department of the Town to enter into a lease purchase financing agreement to acquire equipment;
and
WHEREAS,the Town Manager, based upon information and documentation provided by the
Watertown School Department, recommends the acquisition of the buses through use of a lease-
purchase financing agreement; and
WHEREAS, funding for the initial FY 2019 payment required under the lease purchase
financing agreement is included within the Watertown School Department operating budget.
NOW THEREFORE BE IT RESOLVED that the Town Council of the City known as the
Town of Watertown hereby authorizes the Watertown School Department enter into a three year
lease purchase financing agreement, to be executed by the Town Manager, to acquire two Multi-
Function Student Activity Buses in accordance with the provisions of G.L. c. 44, sec. 21 C.
Council Member
I hereby certify that at a regular meeting of the Town Council for which a quorum was present,
the above resolution was adopted by a vote of for, against and present on
2019.
Marilyn W. Pronovost, Council Clerk Mark S. Sideris, Council President
658715/WATR/0103
Watertown Public Schools
• 30 Common Street
Watertown,Massachusetts 02472-3492
Phone:(617)926-7700
Fax: (617)923-1234
Ms.Heidi Perkins Dr.Theresa B.McGuinness
Director of Finance&Operations Assistant Superintendent
Dr.Deanne Galdston Teaching,Learning, &Assessment
Superintendent of Schools
Ms.Kathleen Desmarais Mr.Kenneth Storlazzi
Director of Student Services Director of Human Resources
To: Mr. Michael Driscoll, Town Manager
From: Heidi Perkins,Director of Finance and Operations on behalf of Deane Galdston, Superintendent
Re: Municipal Lease for Two (2)Multi-Function Student Activity Buses
February 19, 2019
Toward the end of FYI the School Administration requested that the School Committee approve the
use of available FYI operating budget funds to purchase one (1) 14-passenger Multi-Function Student
Activity Bus (MFSAB). As happens in many school districts with one or more MFSABs,the District
would use the buses to transport students to athletic events,field trips, and other programs such as
student leadership events, Robotics competitions and the like. The use of MFSABs would decrease the
per-trip expense incurred for vendor busing and allow the District to offer more transportation
opportunities that we have been unable to offer in the past. The Committee elected at that time to defer
the purchase pending the receipt of additional information and further discussion.
Over the course of the summer and early fall of 2018 the Administration provided the Committee with
the additional information and documents as requested. Several weeks into September the
Administration was able to confirm the number of Minuteman students using the vendor bus
transportation; two vendor buses were budgeted but only one is required for the 2018-2019 school year.
This resulted in a favorable position in the transportation budget of sixty-five thousand dollars.
The buses had not been added to the capital improvement plan for FYI and therefore could not be an
outright purchase but instead required a lease. Three lease options were provided to the School
Committee; the Committee voted to put out a bid for two MFSABs with a"three-year lease to zero"
funding plan requiring a single lease payment due each of three years beginning in FYI 9. The District
will own the vehicles at the end of the lease period.
A Request for Bids was issued and the winning bid came in at$113,521.92 for the total three-year lease,
or$37,840.64 per year for three years. There is a potential for the price to be slightly lower due to lower
borrowing rates than first quoted. The $65,000 in savings from the Minutemen bus is sufficient to pay
the lease for FYI as well as for fuel and any other ancillary costs.
The FY20 lease payment and amounts for fuel, driving record checks, and lesser costs such as a cell
phone for each bus, and a repair and maintenance line for smaller expenses and/or repairs not covered
under warranty(deductibles, flat tires, etc.)have been incorporated in the FY20 Preliminary Budget.
In anticipation of some questions the Council may have we are including the following information:
1. Only school staff may volunteer to drive the buses and will not be paid (paid drivers require a
CDL license). The District will check driving records prior to approving a staff member to drive
the buses
2. WEA has approved the driver agreement
3. To the greatest extent possible two eligible drivers will be on each trip
4. Annual parent notice and agreement in writing is required for students to ride with staff drivers
5. Other Town departments are welcome to reserve the buses when not needed by the school
6. The District has received multiple requests to reserve the buses before the end of the school year
7. The vendor will build the buses to bid specifications once the signed agreement and Attorney
approval documents have been submitted to the leasing company
Sample lease documents have been approved by the Town's attorney,Mark Reich of KP Law PC
(Kopelman &Paige).Attorney Reich will sign the final documentation after the Town Council votes.
Under the Municipal Modernization Act of 2016 lease agreements must be approved by the Town's
governing body. We respectfully request that the Honorable Town Council vote favorably to approve
the lease agreement.
Thank you for your consideration.
Hand, JoAnna
From: Driscoll, Michael
Sent: Wednesday, February 20, 2019 2:54 PM
To: Hand,JoAnna
Subject: FW: FW: FW: Municipal lease quote
Attachments: Master Installment Purchase Agreement- Exhibits (TFFF1870 - Revised 07-28-2015).pdf,
Master Installment Purchase Agreement (TFFF1871 - Revised 07-28-2015).pdf; KP-#
658715-vl-
WATR_Resolution_re_Authorization_of_School_Bus_Lease_Purchase_Agreement.DOC
From: Mark R. Reich [mailto:MReich@k-plaw.com]
Sent:Wednesday, February 20, 2019 2:11 PM
To: Driscoll, Michael <mdriscoll@watertown-ma.gov>
Subject: FW: FW: FW: Municipal lease quote
Mr. Manager—
I have reviewed the form of the Master Installment Purchase Agreement provided to the School Department by.
Mercedes-Benz Financial Services USA LLC. This form Agreement will be used for the lease purchase of two Multi-
Function Student Activity Buses which will be used to transport students for athletic activities, field trips, and other
programs. This is a standard document which reflects specific municipal concerns. It is terminable due to lack of
appropriation, and requires indemnification to the extent permitted by law. In my opinion,this agreement is suitable
for use by the Town.
The agreement, once finalized, will provide for a three year term,with equal payments due in each year. After this three
year term,the Town will own the buses.
The provisions of G.L. c.44, sec. 21C indicate that a lease purchase financing agreement, such as the agreement
referenced above, acts in the manner of a debt obligation of the Town and therefore requires authorization by a two
thirds majority vote of the Town Council based upon the recommendation of the Town Manager. I have therefore
prepared the attached resolution for consideration by the Town Council which would authorize the three year lease
purchase financing agreement allowing for the lease purchase of the two buses. It is my understanding that funding for
the first year of this agreement is included in the FY 2019 operating budget of the School Committee. Again, a two-
thirds majority vote of the Town Council will be required to authorize this agreement.
Please contact me with any further questions regarding this matter.
Thank you.
Mark
Mark R. Reich, Esq.
KPILAW
101 Arch Street, 12th Floor
Boston, MA 02110
O: (617) 556 0007
F: (617)654 1735
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MASTER INSTALLMENT PURCHASE AGREEMENT
This Master Installment Purchase Agreement is dated as of ("Master Agreement"),
and entered into by and between Mercedes-Benz Financial Services USA LLC, a Delaware limited liability
company ("Lender"), and , a body corporate and politic existing under the
laws of the State of ("Borrower").
1. Agreement. Borrower agrees to finance with Lender its installment purchase of certain
"Equipment" as described in each Equipment Schedule (in substantially the form attached hereto as Exhibit A),
which together with an Installment Payment Schedule (in substantially the form attached to such Equipment
Schedule as Exhibit A-1) constitute a "Schedule", subject to the terms and conditions of and for the purposes
set forth in the related Contract. Trucks, buses, other motor vehicles and other items of equipment and
personal property may be financed under this Master Agreement from time to time by execution of individual
Schedules by the parties hereto and as otherwise provided herein. Each Schedule and the terms and provisions
of this Master Agreement (which includes all exhibits hereto, together with any amendments and modifications
pursuant hereto) that are incorporated by reference into such Schedule shall constitute a separate and
independent contract and installment purchase of the Equipment therein described and are referred to herein
as a "Contract". In the event of any conflict in terms between a Schedule and this Master Agreement, the
terms of the Schedule shall control in the interpretation of the Contract created thereby.
2. Term. The "Commencement Date" for each Contract is the date when interest commences to
accrue under such Contract which date shall be the earlier of (a) the first date on which the Equipment listed in
such Contract is accepted by Borrower in the manner described in Section 11 and the Funding Conditions
under Section 8 with respect to such Contract have been satisfied, or (b) the first date on which the Funding
Conditions under Section 8 with respect to such Contract have been satisfied and sufficient monies to
purchase the Equipment listed in such Contract are deposited for that purpose into an Escrow Fund with an
escrow agent as provided in Section 11, or (c) the date sufficient monies are set aside for acquisition of
Equipment as evidenced in Exhibit D, if applicable. The "Contract Term" for each Contract means the Original
Term and all Renewal Terms therein provided and for this Master Agreement means the period from the date
hereof until termination of all Contracts thereunder. The "Original Term" means, with respect to a Contract, the
period from the Commencement Date for such Contract until the end of Borrower's fiscal year or biennium, as
the case may be (the "Fiscal Period") in effect at such Commencement Date. The "Renewal Term" for each
Contract means each successive term having a duration that is coextensive with the Fiscal Period.
3. Representations and Covenants of Borrower. Borrower represents, covenants and warrants for
the benefit of Lender on the date hereof and as of the Commencement Date of each Contract as follows:
(a) Borrower is a public body corporate and politic duly organized and existing under the constitution and laws
of the State where Borrower is located ("State") with full power and authority under the constitution and laws of
the State to enter into this Master Agreement and each Contract and the transactions contemplated hereby
and thereby and to perform all of its obligations hereunder and thereunder; (b) Borrower has duly authorized
the execution and delivery of this Master Agreement and each Contract by proper action of its governing body
at a meeting duly called and held in accordance with State law, or by other appropriate official approval, and all
requirements have been met and procedures have occurred to ensure the validity and enforceability of this
Master Agreement and each Contract;
(c) Borrower will do or cause to be done all things necessary to preserve and I<eep in full force and effect its
existence as a body corporate and politic; (d) Borrower has complied with such public bidding requirements as
may be applicable to this Master Agreement and each Contract and the acquisition by Borrower of the
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Equipment as provided in each Contract; (e) during the Contract Term, the Equipment will be used by Borrower
solely and exclusively for the purpose of performing essential governmental or proprietary functions of
Borrower consistent with the permissible scope of Borrower's authority; (f) within 210 days after the end of
each Fiscal Period, Borrower will provide Lender with a copy of its audited financial statements for such Fiscal
Period, budgets and proof of appropriation for the ensuing Fiscal Period, and such other financial information
relating to the ability of Borrower to continue each Contract as may be requested by Lender; (g) Borrower has
an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the
Equipment listed on each Schedule; and (h) during the last ten years prior to the Commencement Date of the
applicable Contract, Borrower's governing body has not failed (for whatever reason) to appropriate amounts
sufficient to pay its obligations that are subject to termination or non,renewal for failure to appropriate funds.
4. Tax Covenants and Representations; Tax Indemnity. Borrower agrees that it will not take any
action that would cause the interest portion of Installment Payments under any Contract to be or to become
ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes,
nor will it omit to take or cause to be tal<en, in a timely manner, any action which omission would cause the
interest portion of Installment Payments under a Contract to be or to become ineligible for the exclusion from
gross income of the owner or owners thereof for federal income tax purposes. Borrower agrees to (a) complete
and file in a timely manner an information reporting return with respect to each Contract as required by the
Internal Revenue Code of 1986, as amended ("Tax Code"); (b) rebate an amount equal to excess earnings on
any escrow or other fund created with respect to a Contract to the federal government if required by, and in
accordance with, Section 148(f) of the Tax Code, and mal<e the determinations and maintain the records
required by the Tax Code; and (c) so long as any Installment Payments under a Contract remain unpaid, moneys
on deposit in any Escrow Fund created with respect to a Contract as provided in Section 11 will not be used in
a manner that will cause such Contract to be classified as an "arbitrage bond" within the meaning of Section
148(a) of the Tax Code.
Borrower represents to Lender on the date hereof and as of the Commencement Date of each Contract that (i)
Borrower has a substantial amount of the power to tax, the power of eminent domain or police power under
applicable State law; (ii) neither Borrower nor any agency or unit of Borrower has on hand any property,
including cash and securities, that is legally required or otherwise restricted (no matter where held or the
source thereof) to be used directly or indirectly to purchase the Equipment under the related Contract; (iii)
Borrower has not and will not establish any funds or accounts (no matter where held or the source thereof) the
use of which is legally required or otherwise restricted to pay directly or indirectly Installment Payments under
a Contract; (iv) Borrower does not intend to sell or otherwise dispose of the Equipment or any interest therein
prior to the conclusion of the Contract Term of the related Contract; (v) the payment of the Installment
Payments or any portion thereof under each Contract is not (under the terms of this Master Agreement or any
Contract) directly or indirectly (A) 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 (B)
on a present value basis, derived from payments (whether or not to Borrower) 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; (vi) the Equipment will not be used, directly or indirectly, in any activity carried on by any
person other than a state or local government unit; (vii) no portion of the purchase price for the Equipment will
be used, directly or indirectly, to mal<e or finance loans to any person other than Borrower; (viii) Borrower has
not entered into any management or other service contract with respect to the use and operation of the
Equipment; (ix) Borrower has entered into, or will enter into, each Contract for the purpose of purchasing and
acquiring the Equipment and not for the purpose of refinancing any outstanding obligation of Borrower more
than 90 days in advance of its payment or prepayment date; and (x) the purchase price for the Equipment has
been or will be paid directly by Lender to the supplier thereof, and no portion of the purchase price for the
Equipment has been or will be paid to Borrower as reimbursement for any expenditures paid by Borrower more
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than 60 days prior to the Commencement Date of the applicable Contract or, if earlier, more than 60 days prior
to any official action taken to evidence an intent to finance the Equipment on a federally tax-exempt basis.
If Borrower takes any action or fails to take any action (including, without limitation, breaching any covenant
contained in this Section 4), or makes any misrepresentation herein or in any certificate or document required
to be given in connection with this Master Agreement or any Contract, in any case which causes or results in
the interest portion of Installment Payments under such Contract to be or become includible in gross income of
the owner or owners thereof for federal income tax purposes, Borrower agrees to pay (subject to Section 7)
promptly after any such determination of taxability and on each Installment Payment due date thereafter to
Lender an additional amount determined by Lender to compensate such owner or owners for the loss of such
excludability (including without limitation, compensation relating to interest expense, penalties or additions to
tax), which determination shall be conclusive (absent manifest error).
Lender and Borrower intend that each Contract constitute a "conditional sale" for federal income tax purposes
and, therefore, Lender and Borrower intend that Borrower be considered the owner of the Equipment under
each Contract for federal income tax purposes.
5. Financin-' Installment Purchase of Equipment. Upon satisfaction of the Funding Conditions set
forth in Section 8 with respect to a Contract and execution and delivery of such Contract, Lender advances
funds to provide for, and Borrower borrows funds from Lender to finance, Borrower's installment purchase and
acquisition of the Equipment in accordance with the terms thereof. The Contract Term for each Contract may
be continued, solely at the option of Borrower, at the end of its Original Term or any Renewal Term for the next
succeeding Renewal Term up to the maximum Contract Term set forth in such Contract. At the end of the
Original Term and at the end of each Renewal Term the Contract Term shall be automatically extended upon the
successive appropriation by Borrower's governing body of amounts sufficient to pay Installment Payments and
other amounts payable under the related Contract during the next succeeding Fiscal Period until all Installment
Payments payable under such Contract have been paid in full, unless Borrower shall have terminated such
Contract pursuant to Section 7 or Section 22. The terms and conditions during any Renewal Term shall be the
same as the terms and conditions during the Original Term, except that the Installment Payments shall be as
provided in the applicable Contract.
6. Continuation of Contract Term. Borrower currently intends, subject to Section 7, to continue
the Contract Term of each Contract through its Original Term and all of its Renewal Terms and to pay the
Installment Payments and other amounts thereunder. Borrower reasonably believes that legally available funds
in an amount sufficient to make all Installment Payments and other payments during the maximum Contract
Term of each Contract can be obtained. Borrower currently intends to do all things lawfully within its power to
obtain and maintain funds from which the Installment Payments may be made, 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. Notwithstanding the foregoing, the decision whether or not to
budget and appropriate funds or to extend the applicable Schedule for any Renewal Term is within the
discretion of the governing body of Borrower.
7. Non-appropriation. Borrower is obligated only to pay such Installment Payments and other
amounts under each Contract as may lawfully be made from funds budgeted and appropriated for that purpose.
If Borrower's governing body fails to appropriate sufficient funds in any Fiscal Period to pay Installment
Payments and other amounts when due under any Contract during the next succeeding Fiscal Period (a "Event
of Non-Appropriation"), then (a) Borrower shall deliver written notice to Lender of such Event of Non-
Appropriation at least 30 days prior to the end of the then current Fiscal Period, but failure to deliver such
notice shall not extend the Contract Term; (b) on or before the Return Date, Borrower shall cease use of the
Equipment covered by the affected Contract and peaceably remove and deliver all (but not less than all) of
such Equipment to Lender, at Borrower's expense (from legally available funds) at the location(s) in the United
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States to be specified by Lender and in the condition required by Section 13; and (c) the affected Contract shall
terminate on the Return Date without penalty or expense to Borrower, provided that Borrower shall pay all
Installment Payments and other amounts payable under the affected Contract for which funds shall have been
appropriated, and provided further that Borrower shall pay month-to-month rent at the rate set forth in the
affected Contract for each month or part thereof that Borrower fails to return the Equipment under the affected
Contract as provided in this Section 7. "Return Date" means the last day of the Fiscal Period for which
appropriations were made for the Installment Payments due under a Contract.
8. Conditions to Lender's Performance. This Master Agreement is not a commitment by Lender or
Borrower to enter into any Contract not currently in effect, and nothing in this Master Agreement is intended or
shall be construed to impose any obligation upon Lender or Borrower to enter into any proposed Contract, it
being understood that whether Lender or Borrower enters into any proposed Contract shall be a decision solely
within their respective discretion. Lender shall have no obligation to pay the purchase price for Equipment to
a supplier or deposit any amount into an Escrow Fund as provided in Section 11 unless all reasonable
conditions established by Lender ("Funding Conditions") have been satisfied, including, without limitation, the
following: (a) Borrower has signed and delivered to Lender the Schedule and the related Escrow Agreement (if
applicable); (b) no Event of Default or Event of Non-Appropriation shall have occurred and be continuing under
any Contract; (c) no material adverse change shall have occurred in the financial condition of Borrower since
the date of this Master Agreement; (d) the Equipment to be described in such Schedule is reasonably
satisfactory to Lender and is free and clear of any security interests, liens or other encumbrances (except the
security interest provided in this Master Agreement to secure Borrower's obligations to Lender under the
related Contract); (e) all representations of Borrower in each Contract remain true, accurate and complete; and
(f) Lender has received all of the following documents, which shall be reasonably satisfactory, in form and
substance, to Lender: (1) evidence of insurance coverage or self-insurance required by Section 17; (2) an
opinion of Borrower's counsel in substantially the form attached as Exhibit C hereto; (3) if any items of
Equipment are motor vehicles, properly completed certificates of title or certificates of origin (or applications
therefor) for such vehicles and noting Lender's interest thereon; (4) for Equipment other than motor vehicles,
such Uniform Commercial Code financing statements as Lender may require; (5) copies of resolutions by
Borrower's governing body duly authorizing the Contract and incumbency certificates for the person(s) who will
sign the Contract; (6) such documents, opinions and certificates as Lender may request relating to federal tax-
exemption of the interest portion of Installment Payments payable under the Contract, including (without
limitation) IRS Form 8038-G or 8038-GC and evidence of the adoption of a reimbursement resolution or other
official action in the event that Borrower is to be reimbursed for expenditures that it has paid more than
sixty days prior to the date on which the Funding Conditions are satisfied; (7) if applicable, a certificate of an
authorized official of Borrower designating the Contract as a "qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) of the Tax Code; and (8) such other documents and information previously
identified by Lender or otherwise reasonably requested by Lender.
Borrower shall cooperate with Lender in Lender's review of any proposed Contract. Without limiting the
foregoing, Borrower will provide Lender with any documentation or information Lender may request in
connection with Lender's review of any proposed Contract. 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 Borrower and other matters related to Borrower. Credit
information relating to Borrower may be disseminated among Lender and any of its successors and assigns.
9. Installment Pavments. Borrower shall promptly pay "Installment Payments" as described in
Exhibit A-1 to each Contract, in lawful money of the United States of America, to Lender on the dates and in
such amounts as provided in each Contract. Borrower shall pay Lender a charge on any Installment Payment
not paid on the date such payment is due at the rate of 12% per annum or the maximum rate permitted by law,
whichever is less, from such date until paid. Installment Payments consist of principal and interest portions as
more fully detailed on the Schedule for each Contract. Lender and Borrower understand and intend that the
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obligation of Borrower to pay Installment Payments under each Contract shall constitute a current expense of
Borrower 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 Borrower in contravention of any applicable constitutional or
statutory limitation or requirement concerning the creation of indebtedness by Borrower, nor shall anything
contained in this Master Agreement or in a Contract constitute a pledge of the general tax revenues, funds or
monies of Borrower.
10. INSTALLMENT PAYMENTS TO BE UNCONDITIONAL. EXCEPT AS PROVIDED IN SECTION 7, THE
OBLIGATIONS OF BORROWER TO MAKE INSTALLMENT PAYMENTS AND TO PERFORM AND OBSERVE THE
OTHER COVENANTS AND AGREEMENTS CONTAINED IN EACH CONTRACT 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 TO BE DELIVERED OR
INSTALLED, DISPUTES WITH ANY SUPPLIER OR VENDOR OF ANY EQUIPMENT OR LENDER, ANY DEFECTS,
MALFUNCTIONS, BREAKDOWNS OR INFIRMITIES IN THE EQUIPMENT OR ANY ACCIDENT, CONDEMNATION OR
UNFORESEEN CIRCUMSTANCES.
11. Delivery and Acceptance by Borrower. Borrower shall order the Equipment to be subject to a
Contract, cause such Equipment to be delivered and installed at the location specified in such Contract, and
pay any and all delivery, installation and other costs in connection therewith. When the Equipment listed in any
Contract has been delivered and acceptance tested, Borrower shall immediately accept such Equipment and
evidence said acceptance by executing and delivering to Lender an Acceptance Certificate (in substantially the
form attached hereto as Exhibit B) whereupon, as between Lender and Borrower, the Equipment shall be
deemed to have been unconditionally accepted by Borrower for all purposes of the applicable Contract. Subject
to satisfaction of the Funding Conditions with respect to the related Contract, Lender shall pay to such supplier
or vendor as directed by Borrower on the Commencement Date for such Contract the purchase price for such
Equipment in an amount equal to the aggregate principal portion of Installment Payments under the applicable
Contract, unless Lender and Borrower otherwise agree in the related Schedule. During the Contract Term of
each Contract, Borrower shall be entitled to quiet use and enjoyment of the Equipment identified therein,
subject to the terms of the applicable Contract.
12. Location; Inspection. Once installed, no item of the Equipment will be moved from the location
(or the base location with respect to motor vehicles) specified for it in the related Contract without Lender's
prior written consent, which consent shall not be unreasonably withheld. Lender shall have the right at all
reasonable times during regular business hours to enter into and upon the property where the Equipment is
located for the purpose of inspecting the Equipment.
13. Use, Maintenance. Borrower 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
Contract. Borrower shall provide all permits and licenses, if any, necessary for the installation and operation of
the Equipment. In addition, Borrower agrees to comply in all respects with all applicable laws, regulations and
rulings of any legislative, executive, administrative or judicial body. Borrower agrees that it will, at Borrower's
own cost and expense, maintain, preserve and I(eep the Equipment in good repair and working order, in a
condition comparable to that recommended by the manufacturer. Lender shall have no responsibility to
maintain, repair or male improvements or additions to the Equipment.
Borrower 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, accessories, equipment and devices furnished, affixed to or installed on any Equipment,
excluding temporary replacements, shall thereupon become subject to the security interest of Lender.
14. Title. During the Contract Term under each Contract, and so long as Borrower is not in default
under Section 24, all right, title and interest in and to each item of the Equipment under the related Contract
shall be vested in Borrower immediately upon its acceptance of each item of Equipment, subject to the terms
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Truck Financial
and conditions of the applicable Contract. Upon the occurrence of an Event of Default under a Contract (as
provided in Section 24) or upon termination of a Contract pursuant to Section 7, full and unencumbered legal
title to the Equipment shall, at Lender's option, pass to Lender, and Borrower shall have no further interest
therein. In addition, upon the occurrence of such an Event of Default or such termination, Borrower shall
execute and deliver to Lender such documents as Lender may request to evidence the passage of such legal
title to Lender and the termination of Borrower's interest therein, and upon request by Lender shall deliver
possession of the Equipment to Lender in accordance with Section 7 or Section 25, as applicable. Upon
payment or prepayment of all amounts due and owing under a Contract in accordance with its terms, Lender's
security interest or other interest in the Equipment under such Contract shall terminate, and Lender shall
execute and deliver to Borrower such documents as Borrower may request to evidence the termination of
Lender's security interest in the Equipment subject to the related Contract.
15. Security Interest. To secure the payment and performance of all of Borrower's obligations under
each Contract, upon the execution of such Contract, Borrower grants to Lender a security interest constituting
a first and exclusive lien on the Equipment subject to such Contract, on the moneys and investments held from
time to time in any related Escrow Fund and on any and all proceeds of any of the foregoing. Borrower agrees
to execute and deliver such additional documents, in form satisfactory to Lender, which Lender deems
necessary or appropriate to establish and maintain its security interest in the Equipment, including, without
limitation, such financing statements with respect to personal property under Article 9 of the Uniform
Commercial Code in effect in the State and treating such Article 9 as applicable to entities such as Borrower.
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.
16. Liens, Taxes, Other Governmental Charges and Utilitv Charges. Borrower 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 the Equipment free and clear of all such claims, liens and
legal processes except those created by the related Contract. The parties to this Master Agreement
contemplate that the Equipment under each Contract will be used for governmental or proprietary purposes of
Borrower and that the Equipment will therefore be exempt from all property and other taxes. Nevertheless,
Borrower shall pay promptly when due or reimburse Lender for, and hold Lender harmless from; (a) all titling,
recordation, filing, registration, documentary stamp and other fees; (b) taxes (other than taxes calculated solely
on the basis of Lender's net income), including but not limited to transfer, sales, use, excise, gross receipts,
value added and personal property taxes; and (c) assessments and all other charges or withholdings of any
nature (together with any penalties, fines or interest on any such fees, taxes, assessments, charges or
withholdings) arising at any time relating to the Equipment or any Contract or with respect to the use,
possession, acquisition, ownership, operation, delivery, return or other disposition of any Equipment or upon
the Installment Payments, whether the same be assessed to Lender or Borrower. Borrower and Lender shall
cooperate in providing each other with any appropriate resale or governmental exemption certificates, sale-for-
lease exemption certificates and other similar documentation, if applicable. Unless otherwise required by
applicable law, Borrower shall timely mal<e all filings, reports or returns with respect to any applicable fees and
taxes. If Lender is required by applicable law to mal<e any such filing, report or return, Borrower shall promptly
notify Lender in writing, provide Lender with all information required in order for Lender to timely file any and all
of the same and pay all costs and expenses related thereto from legally available funds. Borrower shall pay all
utility and other charges incurred in the use and maintenance of the Equipment as the same may become due.
17. Insurance. At its own expense, Borrower shall during the Contract Term of each Contract
maintain (a) casualty insurance insuring the Equipment under such Contract against loss or damage by fire,
collision and all other risks covered by the standard extended coverage endorsement then in use in the State
and any other risks reasonably required by Lender, in an amount at least equal to the then applicable "
Prepayment Price" of the Equipment as described in Exhibit A-1 of each Contract; (b) liability insurance that
protects Borrower from liability in all events in form and amount satisfactory to Lender as set forth in the
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attachment hereto titled "Insurance Coverage Requirements"; and (c) workers' compensation coverage as
required by the laws of the State; provided that, with Lender's prior written consent, Borrower may self-insure
against the risks described in clauses (a) and (b). Borrower shall furnish to Lender evidence of such insurance
or self-insurance coverage throughout the Contract Term of each Contract. Borrower shall not materially
modify or cancel such insurance or self-insurance coverage without first giving written notice thereof to Lender
at least 10 days in advance of such cancellation or modification. Lender shall be named as a loss payee with
respect to all casualty insurance described in clause (a) above and as an additional insured with respect to all
liability insurance described in clause (b) above.
18. Advances. In the event Borrower shall fail to keep the Equipment in good repair and working
order pursuant to Section 13 or to maintain any insurance required by Section 17, Lender may, but shall be
under no obligation to, maintain and repair the Equipment or obtain and maintain any such insurance
coverages, as the case may be, and pay the cost thereof. All amounts so advanced by Lender shall constitute
additional consideration for the then current Original Term or Renewal Term under the affected Contract, and
Borrower agrees to pay such amounts so advanced by Lender with interest thereon from the advance date until
paid at the rate of 12% per annum or the maximum rate permitted by law, whichever is less.
19. Damage, Destruction and Condemnation. If (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,
Borrower and Lender will cause the Net Proceeds to be applied to the prompt replacement, repair, restoration,
modification or improvement of the Equipment to substantially the same condition as existed prior to the event
causing such damage, destruction, or condemnation, unless Borrower shall have exercised its option to prepay
its obligations under the related Contract pursuant to Section 22. Any balance of the Net Proceeds remaining
after such work has been completed shall be paid to Borrower.
For purposes of this Section, the term "Net Proceeds" shall mean the amount remaining from the gross
proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting
all expenses, including attorneys' fees, incurred in the collection thereof. If the Net Proceeds are insufficient to
pay in full the cost of any replacement, repair, restoration, modification or improvement referred to herein,
Borrower shall either (i) complete such replacement, repair, restoration, modification or improvement and pay
any costs thereof in excess of the amount of the Net Proceeds from funds legally available for that purpose, or
(ii) prepay its obligations under the related Contract pursuant to Section 22. The amount of the Net
Proceeds, if any, remaining after completing such replacement, repair, restoration, modification or
improvement or after prepaying its obligations under such Contract pursuant to Section 22 shall be retained by
Borrower. If Borrower shall make any payments pursuant to this Section, Borrower shall not be entitled to any
reimbursement therefor from Lender nor shall Borrower be entitled to any diminution of the amounts payable
under Section 9.
20. DISCLAIMER OF WARRANTIES. BORROWER ACKNOWLEDGES THAT LENDER IS NOT THE
SUPPLIER OR VENDOR OF ANY OF THE EQUIPMENT. LENDER 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 WARRANTY WITH RESPECT THERETO
WHETHER EXPRESS OR IMPLIED. AS BETWEEN BORROWER AND LENDER, BORROWER ACCEPTS ALL SUCH
EQUIPMENT AS IS AND WITH ALL FAULTS. BORROWER AGREES TO SETTLE ALL CLAIMS WITH RESPECT TO THE
EQUIPMENT DIRECTLY WITH THE SUPPLIER OR VENDOR AND WILL NOT ASSERT OR SEEK TO ENFORCE ANY
SUCH CLAIMS AGAINST LENDER OR ITS ASSIGNEE. IN NO EVENT SHALL LENDER BE LIABLE FOR ANY
INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE IN CONNECTION WITH OR ARISING OUT OF
ANY CONTRACT OR THE EXISTENCE, FURNISHING, FUNCTIONING OR BORROWER'S USE OF ANY ITEM,
PRODUCT OR SERVICE PROVIDED FOR IN ANY CONTRACT.
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21. Vendor's Warranties. Lender hereby irrevocably appoints Borrower as its agent and
attorney-in-fact during the Contract Term of each Contract, so long as Borrower shall not be in default under
such Contract, to assert from time to time whatever claims and rights (including without limitation warranties)
relating to the Equipment that Lender may have against Vendor. The term "Vendor" means any supplier or
manufacturer of the Equipment as well as the agents or dealers of the manufacturer or supplier from whom
Borrower purchased or is purchasing such Equipment. Borrower's sole remedy for the breach of such warranty,
indemnification or representation shall be against Vendor of the Equipment, and not against Lender. Any such
matter shall not have any effect whatsoever on the rights or obligations of Lender with respect to any Contract,
including the right to receive full and timely Installment Payments and other payments under each Contract.
Borrower expressly acknowledges that Lender makes, and has made, no representations or warranties
whatsoever as to the existence or the availability of such warranties by Vendor of the Equipment.
22. Prepayment Option. Borrower shall have the option to prepay all, but not less than all, its
obligations under a Contract, upon giving written notice to Lender at least 30 days before the prepayment
date, at the following times and upon the following terms: (a) on the Installment Payment due dates specified in
such Contract, upon payment in full of the Installment Payments then due and all other amounts then owing
under such Contract plus the then applicable Prepayment Price as referenced in Exhibit A-1 to such Contract,
which may include a premium on the unpaid principal balance; or (b) in the event of substantial damage to or
destruction or condemnation of substantially all of the Equipment listed in such Contract, on the day specified
in Borrower's notice to Lender of its exercise of the prepayment option upon payment in full to Lender of the
Installment Payments then due and all other amounts then owing under such Contract plus the then applicable
Prepayment Price plus accrued interest from the immediately preceding Installment Payment due date to such
prepayment date.
23. Assignment. Lender's right, title and interest in and to each Contract, including Installment
Payments and any other amounts payable by Borrower thereunder and all proceeds therefrom, may be assigned
and reassigned at any time and from time to time to one or more assignees or subassignees by Lender without
the necessity of obtaining the consent of Borrower. During the term of this Master Agreement, Borrower 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 Tax Code. For this purpose, Borrower appoints Lender to act as its registration agent,
which appointment Lender hereby accepts. Lender agrees on Borrower's behalf to maintain such record of all
assignments. Borrower agrees to execute all documents that may be reasonably requested by Lender or any
assignee to protect its interests and property assigned pursuant to this Section. Borrower shall not have the
right to and shall not assert against any assignee any claim, counterclaim or other right Borrower may have
against Lender or Vendor. Assignments may include without limitation assignment of all of Lender's security
interest in and to the Equipment listed in a particular Contract and any related Escrow Fund and all rights in, to
and under the Contract related to such Equipment and any related Escrow Agreement. Borrower hereby agrees
that Lender may, without notice to Borrower, sell, dispose of, or assign any particular Contract or Contracts
through a pool, trust, limited partnership, or other similar entity, whereby one or more interests are created in
a Contract or Contracts, or in the Equipment listed in or the Installment Payments under a particular Contract
or Contracts.
None of Borrower's right, title and interest in, to and under any Contract or any portion of the
Equipment listed in any Contract or in any Escrow Fund may be assigned, subleased, or encumbered by
Borrower for any reason without obtaining prior written consent of Lender, which consent may be withheld,
conditioned or delayed in the sole discretion of Lender. Any purported assignment, sublease or encumbrance
without Lender's prior written consent shall be null and void.
24. Events of Default. Any of the following events shall constitute an "Event of Default" under a
Contract: (a) failure by Borrower to (i) pay any Installment Payment or other payment required to be paid under
such Contract at the time specified therein or (ii) maintain insurance as required under such Contract;
(b) failure by Borrower to observe and perform any covenant, condition or agreement contained in this Master
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Agreement or such Contract 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 Borrower by Lender, unless Lender 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, Lender will not unreasonably withhold its consent to an extension of such time if corrective action is
instituted by Borrower within the applicable period and diligently pursued until the default is corrected; (c) any
statement, representation or warranty made by Borrower in or pursuant to any Contract shall prove to have
been false, incorrect, misleading or breached in any material respect on the date when made; (d) Borrower
institutes any proceedings under any bankruptcy, insolvency, reorganization or similar law or a receiver or
similar official is appointed for Borrower or any of its property; or (e) an Event of Default occurs under any other
Contract.
25. Remedies on Default. Whenever any Event of Default exists under a Contract, Lender shall have
the right, at its sole option without any further demand or notice, to tale one or any combination of the
following remedial steps: (a) by written notice to Borrower, Lender may declare all Installment Payments
payable by Borrower pursuant to such Contract and other amounts payable by Borrower under such Contract to
the end of the then current Original Term or Renewal Term to be immediately due and payable; (b) with or
without terminating the Contract Term under such Contract, Lender may enter the premises where the
Equipment listed in such Contract is located and retake possession of such Equipment or require Borrower at
Borrower's expense to promptly return any or all of such Equipment to the possession of Lender at such place
within the United States as Lender shall specify, and sell such Equipment or, for the account of Borrower, lease
such Equipment, continuing to hold Borrower liable, but solely from legally available funds, for the difference
between (i) the Installment Payments payable by Borrower pursuant to such Contract and other amounts
related to such Contract or the Equipment listed therein-that are payable by Borrower to the end of the then
current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale or
leasing (after deducting all expenses of Lender in exercising its remedies under such Contract, including
without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such
Equipment and all brol<erage, auctioneer's and attorney's fees), subject, however, to the provisions of
Section 7. The exercise of any such remedies in respect of any such Event of Default shall not relieve Borrower
of any other liabilities under any other Contract or the Equipment listed therein; (c) Lender may terminate any
Escrow Agreement relating to such Contract and apply any proceeds in the Escrow Fund thereunder to the
Installment Payments under such Contract; and (d) Lender may tal<e whatever action at law or in equity may
appear necessary or desirable to enforce its rights under such Contract or as a secured party in any or all of the
Equipment and any related Escrow Fund. Any net proceeds from the exercise of any remedy under a Contract
(after deducting all costs and expenses described in this Section) shall be applied as follows: (i) if such
remedy is exercised solely with respect to a single Contract, Equipment listed in such Contract or rights
thereunder, then to amounts due pursuant to such Contract and other amounts related to such Contract or
such Equipment; or (ii) if such remedy is exercised with respect to more than one Contract, Equipment listed in
more than one Contract or rights under more than one Contract, then to amounts due pursuant to such
Contracts pro-rata.
26. No Remedv Exclusive. No remedy herein conferred upon or reserved to Lender is intended to be
exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under
a Contract 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 Lender to exercise any remedy reserved to it in Section 25 it shall not be necessary to give any
notice other than such notice as may be required in Section 25.
27. Notices. All notices or other communications under any Contract shall be sufficiently given and
shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight
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courier, to the parties hereto at the addresses listed below (or at such other address as either party hereto shall
designate in writing to the other for notices to such party), or to any assignee at its address as it appears on the
registration bool<s maintained by Lender (as Borrower's registration agent as provided in Section 23).
28. General Indemnification. To the fullest extent permitted by State law, Borrower shall indemnify,
defend and hold harmless Lender 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,
attorney's fees and expenses and court costs and expense) arising out of or as result of (a) entering into this
Master Agreement or any Contract or any of the transactions contemplated hereby or thereby, (b) the
ownership of any item of Equipment, (c) the ordering, acquisition, use, operation, condition, purchase, delivery,
rejection, storage or return of any item of Equipment, (d) any accident in connection with the operation, use,
condition, possession, storage or return of any item of Equipment resulting in damage to property or injury to or
death to any person, and/or (e) the breach of any covenant of Borrower or any material representation of
Borrower contained in this Master Agreement or a Contract. The indemnification and obligations arising under
this Section shall be payable solely from funds legally available for such purpose and shall continue in full force
and effect notwithstanding the full payment of all obligations under all Contracts or the termination of the
Contract Term under all Contracts for any reason.
29. Miscellaneous Provisions. Each Contract shall inure to the benefit of and shall be binding upon
Lender and Borrower and their respective successors and assigns. References herein to "Lender" shall be
deemed to include successors and each of Lender's assignees and subsequent assignees from and after the
effective date of each assignment as permitted by Section 23. In the event any provision of any Contract shall
be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision thereof. Each Contract may be amended by mutual written consent
of Lender and Borrower. Each Contract and this Master Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument. The captions or headings in this Master Agreement and in each Contract are for convenience only
and in no way define, limit or describe the scope or intent of any provisions or sections of this Master
Agreement or any Contract. This Master Agreement and each Contract shall be governed by and construed in
accordance with the laws of the State.
30. Waiver of lury Trial. Borrower expressly waives any and all right to a jury trial in any dispute
regarding or arising out of this Agreement.
IN WITNESS WHEREOF, Lender and Borrower have caused this Master Agreement to be executed in their
names by their duly authorized representatives as of the date first above written.
(LENDER) (BORROWER)
Mercedes-Benz Financial Services
USA LLC
13650 Heritage Parl<way ,
Fort Worth, TX 76177
By X By X
Name Name
Title Title
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10
EXHIBIT A
EQUIPMENT SCHEDULE
SCHEDULE NO.
RE: MASTER INSTALLMENT PURCHASE AGREEMENT dated as of ("Master Agreement"), between
MERCEDES-BENZ FINANCIAL SERVICES USA LLC ("Lender") and (`Borrower"). All terms used and
not otherwise defined herein have the meanings ascribed to them in the Master Agreement.
For purposes of the Contract created hereby,the following items of Equipment are hereby included under this Schedule together with
all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto as provided in the Master
Agreement.
At least ninety-five percent of the amount advanced under the Contract created hereby will be used to finance assets that are
capitalizable for federal income tax purposes.
DESCRIPTION OF EQUIPMENT
Quantity Description Model No./Serial No. Location
SEE ATTACHED EXHIBIT I-EQUIPMENT DESCRIPTION ATTACHED HERETO AND MADE A PART HEREOF.
The Installment Payments shall be in such amounts and payable on such Installment Payment due dates as set forth in the Installment
Payment Schedule attached to this Schedule as Exhibit A-1 and incorporated herein by this reference, subject to adjustment upon the
occurrence of a determination of taxability as provided in Section 4 of the Master Agreement.
CONTRACT TERM: The Contract Term shall consist of the Original Term and the number of consecutive Renewal Terms for
payment of the scheduled Installment Payments shown on the Installment Payment Schedule,with the final Renewal Term ending on
the first day after the last scheduled Installment Payment due date,subject to earlier termination pursuant to the Master Agreement,
APPLICATION OF ADVANCED FUNDS: [OPTION A: If funds advanced pursuant to Section 11 of the Master Agreement are to
be paid directly to a Vendor on the Commencement Date,state the following: The amount for the Equipment listed in this Schedule to
be paid to ,as Vendor, or reimbursed to Borrower is$ J [OPTION B: If funds advanced pursuant
to Section 11 of the Master Agreement are to be deposited into an Escrow Fund on the Commencement Date, state the following:
The total amount of money to be paid by Lender to the Escrow Agent under the Escrow Agreement for deposit and application in
accordance with the Contract created hereby and the applicable Escrow Agreement is$
IF MOTOR VEHICLES ARE BEING FINANCED:
Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a) Registered Oivner:
(b) Lienholder:
Borrower shall be responsible for the correct titling of all Equipment financed under the Contract created hereby. Borrower
will cause the original Certificates of Title to be delivered to Lender for retention in Lender's files throughout the Contract Term of
the Contract created hereby.
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Borrower hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master
Agreement (particularly Sections 3 and 4 thereof) are true, accurate and complete as though made on the Commencement Date.
Borrower acknowledges and agrees that Lender has acted solely for its own account in connection with the Contract and not as a
municipal advisor, financial advisor, agent or fiduciary to Borrower or any other person or entity. Borrower further represents and
warrants that (a) no material adverse change has occurred in the financial condition of Borrower since the dated date of the Master
Agreement; (b) no Event of Default has occurred and is continuing under any Contract currently in effect; (c) no Event of Non-
Appropriation under any Contract currently in effect is threatened; (d) the Equipment listed in this Schedule is essential to the
functions of Borrower or to the services Borrower provides its citizens; (e)Borrower has an immediate need for, and expects to make
immediate use of, substantially all such Equipment,which will be used by Borrower only for the purpose of performing one or more
of Borrower's governmental or proprietary functions consistent with the permissible scope of its authority;and(f)Borrower has made
its own determination to enter into the Contract created hereby and the terms hereof in reliance on the advice of its own financial,
accounting,tax, legal and other advisors. The terms and provisions of the Master Agreement(other than to the extent that they
relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by
reference and made a part hereof.
[IF APPLICABLE:Borrower hereby designates the aggregate principal portions of the Installment Payments payable under the Contract created hereby as a"qualified
tax-exempt obligation"for purposes of Section 265(b)(3)of the Tax Code. In support of such designation,Borrower hereby certifies to Lender that:(a)the reasonably
anticipated amount of tax-exempt obligations (excluding private activity bonds other than qualified 50t(c)(3) bonds) issued or to be issued by Borrower and all
subordinate entities thereof during the current calendar year is not reasonably expected to exceed$10,000,000;and(b)not more than$10,000,000 of obligations issued
by Borrower during the current calendar year have been designated for purposes of Section 265(b)(3)of the Tax Code.] [NOTE: Need to discuss administration of
bank-qualified designation when applicable.]
Dated:
Borrower: Lender: MERCEDES-BENZ FINANCIAL SERVICES USA LLC
ByX By
Name Name
Title Title
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EXHIBIT I
DESCRIPTION OF EQUIPMENT
Quantity Description Model No./Serial No. Location
I
1
1
1
1
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EXHIBIT A-I
INSTALLMENT PAYMENT SCHEDULE
SCHEDULE NO.
Installment
Payment Interest Principal Prepayment Outstanding
Payment No. Due Date Amount Portion Portion Price Principal Balance
+I
I
Totals:
PREPAYMENT PRICE SCHEDULE: The Prepavment Price on each Installment Pavment due date shall be the amount set forth for
such Installment Pavment due date in the "Prepavment Price" column of the Installment Pavment Schedule shown above. The
Prepavment Price is in addition to all Installment Pavments then due under this Schedule(including the Installment Pavment shown on
the same line in the Installment Pavment Schedule).
COMMENCEMENT DATE:
Borrower:
By X:
Name:
Title:
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EXHIBIT B
PLEASE COMPLETE EITHER FINAL OR PARTIAL ACCEPTANCE,AS APPLICABLE
FINAL ACCEPTANCE CERTIFICATE
Re: Schedule No. dated that incorporates by reference the terms and provisions of the Master Installment Purchase Agreement dated as of
,between MERCEDES-BENZ FINANCIAL SERVICES USA LLC,as Lender,and ,as Borrower.
In accordance with the Master Installment Purchase Agreement described above (the"Master Agreement'),the undersigned Borrower hereby certifies and represents
to,and agrees with Lender as follows:
(1) All of the Equipment listed in the above-referenced Schedule(the"Schedule")has been delivered,installed and accepted on the date hereof.
(2) Borrower 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) Borrower is currently maintaining the insurance coverage required by Section 17 of the Master Agreement.
(4) (a)No event or condition that constitutes,or with notice or lapse of time,or both,would constitute,an Event of Default exists at the date hereof under any
Contract currently in effect; (b) no material adverse change has occurred in the financial condition of Borrower since the dated date of the Master
Agreement;and(c)no Event of Non-appropriation under any Contract currently in effect has been threatened.
BORROWER
By X:
Title:
Acceptance Date:
>OR<
PAYMENT RE,OUEST and PARTIAL ACCEPTANCE CERTIFICATE
MERCEDES-BENZ FINANCIAL SERVICES USA LLC is hereby requested to pay the person or entity designated below as Payee,the sum set forth below in
payment of a portion or all of the cost of the acquisition described below. The amount shown below is due and payable under the invoice of the Payee attached hereto
with respect to the cost of the acquisition of the equipment and has not formed the basis of any prior request for payment. The equipment described below is part or all
of the"Equipment'listed in Exhibit A to the Master Installment Purchase Agreement referenced above.
Quantity Serial Number/Description: Amount:
Payee:
Payee's Federal ID Number:
Borrower hereby certifies and represents to and agrees with Lender as follows:(i)the equipment described above has been delivered,installed and accepted on the date
hereof-,(ii)Borrower has conducted such inspection and/or testing of said equipment as it deems necessary and appropriate and hereby acknowledges that it accepts said
equipment for all purposes;(iii)Borrower is currently maintaining the insurance coverage required by Section 17 of the Master Agreement;(iv)no event or condition
that constitutes,or with notice or lapse of time or both would constitute,an Event of Default exists at the date hereof under any Contract currently in effect;(v)no
material adverse change has occurred in the financial condition of Borrower since the dated date of the Master Agreement;and(vi)no Event of Non-appropriation
under any Contract currently in effect has been threatened.
Dated:
BORROWER
By
Title
PLEASE RETURN PAYMENT REQUEST TO:
MERCEDES-BENZ FINANCIAL SERVICES USA LLC
13650 Heritage Parkway
Fort Worth,TX 76111
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EXHIBIT C
(To be put on Attorney's Letterhead)
MERCEDES-BENZ FINANCIAL SERVICES USA LLC
13650 Heritage Parkway
Fort Worth,TX 76111
Re: Schedule No. dated that incorporates by reference the terms and provisions of the Master Installment
Purchase Agreement dated as of between MERCEDES-BENZ FINANCIAL SERVICES USA LLC,as Lender,
and as Borrower.
Ladies and Gentlemen:
As legal counsel to State of (the`Borrower"), I have examined(a)an executed counterpart
of a certain Master Installment Purchase Agreement dated as of , and Exhibits thereto (collectively, the "Master
Agreement"), by and between MERCEDES-BENZ FINANCIAL SERVICES USA LLC (the "Lender") and the Borrower, and an
executed counterpart of Schedule No. .dated (the"Schedule"),by and between the Lender and the Borrower
which, among other things,provides for the financing of certain property listed in the Schedule(the"Equipment"), (b) certified copy
of the ordinances or resolutions of the governing body of the Borrower which,among other things, authorize the Borrower 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 opinion. The Schedule and the terms and provisions of the Master Agreement incorporated therein by reference
together with the Installment Payment Schedule attached to the Schedule are herein referred to collectively as the"Contract".
In rendering this opinion,I have assumed without inquiry:
(a) The authenticity of all documents submitted to me as copies of the originals and the conformity of such copies to the
originals as they are finally executed and delivered by the Borrower and the Lender;
(b) That the Contract has been or will be duly authorized,executed and delivered by the Lender;
(c) That the Contract constitutes the valid, legal and binding obligation of the Lender enforceable against the Lender in
accordance with its terms;and
(d) That the Contract accurately describes and contains the mutual understandings of the parties, and that there are not oral or
written statements or agreements that modify,amend or vary,or purport to modify,amend or vary,any of the terms thereof.
Based on the foregoing,I am of the following opinion:
(a) The Borrower is a public body corporate and politic, duly organized and existing under the laws of the State, eFand has a
substantial amount of one of the following sovereign powers: (i)the power to tax, (ii)the power of eminent domain, or(iii)
police power;
(b) The name of the Borrower contained in the Contract is the correct legal name of the Borrower;
(c) The Borrower has the requisite power and authority to acquire and finance the Equipment and to execute and deliver the
Contract and to perform its obligations under the Contract;
(d) The Contract has been duly authorized,approved,executed,and delivered by and on behalf of the Borrower and the Contract
is a legal,valid and binding obligation of the Borrower enforceable in accordance with its terms, subject to (i) all applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium and other similar laws; (ii)the qualification that
certain waivers, restrictions and remedies provided for in the Contract, including without limitation certain indemnification
obligations,may be wholly or partially unenforceable under law;and(iii)general principles of equity.;
(e) The authorization, approval,execution,and delivery of the Contract and all other proceedings of the Borrower relating to the
transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and
all other applicable State laws;and
(f) To the best of my knowledge,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
Contract or the security interest of Lender or its assigns,as the case may be,in the Equipment thereunder.
TFFF1870(07-28-2015)
All of the opinions set forth above are also subject to the following qualifications,limitations and exceptions:
(a) The opinions expressed herein are limited to matters governed by the laws of the State of No opinion is
expressed regarding the laws of any other jurisdiction.
(b) The opinions expressed herein are based upon the law in effect on the date hereof, and I assume no obligation to revise or
supplement them if the law is changed by legislative action,judicial decision or otherwise.
All capitalized terms herein shall have the same meanings as in the Contract unless otherwise provided herein. Lender,its successors
and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest portions of the Installment Payments, are
entitled to rely on this opinion.
Printed Name
Signature
TFFF1870(07-28-2015)
EXHIBIT D
ACCEPTANCE OF INSTALLMENT PAYMENT OBLIGATION
Re: Schedule No. dated that incorporates by reference the terms and provisions of the Master
Installment Purchase Agreement dated as of between MERCI DES-BENZ FINANCIAL SERVICES USA
LLC,as Lender,and ,as Borrower.
In accordance with the Master Installment Purchase Agreement described above(the"Master Agreement"),the undersigned
hereby acknowledges and represents that:
All or a portion of the Equipment(as such term is defined in the Master Agreement)listed in the above-referenced Schedule
(the"Schedule")has not been delivered,installed,or available for use and has not been placed in service as of the date hereof,
Borrower acknowledges that Lender has agreed to set aside funds in an amount sufficient to provide financing(to the extent
requested by Borrower and agreed to by Lender)for the Equipment listed in the Schedule(the"Financed Amount");
The Financed Amount is set forth as the "Total Principal Portion" of Installment Payments in the Installment Payment
Schedule attached to the Schedule as Exhibit A-1 ("Exhibit A-1");and
Borrower agrees to execute a Payment Request Form,attached to the Master Agreement as Exhibit B,authorizing payment of
the Financed Amount,or a portion thereof,for each disbursement of funds.
NOTWITHSTANDING that all or a portion of the Equipment has not been delivered to, or accepted by, Borrower on the
date hereof,Borrower warrants that:
(a) Borrower's obligation to commence Installment Payments as set forth in Exhibit A-1 is absolute and unconditional as
of the Commencement Date of the Schedule and on each date set forth in Exhibit A-1 thereafter,subject to the terms and conditions of
the Master Agreement;
(b) Immediately upon delivery and acceptance of all the Equipment, Borrower will notify Lender of Borrower's final
acceptance of the Equipment by delivering to Lender a "Final Acceptance Certificate" in the form set forth as Exhibit B to the
Agreement;
(c) In the event that any surplus amount remains from the funds set aside or an Event of Non-appropriation under the
Master Agreement occurs, any amount then remaining shall be applied or distributed in accordance with Lender's standard servicing
procedures, which includes, but is not limited to, application of the remaining amount to the next Installment Payment and other
amounts due; and
(d) Regardless of whether Borrower delivers a Final Acceptance Certificate, Borrower shall be obligated to pay all
Installment Payments (including principal and interest) as they become due as set forth in Exhibit A-1, subject to the terms of the
Master Agreement.
(e) Borrower understands and agrees that interest shall accrue on the entire Financed Amount as of the date hereof, and
further understands and agrees that any interest earned shall be retained by Lender in consideration of managing the internal escrow
account.
AGREED TO on
BORROWER
By X
Title
TFFF1870(07-28-2015)
INSURANCE COVERAGE REQUIREMENTS
LENDER: MERCEDES-BENZ FINANCIAL SERVICES USA LLC,and its successors,transferees and assigns
BORROWER:
1. In accordance with Section 17 of the Master Agreement,we have instructed the insurance agent named below:
(Please fill in name,address and telephone number).
Telephone:
Fax:
Contact:
a. All Risk Physical Damage Insurance on the leased equipment evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming
MERCEDES-BENZ FINANCIAL SERVICES USA LLC and/or its successors,transferees and assigns,as loss payee.
Coverage Required: Prepayment Price
b. Public Liability Insurance evidenced by a Certificate of Insurance naming MERCEDES-BENZ FINANCIAL SERVICES USA LLC and/or its successors,
transferees and assigns as Additional Insured.
Minimum Coverage Required: $
C. Workers compensation coverage as required by the laws of the State: provided that,with Lender's prior written consent,Borrower may self-insure against
the risk described in clauses.
OR
2. Pursuant to Section 17 of the Master Agreement,we are self-insured for all risk,physical damage,and public liability and will provide proof of such self-
insurance in letter form together with a copy of the statute authorizing this form of insurance.
Proof of insurance coverage will be provided prior to the lime the Equipment is delivered to its.
PLEASE LIST NAME&ADDRESS AS FOLLOWS:
MERCEDES-BENZ FINANCIAL SERVICES USA LLC
[insert address]
Borrower:
By X:
Name:
Title:
TFFF1870(07-28-2015)
PAYMENT INSTRUCTIONS
Pursuant to the Master Installment Purchase Agreement dated as of (the"Master Agreement'),the terms and provisions of which are incorporated by
reference into Schedule No. . dated , behveen MERCEDES-BENZ FINANCIAL SERVICES USA LLC (the "Lender") and
(the`Borrower"),the Borrower hereby acknowledges the obligations to make Installment Payments promptly when due,in accordance with
Exhibit A-1 to such Schedule.
BORROWER NAME: TAX ID#:
INVOICE MAILING ADDRESS:
Mail invoices to the attention of. Phone ( ) Fax ( )
Approval of Invoices required by: Phone ( ) Fax ( )
Accounts Payable Contact: Phone ( ) Fax ( )
Processing time for Invoices: Approval: Checks:
Do you have a Purchase Order Number that you would like included on the invoice? No Yes PO#
Do your Purchase order numbers change annually? No Yes Processing time for new purchase orders:
BORROWER:
By :
Title:
Date:
TFFF1870(07-28-2015)
CERTIFICATE OF SIGNATURE AUTHORITY OF BORROWER
AGREEMENT—DATE
MERCEDES-BENZ FINANCIAL SERVICES USA LLC
[insert address]
RE: Master Installment Purchase Agreement dated (the "Master Agreement"), between
(`Borrower")and MERCEDES-BENZ FINANCIAL SERVICES USA LLG("Lender").
Dear MERCEDES-BENZ FINANCIAL SERVICES USA LLC,
I do hereby certify that I am the duly elected or appointed and acting Secretary/Clerk of the a body corporate
and politic duly organized and existing under the laws of the state of , that I have custody of the records of such entity,
and that,as of the date hereof,the individuals named below are the duly elected or appointed officers of such entity holding the offices
set forth opposite their respective names. I further certify that(a)the signatures set opposite their respective names and titles,are their
true and authentic signatures, and (b) such officers are the duly authorized persons or have the authority on behalf of such entity to
enter into Master Agreement described above and separate Schedules relating thereto from time to time as provided in the Master
Agreement and to execute Acceptance Certificates, Disbursement Requests, and other documents relating to the Master Agreement
and such Schedules.
NAME TITLE SIGNATURE
I further certify that the fiscal year of Borrower is from tq
IN WITNESS WHEREOF,I have duly executed this Certificate this day of .20
(Secretary/Clerk)
(Someone other than the person signing the documents)
TFFF1870(07-28-2015)
BANK QUALIFIED DESIGNATION
Schedule No. 1 dated to Master Installment Purchase Agreement dated
Borrower hereby represents and certifies the following(please check one):
Bank Qualified
❑ Borrower has designated, and hereby designates,this Contract as a"qualified tax-exempt obligation" for the purposes and within
the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended(the"Code"). In making that designation,
Borrower hereby certifies and represents that:
• As of the date hereof in the current calendar year,neither Borrower nor any other issuer on behalf of Borrower has designated
more than$10,000,000 of obligations(including this Contract)as"qualified tax-exempt obligations";
• Borrower reasonably anticipates that the total amount of tax-exempt obligations (including this Contract)to be issued by or
on behalf of Borrower(or allocated to Borrower)during the current calendar year will not exceed$10,000,000;
• The Contract will not be at any time a"private activity bond"as defined in Section 141 of the Code;
• The Contract is not subject to control by any entity and there are no entities subject to control by Borrower;and
• Not more than $10,000,000 of obligations of any kind (including the Contract) issued by, on behalf of or allocated to
Borrower will be designated for purposes of Section 265(b)(3)of the Code during the current calendar year.
Non-Bank Qualified
❑ Borrower has not designated this Contract as a "qualified tax-exempt obligation" for the purposes and within the meaning of
Section 265(b)(3)of the Code.
BORROWER: Name of Borrower
Signature: X
Printed Name/Title: 1
TFFF1870(07-28-2015)
ACKNOWLEDGEMENT OF BOARD APPROVAL
FROM A BOARD OF MEETING
| Board: [Name |
' |
| Date K8eedn0� [Qa��ofKQ��t Meeting]
.
' |
| Borrower: [Name ofBorrower] .
| Lender: Mercedes-Benz Financial Services USA LLC |
Master Installment Master Installment Purchase Agreement dated |
| |
| Purchase Agreement
Contract Schedule No. dated tm the Master
Installment Purchase Agreement
Equipment tobe See attachment for details |
� purchased: /
| Cost not toexceed: [$Amount associated with promotional rate] |
[0BFS Promo Rate%
Rate ofinterest:
mvm: If the moomut n,ue xmmu above is u promotional rate of
interest, the original pvmxaoo vnon of the onmvmont may be
discounted to reach on equivalent payment amount wuu market rate
of interest.
A motion was offered by . . seconded bv . and carried by
vote uf—hn—ho approve entering into a Master Installment Purchase Agreement �h KAarmadoo-
BenzFinancial SarvioeaUSA LLC for the purpose of purchasing, via e financing contract, the equipment
listed on the attachment, The cost shall not exceed the figure specified above.
Borrower has or will comply with applicable property acquisition laws, public bidding requivementa, and
open meeting |ewo in connection with the yWaohar Installment Purchase Agreement and the transactions
contemplated thereby. Borrower is a political subdivision or agency of the State of[insert State] within
the meaning of Section 103 of the Internal Revenue Code of 1986' as omended, with full power and
authority to enter into, and perform its obligations under, the Contract.
The Meohsr Installment Purchase Agreement and the Contract have been or will be duly auhorized,
exaoutod, and delivered by Borrower. It is the intention of the Board that the above Contract shall �
constitute a |aga|, valid and binding obligation of Borrowar, enforceable against Borrower in accordance
with its b*rmo, except to the extent limited by state and federal laws affecting creditors' remedies and by
bonkruptoy, naorgonizaUon, moratorium or other |mwu of general application relating to or affecting the
enforcement of creditors' rights.
Capitalized terms herein shall have the same meanings oo in the Contract unless otherwise provided
herein.
/oertify the above Contract is approved by the Board. _
Board Member Signoture Date
Print Name
Title
TpFp1870(07-28-2015)
�
^ .
General Law-Part I, Title VII, Chapter 44, Section 21C Page 1 of 2
Part I ADMINISTRATION OF THE GOVERNMENT
Title VII CITIES, TOWNS AND DISTRICTS
Chapter 44 MUNICIPAL FINANCE
Section 21CLEASE PURCHASE FINANCING AGREEMENTS
[ Text of section added by 2016, 218, Sec. 69 effective November
7, 2016.]
Section 21C. A city, town or district may by a two-thirds vote of
its legislative body, if recommended by its chief executive officer,
authorize any department of the city, town or district to enter into
a lease purchase financing agreement to acquire equipment or
improve a capital asset that may be financed by the issuance of
debt under this chapter or otherwise authorized by law, for a term
UP to the useful life of the property to be procured as determined
by its chief executive officer. Any lease purchase financing
agreement under this section shall be considered a binding
obligation of the city, town or district as if it were a debt
authorization under this chapter, provided an appropriation
available for the purpose has been made in the first fiscal year in
which the lease becomes effective. Any city, town or district that
https:Hmalegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter44/Section21 C 2/21/2019
General Law-Part I, Title VII, Chapter 44, Section 21C Page 2 of 2
follows the procedure in this section with respect to entering into a
lease purchase financing agreement for the procurement of any
personal property for the governmental entity, may refinance the
purchase with the issuance of refunding bonds under section 21A
to pay the balance of the lease obligation.
https://malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter44/Section2l C 2/21/2019