C:~TER~ILLAR FINANCIAL SERVICES CORPORATION LESSEE: KERR COUNTY ROAD & BRIDGE "A political agency or subdivision of the State of TEXAS" ADDRESS: 700 MAIN ST KERRVILLE, TX 78028 GOVERNMENTAL LEASE-PURCHASE AGREEMENT Dated as of ~~~` ~Q LESSOR: CATERPILLAR FINANCIALSERVICESCORPORATION ADDRESS: 4975 Preston Park Blvd. Plano, TX 75093 Lessor, in reliance on Lessee's selection of the equipment described below ("Unit" or "Units"), agrees to acquire, lease, let and sell the Units to Lessee, and Lessee agrees to rent, lease, hire and purchase the Units from Lessor. Description of Unit(s) Serial# (1) 12H Caterpillar MOTOR GRADER 4XM00957 Location of Unit(s): 700 MAIN ST KERRVILLE, TX 78028 KERB Payment Schedule attached. Lease Term: 60 Months Credit Utilization Date: APRIL 30, 1998 PAYMENT PROVISION: Lessee shall pay to Lessor payments /including the principal and interest portion) in 60 consecutive monthly installments commencing on the Delivery Date. ADDITIONAL PROVISIONS: RIDERS: EXHIBIT 2 Construction Equip Application Survey/Equip Return Rider TERMS AND CONDITIONS 1. LEASE TERM; NON-APPROPRIATIONS: The Lease term for each Unit shall commence on its "Delivery Date" (which is the later of the date on which Ia1 Lessor executes this Lease, (b) Lessor takes title to the Unit, or (c) Lessee or its agent receives possession or takes control of the Unit, provided the Delivery Date is on or prior to the Credit Utilization Date set forth above) and shall continue through the last day of Lessee's fiscal year in which the Delivery Date occurs and, thereafter, shall automatically be extended for successive annual periods coinciding with Lessee's fiscal years. If the Delivery Date is not on or prior to the Credit Utilization Date, Lessee shall, at the option of Lessor, assume Lessor's obligations to purchase and pay for the Unit. Within seven days following the Delivery Date of each Unit, Lessee shall execute and deliver to Lessor a Delivery Supplement using Lessor's standard form. In the event no funds or insufficient funds are appropriated and budgeted or are otherwise not available in any fiscal year for payments due under this Lease, Lessee will immediately notify Lessor of such occurrence and this Lease shall terminate on the last day of the fiscal year for which appropriations were received without penalty or expense to Lessee, except as to the portions of payments herein agreed upon for which funds shall have been appropriated and budgeted or are otherwise available. Notwithstanding the foregoing, Lessee agrees that, to the extent permitted by law, it will not cancel the Lease under the provisions of this Section 1 if any funds are appropriated to it or by it for the acquisition, retention or operation of the Units or other equipment performing functions similar to the Units for the fiscal year in which termination occurs or the next succeeding fiscal year. 2. PAYMENTS; NET LEASE: During the Lease term, Lessee shall pay to Lessor, at the address stated above or such other location Lessor designates in writing, rent for each Unit as stated in the attached Payment Schedule and according to the above Payment Provision. An amount equal to one payment for all of the Units must accompany this Lease. If Lessor accepts and executes this Lease, said amount shall be applied to the first payment due. If Lessor does not execute this Lease, said amount will be returned to Lessee. If Lessor does not receive a payment on the date it is due, Lessee shall pay to Lessor, on demand, a late payment charge equal to the lesser of five percent (5%) of the payment not paid when due or the highest charge allowed by law, whichever is less. This Lease is a net lease, and Lessee shall not be entitled to any abatement or reduction of payment or any setoff against payment, whether arising by reason of any past, present or future claims of any nature by Lessee against Lessor or otherwise. Except as otherwise expressly provided herein, the obligations of lessor and Lessee shall not be affected by an defect in, damage to, loss of possession or use of any Unit, however caused, by the attachment of any lien or other claim to any Unit, by any interference with Lessee's use of the Unit, or for any other cause, whether similar or dissimilar to the foregoing, any present or future law to the contrary notwithstanding. 3. WARRANTY DISCLAIMER: Lessee acknowledges and agrees that (a) each Unit is of a size, design and make selected by Lessee, (b) each Unit is suitable for Lessee's purposes, (c) each Unit contains all safety features deemed necessary by Lessee, (d) Lessor is not the manufacturer of any Unit, let the vendor of any Unit is not an agent of Lessor, and If) LESSOR HAS NOT MADE, AND DOES NOT HEREBY MAKE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALITY, DESCRIPTION OR DURABILITY OF A UNIT, OR ITS FITNESS FOR A PARTICULAR PURPOSE. Lessor assigns to Lessee, to the extent assignable, any warranties of a Unit by its manufacturer and/or vendor, provided that any action taken by Lessee by reason thereof shall be at the expense of Lessee. 4. POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain or store any Unit improperly, carelessly, unsafely or in violation of any applicable law or regulation or for any purpose other than in the conduct of Lessee's business; Ib) abandon any Unit; (c) sublease any Unit, permit the use of any Unit by anyone other than Lessee, change the use of any Unit from that specified in the attached Application Survey/Usage Rider, or change the location of any Unit from that specified above, without the prior written consent of Lessor, or (d) sell, assign or transfer, or directly or indirectly create or suffer to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or in any Unit. The Units are and shall remain personal property irrespective of their use or manner of attachment to realty. Upon prior notice to Lessee, Lessor or its agent shall have the right (but not the obligation) at all reasonable times to inspect any Unit and maintenance records relating thereto. Lessee shall, at its expense and at all times during the Lease term, maintain SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS LESSEE ACKNOWLEDGES HAVING RECEIVED A FULLY COMPLETED AND EXECUTED COPY OF THIS AGREEMENT Lessee: KERB COUNTY ROAD & BRIDGE By Name (PRI ) `~ v'-" e. Title CC Date ~ 2_V 112196) Lessor: CATERPILLAR INANCIAL SERVICES CORPORATION gy / Name (PRINT) CREDIT ANALYST Title FEB 2 6 1998 Date A95610 01/29/98 03:43PM CT the Units in good operating order, repair and condition and shall perform maintenance at least as frequently as set forth in any applicable operator's guide, servirra manual, and lubrication and maintenanceguidefor t`he U~~??i Lesseeshall not alter any Unit or affix any accessoryor equipmentto any Unit if such alteration or addition would impair the oriy Wally intended function or use or~educq~te,val}]~~~such Unit. Any alteration or addition to any Unit shall be the responsibility of and at the sole risk of Lessee. All parts, accessories and equipment affixed to any Unit shall be subjectto the security interest of Lessor granted hereunder. If Lessor supplies Lessee with labels statingthat the Unit is leased from LLSSOr, Lessee shall affix and keep them in a prominent place on the Unit. 5. LESSEE'S REPRESENTATION AND WARRANTIES: Lessee represents and warrants to Lessor that (a) Lessee is a fully constituted politicalsubdivision or agency duly organized and existing under the Constitution and laws of the state where the Units will be located; (b) Lessee has the power to enter into and perform this Lease and has taken all necessary and appropriate action to authorize the execution, delivery and performance hereof; (c) this Lease constitutes a valid and legally binding and enforceable obligation of Lessee; Id) the interestpayable by Lessee hereunderis excludable from income for Federal incometaxation purposes pursuantto Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"); and le) Lessee has sufficient appropriations or other funds available to pay all amounts due hereunder for the current fiscal year and reasonably believes that funds can be obtained sufficientto make all payments during the term of this Lease. Lessee represents that the use of the Units is essential to Lessee's proper, efficient and economic operation. Lessee acknowledgesand agrees that the payments have been calculated by Lessor assuming that the interest portion of each payment is excludable from gross income for Federal income taxation purposes. Lessee represents warrants and covenants that: (a) Lessee will comply with the information reporting requirements of Section 149(e) of the Code, as the same may be amendedfrom time to time, and such complianceshall include but not be limited to the executionof information statementsrequestedby Lessor; (b) Lessee will not do or cause to be done any act which will cause, or by omission of any act allow, the Lease to be an arbitrage bond within the meaning of Section 148(a) of the Code; (c) Lessee will not do or cause to be done any act which will cause, or by omission of any act allow this Lease to be a private activity bond within the meaning of Section 141(a) of the Code; (d) Lessee will timely pay to the extent of available funds, amounts required to be rebated to the United States pursuantto Section 148(f) of the Code; le) lessee will not do or cause to be done any act which will cause, or by omission of any act allow, the interest portion of the payments to be or became includable in gross income for Federal incometaxation purposes underthe Code; and If) Lessee will be the exclusiveowner, user and operator of the Units, Lessee shall provide to Lessor an opinion of counsel substantially in the form attached hereto. 6. TAXES: Lessee agrees to promptly pay or reimburse Lessor tar all fees and taxes of any nature, together with any penalties, fines or additions to tax, or interest thereon (all of the foregoing hereafter the "Impositions"),arising at any time prior to, during or subsequentto the Lease term and levied by any taxing authority with respectto or in connection with any Unit, excluding, however, taxes measured by Lessor'snet income (of but not excluding any net incometaxes which, by the term of the statue imposing such tax, expressly relieve Lessee or Lessorfrom the payment of any Impositions which Lessee would otherwise be obligated to pay or reimburse). If Lessor is not entitled to a correspondingand equal deduction with respectto any Imposition which Lesseeis required to pay or reimburse and such payment or reimbursement constitutesincometo Lessor, then Lessee shall also pay to Lessor the amount of any Impositions which Lessor is obligated to pay in respect of (al such payment or reimbursement by Lessee and (b) any payment by Lessee made pursuant to this sentence. Lessee shall prepare and file, in a manner satisfactory to Lessor, any reports or returns which may be required with respect to the Units. For purposes of this Section, "Lessor" shall include any affiliated group, within the meaning of Section 1504 of the Code, of which Lessor is a member for any year in which a consolidated or combined income tax return is filed for the affiliated group. 7. LOSS OR DAMAGE; INSURANCE: Lessee assumes all risks and liabilities of loss, damage or Casualty Occurrence (as hereinafter definedl for any cause whatsoever, for condemnation of any Unit prior to, during or subsequentto (until the Unit is returned to Lessor pursuantto Section 10) the Lease term, and far injury to or death of any person or damage to any property in any manner arising out of or incident to the possession, use, operation, condition or storage of the Unit. If any Unit becomes damaged, from any cause whatsoever, Lessee shall give Lessor prompt notice thereof. If Lessor reasonablydeterminesthat such damage is not irreparable, then Lesseeshall, at its expense, promptly restore the Unit to the condition required by Section 4 above. If any Unit becomes worn out, lost, stolen, destroyed or irreparably damaged (as reasonably determined by Lessor) from any cause whatsoever, or taken by condemnation or otherwise (any such occurrence hereafter a "Casualty Occurrence")prior to, during or subsequentto (until the Unit is returned to Lessor pursuantto Section 10) the Lease term, Lessee shall give Lessor prompt notice thereof. In the event of a Casualty Occurrence, Lessee shall pay to Lessor, on the earlier of (a) the first payment date following such Casualty Occurrenceor (b) thirty 130) days following such CasualtyOccurrence, asum (the "Termination Value") equal to (a) the "Beginning Balance" (as specified in the attached Payment Schedulel as of the next payment due following such Casualty Occurrence, plus (b) the amount of the interest portion (as specified in the Payment Schedulel of the next payment due following such Casualty Occurrence multiplied times a fraction the numerator of which is the number of days from the later of (a) the Delivery Date of the Unit or (b) the due date of the payment immediately preceding such Casualty Occurrence until the due date of the payment due hereunder in respect of such Casualty Occurrence and the denominatorof which is 360. Lessee, at its expense, shall keep each Unit insured against all risks for not less than the applicable Beginning Balance with respectto such Unit and shall maintain comprehensivepublic liabilityinsurancecovering each Unit for not lessthan $1,000,000 for combined coverage for bodily injury and property damage. All insurance shall (a) be in a form and with such companies as Lessor shall approve, (bl specify Lessor for its designee) and Lessee as named insureds, (c) be primary, without right of contribution from any other insurance carried by Lessor, (d) provide that such insurance may not be cancelled or altered so as to affect the interest of Lessor without at least thirty 1301 days' prior written notice to Lessor, and (e) name Lessor (or its designee) as loss payee and be payable solely to Lessor. Lessee agrees to notify Lessorof any occurrence which may becomethe basisof an insuranceclaim hereunderand not to make any adjustmentswith insurers without Lessor's prior written consent. Lessee hereby irrevocablyappoints Lessor its attorney-in-factto receive payment of and endorse all checks and other documentsand to take any other actions necessaryto pursue insurance claims. Prior to the first Delivery Date of any Unit, Lessee shall delivery to Lessor satisfactory evidence of such insurance coverage. 8. WAIVER AND INDEMNITY: LESSEE HEREBY RELEASES ANY CLAIM NOW OR HEREAFTER EXISTING AGAINST LESSOR ON ACCOUNT OF, AND AGREES TO DEFEND, INDEMNIFYAND HOLD LESSOR HARMLESSFROM, ALLCLAIMS OF LESSEEAND/ORTHIRD PARTIES (INCLUDING, WITHOUT LIMITATION, CLAIMS BASED UPON STRICT LIABILITY IN TORT AND FOR CONSEQUENTIAL DAMAGES, LOSSES, DEMANDS, LIABILITIES, SUITS AND JUDGMENTS, AND ALL COSTS OR EXPENSES IN CONNECTION THEREWITH, INCLUDING ATTORNEY'S FEES AND EXPENSES, WHICH MAY RESULT FROM OR ARISEOUT OFTHE SELECTION, PURCHASE, DELIVERY (INCLUDING ANY DELAY IN OR FAILURE OF DELIVERY), CONDITION, USE, OPERATION, OWNERSHIP, MAINTENANCEOR REPAIR OF ANY UNIT PRIOR TO, DURING OR SUBSEQUENTTO (UNTIL SUCH UNIT IS RETURNED TO LESSOR PURSUANTTO SECTION 10) THE LEASE TERM AS TO THE UNIT, OR WHICH MAY BE ATTRIBUTABLE TO ANY DEFECT IN ANY UNIT ARISING FROM THE MATERIAL USED THEREIN OR FROM THE DESIGN, MANUFACTURE OR TESTING THEREOF, OR FROM ANY USE, MAINTENANCE OR REPAIR OF ANY UNIT, REGARDLESS OF WHEN SUCH DEFECT SHALL BE DISCOVERED, WHETHER OR NOT THE UNIT IS IN THE POSSESSION OF LESSEE AND NO MATTER WHERE IT IS LOCATED. 9. EVENTS OF DEFAULT; REMEDIES: Each of the following shall constitute an "Event of Default" hereunder: (al Lessee shall fail to make any payment to Lessor when due; (bl any reprasentationor warranty of Lessee contained herein or in any documentturnishedto lessor in connection herewith shall be incorrect or misleading when made; (cl Lessee shall fail to observe or perform any other covenant, agreementor warranty made by Lessee hereunderand such failure shall continue for ten (10) days after written notice thereof to Lessee; (dl Lessee shall fail to make any payment on its bonded indebtedness when due; or le) there shall be a default by Lessee under any other agreement between Lessor and Lessee. If any Event of Default shall occur, Lessor, at its option, may la) proceed by appropriate court action(s) to enforce this Lease or to recover damages for the breach thereof; (b) by notice in writing to Lessee,terminatethis Lease, but Lessee shall remain liable as hereinafterprovided, and there upon Lessor may, at its option do any one or more of the following: (b-1) recover forthwith from Lessee (il any and all amounts then due under this Lease or which may have accrued to the date of such termination, (ii) as damages far loss of the bargain and not as a penalty, a sum equal to the payments due with respectto the Units during the balance of the fiscal year, and (iii) any additional damages and expensessustained by Lessor by reason of the breach of any covenant, representationor warranty containedin this Lease other than for the payment of amounts due hereunder; Ib-2) enforce the security interest given hereunder, Ib-3) without notice, liability or legal process, enter upon the premises where any of the Units maybe and take possessionthereof,and (b-41 require Lessee to return the Units as provided in Section 10. Lessor shall have all rights given to a secured party by law. Provided Lessor receives possession of the Units following an Event of Default, Lessor may, at its option, undertake commercially reasonable effort to self or re-lease the Units, and the proceeds of any such sale or re-lease shall be applied: first, to reimburse Lessor for all reasonable expenses of retaking, holding, preparing for sale or re-lease and selling or re-leasing the Units, including all taxes and reasonable attorney's fees and expenses; second, to the extent not previously paid by Lessee, to pay Lessor all amounts, except those specified below, which under the terms of this Lease are due or have accrued as of the date of Lessor's receiptof said proceeds; third, to pay all late payment charges pursuantto Section 2 hereof; and fourth, to pay Lessor the applicableTermination Value with respectto the Units. Any surplus shall be paid to the person entitled thereto. Lessee shall promptly pay any deficiencyto Lessor. Lessee acknowledgesthat sales for cash or on credit to a wholesaler, retailer or user of the Units are all commercially reasonable. Lessee agrees to pay all reasonable attorney'sfees and all costs and expensesincurred by Lessor in enforcing this Lease. The remedies herein provided shall be cumulative and in addition to all other remedies at law or in equity; provided, however, Lessor shall not be entitled to recover a greater amount in damages than Lessor could have gained through Lessee's full, timely and complete performance under this Lease, plus all tees, costs and expenses incurred by Lessor in enforcing this Lease and all late payment charges pursuantto Section 2. If Lessee fails to perform any of its obligations under this Lease, Lessor may (but need not) at any time thereafter perform such obligation, and the expenses incurred in connection therewith shall be payable by Lessee upon demand. 10. RETURN OF UNIT: Upon any termination of the term of this Lease with respectto each Unit or if Lessor shall rightfully demand possession of any Unit, Lessee, at its expense, shall forthwith deliver the Unit to Lessor, appropriatelyprotected and in the condition required by Section 4, at the option of Lessor, to the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or on board such carrier as Lessor shall specify and shipping the same, freight collect, to the destination designated by Lessor. If the Unit is not in the condition required by Section 4, Lessee shall pay to Lessor, on demand, all costs and expenses incurred by Lessor to bring the Unit into said condition. 11. REPORT TO IRS: Lessee will report this Lease to the Internal Revenue Service by filing Form 8038-G, 8038-GC or 8038 whichever is applicable. Failure to do so will cause the Lease to lose its tax exempt status. Lessee agrees that it the appropriate form is not filed, the interest rate will be adjusted to an equivalent taxable interest rate. .c. TITi,., bci:~ni i t irvTEnEST hYU FiiRT;ztn HSJli,1F1Wl.EJ: I'rUVIUtld (al Le55ee IIAS dCCCpYea eeGi 111111 ur1 ILJ Utlllvery ud(e; ioi the ueuvery i,ete or the iron: is on or purr r~ the Credit Utilization Date noted on the face hereof; and (cl no Event of Default exists as of the Delivery Date of the Unit, title to each Unit shall vest in Lessee on the Delivery Date of the Unit, provided, however, that in the event li) this Lease is terminated pursuantto Section 1 hereof, or (ii) an Event of Default has occurred and is continuing, title to the Unit shallimmediatelyrevestinLessor,freeofanyright,titleandinterestofLessee,unlessLessorelectsotherwiseinwriting. Lessee hereby grants toLessoracontinuingsecurityinterest in the Units, including all attachments, accessoriesand optional features (whether or not installed thereon) and all substitutions, replacements, additions and accessions thereto, and all proceeds of all of the foregoing, to secure the payment of all sums due. Lessee will, at its expense, do any further act and execute, acknowledge, deliver, file, register and record any further documents which Lessor may reasonable request in order to protect Lessor's security interest in the Units and Lessor's rights and benefits under this Lease. 13. ASSIGNMENT; COUNTERPARTS: Without the prior written consent of Lessor, no assignment of this Lease or any right or obligation hereunder may be made by Lessee or any assignee of Lessee. Lessor may not assign its right, title and interest in and to this Lease and the Units and/or grant or assign a security interestin this Lease and the Units, in whole or in part. Although multiple counterpartsof this document may be signed, only the counterpart accepted, acknowledgedand certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 14. EFFECT OF WAIVER: No delay or omission to exercise any right or remedy accruing to Lessor hereunder shall impair any such right or remedy nor shall it be construed to be a waiver of any breach or default of Lessee. Any waiver or consent by Lessor under this Lease must be in writing specifically set forth. This Lease completelystates the rights of Lessor and Lessee with respectto the UnITS arttl supersedesall prior agreements with respect thereto. Time is of the essence of this Lease. No variation or modification of this Lease shall be valid unless in writing and signed by the authorized representativesof Lessor and Lessee. All notices hereundershall pe in w~iting, addressed to each party at the address set forth on the front of this Lease or at such other address as may be furnished in writing. If any provision of this Lease shall be invalid under any applicable law, such provision shall be deemed omitted but the remaining provisions shall be given effect. All obligation of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required far their full observance and performance. 15. GENERAL: This Lease shall be governed by and construed under the laws of the State where the Units are located. I;XHiBI7' 2 Contlndla~ Paymcat Jehedate to ' Goveramental AYreea-cnc n.t`J57 Numl+et uC Paymantc Begaating Paynwx IrNc~ Concluding Made liak~noe Amount 6.00000°.~o P~yrnmt (`) 1 0.00 1.265.00 O.DU 137,777.00 2 137.777.00 1,265.00 f.SS.S9 117.200.39 3 137,200.1;9 1,265.00 6S6.00 136,b21.39 4 136,621.89 1163.00 G83.t 1 13ti,Os0.00 5 136.040.00 i16S.0t1 6R01n 133.453.20 6 135.453.20 1,2GS.W 677.25 134,567.43 7 134,867.48 1,263.00 ti74.34 134,:76.82 R 134.276.32 1.263.00 G71.3S 133 (83.20 9 L33,68310 1165.00 (,l8.a2 133.056.62 10 133,UkGG2 1,265.00 665.43 132,437.05 11 13Z,4S7.05 !165.00 G62.aa 131,384.49 12 131,334.49 1.265,00 639.42 131;73.9! l7 ]31,273.91 1,2GS.UD 636.39 130~t570.30 i4 130,670.30 1,265.00 653.35 130,i73x.G5 13 130.053.63 1163.00 65D.29 129,443.94 16 I19,aa3 J4 1,265.00 647.22 128526.16 17 12x,826.16 1.265.00 644.13 (28,205.29 1 S 125.20519 1.265.00 641.03 127,55 1.32 19 127.531.32 1365.00 637.91 126 X5413 20 126,934.23 1,265.00 62477 126,..324.00 21 126,324.00 1,265.00 G3J.62 125,u9U.62 22 123,690.62 1.263.00 G2b.a5 125,OSa.07 23 125.054.07 1165.00 625.27 124,=,14.34 24 124.414.34 1,265.0(! 622.07 123.771.41 25 123,77141 1.265.00 61 &.3G 123.125.27 26 123.125.27 1,265.00 615.63 122,75.90 27 122,475.90 1165.00 612.38 121,023.28 28 121.52313 1,265.00 609,12 121.167,40 29 121,167.40 ),265.00 li05.84 120,508.24 30 120.308.24 ]163.00 602.54 ]19.543.75 31 119.343.78 1,265.00 599.23 119,!30.01 31 119,180.01 1,265.00 393.90 118,110.91 33 115,310.91 1.263.00 592.55 117,538,46 34 117538.46 1,165.00 589.19 117,162.65 33 117,162.65 1,265.00 383.31 116,433.46 3G 116,4S3.a6 1163.00 58.2.42 113,800.85 37 113,1tW.88 1,265.00 579.00 113,114.33 36 115,114.88 1.265.00 315.57 114,325.45 39 114,425.45 1,263.00 572.13 113,'72.58 40 113.732.58 1,263.00 563.66 113,(13614 41 i13,U36.24 1,265.00 S65.IS 11236.42 a2 112,336,x2 1165.00 561.68 !11,633.10 d3 111.633.10 1165.00 338.17 110,926.2? 44 110,926.27 1.263.00 554.6) 110,213.90 45 110,213.90 1.265.00 551.08 109,501,98 46 109,301.98 1,265.00 547.51 lOS,7S4.49 47 lOR,7x4.x9 1.265.00 343.92 108,063.x1 4R ]05.063.41 1,263.00 Sa0.32 107,335.73 49 107,338.73 1,265.00 536.69 106,610.42 S0 106,610.42 1.265.00 S33.OS 105,678.x7 51 105,573.47 1,265.00 52929 105,142.86 32 105,142.36 1,2GSA0 525.71 ]04,403.57 53 104.403.37 1,265.00 522.02 103,660.57 4~ID-0DSG3 Page 1 Ca2api11st Finuuial Sexvioa Coepotatien t•:XH1R1T 2 Coacludia~ Psymcat Scbednle to Government,el Aereemcnt A„~ FEB 2 6 i99$„_ >~~ C.sterpcllar !'[nmcht 5eeviee~t Carpontlon a~ 1QRR COUNTY RUaD & eR[pGE lkxription of Uait: 1 Cytripe'Dar ItA serial number 4XMp0957 Numbs of Ya}~ro+tx 13eg~emictg Payment (ntaest Ccec:luding Madc IiaLvnac .4moant 6.00000% Paytnatt (') Sa 103,660.59 1,2G5.00 518.30 102,?]3.89 55 102913.89 1.265.00 514.37 102,1 C3.a6 56 t02,163.a6 1,265.00 510.82 !01.409.25 S7 L01,409.25 1.265.00 307.03 100,b51.33 S8 100,G51.33 1$G.S.DO 503.26 99,859.39 59 99,589.59 1263.00 a99.aS 99, t2A.0a GO )9,124.04 1,26S.OD 495.62 95,:154.66 61 98,33a.G6 ')8,8a6.4a 491.?S 0.00 17a,7a6.a4 35,704.4a (~ Doa not ine:lude any rcTt payment of other amiwat thm due bvti~led: .. . .. _ ~i .-~~~ Cri Quote Software 7.00 aN[?1JOSG5 Page 2 (aaap7lx Fioanti~ Swim Ccxpaatim CONSTRUCTION EQUIPMENT APPLICATION SURVEY RIDER To Agreement dated as of FEB 2 6 t~ Between Caterpillar Financial Services Corporation and KERB COUNTY ROAD & BRIDGE Model: 1 2H Attachments: NOTE: If machine is to be used in a landfill, demolition, transfer station, recycling application, scrap yard, steel mill, salt, chemical, corrosive, rendering, or hazardous waste environment, circle the appropriate aforementioned application; describe the exact application and working environment of the machine: then sign below. It is not necessary to complete the remaining portions of this application survey. You will also need to consult your Caterpillar Financial Services Corporation regional office to obtain the necessary quote data. COMPLETE THE FOLLOWING STEPS: 1. Choose the appropriate MARKET CATEGORY and circle the BASE number (one category per survey form). 2. Complete only this MARKET CATEGORY LINE BY CIRCLING ONE number under SECTION A (TOTAL HOURS PER YEAR) and ONE number under SECTION B (U/C, SHEET METAL OR TIRE/BELT CLAUSEI. 3. Add or subtract as necessary the THREE circled numbers starting with BASE and enter in the TOTAL POINTS column. (SECTION A) TOTAL HOURS PER YEAR MARKET CATEGORY' BASE HEAVY CONSTRUCTION 4 BUILDING CONSTRUCTION 4 MINING/AGGREGATE 4 AGRICULTURE 4 FOREST PRODUCTS 3 PAVING PRODUCTS 3 INDUSTRIAL GOVERNMENTAL 7 0-1200 1201-2200 2 1 2 2 2 2 2 L:.J 2201-4000 4001-5000 5001 + -1 -2 -3 -1 -2 -3 -1 -2 -3 -1 -2 -3 -1 -2 -3 (SECTION B) U/C,SHEET METAL,OR TOTAL TIRE/BELT CLAUSE POINTS YES NO +2 -1 + 2 -1 + 2 -1 +2 -1 + 2 -1 1 -1 -2 -3 + 1 -1 -1 -2 -3 -4 ±~ -1 -1 -2 -3 -4 ~~+ 1 -1 9 This application survey is considered to be an inte ral part of the binding contract between the lessor and lessee. The information obtained from this survey will be of arimary importance in the contract payment schedule. Any change in the location, severity of application, hourly usage and/or attachments or configuration must be approved in writing by Caterpillar Financial Services Corporation. IMPORTANT NOTE: In addition to the lessors other rights hereunder and not in lieu thereof, lessee shall pay lessor additional rent for each hour in excess of the maximum hours established for the lease. The Associated Equipment Distributors Green Book will be used as a base for determining an excess hour rental rate. Take 40% of the Published Associated Equipment Distributors monthly rental rate and divide by 176 to establish the hourly rate. Take this hourly rate times the total additional hours over the maximum used in the lease. The maximum number of hours established for this unit are ~. The calculated sum will be due upon receipt of invoice. NOTE: SIGNATURES ARE REQUIRED ON THE REVERSE CONSTRUCTION EQUIPMENT 'MARKET DEFINITIONS HEAVY CONSTRUCTION BUILDING CONSTRUCTION MINING/AGGREGATE AGRICULTURAL FOREST PRODUCTS PAVING PRODUCTS INDUSTRIAL GOVERNMENTAL - All highway/road construction, dams, railroads, airports and large earthmoving projects, including landfill site preparation. - All site development, sewer/water and utilities construction relating to building projects. - All metal and non-metal including quarries and sand/gravel operations. - All machines other than Challenger Tractors that are used in the preparation and harvesting of farm products. - All timber harvesting, handling, logging road construction, sawmills and logging yards. - All Caterpillar paving products, including compactors used for soil compacting excluding the 800 series. - All machines used inside an industrial plant or complex for the purpose of handling raw materials, finished products or any other task required. (Machines are owned or leased by the plant itself.) - All machines used by governmental entities for routine road maintenance, snow removal and other light applications. NOTE: APPLICATION SURVEY MUST BE SIGNED BY LESSEE AND AUTHORIZED DEALER REPRESENTATIVE. Lessee: KERB COUNTY ROAD Signature Name (Print) ~~©ct. ~ C~~= Title ~~cvL; •-L ~ ~-~- ~+'~r~-d •° Date 2 ~3'-~ Reviewed by: ~/ I CFSC Region Offic Dealer: B. D, I•iOLT COMPANY Signature j '~ Name (Print) _~~•, ~ Title .L'~~T(?.~`S L~!~ Date r'~ ~ ? ~ ~~ Form No. ASCONST - 1 1 /95 A95610 01 /29/98 03:43PMCT CONDITION OF EQUIPMENT UPON RETURN RIDER To Agreement dated as of ~ FEB Z g j`~'~`` Between Caterpillar Financial Services Corporation and KERB COUNTY ROAD & BRIDGE Notwithstanding the provisions of (check appropriate line): _ Sections 4 and 9 of Master Tax Lease Sections 4 and 9 of the Master Finance Lease Sections 4 and 9 of the Governmental Lease-Purchase Agreement _ Sections 5 and 12 of the Finance Lease _ Sections 5 and 13 of the Long-Term Rental Agreement Sections 4 and 10 of the Governmental Agreement Lessee agrees that each unit, upon its return, shall: 1 . be in sound mechanical shape and, if mobile, shall be in good working order under full payload; 2a. have tires in safe and operable condition with a minimum of forty percent {40%) original tread life remaining; OR b. have a minimum of forty percent (40%) life remaining on all undercarriage components including track shoes, links, pins and bushings,idlers, bogies, sprockets, carrier rollers, track rollers and belts for belted drive units with no cuts extending into the belt cords; 3. have no cracked or broken glass; 4. have no missing sheet metal and any damage to sheet metal shall not exceed $1,500.00; and 5. have no structural damage to the frame. The condition of each Unit shall be determined by an inspection report done prior to its return to be provided by Lessor. In lieu of returning a Unit in the condition specified above, Lessee shall reimburse Lessor for the cost to restore the Unit to such condition. Lessee: KERB COUNTY ROAD &~IDGE Signature Name (Print) ~~Kt~'r-c~~• ~ou-+-`-~'r• Title !'l~vw•..~-s~~~~. Date E'ER 2 6 ' Lessor: Caterpillar Financial Services Corporation Signature Name (Print) R~rHpRp lCNUDSOM CREDIT ANALYST Title Date FFR 2 6 Form No. ASCONRET - 1 1 /95 A95610 01 /29/98 03:43PMCT To: Caterpillar Financial Services Corporation OPINION OF COUNSEL Re: Governmental Lease-Port a Agreement Dated as of FE$ 2 6 19 (the "Lease") Between Caterpillar Financial Services Corporation ("Lessor") and KERR COUNTY ROAD & BRIDGE ("Lessee"). Sir/Madam: I am an attorney for Lessee, and in that capacity I am familiar with the above-referenced transaction, the Lease, and all other documents pertaining to the Lease. Based on my examination of these and such other documents, records and papers and matters of fact and law as I deemed to be relevant and necessary as the basis for my opinion set forth below, upon which opinion Lessor and any subsequent assignee of Lessor's interest may rely, it is my opinion that: 1. Lessee is a fully constituted political subdivision or agency duly organized and existing under the Constitution and laws of the State of TEXAS and is authorized by such Constitution and laws to enter into the transaction contemplated by the Lease and to carry out its obligations thereunder. 2. The Lease and all other documents contemplated by the Lease have been duly authorized, executed and delivered by Lessee and constitute valid, legal and binding obligations and agreements of Lessee, enforceable against Lessee in accordance with their terms. 3. The person or persons who have executed and delivered the Lease, and all other documents contemplated by the Lease were authorized to do so~ on behalf of Lessee. 4. No further approval, license, consent, authorization or withholding of objections is required from any federal, state or local governmental authority with respect to the entering into or performance by Lessee of the Lease or the Schedules(s) and the transactions contemplated thereby, and Lessee has sufficient appropriations or other funds available to pay all amounts due under the Lease for the current fiscal year. 5. The interest payable to Lessor by Lessee under the Lease is exempt from federal income taxation pursuant to Section 103 of the Internal Revenue Code of 1986, as amended. 6. The entering into and performance of the Lease and all other documents contemplated by the Lease will not conflict with or constitute a breach or violation of any judgment, consent decree, order, law, regulation, bond, indenture or contract, applicable to Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon any assets of Lessee or the units leased under the Lease pursuant to, any indenture, mortgage, deed of trust, bank loan, credit agreement or other instrument to which Lessee is a party or by which it or its assets may be bound. 7. There is no litigation, action, suit or proceeding pending or, to the best of my knowledge, threatened against or affecting Lessee in any court or before any govertunental commission, board, agency, arbitrator or authority which, if adversely determined, will have an adverse effect on the ability of Lessee to perform its obligations under the Lease. In addition, I am not aware of any facts or circumstances which would give rise to any litigation, action, suit or proceeding relating to or potentially adversely affecting the ability of the Lessee to perform its obligations under the Lease. 8. The units leased under the Lease are personal property and, when subject to use by Lessee, will not be or become fixtures under the laws of the State of TEXAS. 9. The authorization, approval and execution of the Lease, the Schedule(s) and all other documents contemplated by the Lease and all other proceedings of the Lessee related to the transactions therein and contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws, and all other applicable laws of the State of TEXAS. 10. The Lessor will have a perfected security interest in the Units upon filing with the Secretary of State for the State of TEXAS and/or the F~$ 2 ~ jQ~$ of at the time of acceptance of the Units of an executed UCC-1 or other financing statement. Yours sincerely, Signa e: Name (PRINT): ~-{t~wiA'S W, ~i1.~IiRO Title: ~'T ?'O~11~[ `I Date: F ~d . b'~ ~ i4 9 8' Address: y,~ 1 ~ I'4't ~J S 7, ~trt~~Ibt.R- ~ l~~-s ~BoZd' Telephone: $ ~ Q ~ ~" ~/ ~D ' 7 b'b O Form No. 0008-5/93 A95610 01/29/98 03:43PMCT DELIVERY SUPPLEMENT This pertains to the Lease, dated as of F~B 2 ~ l9~ as Lessor and KERB COUNTY ROAD & BRIDGE as Lessee. between Caterpillar Financial Services Corporation This confirms that the Lessee physically received the following Unit(s) on the possession date below. As of the date of signature of this form, (i) the Unit(s) are in all respects satisfactory to Lessee for leasing under the Lease, and (ii) Lessor has performed all of its obligations under the Lease. Descriation of Unit(s) (1) 12H Caterpillar MOTOR GRADER 4XM00957 Possession Date Location KERRVILLE, TX County: KERR KERR COUNTY AD ~- ~~ 3 `t ~ Signature Name (PRINT) ~ G Pi'i,t%L r G<-t,~4`~ Title A~ Vim. ~ w , 5 -~ ,r'r,/'~~ Date Z ' ~ ' 1 'orm No. 0001-12/96 A95610 01/29/98 03:43PMCT :gym 8UJ a-U '""""'°~r..n Return for Sax-Exempt Governmental Obligations (R¢r. Cc:ooer 1989) - Under Secdon ld9(e) OtaB Via. tia5~710 - See separatt Insttvdiora Qeoarsertor:he~rmsury EaarlS S-It-42 lMlrNl pf-MO• slry~C! (Use form 9038•GC.f the is3ue pritei3 under 5100.000) Reportin Authorit Check box if Amended Return - U 1 Issu:r's -ame 2 Issuer's employer ~dent:ficatlan numtxr 3 Vumt7er and street d Report numt:er 70MT T G19 - 5 Cary ar taMn, state, one ZIP coca 6 Oate ~F issue KEliRIrILLE, IX 78028 r name or issue 8 CU51P Numou Cat: Governmental Lea a-~ :chase A NONE Type of Issue (check box(es) that a plies and enter the Issue Price) 9 Check box ~f o0liga:ians are tax or other revenue anticipation Donds - ^ ( Issue ~r+ce 10 Check box if obtigatiors are i,^, the for- of a lease or installment sale - ® I 11 ^ Education ~ 12 Q' Health and hosp,tat . , 13 ^ Transportation _ 14 Q Public safety _ _ 15 ^ Environment (including se~rage bonds) 16 ^ Housing I7 ^ Utilities 18 ~Xi Ot.~er.0escr;be;seelns;:t:c+lons)- Lease-Purchase of construction Description of Obli atians 1 (a) 1 (s) (r:) td) (at I ~ } Staten reGempnon wa4ntea ( f0 ~ vet v,;aeu `Aarn;r :ate tn;eeest rate Issue ?rite :rKa at matmin awra a !Hato ' 1 'r:aie ~ 19 Final ma[urir~ . ! v/~. I :t/A I N/A N A 20 Entire issue . / e I N/A years I 6.0561 .25 % Uses of Ori final Proceeds of Bond Issues ineludin underwriters' discount) 2I Proceeds used far accrued interest 21 I 22 Issue price of entire issue (en;er-ine 20e) _ 22 {5139,042.00 23 Proceeds used For Ccnt' issuance toss (including underwriters' discount) . 123 2a ProceeCs :ased'or c: _Cit enhancement . 24 25 ?rocaeCs atlccatec ;o reasonably reti;uired reserve or reptacemert fund 25 26 Proceeds used to re:und ~ricr issues . 26 i 27 Total (aCd tines 23, 2a, 2~, and 25) . 127 28 Nonrefvndin¢ oroceetis of ;he issue (subtract tine 27 from line 22 and enter amount hnrN1 ~ w 15139.042.00 29 Enter the remaining weighted average mattuiry of the Oonds to be refunded - Y~rs 30 Enter the test date on which ;he refunded bonds will De tatted _ - 31 Enter ;he datels tl'e refunded bonds were issued - Miscellaneous 32 Enter tre ar,.ot:n; or :t-.e s:a:z rolurr,e cap attacateo to the issue . * N! 33 Enter ;r+e amour,; o` t-e bends des:grated by the issuer under section 265(b)(3)(8)(i)(111) (small issl:er a:ceptton) - 3a Pcoled financings: a cnter;le anot:n: o~ :'e ^rcce:cs of his Issue that are :o be used to make loans to other govommenWl units - ~' ~ b Checie ao:.f chu isst.e s a .can made from the Droceeds of another tax-exempt issue - ^ artd enter the name of the isst:er - and the date of the issue - ;ir'ecr x-a.• es r.:e•°.•- ~ ar_•a•e :-a: t 1Ae esarnmee :lw3 re:.rn ar0 aCOTOarry~~~ 7G'teQUtei anQ StateTlnTt. a~0 :D S! SlS::i ~~l r ar•e-irre ue :ax'. i Please Sign ~-yyri~yj/,~ ~_ 1.~ity~l~'L a - y- 9~ yC?%'~Y' Here j, s. -.::r.:~3-~-• o.~t S ~ rr:• 7~ ~r:nl Hirt ar'O :::'t For Paperwork Reduction ac: Notice. see page 1 of the lnstruetionz. ;,,-+ 8038-G ;~a• :o-s91 .Y.1. G•.y.we J+aa:,w. or:le• :~sa•:S:-Ut/w:r CATERPILLARS March 9, 1998 KERB COUNTY ROAD & BRIDGE 700 MAIN ST. KERRVILLE, TX 78028 CONTRACT: #76554 Dear Customer: Caterpillar Financial Services Corporation 4975 Preston Park Boulevard, Suite 280 Plano, Texas 75093 (972)985-6900 Fax (972)985-6925 Enclosed are your copies of the documents covering the equipment recently fmanced with Caterpillar Financial Services Corporation. Please take a moment to review these documents carefully. An amortization schedule has been enclosed for your convenience. However, should you require an eazly payoff you must contact our Customer Services Department for an accurate amount. This amortization schedule should also be used to calculate your yeaz-end interest and balance. Payments should be mailed on or before the due date to insure time for processing through the U.S. Postal service. Mail to: Caterpillaz Financial Services Corporation P.O. Box 60197 St. Louis, MO 63160 We appreciate your business and look forwazd to serving you. Keep these documents in a safe place for future reference. Our Customer Services department can be reached at 1-800-353-2372 should you have any questions over the life of your contract. Sincerely, CUSTOMER SERVICES DEPARTMENT enclosures