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MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
THIS MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT (the
"Agreement "), dated as of March 16, 2006, is by and between BANC OF AMERICA
LEASING & CAPITAL, LLC ("Lessor "), and KERR COUNTY, TEXAS ("Lessee ").
WITNESSETH:
WHEREAS, Lessee is a county and a political subdivision of the State of Texas (the
"State"), and is authorized and empowered under the laws of the State, particulazly the Public
Property Finance Act, Texas Loc. Gov't. Code Ann. §271.001 et seq. (the "Act") to lease, as
lessee, to purchase and receive, and to control and dispose of personal property, whether
movable or fixed, considered by the Commissioners Court of Lessee to be necessary, useful or
appropriate to one or more governmental purposes of Lessee.
WHEREAS, the parties hereto desire that Lessee from time to time lease from Lessor
Equipment (defined below) to be identified by Lessee on the terms and conditions set forth
below, which Equipment the Commissioners Court of Lessee shall determine is necessary, useful
and appropriate to one or more governmental purposes of Lessee and shall be specifically
identified in any Schedule A (as hereinafter defined) attached hereto and made a part hereof; and
WHEREAS, Lessee shall make Rental Payments (as hereinafter defined) and certain
other payments directly to Lessor for the possession, use and ownership of the Equipment; and
WHEREAS, this Agreement shall be payable from and secured by a pledge of ad
valorem taxes of Lessee in accordance with the provisions hereof and by a security interest in the
Equipment being financed hereunder; and
WHEREAS, as further security for the payment of all of Lessee's obligations under this
Agreement Lessee shall assign to Lessor a first priority perfected security interest in the
Equipment;
NOW, THEREFORE, for and in consideration of the premises and of the covenants
hereinafter contained, and other valuable considerations, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
For the purposes of this Agreement and related documents, the following definitions will
apply:
1.1. Acceptance Certificate. A Certificate of Lessee, in substantially the form set
forth on Attachment A to Schedule A hereunder by which Lessee accepts delivery of the
Equipment and authorizes Lessor to disburse funds for said Equipment.
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1.2. Acceptance Date. Unless otherwise agreed to by the prior written consent of
Lessor, the date on which the Acceptance Certificate is executed and delivered by Lessee to
Lessor pursuant to the terms of this Agreement.
1.3 Acquisition Fund and Account Control Agreement. The Acquisition Fund and
Account Control Agreement entered into among Lessor, Lessee and the Acquisition Fund
Custodian named therein, in connection with this Agreement.
1.4. Authorized Officer. (i) In the case of Lessor, any President or Vice President,
and when used in reference to an act or document of Lessor, also means any other person
authorized to perform the act or sign the document, and (ii) in the case of Lessee, the County
Judge of Lessee or any other person authorized by the Commissioners Court of Lessee.
1.5. Closin The date of delivery of all executed documents related to this
Agreement and any Schedule A hereunder as required under this Agreement and such related
Schedule A.
1.6. Contract Price. The all-inclusive price of an item of Equipment, including the
cost of installation, freight, taxes and training (such costs not to exceed 20% of the total cost of
the Equipment), but excluding the cost of any service contract, as set forth in the applicable
Purchase Agreement.
1.7. Determination of Taxability. One of the following determinations, made in
regard to section 103 of the Code (as defined herein) to the effect that by reason of any action or
inaction by Lessee or any violation by Lessee of any of its covenants or representations in this
Agreement or any misrepresentation in any certificate furnished in connection with any
Schedule A hereunder, the interest payable on such Schedule A is includable in the gross income
of owner of such obligation: (i) a final determination, decision or decree by the Commissioner or
any District Director of Internal Revenue, or by any court of competent jurisdiction, which is not
subject to further review, or (ii) an opinion of a nationally recognized bond counsel furnished by
Lessor to Lessee.
1.8. Equipment. The goods enumerated on each Schedule A that is now or may
hereafter from time to time become attached hereto and incorporated herein by reference,
together and with any and all additions, modifications, attachments, replacements and parts
thereof.
1.9. Equipment Acquisition Account. The account so designated and established by
Lessee with Lessor pursuant to Section 14.2 hereof.
1.10. Lease Proceeds. With respect to any Schedule A, the total amount of money or
other consideration to be paid or provided by Lessor, in no event to exceed the Maximum
Contract Amount, for application in accordance with such Schedule A and Section 14 hereof,
including (a) the Contract Price of each item of Equipment set forth on such Schedule A payable
to the Vendor thereof upon acceptance by Lessee and (b) the amount, if any, paid by Lessor and
applied to the reasonable costs of issuance of such Schedule A.
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1.11. Lease Term. With respect to this Agreement and any Schedule A hereunder, the
term specified in the applicable Schedule A in accordance with Section 3 hereof.
1.12. Lease Term Commencement Date. The date as set forth on each Schedule A
hereto.
1.13. Lease Term Interest Rate. The interest rate per annum on the Lease Proceeds as
set forth on each Schedule A hereto as adjusted pursuant to the provisions of Section 4.4 hereof.
1.14. Maximum Amount. The amount as set forth on each Schedule A hereto.
1.15. Permitted Investments. Any investment authorized pursuant to the Public Funds
Investment Act, V.T.C.A. Government Code §2256.001 et seq. and the written investment policy
of Lessee.
1.16. Purchase Agreement or Purchase Agreements. Each of the purchase
agreements between Lessee and the Vendors of the Equipment.
1.17. Purchase Price. The amount set forth in the Schedule A relating to the
Equipment described therein.
1.18. Rebate Account. The account so designated by Lessee if so established pursuant
to this Agreement.
1.19. Rental Payments. The scheduled payments (but excluding indemnifications and
reimbursements and Additional Rents payable to Lessor hereunder) payable by Lessee pursuant
to the provisions of this Agreement and each Schedule A.
1.20. Schedule A. The document(s) now or hereafter from time to time attached hereto
and incorporated herein by reference and signed by the parties which, among other things,
describes the equipment to be leased by Lessor to Lessee, describes the Lease Term for the
Equipment listed thereon and Lessee's obligations with respect to payment and which shall be
numbered consequentially from No. 1 upward.
1.21. State. The State of Texas.
1.22. Taxable Rate. The interest rate representing the equivalent yield to Lessor of the
Lease Term Interest Rate if the interest component of the Rental Payments is included in the
gross income of Lessor under the Code.
1.23. Total Contract Price. The amount as set forth in each Schedule A hereto.
1.24. UCC. The State's Uniform Commercial Code.
1.25. Vendor or Vendors. The manufacturer or manufacturers of an item of
Equipment, as well as the agents or dealers of the manufacturer, from whom Lessor has
purchased or is purchasing items of Equipment.
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SECTION 2. LEASE OF EQUIPMENT.
2.1. Acquisition of Equipment; Conditions Precedent.
(a) Lessee either has ordered or shall order the Equipment pursuant to one or
more Purchase Agreements from one or more Vendors. Lessee shall remain liable to each such
Vendor with respect to its duties and obligations in accordance with the Purchase Agreement,
and as between Lessor and Lessee, Lessee shall bear the risk of loss with respect to any loss or
claim relating to any item of Equipment covered by any Purchase Agreement.
(b) The obligation of Lessor to purchase, pay or provide other consideration
for, or provide an item of Equipment or to deposit the Lease Proceeds to the Equipment
Acquisition Account is subject to the receipt by Lessor of the following documents and the
satisfaction of the following conditions, all of which shall be satisfactory to Lessor in form and
substance:
(i) Lessee shall have accepted the Equipment by delivery to Lessor of
an Acceptance Certificate, whereupon the item of Equipment shall immediately become
subject to and governed by the provisions of this Agreement and the related Schedule A;
(ii) There shall exist no Event of Default (as defined in Section 12.1
hereof) under this Agreement or any Schedule A hereunder, or any condition, event or act
which with notice or lapse of time, or both, would become an Event of Default
thereunder which has not been remedied or waived;
(iii) There shall exist no material adverse change in the financial
condition of Lessee;
(iv) This Agreement, the applicable Schedule A (including all
attachments) duly executed by Lessee and an Acquisition Fund and Account Control
Agreement duly executed by Lessee and Acquisition Fund Custodian;
(v) Evidence of insurance as required under Section 6.7 hereof; and
(vi) Financial information and such other documents, instruments or
other items as may be reasonably required by Lessor.
2.2. Lease of Equipment. Upon execution of each Schedule A, Lessor shall provide
the consideration specified in such Schedule A to be provided by it to acquire the Equipment and
to lease to Lessee, and Lessee shall lease from Lessor the Equipment, all in accordance with the
provisions of this Agreement and the related Schedule A, to have and to hold for the Lease Term.
Lessee hereby acknowledges and agrees that Lessor shall retain a perfected first priority security
interest in the Equipment in accordance with this Agreement. The execution and delivery of this
Agreement and any Schedule A hereunder shall not obligate Lessor to execute and deliver any
Schedule A or to provide any funds or other consideration with respect to any Schedule A unless
and until such Schedule A has been executed and delivered by all other parties thereto and all
conditions set forth in this Agreement and such Schedule A have been satisfied.
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SECTION 3. LEASE TERM.
3.1. Lease Term.
(a) The Lease Term applicable to any Schedule A shall commence on the
Lease Term Commencement Date and shall terminate on the last business day of Lessee's then
current fiscal budget period (such period hereinafter referred to as the "Original Lease Term")
unless renewed pursuant to Section 3.1(b) hereof.
(b) The Original Lease Term with respect to the items of Equipment described
in each Schedule A will be automatically and successively renewed at the end of the Original
Lease Term under the same terms and conditions for such number of successive renewal periods
(such renewal periods hereinafter individually referred to as a "Renewal Lease Term ") as is set
forth on such Schedule A.
3.2. Termination of Lease Term. The Lease Term applicable to any Schedule A will
terminate upon the earliest to occur of any of the following events:
(a) The expiration of the Original Lease Term or any Renewal Lease Term
with respect to all items of Equipment described in a Schedule A and the non-renewal thereof in
accordance with the terms and conditions of this Agreement; or
(b) The exercise by Lessee of the option granted under the provisions of
Sections 5.1 or 6.8 hereof to purchase the Equipment identified in such Schedule A; or
(c) Lessor's election to terminate this Agreement under Section 12.2 due to
Lessee's default hereunder or termination of this Agreement under the provisions of Section 3.3;
or
(d) The payment by Lessee of all Rental Payments in accordance with this
Agreement with respect to such Schedule A and any additional amounts required to be paid by
Lessee hereunder.
3.3. Intentionally Omitted.
SECTION 4. RENTAL PAYMENTS.
4.1. Rental Payments Payable From Pled˘e of Ad Valorem Taxes. Lessor and
Lessee understand and intend that the obligation of Lessee to pay Rental Payments hereunder
and under any Schedule A shall constitute a debt of Lessee payable from a pledge of ad valorem
taxes. A special "Interest and Sinking Fund" is hereby created and shall be established and
maintained by Lessee at an official depository bank of Lessee. Said Interest and Sinking Fund
shall be kept separate and apart from all other funds and accounts of Lessee, and shall be used
only for paying the Rental Payments due under this Agreement. All ad valorem taxes levied and
collected for and on account of said Rental Payments shall be deposited, as collected, to the
credit of said Interest and Sinking Fund. For each fiscal year while any Rental Payments remain
unpaid under this Agreement, the governing body of Lessee shall compute and ascertain a rate
and amount of ad valorem tax which will be sufficient to raise and produce the money required
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to pay the Rental Payments coming due during such fiscal year, and to provide and maintain a
sinking fund adequate to pay the principal portion of such Rental Payments as such principal
portion matures (but never less than 2% of the original amount provided by Lessor to Lessee
under the respective Schedule A as a sinking fund each year); and said tax shall be based on the
latest approved tax rolls of Lessee, with full allowance being made for tax delinquencies and the
cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby
ordered to be levied, against all taxable property in Lessee for each year while any Rental
Payments under this Agreement are outstanding and unpaid; and said tax shall be assessed and
collected each such year and deposited to the credit of the Interest and Sinking Fund created by
this Agreement. Said ad valorem taxes sufficient to provide for the payment of the Rental
Payments due under this Agreement are hereby pledged for such payment, within the limit
prescribed by law.
4.2. Intentionally Omitted.
4.3. Amount and Times of Pavment. As rental for the Equipment, Lessee hereby
agrees to pay Lessor the amounts specified in each Schedule A at the times and in the manner set
forth therein.
4.4. Allocation of Interest. A portion of each Rental Payment shall be allocated to
interest in accordance with the amortization schedule attached to the Schedule A and its
corresponding Acceptance Certificate.
4.5. Lease Term Interest Rate. The Rental Payments shall bear interest during the
Lease Term at the rate set forth in each Schedule A; provided, however, in the event of a
Determination of Taxability, such interest rate set forth in each Schedule A shall automatically
increase to the Taxable Rate retroactive to the date of the occurrence of the Determination of
Taxability and Lessee will pay such additional amount as will result in Lessor receiving the
interest component of the Rental Payments at the Taxable Rate; provided, further, that such
interest rate set forth in each Schedule A or such interest rate set forth in each Schedule A as
increased by the teens hereof, respectively, shall never exceed the then maximum interest rate
allowed for similar govenunental obligations pursuant to Chapter 1204, "fexas Government
Code, as amended, or other applicable laws in effect as of the date of such Schedule A or as of
the date of any increase to such interest rate, respectively.
4.6. Place of Pavments. All payments required to be made to Lessor hereunder shall
be made at Lessor's principal office or as may be otherwise directed by Lessor or its assignee.
4.7. Late Pavment. Should Lessee fail to pay any part of the Rental Payments or any
other sum required to be paid by Lessor on or before the due date thereof, such unpaid amount
shall continue to accrue interest at the maximum rate allowed under Texas law for Rental
Payments set forth in the related Schedule A until paid.
4.8. Abatement of Pavments. There will be no abatement or reduction of payments
by Lessee for any reason, including but not limited to, any defense, recoupment, setoff,
counterclaim, or any claim (real or imaginazy) azising out of or related to any defects, damages,
malfunctions, breakdowns or infirmities of the Equipment. Lessee assumes and shall bear the
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entire risk of loss and damage to the Equipment from any cause whatsoever, it being the
intention of the parties that the Rental Payments shall be made in all events unless the obligation
to make Rental Payments is terminated as otherwise provided herein.
4.9. Rental Payments to Be Unconditional. The obligations of Lessee to make
payment of the Rental Payments and all other payments and fees due hereunder, as well as to
perform and observe all other covenants hereunder, shall be absolute and unconditional in all
events, without abatement, diminution, deduction, set-off or defense for any reason, including
without limitation any failure of the Equipment to be delivered or installed, any defects,
malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation,
destruction or unforeseen circumstances. Notwithstanding any dispute between Lessee and
Lessor, any vendor or any other person, Lessee shall make all Rental Payments when due and
shall not withhold any Rental Payments pending final resolution of such dispute, nor shall Lessee
assert any right of set-off or counterclaim against its obligation to make such payments required
under this Agreement.
4.10. Appointment of Servicer. Lessor shall have the right to designate an entity to
act as the `:Servicer" for the collection of Rental Payments payable by Lessee, the enforcement of
remedies or the distribution of funds to one or more holders of interests in this Agreement, all as
provided herein. Any Servicer appointed under this Section shall be a trust company or a bank
having the powers of a trust company, having a capital and surplus of not less than $25,000,000.
Any such Servicer shall notify Lessee and Lessor of its acceptance of the appointment and, upon
giving such notice, shall become Servicer, vested with all the property, rights and powers of the
Servicer hereunder, without any further act or conveyance. Such Servicer shall execute, deliver,
record and file such instruments as are required to confirm or perfect its acceptance hereunder
and set forth its duties hereunder.
SECTION 5. PREPAYMENT; PURCHASE.
5.1. Purchase Rights. Lessee shall be entitled to full title and all ownership interests
in the Equipment identified on a particular Schedule A, and Lessor's security interest therein
shall be terminated:
(a) Upon payment in full of all Rental Payments of the applicable Schedule A
and all other amounts due under this Agreement, with respect to such Schedule A; or
(b) Upon written notice by Lessee delivered at least thirty (30) days in
advance of any date on which a Rental Payment is due, and upon the payment on such date of the
Rental Payments due, the Purchase Price, and all other amounts owed by Lessee hereunder.
5.2. Optional Prepayment. Lessee shall have the right to prepay the outstanding
principal balance of each Schedule A hereunder, in full at any time, provided, that as conditions
precedent to Lessee's right to make, and Lessor's obligation to accept, any such prepayment:
(i) Lessor shall have actually received the notice required in Section 5.1(b) above providing the
amount of principal which will be prepaid (the "Prepaid Principal ") and the date (the
"Prepayment Date ") on which the prepayment will be made; and (ii) each such prepayment shall
be in the amount of 100% of the principal amount to be prepaid, plus accrued unpaid interest
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thereon to the Prepayment Date, plus any other sums which have become due to Lessor under
such Schedule A on or before the Prepayment Date but have not been paid, provided, however,
in no event shall any prepayment cause the interest rate on any Schedule A to exceed the
maximum interest rate allowed for similar governmental obligations pursuant to Chapter 1204,
Texas Government Code, as amended, or other applicable laws in effect as of the date of such
Schedule A. All prepayments of principal shall be applied to principal in inverse order of
maturity.
5.3. Consummation of Purchase. Lessor's security interest in the Equipment
identified in a particular Schedule A shall be terminated and released automatically in
conjunction with the receipt of the full Purchase Price or the final Rental Payment due
thereunder plus any other amounts then due from Lessee hereunder, unless an Event of Default
hereunder shall have occurred and be continuing as of such date. Such date may at the discretion
of Lessor be extended for such additional period as Lessor's counsel reasonably determines to be
necessary to reflect the impact of, and avoid the risks related to, bankruptcy-related laws. On
such date, Lessor shall deliver to Lessee such deeds, termination statements, bills of sale and
other documents and instruments as Lessee shall reasonably require to evidence the transfer of
all right, title and interest of Lessor in such Equipment to Lessee free and clear of all liens and
encumbrances created by or arising, directly or indirectly, through Lessor.
5.4. Mandatory Prepayment. Subject to Section 13.1, all or substantially all of the
assets of Lessee, including Lessee's interest in this Agreement and the Equipment, may be
acquired in any manner by another entity, subject to the opinion of counsel acceptable to Lessor
as to the continued exclusion From gross income of the interest component of the Rental
Payments. However, if all or substantially all of the assets of Lessee, including Lessee's interest
in this Agreement and the Equipment, are acquired in any manner by another entity, Lessee may
be required, at the direction of Lessor to prepay in whole the Purchase Price, plus any other
amounts then due from Lessee hereunder.
5.5. Eminent Domain by Lessee. Lessee expressly agrees that in connection with
any exercise of its eminent domain powers, the fair market value of the Equipment shall be the
sum of all remaining Rental Payments.
SECTION 6. RESPONSIBILITIES OF LESSEE.
6.1. Care and Use of Equipment. Lessee shall use the Equipment in a cazeful and
proper manner, in compliance with all applicable laws and regulations, and at its sole cost and
expense, service, repair and maintain the Equipment so as to keep the Equipment in good
condition, repair, appearance and working order for the purposes intended, ordinary wear and
teaz excepted, and shall replace any part of the Equipment as may from time to time become
worn out, lost, stolen, destroyed or damaged or is unfit for use. Subject to the terms of
Section 6.5 hereof, any and all such additions to or replacements of the Equipment and all parts
thereof shall constitute accessions to the Equipment and shall be subject to all the terms and
conditions of this Agreement and included in the term "Equipment" as used in this Agreement or
in any Schedule A hereunder. If requested by Lessor, Lessee shall enter into or cause to be
entered into, and maintained in full force and effect during the term of this Agreement, standard
maintenance contracts satisfactory to Lessor covering the Equipment and shall comply with all
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its obligations thereunder. Lessee shall furnish evidence to Lessor of such signed maintenance
agreement at or prior to the date of this Agreement and the payment of all charges and premiums
therefor. Substitute maintenance may be used if necessary and if first approved by Lessor in
writing. Upon the early termination of this Agreement pursuant to Section 12.2, Lessee shall
return the Equipment at its sole expense to Lessor at a place designated by Lessor in the same
condition as originally received, ordinary wear and tear excepted, and in a condition which will
permit Lessor to be eligible for such standard maintenance contract without incurring any
expense to repair or rehabilitate the Equipment.
6.2. Insueetion. Lessor shall have the right upon reasonable prior notice to Lessee to
enter onto and upon the premises where the Equipment is located to inspect the Equipment and
observe its use during normal business hours.
6.3. Utilities. Lessee shall pay all charges for gas, water, steam, electricity, light, heat
or power, telephone or other utility service furnished to or used on or connection with the
Equipment during the Lease Term. There shall be no abatement of Rental Payments on account
of interruption of any such services.
6.4. Taxes. Lessee agrees to pay when due any and all taxes relating to the Equipment
and Lessee's obligations hereunder, including but not limited to, all license or registration fees,
gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental
taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes licenses and
charges imposed on the ownership, possession or use of the Equipment by any governmental
body or agency, together with any interest and penalties, whether the taxes assessed are assessed
against Lessor or Lessee, other than taxes on or measured by the net income of Lessor.
6.5. Alterations. Without the prior written consent of Lessor, which consent shall not
be unreasonably withheld, Lessee shall not make any alterations, modifications or attachments to
the Equipment which cannot be removed without materially damaging the functional capabilities
or economic value of the Equipment. Upon return of the Equipment and at Lessor's request,
Lessee at its sole cost and expense, will remove all alterations, additions and attachments and
repair the Equipment as necessary to return the Equipment to the condition in which it was
furnished, ordinary wear and tear excepted.
6.6. Transportation and Installation Char˘es. Lessee shall be responsible for all
charges relating to the transportation of the Equipment to Lessee's location and the installation at
such location. Lessor may at its option either prepay such charges and invoice Lessee or forward
invoices to Lessee as they are received and Lessee shall remit payment within ten (10) days upon
Lessee's receipt of same.
6.7. Insurance. Lessee shall during each Lease Term maintain or cause to be
maintained (a) casualty insurance naming Lessor and its assigns as additional insured and loss
payee and insuring the Equipment against loss or damage by fire and all other risks covered by
the standard extended coverage endorsement then in use in the State, and any other risks
reasonably required by Lessor, in an amount at least equal to the Purchase Price of the
Equipment and with such deductibles as Lessor may require in its sole discretion; (b) liability
insurance that protects Lessor from liability in all events in form and amount satisfactory to
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Lessor; and (c) worker's compensation coverage as required by the laws of the State; provided
that, with Lessor's prior written consent, Lessee may self-insure against the risks described in
clause (a). Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage
throughout each Lease Term. Lessee shall not cancel or modify such insurance or self-insurance
coverage in any way that would affect the interests of Lessor without first giving written notice
thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.
6.8. Risk of Loss. Lessee shall bear all risk of loss to the Equipment, after delivery of
the Equipment to Lessee, and in the event of loss or damage thereto, Lessee shall as its option
either (i) continue to make the Rental Payments due hereunder and repair or replace the
Equipment as mutually agreed between Lessee and Lessor, or (ii) purchase the Equipment for the
Purchase Price.
6.9. Performance by Lessor of Lessee's Responsibilities. Any performance
required of Lessee or any payments required to be made by Lessee may, if not timely performed
or paid, be perfonmed or paid by Lessor, and in that event, Lessor shall be immediately
reimbursed as Additional Rents payable under Section 4.7 by Lessee for such payments and for
any costs and expense, legal or otherwise associated with the payments or other performance by
Lessor, with interest per annum thereon at the maximum rate for governmental obligations under
Chapter 1204, Texas Government Code, as amended, or other applicable laws in effect as of the
date such Additional Rents are incurred.
6.10. Financial Statements. Lessee shall keep its books and records in accordance
with generally accepted accounting principles. Lessee agrees that it will furnish Lessor:
(a) Lessee's current audited financial statements within 180 days of each fiscal year end
including (i) a balance sheet, (ii) statement of revenues, expenses and changes in fund balances,
(iii) statement of cash flows, (iv) operating fund budget analysis, and (v) appropriate notes,
schedules and attachments to the financial statements, (b) within 90 days of each fiscal year end
a copy of the annual budget for the then current fiscal year; and (c) such other financial
information relating to the ability of Lessee to continue performing hereunder (as submitted or
approved) as Lessor may from time to time reasonably request, and permit Lessor or its agents
and representatives to inspect Lessee's books and records and make extracts therefrom. Lessee
represents and warrants to Lessor that all financial statements which have been delivered to
Lessor fairly and accurately reflect Lessee's financial condition and there has been no material
adverse change in Lessee's financial condition as reflected in the statements since the date
thereof.
6.11. Purchase Agreement; Installation Contract. Lessee shall provide to Lessor a
copy of any Purchase Agreement, installation contract and the projected installation schedule and
any amendments thereto entered into for the Equipment being financed pursuant to this
Agreement.
6.12. Advances. In the event Lessee shall fail to keep the Equipment in good repair
and working order, Lessor may, but shall be under no obligation to, maintain and repair the
Equipment and pay the costs thereof. All amounts so advanced by Lessor shall constitute
Additional Rent for the Lease Term and Lessee agrees to pay such amounts so advanced by
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Lessor with interest thereon from the date of the advance until paid at the maximum interest rate
allowed under Chapter 1204, Texas Government Code, as amended.
6.13. Rates and Charees. Lessee will, at all times while this Agreement and any
Schedule A issued hereunder are outstanding, establish, fix, prescribe and collect rates and
charges for the services produced or furnished by Lessee which are reasonably expected to yield
income sufficient to satisfy the Rental Payments due thereunder.
SECTION 7. DAMAGE, DESTRUCTION AND CONDEMNATION.
7.1. Damage, Destruction and Condemnation. Unless Lessee shall have exercised
its option to purchase the Equipment by making payment of the Purchase Price and any other
amounts then due from Lessee hereunder, as provided in this Agreement and the related
Schedule A, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any
portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or
(b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the
exercise or threat of the power of eminent domain by any governmental body or by any person,
firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the
Net Proceeds (as hereinafter defined) of any insurance claim or condemnation award or sale
under threat of condemnation to be applied to the prompt replacement, repair, restoration,
modification or improvement of the Equipment. Any balance of the Net Proceeds remaining
after such work has been completed shall be paid to Lessee.
Notwithstanding the foregoing, Lessee may elect to replace the Equipment. If Lessee
elects to replace any item of the Equipment (the "Replaced Equipn2ent ") pursuant to this
Section, the replacement equipment (the "Replacement Equipment ") shall be of similar type,
utility and condition to the Replaced Equipment and shall be of equal or greater value than the
Replaced Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of
Replacement Equipment is free and clear of all claims, liens, security interests and
encumbrances, excepting only those liens created by or through Lessor, and shall provide to
Lessor any and all documents as Lessor may reasonably request in connection with the
replacement, including, but not limited to, documentation in form and substance satisfactory to
Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessen
hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this
paragraph shall constitute "Equipment" for purposes of this Agreement and the related
Schedule A. Lessee shall notify Lessor as soon as possible of its election to replace Equipment
in accordance with the foregoing, and in any event, Lessee shall complete the documentation of
Replacement Equipment on or before the next Rental Payment date after the occurrence of a
casualty event, or be required to exercise the purchase option with respect to the damaged
Equipment.
For purposes of this Section, the term "Net Proceeds" shall mean the amount remaining
from the gross proceeds of any insurance claim or condemnation award or sale under threat of
condemnation after deducting all expenses, including attorneys' fees, incurred in the collection
thereof.
#572682v4 (Texas Lease Template) I 1
7.2. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full
the cost of any repair, restoration, modification or improvement referred to in Section 7.1, Lessee
shall either (a) complete such replacement, repair, restoration, modification or improvement and
pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid
to Lessor the amount of the Purchase Price for the Equipment, plus any other amounts then due
from Lessee hereunder, and, upon such payment, the applicable Lease Term shall terminate and
Lessor's security interest in the Equipment shall terminate as provided in Section 3 hereof. The
amount of the Net Proceeds, if any, remaining after completing such repair, restoration,
modification or improvement or after purchasing such Equipment and such other Equipment
shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee
shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to
any diminution of the amounts payable under Section 4 hereof.
SECTION 8. TITLE TO EQUIPMENT; SECURITY INTEREST.
8.1. Title. During the Lease Term, legal title to the Equipment governed by
Schedule A shall, so long as no Event of Default has occurred and is continuing under such
Schedule A and hereunder, be in Lessee. The Equipment shall be registered in the name of
Lessee and, if applicable, title thereto shall be evidenced by a certificate of title, or such other
instrument as may be required by or utilized by the laws of the State to demonstrate ownership.
Such certificate shall be held at all times during the term of this Agreement by Lessor and shall
expressly state thereon that (a) Lessor holds a lien on the Equipment (Lessor's name and address
shall appear on such certificate as "Banc of America Leasing & Capital, LLC, 2059 Northlake
Parkway, 4th Floor, Tucker, GA 30084"), (b) Lessee's possession of the Equipment is subject to
this Agreement, and (c) any other information required by applicable law and that may be
necessary or convenient, as determined by Lessor, to establish Lessor's rights, title and interest
as the first secured lienholder of the Equipment. Lessee shall at all times protect and defend, at
its own cost and expense, its title to the Equipment from and against all claims, liens and legal
processes of creditors of Lessee, and keep all Equipment free and clear of all such claims, liens
and processes. The Equipment is and shall remain personal property. Upon the occurrence of an
Event of Default under this Agreement or upon the termination of this Agreement, other than
pursuant to Sections 3.2(b), 3.2(d) or 6.8 hereof, and Lessor's termination thereof (i) full and
unencumbered legal title to the Equipment shall pass and revert to Lessor and Lessee shall have
no further interest therein; (ii) Lessee shall execute and deliver to Lessor such documents as
Lessor may request to evidence the passage of Lessee's title and interest therein; and (iii) upon
request by Lessor, Lessee shall deliver possession of the Equipment to Lessor. Upon termination
pursuant to Sections 3.2(b), 3.2(d) or 6.8 hereof, full and unconditional title to the applicable
Equipment shall pass to Lessee, and Lessor's security interest in the applicable Equipment shall
terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request
to evidence the termination of Lessor's security or other interest in such Equipment.
8.2. Security Agreement. Anything in Section 8.1 hereof to the contrary
notwithstanding, Lessee hereby grants to Lessor, as security for all of the obligations of Lessee
hereunder, a security interest in any and all of Lessee's right, title and interests in and to this
Agreement the Equipment, all additions, attachments, accessions, substitutions and replacements
thereto, and Rental Payments due or to become due hereunder, and any and all proceeds thereof,
including without limitation, the proceeds of insurance thereon and any amounts of Lease
#572682v4 (Texas Lease Template) 12
Proceeds on deposit in the Equipment Acquisition Account, and all investments and proceeds
thereof. Lessee agrees to execute and deliver all documents, instruments and financing
statements necessary or appropriate to perfect or maintain the security interest granted hereby.
At the request of Lessor, Lessee will keep and maintain a conspicuous marking or tag on the
Equipment that a security interest therein is held by Lessor. It is the intention of the parties
hereto that the relationship between such parties created herein is that Lessor be the equivalent of
a secured party under Article 9 of the UCC as in effect from time to time and that Lessee be the
equivalent of a debtor under such Article 9. To that end, the parties hereto agree that this
Agreement shall be governed by Article 9 as if such Article 9 were applicable hereto and that
Lessor and Lessee have the rights and obligations of a secured party and debtor, respectively,
under such Article 9.
8.3. Personal Property. The Equipment is, and shall at all times be and remain,
personal property notwithstanding that the Equipment or any part thereof may now be, or
hereafter become, in any manner affixed or attached to, or embedded in, or permanently resting
upon, real property or any building thereon or any fixtures, or attached in any manner to what is
permanent by any means of cement, plaster, nails, bolts, screws or otherwise. Upon request of
Lessor, Lessee shall obtain, as to any place where the Equipment is located, a waiver from the
landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment
of the rights of levy or distraint thereon.
8.4. Liens. Lessee shall not directly create, incur, assume or suffer to exist any
mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the
Equipment or any interest therein, except for the lien and security interest of Lessor therein.
Lessee shall promptly, at its own expense, take such action as may be necessary to duly
discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the
same shall arise at any time.
8.5. Inspection, Acceptance and Written Notice of Defects. Immediately, or as
soon as practicable to provide time for testing, upon receipt and installation of the Equipment,
Lessee shall inspect the Equipment. Unless Lessee gives Lessor written notice of each defect or
other proper objection to the Equipment before the execution of the Acceptance Certificate, it
shall be conclusively presumed, as between Lessor and Lessee, that Lessee has fully inspected
and acknowledged that the Equipment is in good condition and repair, has been properly
installed and is performing satisfactorily, and that Lessee is satisfied with and has accepted the
Equipment in such good condition and repair. Lessor shall not make or provide payment to any
Vendor (or reimbursement to Lessee pursuant to the requirements of Section 9.2(f) hereof) of the
Total Contract Price, or any portion thereof, for the Equipment, or any portion thereof, until
Lessor shall have received a duly executed Acceptance Certificate of lessee in accordance with
Section 14.3 hereof.
8.6. Chanee in Name, Corporate Structure or Principal Place of Business. Lessee
shall maintain its existence as a junior college district and a political subdivision of the State and
Lessee shall provide to Lessor written notice of any change in its name, structure, or principal
place of business thirty (30) days in advance of the date that such change is planned to take
effect. This Section shall also apply to any of Lessee's assignees or subassignees permitted
under Section 13.1 hereof.
#572682v4 (Texas Lease Template) 13
8.7. Location. The Equipment shall be located in the place(s) designated in the
related Schedule A pertaining thereto.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
LESSEE.
9.1. Lessee's Representations, Warranties and Covenants. Lessee warrants and
represents to Lessor (all such representations and warranties being continuing), as follows:
(a) Lessee has or will budget and appropriate for the initial fiscal year during
the Lease Term of this Agreement unobligated funds in an amount equal to the sum of the Rental
Payments due during such initial fiscal year and any other amounts due under this Agreement;
(b) Lessee is a state or a duly organized and validly existing body corporate
and politic and a political subdivision or agency thereof within the meaning of section 103 of the
Internal Revenue Code of 1986, as amended, and the related regulations and rulings thereunder
(the "Code ");
(c) Lessee will exercise its best efforts to preserve and keep in full force and
effect its existence as a body corporate and politic;
(d) Lessee is authorized under the Act and laws of the State to enter into this
Agreement and the transactions contemplated hereby and to perform all of its obligations
hereunder;
(e) Lessee has duly authorized the execution and delivery of this Agreement
under the terms and provisions of the Order of its Commissioners Court or by other appropriate
official approval, and further represents, covenants and warrants that all requirements have been
met and procedures have occurred in order to ensure the enforceability of this Agreement against
Lessee, and that this Agreement is a legal, valid and binding obligation of Lessee, enforceable in
accordance with its terms, except to the extent limited by bankruptcy, reorganization or other
laws of general application relating to effecting the enforcement of creditors' rights, and
acknowledges that Lessee has granted to Lessor a security interest in the Equipment; and that
Lessee has complied with any applicable public bidding/proposal requirements with respect to
this Agreement and the Equipment;
(~ Lessee is not in breach of or in default under any constitutional provision,
applicable law or administrative rule or regulation of the State, the United States, or of any
department, division, agency or instrumentality of either thereof or any applicable court or
administrative decree or order, or any loan agreement, note, ordinance, order, resolution,
indenture, contract, agreement or other instrument to which Lessee is a party or to which Lessee
or any property or assets of Lessee is otherwise subject or bound which in any material way,
directly or indirectly, affects Lessee's entering into this Agreement, or the validity thereof, the
validity or adoption of the Order authorizing Lessee to enter into this Agreement, the execution
and delivery of this Agreement or other instruments contemplated thereby to which Lessee is a
party, and compliance with the provisions of each thereof will not conflict with or constitute a
breach of or default under any constitutional provision, applicable law or administrative rule or
regulation of the State, the United States, or of any department, division, agency or
#572682v4 (Texas Lease Template) 14
instrumentality of either thereof, or any applicable court or administrative decree or order, or any
loan agreement, note, ordinance, order, resolution, indenture, contract, agreement or other
instrument to which Lessee is a party or to which Lessee or any of the property or assets of
Lessee is otherwise subject or bound;
(g) Lessee shall cause to be executed and delivered in connection with each
Schedule A an opinion of its counsel and an applicable IRS Form 8038-G (or, if the Total
Contract Price of the Equipment is less than $100,000 an IRS Form 8038-GC) in form and
substance satisfactory to Lessor and its counsel; provided, however, that Lessor shall have the
sole responsibility to cause such IRS Form 8038-G (or, if applicable, IRS Form 8038-GC) to be
filed with the Internal Revenue Service not later than the fifteenth (15th) day of the second
month following the end of the calendar quarter during which this Agreement and any
Schedule A hereunder was issued;
(h) Lessee has been fully authorized to execute and deliver this Agreement
under the Order of its Commissioners Court and by any other appropriate official approval, and
further represents, warrants and covenants that all requirements have been met, and all
procedures have taken place, in order to ensure the enforceability of this Agreement, has
complied with all applicable public bidding/proposal requirements, if any, with respect to this
Agreement, including the lease and the acquisition by Lessee of the Equipment hereunder;
(i) The Equipment is, and during the period this Agreement is in force will
remain, personal property and, when subjected to use by Lessee hereunder, will not be or become
fixtures;
(j) During the Lease Term, except as otherwise permitted by this Agreement,
the Equipment shall be used by Lessee only for the purpose of performing services related to its
status as a political subdivision of the Sate, and consistent with the permissible scope of Lessee's
authority and will not be used in an unrelated trade or business of Lessee or in the trade or
business of any person or entity other than Lessee;
(k) Lessee assumes full responsibility for the safety and any consequences of
lank of safety with respect to the operation and maintenance of the Equipment while Lessee has
the right to possession or control of the Equipment;
(1) Lessee acknowledges that Lessor is acting as a financing source only with
respect to the Equipment which has been selected, and the related specifications developed, by
Lessee;
(m) 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 any
Schedule A hereunder and to establish and protect the rights and remedies created or intended to
be created in favor of Lessor hereunder. Lessor will prepare at Lessee's expense such documents
or instruments for execution by Lessee;
(n) Lessee will, in accordance with the provisions of Section _ hereof, levy
ad valorem taxes each fiscal year during the Lease Term of this Agreement in an amount equal to
#572682v4 (Texas Lease Template) l5
the sum of the Rental Payments due during such fiscal year and any other amounts due under this
Agreement;
(o) Lessee's obligations under this Agreement are obligations payable from
Lessee's budget and are obligations of the general fund;
(p) The payment of the Rental Payments or any portion thereof is not (under
the terms of any lease or any underlying arrangement) directly or indirectly (i) secured by any
interest in property used or to be used in any activity carried on by any person other than a state
or local government unit or payments in respect of such property; or (ii) on a present value basis,
derived from payments (whether or not to Lessee) in respect of property, or borrowed money,
used or to be used in any activity carried on by any person other than a state or local
governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried
on by any person other than a state or local government unit. No portion of the Contract Price
for the Equipment will be used, directly or indirectly, to make or finance loans to any person
other than Lessee. Lessee has not entered into any management or other service contract with
respect to the use and operation of the Equipment;
(q) The representations above shall be deemed to be made on and as of the
beginning date of the Original Lease Term and each Renewal Lease Term, if any, of each
Schedule A hereunder; and
(r) There is no pending litigation, tax claim, proceeding or dispute that may
adversely affect Lessee's financial condition or impairs its ability to perform its obligations
hereunder.
9.2. Tax Matters.
(a) It is the intention of the parties hereto that the interest portion of the Rental
Payments received by Lessor under this Agreement and any Schedule A hereunder be and
remain excludable from gross income for purposes of federal income taxation.
(b) Lessee covenants that, with respect to the law of federal income taxation,
it will not intentionally perform any act that shall have the effect of terminating such exclusion
from gross income of the interest portion of the Rental Payments for federal income tax
purposes.
(c) For purposes of section 148(f) of the Code, which exempts obligations of
certain "small gonermnental units" from the arbitrage rebate requirements of the Code, Lessee
hereby declares that (i) Lessee is a political subdivision of the State, is a governmental unit with
general powers of taxation, and is not a subordinate entity of any other political subdivision or
other governmental unit of the State; (ii) this Agreement will not at any time be a `private
activity bond"; (iii) ninety-five percent (95%) or more of the net proceeds under this Agreement
will be used for local governmental activities of Lessee as described in section 148(f) of the
Code; and (iv) anything in this Agreement to the contrary notwithstanding, including, without
limitation, the provisions of subsection (c) of this Section, the aggregate face amount of all tax-
exempt obligations, not including obligations that, when issued, are and are intended to be
"private activity bonds, "that are reasonably expected (based on Lessee's prior experience and
#572682v4 (Texas Lease Template) 16
all other relevant factors) to be issued by Lessee and all subordinate entities thereof during the
calendar year in which this Agreement is dated will not exceed $5,000,000.00. Neither Lessee
nor any subordinate entity thereof will issue any tax-exempt obligations during the calendar year
in which this Agreement is dated that, when added to the face amount of all other tax-exempt
obligations so issued in such year (not including "private activity bonds" as described in
clause "ii" above) will be in excess of $5,000,000.00 unless, prior to such issuance, Lessee, for
itself and on behalf or its subordinate entity, if appropriate, shall have obtained an opinion of
legal counsel acceptable to and for the benefit of Lessor, with nationally recognized standing in
matters pertaining to tax-exempt obligations, to the effect that such issuance will not result in
Lessee being ineligible for the arbitrage rebate exemption described above.
(d) It is the intention of the parties hereto that during the term of this
Agreement, Lessee be the sole beneficial and legal owner of the Equipment, and will report on
such basis for financial accounting, federal income tax, and all other purposes. Lessor shall not
take any action inconsistent with Lessee's ownership of the Equipment for federal income tax
purposes except pursuant to the exercise of remedies under Section 12.2 hereof.
(e) The weighted average maturity (defined in accordance with the Code) of
any Schedule A will not exceed one hundred twenty percent (120%) of the weighted average
reasonably expected economic life in the hands of Lessee of the Equipment financed by Lease
Proceeds derived from such Schedule A.
(f) Lessee will not use the proceeds of any Schedule A under this Agreement
to reimburse expenditures previously paid by Lessee, except in compliance with the
requirements of Treas. Reg. 1.150-2.
(g) Lessee will assure that the proceeds of any Schedule A under this
Agreement are not so used as to cause this Agreement and any Schedule A hereunder to satisfy
the private loan financing test of section 141(c) of the Code.
(h) Lessee will not take or permit or suffer to be taken any action to be taken
if the result of the same would be to cause this Agreement and any Schedule A hereunder to be
`federally guaranteed" within the meaning of section 149(b) of the Code.
(i) Lessee will not take, or permit or suffer to be taken, any action with
respect to the Lease Proceeds which, if such action had reasonably expected to have been taken,
or had been deliberately and intentionally taken, on the date of this Agreement would have
caused this Agreement and any Schedule A hereunder to bean "arbitrage bond" within the
meaning of section 148 of the Code.
(j) If the Lease Proceeds of any Schedule under this Agreement (i) have all
been expended on the date thereof for the purpose set forth therein, or (ii) do not exceed
$1,000,000.00, Lessee shall not be required to provide an issuer's certification pursuant to
Treasury Regulation 1.148-2(b)(2)(ii)(A) or (B), respectively.
(k) In the event that Lessee does not spend the moneys in the Equipment
Acquisition Account within six (6) months of the date the deposit is made pursuant to
Section 14.2 hereof, Lessee will, if required by section 148(f) of the Code to pay rebate:
#572682v4 (Texas Lease Template) 17
(i) establish a Rebate Account and deposit the Rebate Amount (as defined in Section 1.148-3(b)
of the Federal Income Tax Regulations) not less frequently than once per year after the Lease
Commencement Date; (ii) shall rebate to the United States, not less frequently than once every
five (5) years after the Lease Commencement Date, an amount equal to at least 90% of the
Rebate Amount and within 60 days after payment of all Rental Payments or the optional
prepayment price calculated pursuant to Section 5.2 hereof (the "Optional Prepayment Price ")
100% of the Rebate Amount, as required by the Code and any regulations promulgated
thereunder. Lessee shall determine the Rebate Amount, if any, at least every year and upon
payment of all Rental Payments or the Optional Prepayment Price and shall maintain such
determination, together with any supporting documentation required to calculate the Rebate
Amount, until six (6) years after the date of the final payment of the Rental Payments or the
Optional Prepayment Price.
(1) The representations above shall be deemed to be made on and as of the
beginning date of the Original Lease Term and each Renewal Lease Term, if any, of each
Schedule A hereunder.
SECTION 10. INDEMNIFICATION.
TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF THE STATE,
LESSEE HEREBY AGREES TO INDEMNIFY, PROTECT, AND SAVE LESSOR
HARMLESS FROM ALL LIABILITY, OBLIGATIONS, LOSSES, CLAIMS, DAMAGES,
ACTIONS, SUITS, PROCEEDINGS, COSTS AND EXPENSES, INCLUDING
REASONABLE ATTORNEY'S FEES, ARISING OUT OF, CONNECTED WITH, OR
RESULTING DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT AND THE
EQUIPMENT, INCLUDING WITHOUT LIMITATION, THE MANUFACTURE,
SELECTION, DELIVERY, POSSESSION, CONDITION, LEASE, USE, OPERATION OR
RETURN OF THE EQUIPMENT. NOTWITHSTANDING ANYTHING STATED IN
SECTION 3 HEREOF OR IN ANY OTHER PROVISION HEREOF, THE
INDEMNIFICATION ARISING UNDER THIS SECTION SHALL CONTINUE IN FULL
FORCE AND EFFECT NOTWITHSTANDING THE FULL PAYMENT OF ALL
OBLIGATIONS UNDER THIS AGREEMENT OR ANY SCHEDULE A HEREUNDER.
SECTION l 1. DISCLAIMER OF WARRANTIES.
11.1. Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN,
COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR
WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR
COPYRIGHT INFRINGEMENT, TITLE OR FITNESS FOR USE OF THE EQUIPMENT, OR
ANY COMPONENT THEREOF OR ANY OTHER WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT THERETO AND, AS TO LESSOR, LESSEE'S
LEASE AND PURCHASE OF THE EQUIPMENT SHALL BE ON AN "AS IS" BASIS. All
such risks, as between Lessor and Lessee, are to be borne by Lessee. Without limiting the
foregoing Lessor shall have no responsibility or liability to Lessee or any other person with
respect to any of the following: (i) any liability, loss or damage caused or alleged to be caused
#572682v4 (Texas Lease Template) 18
directly or indirectly by the Equipment, any inadequacy thereof, any deficiency or defect (latent
or otherwise) therein, or any other circumstances in connection therewith; (ii) the use, operation
or performance of the Equipment or any risks relating thereto; (iii) any interruption of service,
loss of business or anticipated profits or consequential damages; or (iv) the delivery, operation,
servicing, maintenance, repair, improvement or replacement of the Equipment. If, and so long
as, no Event of Default has occurred and is continuing under this Agreement and the related
Schedule A, Lessee shall be, and hereby is, authorized during the term of such Schedule A to
assert and enforce, at Lessee's sole cost and expense, from time to time, in the name of and for
the account of Lessor and/or Lessee, as their interests may appear, whatever claims and rights
Lessee or Lessor may have against the Vendor or any prior title holder or possessor of the
Equipment. In no event shall Lessor be liable for any loss or damage in connection with or
arising out of this Agreement, any Schedule A, the Equipment, or the existence, furnishing,
functioning or Lessee's use of any item or products or services provided for in this Agreement.
11.2. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and
attorney-in-fact during the Lease Term, so long as no Event of Default shall have occurred and
be continuing hereunder, to assert from time to time whatever claims and rights including
warranties of the Equipment which Lessor may have against the Vendor. Lessee's sole remedy
for the breach of such warranty, indemnification or representation shall be against the Vendor of
the Equipment and any other entities involved in the chain of production and distribution of the
Equipment, and not against Lessor, nor shall such matter have any effect whatsoever on the
rights and obligations of Lessor with respect to this Agreement, including the right to receive full
and timely payments under this Agreement. LESSEE EXPRESSLY ACKNOWLEDGES
THAT IN LESSOR'S CAPACITY AS LESSOR HEREUNDER, LESSOR MAKES, AND
HAS MADE HEREUNDER, NO REPRESENTATION OR WARRANTY
WHATSOEVER AS TO THE EXISTENCE OR AVAILABILITY OF SUCH
WARRANTIES OF THE VENDOR OF THE EQUIPMENT.
SECTION 12. DEFAULT AND REMEDIES.
12.1. Definition of Default. Lessee shall be deemed to be in default hereunder upon
the happening of any of the following events of default ("Events of Defut~lt "):
(a) Lessee shall fail to make any Rental Payment when due or any other sum
within 10 days of becoming due; or
(b) Lessee shall fail to perform or observe any term or condition or covenant
of this Agreement or any Schedule A hereto (other than those covenants referred to in
subparagraphs (e), (f), (g), or (h) below), for a period of 15 days after written notice specifying
such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall
agree in writing to an extension of such time prior to its expiration; provided that, if the failure
stated in the notice cannot be corrected within the applicable period, Lessor will not
unreasonably withhold its consent to an extension of such time if corrective action is instituted
by Lessee within the applicable period and diligently pursued until the default is corrected; or
(c) Proceedings under any bankruptcy, insolvency, reorganization or similar
legislation shall be instituted by or against Lessee, or a receiver, custodian or similar officer shall
#572682v4 (Texas Lease Template) 19
be appointed for Lessee or any of its property, and such proceedings or appointments shall not be
vacated, or fully stayed, within twenty (20) days after the institution or occurrence thereof; or
(d) Any representation, warranty or covenant made by Lessee is found to be
incorrect or misleading in any material respect on the date made; or
(e) Any insurance carrier cancels any insurance on the Equipment without
Lessee first providing replacement coverage; or
(f) Lessee sells, assigns, subleases, or otherwise transfers or encumbers all or
any part of its interest in this Agreement or the Equipment without Lessor's prior written
consent; or
(g) Lessee permits a change in ownership or management control of Lessee
without the prior written consent of Lessor that Lessor in good faith deems disadvantageous to
Lessor; or
(h) Lessee shall fail to satisfy any of Lessee's bond indebtedness or other
material credit obligation when required under the instruments evidencing such obligations
unless Lessee demonstrates in writing an adequate justification for its failure to satisfy the bond
indebtedness or other material credit obligation.
12.2. Remedies on Default. Upon the occunrence of any Event of Default, Lessor may
exercise any one or more of the following remedies as Lessor in its sole discretion shall elect:
(a) To declare the entire amount of Rental Payments hereunder immediately
past due and payable as to any or all items of Equipment without any further notice or demand to
Lessee;
(b) Proceed by appropriate court action to enforce performance by Lessee of
the applicable covenants of this Agreement or to recover for the breach thereof including the
payment of Rental Payments due or to become due hereunder or any deficiency thereof
following disposition of the Equipment;
(c) With or without terminating this Agreement, enter and take possession of
the Equipment wherever situated, without any court order or other process of law and without
liability for entering the premises, and sell, lease, sublease or make other disposition of the same
in a commercially reasonable manner for the account of Lessee, and apply the proceeds of any
such sale, lease, sublease, or other disposition, after deducting all costs and expenses, including
court costs and attorney's fees, incurred with the recovery, repair, storage and other sale, lease,
sublease or other disposition costs, toward the balance due under this Agreement;
(d) Terminate this Agreement as to all or any part of the Equipment and use,
operate, lease or hold the Equipment as Lessor in its sole discretion may decide;
(e) Require Lessee to deliver or assemble the Equipment at a place reasonably
convenient to Lessee and use or operate the Equipment for the purpose of preserving it;
#572682v4 (Texas Lease Template) 20
(f) Proceed by appropriate court action to enforce performance by Lessee of
the applicable covenants of this Agreement or to recover for the breach thereof, including the
payment of all amounts due from Lessee, in which event Lessee shall pay or repay to Lessor all
costs of such action or court action including without limitation, reasonable attorneys' fees and
expenses; and/or
(g) Take whatever action at law or in equity may appear necessary or
desirable to enforce its rights with respect to the Equipment, in which event Lessee shall pay or
repay to Lessor all costs of such action or court action, including, without limitation, reasonable
attorneys' fees and disbursements.
12.3. Further Remedies: No Remedy Exclusive. A termination hereunder shall occur
only upon notice by Lessor to Lessee and only with respect to such part of the Equipment as
Lessor specifically elects to terminate in such notice. Except as to those parts of the Equipment
with respect to which there is a termination, this Agreement shall remain in full force and effect
and Lessee shall be and remain liable for the full performance of all its obligations hereunder.
All remedies of Lessor are cumulative and may be exercised concurrently or separately and shall
survive the termination of this Agreement. The exercise of any one remedy shall not be deemed
an election of such remedy or preclude the exercise of any other remedy.
12.4. Return of Eauipment. If an Event of Default has occurred and is continuing,
Lessee shall allow Lessor to recover the Equipment at a place reasonably convenient to Lessor at
Lessee's sole cost and expense, including, without limitation, all costs of transportation. The
cost of all transportation of Equipment of any nature prior to the expiration or prior termination
of an Agreement will be at Lessee's sole expense. In the event that Lessee makes modifications
to a site after any Equipment has been installed therein and such modifications impede the
removal of the Equipment, the cost of removing the impediments and restoring the site shall be
the sole expense of Lessee.
SECTION 13. ASSIGNMENT, SUBLEASING AND SELLING.
13.1. No Sale, Assienment or Subleasine by Lessee. Lessee agrees not to sell, assign,
lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against
any interest in this Agreement or the Equipment (except for the lien and security interest of
Lessor therein) or to remove the Equipment from its place of installation without Lessor's prior
written consent which shall not be unreasonably withheld.
13.2. Assienment by Lessor. Lessor's right, title and interest in and to Rental
Payments and any other amounts payable by Lessee under this Agreement and any Schedule A,
its security interest in the Equipment subject to each such Schedule A, and all proceeds
therefrom may be assigned and reassigned in whole or in part to one or more assignees by
Lessor, without the necessity of obtaining the consent of Lessee; provided, however, that any
such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of
participation shall be made with notice to Lessee and in a manner that conforms to any
applicable State law. Nothing in this Section shall be construed, however, to prevent Lessor
from executing any such assignment, transfer, or conveyance that does not involve funding
through the use of certificates of participation within the meaning of applicable State law,
#572682v4 (Texas Lease Template) 21
including any such assignment, transfer or conveyance as part of a multiple asset pool to a
partnership or trust, interests in which are offered and sold in a private placement or limited
offering only to investors whom Lessor reasonably believes are qualified institutional buyers or
accredited investors within the meaning of the applicable federal securities law; provided further,
however, that in any event, Lessee shall not be required to make Rental Payments, to send
notices or to otherwise deal with respect to matters arising under a lease with or to more than one
individual or entity. No assignment, transfer or conveyance permitted by this Section shall be
effective until Lessee shall have received a written notice of assignment that discloses the name
and address of each such assignee; provided, however, that if such assignment is made to a bank
or trust company as trustee or paying agent for owners of certificates of participation, trust
certificates or partnership interests with respect to the Rental Payments payable under this
Agreement and any Schedule A, it shall thereafter be sufficient that Lessee receives notice of the
name and address of the bank or trust company as trustee or paying agent. During the Lease
Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such
assignments in form necessary to comply with section 149 of the Code. Lessee shall retain all
such notices as a register of all assignees and shall make all payments to the assignee or
assignees designated in such register. Lessee shall not have the right to and shall not assert
against any assignee any claim, counterclaim or other right Lessee may have against Lessor or
the Vendor. Assignments in part may include, without limitation, assignment of all of Lessor's
security interest in and to the Equipment listed in a particular Schedule A and all rights in, to and
under the Schedule A related to such Equipment. The option granted in this Section may be
separately exercised from time to time with respect to the Equipment listed in each Schedule A,
but such option does not permit the assignment of less than all of Lessor's interests in the
Equipment listed in a single Schedule A.
SECTION 14. APPLICATION OF LEASE PROCEEDS; ACCEPTANCE.
14.1. Application of Lease Proceeds. At the Closing of each Schedule A hereunder,
Lessor shall pay or provide the Lease Proceeds in the amount specified in such Schedule to the
Vendor of the applicable Equipment or, if agreed by Lessor and Lessee, to Lessee for deposit
into an Equipment Acquisition Account.
14.2. Eauipment Acauisition Account. Lessor and Lessee agree that in order to
ensure that moneys sufficient to pay the Total Contract Price of the Equipment under any
Schedule A hereto will be available for the purpose of acquiring such Equipment when required,
on or before the Lease Term Commencement Date, Lessor shall, subject to section 2.1 hereof,
deposit or cause to be deposited into the Equipment Acquisition Account established pursuant to
the Acquisition Fund and Account Control Agreement executed in connection herewith the sum
set forth on such Schedule A. The moneys on hand from time to time in the Equipment
Acquisition Account shall be held intrust for the benefit of Lessee and Lessor and invested at the
written direction of Lessee in Permitted Investments in accordance with the provisions of the
Acquisition Fund and Account Control Agreement. Any balance remaining in the Equipment
Acquisition Account after disbursement of the Total Contract Price or after an Event of Default
has occurred, or this Agreement is terminated for non-appropriation of funds in accordance with
Section 15 hereof, shall be applied as a prepayment to the Rental Payments.
#572682v4 (Texas Lease Template) 22
14.3. Completion of Acquisition of the Equipment. Lessee shall cause the
Equipment to be acquired and installed free of any liens or claims of others except for this
Agreement. Completion of the acquisition and installation of the Equipment identified by a
particulaz Schedule A shall be evidenced by Lessee's filing with Lessor an Acceptance
Certificate. Lessor shall and is hereby directed by Lessee to disburse Lease Proceeds from the
Equipment Acquisition Account to pay the Vendor the purchase price, or any portion thereof, for
the Equipment, or any portion thereof, only upon the receipt by Lessor of a fully executed
Acceptance Certificate of Lessee and the satisfaction of the other conditions in the Acquisition
Fund and Account Control Agreement. At such time, Lessee and Lessor shall execute and
deliver such documents or assurances, including UCC filings or amendments thereto, as may be
necessary to reflect accurately the items of Equipment financed by the Lease Proceeds derived
from such Schedule A.
SECTION 15. INTENTIONALLY OMITTED.
SECTION 16. MISCELLANEOUS.
16.1. Waiver. No covenant or condition of this Agreement can be waived except by
the written consent of Lessor. Any failure of Lessor to require strict performance by Lessee or
any waiver by Lessor of any terms, covenants or agreements herein shall not be construed as a
waiver of any other breach of the same or of any other term, covenant or agreement herein.
16.2. Severability. In the event any portion of this Agreement shall be determined to
be invalid under any applicable law, such provision shall be deemed void and the remainder of
this Agreement shall continue in full force and effect.
16.3. Governin˘ Law and Venue. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State. Venue for any legal proceeding relating to
this Agreement shall lie in Nueces County, Texas.
16.4. Notice. All notices made or required to be given pursuant to this Agreement shall
be in writing and shall be deemed duly served if and when mailed, certified or registered mail,
postage prepaid, return receipt requested, to the other party at its address set forth in each related
Schedule A hereunder or at such other address as such party shall hereafter designate in writing.
16.5. Section Headines. All section headings contained herein are for convenience of
reference only and aze not intended to define or limit the scope of any provision of this
Agreement.
16.6. Entire Agreement. This Agreement, together with the schedules hereto,
constitutes the entire agreement between the parties and this Agreement shall not be modified,
amended, altered or changed except by written agreement signed by the parties.
16.7. Binding Effect. Subject to the specific provisions of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns.
#572682v4 (Texas Lease Template) 23
16.8. Time. Time is of the essence of this Agreement and each and all of its schedules
and provisions.
16.9. Notice of Final Agreement. THIS WRITTEN AGREEMENT AND ANY
OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NOT
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank.]
#572682v4 (Texas Lease Template) 24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
By:
Name:
Title:
KERR COUNTY, TEXAS
as Lessee
By~ ~~ 1
Narv~ Pat~ixl~c'y~~
Title: County Judge
ATTEST:
By:
Name: Ja ett Pieper
Title: unty Clerk _
(SEAL) ~~''°"" "ryS
U~~~~G
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T~•
i X'f
~~9~ r f yE
#572682v4 (Texas Lease Template) 25
MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
By and Between
BANC OF AMERICA LEASING & CAPITAL, LLC
as Lessor,
and
KERR COUNTY, TEXAS
as Lessee
Dated as of March l6, 2006
CLOSING INDEX
1. Master Equipment Lease/Purchase Agreement
2. Schedule A No. 1
3. Acceptance Certificate
4. Essential Use Certificate
5. General Certificate
6. Signature and No-Litigation Certificate
7. Opinion of Counsel to Lessee
8. Order of Lessee
9. Financing Statement
10. Information Report on Form 8038-G (or 8038-GC)
ll. Cross-Receipt
12. No-Arbitrage Certificate
13. Acquisition Fund and Account Control Agreement
#572682v4 (Texas Lease Template)
MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
By and Between
BANC OF AMERICA LEASING & CAPITAL, LLC
as Lessor,
and
KERR COUNTY,TEXAS
as Lessee
Dated as of March 16, 2006
#572682v4 (Texas Lease Template)
SCHEDULE A No. I
TO MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
by and between
BANG OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
and
KERR COUNTY, TEXAS
as Lessee
Dated as of March 16, 2006
THIS SCHEDULER No. 1 ("ScherluleA") to the MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT identified above (the "Master Lease ") is entered into as of this 16`" day of Mazch, 2006, by and
between BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor") and KERR COUNTY,
TEXAS, as lessee ("Lessee "). All of the provisions of the Master Lease are incorporated herein by reference and
capitalized terms used herein and not defined shall have the meanings assigned them in the Master Lease.
The Master Lease and this Schedule A No. 1 jointly constitute an Agreement (this "Agreement"). Lessor
hereby leases and lets to Lessee, Lessee leases and hires from Lessor, subject to the provisions of the
Agreement, the Equipment identified below:
Item (Ouantitvl Descrintion, Make, Model Total Contract Price
[see attached]
As of the date of this Schedule A No. 1 Lessee has not taken possession of any of [he Equipment shown
above. It is expected that by six (6) months from the date of this Schedule A No. 1, Lessee will have taken
possession of all items shown above and that a Lessee's Acceptance Certificate, or Acceptance Certificates,
will be signed by Lessee and delivered to Lessor on or before six (6) months from the date of this
Schedule A No. 1.
2. Lessee hereby certifies that the description of the Equipment set forth above is accurate and reasonably
identifies it for UCC purposes.	T
h
e Egnipment identi
fi
ed in item 1 above shall be located at
Street Address:	/
-
/
~
~/~ mA/nl .s~7c@ef
City:	Kemille
County:	Kerr
State:	Texas
Zip Code:	78028
The following terms are applicable to the lease/purchase of [he Equipment set forth in this Schedule A No.
1:
(a) Lease Term Commencement Date: The date of execution and delivery of this
Schedule A No. 1, includmg all attachments thereto, and the satisfaction of all conditions of the Master
Lease.
(b) Original Lease Term: The period beginning with the Lease Term Commencement Date
and ending with the last business day of Lessee's current fiscal budget period.
#586555v3 (Texas Schedule A Template) 1 Exhibit A -Schedule A
(c) Lease Term Interest Rate: 4.015%
(d) Lessee's Fiscal Year End: September 30
(e) Maximum Amount: The amount equal to $1,030,000
(f) Number of Renewal Lease Terms: 5
4. The Lease Proceeds which Lessor shall pay or provide to the Lessee in connection with this Schedule A
No. 1 is $1,030,000 of which $30,000 is for payment of the costs of issuing this Schedule A No. 1. Such
Lease Proceeds shall be deposited into the Equipment Acquisition Account and disbursed for payments of
the Total Contract Price of [he Equipment, or portions thereof, upon receipt by Lessor of an Acceptance
Certificate, or Acceptance Certificates, executed by Lessee.
5. Interest on the Lease Proceeds shall accme from the date hereof and the payment dates and Rental Payment
amounts (including the principal and interest components thereof) are as follows:
AMORTIZATION SCHEDULE
Total
Payment Payment Principal Interest Rental
No. Date Component Component Pavment
See attached Amortization Schedule
6. Until Lessee receives written notification to the contrary, all payments due under the Master Lease and this
Schedule A No. 1, including but not limited to Rental Payments, aze to be paid to and all notices are to be
sent to the following respective addresses:
The address for notices is:
The address for payments is:
Banc of America Leasing & Capital, LLC
555 California Sheet, 4th Floor
San Francisco, CA 94104
Attention: Contract Administration
Mail Code: CAS-705-04-O1
Ken County, Texas
700 E. Main Street
Kemille, Texas 78028
Attention: County Judge
Banc of America Leasing & Capital, LLC
P.O. Box 31682
Tampa, FL 33631-3682
Lessee further represents, covenants and warrants that it will no[ take, cause to be taken or fail to take any
action which will cause the interest component of any Rental Payments [o be or become subject to federal
income taxation under the Code and that all of its representations, covenants and warranties of Lessee
contained in the Master Lease were true and accurate as of the date made, remain true and accurate as of
the date of this Schedule A No. 1 and aze hereby reaffirmed.
#586555v3 (Texas Schedule A Template) 2 Exhibit A -Schedule A
8. Lessee shall deliver or cause to be delivered an opinion of counsel concurrently with the execution and
delivery of this Schedule A in the form of Attachment F to Exhibit A of the Master Lease and execute and
cause to be timely filed an IRS Form 8038-G (or, IRS Form 8038-GC if the Total Contract Price of the
Equipment is less than $100,000) substantially in the form of Attachment I to Exhibit A of the Master
Lease.
Lessee shall deliver or cause to be delivered concurrently with the execution and delivery of each
Schedule A documents in the respective forms of Attachments B through E, and G, H, J and K to Exhibit A
of the Master Lease, along with invoices, MSO's and applications for titles for any vehicles to be acquired
with proceeds of the applicable Schedule A. Lessee shall deliver its Acceptance Certificate, or Acceptance
Certificates, in the form of Attachment A to Exhibit A of the Master Lease in accordance with the terms
hereof.
10. Attached hereto as Attachment A and incorporated herein by reference is an original Lessee's Acceptance
Certificate, executed by an Authorized Officer of Lessee, with respect to the Equipment identified in item 1
above. Provided, however, Lessee may deliver one or more Acceptance Certificates which shall authorize
Lessor to pay the Purchase Price for the Equipment shown on each such Acceptance Certificate.
11. Attached hereto as Attachment B and incorporated herein by reference is an original Esseutial Use
Certificate, executed by an Authorized Officer of Lessee certifying the essential use of the Equipment
identified in item 1 above.
12. Attached hereto as Attachment C and incorporated herein by reference is an original Certificate of
Appropriation executed by an Authorized Officer of Lessee.
13. Attached hereto as Attachment D and incorporated herein by reference is an original General Certificate,
executed by Authorized Officers of Lessee.
14. Attached hereto as Attachment E and incorporated herein by reference is an original Signature and No-
Litigation Certificate, executed by Authorized Officers of Lessee.
15. Attached hereto as Attachment F and incorporated herein by reference is an original opinion of legal
counsel to Lessee relating to the Agreement and this Schedule A. Lessor may, in its sole discretion, waive
this requirement.
16. Attached hereto as Attachment G is a certified copy of the Order of Lessee's Commissioners Court
authorizing the Master Lease and all other documents deemed necessary m connection with the Master
Lease, including this Schedule A No. 1.
17. Attached hereto as Attachment H are copies of an executed and filed financing statement(s) evidencing
Lessor's security interest in the Equipment. Provided, however, Lessee may deliver one or more financing
statement(s), or amended fmancing statement(s) evidencing Lessor's security interest in the Equipment as
reflected on each Acceptance Certificate.
18. Attached hereto as Attachment I is an IRS Form 8038-G (or IRS Form 8038-GC if the Total Contract Price
of the Equipment is less than $100,000) of Lessee.
19. Attached hereto as Attachment J is an original Cross-Receipt executed by an Authorized Officer of Lessee
and Lessor.
20. Attached hereto as Attachment K is an original No Arbitrage Certificate executed by an Authorized Officer
of Lessee.
#586555v3 (Texas Schedule A Template) 3 Exhibit A -Schedule A
IN WITNESS WHEREOF, the parties hereunto affix their signatures to this Schedule A No. 1 as of the
day and year fast written above.
BANG OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
By:
Name:
Title:
KERR COUNTY, TEXAS
as Lessee
r
BY:
Name: ~('a "i-I-nd~y~~ ~
Title: County Judge
ATTEST:
By:
Name: J sett Pieper
Title: ounty Clerk
(SEAL)
~ ~1 ~un~
~~ go
m p~
~ y
#586555v3 (Texas Schedule A Template) 4 Exhibit A -Schedule A
ATTACHMENT A TO SCHEDULE A NO. 1
FORM OF
LESSEE'S ACCEPTANCE CERTIFICATE
Part I:
KERR COUNTY, TEXAS ("Lessee"), as lessee under that certain MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT dated as of Mazch 16, 2006, and under Schedule A. No. 1 thereto dated as of
Mazch 16, 2006 (collectively, the "Agreement"), with BANC OF AMERICA LEASING & CAPITAL, LLC, as
lessor ("Lessor ") hereby acknowledges receipt in good condition of all of the Equipment described in Part II below
(the "Equipment "), hereby accepts such Equipment and hereby certifies:
(a) That Lessor has fully and satisfactorily performed all covenants and conditions to be performed by
it under the Agreement with regard to such Equipment; provided, however, that this certification does not constitute
a waiver by Lessee of any rights against third parties, including the Vendor(s) under the Purchase Agreement(s) (as
such terms are defined in the Agreement) with respect [o such Equipment, which exist at the date hereof or which
may subsequently come into being; and
(b) Tha[ such Equipment is fully insured in accordance with Section 6 of the Agreement.
Part II•
The Equipment which is governed by [he Agreement identified in Part I above is as follows:
Item fOuantity) Description. Make. Model
[see attached]
Total Contract Price
DATED: ~ _, 2006.	
	KERR COUNTY, TEXAS
	as Lessee
	~~~ '
	By:
	Name: a~~
	Title: County Judge
ATTEST:	
By:	
Name: J ett Pieper	
Title: County Clerk	
(SEAL)
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment A
ATTACHMENT B TO SCHEDULE A NO. 1
FORM OF
ESSENTIAL USE CERTIFICATE
We, the undersigned Authorized Officers of KERB COUNTY, TEXAS acting in our capacities as such,
hereby certify with respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of
March 16, 2006 by and between Lessee, as lessee, and BANG OF AMERICA LEASING & CAPITAL, LLC, as
lessor ("Lessor") and ScheduleA No. 1, dated as of Mazch 16, 2006, issued thereunder ("ScheduleA"), that the
Equipment referenced in Schedule A shall be used for the following purpose:
[Describe Use of Equipment]
The undersigned hereby further certify and represent that the use of the Equipment is essential to the
proper, efficient and economic operation of Lessee.
DATED: _, 2006.
ATTEST:
By:
Name: J ett Pieper
Title: ounty Clerk
(SEAL)
~MMISSI®n,F9s
~j
~ . -1
KERR COUNTY, TEXAS,
as Lessee
By: /
Name: Pa "P~y \
Title: County Judge
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment B
ATTACHMENT C TO SCHEDULE A NO. 1
FORM OF
CERTIFICATE OF APPROPRIATION
We, the undersigned Authorized Officers of KERR COUNTY, TEXAS ("Lessee "), hereby certify that all
Rental Payments (as defined in the Agreement) presently due under that certain MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT ("Agreement ") dated as of Mazch 16, 2006, between Lessee and BANC OF
AMERICA LEASING & CAPITAL, LLC ("Lessor"), and ScheduleA No. 1, dated as of Mazch 16, 2006
thereunder ("ScheduleA ") for the fiscal year ending September 30, 20~, are available, unexhausted,
unencumbered appropriation of unobligated funds for Lessee, representing the sum of its Rental Payment
obligations owing under the Agreement and Schedule A during such fiscal year.
IN WITNESS WHEREOF, I have set my hand this ~, 20~.
KERR COUNTY, TEXAS,
as Lessee
ATTEST:
By:
Name: J ett Pieper
Title: County Clerk
(SEAL)
~~~5g1®NEgs
OG
O 9
U ~.1
~I i
>f
~~ _i .a/
~+~~~J"'_~ _
By: ~ \_/ 1
Name: P ~~
Title: County Judge
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment C
ATTACHMENT D TO SCHEDULE A NO. 1
GENERAL CERTIFICATE
OF
KERB COUNTY, TEXAS
We, the undersigned Authorized Officers of KERB COUNTY, TEXAS ("Lessee ") acting in our official
capacities as such, hereby certify with respect to the MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT, dated as of March 16, 2006, (the "Master Lease) by and between Lessee, as lessee, and BANC
OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor ") and Schedule A No. 1 issued thereunder (the
Master Lease and Schedule A No. 1 collectively referred to as the "Agreement "), as follows:
Intentionally Omitted.
2. That Lessee is a body corporate and politic, and was validly created and exists under the laws and
the Constitution of the State of Texas and is a political subdivision or governmental agency thereof.
3. That as of the date of approval of [he Master Lease and Schedule A No. 1, the following named
persons constitute the members of the Commissioners Court of Lessee:
NAME
Pat Tinley
H. A. "Buster" Baldwin
William "Bill" Williams
Jonathan Letz
Dave Nicholson
TITLE
County Judge
Commissioner, Precinct 1
Commissioner, Precinct 2
Commissioner, Precinct 3
Commissioner, Precinct 4
4. The Commissioners Court of Lessee duly adopted by a majority vote the ORDER
AUTHORIZING THE COUNTY TO ENTER INTO A FINANCING LEASE WITH BANG OF AMERICA
LEASING & CAPITAL, LLC, FOR THE PURPOSE OF FINANCING THE ACQUISITION OF CERTAIN
COMPUTER HARDWARE AND SOFTWARE FROM THE SOFTWARE GROUP DIVISION OF TYLER
TECHNOLOGIES, INC., AND AUTHORIZING THE COUNTY JUDGE TO APPROVE AND EXECUTE THE
FINAL FORM OF A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA
LEASING & CAPITAL, LLC, AND ALL OTHER DOCUMENTS DEEMED NECESSARY RELATED
THERETQ AND APPROVING OTHER MATTERS RELATED TO SUCH LEASE FINANCING (the "Order")
authorizing and approving the entering into the Master Lease and all other documents deemed necessary in
connection therewith, which includes Schedule A No. 1 to the Master Lease, at a duly called public meeting, at
which a quorum was present and acting throughout; the Order is in full force and effect and has not been altered,
amended or repealed as of the date hereof; that said meeting was duly called and open to the public in accordance
with the laws of the State of Texas.
5. The following described instmments (collectively, the "Instruments "), as executed and delivered
or authorized by Lessee, are in substantially [he same form and text as copies of such Instruments which were before
and were approved or ratified by the Commissioners Court of Lessee, and which the officers of Lessee were
authorized to execute and deliver for and on behalf of Lessee:
(a) Master Lease; and
(b) Schedule A No. 1 (including Attachments A through G and I through L thereto).
6. To the best larowledge of the undersigned, on the date hereof, Lessee is not in default in the
performance or observance of any of the covenants, conditions, agreements or provisions of the Instruments.
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment D
7. The representations and warranties of Lessee contained in the Instruments are correct on and as of
the date hereof as though made on and as of such date.
IN WITNESS WHEREOF, we have duly executed this certificate this Mazch 16, 2006.
KERR COUNTY, TEXAS,
as Lessee
ATTEST:
By: t-/t~i1
Name: Jai ett Pieper
Title: County Clerk
(SEAL)
o~~~5S1ONEq~~
OG
U ~~~
i
~F~ _'{a/
n
BY: ~ ~
Name: P~urley's
Title: County Judge
#586555v3 (Texas Schedule A Template) Page 2 Schedule A -Attachment D
ATTACHMENT E TO SCHEDULE A NO. 1
SIGNATURE AND NO-LITIGATION CERTIFICATE
We, the undersigned Authorized Officers of the Commissioners Court of KERR
COUNTY, TEXAS ("Lessee "), acting in our official capacities as such, hereby certify with
respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of
March 16, 2006 (the `Master Lease") by and between Lessee, as lessee, and BANC OF
AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor ") and Schedule A No. 1, dated as
of March 16, 2006 issued thereunder (the Master Lease and Schedule A No. 1 collectively referred
to as the "Agreement ") as follows:
1. The Master Lease and Schedule A No. 1 have been duly and officially executed by the
undersigned with their manual or facsimile signatures in the same manner appearing thereon, and the undersigned
hereby adopt and ratify their respective signatures in the manner appearing on each side of the Master Lease and
Schedule A No. 1 whether in manual or facsimile form, as the case may be, as their tme, genuine, and official
signature.
2. On the date of Schedule A No. 1 and on the date hereof, we were and are the duly qualified and
acting officers indicated therein and authorized to execute the same.
3. The legally adopted proper and official corporate seal of Lessee is impressed or imprinted on the
Master Lease and Schedule A No. 1 and impressed on [his certificate.
4. No litigation of any nature is now pending before any federal or state court, or administrative
body, or to our knowledge threatened, seeking to restrain or enjoin the issuance or delivery of the Master Lease or
Schedule A No. 1, the authority or action of the Commissioners Court of Lessee relating to the issuance or delivery
of the Master Lease or Schedule A No. 1, the collection of the revenues of Lessee or the imposition of rates and
charges with respect to Lessee, pledged to pay the Rental Payments on Schedule A No. 1, or that would otherwise
adversely affect in a material manner the financial condition of Lessee to pay the Rental Payments on the
Schedule A No. 1; and that neither the corporate existence or boundaries of Lessee nor the right to hold office of any
member of the Commissioners Court of Lessee or any other elected or appointed official of Lessee is being
contested or otherwise questioned.
5. That no petition or other request has been filed with or presented to any official of Lessee
requesting any proceeding authorizing the issuance of the Master Lease or the Schedule A No. 1 adopted by the
Commissioners Court of Lessee be submitted to a referendum or other election; no authority or proceeding for the
issuance, sale, or delivery of the Master Lease or the Schedule A No. 1, passed and adopted by the Commissioners
Court of Lessee, has been amended, repealed, revoked, rescinded, or otherwise modified since the date of passage
thereof, and all such proceedings and authority relating to the issuance and delivery of the Master Lease or
Schedule A No. 1 remain in full force and effect as of [he date of this certificate.
EXECUTED AND DELIVERED as of March 16, 2006.
(SEAL)
SIGNATURE
OFFICIAL TITLE

#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment E
BEFORE ME, on this day personally appeared the foregoing individuals, known to me to be the persons
whose names are subscribed to the foregoing instrument.
GIVEN UNDER MY HAND AND SEAL of office, this ~ day of///~~March, 2006.
(NOTARY SEAL)
,State of Texas ~
~~~SS10NEggc
p GG
U ~9,.t
~i = ~
~} %
~tt`..\ .`.v~
#586555v3 (Texas Schedule A Template) Page 2 Schedule A -Attachment E
ATTACHMENT F TO SCHEDULE A NO. 1
OPINION OF COUNSEL TO LESSEE
(LETTERHEAD OF COUNSEL TO LESSEE
March 16, 2006
Banc of America Leasing & Capital, LLC
555 Califomia Street, 4th Floor
San Francisco, California 94104
Re: MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT dated as of March 16, 2006, and that
certain Schedule A No. 1 dated as of March 16, 2006 (collectively, the "Agreement', by and between
I~RR COUNTY, TEXAS, as lessee ("Lessee "), and BANC OF AMERICA LEASING & CAPITAL,
LLC, as lessor ("Lessor'
Gentlemen:
As counsel for Lessee, we have examined duly executed originals of the Agreement and the Acquisition
Fund and Account Control Agreement and the ratified proceedings of the Commissioners Court of Lessee
authorizing execution and delivery of the Agreement and the Acquisition Fund and Account Control Agreement,
and certain other security instruments and documents with respect to the Equipment to be fmanced with Lease
Proceeds of the Agreement. All capitalized terms herein shall have the same meanings as in [he Agreement unless
otherwise provided herein.
Based upon the examination and upon such other examination as we have deemed necessary or appropriate,
we aze of the opinion that:
Lessee is a public body corporate and politic, legally existing under the laws of, and is a
political subdivision or agency of, the State of Texas.
Lessee is authorized and has the power under the laws of the State of Texas to enter into
the Agreement and the Acquisition Fund and Account Control Agreement and to carry out its
obligations thereunder.
The execution, delivery and performance by Lessee of the Agreement and the
Acquisition Fund and Account Control Agreement have been duly authorized by all necessary
action on the part of Lessee and, assuming the due and proper authorization, execution and
delivery thereof by Lessor, the Agreement constitute legal, valid and binding obligations of
Lessee, enforceable in accordance with their respective terms, except to the extent limited by
bankmptcy, reorganization or other laws of general application relating to effecting the
enforcement of creditors' rights.
The entering into and performance of the Agreement and the Acquisition Fund and
Account Control Agreement will not violate any judgment, order, law or regulation applicable to
Lessee or result in any breach of, or constitute a default under, any instrument of which we have
knowledge by which Lessee is affected.
No action, suit, proceeding, inquiry or investigation at law or in equity before or by any
judicial or administrative court or agency, is pending or, to the best of our knowledge, threatened,
against or affecting Lessee or its properties wherein any unfavorable decision, ruling or finding
would materially and adversely affect the validity or enforceability of the Agreement or the
Acquisition Fund and Account Control Agreement or materially and adversely affect the financial
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment F
condition, business, or properties of Lessee. We have inquired of the appropriate officers of
Lessee whether [hey know of any such matters, and they have informed us that they know of none.
Our opinion that the Agreement is enforceable in accordance with its terms is qualified to the extent that
enforcement of the rights and remedies created hereby is subject to (i) general principles of equity, (ii) applicable
bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors' rights in general,
and (iii) laws concerning recourse by creditors to security in the absence of notice and hearing.
It is further our opinion, except as discussed below, that the interest component on each Rental Payment
made by Lessee under the Agreement is excludable from the gross income of the owners for federal income tax
purposes under the statutes, regulations, published rulings and court decisions existing on the date of this opinion.
We are further of the opinion that the Agreement is are not a "specified private activity bond" and that, accordingly,
the interest component of each Rental Payment made by Lessee under the Agreement will not be included as an
individual or corporate alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue
Code of 1986 (the "Code"). In expressing the aforementioned opinions, we have relied on and assumed compliance
by Lessee with, certain representations and covenants regarding the use and investment of the proceeds of the
Agreement. We call your attention to the fact that failure by Lessee to comply with such representations and
covenants may cause the interest component of a Rental Payment made by Lessee under the Agreement to become
includable in gross income retroactively to the date of delivery of the Agreement.
Except as stated above, we express no opinion as to any other federal, state or local tax consequences
relating to the Agreement. In particular, but not by way of limitation, we express no opinion with respect to the
federal, state or local tax consequences arising from the enactment of any pending or future legislation.
We call your attention to the fact that the interest on tax-exempt obligations, such as the interest component
of Rental Payments made by Lessee under the Agreement , is included in a corporation's alternative minimum
taxable income for purposes of determining the altemative minimum tax imposed on corporations by section 55 of
the Code.
Our sole engagement in connection with the Agreement is as Bond Counsel for Lessee, and, in that
capacity, we have been engaged by Lessee for the sole purpose of rendering an opinion with respect to the legality
and validity of the Agreement under the Constitution and laws of the State of Texas, and with respect to the
exclusion from gross income of the interest component of the Rental Payments made by Lessee under [he
Agreement for federal income tax purposes, and for no other reason or purpose. The foregoing opinions represent
our legal judgment based upon a review of existing legal authorities that we deem relevant to render such opinions
and are not a guazantee of a result. We have not been requested to investigate or verify, and have not independently
investigated or verified, any records, data, or other material relating to the fmancial condition or capabilities of the
Lessee, or the disclosure thereof in connection with the Agreement, and have not assumed any responsibility with
respect thereto. We have relied solely on certificates executed by officials of the Authority as to the sufficiency of
revenues to pay Rental Payments.
Our opinions are based on existing law, which is subject to change. Such opinions are fiuther based on our
knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any
facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may
thereafter occur or become effective. Moreover, our opinions are not a guarantee of a result and are not binding on
the Internal Revenue Service (the "Service"); rather, such opinions represent our legal judgment based upon our
review of existing law and in reliance upon the representations and covenants referenced above that we deem
relevant to such opinions. The Service has an ongoing audit program to determine compliance with roles that relate
to whether interest on state or local obligations is includable in gross income for federal income tax purposes. No
assurance can be given whether or not the Service will commence an audit of the Agreement. If an audit is
commenced, in accordance with its current published procedures the Service is likely to treat the Lessee as the
taxpayer. We observe that the Lessee has covenanted not to take any action, or omit to take any action within its
control, [hat if taken or omitted, respectively, may result m the treatment of interest component of the Rental
Payments made by [he Lessee under the Agreement as includable in gross income for federal income tax purposes.
Lessor and its successor and assigns are entitled to rely on this opinion.
#586555v3 (Texas Schedule A Template) Page 2 Schedule A -Attachment F
Respectfully submitted,
#586555v3 (Texas Schedule A Template) Page 3 Schedule A -Attachment F
ATTACHMENT G TO SCHEDULE A NO. 1
CERTIFIED COPY OF ORDER ADOPTED
BY LESSEE'S COMMISSIONERS COURT
CERTIFICATE FOR ORDER
THE STATE OF TEXAS )
COUNTY OF KERB ) ss.
KERB COUNTY, TEXAS )
We, the undersigned officers of the Kerr County, Texas ("Lessee"), hereby certify as follows:
1. The Commissioners Court of Lessee convened in regular meeting on Febmary 27, 2006, at the
designated meeting place, and the roll was called of the duly constituted officers and members of said
Commissioners Court, to wit:
NAME
Pat Tinley
H. A. "Buster" Baldwin
William"Bill" Williams
Jonathan Letz
Dave Nicholson
TITLE
County Judge
Conunissioner, Precinct 1
Commissioner, Precinct 2
Commissioner, Precinct 3
Commissioner, Precinct 4
and all of said persons were present, except the following absentees:
thus constituting a quorum. Whereupon, among other business, the following was
transacted at said Meeting: a written
ORDER AUTHORIZING THE COLINTY TO ENTER INTO A FINANCING
LEASE WITH BANC OF AMERICA LEASING & CAPITAL, LLC, FOR THE
PURPOSE OF FINANCING THE ACQUISITION OF CERTAIN COMPUTER
HARDWARE AND SOFTWARE FROM THE SOFTWARE GROUP DIVISION
OF TYLER TECHNOLOGIES, INC., AND AUTHORIZING THE COUNTY
JUDGE TO APPROVE AND EXECUTE THE FINAL FORM OF A MASTER
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA
LEASING & CAPITAL, LLC, AND ALL OTHER DOCUMENTS DEEMED
NECESSARY RELATED THERETO, AND APPROVING OTHER MATTERS
RELATED TO SUCH LEASE FINANCING
was duly introduced for the consideration of said Commissioners Court and read in full. It was then duly moved and
seconded that said Order be adopted; and, after due discussion, said motion carrying with it the adoption of said
Order, prevailed and carried by the following vote:
AYES: All members of the Commissioners Court shown present above voted "Aye" except as
shown below.
NOES:
ABSTAIN:
2. A tme, full and correct copy of the aforesaid Order adopted at the Meeting described in the above
and foregoing paragraph is attached [o and follows this Certificate; said Order has been duly recorded in said
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment G
Commissioners Court minutes of said Meeting; the above and foregoing pazagraph is a true, full and correct excerpt
from said Commissioners Court minutes of said Meeting pertaining to the adoption of said Order; the persons named
in the above and foregoing pazagraph aze the duly chosen, qualified and acting officers and members of said
Commissioners Court as indicated therein; each of the officers and members of said Commissioners Court was duly
and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid
Meeting, and that said Order would be introduced and considered for adoption at said Meeting, and each of said
officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting
was open to the public and public notice of the time, place and purpose of said Meeting was given, all as required by
Chapter 551, Texas Government Code.
3. The County Judge of the Lessee has approved and hereby approves the aforesaid Order; the
County Judge and the County Clerk of said Lessee have duly signed said Order; and the County Judge and the
County Clerk of said Lessee hereby declare that their signing of this Certificate shall constitute the signing of the
attached and following copy of said Order for all purposes.
SIGNED AND SEALED the ~ day of Mazch, 2006.
(~-f~ `
Co ty Clerk
~~.	--t .
	-~
(SEAL)
O~~ tiG9~~
",~; ˘ ~7
{~
x.99»-'.'fc``~~-
#586555v3 (Texas Schedule A Template) Page 2 Schedule A -Attachment G
ORDER AUTHORIZING THE COUNTY TO ENTER INTO A FINANCING
LEASE WITH BANC OF AMERICA LEASING & CAPITAL, LLC, FOR THE
PURPOSE OF FINANCING THE ACQUISITION OF CERTAIN COMPUTER
HARDWARE AND SOFTWARE FROM THE SOFTWARE GROUP DIVISION
OF TYLER TECHNOLOGIES, INC., AND AUTHORIZING THE COUNTY
JUDGE TO APPROVE AND EXECUTE THE FINAL FORM OF A MASTER
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA
LEASING & CAPITAL, LLC, AND ALL OTHER DOCUMENTS DEEMED
NECESSARY RELATED THERETO, AND APPROVING OTHER MATTERS
RELATED TO SUCH LEASE FINANCING
WHEREAS, KERR COUNTY, TEXAS ("Lessee ") proposes to enter into the MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT with BANG OF AMERICA LEASING & CAPITAL, LLC, as lessor
('Zessor'~ and Lessee, as lessee (the "Master Lease") and proposes to enter into Schedule A No. 1 thereunder to
enable Lessee to finance the lease/purchase acquisition of up to $1,030,000 principal amount of Equipment (as
defined in Schedule A No. 1 with the intent that the interest portion of the Rental Payments (as defined in the Master
Lease) therefor, in an amount not [o exceed 4.015% per annum, be excluded from Boss income for federal income
tax purposes and, as security for such Rental Payments, Lessee has ageed to grant a fast lien securiTy interest in the
Equipment to Lessor, and to make payments, as set forth in Schedule A No. 1, sufficient to pay both the principal
and interest portion of the Rental Payments under the Master Lease and Schedule A No. 1.
WHEREAS, the Master Lease and Schedule A No. 1 have been presented to this meeting.
NOW THEREFORE, BE IT RESOLVED BY THE COMMISSIONERS COURT OF KERR
COUNTY, TEXAS:
Section 1. The Commissioners Court agees to enter into the Master Lease and Schedule A No. 1 pursuant
to the Master Lease in order to fmance acquisition of the Equipment in a principal amount of up to $1,030,000 at an
interest rate not to exceed 4.015% per annum and, in order to secure the Master Lease and Schedule A No. 1, to
gant a first lien securiTy interest in the Equipment, in accordance with said Master Lease and Schedule A No. 1.
Section 2. Any one or more of [he Authorized Officers of Lessee listed in Section 3 below be, and each of
them hereby is, authorized to execute, acknowledge and deliver in the name and on behalf of Lessee to Lessor the
Master Lease and Schedule A No. 1 to the Master Lease including all attachments, financing statements and
schedules thereto, such Master Lease and Schedule A No. 1 to be in substantially the form presented to this meeting
with such changes as [he signing officer shall determine to be advisable. Further, said Authorized Officers are
authorized to execute, acknowledge and deliver in the name and on behalf of Lessee any other agreement,
instrument, certificate, representation and document, and to take any other action as maybe advisable, convenient or
necessary to enter into such Master Lease and Schedule A No. 1; the execution thereof by any such Authorized
Officer shall be conclusive as to such determination.
Section 3. For the purpose of this Order, the following persons, or the persons holding the following
positions, aze "Authorized Officers" duly authorized to enter into the transaction contemplated by this Order in the
name and on behalf of Lessee:
#586555v3 (Texas Schedule A Template) Page 3 Schedule A -Attachment G
Title Name
County Judge Pat Tinley
Section 4. There is hereby authorized the continuing execution and delivery by the Authorized Officers or
any one of [hem in the name of and on behalf of Lessee the Schedule A No. 1 and Attachments in substantially the
form presented to this meeting with such changes as the signing officer shall determine advisable, and the execution
thereof shall be conclusive as to such determination.
Section 5. The Lease of the Equipment which is described in or incorporated by reference in the
Schedule A No. 1 to the Agreement is hereby approved by the Commissioners Cour[. The Authorized Officers shall
be authorized to make replacements or otherwise substitute other similar equipment for any of the items so described
or incorporated if necessary due to inability of the Vendor to deliver an item of equipment, so long as such
substitution of any item of equipment does not frustrate the purpose of Lessee for which the Equipment is being
leased or result in an increase in the amount required to be paid by Lessee for the Equipment, as provided in Section
1 hereof.
Section 6. This Order shall take effect immediately.
PASSED AND ADOPTED THE 27i° day of Febmary, 2006.
ATTEST:
By:
Co ty Clerk
9,9
~~~SSIONFRSOA
UO YG9
~~ ~ ~
~t - 5~
F !y~
t^ "'" ,~'
DUNTY,~
_		
By.~	~	
	ge	
#586555v3 (Texas Schedule A Template) Page 4 Schedule A -Attachment G
ATTACHMENT H TO SCHEDULE A NO. 1
ATTACH COPIES OF FILED FINANCING STATEMENTS SHOWING PERFECTION OF SECURITY
INTEREST IN THE PROPERTY AND ASSIGNMENT OF SECURITY INTEREST TO LESSOR
TO BE COMPLETED AND SUBMITTED CONCURRENTLY
WITH EACH ACCEPTANCE CERTIFICATE
[see attached]
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment H
ATTACHMENT I TO SCHEDULE A No. l
IRS Form 8038-G or IRS Form 8038-GC (if less than $100,000)
(IRS FORM 8038-G OR IRS FORM 8038-GC FOLLOW)
[see attached]
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment I
ATTACHMENT J TO SCHEDULE A NO.1
CROSS-RECEIPT
With respect to the MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT, dated as of March 16,
2006 (the "Master Lease ") by and between BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor
("Lessor") and KERR COUNTY, TEXAS, as lessee ("Lessee ") and Schedule A No. 1, dated as of March 16, 2006
to the Master Lease:
Lessor hereby acknowledges the lease to Lessee of the Equipment listed on Schedule A No. 1 to the Master
Lease and receipt from Lessee of Schedule A No. 1 to the Master Lease dated as of the date hereof.
Lessee hereby acknowledges the lease of [he Equipment pursuant to the Master Lease and Schedule A No.
1 to the Master Lease.
Dated: March 16, 2006
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lessor
By:
Name:
Title:
KERR COUNTY, TEXAS,
as Lessee
By' ~~~ ~ ~~
Name:
Title: County Judge
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment J
ATTACHMENT K TO SCHEDULE A NO. 1
NO-ARBITRAGE CERTIFICATE
I, the undersigned Authorized Officer of KERB COUNTY, TEXAS (the "Lessee"), make this
certification for the benefit of all persons interested in the exclusion from gross income for federal income tax
purposes of the interest component of the Rental Payments under that certain MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT, dated as of March 16, 2006, by and between Lessee and Lessor, and under
Schedule A No. 1 thereto, dated as of Mazch 16, 2006 (collectively the "Agreement"), between Lessee, as lessee and
BANC OF AMERICA LEASING & CAPITAL, LLC, as lessor ("Lessor").
1. Responsible Officer. I am the duly chosen, qualified and acting officer of Lessee for the office
shown below my signature. As such, I am familiar with the facts herein certified and I am duly authorized to
execute and deliver this certificate on behalf of Lessee. I am the officer of Lessee charged, along with other officers
of Lessee, with the responsibility for issuing the Agreement.
2. Purpose. This certificate is being executed and delivered pursuant to Sections 1.148-0 through
1.148-11, 1.149(d)(1), 1.149(g)-1, 1.150-1 and 1.150-2 of the Treasury Regulations (the "Regulations").
3. Definitions. The capitalized terms used in this certificate (unless otherwise defined) that aze
defined hr the Agreement shall for all purposes hereof have the meanings therein specified. All such terms defined
in the Internal Revenue Code of 1986, as amended (the "Code") or Regulations shall for all purposes hereof have the
meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise.
4. Reasonable Expectations. The facts and estimates that are set forth in this certificate aze
accurate; and the expectations set forth herein are reasonable in light of such facts and estimates. The undersigned is
aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of
such facts, estimates or expectations.
5. Description of Governmental Purpose and Size. Lessee is entering into the Agreement for [he
purposes of funding the acquisition of the Equipment and the costs related [o the issuance of the Agreement.
(a) The Equipment will be owned, operated, and maintained by Lessee and Lessor has not
contracted in any manner with any company, Earn or other person or entity to operate or maintain the
Equipment or any par[ thereof for and on behalf of Lessee.
(b) There is not, and as of the date hereof, Lessee does not anticipate entering into, any lease,
contract or other understanding or arrangement, such as a take-or-pay contract or output contract, with any
person other than a State or local governmental unit, pursuant to which Lessee expects that the proceeds of
the Agreement, or the Equipment fmanced therewith or any part thereof, will be used in the trade or
business of such person (including all activities of such persons who are not individuals).
(c) The amounts received from the Agreement, when added to the amounts expected to be
received from the investment thereof, do not exceed the amounts required to pay the costs of the
Equipment, including payment of the Total Contract Price, and the costs of issuing the Agreement.
(d) No other obligations of Lessee payable from the same source of funds were sold or
delivered within fifteen (15) days from the date hereof.
6. Amount and Use of Proceeds of the Agreement. The proceeds of the Agreement are $1,030,000
of which of $30,000 is for payment of the costs of issuance. There is no accmed interest on the Agreement. Lessee
will pay from its own funds any other cost of issuance. No proceeds will be used [o pay, refund, retire or replace
any governmental obligations previously issued. The proceeds will be used as follows:
#586555v3 (Texas Schedule A Template) Page 1 Schedule A -Attachment K
(a) The amount of $1,000,000 will be deposited into the Equipment Acquisition Account and
is expected to be disbursed to pay or reimburse the costs of acquisition of the Equipment. The aggregate
amount of the costs of acquisition of the Equipment is anticipated to be not less than such amount. Any
costs of the Equipment not financed out of the proceeds of the Agreement, or investment proceeds thereof,
will be financed out of Lessee's available funds. No portion of the amount deposited into the Equipment
Acquisition Account will be disbursed to reimburse Lessee for any expenditures made by Lessee, unless
(i) prior to the date that is 60 days before the date hereof or the date that is 60 days prior to the date Lessee
adopted or expressed its official intent to reimburse such expenditures meeting the requirements of
Section 1.150-2(e)(1) of the Regulations; (ii) the expenditure is a capital expenditure, a cost of issuance of
the Agreement, an extraordinary working capital item or grant; and (iii) the reimbursement is made not
later than 18 months afer the later of (A) the date of the expenditure or (B) the date the Equipment was
placed into service or abandoned but not more than three (3) yeazs after the date of expenditure.
(b) The amount of $30,000 will be used [o pay the costs of issuance of the Agreement.
7. Use of Investment Proceeds. The best estimate of Lessee is that investment proceeds resulting
from the investment of any of the proceeds of the Agreement pending expenditure of such proceeds for costs of
acquiring the Equipment will be retained in the Equipment Acquisition Account and used to pay or reimburse the
Total Contract Price of the Equipment in addition to those described in Paragraph 6 above.
8. No Replacement Proceeds. Lessee has not established and does not expect to establish any
sinking fund, debt service fund, redemption fund, reserve fund, replacement fund or similaz fund to be used to pay,
directly or indirectly, principal or interest on the Agreement. Lessee has not pledged or otherwise restricted and
does not expect to pledge or restrict any other funds or property which as a result of the pledge or restriction could
be reasonably assured to be available to pay, directly or indirectly, principal or interest on the Agreement, even if
Lessee encounters financial difficulty.
9. Intentionally Omitted.
10. Rebate. Lessee does not expect to be required to make any rebate payments to the United States
pursuant to section 148(f) of the Code because Lessee expects that the gross proceeds of the Agreement (within the
meaning of section 148(f)(4)(B) of the Code) will be expended for the governmental purpose for which the
Agreement is entered into no later than a date which is six (6) months from the date hereof. Lessee has covenanted,
however, in the Agreement that in the event that Lessee should be required to make rebate payments to the United
States pursuant to section 148(f) of the Code, Lessee will make such payments as and when provided in the
Agreement.
11. No Artifice or Device. In connection with the issuance of the Agreement, Lessee has not
(a) employed any abusive azbitrage device, or (b) over-burdened the market for tax-exempt obligations.
12. Agreement Not Hedge Bonds. Lessee expects to expend within three (3) years from the date
hereof, in addition to the costs of issuance of the Agreement, an amount of proceeds of the Agreement equal to not
less than 85% of the net proceeds of the Agreement. No proceeds of the Ageement have been or will be invested
in nonpurpose investments which have substantially guazanteed yield for four (4) years or more.
13. OualiSed Tax-Exempt Obligations. Lessee has not issued and reasonably anticipates that it and
its subordinate entities, if any, will not issue, tax-exempt obligations (including this Agreement) in an amount of
more than $10,000,000 during the current calendar yeaz, and hereby designates this Agreement as a "qualified tax-
exempt obligation" within the meaning of section 265(b)(3) of the Code and agees 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 yeaz.
14. No-Arbitrage Certificate Mav be Relied Upon. Lessee has not been notified of the listing or
proposed listing of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied
upon.
#586555v3 (Texas Schedule A Template) Page 2 Schedule A -Attachment K
15. No Arbitraee. On the basis of the foregoing facts, estimates and circumstances, it is expected that
the gross proceeds of the Agreement will not be used in a manner that would cause any obligation to be an
"arbitrage bond" within the meaning of section 148 of the Code and the Regulations.
WITNESS MY HAND, this March 16, 2006.
I{ERR COUNTY, TEXAS,
as Lessee
sy: ~ ~ ,
Name: ey
Title: County Judge
#586555v3 (Texas Schedule A Template) Page 3 Schedule A -Attachment K
ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT
Thls ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT (th1S
"Agreement"), dated as of March 16, 2006, by and among Banc of America Leasing
& Capital, LLC, a Delaware limited liability company (hereinafter referred to as
"Lessor"), Kerr County, Texas, a political subdivision of the state of Texas
(hereinafter referred to as "Lessee") and Bank of America, N.A., a national banking
association (hereinafter referred to as "Acquisition Fund Custodian").
Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as
of March 16, 2006, between Lessor and Lessee (hereinafter referred to as the "Lease"), covering
the acquisition and lease of certain Equipment described therein (the "Equipment"). It is a
requirement of the Lease that the Equipment Cost of the Equipment (an amount not to exceed
X1,030,000) be deposited into an escrow under terms satisfactory to Lessor, for the purpose of
fully funding the Lease, and providing a mechanism for the application of such amounts to the
purchase of and payment for the Equipment.
The parties agree as follows:
1. Creation of Acauisition Fund.
(a) There is hereby created a special trust fund to be known as the "Kerr
County, Texas Acquisition Fund" (the "Acquisition Fund") to be held in trust by the Acquisition
Fund Custodian for the purposes stated herein, for the benefit of Lessor and Lessee, to be held,
disbursed and returned in accordance with the terms hereof.
(b) The Acquisition Fund Custodian shall invest and reinvest moneys on
deposit in the Acquisition Fund in Qualified Investments in accordance with written instructions
received from Lessee. Lessee shall be solely responsible for ascertaining that all proposed
investments and reinvestments are Qualified Investments and that they comply with federal, state
and local laws, regulations and ordinances governing investment of such funds and for providing
appropriate notice to the Acquisition Fund Custodian for the reinvestment of any maturing
investment. Accordingly, neither the Acquisition Fund Custodian nor Lessor shall be
responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising
out of or related to the investment or reinvestment of all or any portion of the moneys on deposit
in the Acquisition Fund, and Lessee agrees to and does hereby release the Acquisition Fund
Custodian and Lessor from any such liability, cost, expenses, loss or claim. Interest on the
Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the
investment of the moneys on deposit in the Acquisition Fund shall be borne by the Acquisition
Fund. For purposes of this agreement, "Qualified Investments" means any investments which
meet the requirements of the Texas Public Funds Investment Act, Chapter 2256, Texas
Government Code, as amended.
(c) Unless the Acquisition Fund is earlier terminated in accordance with the
provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the
Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of
written authorization(s) from Lessor, as is more fully described in Section 2 hereof. If the
t
amounts in the Acquisition Fund are insufficient to pay such amounts, Lessee shall provide any
balance of the funds needed to complete the acquisition of the Equipment Any moneys
remaining in the Acquisition Fund after March 15, 2007 (the "Acquisition Period") shall be
applied as provided in Section 4 hereof.
(d) The Acquisition Fund shall be terminated at the earliest of (i) the final
distribution of amounts in the Acquisition Fund or (ii) written notice given by Lessor of the
occurrence of a default or termination of the Lease due to non-appropriation.
(e) The Acquisition Fund Custodian may act in reliance upon any writing or
instrument or signature which it, in good faith, believes to be genuine and may assume the
validity and accuracy of any statement or assertion contained in such a writing or instrument.
The Acquisition Fund Custodian shall not be liable in any manner for the sufficiency or
correctness as to form, manner of execution, or validity of any instrument nor as to the identity,
authority, or right of any person executing the same; and its duties hereunder shall be limited to
the receipt of such moneys, instruments or other documents received by it as the Acquisition
Fund Custodian, and for the disposition of the same in accordance herewith.
(f) Unless the Acquisition Fund Custodian is guilty of gross negligence or
willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release
and indemnify the Acquisition Fund Custodian and hold it harmless from any and all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or
charges of any character or nature, which it may incur or with which it may be threatened by
reason of its acting as Acquisition Fund Custodian under this agreement; and in connection
therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian against
any and all expenses; including reasonable attorneys' fees and the cost of defending any action,
suitor proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of
the Lease, or about the rights and obligations, or the propriety of any action contemplated by the
Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be
required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund
Custodian shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in
connection with such civil action, and shall be fully protected in suspending all or part of its
activities under the Lease until a final judgment in such action is received.
(h) The Acquisition Fund Custodian may consult with counsel of its own
choice and shall have full and complete authorization and protection with the opinion of such
counsel. The Acquisition Fund Custodian shall otherwise not be liable for any mistakes of fact
or errors of judgment, or for any acts or omissions of any kind unless caused by its willful
misconduct.
(i) Lessee shall reimburse the Acquisition Fund Custodian for all reasonable
costs and expenses, including those of the Acquisition Fund Custodian's attorneys, agents and
employees incurred for extra-ordinary administration of the Acquisition Fund and the
performance of the Acquisition Fund Custodian's powers and duties hereunder in connection

with any Event of Default under the Lease, or in connection with any dispute between Lessor
and Lessee concerning the Acquisition Fund.
2. Acquisition of Property.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for,
or cause to be supervised and provided for, the acquisition of the Equipment, with moneys
available in the Acquisition Fund. Lessee represents the estimated costs of the Equipment are
within the funds estimated to be available therefor, and Lessor makes no warranty or
representation with respect thereto. Lessor shall have no liability under any of the acquisition or
construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the
acquisition, equipping and installation of the Equipment, and the operation and maintenance
thereof.
(b) Authorized Acquisition Fund Disbursements. Disbursements from the
Acquisition Fund shall be made for the purpose of paying (including the reimbursement to
Lessee for advances from its own funds to accomplish the purposes hereinafter described) the
cost of acquiring the Equipment.
(c) Requisition Procedure. No disbursement from the Acquisition Fund shall
be made unless and until Lessor has approved such requisition. Prior to disbursement from the
Acquisition Fund there shall be filed with the Acquisition Fund Custodian a requisition for such
payment in the form of Disbursement Request attached hereto as Schedule 1, stating each
amount to be paid and the name of the person, firm or corporation to whom payment thereof is
due. Each such requisition shall be signed by an authorized representative of Lessee (an
"Authorized Representative") and by Lessor, and shall be subject to the following:
1. Delivery to Lessor of a certificate of Lessee to the effect that:
(ij an obligation in the stated amount has been incurred by Lessee, and that
the same is a proper charge against the Acquisition Fund for costs relating
to the Equipment identified in the Lease, and has not been paid; (ii) the
Authorized Representative has no notice of any vendor's, mechanic's or
other liens or rights to liens, chattel mortgages, conditional sales contracts
or security interest which should be satisfied or discharged before such
payment is made; (iii) such requisition contains no item representing
payment on account, or any retained percentages which Lessee is, at the
date of such certificate, entitled to retain; and (iv) the Equipment is
insured in accordance with the Lease.
2. Delivery to Lessor of an Acceptance Certificate executed by Lessee,
together with any Purchase Agreement Assignment or bill of sale and
invoice therefor as required by Section 3.04 of the Lease;
3. The disbursement shall occur during the Acquisition Period set forth in the
Schedule applicable to such Equipment;
3
4. There shall exist no Event of Default (nor any event which, with notice or
lapse of time or both, would become an Event of Default); and
5. No material adverse change in Lessee's or any guarantor's financial
condition shall have occurred since the date of the Lease.
3. Deposit to Acquisition Fund. Upon satisfaction of the conditions specified in
Section 3.04 of the Lease, Lessor will cause the Lease Proceeds to be deposited in the
Acquisition Fund. Lessee agrees to pay any costs with respect to the Equipment in excess of
amounts available therefor in the Acquisition Fund.
4. Excessive Acquisition Fund. Following the final disbursement from the
Acquisition Fund at the end of the Acquisition Period, or termination of the Acquisition Fund as
otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the
Acquisition Fund to Lessor for application to amounts owed under the Lease in accordance with
Section 4.07 of the Lease.
5. Security Interest. The Acquisition Fund Custodian and Lessee acknowledge and
agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund
Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a lust
priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all
investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any
part thereof, is converted to investments as set forth in this agreement, such investments shall be
made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian hereby
agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession
of such investments for the purpose of perfecting its security interest.
6. Control of Acquisition Account. In order to perfect Lessor's security interest by
means of control in (i) the Acquisition Fund established hereunder, (ii) all securities entitlements,
investment property and other financial assets now or hereafter credited to the Acquisition Fund,
(iii) all of Lessee's rights in respect of the Acquisition Fund, such securities entitlements,
investment property and other financial assets, and (iv) all products, proceeds and revenues of
and from any of the foregoing personal property (collectively, the "Collateral"), Lessor, Lessee
and Acquisition Fund Custodian further agree as follows:
(a) All terms used in this Section 6 which are defined in the Commercial
Code of the State of Texas ("Commercial Code") but are not otherwise defined herein shall have
the meanings assigned to such terms in the Commercial Code, as in effect on the date of this
Agreement.
(b) Acquisition Fund Custodian will comply with all entitlement orders
originated by Lessor with respect to the Collateral, or any portion of the Collateral, without
further consent by Lessee.
(c) Acquisition Fund Custodian hereby represents and warrants (a) that the
records of Acquisition Fund Custodian show that Lessee is the sole owner of the Collateral,
(b) that Acquisition Fund Custodian has not been served with any notice of levy or received any
notice of any security interest in or other claim to the Collateral, or any portion of the Collateral,
4
other than Lessor's claim pursuant to this Agreement, and (c) that Acquisition Fund Custodian is
not presently obligated to accept any entitlement order from any person with respect to the
Collateral, except for entitlement orders that Acquisition Fund Custodian is obligated to accept
from Lessor under this Agreement and entitlement orders that Acquisition Fund Custodian,
subject to the provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Acquisition Fund Custodian
will not enter into any agreement by which Acquisition Fund Custodian agrees to comply with
any entitlement order of any person other than Lessor or, subject to the provisions of
paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Acquisition
Fund Custodian shall promptly notify Lessor if any person requests Acquisition Fund Custodian
to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or
adverse claim against any portion or all of the Collateral.
(e) Except as otherwise provided in this paragraph (e) and subject to
Section 1(b) hereof, Acquisition Fund Custodian may allow Lessee to effect sales, trades,
transfers and exchanges of Collateral within the Acquisition Fund, but will not, without the prior
written consent of Lessor, allow Lessee to withdraw any Collateral from the Acquisition Fund.
Acquisition Fund Custodian acknowledges that Lessor reserves the right, by delivery of written
notice to Acquisition Fund Custodian, to prohibit Lessee from effecting any withdrawals
(including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or
exchanges of any Collateral held in the Acquisition Fund. Further, Acquisition Fund Custodian
hereby agrees to comply with any and all written instructions delivered by Lessor to Acquisition
Fund Custodian (once it has had a reasonable opportunity to comply therewith) and has no
obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of
any obligations of Lessee to Lessor, the validity of any of Lessor's claims against or agreements
with Lessee, the existence of any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Acquisition Fund Custodian to
comply with all instructions and entitlement orders delivered by Lessor to Acquisition Fund
Custodian.
(g) Acquisition Fund Custodian will not attempt to assert control, and does
not claim and will not accept any security or other interest in, any part of the Collateral, and
Acquisition Fund Custodian will not exercise, enforce or attempt to enforce any right of setoff
against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever.
(h) Acquisition Fund Custodian and Lessee hereby agree that any property
held in the Acquisition Fund shall be treated as a financial asset under such section of the
Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code,
notwithstanding any contrary provision of any other agreement to which Acquisition Fund
Custodian may be a party.
(i) Acquisition Fund Custodian is hereby authorized and instructed, and
hereby agrees, to send to Lessor at its address set forth in Section 7 below, concurrently with the
sending thereof to Lessee, duplicate copies of any and all monthly Acquisition Fund statements
or reports issued or sent to Lessee with respect to the Acquisition Fund.
5
7. Miscellaneous. Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Lease. This agreement may not be amended except in writing
signed by all parties hereto. This agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original instrument and each shall have the force and effect of
an original and all of which together constitute, and shall be deemed to constitute, one and the
same instrument. Notices hereunder shall be made in writing and shall be deemed to have been
duly given when personally delivered or when deposited in the mail, first class postage prepaid,
or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic
confirmation, addressed to each party at its address below:
If to Lessor: Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
Mail Code: CAS-705-04-01
San Francisco, CA 94104
Attn: Contract Administration
Fax: (415)765-7373
If to Lessee: Kerr County, Texas
700 Main Street
Kerrville, TX 78028
Attn: County Judge
Fax: (830) 792-2218
If to Acquisition
Fund Custodian: Bank of America, N.A.
700 Louisiana Street
Houston, Texas 77002-2700
Attn: Kim M. Carver
Phone: (713)247-6626
Fax: (713)247-6083
In Witness Whereof, the parties have executed this Acquisition Fund and Account
Control Agreement as of the date first above written.
BANC OF AMERICA LEASING & CAPITAL, LLC, KERB COUNTY TEXAS,
as Lessor as Lessee
By:
Title:
By:.~~ ~
Title: County Judge
6
BANK OF AMERICA, N.A.
As Acquisition Fund Custodian
By:
Title:
SCHEDULEI
FORM OF DISBURSEMENT REQUEST
Re: Master Equipment Lease/Purchase Agreement dated as of March 16, 2006 by and
between Banc of America Leasing & Capital, LLC, as Lessor and Kerr County,
Texas, as Lessee (the "Lease")
In accordance with the terms of the Acquisition Fund and Account Control Agreement,
dated as of March 16, 2006 (the "Acquisition Fund and Account Control Agreement"), by and
among Lessor, Lessee and Bank of America, N.A., Houston, Texas branch (the "Acquisition
Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the
following persons the following amounts from the Acquisition Fund created under the
Acquisition Fund and Account Control Agreement (the "Acquisition Fund") for the following
purposes.
~ Pavee's Name and Address ~ Invoice Number ~ Dollar Amount ( Puroose ~
The undersigned hereby certifies as follows:
(i) An obligation in the stated amount has been incurred by Lessee, and the same is a
proper charge against the Acquisition Fund for costs relating to the Equipment identified in the
Lease, and has not been paid. Attached hereto is the original invoice with respect to such
obligation.
(ii) 'the undersigned, as Authorized Representative, has no notice of any vendor's,
mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or
security interest which should be satisfied or discharged before such payment is made.
(iii) This requisition contains no item representing payment on account, or any
retained percentages which Lessee is, at the date hereof, entitled to retain.
(iv) The Equipment is insured in accordance with the Lease.
(v) No Event of Default, and no event which with notice or lapse of time, or both,
would become an Event of Default, under the Lease has occurred and is continuing at the date
hereof.
(vi) The disbursement shall occur during the Acquisition Period set forth in the
Schedule applicable to such Equipment.
(vii) No material adverse change in Lessee's or any guarantor's financial condition
shall have occurred since the date of the Lease.
Dated: ~c rr,G. /S 2c7D b
KERR COUNTY, TEXAS
may:
--~ oozed Representative
Disbursement of funds from the Acquisition
Fund in accordance with the foregoing
Disbursement Request hereby is authorized
BANG OF AMERICA LEASING & CAPITAL, LLC
as Lessor under the Lease
By:
Title: Vice President
2
~~-S ~/
AMORTIZATION SCHEDULE
Interest
Payment Payment Component Principal
Date Number 4.01500% Component
Total
Rental
Payment Purchase Price
Mar-16-06	0				1,030,000.00
Mar-16-07	1	41,354.50	190,108.93	231,463.43	839,891.07
Mar-16-08	2	33,721.63	197,741.80	231,463.43	642,149.27
Mar-16-09	3	25,782.29	205,681.14	231,463.43	436,468.13
Mar-16-10	4	17,524.20	213,939.23	231,463.43	222,528.90
Mar-16-11	5	8,934.54	222,528.90	231,463.43	0
127,317.15 1,030,000.00 1,157,317.15
roan 8038-G 6tformatbn Return for Tax-F~cempt Governmental ObligatbAAs
- Under Naerrrd Imverare Cods section 749(e) oMe No. 1546-0720
(Rev. November 2000) - See separate InsL[rclierts.
°~~°i~ 1bm" °r!^`~?'"~"Y Caution N tM issue pace is wider f700,004 use Form 8038-GG
7 Issuer's name
KERR COUNTY, TEXAS
3 Number and street (or P.O. box r maA is rat derw;red in street
700 MAIN STREET
5 City, town. ar post dfice, state. and ZIP code
KERRVILLE. TEXAS 78028
7 Name d issue
9 Name and title d officer or legal represenm[ive when the IRS may caA for mme
PAT TINLEY, COUNTY JUDGE
11
72
13
14
15
16
n
78
19
27
22
23
24
25
26
27
28
29
2 ISSIMr's
74161
4 Report member
3 1
March 16,2006
8 CUSIP number
N/A
70 Trleypre nnea d dfica v kg0 repreavaa0w
1 830 1792-2211
^ Education
^ Heakh and hospital . ' .
^ Transportation
^ Publb safety.
^ Envkwlmerlt Gnctudin9 sewage bonds) .
^ Housing
..............
^ Utilities -
®Ocher Descritle - General govt; computer technology
R ot7kgations are TANS or RANs, check box - ^ N oWigatians are BANS, check box - ^
H Nalinatinns are in the form d a lease Or installment Sale. check box - ^
(al nr1N rrwaelty eme I ptl Issue ~ I W Stamd retla14xi0rr I (a/ ~ kl rid
price ei manrxy average malrray
Proceeds used for accrued interest .
Issue price of entire issue (enter anaurlt from Arle 21, cohrmn (b)) .
Proceeds used far txxd issuance costs prrdttdirng urlderswiterss' discorxN)
Proceeds used far credit enhancement .
Proceeds aAOCated to reasonably required reserve a replacement Hard
Proceeds used [o currently refuntl prior issues
Proceeds used to advance refund prior issues
Total (add Orles 24 through 28) .
I z9 I u
37 Enter tare remaining weighted average maturity of [he bonds [o l7e currently refunded - Years
32 Enter the remaining weighted average tnadaily of the bonds ro be advance refunded . - years
33 Emer the last date on which the refunded bonds wi0 be called . . -
34 Emer the date(s) the refunded Ixxrds were issued -
35 Enter the amoum of the state volume cap arocated to the issue urWer section 141(bx5) 3S NIA
36a F.raer the ammart d Boss proceeds kited Orro he irtested in a guamrfeed inrestnlerlt contract (see irstrt7ctions) ~a NfA
b Enter the final maturity date of the guardmem imestrrtertt contract -
37 Pod˘d finamirgs: a Proceeds d this issrie that are to be used W make bans to adler governmental utters 37a NIA
b ff this issue is a loan made from the proceeds of another tax-exempt issue, check box - ^ and enter [he name of the
issuer - and the date of the issue -
38 If the issuer has tlesignated [he issue under section 265(bx3xB~i (III (small issuer exception), check box - ^
39 If the issuer has elected to pay a penalty in lieu of arbiVage rebate, check box - ^
40 ff the issuer has identified a , chedt box - ^
radar perwltMS d perjury, r eedare mar I rave exariinee aas ream amt acrarperrytrg srlrtlrYes one staremeras, ale m me nest a my krgwleege
and befid, ttrey am tme, carrecL and caryteee.
Sign
Here
For Paperwork Reduction Act Notice, see page 2 of the hrsattctiwrs.
Pat Tinley
Type a putt name and lale
Coe No. 637735 Farm ~3a-6i (Rev. 11-2000)