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HomeMy Public PortalAbout2003 Fire Trucks Agreement also see Suntrust Leasing.tifORDINANCE NO. 2003-4 A CAPITAL PROJECT AUTHORIZING ORDINANCE OF THE VILLAGE OF KEY BISCAYNE, FLORIDA (THE "VILLAGE"), CONCERNING THE ACQUISITION OF FIRE TRUCKS FOR THE VILLAGE FIRE RESCUE DEPARTMENT; AUTHORIZING AND PROVIDING FOR THE VILLAGE TO PURCHASE FIRE FIGHTING EQUIPMENT, TO -WIT: ONE (1) NEW PIERCE SKYBOOM AND ONE (1) NEW PIERCE PUMPER; AUTHORIZING EXPENDITURE OF FUNDS; AUTHORIZING AND APPROVING MASTER LEASE AGREEMENT AND RELATED DOCUMENTS; PROVIDING FOR NOTICE OF ORDINANCE ADOPTION; PROVIDING FOR SEVERABILITY; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Village Council, as the governing body of the Village of Key Biscayne (the "Village"), desires to obtain certain fire fighting equipment (the "Equipment") for the Village Fire Rescue Department as described in Equipment Schedule No. 01 to the Master Lease Agreement (collectively, the "Lease") with Leasing 2, Inc., the form of which Lease has been available for review by the Village Council prior to this meeting; and WHEREAS, the Equipment is essential for the Village to perform its governmental functions; and WHEREAS, the funds made available under the Lease will be deposited into an Escrow Account pursuant to the Lease and will be applied to the acquisition of the Equipment in accordance with the Lease; and WHEREAS, based upon the calculations of the Finance Department, the Village Council finds that this transaction complies with the debt limit provisions of Section 4.1 0(b)(i) of the Village Charter; and WHEREAS, the V illage h as t aken the n ecessary s teps, including t hose r elating t o any applicable legal bidding requirements, to arrange for the acquisition of the Equipment; and WHEREAS, the Village proposes to enter into the Lease with Leasing 2, Inc., substantially in the form presented at this meeting; and WHEREAS, the Village Council hereby finds and determines that the terms of the Lease and related instruments (collectively, the "Financing Documents") in substantially the form presented at this meeting and incorporated in this Resolution are in the best interests of the Village for the acquisition of the Equipment. NOW, THEREFORE, IT IS HEREBY ORDAINED BY THE VILLAGE COUNCIL OF THE VILLAGE OF KEY BISCAYNE, FLORIDA, AS FOLLOWS: Section 1. Recitals Adopted. T hat t he r ecitals stated above are h ereby a dopted a nd confirmed. Section 2. Capital Project Authorizing Ordinance. That pursuant to Village Charter Sec. 3.07(b) and Sec. 4.03(9), this Ordinance shall constitute a Capital Project Authorizing Ordinance. The Capital Project is the purchase of fire fighting equipment, to -wit: one (1) New Pierce Skyboom and one (1) New Pierce Pumper (the "Equipment") for the Village of Key Biscayne Fire Rescue Department, at a projected cost of Eight Hundred Sixty One Thousand, Seven Hundred Forty -Four ($861344.00) Dollars. However, the portion of the Equipment cost which shall be financed is Six Hundred Ninety -One Thousand, Seven Hundred Forty -Four ($691,744.00) Dollars, plus fixed annual financing costs of a range of not less than 3% and not more than 5% for the six (6) year (73 1/2 month) term of the lease - purchase transaction, as payable in seven (7) annual installment payments. 2 Section 3. Equipment Purchase Authorized. A. That the purchase of the Equipment is hereby authorized. The Equipment is further described in the Master Lease Agreement and Equipment Schedule No. 01 (collectively the "Lease") between the Village and Leasing 2, Inc., a copy of which is set forth in Exhibit "A," attached hereto and incorporated_ herein. The Equipment shall be utilized by the Village Fire Rescue Department to provide fire fighting and rescue services for the Village. B. That the Village Council hereby approves the Lease, and authorizes the Village Manager to execute the Lease, once approved by the Village Attorney for legal sufficiency, for the acquisition of the Equipment for a cost which is consistent with this Ordinance and the Lease. C. That the Village Manager is authorized to take all action necessary to implement this Ordinance and the Lease, and is authorized to expend Village funds for the purchase of the Equipment pursuant to the Lease and in accordance with Village budget appropriations. D. That the Financing Documents and the acquisition and financing of the Equipment under the terms and conditions as described in the Financing Documents are hereby approved. The Village Manager and any other officer of the Village who shall have power to execute contracts on behalf of the Village be, and each of them hereby is authorized to execute, acknowledge and deliver the Financing Documents with any changes, insertions and omissions therein as may be approved by the Village Attorney such approval to be conclusively evidenced by such execution and delivery of the Financing Documents. The Village Clerk of the Village is authorized to affix the official seal of the Village to the Financing Documents and attest the same. E. That the proper officers of the Village, be and each of them hereby is, authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper 3 for carrying out this Resolution and the Financing Documents. F. That the closing of this transaction and the effective date of the Lease shall be as of October 1, 2003, provided that this may be revised to an earlier date, so long as the debt limit provisions of Village Charter Section 4.10(b)(i) are complied with as determined by the Village Manager after consultation with the Finance Director and Village Attorney. G. That pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code"), Village hereby specifically designates the Lease as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code. Section 4. Notice of Ordinance Adoption. That pursuant to Village Charter Sec. 4.03(9), following the passage of this Ordinance on first reading, the Village Clerk shall provide notice of the date and time of the second reading ("Second Reading Notice"). The Second Reading Notice shall include a brief description of the Equipment and its cost and shall be published in addition to and contemporaneously with notices regularly published for second readings of ordinances. The published notice shall be in substantially the form attached hereto as Exhibit "B." Further, the Village Clerk shall provide for each Village elector to be sent a Second Reading Notice by postcard. The postcard notice shall be in substantially the form attached hereto as Exhibit "C." Any action taken by the Council on this Ordinance shall not be voided by the failure of an individual Village elector to receive a Second Reading Notice postcard. Section 5. Severability. That the provisions of this Ordinance are declared to be severable and if any section, sentence, clause or phrase of this Ordinance shall for any reason be held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining sections, sentences, c lauses, and p hrases o f t his 0 rdinance b ut t hey s hall r emain i n e ffect, i t being t he legislative intent that this Ordinance shall stand notwithstanding the invalidity of any part. 4 Section 6. Effective Date. That this Ordinance shall be effective upon adoption on second reading. PASSED AND ADOPTED on first reading this 22nd day of April, 2003. PASSED AND ADOPTED on second reading this 13th day of May, 2003. /4, , o ( e t e x . t i d t . . _ L , MAYOR ROBERT OLDAKOWSKI 4 dve CHITA H. ALVAREZ, CMC, VILLAGE CLERK APPROVED AS TO F RM AND LEGAL SUFFICIE Y. VILLAGE ATT • RNE 103001 \ordinances\acquisition of firetrucks Certified Copy of Ordinance 2003-4 Deputy Village Clerk 5 EXHIBIT "A" MASTER LEASE AND EQUIPMENT SCHEDULE NO.01 6 EXHIBIT "B" PUBLIC NOTICE Pursuant to Village of Key Biscayne Charter Section 4.03(9), notice is hereby provided that on Tuesday, May 13, 2003 at 7:00 p.m., in the Village Council Chamber, at 560 Crandon Blvd., Key Biscayne, FL, a public hearing on the second and final reading of an ordinance concerning the Fire Truck equipment acquisition capital project shall be heard by the Village Council, as follows: A CAPITAL PROJECT AUTHORIZING ORDINANCE OF THE VILLAGE OF KEY BISCAYNE, FLORIDA (THE "VILLAGE"), CONCERNING THE ACQUISITION OF FIRE TRUCKS FOR THE VILLAGE FIRE RESCUE DEPARTMENT; AUTHORIZING AND PROVIDING FOR THE VILLAGE TO PURCHASE FIRE FIGHTING EQUIPMENT, TO -WIT: ONE (1) NEW PIERCE SKYBOOM AND ONE (1) NEW PIERCE PUMPER; AUTHORIZING EXPENDITURE OF FUNDS; AUTHORIZING AND APPROVING MASTER LEASE AGREEMENT AND RELATED DOCUMENTS; PROVIDING FOR NOTICE OF ORDINANCE ADOPTION; PROVIDING FOR SEVERABILITY; PROVIDING FOR AN EFFECTIVE DATE. Capital Project: Acquisition of One (1) New Pierce Skyboom; Acquisition of One (1) New Pierce Pumper. Cost: The projected cost of the Equipment is $861344. However, the portion of this Equipment cost which shall be financed is approximately $691,744 plus annual financing costs (anticipated to be between 3% to 5%) for the seven (7) annual installment payments of the six (6) year (73 1/2 month) term of the lease - purchase transaction. This notice is published in addition to and contemporaneously with notices regularly published for second readings of ordinances. For any question on this item, please contact the Village Clerk at 305-365-5506. In accordance with the Americans With Disabilities Act of 1990, all persons who are disabled and who need special accommodations to participate in this proceeding because of that disability should contact the office of the Village Clerk, 88 W. McIntyre Street, Key Biscayne, FL 33149, telephone number: 305-365-5506, not later than two (2) business days prior to such proceedings. If a person decides to appeal any decision made by the Village Council with respect to any matter considered at a meeting or hearing, that person will need a record of the proceedings and, for such purpose, may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based (F.S. 286.0105). 7 EXHIBIT "C" PUBLIC NOTICE (Postcard to Electors) Pursuant to Village of Key Biscayne Charter Section 4.03(9), notice is hereby provided that on Tuesday, May 13, 2003 at 7:00 p.m., in the Village Council Chamber, at 560 Crandon Blvd., Key Biscayne, FL, a public hearing on the second and final reading of a Capital Project Authorizing Ordinance for the Fire Truck equipment acquisition capital project shall be heard by the Village Council. Capital Project: Acquisition of One (1) New Pierce Skyboom; Acquisition of One (1) New Pierce Pumper. Cost: The projected cost of the Equipment is $861,744. However, the portion of this Equipment cost which shall be financed is approximately $691,744 plus annual financing costs (anticipated to be between 3% to 5%) for the seven (7) annual installment payments of the six (6) year (73 1/2 month) term of the lease - purchase transaction. For any question on this item, please contact the Village Clerk at 305-365-5506. If a person decides to appeal any decision made by the Village Council with respect to any matter considered at a meeting or hearing, that person will need a record of the proceedings and, for such purpose, may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based (F.S. 286.0105). 8 EXHIBIT D Lease No Equipment Schedule: 01 INCUMBENCY CERTIFICATF, I do hereby certify that I am the duly elected or appointed and acting l V ��4��C/ lam PP of Village of Key Biscayne, a political subdivision duly organized and existing under the laws of the State of Florida, 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 (i) the signatures set opposite their respective names and titles are their true and authentic signatures and (ii) such officers have the authority on behalf of such entity to enter into that certain Master Lease Agreement dated as of June 16, 2003 between such entity and Leasing 2, Inc.. NAME TITLE Jacqueline R Menendez Village Manager IN WITNESS WHEREOF, I have duly executed this certificate as of this ! day of r),e , 0),0q?, By Title* Board Mtinber or other authorized officer's signature 1)•eft4-1 V//5 C/ (f Name • 44-7,01- F. cz 9•9 Z (Printed or typed) WEISS SEROTA HELFMAN PASTORIZA GUEDES COLE & BONISKE, P.A. ATTORNEYS AT LAW MITCHELL A. BIERMAN NINA L. BONISKE JAMIE ALAN COLE EDWARD G. GUEDES STEPHEN J. HELFMAN JOHN R. HERIN, JR. GILBERTO PASTORIZA GARY I. RESNICK JOSEPH H. SEROTA NANCY E. STROUD RICHARD JAY WEISS DAVID M. WOLPIN STEVEN W. ZELKOWITZ THOMAS J. ANSBRO• LILLIAN ARANGO DE LA HOZ• ALISON S. BIELER MITCHELL J. BURNSTEIN ELAINE M. COHEN STEPHANIE DEUTSCH• MIAMI-DADE OFFICE 2665 SOUTH BAYSHORE DRIVE SUITE 420 MIAMI, FLORIDA 33133 TELEPHONE (305) 854-0800 TELECOPIER (305) 854-2323 WWW.WSH-FLALAW.COM BROWARD OFFICE 3107 STIRLING ROAD • SUITE 300 FORT LAUDERDALE, FLORIDA 33312 TELEPHONE (954) 763-4242 • TELECOPIER (954) 764-7770 LEASING 2, INC. 1720 West Cass Street Tampa, Florida 33606-1230 *OF COUNSEL June 16, 2003 JENNIFER A. GOLDBERG DOUGLAS R. GONZALES MARK B. KRAVITZ CHRISTOPHER F. KURTZ HARRIET R. LEWIS* PETER A. LICHTMAN KAREN LIEBERMAN• MATTHEW H. MANDEL BERNARD S. MANDLER• MICHAEL J. MARRERO ALEXANDER L. PALENZUELA-MAURI MICHAEL S. POPOK• ANTHONY L. RECIO MARK A. ROTHENBERG SCOTT A. ROBIN DANA J. SCHINDLER GAIL D. SEROTA• JEFFREY P. SHEFFEL MIA M. SINGH JOSE S. TALAVERA SUSAN L. TREVARTHEN Re: Master Lease Agreement dated as of June 16, 2003 (the "Agreement") by and between Leasing 2, Inc. ("Lessor") and VILLAGE OF KEY BISCAYNE ("Lessee") Ladies and Gentlemen: We have acted as counsel to Lessee with respect to the Agreement described above and various related matters, and in this capacity have reviewed a duplicate original or certified copy thereof and Equipment Schedule No. 01 executed pursuant thereto (together with the Agreement, the "Lease"). The terms capitalized in this opinion but not defined herein shall have the meanings assigned to them in the Lease. Based upon the examination of these and such other documents as we have deemed relevant, it is our opinion that: 1. Lessee is a political subdivision of the State of Florida (the "State") within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended, and is duly organized, existing and operating under the Constitution and laws of the State. 2. Lessee is authorized and has the power under applicable law to enter into the Lease, and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Lease has been duly authorized, executed and delivered by and on behalf of Lessee, and is a legal, valid and binding obligation of Lessee enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. Leasing 2, Inc. June 16, 2003 Page Two 4. The authorization and execution of the Lease and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting, public records, public bidding and all other laws, rules and regulations of the State. 5. The execution of the Lease and the appropriation of moneys to pay the Rental Payments coming due thereunder do not and will not result in the violation of any constitutional, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee. 6. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body that challenges the organization or existence of Lessee, the authority of Lessee or its officers or its employees to enter into the Lease, the proper authorization and/or execution of the Lease or the documents contemplated thereby, the appropriation of moneys to make Rental Payments under the Lease for the current Fiscal Year of Lessee, or the ability of Lessee otherwise to perform its obligations under the Lease and the transactions contemplated thereby. To the best of our knowledge, no such litigation, action, suit or proceeding is threatened. 7. The Equipment is personal property, and when used by Lessee will not be or become fixtures under the laws of the State. 8. Ordinance No. 2003-4 of the governing body of Lessee was duly and validly adopted by such governing body on May 13, 2003, and such Ordinance has not been amended, modified, supplemented or repealed and remains in full force and effect. This opinion may be relied upon by the addressee hereof and its successors and assignees of interests in the Lease, but only with regard to matters specifically set forth herein. DMW/ajj 103.001 Very truly yours, David M. Wolpin Shareholder WEISS SEROTA HELFMAN PASTORIZA GUEDES COLE & BONISKE, P.A. EXHIBIT G-1 Lease No.: Equipment Schedule: 01 DATE. Art -iv. 730,ln 1 e. K z 1 GS rrl.4 �l TO -R c5 K Mt,,v��1 e rn e n f Ass oe Fail tkj . r3 Ro f9/d ,Bind - sft 4/6 a Pt- c, n t -c o f4.- 3 3 3 c -;? 4( Insurance Agent Name & Address FA x ( 95-4) 7 3 - 09 ti Phone Number and Fax Number J //310LoK)3 Gentlemen: VILLAGE OF KEY BISCAYNE has entered into a Master Lease Agreement dated as of June 16, 2003 with LEASING 2, INC.. In accordance with the Agreement, Lessee certifies that it has instructed the insurance agent named above to issue: a. All Risk Physical Damage Insurance on the leased Equipment evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming Leasing 2, Inc. and/or its assigns as Loss Payee. The Coverage Required is $691,744.00. b. Public Liability Insurance evidenced by a Certificate of Insurance naming Leasing 2, Inc. and/or its assigns as Additional Insured. The following minimum coverage is required: Liability: $ 500,000.00 per person Liability - Bodily Injury: $1,000,000.00 aggregate Liability - Property Damage: $1,000,000.00 property damage liability PROPERTY: One (1) new Pierce Dash 61' Skyboom, VIN: One (1) new Pierce Dash Pumper, VIN: LOCATION: 560 Crandon Boulevard, Key Biscayne, FL 33149 Upon issuance of the coverage outlined above, please mail a certificate of insurance to Leasing 2, Inc. and/or its Assigns 1720 West Cass Street Tampa, FL 33606-1230. Your courtesy in issuing and forwarding the requested certificate at your earliest convenience will be appreciated. Date ..3.3 : Jacqueline R. Menendez e: Village Mana er � 13 Date: Lease No.: Equipment Schedule: 01 NOTICE AND ACKNOWLEDGMENT OF ASSIGNMENT Dated: June 16, 2003 LEASING 2, INC. ("Assignor") hereby gives notice that it has assigned and sold to SunTrust Leasing Corporation ("Assignee") all of Assignor's right, title and interest in and to the rental payments and other amounts due under the Master Lease Agreement (the "Lease") by and between Assignor and VILLAGE OF KEY BISCAYNE ("Lessee"). All rental payments and other amounts coming due pursuant to the Lease on and after the date hereof are payable to and should be remitted to Assignee at the following address: SunTrust Leasing Corporation P.O. Box 79194 Baltimore, MD 21279-0194 Lessee hereby acknowledges the effect of the assignment and absolutely and unconditionally agrees to deliver all rental payments and other amounts coming due under the Lease in accordance with the terms thereof on or after the date of this Notice and Acknowledgment of Assignment. Lessee agrees that (i) Assignee shall have all the rights of lessor under the Lease and all related documents, including, but not limited to, the right to issue or receive all notices and reports, to give all consents, to receive title to the equipment, to declare a default and to exercise all remedies thereunder, and (ii) Lessee shall pay Assignee all installment payments and other amounts due under the Lease as and when due, without deduction or offset, notwithstanding any claim Lessee may have against the original lessor, Assignor, Assignee or relative to the equipment, or any other claim of Lessee arising prior to the assignment and sale of the Lease to Assignee, and (iii) Lessee has an unconditional obligation to make payments to Assignee and its assigns under the Lease and the Lease may be terminated (in whole, hut not in part) by Lessee prior to all payments having been made only pursuant to nonappropriation. Assignor and Lessee agree and acknowledge that this Notice and Acknowledgment of Assignment is made for and inures to the benefit of Assignee and its assigns. The Lease remains in full force and effect, has not been amended and no nonappropriation or event of default (or event which with the passage of time or the giving of notice or both would constitute a default) has occurred thereunder. Any inquiries of Lessee related to the Lease and any requests for escrow disbursements, if applicable, should be directed as follows: SunTrust Leasing Corporation 29 West Susquehanna Avenue, Suite 400 CMD2424 Towson, MD 21204 VILLAGE OF KEY BISCAYNE LEASING 2, INC. Lessee Assignor By- e: Jacq '• me R. Menendez Name: Brad Meyers itle: Village Man ger C / (tk73 A3) Title: President Date: (0-2,4-03 BILLING INFORMATION Please indicate below how you would like us to bill you for the lease payments due under this Agreement, including a contact name, if applicable: Contact Name. /23i•cv#9 Company. // ` / / S C� / 4.4 �• Street Address or Box #• 46 WeS7— G 1 - /L �e-.- 71 City, State, Zip. Telephone. Fax leasing 2 government leasing specialists 1720 west cass street tampa, Fl 33606-1:30 900 287 5155 813 258 9858 8 1 3 258 9333 arm e2 con June 26, 2003 C O i Canon John C. Gilbert, Fire Chief Village of Key Biscayne 560 Crandon Boulevard Key Biscayne, Florida 33149 Re: Master Lease Agreement Dear Chief Gilbert: aw en'orcement ene gy ms,ag.ment Enclosed for your records please find fully executed copies of our recent lease agreement. Thank you for the trust and confidence you have placed in Leasing 2 by awarding us this business. As our customer, we value you, your business and our relationship. You can depend on Leasing 2 to always provide you with the highest level of leasing expertise and customer care available. It has been a pleasure working with you and Village of Key Biscayne to provide these services. If we can ever be of further assistance, please do not hesitate to contact me at 800-287-5155. Best regards, Brad Meyers BM/If encl. LEASING 2, INC. MASTER LEASE AGREEMENT LEASE NUMBER: CD5 This MASTER LEASE AGREEMENT (the "Agreement"), dated as of June 16, 2003 is made and entered into by and between Leasing 2, Inc., a Florida corporation, as lessor (the "Lessor"), and VILLAGE OF KEY BISCAYNE, a political subdivision of the State of Florida, as lessee ("Lessee"). In consideration of the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE I. DEFINITIONS AND EXHIBITS Section 1.1. Definitions. The following terms have the meanings specified below. "Acceptance Certificate" means each Acceptance Certificate delivered by Lessee as part of an Equipment Schedule certifying as to the delivery, installation and acceptance of Equipment. "Agreement" means this Master Lease Agreement and all Equipment Schedules hereto. "Agreement Date" means the date first written above. "Code" means the Internal Revenue Code of 1986, as amended, together with Treasury Regulations promulgated from time to time thereunder. "Equipment" means all items of property described in Equipment Schedules and subject to this Agreement. "Equipment Group" means each group of Equipment listed in a single Equipment Schedule. "Equipment Schedule" means each sequentially numbered schedule executed by Lessor and Lessee with respect to an Equipment Group. "Escrow Account" means the equipment acquisition account established by Lessor pursuant to the Agreement. "Events of Default" means those events described in Section 12.1. "Fiscal Year" means each 12 -month fiscal period of Lessee. "Interest" means the portion of a Rental Payment designated as and comprising interest as provided in a Payment Schedule. "Lease" means, with respect to each Equipment Group, this Agreement and the Equipment Schedule relating thereto, which together shall constitute a separate contract between Lessor and Lessee relating to such Equipment Group. "Lease Date" means, with respect to each Lease, the date so designated in the related Equipment Schedule and the commencement date of the interest component as provided in the related Payment Schedule. "Lease Term" means, with respect to each Equipment Group, the period during which the related Lease is in effect as specified in Section 31 "Net Proceeds" means any insurance proceeds or condemnation awards paid with respect to any Equipment remaining after payment therefrom of all expenses incurred in the collection thereof. "Non -Appropriation" means the failure of Lessee, Lessee's governing body, or, if applicable, the governmental entity from which Lessee obtains its operating and/or capital funds to appropriate money for any Fiscal Year sufficient for the continued performance by Lessee of all of Lessee's obligations under this Agreement, as evidenced by the passage of an ordinance or resolution specifically prohibiting Lessee from performing its obligations under this Agreement with respect to any Equipment, and from using any moneys to pay any Rental Payments due under this Agreement for a designated Fiscal Year and all subsequent Fiscal Years. "Payment Date" means each date upon which a Rental Payment is due and payable as provided in a Payment Schedule. "Payment Schedule" means the schedule of Rental Payments attached to an Equipment Schedule. "Principal" means the portion of any Rental Payment designated as and comprising principal as provided in a Payment Schedule. "Prepayment Price" means the amount so designated and set forth opposite a Payment Date in a Payment Schedule indicating the amount for which Lessee may purchase the related Equipment Group as of such Payment Date after making the Rental Payment due on such Payment Date. 6/2/0; LES-BQ-ESR DOC/rev 5/01/kessoriL2 1 "Rental Payment" means each payment due from Lessee to Lessor on a Payment Date. "Specifications" means the bid specifications and/or purchase order pursuant to which Lessee has ordered any Equipment from a Vendor "State" means the state or commonwealth in which Lessee is situated. "Vendor" means each of the manufacturers or vendors from which Lessee has ordered or with which Lessee has contracted for the manufacture, delivery and/or installation of the Equipment. Section 1.2. Exhibits. Exhibit A- Equipment Schedule including form of Acceptance Certificate and form of Payment Schedule. Exhibit B-1. Form of Tax Agreement and Arbitrage Certificate (Escrow). Exhibit C-1 • Form of Resolution of the Governing Body of Lessee relating to each Lease (Escrow). Exhibit ft Form of Incumbency Certificate as to each officer or representative of Lessee executing this Agreement or any Lease. Exhibit F- Form of Opinion of Independent Counsel to Lessee. Exhibit F. Form of Payment Request Form. Exhibit G-1 • Form of Confirmation of Outside Insurance. Exhibit G-7: Form of Questionnaire for Self -Insurance and Addendum to Equipment Schedule Relating to Self -Insurance. ARTICLE II. LEASE OF EQUIPMENT Section 2.1. Acquisition of Equipment. Prior to the addition of any Equipment Group, Lessee shall provide Lessor with a description of the equipment proposed to be subject to a Lease hereunder, including the cost and vendor of such equipment, the expected delivery date and the desired lease terms for such equipment, and such other information as the Lessor may require. If Lessor, in its sole discretion. determines the proposed equipment may be subject to a Lease hereunder, Lessor shall furnish to Lessee a proposed Equipment Schedule relating to the Equipment Group for execution by Lessee and then Lessor. By execution hereof, Lessor has made no commitment to lease any equipment to Lessee. Section 2.2. Disbursement. Lessor shall have no obligation to make any disbursement to a Vendor or reimburse Lessee for any payment made to a Vendor for an Equipment Group (or, if the escrow procedure described in Section 2.4 hereof is utilized, consent to a disbursement) until five (5) business days after Lessor has received all of the following in form and substance satisfactory to Lessor. (a) a completed Equipment Schedule executed by Lessee; (b) an Acceptance Certificate in the form included with Exhibit A hereto; (c) a resolution or evidence of other official action taken by or on behalf of the Lessee to authorize the acquisition of the Equipment Group on the terms provided in such Equipment Schedule; (d) a Tax Agreement and Arbitrage Certificate in the form of Exhibit B -1 (as applicable) attached hereto: (e) evidence of insurance with respect to the Equipment Group in compliance with Article VII of this Agreement. (t) Vendor invoice(s) and/or bill(s) of sale relating to the Equipment Group, and if such invoices have been paid by Lessee, evidence of payment thereof and evidence of official intent to reimburse such payment as required by the Code; (g) financing statements executed by Lessee as debtor and/or the original certificate of title or manufacturer's certificate of origin and title application, if any, for any Equipment which is part of such Equipment Group and is subject to certificate of title laws; (h) a completed and executed Form 8038-G or 8038 -GC, as applicable, or evidence of filing thereof with the Secretary of Treasury; (i) an opinion of counsel to the Lessee substantially in the form of Exhibit E hereto, and 0) any other documents or items reasonably required by Lessor. Section 2.3. Lease; Possession and Use. Lessor hereby leases the Equipment to Lessee, and Lessee hereby leases the Equipment from Lessor, upon the terms and conditions set forth herein. Lessee shall have quiet use and enjoyment of and peaceably have and hold each Equipment Group during the related Lease Term, except as expressly set forth in this Agreement. Section 2.4. Escrow Procedure. If Lessor and Lessee agree that the cost of an Equipment Group is to be paid from an Escrow Account: (a) Lessor and Lessee shall execute an Equipment Schedule relating to such Equipment Group; and (b) Lessor shall deposit an amount into the Escrow Account sufficient to cover the cost of the Equipment Group at delivery. All amounts deposited by Lessor into the Escrow Account shall constitute a loan from Lessor to Lessee that shall be repaid by the Rental Payments due under the related Lease. ARTICLE III. TERM Section 3.1. Term. This Agreement shall be in effect from the Agreement Date until the earliest of (a) termination under Section 3.2 or (b) termination under Section 12.2; providjl, however, no Equipment Schedules shall be executed after any Non -Appropriation or Event of Default. Each Lease with respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease Date and ending as provided in Section 3.4. Section 3.2. Termination by Lessee. In the sole event of Non -Appropriation, this Agreement and each Lease hereunder shall terminate. in whole, but not in part, as to all Equipment effective upon the last day of the Fiscal Year for which funds were appropriated, in the manner and subject to the terms specified in this Article. Lessee may effect such termination by giving Lessor a written notice of termination and by paying to Lessor any Rental Payments and other amounts which are due and have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to give notice of such termination not less than ninety (90) days prior to the end of the Fiscal Year for which appropriations were made, and shall notify Lessor of any anticipated termination. In the event of termination of this Agreement as provided in this Section, Lessee shall comply with the instructions received from Lessor in accordance with Section 12.3. Section 3.3. Effect of Termination. Upon termination of this Agreement as provided in Section 3.2, Lessee shall not be responsible for the payment of any additional Rental Payments coming due in succeeding Fiscal Years, but if Lessee has not complied with the instructions 6r'-'0+ LFS-BQ-LSR DOC/res. S/01/lessor/L'_ 2 received from Lessor in accordance with Section 12.3, the termination shall nevertheless be effective, but Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Rental Payments that would thereafter have come due if this Agreement had not been terminated and which are attributable to the number of days after which Lessee fails to comply with Lessor's instructions and for any other loss suffered by Lessor as a result of Lessee's failure to take such actions as required. Section 3.4. Termination of Lease Term. The Lease Term with respect to any Lease will terminate upon the occurrence of the first of the following events: (a) the termination of this Agreement by Lessee in accordance with Section 3.2; (b) the payment of the Prepayment Price by Lessee pursuant to Article V; (c) an Event of Default by Lessee and Lessor's election to terminate such Lease pursuant to Article XII; or (d) the payment by Lessee of all Rental Payments and all other amounts authorized or required to be paid by Lessee pursuant to such Lease. ARTICLE IV. RENTAL PAYMENTS 1. Section 4.1. Rental Payments. The Lessee agrees to pay the Rental Payments due as specified in the Payment Schedule in Exhibit A A portion of each Rental Payment is paid as interest as specified in the Payment Schedule of each lease, and the first Rental Payment i l l include Interest accruing from the Lease Date. Lessor is authorized to insert the due date of the first Rental Payment in the Payment Schedule in Exhibit A. All Rental Payments shall be paid to Lessor, or to such assignee(s) Lessor has assigned as stipulated in Article XI, at such places as Lessor or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay the Rental Payments with lawful money of the United States of America from moneys legally available therefore.Lessor and Lesseeconfirm their understanding and agreement that (a) all payments due under the Agreement are to be made only from Lessee's legally available and appropriated revenues from sources other than ad valorem or other taxes, (b) that Lessee shall not be obligated to pay any sums due under the Agreement from the proceeds of ad valorem or other taxes, and (c) that Lessee's contractual obligations to request annual appropriations from which payments due under the Agreement may be made does not constitute an indebtedness of Lessee within the meaning of any constitutional or statutory provision or limitation. Section 4.2. Current Expense. The obligations of Lessee, including its obligation to pay the Rental Payments due in any Fiscal Year of a Lease Term, shall constitute a current expense of Lessee for such Fiscal Year and shall not constitute an indebtedness of Lessee within the meaning of the Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of Lessee for this Agreement and the Net Proceeds of the Equipment) to the payment of any Rental Payment or other amount coming due hereunder. Section 4.3. Unconditional Rental Payments. The Lessee's obligation to make Rental Payments shall be absolute and unconditional Also, any other payments required hereunder shall be absolute and unconditional. Lessee shall make these payments when due and shall not withhold any of these payments pending final resolution of any disputes. The Lessee shall not assert any right of set-off or counterclaim against its obligation to make these payments. Lessee's obligation to make Rental Payments or other payments shall not be abated through accident, unforeseen circumstances, failure of the Equipment to perform as desired, damage or destruction to the Equipment. loss of possession of the Equipment or obsolescence of the Equipment. The Lessee shall be obligated to continue to make payments required of it by this Agreement if title to, or temporary use of, the Equipment or any part thereof shall be taken under exercise of the power of eminent domain. ARTICLE V. OPTION TO PREPAY Section 5.1. Option to Prepay. Lessee shall have the option to prepay its obligations under any Lease in whole but not in part on any Payment Date for the then applicable Prepayment Price as set forth in the related Payment Schedule, provided there has been no Non - Appropriation or Event of Default. Section 5.2. Exercise of Option. Lessee shall give notice to Lessor of its intention to exercise its option not less than thirty (30) days prior to the Payment Date on which the option will be exercised and shall pay to Lessor not later than such Payment Date an amount equal to all Rental Payments and any other amounts then due or past due under the related Lease (including the Rental Payment due on the Payment Date on which the option shall be effective) and the applicable Prepayment Price set forth in the related Payment Schedule In the event that all such amounts are not received by Lessor on such Payment Date, such notice by Lessee of exercise thereof shall be void and the related Lease shall continue in full force and effect. Section 5.3. Release of Lessor's interest. Upon receipt of the Prepayment Price in good funds with respect to any Equipment Group, the Lease with respect to such Equipment Group shall terminate and Lessee shall become entitled to such Equipment Group AS IS, WHERE IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any lien or encumbrance created by or arising through Lessor. ARTICLE VI. REPRESENTATIONS, WARRANTIES AND COVENANTS Section 6.1. Representations and Warranties of Lessee. Lessee represents and warrants as of the Agreement Date and as of each Lease Date as follows: (a) Lessee is a state or political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the Constitution and laws of the State, and is authorized under the Constitution and laws of the State to enter into this Agreement, each Lease and the transactions contemplated hereby and thereby, and to perform all of its obligations under this Agreement and each Lease. 6/'_/03 LES-BQ-ESR DOC/tes S/01/lesson'! 3 (b) The execution and delivery of this Agreement and each Lease have been duly authorized by all necessary action of Lessee's governing body and such action is in compliance with all public bidding and other State and federal laws applicable to this Agreement. each Lease and the acquisition and financing of the Equipment by Lessee. (c) This Agreement and each Lease have been duly executed and delivered by and constitutes the valid and binding obligation of Lessee, enforceable against Lessee in accordance with their respective terms. (d) The execution, delivery and performance of this Agreement and each Lease by Lessee shall not (i) violate any State or federal law or local law or ordinance, or any order, writ, injunction, decree, or regulation of any court or other governmental agency or body applicable to Lessee, or (ii) conflict with or result in the breach or violation of any term or provision of, or constitute a default under, any note, bond, mortgage, indenture, agreement, deed of trust, lease or other obligation to which Lessee is bound. (e) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best of Lessee's knowledge, threatened against or affecting Lessee, challenging Lessee's authority to enter into this Agreement or any Lease or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of this Agreement or any Lease. (f) No lease, rental agreement, lease -purchase agreement, payment agreement or contract for purchase to which Lessee has been a party at any time during the past ten (1 0) years has been terminated by Lessee as a result of insufficient funds being appropriated in any Fiscal Year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation, which Lessee has issued during the past ten (10) years. (g) Lessee or Lessee's governing body has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all Rental Payments during the current Fiscal Year, and such moneys will be applied in payment of all Rental Payments due and payable during such current Fiscal Year. (h) Lessee has an immediate need for, and expects to make immediate use of, the Equipment, which need is not temporary or expected to diminish during the applicable Lease Term. Lessee presently intends to continue each Lease hereunder for its entire Lease Term and to pay all Rental Payments relating thereto. Section 6.2. Covenants of Lessee. Lessee agrees that so long as any Rental Payments or other amounts due under this Agreement remain unpaid: (a) Lessee shall not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable law or regulation or in a manner contrary to that contemplated by this Agreement. Lessee shall obtain and maintain all permits and licenses necessary for the installation and operation of the Equipment. Lessee shall not, without the prior written consent of Lessor. affix or install any accessory equipment or device on any of the Equipment if such addition would change or impair the originally intended functions. value or use of such Equipment. (b) Lessee shall provide Lessor access at all reasonable times to examine and inspect the Equipment and provide Lessor \4 ith such access to the Equipment as may be reasonably necessary to perform maintenance on the Equipment in the event of failure by Lessee to perform its obligations hereunder. (c) Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or other claim with respect to the Equipment, other than the respective rights of Lessor and Lessee as herein provided. Lessee shall promptly, at its own expense, take such actions as may be necessary duly to discharge or remove any such claim if the same shall arise at any time. Lessee shall reimburse Lessor for any expense incurred by Lessor in order to discharge or remove any such claim. (d) The person or entity in charge of preparing Lessee's budget will include in the budget request for each Fiscal Year the Rental Payments to become due during such Fiscal Year, and will use all reasonable and lawful means available to secure the appropriation of money for such Fiscal Year sufficient to pay all Rental Payments coming due therein. Lessor acknowledges that appropriation for Rental Payments is a governmental function, which Lessee cannot contractually commit itself in advance to perform. Lessee acknowledges that this Agreement does not constitute such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to make all Rental Payments can and will lawfully be appropriated and made available to permit Lessee's continued utilization of the Equipment in the performance of its essential functions during the applicable Lease Terms. (e) Lessee shall assure that its obligation to pay Rental Payments is not directly or indirectly secured by any interest in property, other than the Equipment, and that the Rental Payments will not be directly or indirectly secured by or derived from any payments of any type or any fund other than Lessee's general purpose fund. (f) Upon Lessor's request, Lessee shall provide Lessor with current financial statements, budgets, and proof of appropriation for the ensuing Fiscal Year and such other financial information relating to the ability of Lessee to continue this Agreement and each Lease as may be reasonably requested by Lessor. (g) Lessee shall promptly and duly execute and deliver to Lessor such further documents, instruments and assurances and take such further action as Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lessor hereunder. Section 6.3. Tax Related Representations, Warranties and Covenants. (a) Incorporation of Tax Agreement and Arbitrage Certificate. As of each Lease Date and with respect each Lease, Lessee makes each of the representations, warranties and covenants contained in the Tax Agreement and Arbitrage Certificate delivered with respect to such Lease. By this reference each such Tax Agreement and Arbitrage Certificate is incorporated in and made a part of this Agreement (b) Event of Taxability. If Lessor either (i) receives notice, in any form, from the Internal Revenue Service or (ii) reasonably determines, based on an opinion of independent tax counsel selected by Lessor, that Lessor may not exclude any Interest paid under any Lease from its Federal gross income (each an "Event of Taxability"), the Lessee shall pay to Lessor upon demand (x) an amount which, 6,2/03 LES-[3Q-ESR DOC/rev 5/0I/Iessor/L2 4 with respect to Rental Payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the Interest due through the date of such event), will restore to Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of Rental Payments and reinvestment at the after-tax yield rate) on the transaction evidenced by such Lease through the date of such event and (y) as additional Rental Payments to Lessor on each succeeding Payment Date such amount as will maintain such after-tax yield to Lessor. ARTICLE VII. INSURANCE AND RISK OF LOSS Section 7.1. Liability and Property Insurance, Lessee shall, at its own expense, procure and maintain continuously in effect during each Lease Term: (a) public liability insurance for death or injuries to persons, or damage to property arising out of or in any way connected to the Equipment sufficient to protect Lessor and/or assigns from liability in all events, with a coverage of not less than $1,000,000 per occurrence unless specified differently in the related Equipment Schedule, and (b) insurance against such hazards as Lessor may require, including, but not limited to, all-risk casualty and property insurance, in an amount equal to the greater of the full replacement cost of the Equipment or the applicable Prepayment Price of each Equipment Group. Section 7.2. Workers' Compensation Insurance. If required by State law, Lessee shall carry workers' compensation insurance covering all employees on, in, near or about the Equipment, and upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Lease Term. Section 7.3. insurance Requirements, (a) Insurance Policies. All insurance policies required by this Article shall be taken out and maintained with insurance companies acceptable to Lessor and shall contain a provision that thirty (30) days prior to any change in the coverage the insurer must provide written notice to the insured parties. No insurance shall be subject to any co-insurance clause. Each insurance policy shall name Lessor and/or its assigns as an additional insured party and loss payee regardless of any breach of warranty or other act or omission of Lessee and shall include a lender's loss payable endorsement for the benefit of Lessor and/or is assigns. Prior to the delivery of Equipment, Lessee shall deposit with Lessor evidence satisfactory to Lessor of such insurance and, prior to the expiration thereof, shall provide Lessor evidence of all renewals or replacements thereof. (b) Self Insurance. With Lessor's prior consent, Lessee may self -insure the Equipment by means of an adequate insurance fund set aside and maintained for that purpose which must be fully described in a letter delivered to Lessor in form acceptable to Lessor. (c) Evidence of Insurance. Lessee shall deliver to Lessor upon acceptance of any Equipment evidence of insurance which complies with this Article VII with respect to such Equipment to the satisfaction of Lessor, including, without limitation, the confirmation of insurance in the form of Exhibit G-1 attached hereto together with Certificates of Insurance, when available, or the Questionnaire for Self - Insurance and Addendum to Equipment Schedule Relating to Self -Insurance in the form of Exhibit G-2 attached hereto, as applicable Section 7.4. Risk of Loss. To the extent permitted by the applicable laws of the State, as between Lessor and Lessee, Lessee assumes all risks and liabilities from any cause whatsoever, whether or not covered by insurance, for loss or damage to any Equipment and for injury to or death of any person or damage to any property. Whether or not covered by insurance, Lessee hereby assumes responsibility for and agrees to indemnify Lessor from all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses, including reasonable attorneys' fees, imposed on, incurred by or asserted against Lessor that relate to or arise out of this Agreement, including but not limited to, (a) the selection, manufacture, purchase, acceptance or rejection of Equipment or the ownership of the Equipment, (b) the delivery, lease, possession, maintenance, use, condition, return or operation of the Equipment, (c) the condition of the Equipment sold or otherwise disposed of after possession by Lessee, (d) the conduct of Lessee, its officers, employees and agents, (e) a breach of Lessee of any of its covenants or obligations hereunder, (f) any claim, loss, cost or expense involving alleged damage to the environment relating to the Equipment, including, but not limited to investigation, removal, cleanup and remedial costs, and (g) any strict liability under the laws or judicial decisions of any state or the United States. This provision shall survive the termination of this Agreement. Section 7.5. Destruction of Equipment. Lessee shall provide a complete written report to Lessor immediately upon any loss, theft, damage or destruction of any Equipment and of any accident involving any Equipment. Lessor may inspect the Equipment at any time and from time to time during regular business hours. If all or any part of the Equipment is stolen, lost, destroyed or damaged beyond repair ("Damaged Equipment"), Lessee shall within thirty (30) days after such event either: (a) replace the same at Lessee's sole expense with equipment having substantially similar Specifications and of equal or greater value to the Damaged Equipment immediately prior to the time of the loss occurrence, such replacement equipment to be subject to Lessor's approval, whereupon such replacement equipment shall be substituted in the applicable Lease and the other related documents by appropriate endorsement or amendment; or (b) pay the applicable Prepayment Price of the Damaged Equipment determined as set forth in the related Equipment Schedule. Lessee shall notify Lessor of which course of action it will take within fifteen (15) days after the loss occurrence. If, within forty-five (45) days of the loss occurrence, (a) Lessee fails to notify Lessor; (b) Lessee and Lessor fail to execute an amendment to the applicable Equipment Schedule to delete the Damaged Equipment and add the replacement equipment or (c) Lessee has failed to pay the applicable Prepayment Price. then Lessor may, at its sole discretion, declare the applicable Prepayment Price of the Damaged Equipment, to be immediately due and payable. The Net Proceeds of insurance with respect to the Damaged Equipment shall be made available by Lessor to be applied to discharge Lessee' obligation under this Section. 6;2/03 LES-BQ-ESR DO( ic. „Ul lexui'1.2 5 ARTICLE VIII. OTHER OBLIGATIONS OF LESSEE fiction 8.1. Maintenance of F.qui nn lent. Lessee shall notify Lessor in writing prior to moving the Equipment to another address and shall otherwise keep the Equipment at the address specified in the related Equipment Schedule. Lessee shall, at its own expense. maintain the Equipment in proper working order and shall make all necessary repairs and replacements to keep the Equipment in such condition including compliance with State and federal laws. Any and all replacement parts must be free of encumbrances and liens. All such replacement parts and accessories shall be deemed to be incorporated immediately into and to constitute an integral portion of the Equipment and as such, shall be subject to the terms of this Agreement. Section 8.2. Taxes. Lessee shall pay all taxes and other charges which are assessed or levied against the Equipment, the Rental Payments or any part thereof, or which become due during the Lease Term, whether assessed against Lessee or Lessor, except as expressly limited by this Section. Lessee shall pay all utilities and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment, and all special assessments and charges lawfully made by any governmental body that may be secured by a lien on the Equipment. Lessee shall not be required to pay any federal, state or local income, succession, transfer, franchise, profit, excess profit, capital stock, gross receipts, corporate, or other similar tax payable by Lessor, its successors or assigns, unless such tax is made as a substitute for any tax, assessment or charge which is the obligation of Lessee under this Section. Section 8.3. Advances. If Lessee shall fail to perform any of its obligations under this Article, Lessor may take such action to cure such failure, including the advancement of money, and Lessee shall be obligated to repay all such advances on demand, with interest at the rate of 18% per annum or the maximum rate permitted by law, whichever is less, from the date of the advance to the date of repayment. ARTICLE IX. TITLE Section 9.1. Title. During the Lease Term, ownership and legal title of all Equipment and all replacements, substitutions, repairs and modification shall be in Lessee and Lessee shall take all action necessary to vest such ownership and title in Lessee. Lessor does not own the Equipment and by this Agreement and each Lease is merely financing the acquisition of such equipment for Lessee. Lessor has not been in the chain of title of the Equipment, does not operate, control or have possession of the Equipment and has no control over the Lessee or the Lessee's operation, use, storage or maintenance of the Equipment. Section 9.2. Security Interest. All provisions referencing Lessor having a security interest in the Equipment are hereby cancelled and shall not have any force or effect. Lessor and Lessee agree that the Agreement does not result in the creation of any lien, charge, security interest or other encumbrance upon the Equipment or any other asset of Lessee. Section 9.3. Modification of Equipment. Lessee will not, without the prior written consent of Lessor, affix or install any accessory equipment or device on any of the Equipment if such addition will change or impair the originally intended value, function or use of the Equipment. Section 9.4. Personal Property. The Equipment is and shall at all times be and remain personal property and not fixtures. ARTICLE X. WARRANTIES Section 10.1. Selection of Equipment. Each Vendor and all of the Equipment have been selected by Lessee. Lessor shall have no responsibility in connection with the selection of the Equipment, the ordering of the Equipment, its suitability for the use intended by Lessee, the acceptance by any Vendor or its sales representative of any order submitted, or any delay or failure by such Vendor or its sales representative to manufacture, deliver or install any Equipment for use by Lessee. Section 10.2. Vendor's Warranties. Lessor hereby assigns to Lessee for and during the related Lease Term, all of its interest, if any, in all Vendor's warranties, guarantees and patent indemnity protection, express or implied issued on or applicable to an Equipment Group, and Lessee may obtain the customary services furnished in connection with such warranties and guarantees at Lessee's expense. Lessor has no obligation to enforce any Vendor's warranties or obligations on behalf of itself or Lessee. Section 10.3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT THE EQUIPMENT IS OF A SIZE, DESIGN. CAPACITY, AND MANUFACTURE SELECTED BY LESSEE. LESSEE ACKNOWLEDGES THAT IT SELECTED THE EQUIPMENT WITHOUT ASSISTANCE OF LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR IS NOT A MANUFACTURER OF THE EQUIPMENT OR A DEALER IN SIMILAR EQUIPMENT, AND DOES NOT INSPECT THE EQUIPMENT BEFORE DELIVERY TO LESSEE. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, QUALITY, DURABILITY, SUITABILITY, MERCHANT -ABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT. ARTICLE XI. ASSIGNMENT AND SUBLEASING Section 11.1. Assignment by Lessor. Lessor, without Lessee's consent, may assign and reassign all of Lessor's right, title and/or interest in and to this Agreement or any Lease, including, but not limited to, the Rental Payments and other amounts payable by Lessee and Lessor's interest in the Equipment, in whole or in part to one or more assignees or subassignee(s) by Lessor at any time. No such assignment shall be effective as against Lessee unless and until written notice of the assignment is provided to Lessee. When presented with a notice of assignment, Lessee will acknowledge in writing receipt of such notice for the benefit of Lessor and any assignee. Lessee shall keep a complete and accurate record of all such assignments. 6;2/01 LES-BQ-CSR DOC/rep 5/01/lessor/L2 6 Section 11 2. Assignment and Subleasing by Lessee Neither this Agreement nor any Lease or any Equipment may be assigned. subleased, sold, transferred, pledged or mortgaged by Lessee. ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events_ of Default Defined. The occurrence of any of the following events shall constitute an Event of Default under this Agreement and each Lease: (a) Lessee's failure to pay, within ten (10) days following the due date thereof, any Rental Payment or other amount required to be paid to Lessor (other than by reason of Non -Appropriation). (b) Lessee's failure to maintain insurance as required by Article VII. (c) With the exception of the above clauses (a) & (b), Lessee's failure to perform or abide by any condition, agreement or covenant for a period of thirty (30) days after written notice by Lessor to Lessee specifying such failure and requesting that it be remedied, unless Lessor shall agree in writing to an extension of time prior to its expiration. (d) Lessor's determination that any representation or warranty made by Lessee in this Agreement was untrue in any material respect upon execution of this Agreement or any Equipment Schedule. (e) The occurrence of ari Event of Taxability (0 The filing of a petition in bankruptcy by or against Lessee, or failure by Lessee promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Lessee to carry on its governmental functions or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of any adjustment of indebtedness of Lessee, or the dissolution or liquidation of Lessee. Section 12.2. Remedies on Default. In the event of default by Lessee under the Agreement, Lessor's sole remedies shall be to sue Lessee for compensatory damages, which Lessee agrees to pay and which are hereby agreed to be the Prepayment Price applicable to the immediately preceding rental payment due date, as set forth on the Payment Schedule, plus any rental payments accrued and unpaid as of the date default, provided that in the event that Lessee voluntarily returns the Equipment to Lessor to a location specified by Lessor, at Lessee's sole risk, cost and expense and in the condition required by Section 8.1 of the Agreement, Lessor shall not have any further remedies against Lessee. Lessor shall also have the right in the event of default to exercise any other right. remedy or privilege which may be available to it, including without limitation proceedings by appropriate court action to require specific performances of any provision of the Agreement other than Lessee's covenant to return possession of and title to the Equipment. which covenant shall not be subject to enforcement by specific performance. Lessee shall remain liable for all legal fees and other costs and expenses. including court costs, incurred by Lessor in the enforcement of its remedies under the Agreement except to the extent prohibited by the Constitution and laws of the State of Florida. Section 12.3. Retur_tr of Equipment: Release of Lessee's Interest. With respect to any provision of the Agreement requiring Lessee to return all or any portion of the Equipment to Lessor or to transfer title to all or any portion of the equipment to Lessor, Lessee agrees to voluntarily do so. In the event that Lessee fails or refuses to return or transfer the Equipment or title thereto voluntarily as set forth above, Lessor acknowledges that the Agreement does not and shall not create a right in Lessor to involuntarily dispossess Lessee of title to or possession of all or any item of the Equipment. In lieu of such right Lessor shall be entitled to and Lessee agrees to pay to Lessor immediately, but only from Lessee's legally available and appropriated revenues from sources other than ad valorem or other taxes. the Prepayment Price applicable to the immediately preceding rental payment due date, as set forth on the Payment Schedule. plus any rental payments accrued and unpaid as of the date of such payment. Section 12.4 Late Charge. Lessor shall have the right to require late payment charge for each Rental or any other amount due hereunder which is not paid within 10 days of the date when due equal to the lesser of 5% of each late payment or the legal maximum This Section is only applicable to the extent it does not affect the validity of this Agreement. ARTICLE XIII. MISCELLANEOUS PROVISIONS Section 13.1. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address specified beneath each party's signature, or at such address as the party may provide to the other parties hereto in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered or certified form, with postage fully prepaid, or, if given by other means, when delivered at the address specified in this Section 13 1. Section 13.2. Binding Effect. This Agreement and each Lease hereunder shall be binding upon and shall inure to the benefit of Lessor and Lessee and their respective successors and assigns. Specifically, as used herein the term "Lessor" means any person or entity to whom Lessor has assigned its right to receive Rental Payments under any Lease. Section 13.3. Severahility. In the event any provision of this Agreement or any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 13.4. Entire Agreement; Amendments. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous writings, understandings, agreements, solicitation documents and representations, express or implied. This Agreement may be amended or modified only by written documents duly authorized, executed and delivered by Lessor and Lessee. Section 13.5. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses hereof. Section 13.6. Further Assurances and Corrective instruments. Lessor and Lessee agree that they will, from time to time, execute. acknowledge and deliver, or cause to be executed. acknowledged and delivered, such supplements hereto and such further instruments as 6/2 01 LES-BQ-LSR DOC re. 'lessor 'I 7 may reasonably be required for correcting any inadequate or incorrect description of the Equipment hereby leased or intended so to be, or for otherwise carrying out the expressed intention of this Agreement. Section 13.7. Governing law. This Agreement shall be governed by and construed in accordance with the laws of the State. Section 13.8. Usury. It is the intention of the parties hereto to comply with any applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary herein or in any Equipment Schedule, in no event shall this Agreement or any Lease hereunder require the payment or permit the collection of Interest or any amount in the nature of Interest or fees in excess of the maximum amount permitted by applicable law. Any such excess Interest or fees shall first be applied to reduce Principal, and when no Principal remains, refunded to Lessee. In determining whether the Interest paid or payable exceeds the highest lawful rate, the total amount of Interest shall be spread through the applicable Lease Term so that the Interest is uniform through such term. Section 13.9. Delayed Closing. In the event of a delayed closing, Lessor will benefit from the interest that accrues between the Commencement Date and the Closing Date. Section 13.10. Lessee's Performance. A failure or delay of Lessor to enforce any of the provisions of this Agreement or any Lease shall in no way be construed to be a waiver of such provision. Section 13.101. Waiver of Jury Trial. Lessor and Lessee hereby waive any right to trial by jury in any action or proceeding with respect to, in connection with or arising out of this Agreement. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 6/2/03 LES-BQ-ESR DOC/rev 5/01/lessor/L2 8 EXECUTION PAGE OF MASTER LEASE AGREEMENT LEASE NUMBER: IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by its duly authorized officer. VILLAGE OF KEY BISCAYNE Lessee By N. - Jacqueline R. Menendez Village 7anagey Date: Address: 88 West McIntyre Key Biscayne, FL 33149 Telephone: 305-365-8989 Facsimile: 305-365-8933 LEASING 2, INC. Lessor By. Name: Brad yers Title: President Date (? -114/-03 Address: 1720 West Cass Street Tampa, FL 33606-1230 Telephone: 813-258-9888 Facsimile: 813-258-9333 6/2/03 LES•BQ-ESR DOC/rev 5/01/lessor/L2 9 EXHIBIT A EQUIPMENT SCHEDULE NO. 01 TO MASTER LEASE NUMBER: The following Equipment comprises an Equipment Group which is the subject of the Master Lease Agreement dated as June 16, 2003 (the "Agreement") between the undersigned Lessor and Lessee. The Agreement is incorporated herein in its entirety, and Lessee hereby reaffirms each of its representations, warranties and covenants contained in the Agreement. Lessee warrants that no Non - Appropriation and no Event of Default, or event which, with the passage of time or the giving of notice or both, would constitute an Event of Default, has occurred under the Agreement. An Acceptance Certificate and Payment Schedule are attached to this Equipment Schedule and by reference are made a part hereof. The terms capitalized in this Equipment Schedule but not defined herein shall have the meanings assigned to them in the Agreement. EQUIPMENT GROUP The cost of the Equipment Group to be funded by Lessee under this Lease is six hundred ninety one thousand seven hundred forty-four dollars (5691,744.00) (the "Acquisition Cost"). The Equipment Group consists of the following Equipment which has been or shall be purchased from the Vendor(s) named below for the prices set forth below: One (1) new Pierce Dash 61' Skyboom, VIN: One (1) new Pierce Dash Pumper, VIN: The Equipment Group is or will be located at the following address(es). Prior to relocation of the Equipment Group or any portion thereof during the Lease Term, Lessee will provide written notice to Lessor: 560 Crandon Boulevard, Key Biscayne, FL 33149 VENDOR TERMS Lessor shall have funds not immediately paid to vendor(s) at closing deposited in an "Escrow Account" in order to facilitate payment to vendors for equipment deliveries that are scheduled to occur according to the following schedule: EQUIPMENT PAYMENT NO DESCRIPTION AMOUNT EARLIER THAN Pierce Dash 61' Skyboom & Pierce Dash Pumper EQUIPMENT SCHEDULE LEASE DATE: June 16, 2003 VILLAGE OF KEY BISCAYNE Lessee By: e: Jacqu '. e R. Menendez le: Village Manager Date: ‘//4/"</°) Address: 88 West McIntyre Key Biscayne, FL 33149 Telephone: 305-365-8989 Facsimile: 305-365-8933 $691,744.00 July 1, 2003 LEASING 2, INC. Lessor By: Name: Brad rs Title: President Date: co —L4 -0 3 Address: 1720 West Cass Street Tampa, FL 33606-1230 Telephone: 813-258-9888 Facsimile: 813-258-9333 Date - Lease No.: Equipment Schedule: 01 ACCEPTANCE OF OBLIGATION TO COMMENCE RENTAL PAYMENTS UNDER PAYMENT SCHEDULE RE: Master Lease Agreement dated June 16, 2003, between Leasing 2, Inc. (Lessor) and Village of Key Biscayne (Lessee) I, the undersigned, hereby certify that I am a duly qualified representative of Lessee and have been given the authority by the governing body of Lessee to sign this Acceptance of Obligation to Commence Rental Payments with respect to the above referenced Lease. I hereby certify that: 1. The Equipment described in the Equipment Schedule has not been delivered, installed or available for use as of the Lease Date of this Equipment Schedule; 2. Lessee acknowledges that Lessor has agreed to deposit into an Escrow Account an amount sufficient to pay the total cost of the Equipment identified in Exhibit A upon delivery; 3. The principal amount of the Rental Payments in the Payment Schedule accurately reflects the cost of the Equipment; 4. Lessee agrees to execute an Acceptance Certificate and Payment Request Form authorizing payment of the cost of the Equipment, or a portion hereof, for each withdrawal of funds from the Escrow Account. Notwithstanding that the Equipment has not been delivered to, or accepted by, Lessee on the Lease Date hereby warrants that: (a) Lessee's obligation to commence Rental Payments as set forth in Payment Schedule is absolute and unconditional as of the Lease Date and on each date set forth in Payment Schedule thereafter, subject to the terms and conditions of the Lease; (b) immediately upon delivery and acceptance of all the Equipment, Lessee will notify Lessor of Lessee's final acceptance of the Equipment by delivering to Lessor the "Acceptance Certificate" in the form attached to the Equipment Schedule; (c) in the event that any surplus amount is on deposit in the Escrow Account and the Agreement is terminated pursuant to Section 3.2 (Termination by Lessee) or Section 12.1 (Event of Default) thereof, those amounts shall be forwarded to Lessor or its assignee, if assigned, to be applied as provided in the Agreement. Lessee shall have no further interest therein. Any surplus amount remaining after payment of all of the Equipment to be leased under the Agreement will be forwarded to Lessor, or to its assignee, if assigned, for application toward the next Rental Payment due. (d) regardless of whether Lessee delivers a final Acceptance Certificate, all Rental Payments paid prior to delivery of all the Equipment shall be credited to Rental Payments as they become due under the Lease as set forth in Payment Schedule. Notwithstanding any other provision of this Acceptance of Obligation, the Lease shall remain in full force and effect with respect to all or the portion of the Equipment accepted by Lessee as provided in this Lease. VILLAGE I F KEY BISCAYNE Lessee By. e: Jacquel e R. Menendez le: Village Ma ger C /b/OL k3 Date- * After payment of Rental Payment due on such date. Lease No.: Equipment Schedule: 01 PAYMENT SCHEDIJI ,F, The Lease Date with respect to the above referenced Equipment Group shall be June 16, 2003. The Annual Interest Rate applicable to the Equipment Group shall be 2.994%. Lessee will make Rental Payments each consisting of Principal and Interest as set forth below for a term of seven (7) years. The first Rental Payment is due on November 15, 2003 and subsequent payments are due annually on like date thereafter. Payment Payment Total Interest Principal Prepayment Number Date, Payment Component Component Price* 1 11/15/03 $109,139.51 $8,744.33 $100,395.18 $609,089.28 2 11/15/04 $109,139.51 $17,704.50 $91,435.01 $514,911.22 3 11/15/05 $109,139.51 $14,967.01 $94,172.50 $417,913.55 4 11/15/06 $109,139.51 $12,147.56 $96,991.95 $318,011.84 5 11/15/07 $109,139.51 $9,243.70 $99,895.81 $215,119.16 6 11/15/08 $109,139.51 $6,252.90 $102,886.61 $109,145.95 7 11/15/09 $109,139.51 $3,172.57 $105,966.94 $0.00 Grand Totals $763,976.57 $72,232.57 $691,744.00 Last interest amount increased by 0.01 due to rounding. VILLAGE OF KEY BISCAYNE Lessee ►rte- BY- me: Jac eline R. Menendez itle: Village Manager filg))) EXHIBIT B-1 [Escrow] TAX AGREEMENT AND ARBITRAGE CERTIFICATE Lease No • Equipment Schedule 01 This TAX AGREEMENT AND ARBITRAGE CERTIFICATE (this "Certificate") is issued by VILLAGE OF KEY BISCAYNE ("Lessee") in favor of Leasing 2, Inc. ("Lessor") in connection with that certain Master Lease Agreement dated as of June 16, 2003 (the "Agreement"), by and between Lessor and Lessee. The terms capitalized herein but not defined herein shall have the meanings assigned to them in the Agreement. Section 1. In General. 1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain equipment (the "Equipment") to be acquired by Lessor and leased to Lessee pursuant to and in accordance with the Equipment Schedule referenced above (the "Equipment Schedule") executed under the Agreement (together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents. Lessor shall apply six hundred ninety one thousand seven hundred forty-four dollars ($691,744.00) (the "Principal Amount") toward the acquisition of the Equipment and Lessee shall make Rental Payments under the terms and conditions as set forth in the Financing Documents. 1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing Documents, pursuant to the resolution or other official action of Lessee adopted with respect to the Financing Documents, a copy of which has been delivered to Lessor. 1.3. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring, equipping and installing the Equipment which is essential to the governmental functions of Lessee, which Equipment is described in the Equipment Schedule. The Principal Amount will be deposited in escrow by Lessor on or after the Lease Date of the Equipment Schedule and held pending acquisition of the Equipment under the terms of the Agreement. 1.4. Lessee will timely file for each payment schedule issued under the Lease a Form 8038-G (or, if the invoice price of the Equipment under such schedule is less than $100,000, a Form 8038 -GC) relating to such Lease with the Internal Revenue Service in accordance with Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code"). 1.5. Lessee has not issued, and reasonably anticipates that it and its subordinate entities, if any. will not issue, tax-exempt obligations (including the Lease) in the amount of more than $10,000,000 during the current calendar year. Lessee hereby designates the Lease as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code and agrees that it and its subordinate entities, if any, will not designate more than $10,000,000 of their obligations as "qualified tax-exempt obligations" during the current calendar year. Section 2. Non -Arbitrage Certifications. 2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or subaccount therein). No sinking, debt service, reserve or similar fund or account will be created or maintained for the payment of the Rental Payments due under the Financing Documents or pledged as security therefor. 2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be (i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (iii) paid out of substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of substantially the same source of funds as, the Financing Documents. 2.3. Other than the Principal Amount held in the Escrow Account , Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Equipment. 2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing Documents. 2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and installing the Equipment. 2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part. at a date which is earlier than the final Payment Date under the Financing Documents. Section 3. Disbursement of Funds; Reimbursement to Lessee. 3.1. It is contemplated that the entire Principal Amount deposited in escrow will be used to pay the acquisition cost of Equipment to the vendors or manufacturers thereof provided that, if applicable, a portion of the principal amount may be paid to Lessee as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied. 3.2. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless each of the following conditions have been satisfied: (a) Lessee adopted a resolution or otherwise declared its official intent in accordance with Treasury Regulation § 1.150-2 (the "Declaration of Official Intent"), wherein Lessee expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Equipment, which expenditure was paid to the Vendor not earlier than sixty (60) days before Lessee adopted the Declaration of Official Intent; (b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen (18) months after the items of Equipment to which such payment relates were placed in service; (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of a type properly chargeable to a capital account under general federal income tax principles; and (d) Lessee will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice or device under Treasury Regulation § 1.148-10 to avoid, in whole or in part, arbitrage yield restrictions or arbitrage rebate requirements. Section 4. Use and Investment of Funds; Temporary Period. 4.1. Lessee has incurred or will incur, within six (6) months from the date of issuance of the Financing Documents, binding obligations to pay an amount equal to at least five percent (5%) of the Principal Amount toward the costs of the Equipment. An obligation is not binding if it is subject to contingencies within Lessee's control. The ordering and acceptance of the items of Equipment will proceed with due diligence to the date of final acceptance of the Equipment. 4.2. An amount equal to at least eighty-five percent (85%) of the Principal Amount will be expended to pay the cost of the Equipment by the end of the three-year period commencing on the date of this Certificate. No portion of the Principal Amount will be used to acquire investments that do not carry out the governmental purpose of the Financing Documents and that have a substantially guaranteed yield of four (4) years or more. 4.3. (a) Lessee reasonably expects to cause the Equipment to be ac acquired by 7 (date). (b) date . Pq O (b) Lessee will provide evidence to Lessor that the rebate amount has been calculated and paid to the Internal Revenue Service in accordance with Section 148(f) of the Code unless (i) the entire Principal Amount is expended on the Equipment by the date that is the six-month anniversary of the Financing Documents or (ii) the Principal Amount is expended on the Equipment in accordance with the following schedule: At least fifteen percent (15%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment within six months from the date of issuance of the Financing Documents; at least sixty percent (60%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment within 12 months from the date of issuance of the Financing Documents; and one hundred percent (100%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment prior to eighteen (18) months from the date of issuance of the Financing Documents. (c) Lessee hereby covenants that (i) Lessee is a governmental unit with general tax powers; (ii) the Lease is not a "private activity bond" under Section 141 of the Code; (iii) at least ninety-five percent (95%) of the Principal Amount is used for the governmental activities of Lessee; and (iv) the aggregate principal amount of all tax-exempt obligations (including the Lease) issued by Lessee and its subordinate entities, if any, during the current calendar year is not reasonably expected to exceed $5,000,000. Accordingly, the rebate requirements of Section 148(f) of the Code are treated as being met, in lieu of the spending exceptions set forth in paragraph (b) above. Section 5. Escrow Account. The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the vendor(s) or manufacturer(s) of the Equipment are due. Lessee will ensure that such investment will not result in Lessee's obligations under the Financing Documents being treated as an "arbitrage bond" within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended (the "Code"), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such monies will be disbursed on or promptly after the date that Lessee accepts the Equipment. Section 6. No Private Use; No Consumer Loan. 6.1. Lessee will not exceed the private use restrictions set forth in Section 141 of the Code. Specifically, Lessee will not permit more than 10% of the Principal Amount to be used for a Private Business Use (as defined herein) if, in addition, the payment of more than ten percent (10%) of the Principal Amount plus interest earned thereon is, directly or indirectly, secured by (i) any interest in property used or to be used for a Private Business Use or (ii) any interest in payments in respect of such property or derived from any payment in respect of property or borrowed money used or to be used for a Private Business Use. In addition, if both (A) more than five percent (5%) of the Principal Amount is used as described above with respect to Private Business Use and (B) more than five percent (5%) of the Principal Amount plus interest earned thereon is secured by Private Business Use property or payments as described above, then the excess over such five percent (5%) (the "Excess Private Use Portion") will be used for a Private Business Use related to the governmental use of the Equipment. Any such Excess Private Use Portion of the Principal Amount will not exceed the portion of the Principal Amount used for the governmental use of the particular project to which such Excess Private Use Portion is related. For purposes of this paragraph 6.1, "Private Business Use" means use of bond proceeds or bond financed -property directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a state or local governmental unit and excluding use as a member of the general public. 6.2. No part of the Principal Amount or interest earned thereon will be used, directly or indirectly, to make or finance any loans to non- governmental entities or to any governmental agencies other than Lessee. Section 7. No Federal Guarantee. 7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed, in whole or in part, by the United States or an agency or instrumentality thereof. 7.2. No portion of the Principal Amount or interest earned thereon shall be (i) used in making loans the payment of principal or interest of which are to be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof, or (ii) invested, directly or indirectly, in federally insured deposits or accounts if such investment would cause the financing under the Financing Documents to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 8. Miscellaneous. 8.1. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form and substance satisfactory to comply with the registration requirements of Section 149(a) of the Code unless Lessor or its assignee agrees to act as Lessee's agent for such purpose. 8.2. Lessee shall maintain complete and accurate records establishing the expenditure of the Principal Amount for a period of five (5) years after payment in full under the Financing Documents. 8.3. To the best of the undersigned's knowledge, information and belief, the above expectations are reasonable and there are no other facts, estimates or circumstances that would materially change the expectations expressed herein. IN WITNESS WHEREOF, this Tax Agreement and Arbitrage Certificate has been executed on behalf of Lessee as of June 16, 2003. VILLAGE OF KEY BISCAYNE Lessee By: N, Jacquel i e R. Menendez Village Manager // vi Date: Form 8038-G (Rev. November 2000) Department of the Treasury Internal Revenue Service Information Return for Tax -Exempt Governmental Obligations ► Under Internal Revenue Code section 149(e) ► See separate Instructions. Caution: If the issue price is under $100,000, use Form 8038 -GC. OMB No 1545-0720 Authorit If Amended Return, check here ► ❑ -i•lamn - --1- - - ----..I 1 Issuer's name Village of Key Biscayne 2 Issuer's, employer identification number 65 ; 0291811 3 Number and street (or P.O. box if mail is not delivered to street address) 88 West McIntyre Room/suite 4 Report number 3 - 02 5 City, town or post office, state, and ZIP code Key Biscayne, FL 33149 6 Date of issue June 16, 2003 7 Name of issue Master Lease Agreement 8 CUSIP number 9 Na and ti le of Offic�e j or gal re re entative whom the IRS ma call for more information Ka. M tile W A 11 p i A a-4 ),\ r e c 10 Telephone number of�f�or legal repres�njatwve 3 1 3 ((moo "s'/,/(a( Part II Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule 11 0 Education 12 ❑ Health and hospital 13 0 Transportation 14 0 Public safety 15 ❑ Environment (including sewage bonds) 16 0 Housing 17 0 Utilities 18 0 Other. Describe ► 19 If obligations are TANs or RANs, check box ► 0 If obligations are BANs, check box ► 20 If obligations are are in the form of a lease or installment sale, check box . . . ► Description of Obligations. Complete for the entire issue for which this form is being filed. (a) Final maturity date 21 Part IV 11/15/2009 (b) Issue price $ 691,744.00 (c) Stated redemption once at maturav $ n/a Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest (d) Weighted average maturity 11 12 13 14 15 $691,744.00 16 17 18 o / seven (7) years 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) . 24 25 Proceeds used for credit enhancement 26 Proceeds allocated to reasonably required reserve or replacement fund . 27 Proceeds used to currently refund prior issues 28 Proceeds used to advance refund prior issues 29 Total (add lines 24 throuah 28) 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here). 31 32 33 34 Enter the remaining weighted average maturity of the bonds to be currently refunded . Enter the remaining weighted average maturity of the bonds to be advance refunded Enter the last date on which the refunded bonds will be called Enter the datels) the refunded bonds were issued ► Part VI Miscellaneous 25 26 27 28 29 Description of Refunded Bonds (Complete this part only for refunding bonds.) ► ► 22 23 30 (e) Yield 2.994 % $691,744.00 $691,744.00 years years 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) ]l b Enter the final maturity date of the guaranteed investment contract ► i 3 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the name of the issuer ► and the date of the issue ► 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box 40 If the issuer ha identified a hedge, check box Sign Here Under pe are tru tie of perjury, I declare i.t I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief they ct and co c1/(2/A)1 ignatu'.: of issuer's author ze. representative For Paperw , k Reduction Act Notice, see page 2 of the Instructions. Date Jacqueline R. Menendez, \ iliage Mgr. Type or print name and title Cat No 63773S Form 8038-G (Rev 11 2000)