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I - r T ( 131 ,I ,-- TEXAS LEAS E - P DR CHASE AGREEMENT -- This LEASE-PURCHASE AGREEMENT ("Lease") is made and entered into on Apm19. 1995 by and between BANC ONE LEASING CORPORATION, Municipal Leasing Division, with offices at 140117th, Suite 900, Denver, CO 80202 (herein called "Lessor") and City of San Marcos. with its principal office at 630 East Hopkins. San Marcos. Texas 78666 (herein called "Lessee"), wherein it is agreed as follows: 1. LEASE OF EQUIPMENT. Subject to the terms and conditions hereof, Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor the equipment described in Exhibit A attached hereto and made a part hereof, with all replacement parts, repairs, additions and accessories incorporated therein or affixed thereto (herein collectively called the "Equipment"). 2. DELIVERY. The Equipment will be delivered at the location specified in Exhibit A (the "Equipment Location"), if other than Lessee's business address. Lessee will pay all transportation and other costs, if any, incurred in connection with the delivery and installation of the Equipment. 3. TERM. This Lease will become effective upon the execution hereof by Lessee and Lessor. The term of this Lease will commence on the date the Equipment is installed and ready for use as determined by the Receipt Certificate. The term of this Lease shall continue for the Rental Term set forth in Exhibit B with the first payment due as set forth in the Receipt Certificate and then in accordance with Exhibit B. < 4. PAYMENTS. The Payments pursuant to this Agreement shall commence as of the date of acceptance of the Equipment described herein by Lessee as evidenced by return of a Receipt Certificate (Exhibit C to each Delivery Order) A portion of each Payment is paid as and represents payment of interest and Exhibit B sets forth the interest component of each Payment. All Payments shall be made payable to Lessor or Lessor's assignee at the address designated on periodic invoices submitted for payment hereunder. Notwithstanding any dispute between Lessee and Lessor, Lessee shall make all Payments when due and shall not withhold any Payments or portions thereof pending fmal resolution of such dispute. Lessee hereby covenants it will not assert any right of setoff or counterclaim against its obligation to make the Payments provided for. The foregoing notwithstanding, in the event that Lessee is not such an entity whose obligations are exempt from federal income taxation under Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code") or if for any reason the use of the Equipment wotùd cause any interest payment hereunder to be subject to federal income taxation, or if Lessee takes any action or omits to take any action, including, without limitation, complying with all reporting and filing requirements of the Code, such as the filing of a Form 8038, the restùt of which is to cause any interest payment hereunder to be subject to federal income taxation, then Lessee agrees to pay Lessor, its assignees, and any participants with such, an additional amount which, together with the amount of interest to be paid by Lessee under this Lease, puts Lessor, its assignees, and any participants with such, in the same after- tax position, as determined by Lessor, they wotùd have been in had such payments been exempt from federal income taxation under Section 103 of the Code; provided, however, that no such additional payments will result in Lessee paying interest at a rate that wotùd restùt in the payment of interest in excess of the maximum "net effective interest rate" obligations of political subdivisions, such as Lessee, are permitted to bear under the provisions of Article 717K.2, Texas Revised Civil Statutes, as amended. Lessor agrees to provide Lessee with copies of the calculation of the amount of the additional payments payable under this paragraph. CERTïFlED COpy