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RES 1997-02 - Board
EXHIBIT A RESOLUTION NO. 97 OF THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT APPROVING AGREEMENT TO ACQUIRE EQUIPMENT WHEREAS, the Board of Directors of the Truckee Donner Public Utility District has determined that a true and very real need exists for the acquisition of the equipment described in the individual Payment Schedule No. 003 and the Master Municipal Lease and Option Agreement No. 909 presented at this meeting; and WHEREAS, the Board of Directors has taken the necessary steps under applicable law, including any legal bidding requirements, to arrange for the acquisition of such equipment, and WHEREAS, the Board hereby directs its legal counsel to review the agreement and negotiate appropriate modifications to said agreement so as to assure compliance with state law and local statutory law, prior to execution of the agreement by those persons so authorized by the District for such purposes; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors as follows: 1. The Board finds that the terms of said agreement are in the best interests of the District for the acquisition of such equipment and the Board designates and confirms the General Manager and the Deputy District Clerk to execute and deliver, and to witness (or attest) respectively, the agreement and any related documents necessary for the consummation of the transactions contemplated by the agreement. 2. That the acquisition of the equipment, under the terms and conditions provided for in the agreement is necessary, convenient, in the furtherance of and will at all times be used in connection with the District's governmental and proprietary purposes and functions (except to the extent that subleasing of the equipment is permitted under terms of the agreement) and are in the best interests of the District and no portion of the equipment will be used directly or indirectly in any trade or business carried on by any person other than a governmental unit or the state on a basis different from the general public. 3. The lessee covenants that it will perform all acts within its power which are or may be necessary to insure the maintenance of its legal status as being a duly organized and existing entity under the laws of the state, which status is the basis for the interest portion of the rental payments coming due under the agreement to at all times remain exempt from federal income taxation under the laws and regulations of the United States of America as presently enacted and construed or as hereafter amended. -- PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the District on the nineteenth day of February 1997 by the following roll call vote: AYES: NOES: ABSENT. TRUCKEE DONNER PUBLIC UTILITY DISTRICT Peter L. Holzmeister, General Manager ATTEST.- Susan M. Craig, Deputy District Clerk me 14 l_y:� EXHIBIT B KELLEY R.CARROLL- PCTF.R K CUTPITfA• STEVEN C.GROSS' STEPHEN C.LIESE.WIAN LAW OF—MCE 4F JAMES L.PORTER JR•" PORTER - SIMON DAMES ERr►EST SI)JON PROFESSIONAL CORPORATION CHUSTINA M.BAPLK" miCHAAI R.RROwN -.also Licensed in Nevada t Certified Specialist In Euare Planning. TAUCI'.EE OFFICE Trusts and Pt,,bate Law 40200 Truckee Airport Road DRAFT Truckee, California 95161 TWEA'TIF'tH CEh"I'iJRI•st;tLD[Nc 33s w.FIRST STRP—et (916) W-2002 RENO.NV 59s01 FAX (916) 537-I316 (1,02)3_2-6767 February 19, 1997 Municipal Services Group, Inc. 5125 South Kipling Parkway, Suite 300 Littlewton, Colorado 80127 Re: Truckee Danner Public utility District Ladies and Gentlemen: With respect to Individual payment Schedule No. 3 and that certain Master Municipal Lease and Option Agreement ("the Agreement") by and between Municipal Services Group, Inc. ("Lessor") and the Truckee Donner Public Utility District ("Lessee") I am of the opinion that: (i) the Lessee is a state or political subdivision thereof within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended; (ii) the execution, delivery and performance by the Lessee of the Agreement has been duly authorized by all necessary action on the part of the Lessee; (iii) the Agreement is a legal, valid and binding obligation of Lessee, enforceable in accordance with its terms. To the extent lawful, in the event the Lessor obtains a judgment against Lessee in money damages, as a result of an event of default under the Agreement, Lessee will be obligated to pay such judgment; (iv) the signatures of the officers of the Lessee which appear on the Agreement are true and genuine; I know said officers and know them to hold the offices set forth below their names; and (v) the Equipment leased pursuant to the Agreement constitutes personal property under applicable law and when subjected to use by Lessee will not be construed as a fixture. This Opinion of Counsel may be relied upon by any assignee(s) of Municipal Services Group, Inc. Very truly yours, PORTER - SIMON Professional Corporation r STEVE:v C. GROSS SCG:pg cc: Truckee Donner Public Utility District IpVcS\municipalJtrl TOTAL F'.042'' meat No.909-3 SIT C . CERTIFICATE AS TO ARBITRAGE I, the undersigned officer of the Truckee Donner Public Utility District (the "Lessee'O being the person duly charged, with others, with responsibility of issuing the Lessee's obligation in the form of that certain agreement entitled Master Municipal Lease and Option Agreement (the "Agreement'D numbered 909, and issued said date HEREBY CERTIFY that: 1. The Agreement was issued by the Lessee under and pursuant to existing law to finance the acquisition of the certain Equipment described therein. 2. Pursuant to the Agreement, the Lessee is entitled to receive said Equipment in consideration for the obligation of the Lessee under the Agreement. Said Equipment will be used in furtherance of the public purposes of the Lessee. The Lessee does not intend to sell said Equipment or said Agreement or to otherwise dispose of said Equipment during the term of the Agreement. The Lessee will not receive any monies, funds, or other "proceeds"as a result of the Agreement. 3. The Lessee expects to make payments under the Agreement from its general funds on the basis of annual appropriations in amounts equal to the required payments under the Agreement. The remaining general funds of the Lessee are not reasonably expected to be used to make such payments and no other monies are pledged to the Agreement or reasonably expected to be used to pay principal and interest on the Agreement. 4. The Lessee has not received notice that its Certificate may not be relied upon with respect to its own issues nor has it been advised that any adverse action by the Commissioner of Internal Revenue is contemplated. S. The Lessee certifies that the Property (as defined in the Agreement) is or will be owned and operated by the Lessee and will not be used in the trade or business of any person on a basis different from the general public. To the best of my knowledge, information and belief the expectations herein expressed are reasonable and there are no facts, estimates or circumstances other than those expressed herein that would materially affect the expectations herein expressed. IN WITNESS WHEREOF, I have hereunto set my hand this day of 19 LESSEE: Truckee Donner Public Utility District By: Title: 1V A No.909 , MASTER MUNICIPAL LEASE AND OPTION AGREBMff FIRM LEASE Lessor: Municipal Services Group, Inc. 165 South Union Blvd. Union Tower, Suite 160 Denver, Colorado 80228 Lessee: Truckee Donner Public Utility District P. O. Box 309 11570 Donner Pass Road Truckee, California 96160 This Master Municipal Lease and Option Agreement(the"Agreement") entered into between Municipal Services Group, Inc. (together with any assignee thereof collectively referred to herein as the"Lessor"), and Truckee Donner Public Utility District ("Lessee"), a body corporate and politic duly organized and existing under the laws of the State of California ("State"); WITNESSETH: WHEREAS, Lessor desires to lease the Equipment, as hereinafter defined, to Lessee, and Lessee desires to lease the Equipment from Lessor, subject to the terms and conditions of and for the purposes set forth in this Master Lease Agreement: and WHEREAS, the Lessor, simultaneously with the execution and delivery of this Agreement, may enter into an escrow agreement (the "Escrow Agreement") with an escrow agent whereby the Lessor, or its Assignee, if any, shall deposit monies sufficient to acquire the Equipment to be leased hereunder; and WHEREAS, Lessee is authorized under the Constitution and laws of the State to enter into this Agreement for the purposes set forth herein; NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I COVENANTS OF LESSEE Lessee represents, covenants and warrants, for the benefit of Lessor and its assignees, as follows: (a) Lessee is a public body, corporate and politic, duly organized and existing under the Constitution and laws of the State. (b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (c) Lessee is authorized under the Constitution and laws of the State to enter into this Agreement, all Individual Payment Schedules (as defined below) and the transaction contemplated hereby, and to perform all of its obligations hereunder. (d) Lessee has been duly authorized to execute and deliver this Agreement and each of the Individual Payment Schedules under the terms and provisions of the ordinance or resolution of its governing body,or by other appropriate official approval, (attached hereto as Exhibit A),and further represents, covenants and warrants that all requirements have been met, and procedures have occurred in order to insure the enforceability of this Agreement, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment hereunder. Lessee shall cause to be executed an opinion of its counsel substantially in the form attached hereto as Exhibit B. (e) Each lease of specific Equipment (as defined herein) or unit(s) of Equipment hereunder shall be evidenced by an Individual Payment Schedule executed by Lessor and Lessee describing specific personal property(the"Equipment"or"Unit(s) of Equipment",as the case may be) and setting forth the rent, the term of lease, disposition of Equipment upon the expiration of the lease term and other details with respect to it. The lease for each Unit of Equipment shall become effective on the Closing Date or on the date such Unit of Equipment is delivered to and accepted by Lessee,as applicable, and the Individual Payment Schedule for the Unit or Unit(s) of Equipment shall specify such date as the effective date of the lease (the"Commencement Date'J. The lease term of each Individual Payment Schedule shall commence on the Commencement Date as indicated therein and shall terminate as specified in Section 4.02. During the Lease term, the rental payments shall be as provided in the specific exhibit attached to the applicable Individual Payment Schedule. (f) During the period this Agreement is in force,Lessee will annually provide,if requested by Lessor,current financial statements,budgets, proof of appropriation for the ensuing fiscal year and such other financial information relating to the ability of Lessee to continue this Agreement as may be reasonably requested by Lessor or its assignee. (g) Each Unit of Equipment acquired under this Agreement will have a useful life in the hands of the Lessee that is substantially in excess of the Lease Term specifically relating to it. (h) All acquired Equipment is,and during the period this Agreement is in force will remain, personal property and when subjected to use by the Lessee under this Agreement, will not be or become fixtures. 1 W This Agreement applies to all items of personal property acquired, or to be acquired, by Lessee as evidenced by the execution of Individual Payment Schedules from time to time as may be required to fulfill Lessee's equipment needs. ARTICLE II DEFINITIONS The following terms will have meanings indicated below unless the context clearly requires otherwise: "Adjusted Base Interest Rate"means the Base Interest Rate as adjusted as described in the Individual Payment Schedule hereof. "Base Interest Rate"means the interest rate quoted to Lessee at the inception of the Agreement as set forth in the Individual Payment Schedule hereof or as may be adjusted as provided therein. "Certificate of Acceptance" means the Certificate(s) of Acceptance attached hereto as Exhibit F, relating to the applicable Unit of Equipment, whereby Lessee acknowledges receipt of the applicable Unit of Equipment in good condition. "Closing Date" means the date on which Lessor deposits with the Escrow Agent the funds required to be deposited by Section 3.01 of this Agreement. "Commencement Date"is the date when the term of the Individual Payment Schedule begins and Lessee's obligation to pay rent accrues,.which date shall be the date on which the Equipment is accepted by Lessee as indicated on the Certificate of Acceptance attached to the Individual Payment Schedule. "Individual Payment Schedules" means the schedules which identify specific Unit(s) of Equipment, the commencement dates of the lease and terms thereof (which are treated as a separate lease apart from any other Individual Payment Schedules) which may become a part of this Agreement from time to time. Each Individual Payment Schedule will consist of at least an Exhibit D, Exhibit E, and Exhibit F, including an original invoice and any other documents needed to perfect a security interest in the Equipment by the Lessor. "Lessee" means the entity which is described in the first paragraph of this Agreement and which is leasing the Equipment from Lessor under the provisions of this Agreement. "Lease Term" means the Original Term and all Renewal Terms provided for in this Agreement under Article I and 4.01. "Lessor" means (i) Municipal Services Group, Inc., acting as Lessor hereunder; (ii) any surviving, resulting or transferee corporation; and (iii) except where the context requires otherwise, any assignee(s) of Lessor. "Purchase Price" means the amount which Lessee may, in its discretion, pay to Lessor in order to purchase the Equipment, as set forth in Exhibit(s) E hereto or as set forth in any applicable Individual Payment Schedule. "Rental Payments" mean the rental payments payable by Lessee for each Unit of Equipment pursuant to the provisions of this Agreement and any applicable Individual Payment Schedule during the Lease Term, payable in consideration of the right of Lessee to use the Equipment during the term of this Agreement. Rental Payments shall be payable by Lessee to the Lessor or its assignee in the amounts and at the times during the Lease Term, as set forth in the Individual Payment Schedules made a part of this Agreement. "Vendor"means the manufacturer/contractor of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing the Equipment. ARTICLE III DEPOSIT OF MONIES; ACQUISITION AND LEASE OF EQUIPMENT Section 3.01. Deposit of Monies. In the event an Escrow Agreement is entered into pursuant to this Agreement,then on the Closing Date, Lessor shall cause to be deposited in the Acquisition Fund created under such Escrow Agreement and held by the Escrow Agent, monies sufficient to acquire the Equipment to be leased hereunder. Section 3.02. Acquisition of the Equipment. Lessor agrees to acquire the equipment pursuant to the Lessee's specifications. Lessee, as agent for Lessor,will supervise,and provide for the complete acquisition of the Equipment pursuant to the terms of the Agency Agreement,by and between Lessor and Lessee. Lessee further agrees that it will cause the acquisition of the Equipment to be diligently performed after the deposit of funds with the Escrow Agent pursuant to Section 3.01, if applicable, and that the Equipment will be substantially acquired in accordance with said specification within one year from the Closing Date. The Lessee's obligation to make Rental Payments under this agreement shall only exist to the extent of and for repayment of the monies disbursed for the acquisition of Equipment as set forth in Article I(e). Upon completion of acquisition of the equipment satisfactory to the Lessee and after authorization by the Lessor, but in any event not later than thirty (30) days following completion of such acquisition, Lessee shall deliver to the Escrow Agent an executed Certificate of Acceptance. Section 3.03. Payment of Acquisition Costs.Payment to the Vendor (s) of the cost of acquiring the Equipment shall be made from the monies deposited with the Escrow Agent, if applicable and if so provided in Section 3.01, which shall be disbursed for that purpose in accordance with and upon compliance with Article II of the Escrow Agreement. ARTICLE IV LEASE TERM Section 4.01. Commencement of Lease Term. The Lease Term of any Individual Payment Schedule shall commence according to Article I, subparagraph (e), and shall terminate as specified in Section 4.02. 2 Section 4.02. Termination of Lease Term. The Lease Term as it pertains to any Individual Payment Schedule will terminate upon the earliest of any of the following events: (a) the exercise by Lessee of the option to purchase the Equipment granted under the provisions of Articles IX or XI of this Agreement; .�.. (b) a default by Lessee and Lessor's election to terminate this Agreement under Article XIII; or (c) the payment by Lessee of all Rental Payments, late payment charges and past due finance charges authorized or required to be paid by Lessee hereunder or under any Individual Payment Schedule. ARTICLE V ENJOYMENT OF EQUIPMENT Lessor hereby covenants to provide Lessee during the Lease Term with quiet use and enjoyment of the Equipment, and Lessee shall during the Lease Term peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Agreement. Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment. ARTICLE VI RENTAL PAYMENTS Section 6.01. Rental Payments Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments hereunder and under each Individual Payment Schedule shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or monies of Lessee. Section 6.02. Payment of Rental Payments. Lessee shall pay Rental Payments, exclusively from legally available monies from its general fund and such other funds as may be designated by the Lessee, in lawful money of the United States of America to Lessor or, in the event of assignment by Lessor, to its assignee, in the amounts and no later than the dates set forth in the applicable Individual Payment Schedule(s). Lessee further agrees to forward rental payments to the Lessor or its assignee ten (10) days prior to the due date as set forth in an applicable Individual Payment Schedule. In the event the Lessor or its assignee does not receive rental payments by the due date, then and in such event,a twenty-five dollar($25.00) late charge will be assessed plus finance charges on the outstanding principal balance,equal to eighteen percent(18%) per annum or the highest interest rate legally allowable under the laws of the State. Rental Payments shall be in consideration for Lessee's use of the Equipment during the applicable year in which such payments are due. Section 6.03. Interest and Principal Components. A portion of the Rental Payment payable hereunder is paid as, and represents payment of, interest, and the balance of the Rental Payment payable hereunder is paid as, and represents payment of,principal. Exhibit(s) E hereto and each Individual Payment Schedule set forth the interest component and the principal component of each Rental Payment during the Term of the respective Individual Payment Schedules. Section 6.04. Rental Payments to be Unconditional. The obligations of Lessee to make payment of the Rental Payments required under this Article VI and other sections hereof,and to perform and observe the covenants and agreements contained herein,shall be absolute and unconditional in all events,except as expressly provided under this Agreement. Notwithstanding any dispute between Lessee and Lessor,any Vendor or any other person, Lessee shall make all payments of 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. Lessee's obligation to make Rental Payments during the Term of the Lease shall not be abated through accident or unforeseen circumstances. ARTICLE VII TITLE TO EQUIPMENT; SECURITY INTEREST Section 7.01. Title to the Equipment. During the term of this Agreement,title to the Equipment and any and all additions,repairs, replacements or modifications shall vest in Lessee, subject to the rights of Lessor under this Agreement. In the event of default as set forth in Section 13.02, title to the Equipment shall immediately vest in Lessor, and Lessee will reasonably surrender possession of the Equipment to Lessor. Section 7.02. Security Interest. To secure the payment of all of Lessee's obligations under this Agreement, Lessee grants to Lessor a security interest constituting a first lien on the Equipment and on all additions, attachments, accessions and substitutions thereto, and on any proceeds therefrom. Lessee agrees to execute such additional documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor,which Lessor deems necessary or appropriate to establish and maintain its security interest,and upon assignment,the security interest of any assignees of Lessor, in the Equipment. ARTICLE VI[I MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES Section 8.01. Maintenance of Equipment by Lessee. Lessee agrees that at all times during the Lease Term Lessee will,at Lessee's own cost and expense, maintain, preserve and keep the Equipment in good repair, working order and condition,and that Lessee will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. Lessor shall have no responsibility in any of these matters, or for the making of improvements or additions to the Equipment. If requested by Lessor, Lessee will enter into a maintenance contract for the Equipment with a Vendor, mutually acceptable to the parties to this Agreement. 3 Section 8.02. Taxes, Other Governmental Charges and Utility Charzes. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and, therefore, that the Equipment will be exempt from all taxes presently assessed and levied with respect to personal property. In the event that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form (except for income taxes of Lessor), Lessee will pay during the Lease Term, as the same respectively come due, all taxes and governmental charges �-- of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal or replacement of, or a modification, improvement or addition to the Equipment, as well as all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during the time this Agreement is in effect. Section 8.03. Tax Covenants. The Lessee will not make or direct any use of the proceeds of the obligation provided herein or any other funds of the Lessee which will cause such obligation to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the"Code"), to be"federally guaranteed"within the meaning of Section 149 of the Code, or to be a"private activity bond"within the meaning of Section 141 (a)of the Code. To that end,so long as any Rental Payments are unpaid,the Lessee,with respect to such proceeds and such other funds,will comply with all requirements of such Code sections and all regulations of the United States Department of the Treasury issued thereunder to the extent that such requirements are, at the time, applicable and in effect. Furthermore, to the extent applicable pursuant to Section 148 (f) of the Code, Lessee covenants to rebate all positive arbitrage to the United States of America. Lessee covenants that the Equipment will be used only for the purpose of performing one or more governmental or proprietary functions of Lessee, and the Equipment will not be used in a trade or business of any person or entity other than the Lessee on a basis different from the general public. The Lessee will not use or permit the use of the Property by any person for a "private business use" within the meaning of Section 141 (b) of the Code in such manner or to such extent as would result in the inclusion of interest received hereunder in gross income for federal income tax purposes under Section 103 of the Code. The Lessor and the Lessee shall at all times do and perform all acts and things permitted by la%v which are necessary or desirable in order to assure that the interest component of the Rental Payments will not be included in gross income for federal income tax purposes. The Lessee agrees and covenants, in addition to the above, to comply with all information filing requirements of the Code relating to this Agreement or any Individual Payment Schedule. Section 8.04. Provisions Regarding Insurance. At its own expense Lessee shall cause casualty,public liability and property damage insurance to be carried and maintained, or shall demonstrate to the satisfaction of Lessor that adequate self-insurance is provided with respect to the Equipment, sufficient to protect the Full Insurable Value (as that term is hereinafter defined) of the Equipment, and to protect Lessor from liability in all events. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. Lessee shall furnish to Lessor Certificates evidencing such coverage throughout the Lease Term and for each Individual Payment Schedule. Alternatively, Lessee may insure the Equipment under a blanket insurance policy or policies which cover not only the Equipment but other properties. If Lessee shall insure similar properties by self-insurance, Lessee will insure the Equipment by means of an adequate insurance fund set aside and maintained out of its fund balance. The term "Full Insurable Value" as used herein shall mean the full replacement value of the Equipment. Any insurance policy pursuant to this Section 8.04 shall be so written or endorsed as to make losses, if any, payable to Lessee and Lessor as their respective interests may appear. The Net Proceeds (as defined in Section 9.01 hereof) of the insurance required in this Section 8.04 shall be applied as provided in Article IX hereof. Each insurance policy provided for in this Section 8.04 shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interest of Lessor without first giving written notice thereof to Lessor at least 10 days in advance of such cancellation. Section 8.05. Advances.In the event Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Equipment in good repair and operating condition, Lessor may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may cause to be made such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by Lessor shall become additional rent for the lease term of the applicable Individual Payment Schedule or Schedules,which amounts, together with interest thereon at the rate of 18% per annum, Lessee agrees to pay. ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION: USE OF NET PROCEEDS Section 9.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment or any Unit thereof by making payment of the Purchase Price as provided herein or in the applicable Individual Payment Schedule, if prior to the termination of the Lease Term (a) the Equipment or any Unit 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 or the estate of Lessee or Lessor in the Equipment or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, Lessee and Lessor will cause the Net Proceeds (as defined below) of any insurance claim or condemnation awarded to be applied to the prompt 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. For purposes of Section 8.04 and this Article IX, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award after deducting all expenses (including attorneys'fees) incurred in the collection of such claim or award. Section 9.02. Insufficiency of Net Proceeds.Subject to the Lessee's right to terminate this Agreement or any Individual Payment Schedule, if the Net Proceeds are insufficient to pay in full the cost of any repair,restoration,modification or improvement referred to in Section 9.01 hereof, Lessee shall either (a) complete the work and pay any cost in excess of the amount of the Net Proceeds, in which case Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article VI hereof,or(b) if Lessee is not in default hereunder, Lessee shall pay to Lessor the amount of the then applicable Purchase Price set forth in the applicable Individual Payment Schedule(s), and upon such payment, the Lease Term of the applicable Individual Payment Schedule shall terminate and Lessor's security interest in the Equipment or the specific Unit thereof shall terminate as provided in Article XI of this Agreement. The amount of the Net Proceeds in excess of the then applicable Purchase Price, if any, may be retained by Lessee. 4 ARTICLE X DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE EQUIPMENT Section 10.01. Disclaimer of Warranties. AS BETWEEN LESSOR AND LESSEE (UNLESS THE LESSOR IS ALSO THE VENDOR, IN WHICH CASE THIS SECTION SHALL NOT APPLY), DELIVERY OF EQUIPMENT TO LESSEE AND EXECUTION BY LESSEE OF AN INDMDUAL PAYMENT SCHEDULE WITH RESPECT THERETO SHALL CONSTITUTE LESSEE'S ACKNOWLEDGEMENT THAT THE EQUIPMENT IS IN GOOD ORDER AND CONDITION AND IS OF THE MANUFACTURE,DESIGN AND CAPACITY SELECTED BY THE LESSEE,THAT THE LESSEE IS SATISFIED THAT THE SAME IS SUITABLE FOR ITS PURPOSE, AND THAT LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED WITH RESPECT TO EQUIPMENT,INCLUDING WITHOUT LIMITATION,ITS VALUE,DESIGN,CAPACITY,CONDITION,MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS INTENDED FOR USE OF THE EQUIPMENT, OR WARRANTY WITH RESPECT THERETO AND LESSOR HEREBY DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement or the existence, furnishing, functioning or Lessee's use of any item or products or services provided for in this Agreement. Section 10.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term, so long as Lessee shall not be in default hereunder, to assert from time to time whatever claims and rights, including warranties of the Equipment,which Lessor may have against the Vendor of the Equipment. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Equipment, and not against an Assignee, if any, of 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 hereunder. Lessee expressly acknowledges that an Assignee, if any,of Lessor makes, and has made, no representation or warranties whatsoever as to the existence or availability of such warranties of the Vendor of the Equipment. Section 10.03. Use of the Eouipment. Lessee will not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Agreement. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each item of the Equipment) with all laws of the jurisdictions in which its operations involving any item of Equipment may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Equipment; provided, however, that Lessee may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of Lessor, adversely affect the estate of Lessor in and to any of the items of the Equipment or its interest or rights under this Agreement. ARTICLE XI OPTION 1'0 PURCHASE The Lessee hereby has the option to purchase the Equipment or any Unit thereof and at the request of Lessee, Lessor's security interest in the Equipment or any Unit thereof will be terminated and the applicable Individual Payment Schedule shall terminate: (a) at the end of the Lease Term, upon payment in full of Rental Payments due hereunder, plus all past due charges, if any; or (b) at the end of the Lease Term, upon payment by Lessee of the then applicable Purchase Price as set forth in the applicable Individual Payment Schedule, plus all past due charges, if any; or (c) if the Lease Term is terminated pursuant to Article IX of this Agreement, in the event of total damage, destruction or condemnation of the Equipment or any Unit thereof and, if Lessee is not on such date in default under this Agreement, upon payment of the then applicable Purchase Price to Lessor plus all past due charges, if any, subject to the Lessee's right to terminate this Agreement or any Individual Payment Schedule. ARTICLE XII ASSIGNMENT, SUBLEASING, INDEMNIFICATION MORTGAGING AND SELLING Section 12.01. Assignment by Lessor. This Agreement, and the Lessor's right to receive payments hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor at any time subsequent to this execution, without the necessity of obtaining the consent of Lessee; provided, however, that no such assignment or reassignment shall be effective unless and until (i) Lessee shall have received notice of the assignment or reassignment disclosing the name and address of the assignee or subassignee, and (ii) in the event that such assignment or reassignment is made to a bank or trust company as trustee for holders of certificates representing interests in this Agreement, such bank or trust company agrees to maintain, or cause to be maintained, a book-entry system by which a record of the names and addresses of such holders as of any particular time is kept and agrees, upon request of Lessee, to furnish such information to Lessee. Upon receipt of notice of assignment, Lessee agrees to reflect in a book entry the assignee designated in such notice of assignment,and to make all payments to the assignee designated in the notice of assignment, notwithstanding any claim, defense, set-off or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise) that Lessee may from time to time have against Lessor, or the assignee. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements which may be reasonably requested by Lessor or its assignee to protect their interests in the Equipment and in this Agreement. Section 12.02. No Sale, Assignment or Subleasing by Lessee. This Agreement and the interest of Lessee in the Equipment may not be sold, assigned or encumbered by Lessee without the prior written consent of Lessor. Section 12.03. Release and Indemnification Covenants. To the extent permitted by the laws and Constitution of the State, Lessee shall protect, hold harmless and indemnify Lessor from and against any and all liability, obligations,losses,claims and damages whatsoever,regardless of cause thereof,and expenses in connection therewith,including,without limitation,counsel fees and expenses,penalties and interest arising out of or as the result of the entering into of this Agreement, the ownership of any item of purchase, delivery, rejection,storage or return of any item of the Equipment or any accident in connection with the operation, use, condition, possession,storage or return of any item of the Equipment resulting in damage to property or S injury to or death to any person. The indemnification arising under this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason. Lessee agrees not to withhold or abate any portion of the payments required pursuant to this Agreement by reason of any defects, malfunctions, breakdowns or infirmities of the Equipment or any Unit thereof. ARTICLE)III EVENTS OF DEFAULT AND REMEDIES Section 13.01. Events of Default Defined. The following shall be "events of default" under this Agreement and the terms "event of default"and "default"shall mean, whenever they are used in this Agreement, any one or more of the following events: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time specified herein; and (b) Failure by Lessee to observe and perform any other covenant, condition or agreement on its part to be observed or performed for a period of 30 days after written notice,specifying such failure and requesting that it be remedied as given to Lessee by Lessor(pursuant to the provisions of Section 14.01 hereof), unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided, however, 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 deemed appropriate by Lessor in its sole discretion, is instituted by Lessee within the applicable period and diligently pursued until the default is corrected. The foregoing provisions of this Section 13.01 are subject to: If by reason of force maieure Lessee is unable in whole or in part to carry out its agreement on its part herein contained, other than the obligations on the part of Lessee contained in Article VI hereof, Lessee shall not be deemed in default during the continuance of such inability. The term"force majeure"as used herein shall mean, without limitation, the following: acts of God, strikes, lockouts or other industrial disturbances;acts of public enemies,orders or restraints of any kind of the government of the United States of America or of the state wherein Lessee is located or any of their departments,agencies or officials,or any civil or military authority; insurrections;riots; landslides; earthquakes; fires; storms; droughts; floods; or explosions. Section 13.02. Remedies on Default. Whenever any event of default referred to in Section 13.01 hereof shall have happened and be continuing, Lessor shall have the right, at its sole option without further demand or notice, to take one or any combination of the following remedial steps with respect to any or all Units of Equipment: (a) With or without terminating this Agreement, retake possession of any or all Units of the Equipment and sell, lease or sublease any or all Units of the Equipment for the account of Lessee, holding Lessee liable for the rents and other amounts payable by Lessee hereunder and any applicable Individual Payment Schedule to the end of the Lease Term; and (b) Take whatever action at law or in equity may appear necessary or desirable to enforce its rights as the owner of any or all Units of the Equipment. Section 13.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall, as to each Unit of Equipment, be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. Any repossession or subsequent sale or lease by Lessor of any item or Unit of Equipment shall not bar an action against Lessee for a deficiency, and the bringing of any action or the entity of judgement against Lessee shall not bar Lessor's right to repossess any or all Units of Equipment. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. ARTICLE XIV MISCELLANEOUS Section 14.01. Notices. All notices,certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, to the parties at their respective places of business. Section 14.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 14.03. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 14.04. Amendments. The terms of this Agreement or of any Individual Payment Schedule shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the Lessor and the Lessee, nor shall any such amendment that affects the rights of Lessor's assignee be effective without such assignee's consent. Section 14.05. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument,and that this instrument shall pertain to and govern any Individual Payment Schedules executed hereunder. Section 14.06. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 14.07. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. Section 14.08. Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement shall bind either parry unless in writing gigned by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein or in any Individual Payment Schedule regarding this Agreement or the Equipment 6 leased hereunder. Any terms and conditions of any purchase order or other document(with the exception of Individual Payment Schedules or amendments or supplements pursuant hereto or pursuant to Section 14.04 hereof) submitted by Lessee in connection with this Agreement which are in addition to or inconsistent with the terms and conditions of this Agreement will not be binding on Lessor and will not apply to this Agreement. Lessee by the signature below of its authorized representative acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and conditions. IN WITNESS WHEREOF, Lessor has executed this Agreement in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers, and Lessee has caused this Agreement to be executed in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers. All of the above occurred as of the date first written below. LESSEE: Truckee Donner Public Utility District Atte st:VB By: r Ti tie:?.1E/�//T� .�/STD°/GT" Title: G P Date: � C LESSOR: Municipal Services Group, Inc. Attest: Title:1J l f ecwr Date: (� / 3 7 AMENDMENT TO MASTER MUNICIPAL LEASE AND OPTION AGREEMENT This Amendment is made as of the 5 th day of August 1993) between Truckee Donner Public Utility District ("Lessee") and Municipal Services Group, Inc. ("Lessor"). RECITALS A. Lessor and Lessee have entered into a Master Municipal Lease and Option Agreement dated as of July 7, 1993, (the "Lease"). B. Lessor and Lessee desire to amend the Lease to, among other things, clarify the nature of the Lease as a "firm" obligation of Lessee. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, it is hereby agreed as follows: 1. All terms capitalized but not defined herein shall have the meanings given to them in the Lease. 2. The Lease is hereby amended by deleting in its entirety Section 6.01 thereof and by substituting therefor the following new Section 6.01: Section 6.01. Rental Payments Constitute a Firm Obligation of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments hereunder and under each Individual Payment Schedule shall constitute a firm obligation and debt of Lessee. 3. Section 3.02 of the Lease refers to an Agency Agreement. However, no such Agency Agreement exists, and, accordingly, the second sentence of Section 3.02 of the Lease is hereby deleted in its entirety. 4. Section 13.02 of the Lease is hereby amended by adding thereto the following new remedy and subsection (c) thereof: (c) With or without terminating the Agreement, declare all Rental Payments due or to become due to be immediately due and payable by Lessee, whereupon such Rental Payments shall be immediately due and payable. 5. All other terms and conditions of the Lease not specifically amended by this Amendment shall remain in full force and effect and are hereby ratified and confirmed by Lessee. 6. This Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. i i J IN WITNESS WHEREOF, the parties by their duly authorized officers have executed this Amendment as of the date and year first above written. TRUCKEE DONNER PUBLIC UTILITY DISTRICT By: Its: General Manager MUNICIPAL SERVICES GROUP, INC. By: . LO. Its: L Y2 Ct� Agreement No. 909-3 EXMIT D DESCREMON OF EQUIPMENT The Equipment which is the subject of the Individual Payment Schedule No.3 to the Master Municipal Lease and Option Agreement is as follows: One (1) 1995 Caterpillar 928R Wheel Loader Together with all additions, accessions and replacements thereto. Lessee hereby certifies that the description of the Equipment set forth above constitutes an accurate description of the"Equipment", as defined in the attached Master Municipal Lease and Option Agreement applicable Individual Payment Schedule. LESSEE: Truckee Donner Public Utility District By: Title: Address of Equipment Upon Delivery and Acceptance: V �1u.ri i �= i pa. l _'.'C = . TEL No 'U 9,_i��1 Fritag, , i:ii1 r' , i1� EXHIBIT E SCHEDULE OF PAYMENTS DATED DATE: JA11 09, 1997 Truckee D01111,sr Public Utility District pM'r PAYMENT FmINCIPAL INTEREST PURCIIAnr q PATE PAYMENT PORTION PORT1014 PRICE _ 1 9 - Feb-97 1,858.03 1,399.88 468.16 97,944.01 2 9 - Mar-91 1,858.03 1,396.63 461.41 96,441.41 3 9 - Apr-97 1,855.03 1,403,40 454.62 94,913.17 4 9 - May-97 1,655.03 1,410.20 44.1.83 93,479.20 5 9 - Jun-97 1,A58.03 1,41?.04 440.99 91,979.51 G 9 - Jul-97 1,858.03 1,423.93 434.11 90,474.07 7 9 - Aug-97 1,958.03 1,430.02 427.21 aa,*42.86 B 9 - SAN-97 1,850,03 1,437,76 470.27 87,445-st 9 9 - Oct-97 1,8S8.03 1,444.74 413.29 85,923.03 10 9 - Nov-97 1,252.03 1,451.74 40G,29 84,394.37 11 9 - Dec-97 1,856.03 1,450.79 399.25 82,8S9.95 12 9 - Jan-98 1,95s.03 1,465.96 392.17 81,319.45 13 9 - Fab-96 1,958.03 1,472.97 385.06 79,773.14 14 9 - Mar-98 1,858.03 1,480.11 377.92 78,220.91 1S 9 - Apr-9a 1,858.03 1,487.29 370.74 76,662.73 16 9 - May-98 l,a5A.03 1,494•SU 363.53 7S,098.57 17 9 - Jun-98 1,256.03 1,501.75 556.28 73,520,42 18 9 - Jul-98 1,858,03 1,509.04 348.99 11,952.25 19 9 - Aug-98 1,858.03 1,b16.35 341.60 10,370.04 20 9 _ gep_98 1,858.03 1,523,71 334.32 6B,781.76 21 9 - Oct-98 1,958,03 1,531.10 326,93 67,107.19 :z 9 - Nov-98 1,85F..,03 1,538.52 319.51 65,586.9i 23 9 L7oc-98 1,899.01 :,545.99 312.04 63,980.30 ;4 9 - jai).99 1,058.03 1,553.48 304,55 62,367.S3 25 9 - Fab-99 1,B58.03 1,561.01 297.01 60,140.50 Mar-99 1,858.03 1.560.59 269.44 59,123.42 27 9 - Apr-99 1,858.03 1,576.70 281,83 57,492.03 ,�$ 9 - May-99 1,058.01 1,583.84 274.15 SS,AS4.39 29 9 - Oun-99 1,858.03 1,S91.52 26(;.51 S4,210.47 30 9 Jul-99 1,S59.03 1,599.24 2S8.79 .52.560.25 31 9 - Aug-99 1,858.03 1,907,00 251.03 5019D3.70 32 9 - Sep-99 1,855.03 1,624.79 243.24 49,240.90 33 9 - Oct-99 1,A5A.03 1,(.22.62 215.41 47,571.53 34 9 - NOV-99 1,958.03 1,630.49 227.54 45,895.86 35 9 - Dec-99 1,858.03 1,639.40 2191E.3 44,213,16 36 9 - Jatt-00 11856.03 1,646.35 211 68 42,52S.22 37 9 - Fab-00 1,8SA.03 1 654.33 203.70 40,910.20 38 Q - Mar-00 1,858.03 1,662.36 195.67 39,120,G9 39 9 - Apr-00 1,858,03 1,670,42 187.61 17,420.69 40 9 - May-00 1,85A.03 1,67B.52 179.S1 35,706.07 41 9 - Jun-00 1,Bb8.03 1,686.b6 171.37 22,994.91 42 9 - Jul-00 1,859.03 1,694.84 163.19 32,257.1G 43 9 - Aug-00 1,858.03 1,703.06 154.91 30,522.78 44 9 - sap-00 1,959.03 1,?11.32 146.71 28,781.75 45 9 - Oct.-00 1,958.03 1,719.62 139.41 27,034,05 46 9 - Nov-00 1,858.03 1,727.96 130.07 25,279.6S 47 9 - Pee-00 1,858.03 1,736.34 121.69 Y3,S18.52 48 9 - Jan-01 1,Rs8.03 1,144.76 113.z7 21,7S0.64 49 p - Fob-01 1,858.03 1,?53.23 104.90 19,975.99 50 9 - Mar-01 1,956.03 1,761.73 96.30 10,194,53 51 9 - Apr-01 1,850.03 1,770.27 87.76 1G,406.2S S2 9 - May-D1 1,058.03 1,770.86 79.17 14,E11.11 53 9 - Jun-01 1,8s8.03 1,7s7.49 70.54 12,809.09 54 p Jul-01 1,858.03 1,796.1L 61.87 11,000.16 55 9 - AU�1-01 1,858,03 1,804.R7 53.16 9,lIi4.3o 5F 9 - Sep-01 1,85R.03 1,813.41 44.41 7,161.49 5? 9 - cfat-01 1,859.03 1,822.42 35.61 S,531,67 58 9 NOV-01 1,858.03 1,831.26 26.77 3,694.84 59 9 - Dec-01 1,856.03 1,040.14 17.89 1,850.97 EO 9 - Jan-02 1,858,03 1,849.10 B.93 0.00 7U1k1, 111,481.1<3 96,025.00 14,95i.83 LESSEE: Truckee D01111ftr Public Utilit-y pintrict BY' ..,�. �_.,.....w..�:..P-<. ....,......._w..K....�.-.�.,.�.....r.,... _., ._�..._.,..._.,.m..._.-ate =� i� -� 1. t i�i C a. TEL do Fri r EX BIT it SCHEDULE OF PAYWI TI a Page 2 of 2 Base Interest Rate: 5.82% U. S. Treasury Note Yield: 6.12% U. S. Treasury Note Index Percent: 95.100/u Adjusted Base Interest Rate: Dated Date: January 9, 1997 Provided all documents have been returned in a form acceptable to Lessor within thirty (30) days of the Dated Date (the 'Period"), then the Base Interest Rate can remain in effect during the Period. In the event all documents have not been returned within the Period, in a form acceptable to Lessor, and/or if the U. S. Treasury Note Yield for a maturity comparable to the Lease Teri increases significantly, the Lessor reserves the right to adjust and determine a new Base Interest Rate (the "Adjusted Base Interest Rate") pursuant to the provisions hereof. The Adjusted Base Interest Rate shall be determined by multiplying the U. S. 'Treasury, Note Yield for a maturity comparable to the Lease Term (as of the business day immediately preceding the receipt of the documents by the Lessor) by the U. S. Treasury Note Index Percent. Such Adjusted Base Interest Rate shall be the applicable interest rate for the principal balance of the Equipment which is the subject of this Individual Payment Schedule, and the Lessor and the Lessee shall execute a revised Exhibit I; to this Individual Payment Schedule to acknowledge such change. LESSEE: Truckee Donner Public Utility District By: Title: Agreement No.909-3 EXHWrr F ACCEPTANCE CERTIFICATE The undersigned,as Lessee under the Master Municipal Lease and Option Agreement(the"Agreement') numbered 909,with Municipal Services Group, Inc. (Lessor"), acknowledges receipt in good condition of the Equipment described in the Agreement or in the applicable Individual Payment Schedule attached thereto this day of and certifies that Lessor has fully and satisfactorily performed all of its covenants and obligations required under the Agreement. Lessee confirms that it will commence payments in accordance with Article 6 of the Agreement or the provisions of the applicable Individual Payment Schedule. The undersigned officer of the Lessee hereby reaffirms in all respects the Certificate as to Arbitrage attached as Exhibit C to the Agreement, and represents that, to the best of his or her knowledge, information and belief, the expectations therein expressed were reasonable as of the Accrual Date on which they were made,and are reasonable as of this date, and that there were,and are as of this date,no facts,estimates or circumstances other than those expressed therein that would materially affect the expectations expressed therein. LESSEE: Truckee Donner Public Utility District By: Title: V111 Agreement No.909-3 DPP G INSURANCE COVERAGE REQUIREMENTS TO: Municipal Services Group, Inc. 5125 South Kipling Parkway Suite 300 Littleton, Colorado 80127 FROM: Truckee Donner Public Utility District P. O. Box 309 Truckee, California 96160 SUBJECT:INSURANCE COVERAGE REQUIREMENTS 1. In accordance with Section 8.03 of the Master Municipal Lease and Option Agreement No. 909, we have instructed the insurance agent named below (please fill in name, address, and telephone number) to issue: a. All Risk Physical Damage Insurance on the leased Equipment of Unit thereof(as defined in the Agreement) evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming Lessor"and/or its assign."Loss Payee. b. Public liability Insurance evidence by a Certificate of Insurance naming"Lessor and/or its assigns"as an Additional Insured. Minimum Coverage Required: $500,000.00 per person $500,000.00 aggregate bodily injury liability $300,000.00 property damage liability OR 2. Pursuant to Section 8.03 of the Agreement, we are self-insured for all risk, physical damage, and public liability and will provide proof of such self-insurance in letter form together with a copy of the statute authorizing this form of insurance. 3. Proof of insurance coverage will be provided to Lessor prior to the time that the Equipment or Unit thereof is delivered to us. LESSEE: Truckee Donner Public Utility District By: Title: Please attach the Insurance Certificate to this Exhibit. 1X Form 8038.GC Information Return for Small Tax-Exempt Governmental Bond issues, Leases, and Installment Sales OMB No.1545-0720 (Rev. May 1995) ► Under Internal Revenue Code section 149(e) ► For calendar year ending 19 ..... Department of the Treasury Internal Revenue sarace (Use Form 8038-G if the issue price of the issue is$100,000 or more.) 11 Reporting Authority Check box if Amended Return 0- 1 Issuer's name 2 Issuer's employer identirkmtion number Truckee Donner Public Utility District 3 Number and street(or P.O. box if mail is not delivered to street address) Room/suite P. 0. Box 309 4 City,town,or post office,state,and ZIP code Truckee, CA 96160 Description of Obligations 5 Issue price of small tax-exempt governmental obligations reported on this form. . . , 5 $96,525.00 6 Check the box that most nearly approximates the weighted average maturity of the obligation(s): a © Less than 5 years b ❑ From 5 to 10 years c ❑ More than 10 years 7 Check the box that most nearly approximates the weighted average interest rate on the obligation(s): a ❑ Less than 5% b ® From 5% to 10% c ❑ More than 10% 8 Total issue price of the obligation(s) reported on line 5 that is/are: a Obligations; :ssued in the form of a lease or installment sale . . . , . . . . . . ga 96,525.00 b Obligation(s) designated by the issuer under section 265(b)(3)(B)(i)(III) . . . , . . , 8b 96,525.00 F c Obligation(s) issued to refund prior issues . . . . , , , , , , , . . . 8c d Loans made from the proceeds of another tax-exempt obligation . . , . . , . . . . 8d 9 Check box if 'issuer has elected to pay a penalty in lieu of arbitrage rebate [] Under penalties of penury, i declare that I have examined this return arC accomparytng schedules and statements, and tc the best of my knowledge Please arc beiief,they are true, correct,and complete. Sign Here Issuer's authonzed representative Date Type or print name and title Paperwork Reduction Act Notice General Instructions an issue price of less than $100,000. Each We ask for the information on this form to such separate return should specify the carry out the Intemal Revenue laws of the Section references are to the Internal calendar year in which the issue was issued.United States. You are required to give us the Revenue Code unless otherwise noted. An issuer of a tax-exempt bond used to information. We need it to ensure that you are purpose of Form finance construction expenditures must file a complying with these laws. separate Form 80387GC for each issue to The time needed to complete and file this Form 8038-GC is used by issuers of give notice to the IRS that an election was form varies depending on individual tax-exempt governmental obligations to made to pay a penalty in lieu of arbitrage circumstances. The estimated average time provide the IRS with the information required rebate(see line 9 instructions). is: by section 149(e)and to monitor the Filing a consolidated retum.—For all Learning about the requirements of sections 141 through 150. tax-exempt governmental obligations with law or the form 1 hr., 46 min. Who Must File issue prices of less than$100,000 that are not reported on a separate Form 8038-GC, Preparing the form . . . 2 hr., 50 min. Issuers of tax-exempt governmental an issuer must file a consolidated information Copying, assembling,and obligations with issue prices of less than return including all such issues issued within sending the form to the IRS 16 min. $100,000 must file Form 8038-GC. the calendar year. If you have comments concerning the Issuers of a tax-exempt governmental Thus, an issuer may file a separate Form accuracy of these time estimates or obligation with an issue price of$100,000 or 8038-GC for each of a number of small suggestions for making this form simpler, we more must file Form 8038-G, Information issues and report the remainder of small would be happy to hear from you. You can Return for Tax-Exempt Governmental issues issued during the calendar year on one write to the Internal Revenue Service, Obligations. consolidated Form 8038-GC. However, a Attention:Tax Forms Committee, PC:FP, Filing a separate return.Issuers have the separate Form 8038-GC must be filed to give Washington, DC 20224. DO NOT send the option to file a separate Form 8038-GC for the IRS notice of the election to pay a penalty form tothis address: Instead, see Where To File onn page 2. any tax-exempt governmental obligation with in lieu of arbitrage rebate. Cat. No.64108B Form 8038-GC (Rev.5-95) BANK ELIGI aUM CERTIFICATE THIS BANK ELIGIBILITY CERTIFICATE is entered into this day of 19 and executed by the Truckee Donner Public Utility District, as Lessee, supplementing and adding to Master Municipal Lease and Option Agreement No. 909. WITNESSETH: WHEREAS, the Lessor and the Lessee have entered into Master Municipal Lease and Option Agreement No. 909; and WHEREAS, the Lessee desires to supplement the Agreement; NOW THEREFORE, in consideration of the premises hereinafter contained, the Lessee hereby certifies that: The Lessee has not issued or effected the issuance of, and reasonably anticipates that it shall not issue or effect the issuance of more than Ten Million Dollars ($10,000,000.00) of tax-exempt obligations during the 1997 calendar year, and hereby designates the lease of the Equipment to which this certificate pertains as a"qualified tax-exempt obligation,"as defined by Section 265 (b) (3) of the Internal Revenue Code of 1986, as amended. In witness whereof, the Lessee has caused this Supplement to the Agreement to be executed by its respective officers thereunto duly authorized, all as of the date and year first above written. LESSEE: Truckee Donner Public Utility District By: Title: X SMALL ISSUER F:?EmirTION CERTIFICATE THIS SMALL ISSUER EXEMPTION CERTIFICATE is entered into this day of 19 and executed by the Truckee Donner Public Utility District, as Lessee, supplementing and adding to Master Municipal Lease and Option Agreement No. 909. WITNESSETH: WHEREAS, the Lessor and the Lessee have entered into Master Municipal Lease and Option Agreement No. 909; and WHEREAS, the Lessee desires to supplement the Agreement; NOW THEREFORE, in consideration of the premises hereinafter contained, the patties hereto agree to supplement the Agreement as follows: The Lessee has not issued or effected the issuance of,and reasonably anticipates that it shall not issue or effect the issuance of, more than Five Million Dollars ($5,000,000.00) of tax-exempt bonds (other than private activity bonds) (such terms being within the meaning of Section 148 (f)(4)(C) of the Internal Revenue Code of 1986, as amended), during the 1997 calendar year. In witness whereof, the Lessee has caused this Supplement to the Agreement to be executed by its respective officers thereunto duly authorized, all as of the date and year first above written. LESSEE: Truckee Donner Public Utility District By: Title: Xl THIS SPACE FOR USE of FILING OFFICER _., FINANCING STATEMENT — FOLLOW INSTRUCTIONS CAREFULLY This Financing Statement is presented for filing pursuant to the Uniform Commercial Code and will remain effective with certain exceptions,for 5 years from date of filing. A. NAME&TEL#OF CONTACT AT FILER(optional) B.FILING OFFICE ACCT.#f (optional) C. RETURN COPY TO: (Name and Mailing Address) I LJ D.OPTIONAL DESIGNATION(if applicable):ULESSORILESSEE U CONSIGNOR/CONSIGNEE NON-UCC FILING 1. DEBTOR'S EXACT FULL LEGAL NAME-insert only one debtor name (1a or 1b) 1 a.ENTITY'S NAME Truckee Donner Public Utility District OR 1 b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 1 c.MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE P. 0. Box 309 Truckee CA USA 96160 1 d.S.S.OR TAX I.D.# OPTIONAL Ile.TYPE OF ENTITY 11.ENTITY'S STATE 1 U.ENTITY'S ORGANIZATIONAL I.D.,t1,if any ADD'NL INFO RE OR COUNTRY OF ENTITY DEBTOR I JORGANIZATION NONE 2.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME-insert only one debtor name(2a or 2b) 2a.ENTITY'S NAME OR 2b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 2c.MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE 2d.S.S.OR TAX I.D.A OPTIONAL 12e.TYPE OF ENTITY 2f.ENTITY'S STATE 12g.ENTITY'S ORGANIZATIONAL I.D.B,if any ADD'NL INFO RE OR COUNTRY OF ENTITY DEBTOR I JORGANIZATION 1 11 NONE 3. SECURED PARTY'S(ORIGINAL SIP or ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME-insert only one secured party name(3a or 3b) 3a.ENTITY'S NAME OR 3b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c.MAILING ADDRESS CITY STATE COUNTRY IPOSTALCODE 4.This FINANCING STATEMENT covers the following types or Items of property: One 1995 Model 928R Caterpillar wheel loader, together with all additions, accessions, and replacements thereto. Serial No. : 5.CHECK This FINANCING STATEMENT is signed by the Secured Party instead of the Debtor to perfect a security interest 7.If filed In Florida(check one) BOX (a)in collateral already subject to a security interest In another jurisdiction when it was brought into this state,or when the Documentary Documentary stamp - lif applicablei debtor's location was changed to this state,or(b)in accordance with other statutory provisions[additional data may be required] 11 stamp tax paid 11 tax not applicable 6. REQUIRED SIGNATURE(S) 8. This FINANCING STATEMENT is to be filed(for recordl (or recorded)in the REAL ESTATE RECORDS Attach Addendum [if applicable] ' 9. Check to REQUEST SEARCH CERTIFICATE(S)on Debtors) [ADDITIONAL FEE] (optional) All Debtors Debtor 1 DDebtor 2 REORDER FROM (1)FILING OFFICER COPY—NATIONAL FINANCING STATEMENT(FORM UCC1)(TRANS)(REV. 12/18/95) Registry, Inc. 51♦PIERCE ST. P.O.BOX 216 ANOKA,MN 55303 (612)421.1713