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02-14-2012 Agenda PacketSCHERTZ CITY COUNCIL REGULAR SESSION MUNICIPAL COMPLEX COUNCIL CHAMBERS 1400 SCHERTZ PARKWAY BUILDING #4 SCHERTZ, TEXAS 78154 02-14-2012 Council Agenda AGENDA TUESDAY, FEBRUARY 14, 2012 AT 6:00 P.M. The City Council may, for its convenience or for the convenience of City Staff or persons in attendance, modify the order in which items on the agenda are considered by the City Council. Call to Order – Regular Session – 6:00 p.m. Invocation and Pledges of Allegiance to the Flags of the United States and State of Texas. City Events • Announcements of upcoming City Events (D. Harris/J. Bierschwale) Presentation • Capital Improvement Project update (Councilmember Edwards/J. Kessel/P. Gaudreau) • Update regarding the upcoming Wilenchik Walk for Life. (D. Harris/M. Spence) Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered. Consent Agenda The Consent Agenda is considered to be self-explanatory and will be enacted by the Council with one motion. There will be no separate discussion of these items unless they are removed from the Consent Agenda upon the request by the Mayor or a Councilmember. 02-14-2012 City Council Agenda Page - 2 - 1. Minutes - Consideration and/or action regarding the approval of the minutes of the Regular Meeting of February 7, 2012. 2. Resolution No. 12-R-11 – Consideration and/or action approving a Resolution authorizing a Business Class Customer Service Order and Service Agreement with Time Warner Cable, and other matters in connection therewith. (J. Kessel/M. Clauser) 3. Resolution No. 12-R-12 – Consideration and/or action approving a Resolution authorizing a Lease Agreement with Hewlett-Packard Financial Services, and other matters in connection therewith. (J. Kessel/M. Clauser) 4. Resolution No. 12-R-13 – Consideration and/or action approving a Resolution authorizing a purchase agreement with U. S. Autoweapons, and other matters in connection therewith. (J. Bierschwale/D. Taylor) 5. Resolution No. 12-R-14 – Consideration and/or action approving a Resolution authorizing the purchase of Dispatch Center Workstations, and other matters in connection therewith. (J. Bierschwale/D. Taylor) Discussion and/or Action Items 6. Resolution No. 12-R-15 - Consideration and/or action approving a Resolution authorizing the pursuit of a Power-up Grant from the Guadalupe Valley Electric Cooperative, Inc., to fund the proposed Schertz Parkway and Main Street Holiday Lighting project. (D. Harris/G. Logan) Executive Session Called under Section 551.071 Texas Government Code Litigation, pending or contemplated litigation; Section 551.072 Texas Government Code - Deliberation regarding the purchase, exchange, sale, lease, or value of real property, or real estate, Section 551.074 personnel matters, and Section 551.087 Texas Government Code – Deliberation regarding Economic Development Negotiations. Reconvene into Regular Session 7. Take any action deemed necessary as a result of the Executive Session. Requests and Announcements 8. Requests by Mayor and Councilmembers that items be placed on a future City Council agenda. 9. Requests by Mayor and Councilmembers to City Manager and Staff for information. 10. Announcements by Mayor and Councilmembers • City and community events attended and to be attended 02-14-2012 City Council Agenda Page - 3 - • City Council Committee and Liaison Assignments (see assignments below) • Continuing education events attended and to be attended • Recognition of actions by City employees • Recognition of actions by community volunteers • Upcoming City Council agenda items 11. Announcements by City Manager • Citizen Kudos • Recognition of City employee actions • New Departmental initiatives Adjournment CERTIFICATION I, BRENDA DENNIS, CITY SECRETARY OF THE CITY OF SCHERTZ, TEXAS, DO HEREBY CERTIFY THAT THE ABOVE AGENDA WAS PREPARED AND POSTED ON THE OFFICIAL BULLETIN BOARDS ON THIS THE 10th DAY OF FEBRUARY 2012 AT 1:30 P.M., WHICH IS A PLACE READILY ACCESSIBLE TO THE PUBLIC AT ALL TIMES AND THAT SAID NOTICE WAS POSTED IN ACCORDANCE WITH CHAPTER 551, TEXAS GOVERNMENT CODE. Brenda Dennis Brenda Dennis, TRMC, MMC City Secretary I CERTIFY THAT THE ATTACHED NOTICE AND AGENDA OF ITEMS TO BE CONSIDERED BY THE CITY COUNCIL WAS REMOVED BY ME FROM THE OFFICIAL BULLETIN BOARD ON _____DAY OF _______________, 2012. ____________________________Title:__________________________ This facility is accessible in accordance with the Americans with Disabilities Act. Handicapped parking spaces are available. If you require special assistance or have a request for sign interpretative services or other services please call 210 619-1030 at least 24 hours in advance of meeting. COUNCIL COMMITTEE AND LIAISON ASSIGNMENTS Mayor Baldwin Interview Board for Boards and Commissions Investment Advisory Committee ASA Commuter Rail District Board – Lone Star Alamo Area Council of Governments Cibolo Valley Local Government Corporation Schertz Seguin Local Government Corporation Mayor Pro-Tem Scagliola – Council Place 2 Animal Control Advisory Committee Interview Board for Boards and Commissions Sweetheart Advisory Committee Councilmember Fowler – Place 1 Interview Board for Boards and Commissions Schertz Housing Board Liaison Councilmember Antuna - Place 3 Audit Committee 02-14-2012 City Council Agenda Page - 4 - Councilmember Edwards – Place 4 Investment Advisory Committee Audit Committee Hal Baldwin Scholarship Committee Councilmember Carpenter – Place 5 TIRZ II Board Hal Baldwin Scholarship Committee CIP Projects Status Update Animal Control Renovation/Expansion This design contract was approved by Council on December 20, 2011. Currently the schematic design has been approved and this project is in the beginning of the design development phase. An expanded status report is planned for the February 28 Council Meeting. A preliminary budget has been prepared for this project that is within the approved $2,250,000.00 Bond amount. We are anticipating a 3 month design period. Parks and staff are proposing to temporally relocate Animal Services during the construction period in order to allow the successful contractor to perform the work in one continuous operation as opposed to requiring a “phased” approach to completing the work. Staff is confident that any additional cost associated with the temporary relocation will be realized in construction cost savings. Soccer Fields Renovation This design contract was ratified by Council on December 20, 2011. There have been several meetings with the design team and staff is currently reviewing three concept schemes from which a final layout will be selected and then the design team will be released to proceed with final design documents. The time required to complete this design has not been established but is anticipated to be four to six months from final concept selection. An expanded status report is planned for the February 28 Council Meeting. A preliminary budget has been prepared for this project that is within the approved $6,000,000.00 Bond amount. Aquatic Facility A Request For Qualifications (RFQ) was issued on December 12, 2011 and six firms responded on January 26, 2012. A review and selection committee is being formed to review these firm’s qualifications and create a ranking based on the information provided. The City has established a 60 day selection time period in the RFQ. A preliminary budget has been prepared for this project that is within the approved $6,625,000.00 Bond amount. PLAYSCAPE Staff is investigating three manufactures as potential suppliers for the new playscape. It is the intent to capture the main architectural elements currently represented by the existing structure using modern materials that conform to the prescribed Codes. An expanded status report is planned for the February 28 Council Meeting. Main Street The Main Street $1,000,000.00 bond is pending the outcome of the sector study by Gateway Planning. Agenda No. 1 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: City Secretary Subject: Minutes BACKGROUND The City Council held a regular meeting on February 7, 2012. FISCAL IMPACT None RECOMMENDATION Staff recommends Council approve the minutes of the Regular Meeting of February 7, 2012. ATTACHMENT Minutes Regular meeting February 7, 2012. 02-07-2012 Minutes MINUTES REGULAR MEETING February 7, 2012 A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on February 7, 2012, at 6:00 p.m., in the Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to-wit: Mayor Pro-Tem David Scagliola Councilmember Jim Fowler Councilmember George Antuna Councilmember Michael Carpenter Councilmember Cedric Edwards Staff Present: City Manager John Kessel Assistant City Manager John Bierschwale Chief of Staff Bob Cantu City Attorney Michael Spain City Secretary Brenda Dennis Mayor Hal Baldwin was absent. CALL TO ORDER REGULAR MEETING Mayor Pro-Tem Scagliola called the meeting to order at 6:00 p.m. and welcomed everyone in attendance. Mayor Pro-Tem Scagliola stated that Mayor Baldwin would not be in attendance this evening as he had a previous engagement. INVOCATION AND PLEDGES OF ALLEGIANCE TO THE FLAGS OF THE UNITED STATES AND STATE OF TEXAS. Councilmember Fowler gave the invocation followed by the Pledges of Allegiance to the Flags of the United States and State of Texas. City Events Announcements of upcoming City Events (D. Harris/J. Bierschwale) Mayor Pro-Tem Scagliola recognized Assistant City Manager John Bierschwale who stated that the Northeast Partnership meeting will be held on February 9, 2012, at 11:30 a.m. at the Olympia Hills Golf Course and Conference Center. Mr. Bierschwale also stated that there would be a Schertz Chamber of Commerce After-Hours Mixer on February 9, 2012, at 5:30 p.m. at the Schertz Civic Center sponsored by the Schertz Area Arts Council. Presentation • Presentation/discussion and possible action regarding Landmark Property designation. (John Hillert Homestead) (D. Weirtz) 02-07-2012 Minutes Mayor Pro-Tem Scagliola recognized the Chair of the Historical Preservation Committee, Dean Weirtz, who reminded Council that in December 2011, the Kramer House/Schertz Visitors Center was designated as a Historical Landmark Property. Mr. Weirtz showed Council the plaque which will be placed at the property and asked permission to place the plaque on the property. Mr. Weirtz also mentioned that Council and staff have received the Schertz Historical Preservation Committee Annual Report. Mr. Weirtz provided a briefing regarding the John Hillert Homestead property answering questions from Council. Mr. Weirtz introduced the following family members who were present this evening: Conrad and Helen Hillert, and Arthur and Kelly Hillert. Mayor Pro-Tem Scagliola recognized Councilmember Carpenter who moved, seconded by Councilmember Fowler to approve the John Hillert Homestead as a Landmark Property designation. The vote was unanimous. Motion carried. Mayor Pro-Tem Scagliola and Chair Dean Weirtz presented the Hillert Family with the plaque which will be displayed on the John Hillert Homestead property. Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered. Mayor Pro-Tem Scagliola provided the following comments: • He shares the fundamental belief that residents have the right to be heard. • The Ordinance that was changed regarding the time limit for speaking was initiated months ago, and was not intended to stifle the voice of the residents. • Three minutes provides sufficient time to present information, and residents will be provided three uninterrupted minutes, free of distraction. The clock will run for three minutes, and then a yellow warning light will come on at the three minute – fifteen second mark. Then a red warning light will flash signaling you to please complete your thoughts. • If you are on the list to speak, you will be allowed to speak for three minutes. • You will not be allowed to give your time in whole or part to anyone else. • I will not recognize anyone to speak more than once. If only absolutely necessary this may be allowed. • This is a Council meeting, not a Town Hall meeting, and not a debate. 02-07-2012 Minutes Mayor Pro-Tem Scagliola recognized the following who spoke regarding their issues with their homes, Pulte Homebuilders, new information regarding their homes, their continued request for buy-outs from Pulte, and thanking the City for their support: • Faye Touve, 5213 Brookline • Bruce Touve, 5213 Brookline • Janice Lapham, 5236 Columbia Drive • Mary Schmitt, 5436 Storm King • Donna Fitzgerald, 5304 Storm King • John Fitzgerald, 5304 Storm King • Melinda Ruiz, 5408 Storm King • Sherry Clark, 5269 Brookline • Ryan Mahoney, 5233 Columbia Drive • Dan Hollistel, 5525 Columbia Drive • James Evatt, 5568 Columbia • Heather Camelio, 5224 Brookline • Ken Russel, 6034 Mule Deer • Janet Ahmad, 18 Silver Horn, San Antonio, Homeowners for Better Building • Tricia Mattison, P.O. Box 3022, 78148, Homeowners for Better Building • Ralph Houge, 6060 Rooster Run • Ryan Travis, 3605 Storm Ridge • Ryan Casas, 5228 Brookline Mayor Pro-Tem Scagliola recognized City Manager John Kessel who stated that normally he does not debate issues. Mr. Kessel stated the primary issues with HOA properties are private issues between the different members of the HOA or the general public and the Executive Officer of the HOA. The HOA Executive Officer does have the right to swear criminal trespass charges for violations of the use of HOA property. It is certainly not the City’s position to get involved in those types of debates. Mayor Pro-Tem Scagliola recognized Police Chief Don Taylor who came forward rebutting comments made during the Hearing of Residents that he on Saturday, at the Fairhaven Open House, told individuals that if they did not leave they would be arrested. Chief Taylor stated that Ms. Taylor, President of the Fairhaven HOA, did call on Saturday and she stated that she did not want the citizens in the pool parking lot area. Chief Taylor went out to the Fairhaven Open House meeting area. He stated that he has the incident that occurred on Saturday on video, as well as on audio, and could play it this evening. Chief Taylor stated for the record that what he said was; “We are not going to arrest anyone; we are not going to ask you to leave.” He further stated that on “Monday, should Ms. Taylor choose, she could go to court and seek charges against the residents, and should the judge approve that, then he could file a warrant and then you would be arrested.” Mayor Pro-Tem Scagliola provided his final comments: 02-07-2012 Minutes He was wondering why some of the residents wanted to put this item on an agenda for discussion. He stated that he could put this on the agenda, but he believes that would not do any good. It would not give you a voice. If we put it on the agenda then only the Council would be able to talk amongst themselves. It’s not a give and take situation, as in the conduct of a Town Hall meeting. The Hearing of Residents section is your best opportunity to speak to the Council and staff directly, and he does appreciate that. This is what the process is all about. Mayor Pro-Tem Scagliola gave the following reasons why he does not want to speak out and put this item on an agenda: • It is never a good idea to brainstorm in an open mic. It is too easy for comments to be taken out of context. • It is never a good idea to give away your strategy, because you can lose your tactical advantage. Mayor Pro-Tem Scagliola stated he hopes that it is clear where he stands. A leader by definition takes care of his people. The residents of the City are his people; he cannot make it any clearer than that, and he thanked everyone for attending and voicing their concerns. Mayor Pro-Tem Scagliola recognized City Manager John Kessel who stated that each time they have reached the end of the public comments section, he provides very important comments for the citizens. He stated that some of you are hearing his comments for the third or fourth time, and some are hearing his comments for the first time. He stated he is going to repeat some of those comments and that all are very important. He stated the first and most important thing is, and no misunderstanding, everyone who is here from Fairhaven and from other neighborhoods is welcome. This is City Hall; this is an area where you should feel comfortable coming in and visiting. Hopefully, you will see a smile on his face. Hopefully when he walks in the door, he greets you, and makes you feel welcome. It is important to him that you feel comfortable, as this is important to you, and it is important to our City Council. This evening he has taken a few notes. He will try to address some of the items mentioned and he will try to answer some of the questions that came up. In regards to open records requests, to his knowledge, the City has provided complete and accurate responses to every open records request. He is not aware of items that the City has not provided. He also stated that if one party has received information, then certainly the City would make that available to others. There is nothing that the City would have that we would not turn over. The question that came up this evening was if we do not have it, then why can we not get it? The City perhaps is in the same circumstances to a certain degree when requesting voluntary information. He stated he can assure everyone that every single request has been passed on to Pulte. One of the things he recently did was provide Pulte with all City Council DVD’s and minutes and sent them directly to Pulte, just to make certain that he 02-07-2012 Minutes didn’t miss something. He will continue to do this regularly so that they are able to hear that information first hand and what other additional information he has received and is able to share with them. He stated that he did not remember saying that he has spoken to Pulte every day, and wants to make a slight correction. He speaks with Pulte sometimes a couple of times a day, and sometimes a couple of times a week. There has not been a week where he has not spoken to Pulte either by email or in person, and he will continue to do that. The issues that continue to come up are private contracts between two private parties, and civil matters, and what is the proper role of local government in resolving those contract issues. This is a difficult issue when we are not a party to those contracts. We do not have legal standing. We do not have the ability to enforce part of a contract that someone may want us to enforce. We do not have that ability. We are not saying that our hands are tied; we are saying that we are not a party to that. This has actual implications that we all know and appreciate; we do not want government getting into our personal business on many things. This is not a shield that we hide behind. In fact, what he has offered at every meeting is to sit down and facilitate meetings between Pulte and the Fairhaven residents. Again, he would remind everyone that in order to accomplish this, it takes two willing parties to sit down. The City has always been willing to meet with both two sides, and both sides must be willing to meet. If either side says that they cannot meet, then there is nothing the City can do if we are not party to the contracts. We do not have standing, and we cannot get the two sides to sit down and talk. We cannot go back in time, it is not realistic, and we can not force something to happen that is voluntary based, unless individuals and the corporation agree to meet. Mr. Kessel continues to offer to create that dialogue to meet. Some individuals take him up on it, and some do not. Mr. Kessel stated that he and his staff, Mr. Bierschwale and Mr. Harris, have met with individuals, and some individuals met with the Chief over the weekend. We will continue to make ourselves available. Mr. Kessel stated that he believes the City Council is certainly aware of the offer to go visit the citizens, and he does not believe that the City needs to post public hearings to have you welcome someone into your home. Two Councilmembers can attend at a time, and if citizens want to set this up, there is no reason that this could not happen and be managed. Mr. Kessel closed by thanking everyone for coming tonight. Mayor Pro-Tem Scagliola recognized City Attorney Michael Spain who provided the following points: • We can ask Pulte for documents. We can urge them to be responsive. He assured everyone that they have done so, but we can not require Pulte to give us things that they are not legally obligated to give us. • We can not subpoena documents that we do not have a legal right to have. We again have asked them and urged them; we can not do anything more. When residents have asked for copies of documents that the City has, we have provided copies of 02-07-2012 Minutes everything we have. We cannot give you documents that we do not have even if we wished we had them. Under the Public Information Act, we have given you copies of all of the documents related to the subdivision that anyone has asked for, if we have it. • If there is a document that was filed with another government agency, whether it is the Federal Government via VA, FHA, or HUD, a County, or any other government that is entitled to receive that document, and it was allegedly falsified, the City cannot do anything about that falsification, because it was not a document that was provided to the City or that the City requires. The government agency that received the allegedly falsified document could certainly do so, but not the City. If there was a document provided to VA or FHA or HUD that you might think there is something on it that is incorrect, those agencies can deal with the issue, because that is a document they require. Again, the City cannot. • The City is doing what it can and has provided you with all the documents that we have. We have tried to get the additional documents that you have asked for, but we cannot subpoena them to provide those documents that we are not legally required to receive. We are just like you, in that we have the ability to ask for those documents. You have more of a right to those documents than the City, because of your contractual relationship with Pulte. The City continues to urge Pulte to be responsive to you and if they get documents to us, we will certainly provide them. Mr. Kessel welcomed everyone to stay for the remainder of the agenda this evening. Consent Agenda The Consent Agenda is considered to be self-explanatory and will be enacted by the Council with one motion. There will be no separate discussion of these items unless they are removed from the Consent Agenda upon the request by the Mayor or a Councilmember. 1. Minutes - Consideration and/or action regarding the approval of the minutes of the Regular Meeting of January 31, 2012. 2. Resolution No. 12-R-06 – Consideration and/or action approving a Resolution appointing members to the 2012 Hal Baldwin Scholarship Committee. (J. Kessel/B. Cantu) Mayor Pro-Tem Scagliola read the following caption into record: RESOLUTION NO. 12-R-06 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS CREATING AND PROVIDING 2012 FUNDING TO THE HAL BALDWIN SCHOLARSHIP, AND APPOINTING MEMBERS OF THE 2012 HAL BALDWIN SCHOLARSHIP COMMITTEE, AND RESOLVING OTHER MATTERS IN CONNECTION THEREWITH 02-07-2012 Minutes 3. Resolution No. 12-R-09 – Consideration and/or action approving a Resolution amending an agreement with Linebarger Goggan Blair & Sampson, LLP, for Municipal Court and Warrant Collections.( J. Bierschwale/M. Spain) Mayor Pro-Tem Scagliola read the following caption into record: RESOLUTION NO. 12-R-09 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AN AMENDMENT TO AN AGREEMENT WITH LINEBARGER GOGGAN BLAIR & SAMPSON, LLP, AND OTHER MATTERS IN CONNECTION THEREWITH Mayor Pro-Tem Scagliola recognized Councilmember Fowler who moved, seconded by Councilmember Carpenter to approve the consent agenda items 1, 2, and 3. The vote was unanimous. Motion carried. Discussion and/or Action Items 4. Resolution No. 12-R-10 - Consideration and/or action approving a resolution relating to establishing the City’s intention to be reimbursed by the Cibolo Valley Local Government Corporation for the prior lawful expenditure of funds from the proceeds of Tax-exempt Obligations to be issued by the Cibolo Valley Local Government Corporation for authorized purposes; authorizing other matters incident and related thereto; and providing an effective date. (J. Kessel/M. Spain) Mayor Pro Tem Scagliola read the following caption into record: RESOLUTION NO. 12-R-10 A RESOLUTION RELATING TO ESTABLISHING THE CITY’S INTENTION TO BE REIMBURSED BY THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS TO BE ISSUED BY THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION FOR AUTHORIZED PURPOSES; AUTHORIZING OTHER MATTERS INCIDENT AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE Mayor Pro-Tem Scagliola recognized Councilmember Edwards who moved, seconded by Councilmember Fowler to approve the adoption of a reimbursement resolution, Resolution No. 12-R-10. The vote was unanimous. Motion carried. Executive Session 02-07-2012 Minutes Called under Section 551.071 Texas Government Code Litigation, pending or contemplated litigation; Section 551.072 Texas Government Code - Deliberation regarding the purchase, exchange, sale, lease, or value of real property, or real estate. Council did not meet in Executive Session. Reconvene into Regular Session 5. Take any action deemed necessary as a result of the Executive Session. No action taken as Council did not meet. Requests and Announcements 6. Requests by Mayor and Councilmembers that items be placed on a future City Council agenda. No requests given by Mayor or Council. 7. Requests by Mayor and Councilmembers to City Manager and Staff for information. Mayor Pro-Tem Scagliola recognized Councilmember Edwards who had the following requests for information: • Conduct a financial audit on the Senior Center • Availability of having decorative banner poles at the Kramer House/Schertz Chamber of Commerce facility to utilize banner advertisements for non profit organizations. • Update regarding the approved bond projects. Mayor Pro-Tem Scagliola recognized City Manager John Kessel who stated that they will work on the audit of the Senior Center. Regarding the Kramer House location for banner advertisement is an interesting idea, and he and staff are actually looking into two different ideas regarding advertisement. Mr. Kessel stated that we will get Mr. Phil Gaudreau to present an update on the bond projects. He stated that they are making solid progress on each of the measures; for example, the soccer complex. The City has received the schematic designs that are being reviewed. Meetings are being set up between several parties on the natatorium project as well as the City has received all the RFQ’s back on the project and these are in review. The playscape is also being reviewed, and many creative ideas have come forth. In regards to the Animal Control facility project, progress is being made with the design firm. Mr. Kessel stated that a more detailed report is forthcoming. 02-07-2012 Minutes Councilmember Edwards asked if the updates on the projects could be placed in the Schertz Tales. Mr. Kessel stated that currently he doesn’t want to take away from anyone’s thunder, but signs are going up on the different bond locations that will include a QR code. Individuals can scan the code and it will take them to a direct link on the City’s website briefing them on the progress being made. Good ideas are forthcoming where the City is stepping up communication to the public on the projects. Mayor Pro-Tem Scagliola recognized Councilmember Fowler who stated that he was looking at the schedule for this week and there are a lot of activities and meetings going on and wants to make sure that the Council will be able to divide up and attend all of them. 8. Announcements by Mayor and Councilmembers • City and community events attended and to be attended • City Council Committee and Liaison Assignments (see assignments below) • Continuing education events attended and to be attended • Recognition of actions by City employees • Recognition of actions by community volunteers • Upcoming City Council agenda items Mayor Pro-Tem Scagliola recognized Councilmember Fowler who stated he will be attending the following: • Northeast Partnership on February 9, 2012. • Frost Bank Cowboy Breakfast on February 10, 2012. Mr. Fowler held up the Red T-shirt that all Councilmembers received and asked when they should wear them. Assistant City Manager John Bierschwale stated that they are to wear them every Friday in the month of February in recognition of National Wear Red Day to promote Women’s Heart Health, which is the number one killer for women. This is to help bring awareness to this issue. Mayor Pro-Tem Scagliola recognized Councilmember Antuna who stated he attended or will be attending the following: • North San Antonio Commerce Annual Installation Banquet and Gala, February 4, 2012. • Northeast Partnership, February 9, 2012. Councilmember Antuna made an announcement that the Schertz/Cibolo Pachyderm Club will meet February 9, 2012 at 6:30 p.m. at Aw Dang Asian Cuisine Restaurant and invited everyone to attend. 02-07-2012 Minutes Mayor Pro-Tem Scagliola recognized Councilmember Edwards who stated he attended and will be attending the following: • Schertz Senior Center Valentines Dance, February 4, 2012. He stated that this was an excellent event and thanked everyone involved in putting the center together. • Northeast Partnership, February 9, 2012 Mayor Pro-Tem Scagliola stated that he attended the following: • The Fairhaven Open House, Saturday, February 4, 2012. He stated that it was very informative and appreciated everyone opening up their homes. • The Willy Wonka and the Chocolate Factory event at Steel High School, Saturday, February 4, 2012. • Trail Riders at Pickrell Park, February 9, 2012. • The Schertz Chamber of Commerce After-Hours Mixer at the Schertz Civic Center sponsored by the Schertz Area Arts Council, February 9, 2012. • Frost Bank Cowboy Breakfast, February 10, 2010. 9. Announcements by City Manager Mayor Pro-Tem Scagliola recognized City Manager John Kessel who stated that he received notice from the local MPO that they are seeking public input in regards to prioritizing the $50 million in their TIP funding, and interestingly, we were successful in getting FM 1518 listed. Mr. Kessel encouraged individuals to attend the upcoming MPO meetings: • The Northeast meeting is scheduled for Thursday, February 9, 2012, 6:00 p.m. to 8:00 p.m., at Judson Middle School, in Converse on Schaefer Road. • The North Central meeting is scheduled for Thursday, February 23, 2012, 6:00 to 8:00 p.m., at Methodist Hospital Stone Oak, Sonterra Blvd, San Antonio. Mr. Kessel stated that on February 3, 2012, the City received notice from CPS Energy that the Board of Trustees met on January 30, 2012, and voted to terminate the Community Infrastructure and Economic Development Fund Program (CIED funds), and they will be working with the City on a disposition. Mr. Kessel stated that he wanted to recognize the EMS department. He recently received two letters of recognition for EMS saving the lives of others. In one letter in particular, EMS responded to an individual who had a brain aneurism in 2006 and who has as of January 30, 2012, fully recovered. Mr. Kessel stated that the Texas City Managers Association has been trying to encourage youth to get more involved in local government and make a difference. 02-07-2012 Minutes He stated that Assistant City Manager David Harris is a member of the Board and has been participating in a state-wide program trying to encourage youth to take up professions in local government, particularly City Management, and will be featured in some videos that will be shown soon. He wanted Council to be aware of what he has been doing, as Mr. Harris is involved in several behind the scene projects. Mr. Kessel congratulated Mr. Harris for his involvement. Adjournment Mayor Pro-Tem Scagliola adjourned the meeting at 7:40 p.m. ___________________________________ Mayor Pro-Tem Scagliola ATTEST: _______________________________________ Brenda Dennis, TRMC, MMC City Secretary 50492900.1 Agenda No. 2 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: Information Technologies Subject: Resolution No. 2012-R-11 - Acceptance of Contract with Time Warner Telecom for WAN Network Services BACKGROUND The IT Dept. is charged with ensuring reliable, resilient communications between City facilities. As part of this mandate the IT Dept. is recommending that the City enter into a contract with Time Warner Telecom to provide for backup connectivity to various City facilities. FISCAL IMPACT The monthly charges for this service are approximately $311.00 / month / site covered. In addition there is a one-time installation / engineering cost of $1,000.00. Initial deployment will be limited to one site – Public Works. Additional sites will be added during the next FY as required. The initial costs are covered in the current FY budget under account number 853- 581800. Costs for adding other City sites will be added to FY 2-12/2013 budget. RECOMMENDATION Approval of Resolution No. 2012-R-11. ATTACHMENT Resolution Copy of Time Warner Telecom Contract 50494755.1 RESOLUTION NO. 12-R-11 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A BUSINESS CLASS CUSTOMER SERVICE ORDER AND SERVICE AGREEMENT WITH TIME WARNER CABLE, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City staff of the City of Schertz (the “City”) has recommended that the City enter into a Business Class Customer Service Order and Service Agreement with Time Warner Cable (“TWC”), relating to business class ethernet services; and WHEREAS, the City Council has determined that it is in the best interest of the City to contract with TWC pursuant to the Business Class Customer Service Order and Service Agreement attached hereto as Exhibit A (the “Agreement”). BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the Agreement with TWC in substantially the form set forth on Exhibit A. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. 50494755.1 PASSED AND ADOPTED, this _____ day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50494755.1 A-1 EXHIBIT A BUSINESS CLASS CUSTOMER SERVICE ORDER AND SERVICE AGREEMENT Document1 - 1 - Addendum to Contract This Addendum to Contract (the “Addendum”) is attached to and incorporated into that certain Business Class Customer Service Order and Time Warner Cable Business Class Service Agreement (collectively, the “Agreement”) between Time Warner Cable (“TWC”) and the City of Schertz, Texas (the “City”). In addition to the terms in the Agreement, the parties agree to the following: 1. Addendum Controls. Notwithstanding anything in the Agreement or this Addendum to the contrary, including, without limitation, Section 19.0 of the Time Warner Cable Business Class Terms and Conditions, the terms of this Addendum shall control over any conflicting terms in the Agreement. 2. Limitation on Indemnities. Any and all indemnity obligations of the City contained in the Agreement are limited to the extent that such indemnity obligations are permitted by law. 3. Budgeted Current Revenue. All payment obligations of the City under the Agreement will be made solely from budgeted current revenue of the City. Time Warner Cable By: Name: Title: City of Schertz, Texas By: John C. Kessel City Manager Document1 - 1 - Addendum to Contract This Addendum to Contract (the “Addendum”) is attached to and incorporated into that certain Business Class Customer Service Order and Time Warner Cable Business Class Service Agreement (collectively, the “Agreement”) between Time Warner Cable (“TWC”) and the City of Schertz, Texas (the “City”). In addition to the terms in the Agreement, the parties agree to the following: 1. Addendum Controls. Notwithstanding anything in the Agreement or this Addendum to the contrary, including, without limitation, Section 19.0 of the Time Warner Cable Business Class Terms and Conditions, the terms of this Addendum shall control over any conflicting terms in the Agreement. 2. Limitation on Indemnities. Any and all indemnity obligations of the City contained in the Agreement are limited to the extent that such indemnity obligations are permitted by law. 3. Budgeted Current Revenue. All payment obligations of the City under the Agreement will be made solely from budgeted current revenue of the City. Time Warner Cable By: Name: Title: City of Schertz, Texas By: John C. Kessel City Manager Agenda No. 3 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: Information Technologies Subject: Resolution No. 2012-R-12 - 5 year Lease Contract with HP Financial Services for Hardware and Services related to City Phone System Upgrade BACKGROUND Goal: Replacement of existing phone system with new system that is scalable, resilient and capable of providing a solid foundation for growth. City Benefit: The new phone system will be an upgrade to the existing system, allowing the City to leverage its existing investment in hardware. This will minimize transition issues. In addition, this upgrade introduces new features that will allow the City staff to take advantage of emerging communications technologies as it becomes appropriate to do so. Summary of Recommended Action: City Staff recommends approval of the lease contract. FISCAL IMPACT: The 5 year lease terms call for monthly payments of approximately $3,200 / month for 60 months for a total investment of approximately $194,000. The current FY IT budget allocated $170,000.00 for this project under account number 853-599900. The first year’s payment will come from this fund. The balance will be set aside to cover future payments. RECOMMENDATION: City Staff recommends approval of Resolution No. 2012-R-12 regarding the proposed lease. ATTACHMENTS: Resolution No. 2012-R-12 Telephone System Replacement Proposal Summary Lease Contract from HP Financial Services Final Phone System Upgrade Proposal from Lan Comm Technologies. 50448403.2 RESOLUTION NO. 12-R-12 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A LEASE AGREEMENT WITH HEWLETT-PACKARD FINANCIAL SERVICES, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City of Schertz desires to upgrade its existing telephone system, and WHEREAS, the City Council (the “City Council”) of the City has determined that it is in the best interest of the City to enter into a Lease Agreement with Hewlett-Packard Financial Services (HP Financial) in order achieve this goal; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the attached Lease Agreement with HP Financial in the form attached as Exhibit A. The City Manager may agree to changes to the lease which the City Manager, upon the advice of the City Attorney, determines are insubstantial changes in the nature of clarifying additions or corrections of clerical errors. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. 50448403.2 PASSED AND ADOPTED, this 14th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50448403.2 A-1 EXHIBIT A HEWLETT-PACKARD FINANCIAL SERVICES LEASE AGREEMENT See attached Telephone System Replacement Proposal Summary 1) The IT dept. proposes to upgrade the existing phone system as opposed to deploying a complete replacement system. 2) The IT dept. recommends that the system be leased rather than purchased outright. 3) Issues that had to be considered in upgrading vs. replacement: a. PRO: Upgrading system allows the City to leverage its current investment in handsets and peripherals while transitioning to newer technologies as they become useful. This approach will save the City upfront costs of in excess of $100K. b. PRO: Upgrading current system reduces learning curve for employees to a bare minimum. c. PRO: Upgrading current system allows stakeholders to choose and deploy new features and technologies in a deliberate and efficient manner. d. CON: Current system built and supported by 3Com – now wholly owned by Hewlett- Packard (HP). i. Last spring HP announced that it was considering shutting down its PC business, as well as other “marginally profitable” operations. The 3Com phone systems could fall into that category. ii. New HP CEO just reversed that option, but there’s no guarantee that HP will support this technology in years to come. 4) Issues related to leasing vs. outright purchase: a. PRO: 5 year lease with HP will require service and support as part of lease agreement, protecting the City’s investment. Regardless of any of HP’s future business decisions, they will be contractually obligated to provide services, parts, etc. b. PRO: By reserving the monies allocated by council for this system, the lease costs will be mostly paid for within the current FY while providing the protection outlined above. c. PRO: At the end of the lease the City will be in the position of: i. Refreshing the underlying hardware, and renewing the lease, OR ii. Replacing the system under a new lease due to technological advances that are not currently available, OR iii. Doing nothing, letting the lease lapse and delay further changes until circumstances require them or additional funding becomes available, OR iv. Some combination of the above. d. PRO: A 5 year lease “future-proofs” the decision by ensuring that this mission critical system will be reviewed towards the end of the lease to make sure it is still capable of supporting the City’s needs. e. CON: There will be finance charges associated with this option. According to IT’s calculations, these finance charges should be approximately $23K. Cost for Upgraded System (proposed): $169,859.00 Total Amount budgeted current FY: $170,000.00 Lease Payment Factor: 0.01902 (max rate) Monthly Payments: $3,231.00 (approx.) Total lease Amount (60 months): $193,860.00 (approx.) Submitted by: Myles Clauser Director, Information Technology Dept. 200 Connell Drive, Suite 5000 Berkeley Heights, NJ 07922 February 3, 2012 Michael L. Spain, Attorney Fulbright & Jaworski LLP 300 Convent Street, Suite 2100 San Antonio, TX 78205 RE:STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT NO.:4453028924 FOR CITY OF SCHERTZ,TEXAS STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT SCHEDULE NO.: 445302892400001 FOR CITY OF SCHERTZ Thank you for selecting Hewlett-Packard Financial Services Company (“HPFS”) to provide financing for your technology acquisition. As per the request of your HPFS representative, we have prepared the following the lease documents for review and execution: Incumbency Certificate This document certifies to HPFS that the individual(s) signing the Lease Agreement, the Equipment Schedule and the Acceptance Certificate is (are) authorized to execute such documents and that such individual(s) is (are) currently holding the office or title specified in such documents. State and Local Government Master Operating Lease Agreement (“MOLA” Lease Agreement) The Lease Agreement contains the terms and conditions of the lease arrangement between the Customer and HPFS. All of such terms are incorporated by reference into each Equipment Schedule. Exhibit A to MOLA - Schedule The Equipment Schedule sets forth the lease payment schedule, a description of the leased equipment, the equipment location and other matters relating to the leased equipment. Exhibit B to MOLA - Acceptance Certificate (sign only after you have received Equipment) This document confirms that the Customer has received the Equipment, is satisfied with it and is ready to begin the Lease and start making payments. Equipment Listing (Refer to Vendor Quote) This document is the detailed description of the leased equipment to be attached to and incorporated into the Equipment Schedule as Exhibit A. Insurance Request Form The Customer should complete the Insurance Request Form in the event it is obtaining the insurance required by the Lease Agreement Billing Information Form This form should be completed by the Customer to ensure efficient delivery and payment of invoices. Please request that the appropriate authorized officers execute (or initial) where indicated by the red arrows and return to HPFS as soon as possible. Federal Tax ID Number (FEIN): ___________________________ Copy of Sales and Use Tax Exempt Certificate Should you have any questions or comments regarding the enclosed documents or the procedure outlined above, please do not hesitate to contact Paul Hermann. Sincerely, Lynn R. Canfield Lynn R. Canfield Customer Delivery Specialist Email: lynn.canfield@hp.com Phone: 908-898-4975 Fax: 908-898-4817 Page 1 of 10 MOLA 10-01-05 Lessee’s Organization Number Lessee’s Tax Identification Number Lessee’s UCC Section 9-307 Location: Schertz, Texas STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT This State and Local Government Master Operating Lease Agreement (together with Exhibits A and B attached hereto and hereby made a part hereof, (this “Master Agreement”), dated as of February , 2012_________________, is entered into by and between Hewlett-Packard Financial Services Company,1 a Delaware corporation (“Lessor”), and City of Schertz, Texas, an agency, department or political subdivision of the State of Texas (“Lessee”). Capitalized terms used in this Master Agreement without definition have the meanings ascribed to them in Section 30. 1.PURPOSE OF MASTER AGREEMENT.The purpose of this Master Agreement is to set forth the general terms and conditions upon which Lessor shall lease to Lessee, and Lessee shall lease from Lessor, items of Hardware, Software or both (such Hardware and Software being collectively referred to as “Equipment”). 2.COMMENCEMENT PROCEDURES.Subject to the other terms and conditions contained in this Master Agreement and the applicable Schedule, Lessee shall enter into individual Leases (hereinafter defined) with Lessor as follows: (a) Execution of Schedule. Lessor and Lessee mutually agree to enter into a Lease by executing a Schedule in the form of Exhibit A with such changes as Lessor and Lessee shall have agreed to as conclusively evidenced by their execution thereof. Each such Schedule shall specifically identify (by serial number or other identifying characteristics) the items of Equipment to be leased under such Schedule (other than items of System Software, which shall be deemed to be items of Software leased under the Schedule pursuant to which the related items of Hardware are leased). Each Schedule, when executed by both Lessee and Lessor, together with this Master Agreement, shall constitute a separate and distinct lease (“Lease”), enforceable according to its terms. In the event of any conflict between the terms of this Master Agreement and such Schedule, the provisions of the Schedule shall govern. (b) Acceptance; Initial Term of Leases. Lessee shall accept the Equipment subject to a Lease in accordance with Section 3. The Initial Term of each Lease shall begin on the Acceptance Date of the Equipment subject to such Lease and shall continue for the period described in the applicable Schedule unless a Nonappropriation shall have occurred. (c) Adjustments to Schedule. Lessee acknowledges that the Total Cost of Equipment and the related Rent payments set forth in any Schedule may be estimates, and if the final invoice from the Seller attached to the related Acceptance Certificate(s) specifies a Total Cost that is less than the estimated Total Cost set forth in the Schedule, Lessee hereby authorizes Lessor to reduce the applicable Total Cost and Rent payment on the Schedule by up to ten percent (10%) to reflect such final invoice amount (the “Final Invoice Amount”). All references in this Master Agreement and any Schedule to Total Cost and Rent shall mean the amounts thereof specified in the applicable Schedule, as adjusted pursuant to this paragraph. (d) Payment by Lessor. Within 30 days after Lessee’s delivery to Lessor of a properly completed and executed Acceptance Certificate and all other documentation necessary to establish Lessee’s acceptance of such Equipment under the related Lease and Lessor’s acceptance of such Acceptance Certificate, Lessor shall pay for the Equipment. Lessor shall not accept the Acceptance Certificate until it has received from Lessee (1) evidence of insurance with respect to the Equipment in compliance with Section 13 hereof, (2) an opinion of Lessee’s counsel, if required by Lessor, in form and substance reasonably satisfactory to Lessor and (3) any other documents or items reasonably required by Lessor. Notwithstanding the foregoing, Lessor shall not be obligated to pay for the Equipment if a Lessee Default has occurred or an event has occurred and is continuing that with the passage of time or provision of notice would constitute a Lessee Default. 3.ACCEPTANCE OF EQUIPMENT.(a) Inspection of Equipment. Lessee agrees to inspect all Equipment as soon as reasonably practicable after the delivery thereof to Lessee. (b) Acceptance Certificate. Upon the satisfactory inspection of the Equipment by Lessee, or if acceptance requirements for such Equipment are specified in the applicable Purchase Documents, as soon as such requirements are met, Lessee shall unconditionally and irrevocably accept the Equipment by executing and delivering to Lessor a properly completed Acceptance Certificate in substantially the form of Exhibit B. 4.LESSEE’S END-OF-LEASE-TERM OPTIONS;AUTOMATIC EXTENSION.Lessee shall have the following options in respect of each Lease at the end of each of the Initial Term, any Renewal Term and any optional extension of the Initial Term or any Renewal Term: a.Purchase Option.Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term, any Renewal Term or any optional extension of the Initial Term or any Renewal Term, to purchase any or all Units of Equipment then subject to such Lease (other than items of Software that may not be sold by Lessor under the terms of any applicable License Agreement) for an amount equal to the Fair Market Value of such Units of Equipment as of the end of the Then Applicable Term, provided no Lessee Default shall have occurred and be continuing. In the event of such an election, Lessee shall pay such amount to Lessor, in immediately available funds, on or before the last day of the Then Applicable Term. If Lessee shall have so elected to purchase any of the Units of Equipment, shall have so paid the applicable purchase price and shall have fulfilled the terms and conditions of this Master Agreement, then on the last day of the Then Applicable Term (1) the Lease with respect to such Units of Equipment shall terminate and, except as provided in Section 26, Lessee shall be relieved of all of its obligations in favor of Lessor with respect to such Units of Equipment, and (2) Lessor shall transfer all of its interest in such Units of Equipment to Lessee “AS IS, WHERE IS,” without any warranty, express or implied, from Lessor, other than the absence of any liens or claims by or through Lessor. In the event Lessor and Lessee are unable to agree on the Fair Market Value of any Units of Equipment, Lessor shall, at Lessee’s expense, select an independent appraiser to conclusively determine such amount. b. Renewal Option.Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term, any Renewal Term, or any optional extension of the Initial Term or any Renewal Term, to renew the Lease with respect to any or all Units of Equipment then subject to such Lease (other than items of Software that may not be re-released by Lessor under the terms of any applicable License Agreement) for an amount equal to the Fair Rental Value of such Units of Equipment as of the end of the Then Applicable Term. In the event of such an election, Lessee shall enter into a mutually agreeable renewal agreement with Lessor (“Renewal Agreement”) on or before the last day of the Then Applicable Term confirming the Units of Equipment as to which the Lease is to be renewed, the period for which the Lease is to be renewed (the “Renewal Term”), and the amount of Rent and the times at which such Rent is to be payable during the Renewal Term. In the event Lessor and Lessee are unable to agree on the Fair Rental Value of any Units of Equipment, Lessor shall, at Lessee’s expense, select an independent appraiser to conclusively determine such amount. c.Return. Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term, any Renewal Term or any optional extension of the Initial Term or any Renewal Term, to return any or all of the Units of Equipment then subject to such Lease in accordance with Section 10 of this Master Agreement. 1 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. Master Agreement Number: 4453028924 Page 2 of 10 MOLA 10-01-05 d. Optional Extension.Lessee may elect, by omitting to deliver to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term or any Renewal Term, to extend the Initial Term or such Renewal Term, as the case may be. In that event, the Initial Term or such Renewal Term shall, without any additional notice or documentation, be automatically extended for successive calendar months with respect to all items of Equipment then subject to such Lease through the end of the calendar month falling at least 90 days after the date Lessee shall have delivered to Lessor an End-of-Term Notice with respect to such Lease. For each calendar month that the Then Applicable Term of such Lease is so extended, Lessee shall pay to Lessor Rent in an amount equal to the monthly Rent payment in effect immediately prior to such extension (or the appropriate pro rata portion of the Rent payment then in effect in the case of Rent payable other than on a monthly basis), and all other provisions of this Master Agreement and the applicable Schedule shall continue to apply. If Lessee shall have delivered to Lessor an End-of-Term Notice with respect to a Lease, but shall have subsequently failed to comply with its obligations arising from its elections specified therein (e.g., Lessee shall have failed, on or before the last day of the Then Applicable Term (1) to pay Lessor the purchase price for Equipment to be purchased in accordance with Section 4(a) above, (2) to execute a Renewal Agreement with respect to Equipment as to which the Lease is to be renewed in accordance with Section 4(b) above, or (3) to return to Lessor Equipment to be returned in accordance with Section 4(c) above), then the Then Applicable Term of such Lease shall, without any additional notice or documentation, be automatically extended for successive calendar months with respect to all items of Equipment as to which Lessee shall have so failed to comply with its obligations through the end of the calendar month in which Lessee shall have complied with such obligations. For each calendar month that the Then Applicable Term of any Lease is so extended, Lessee shall pay to Lessor Rent in an amount equal to the monthly Rent payment in effect immediately prior to such extension (or the appropriate pro rata portion of the Rent payment then in effect in the case of Rent payable other than on a monthly basis), and all other provisions of this Master Agreement and the applicable Schedule shall continue to apply. Notwithstanding any of the provisions of this Section 4 to the contrary, if any Lessee Default shall have occurred and be continuing at any time during the last 90 days of the Then Applicable Term of any Lease, Lessor may cancel any Renewal Term or optional or other automatic extension of the Then Applicable Term immediately upon written notice to Lessee. 5.RENT; LATE CHARGES.As rent (“Rent”) for the Equipment under any Lease, Lessee agrees to pay the amounts specified in the applicable Schedule on the due dates specified in the applicable Schedule.Lessee agrees to pay Lessor interest on any Rent payment or other amount due hereunder that is not paid within 10 days of its due date, at the rate of 1-1/4% per month (or such lesser rate as is the maximum rate allowable under applicable law). Lessee will make provision for such payments in budgets submitted to its governing body for the purpose of obtaining funding for the payments. 6.LEASES NON-CANCELABLE; NET LEASES; WAIVER OF DEFENSES TO PAYMENT. IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT EACH LEASE HEREUNDER SHALL BE NON-CANCELABLE (EXCEPT AS SET FORTH IN SECTION 7 HEREOF), AND THAT EACH LEASE HEREUNDER IS A NET LEASE (SO THAT AMONG OTHER THINGS LESSEE SHALL PAY IN ADDITION TO THE RENT, TAXES, INSURANCE AND MAINTENANCE CHARGES RELATED TO THE EQUPMENT). LESSEE AGREES THAT IT HAS AN ABSOLUTE AND UNCONDITIONAL OBLIGATION TO PAY ALL RENT AND OTHER AMOUNTS WHEN DUE. LESSEE HEREBY WAIVES ANY RECOUPMENT, CROSS-CLAIM, COUNTERCLAIM OR ANY OTHER DEFENSE AT LAW OR IN EQUITY TO ANY RENT OR OTHER AMOUNT DUE WITH RESPECT TO ANY LEASE, WHETHER ANY SUCH DEFENSE ARISES OUT OF THIS MASTER AGREEMENT, ANY SCHEDULE, ANY CLAIM BY LESSEE AGAINST LESSOR, LESSOR’S ASSIGNEES OR SUPPLIER OR OTHERWISE. IF THE EQUIPMENT IS NOT PROPERLY INSTALLED, DOES NOT OPERATE OR INTEGRATE AS REPRESENTED OR WARRANTED BY SUPPLIER OR IS UNSATISFACTORY FOR ANY REASON WHATSOEVER, LESSEE WILL MAKE ANY CLAIM ON ACCOUNT OF THOSE ISSUES SOLELY AGAINST SUPPLIER AND WILL NEVERTHELESS PAY ALL SUMS DUE WITH RESPECT TO EACH LEASE. 7.NONAPPROPRIATION.Notwithstanding anything contained in this Master Agreement to the contrary, in the event that sufficient funds are not appropriated and budgeted by Lessee’s governing body or are not otherwise available from other legally available sources in any fiscal period for the payment of Rent and other amounts due under any Lease, the Lease shall terminate on the last day of the fiscal period for which appropriations were received or other amounts are available to pay amounts due under the Lease without penalty or expense to Lessee of any kind whatsoever, except as to the portions of Rent payments or other amounts herein agreed upon for which funds shall have been appropriated or are otherwise available. Lessee will immediately notify the Lessor or its assignee of such occurrence. In the event of such termination, Lessee shall immediately cease all use of the Equipment, and shall, at its sole expense and risk, immediately de-install, disassemble, pack, crate, insure, and return the Equipment subject to such Lease to Lessor (all in accordance with Section 10 of this Master Agreement). Such Equipment shall be in the same condition as when received by Lessee (reasonable wear, tear and depreciation resulting from normal and proper use excepted), shall be in good operating order and maintenance as required by this Lease, shall be free and clear of any liens (except Lessor’s lien) and shall comply with all applicable laws and regulations. Lessee agrees to execute and deliver to Lessor all documents reasonably requested by Lessor or evidence the transfer of legal and beneficial title to such Equipment to Lessor and to evidence the termination of Lessee’s interest in such Equipment. Lessor will have all legal and equitable rights and remedies to take possession of the Equipment. At Lessor’s request, Lessee shall promptly provide supplemental documentation as to such Non-Appropriation satisfactory to Lessor. Lessee’s exercise of its rights pursuant to this Section 7 shall not affect the survival of any indemnity and other provisions (other than the obligation to lease the Equipment and pay amounts due under the Lease) which survive the termination of the Lease. 8.ASSIGNMENT OF PURCHASE DOCUMENTS.Lessee assigns to Lessor all of Lessee’s right, title and interest in and to (a) the Equipment described in each Schedule, and (b) the Purchase Documents relating to such Equipment. Such assignment of the Purchase Documents is an assignment of rights only; nothing in this Master Agreement shall be deemed to have relieved Lessee of any obligation or liability under any of the Purchase Documents, except that, as between Lessee and Lessor, Lessor shall pay for the Equipment in accordance with Section 2(d) hereof. Lessee represents and warrants that it has reviewed and approved the Purchase Documents. In addition, if Lessor shall so request, Lessee shall deliver to Lessor a document acceptable to Lessor whereby Seller acknowledges and provides any required consent to such assignment. For the avoidance of doubt, Lessee covenants and agrees that it shall at all times during the Total Term of each Lease comply in all respects with the terms of any Licensor License Agreement relating to any Equipment leased thereunder.IT IS ALSO SPECIFICALLY UNDERSTOOD AND AGREED THAT NEITHER SUPPLIER NOR ANY SALESPERSON OF SUPPLIER IS AN AGENT OF LESSOR, NOR ARE THEY AUTHORIZED TO WAIVE OR ALTER ANY TERMS OF THIS MASTER AGREEMENT OR ANY SCHEDULE. 9.ASSIGNMENT OF SUPPLIER WARRANTIES.To the extent permitted, Lessor hereby assigns to Lessee, for the Total Term of any Lease, all Equipment warranties provided by any Supplier in the applicable Purchase Documents. Lessee shall have the right to take any action it deems appropriate to enforce such warranties provided such enforcement is pursued in Lessee’s name and at its expense. In the event Lessee is precluded from enforcing any such warranty in its name, Lessor shall, upon Lessee’s request, take reasonable steps to enforce such warranty. In such circumstances, Lessee shall, promptly upon demand, reimburse Lessor for all expenses incurred by Lessor in enforcing the Supplier warranty. Any recovery resulting from any such enforcement efforts shall be divided among Lessor and Lessee as their interests may appear. 10.EQUIPMENT RETURN REQUIREMENTS.At any time Lessee is required to return Equipment to Lessor under the terms of this Master Agreement or any Schedule, Lessee shall (a) wipe clean or permanently delete all data contained on the Equipment, including without limitation, any data contained on internal or external drives, discs, or accompanying media, and (b) pack the Equipment to be returned to Lessor in accordance with the manufacturer’s guidelines and deliver such Equipment to Lessor at any destination within the continental United States designated by Lessor. In the case of any item of Software or License Agreement subject to a Schedule, at the time of the occurrence of a Non-Appropriation or a Lessee Default, Lessee shall also be automatically deemed to have reassigned any License Agreement, and shall immediately de-install and deliver to Lessor all Software, together with the original certificate of authenticity issued by the licensor of such Software, if any. All dismantling, packaging, transportation, in-transit insurance and shipping charges shall be borne by Lessee. All Equipment shall be returned to Lessor in the same condition and working order as when delivered to Lessee, reasonable wear and tear excepted, and except in the case of PC Equipment and Software, shall qualify for maintenance service by the Supplier at its then standard rates for Equipment of that age, if available. Lessee shall be responsible for, and shall Page 3 of 10 MOLA 10-01-05 reimburse Lessor promptly on demand for the cost of returning the Equipment to good working condition or, in the case of Equipment other than PC Equipment and Software, qualifying the Equipment for the Supplier’s maintenance service, if available. 11.EQUIPMENT USE, MAINTENANCE, AND ADDITIONS.Lessee is solely responsible for the selection, installation, operation and maintenance of the Equipment and all costs related thereto, including shipping charges. Lessee shall at all times operate and maintain the Equipment in good working order, repair, condition and appearance, and in accordance with the manufacturer’s specifications and recommendations. On reasonable prior notice to Lessee, Lessor and Lessor’s agents shall have the right, during Lessee’s normal business hours and subject to Lessee’s reasonable, standard security procedures, to enter the premises where the Equipment is located for the purpose of inspecting the Equipment and observing its use. If Lessor shall have provided to Lessee any tags or identifying labels, Lessee shall, at its expense, affix and maintain in a prominent position on each item of Equipment such tags or labels to indicate Lessor’s ownership of the Equipment. Except in the case of PC Equipment and Software, Lessee shall, at its expense, enter into and maintain and enforce at all times during the Total Term of each Lease a maintenance agreement to service and maintain the related Equipment, upon terms and with a provider reasonably acceptable to Lessor. Lessee shall make no alterations or additions to the Equipment, except those that (a) will not void any warranty made by the Supplier of the Equipment, result in the creation of any security interest, lien or encumbrance on the Equipment or impair the value or use of the Equipment either at the time made or at the end of the Term of the applicable Lease, and are readily removable without damage to the Equipment (“Optional Additions”), or (b) are required by any applicable law, regulation or order. All additions to the Equipment or repairs made to the Equipment, except Optional Additions, become a part of the Equipment and Lessor’s property at the time made; Optional Additions which have not been removed in the event of the return of the Equipment shall become Lessor’s property upon such return. 12.EQUIPMENT OWNERSHIP; LIENS; LOCATION.As between Lessor and Lessee, Lessor is the sole owner of the Equipment and has sole title thereto, Lessee shall not make any representation to any third party inconsistent with Lessor’s sole ownership of the Equipment. Lessee covenants with respect to each Lease that: (i) it will not pledge or encumber the Equipment or Lessor’s interest in the Equipment in any manner whatsoever nor create or permit to exist any levy, lien or encumbrance thereof or thereon except those created by or through Lessor; (ii) the Equipment shall remain personal property whether or not affixed to realty and shall not become a fixture or be made to become a part of any real property on which it is placed without Lessor’s prior written consent; and (iii) Lessee shall maintain the Equipment so that it does not become essential to and may be removed from any building in which it is placed without any damage to the building or the Equipment. Lessee may permit use of the Equipment by its affiliates or independent contractors at the Equipment Location provided it does not relinquish possession and control of the Equipment. Provided Lessee remains in possession and control of the Equipment, Lessee may relocate any Equipment from the Equipment Location specified in the applicable Schedule to another of its locations within the State of the Equipment Location upon prior written notice to Lessor specifying the new Equipment Location or to another of its locations within the United States after receiving the written consent of Lessor to such relocation. Lessee shall not locate or relocate any Equipment such that any third party comes into possession or control thereof without Lessor’s prior written consent; provided, however, that Lessor shall not unreasonably withhold its consent to the location or relocation of Equipment to a third party co-location or hosting facility if such third party shall have executed and delivered to Lessor a waiver agreement in form and substance acceptable to Lessor pursuant to which, among other things, such third party shall have waived any rights to the Equipment and agreed to surrender the Equipment to Lessor in the event of a Lessee Default under this Master Agreement. Notwithstanding the foregoing, Lessor agrees that computer equipment usable outside of a fixed office environment, such as laptops, notebooks or similar PC Equipment (collectively, “Mobile PC Equipment”) may be relocated on a non-permanent basis from the Equipment Location originally specified in the applicable Schedule without Lessor’s prior written consent, provided that (i) such relocation is made by Lessee’s primary employee in the custody and control of such Mobile PC Equipment; (ii) the primary employee remains in possession and control of the Mobile PC Equipment, and (iii) the primary employee’s principal office is the Equipment Location. For purposes of this Master Agreement and any applicable Schedule, the term Equipment shall be deemed to include all Mobile PC Equipment. 13.RISK OF LOSS AND INSURANCE.Lessee assumes any and all risk of loss or damage to the Equipment from the time such Equipment is delivered to Lessee until such Equipment is returned to and is received by Lessor in accordance with the terms and conditions of this Master Agreement. Lessee agrees to keep the Equipment insured at Lessee’s expense against all risks of loss from any cause whatsoever, including without limitation, loss by fire (including extended coverage), theft and damage. Lessee agrees that such insurance shall name Lessor as a loss payee and cover not less than the Stipulated Loss Value of the Equipment. Lessee also agrees that it shall carry commercial general liability insurance in an amount not less than $1,000,000 total liability per occurrence. Lessee agrees that it will not cancel the insurance during the Term and no policy shall contain a deductible in excess of $25,000. Upon Lessor’s prior written consent, in lieu of maintaining insurance obtained by third party insurance carriers, Lessee may self insure against such risks, provided that Lessor’s interests are protected to the same extent as if the insurance had been obtained by third party insurance carriers and provided further that such self insurance program is consistent with prudent business practices with respect with such insurance risk. Lessee shall provide to Lessor (a) on or prior to the Acceptance Date for each Lease, and from time to time thereafter, certificates of insurance evidencing such insurance coverage throughout the Total Term of each Lease, and (b) upon Lessor’s request, copies of the insurance policies. If Lessee fails to provide Lessor with such evidence, then Lessor will have the right, but not the obligation, to purchase such insurance protecting Lessor at Lessee’s expense. Lessee’s expense shall include the full premium paid for such insurance and any customary charges, costs or fees of Lessor. Lessee agrees to pay such amounts in substantially equal installments allocated to each Rent payment (plus interest on such amounts at the rate of 1-1/4% per month or such lesser rate as is the maximum rate allowable under applicable law). 14.CASUALTY LOSS.Lessee shall notify Lessor of any Casualty Loss or repairable damage to any Equipment as soon as reasonably practicable after the date of any such occurrence but in no event later than 30 days after such occurrence. In the event any Casualty Loss shall occur, on the next Rent payment date Lessee shall (a) at Lessee’s option provided no Lessee Default has occurred nor an event that with the passage of time or provision of notice would constitute a Lessee Default has occurred and is continuing or (b) at Lessor’s option if a Lessee Default has occurred or an event that with the passage of time or provision of notice would constitute a Lessee Default has occurred and is continuing (1) subject to Section 7 hereof, pay Lessor the Stipulated Loss Value of the Equipment suffering the Casualty Loss, or (2) substitute and replace each item of Equipment suffering the Casualty Loss with an item of Substitute Equipment. If Lessee shall pay the Stipulated Loss Value of the Equipment suffering a Casualty Loss, upon Lessor’s receipt in full of such payment the applicable Lease shall terminate as it relates to such Equipment and, except as provided in Section 26, Lessee shall be relieved of all obligations under the applicable Lease as it relates to such Equipment. If Lessee shall replace Equipment suffering a Casualty Loss with items of Substitute Equipment (i) the applicable Lease shall continue in full force and effect without any abatement of Rent with such Substitute Equipment thereafter being deemed to be Equipment leased thereunder, and (ii) Lessee shall deliver to Lessor a bill of sale or other documentation, in either case in form and substance satisfactory to Lessor, in which Lessee shall represent and warrant that it has transferred to Lessor good and marketable title to all Substitute Equipment, free and clear of all liens, encumbrances and claims of others. Upon Lessor’s receipt of such payment of Stipulated Loss Value in full, or such bill of sale or other documentation, as the case may be, Lessor shall transfer to Lessee all of Lessor’s interest in the Equipment suffering the Casualty Loss “AS IS, WHERE IS,” without any warranty, express or implied, from Lessor, other than the absence of any liens or claims by or through Lessor. In the event of any repairable damage to any Equipment, the Lease shall continue with respect to such Equipment without any abatement of Rent and Lessee shall, at its expense, from insurance proceeds or other funds legally available, promptly cause such Equipment to be repaired to the condition it is required to be maintained pursuant to Section 11. 15.TAXES.Lessor shall report and pay all Taxes now or hereafter imposed or assessed by any governmental body, agency or taxing authority upon the purchase, ownership, delivery, installation, leasing, rental, use or sale of the Equipment, the Rent or other charges payable hereunder, or otherwise upon or in connection with any Lease, whether assessed on Lessor or Lessee, other than any such Taxes required by law to be reported and paid by Lessee. Lessee shall promptly reimburse Lessor for all such Taxes paid by Lessor, together with any penalties or interest in connection therewith attributable to Lessee’s acts or failure to act, excluding (a) Taxes on or measured by the overall gross or net income or items of tax preference of Lessor, (b) as to any Lease the related Equipment, Taxes attributable to the period after the return of such Equipment to Lessor, and (c) Taxes imposed as a result of a sale or other transfer by Lessor of any portions of its interest in any Lease or in any Equipment except for a sale of other transfer to Lessee or a sale or other transfer occurring after and during the continuance of any Lessee Default. Page 4 of 10 MOLA 10-01-05 16.CLAIMS.Lessor is not responsible for any injuries, damages, penalties, claims, or losses, including legal expenses incurred by Lessee or any other person caused by the transportation, installation, manufacture, selection purchase, lease, ownership, possession modification, maintenance, condition, operation, use, return or disposition of the Equipment. Lessee will not bring any action or file any claim against Lessor or any assignee for any losses, damages, penalties claims, injuries, or expenses incurred by Lessee or any other person caused by the transportation, installation, manufacture, selection, purchase, lease, ownership, possession, modification, maintenance, condition, operation, use, return or disposition of the Equipment. 17.COVENANT OF QUIET ENJOYMENT.So long as no Lessee Default exists, and no event shall have occurred and be continuing which, with the giving of notice or the passage of time or both, would constitute a Lessee Default, neither Lessor nor any party acting or claiming through Lessor, by assignment or otherwise, will disturb Lessee’s quiet enjoyment of the Equipment during the Total Term of the related Lease. 18.DISCLAIMERS AND LESSEE WAIVERS. LESSEE LEASES THE EQUIPMENT FROM LESSOR “AS IS, WHERE IS”. IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT (A) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 17, LESSOR MAKES ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY, OPERATION, OR CONDITION OF ANY EQUIPMENT (OR ANY PART THEREOF), THE MERCHANTABILITY OR FITNESS OF EQUIPMENT FOR A PARTICULAR PURPOSE, OR ISSUES REGARDING PATENT INFRINGEMENT, TITLE AND THE LIKE; (B) LESSOR SHALL NOT BE DEEMED TO HAVE MADE, BE BOUND BY OR LIABLE FOR, ANY REPRESENTATION, WARRANTY OR PROMISE MADE BY THE SUPPLIER OF ANY EQUIPMENT (EVEN IF LESSOR IS AFFILIATED WITH SUCH SUPPLIER); (C) LESSOR SHALL NOT BE LIABLE FOR ANY FAILURE OF ANY EQUIPMENT OR ANY DELAY IN THE DELIVERY OR INSTALLATION THEREOF; (D) LESSEE HAS SELECTED ALL EQUIPMENT WITHOUT LESSOR’S ASSISTANCE; AND (E) LESSOR IS NOT A MANUFACTURER OF ANY EQUIPMENT. IT IS FURTHER AGREED THAT LESSOR SHALL HAVE NO LIABILITY TO LESSEE, LESSEE’S CUSTOMERS, OR ANY THIRD PARTIES FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS MASTER AGREEMENT OR ANY SCHEDULE OR CONCERNING ANY EQUIPMENT, OR FOR ANY DAMAGES BASED ON STRICT OR ABSOLUTE TORT LIABILITY OR LESSOR’S NEGLIGENCE; PROVIDED, HOWEVER, THAT NOTHING IN THIS MASTER AGREEMENT SHALL DEPRIVE LESSEE OF ANY RIGHTS IT MAY HAVE AGAINST ANY PERSON OTHER THAN LESSOR. LESSOR AND LESSEE AGREE THAT THE LEASES SHALL BE GOVERNED BY THE EXPRESS PROVISIONS OF THIS MASTER AGREEMENT AND THE OTHER FUNDAMENTAL AGREEMENTS AND NOT BY THE CONFLICTING PROVISIONS OF ANY OTHERWISE APPLICABLE LAW. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE WAIVES ANY RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A OF THE UCC (INCLUDING, BUT NOT LIMITED TO, LESSEE’S RIGHTS, CLAIMS AND DEFENSES UNDER UCC SECTIONS 2A-303 AND 2A-508 THROUGH 2A-522) AND THOSE RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE, IN EITHER CASE THAT ARE INCONSISTENT WITH OR THAT WOULD LIMIT OR MODIFY LESSOR’S RIGHTS SET FORTH IN THIS MASTER AGREEMENT. 19.LESSEE WARRANTIES.Lessee represents, warrants and covenants to Lessor with respect to each Lease that: (a) Lessee is an agency or department of, or a political subdivision of the state in which it is located; (b) Lessee has the power and authority to enter into each of the Fundamental Agreements; (c) all Fundamental Agreements are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their terms and do not violate or create a default under any instrument or agreement binding on Lessee; (d) there are no pending or threatened actions or proceedings before any court or administrative agency that could reasonably be expected to have a material adverse effect on Lessee or any Fundamental Agreement, unless such actions have been disclosed to Lessor and consented to in writing by Lessor; (e) Lessee shall comply in all material respects with all laws and regulations the violation of which could have a material adverse effect upon the Equipment or Lessee’s performance of its obligations under any Fundamental Agreement; (f) each Fundamental Agreement shall be effective against all creditors of Lessee under applicable law, including fraudulent conveyance and bulk transfer laws, and shall raise no presumption of fraud; (g) all financial statements, certificates or summaries relating to Lessee’s financial condition, fiscal budget or the assessment and collection of taxes and other related information furnished by Lessee shall be prepared in accordance with generally accepted accounting principles in the United States in effect at that time and shall fairly present Lessee’s financial position as of the dates given on such statements; (h) since the date of the most recent annual financial statement, there has been no material adverse change in the financial condition of, or the level of assessment or collection of taxes by, the Lessee; (i) the Equipment, subject to the Lease, is essential to the immediate performance of a governmental or proprietary function by Lessee within the scope of its authority and will be used during the Term of the Lease only by Lessee and only to perform such function; (j) Lessee intends to use the Equipment for the entire Term of the Lease and all Equipment will be used for business purposes only and not for personal, family or household purposes; (k) Lessee has complied fully with all applicable law governing open meetings, public bidding and appropriations required in connection with the Lease and the acquisition of the Equipment; (l) there has been no material change in the budget for Lessee’s current Fiscal Period since its adoption; (m) Lessee’s obligations to pay Rent and any other amounts due under the Lease constitute a current expense and not a debt of Lessee under applicable state law; (n) no provision of the Lease constitutes a pledge of the tax or general revenues of Lessee; (o) Lessee does not export, re-export, or transfer any Equipment, Software, system software or source code or any direct product thereof to a prohibited destination, or to nationals of proscribed countries wherever located, without prior authorization from the United States government and other applicable governments; (p) Lessee does not use any Equipment, Software or system software or technology, technical data, or technical assistance related thereto or the products thereof in the design, development, or production of nuclear, missile, chemical, or biological weapons or transfer the same to a prohibited destination, or to nationals of proscribed countries wherever located, without prior authorization from the United States and other applicable governments; and (q) Lessee is not an entity designated by the United States government or any other applicable government with which transacting business without the prior consent of such government is prohibited. 20.DEFAULT.Any of the following shall constitute a default by Lessee (a “Lessee Default”) under this Master Agreement and all Leases: (a) Lessee fails to pay any Rent payment or any other amount payable to Lessor under this Master Agreement or any Schedule within 10 days after its due date; or (b) Lessee defaults on or breaches any of the other terms and conditions of any Material Agreement, and fails to cure such breach within 10 days after written notice thereof from Lessor; or (c) any representation or warranty made by Lessee in any Material Agreement proves to be incorrect in any material respect when made or reaffirmed; or (d) any change occurs in relation to Lessee’s financial condition that, in Lessor’s opinion, would have a material adverse effect on Lessee’s ability to perform its obligations under this Master Agreement or under any Schedule; or (e) Lessee becomes insolvent or fails generally to pay its debts as they become due; or (f) a proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency or receivership law is filed by or against Lessee (and if such proceeding is involuntary, it is not dismissed within 60 days after the filing thereof) or Lessee takes any action to authorize any of the foregoing matters; or (g) any letter of credit or guaranty issued in support of a Lease is revoked, breached, canceled or terminated (unless consented to in advance by Lessor); or (h) any Equipment is levied against, seized or attached. 21.REMEDIES.If a Lessee Default occurs, Lessor may, in its sole discretion, exercise one or more of the following remedies: (a) declare all amounts due and to become due during Lessee’s current fiscal year under any or all Leases to be immediately due and payable; or (b) terminate this Master Agreement or any Lease; or (c) take possession of, or render unusable, any Equipment wherever the Equipment may be located, without demand or notice and without any court order or other process of law in accordance with Lessee’s reasonable security procedures, and no such action shall constitute a termination of any Lease; or (d) require Lessee to deliver the Equipment to a location specified by Lessor; or (e) declare the Stipulated Loss Value for any or all Equipment to be due and payable as liquidated damages for loss of a bargain and not as a penalty and in lieu of any further Rent payments under the applicable Lease or Leases; or (f) proceed by court action to enforce performance by Lessee of any Lease and/or to recover all damages and expenses incurred by Lessor by reason of any Lessee Default; or (g) terminate any other agreement that Lessor may have with Lessee; or (h) exercise any other right or remedy available to Lessor at law or in equity. Also, subject to applicable law, Lessee shall pay Lessor (i) all costs and expenses that Lessor may incur to maintain, safeguard or preserve the Equipment, and other expenses incurred by Lessor in enforcing any of the terms, conditions or provisions of this Master Agreement (including reasonable legal fees and collection agency costs) and (ii) all costs incurred by Lessor in exercising any of Page 5 of 10 MOLA 10-01-05 its remedies hereunder (including reasonable legal fees). Upon repossession or surrender of any Equipment, Lessor will lease, sell or otherwise dispose of the Equipment in a commercially reasonable manner, with or without notice and at public or private sale, and apply the net proceeds thereof to the amounts owed to Lessor under this Master Agreement; provided, however, that Lessee will remain liable to Lessor for any deficiency that remains after any sale or lease of such Equipment. Any proceeds of any sale or lease of such Equipment in excess of the amounts owed to Lessor under this Master Agreement will be retained by Lessor. Lessee agrees that with respect to any notice of a sale required by law to be given, 10 days' notice will constitute reasonable notice. With respect to any exercise by Lessor of its right to recover and/or dispose of any Equipment or other Collateral securing Lessee’s obligations under any Schedule, Lessee acknowledges and agrees as follows: (i) Lessor shall have no obligation, subject to the requirements of commercial reasonableness, to clean-up or otherwise prepare the Equipment or any other Collateral for disposition, (ii) Lessor may comply with any applicable state or federal law requirements in connection with any disposition of the Equipment or other Collateral, and any actions taken in connection therewith shall not be deemed to have adversely affected the commercial reasonableness of any such disposition, and (iii) Lessor may convey the Equipment and any other Collateral on an “AS IS, WHERE IS” basis, and without limiting the generality of the foregoing, may specifically exclude or disclaim any and all warranties, including any warranty of title or the like with respect to the disposition of the Equipment or other Collateral, and no such conveyance or such exclusion or such disclaimer of any warranty shall be deemed to have adversely affected the commercial reasonableness of any such disposition.These remedies are cumulative of every other right or remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise, and may be enforced concurrently therewith or from time to time. 22.PERFORMANCE OF LESSEE’S OBLIGATIONS.If Lessee fails to perform any of its obligations hereunder, Lessor may perform any act or make any payment that Lessor deems reasonably necessary for the maintenance and preservation of the Equipment and Lessor’s interests therein; provided, however, that the performance of any act or payment by Lessor shall not be deemed a waiver of, or release Lessee from, the obligation at issue. All sums so paid by Lessor, together with expenses (including legal fees and costs) incurred by Lessor in connection therewith, shall be paid to Lessor by Lessee immediately upon demand. 23.TRUE LEASE; SECURITY INTEREST; MAXIMUM RATE.Each Lease is intended to be a “Finance Lease” as defined in Article 2A of the UCC, and Lessee hereby authorizes Lessor to file a financing statement to give public notice of Lessor’s ownership of the Equipment. The parties’ intent that each Lease be a “Finance Lease” within the meaning of Article 2A and the UCC shall have no effect on the characterization of any Lease for accounting purposes, which characterization shall be made by each party independently on the basis of generally accepted accounting principles in the United States in effect at the time. Lessee, by its execution of each Schedule, acknowledges that Lessor has informed it that (a) the identity of Seller is set forth in the applicable Schedule, (b) Lessee is entitled under Article 2A of the UCC to the promises and warranties, including those of any third party, provided to Lessor in connection with, or as a part of, the applicable Purchase Documents, and (c) Lessee may communicate with Seller and receive an accurate and complete statement of the promises and warranties, including any disclaimers and limitations of them or of remedies. If (1) notwithstanding the express intention of Lessor and Lessee to enter into a true lease, any Lease is ever deemed by a court of competent jurisdiction to be a lease intended for security, or (2) Lessor and Lessee enter into a Lease with the intention that it be treated as a lease intended as security by so providing in the applicable Schedule, then to secure payment and performance of Lessee’s obligations under this Master Agreement and all Leases, Lessee hereby grants Lessor a purchase money security interest in the related Equipment and in all attachments, accessories, additions, substitutions, products, replacements, rentals and proceeds (including, without limitation, insurance proceeds) thereto as well as a security interest in any other equipment financed pursuant to this Master Agreement or any other agreement between Lessor and Lessee (collectively, the “Collateral”). In any such event, notwithstanding any provisions contained in this Master Agreement or in any Schedule, neither Lessor nor any Assignee shall be entitled to receive, collect or apply as interest any amount in excess of the maximum rate or amount permitted by applicable law. In the event Lessor or any Assignee ever receives, collects or applies as interest any amount in excess of the maximum amount permitted by applicable law, such excess amount shall be applied to the unpaid principal balance and any remaining excess shall be refunded to Lessee. In determining whether the interest paid or payable under any specific contingency exceeds the maximum rate or amount permitted by applicable law, Lessor and Lessee shall, to the maximum extent permitted under applicable law, characterize any non-principal payment as an expense or fee rather than as interest, exclude voluntary prepayments and the effect thereof, and spread the total amount of interest over the entire term of this Master Agreement and all Leases. 24. ASSIGNMENT.Lessor shall have the unqualified right to sell, assign, grant a security interest in or otherwise convey any part of its interest in this Master Agreement, any Lease or any Equipment, in whole or in part, without prior notice to or the consent of Lessee.Lessor shall not issue a Certificate of Participation in the Lease without conforming to Texas law. If any Lease is sold, assigned, or otherwise conveyed, Lessee agrees that Lessor’s purchaser, assignee or transferee, as the case may be (“Assignee”) shall (a) have the same rights, powers and privileges that Lessor has under the applicable Lease, (b) have the right to receive from Lessee all amounts due under the applicable Lease; and (c) not be required to perform any obligations of Lessor, other than those that are expressly assumed in writing by such Assignee. Lessee agrees to execute such acknowledgements to such assignment as may be reasonably requested by Lessor or the Assignee. Lessee further agrees that, in any action brought by such Assignee against Lessee to enforce Lessor’s rights hereunder, Lessee will not assert against such Assignee any set-off, defense or counterclaim that Lessee may have against Lessor or any other person. Unless otherwise specified by Lessor and the Assignee, Lessee shall continue to pay all amounts due under the applicable Lease to Lessor; provided, however, that upon notification from Lessor and the Assignee, Lessee covenants to pay all amounts due under the applicable Lease to such Assignee when due and as directed in such notice. Lessee further agrees that any Assignee may further sell, assign, grant a security interest in or otherwise convey its rights and interests under the applicable Lease with the same force and effect as the assignment described herein. Lessee may not assign, transfer, sell, sublease, pledge or otherwise dispose of this Master Agreement, any Lease, any Equipment or any interest therein. 25. FURTHER ASSURANCES.Lessee agrees to promptly execute and deliver to Lessor such further documents and take such further action as Lessor may require in order to more effectively carry out the intent and purpose of this Master Agreement and any Schedule. Without limiting the generality of the foregoing, Lessee agrees (a) to furnish to Lessor from time to time, its certified financial statements, officer’s certificates and appropriate resolutions, opinions of counsel and such other information and documents as Lessor may reasonably request, and (b) to execute and timely deliver to Lessor such documents that Lessor deems necessary to perfect or protect Lessor’s security interest in the Collateral or to evidence Lessor’s interest in the Equipment. It is also agreed that Lessor or Lessor’s agent may file as a financing statement, any lease document (or copy thereof, where permitted by law) or other financing statement that Lessor deems appropriate to perfect or protect Lessor’s security interest in the Collateral or to evidence Lessor’s interest in the Equipment. Lessee hereby appoints Lessor and any agent of Lessor as Lessee’s attorney-in-fact, with full power of substitution in its place and stead, in its name or in the name of Lessor to from time to time in Lessor’s sole discretion take any action and to execute any instrument which Lessor may deem necessary or advisable to protect Lessor’s interests hereunder. Lessee acknowledges and agrees that such appointment is coupled with an interest and is irrevocable until the expiration or termination of all Leases and financings and the satisfaction by Lessee of all of its obligations hereunder. Upon demand, Lessee will promptly reimburse Lessor for any filing or recordation fees or expenses (including legal fees and costs) incurred by Lessor in perfecting or protecting its interests in any Collateral. Lessee represents and warrants that Lessee’s name as set forth in the signature block below is Lessee’s full and accurate legal name and that the information set forth on the first page hereof regarding its organization number, tax identification number and location is true and correct as of the date hereof. Lessee further agrees to provide Lessor advance written notice of any change in the foregoing. 26. TERM OF MASTER AGREEMENT; SURVIVAL.This Master Agreement shall commence and be effective upon the execution hereof by both parties and shall continue in effect until terminated by either party by 30 days prior written notice to the other, provided that the effective date of the termination is after all obligations of Lessee arising hereunder and pursuant to any Schedule have been fully satisfied. Notwithstanding the foregoing, all representations, warranties and covenants made by Lessee hereunder shall survive the termination of this Master Agreement and shall remain in full force and effect. All of Lessor’s rights, privileges and indemnities under this Master Agreement or any Lease, to the extent they are fairly attributable to events or conditions occurring or existing on or prior to the expiration or termination of such Lease, shall survive such expiration or termination and be enforceable by Lessor and Lessor’s successors and assigns. Page 6 of 10 MOLA 10-01-05 27. WAIVER OF JURY TRIAL. LESSEE AND LESSOR HEREBY EXPRESSLY WAIVE ANY RIGHT TO DEMAND A JURY TRIAL WITH RESPECT TO ANY ACTION OR PROCEEDING INSTITUTED BY LESSOR OR LESSEE IN CONNECTION WITH THIS MASTER AGREEMENT OR ANY FUNDAMENTAL AGREEMENT. 28. NOTICES.All notices, requests, demands, waivers and other communications required or permitted to be given under this Master Agreement or any other Fundamental Agreement shall be in writing and shall be deemed to have been received upon receipt if delivered personally or by a nationally recognized overnight courier service, or by confirmed facsimile transmission, or 3 days after deposit in the United States mail, certified, postage prepaid with return receipt requested, addressed as follows (or such other address or fax number as either party shall so notify the other): If to Lessor: Hewlett-Packard Financial Services Company 200 Connell Drive, Suite 5000 Berkeley Heights, NJ 07922 Attn: Director of Operations North America Fax: (908) 898-4882 If to Lessee: City of Schertz, Texas 1400 Schertz Parkway Schertz, TX 78154 Attn: John C. Kessel, City Manager (“Authorized Lessee Representative”) Fax: 29. MISCELLANEOUS (a) Governing Law. THIS MASTER AGREEMENT AND EACH LEASE SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF EQUIPMENT LOCATION. (b) Credit Review. Lessee consents to a reasonable credit review by Lessor for each Lease. (c) Captions and References.The captions contained in this Master Agreement and any Schedule are for convenience only and shall not affect the interpretation of this Master Agreement or any Lease. All references in this Master Agreement to Sections and Exhibits refer to Sections hereof and Exhibits hereto unless otherwise indicated. (d) Entire Agreement; Amendments.This Master Agreement and all other Fundamental Agreements executed by both Lessor and Lessee constitute the entire agreement between Lessor and Lessee relating to the leasing of the Equipment, and supersede all prior agreements relating thereto, whether written or oral, and may not be amended or modified except in a writing signed by the parties hereto. (e) No Waiver.Any failure of Lessor to require strict performance by Lessee, or any written waiver by Lessor of any provision hereof, shall not constitute consent or waiver of any other breach of the same or any other provision hereof. (f) Lessor Affiliates.Lessee understands and agrees that Hewlett-Packard Financial Services Company or any affiliate or subsidiary thereof may, as lessor, execute Schedules under this Master Agreement, in which event the terms and conditions of the applicable Schedule and this Master Agreement as it relates to the lessor under such Schedule shall be binding upon and shall inure to the benefit of such entity executing such Schedule as lessor, as well as any successors or assigns of such entity. (g) Invalidity.If any provision of this Master Agreement or any Schedule shall be prohibited by or invalid under law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Master Agreement or such Schedule. (h) Counterparts.This Master Agreement may be executed in counterparts, which collectively shall constitute one document. (i) Lessor Reliance.Lessor may act in reliance upon any instruction, instrument or signature reasonably believed by Lessor in good faith to be genuine. Lessor may assume that any employee of Lessee who executes any document or gives any written notice, request or instruction has the authority to do so. 30 DEFINITIONS.All capitalized terms used in this Master Agreement have the meanings set forth below or in the Sections of this Master Agreement referred to below: “Acceptance Certificate”means an Acceptance Certificate in substantially the form of Exhibit B executed by Lessee and delivered to Lessor in accordance with Section 3. “Acceptance Date”means, as to any Lease, the date Lessee shall have accepted the Equipment subject to such Lease in accordance with Section 3. “Authorized Lessee Representative”has the meaning specified in Section 28. “Assignee”means any assignee of all or any portion of Lessor’s interest in this Master Agreement, any Schedule or any Equipment, whether such assignee received the assignment of such interest from Lessor or a previous assignee of such interest. “Casualty Loss”means, with respect to any Equipment, the condemnation, taking, loss, destruction, theft or damage beyond repair of such Equipment. “Casualty Value”means, as to any Equipment, an amount determined as of the date of the Casualty Loss or Lessee Default in question pursuant to a “Table of Casualty Values” attached to the applicable Schedule or, if no “Table of Casualty Values” is attached to the applicable Schedule, an amount equal to the sum of (i) the present value as of the date of the Casualty Loss or Lessee Default in question (discounted at 5% per annum, compounded monthly) of all Rent payments payable after such date through the scheduled date of expiration of the Then Applicable Term, plus (ii) the present value as of the date of the Casualty Loss or Lessee Default in question (discounted at 5% per annum, compounded monthly, from the scheduled date of expiration of the Then Applicable Term) of an amount determined by multiplying the applicable casualty percentage specified below by the Total Cost of such Equipment. The applicable casualty percentage shall be 35% for Equipment having an Initial Term of less than 24 months; 30% for Equipment having an Initial Term of 24 months or greater, but less than 36 months; 25% for Equipment having an Initial Term of 36 months or greater, but less than 48 months; and 20% for Equipment having an Initial Term of 48 months or greater. “Claims”means all claims, actions, suits, proceedings, costs, expenses (including, without limitation, court costs, witness fees and attorneys’ fees), damages, obligations, judgments, orders, penalties, fines, injuries, liabilities and losses, including, without limitation, actions based on Lessor’s strict liability in tort. “ “Collateral”has the meaning specified in Section 23. “Daily Rent”means, as to any Lease, an amount equal to the per diem Rent payable under the applicable Schedule (calculated on the basis of a 360 day year and 30 day months). “End-of-Term Notice”means, as to any Lease, a written notice delivered by Lessee to Lessor at least 90 days prior to the end of the Initial Term, any Renewal Term or any optional extension of the Initial Term or any Renewal Term setting forth Lessee’s elections pursuant to Section 4 with respect to the Equipment subject to such Lease. Each End-of-Term Notice shall specify on a line item basis and in the same format as the Equipment is described in the applicable Schedule (or if different, in the applicable Acceptance Certificate) the Units of Equipment to be purchased by Lessee (if any), as to which the Lease is to be renewed (if any) and that are to be returned to Lessor (if any). “Equipment”has the meaning specified in Section 1. “Equipment Location”means, as to any Equipment, the address at which such Equipment is located from time to time, as originally specified in the applicable Schedule and as subsequently specified in a notice delivered to Lessor pursuant to Section 12, if applicable. “Fair Market Value”means the total price that would be paid for any specified Equipment in an arm’s length transaction between an informed and willing buyer (other than a used equipment dealer) under no compulsion to buy and an informed and willing seller under no compulsion to sell. Such total price shall not be reduced by the costs of removing such Equipment from its current location or moving it to a new location. “Fair Rental Value”means the amount of periodic rent that would be payable for any specified Equipment in an arm’s length transaction between an informed and willing lessee and an informed and willing lessor, neither under compulsion to lease. Such amount shall not be reduced by the costs of removing such Equipment from its current location or moving it to a new location. Page 7 of 10 MOLA 10-01-05 “Final Invoice Amount”has the meaning set forth in Section 2(c). “First Payment Date”means, as to any Lease, the date the first Rent payment with respect to the Initial Term of such Lease is due, as determined pursuant to the terms of the applicable Schedule. “Fiscal Period”shall mean the fiscal year of Lessee, as it may be more particularly described in a Schedule. “Fundamental Agreements”means, collectively, this Master Agreement, each Schedule and Acceptance Certificate and all other related instruments and documents. “Hardware”means items of tangible equipment and other property. “Initial Term”means, as to any Lease, the initial term thereof as specified in the related Schedule. “Lease”has the meaning specified in Section 2(a). “Lessee”has the meaning specified in the preamble hereof. “Lessee Default”has the meaning specified in Section 20. “Lessor”has the meaning specified in the preamble hereof. “License Agreement”means any license agreement or other document granting the purchaser the right to use Software or any technical information, confidential business information or other documentation relating to Hardware or Software, as amended, modified or supplemented by any other agreement between the licensor and Lessor. “Master Agreement”has the meaning specified in the preamble hereof. “Material Agreements”means, collectively, all Fundamental Agreements, all other material agreements by and between Lessor and Lessee, and any application for credit, financial statement, or financial data required to be provided by Lessee in connection with any Lease. “Mobile PC Equipment”has the meaning specified in Section 12 hereof. “Non-Appropriation”has the meaning specified in Section 7. “Optional Additions”has the meaning specified in Section 11. “PC Equipment”means, collectively, personal computers (e.g., workstations, desktops and notebooks) and related items of peripheral equipment (e.g., monitors, printers and docking stations). “Purchase Documents”means, as to any Equipment, any purchase order, contract, bill of sale, License Agreement, invoice and/or other documents that Lessee has, at any time, approved, agreed to be bound by or entered into with any Supplier of such Equipment relating to the purchase, ownership, use or warranty of such Equipment. “Renewal Agreement”has the meaning specified in Section 4. “Renewal Term”has the meaning specified in Section 4. “Rent”has the meaning specified in Section 5. “Schedule”means, unless the context shall otherwise require a Schedule executed by Lessor and Lessee pursuant to Section 2(a). “Seller”means, as to any Equipment, the seller of such Equipment as specified in the applicable Schedule. “Software”means copies of computer software programs owned or licensed by Lessor, and any disks, CDs, or other media on which such programs are stored or written. “State”means any of the states of the United States, its territories and possessions. “Stipulated Loss Value”means, as to any Equipment, an amount equal to the sum of (a) all Rent and other amounts due and owing with respect to such Equipment as of the date of payment of such amount, plus (b) the Casualty Value of such Equipment. “Substitute Equipment”means, as to any item of Hardware or Software subject to a Lease, a substantially equivalent or better item of Hardware or Software having equal or greater capabilities and equal or greater Fair Market Value manufactured or licensed by the same manufacturer or licensor as such item of Hardware or Software subject to a Lease. The determination of whether any item of Equipment is substantially equivalent or better than an item of Equipment subject to a Lease shall be based on all relevant facts and circumstances, but shall minimally require, in the case of a computer, that each of processor, hard-drive, random access memory and CD ROM drive, if applicable, be equivalent or better. “Supplier”means as to any Equipment, the Seller and the manufacturer or licensor of such Equipment collectively, or where the context requires, any of them. “System Software”means an item of Software that is pre-loaded on an item of Hardware purchased by Lessor for lease hereunder for which the relevant Purchase Documents specify no purchase price separate from the aggregate purchase price specified for such items of Hardware and Software. “Taxes”means all license and registration fees and all taxes (local, state and federal), fees, levies, imposts, duties, assessments, charges and withholding of any nature whatsoever, however designated (including, without limitation, any value added, transfer, sales, use, gross receipts, business, occupation, excise, personal property, real property, stamp or other taxes) other than taxes measured by Lessor’s income. “Term”means the term thereof as specified in the related Schedule. “Then Applicable Term”means, as to any Lease, the term of the Lease in effect at the time of determination, whether it be the Initial Term, any Renewal Term or any optional or other automatic extension of the Initial Term or any Renewal Term pursuant to Section 4. “Total Cost”means as to any Lease, the total acquisition cost to Lessor of the Equipment subject to such Lease as set forth in the applicable Purchase Documents, including related delivery, installation, taxes and other charges which Lessor has agreed to pay and treat as a portion of such acquisition cost, if any. “Total Term”means, as to any Lease, the aggregate term of such Lease, including the Initial Term, any Renewal Term and any optional or other automatic extension of the Initial Term or any Renewal Term pursuant to Section 4. “UCC”means the Uniform Commercial Code as enacted and in effect in any applicable jurisdiction. “Unit of Equipment”means, as to the Equipment leased pursuant to any Schedule (a) each individual item of PC Equipment leased pursuant to such Schedule, and (b) all Equipment taken as a whole leased pursuant to such Schedule other than PC Equipment taken as a whole. IN WITNESS WHEREOF, LESSEE AND LESSOR HAVE EXECUTED THIS MASTER AGREEMENT ON THE DATES SPECIFIED BELOW. LESSEE: LESSOR: CITY OF SCHERTZ, TEXAS HEWLETT-PACKARD FINANCIAL SERVICES COMPANY2 By:__________________________________________________________ By: _______________________________________________________ _____________________________________________________________ __________________________________________________________ Name and Title Name and Title _____________________________________________________________ __________________________________________________________ Date Date 2 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. Page 8 of 10 MOLA 10-01-05 Exhibit A to Master Agreement Master Agreement Number _________ Schedule Number _________ COUNTERPART NO. _______ OF _______. TO THE EXTENT THAT THIS SCHEDULE CONSTITUTES CHATTEL PAPER (AS DEFINED ON THE UCC), NO SECURITY INTEREST IN THIS SCHEDULE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1. STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT SCHEDULE Hewlett-Packard Financial Services Company1 (“Lessor”) and________________, an agency, department or political subdivision of the State of __________ (“Lessee”) are parties to the State and Local Government Master Operating Lease Agreement identified by the Master Agreement Number specified above (the “Master Agreement”). This Schedule (which shall be identified by the Schedule Number specified above) and the Master Agreement together comprise a separate Lease between the parties. The terms and conditions of the Master Agreement are hereby incorporated by reference into this Schedule. All capitalized terms used in this Schedule without definition have the meanings ascribed to them in the Master Agreement. 1.LEASE. A. Description of Items of Leased Equipment Total Cost B. Initial Term: ____ Months. 2.RENT: $ RENT is payable: ___in advance ___in arrears (check one) ____monthly ____quarterly (check one) ____semi-annually ____annually If the Rent is due in advance, then the first Rent payment shall be due on the Acceptance Date. If the Rent is due in arrears, then the first Rent payment shall be due at the end of the first payment frequency period as selected above. 3.LATEST COMMENCEMENT DATE: ____________. Lessor’s obligation to purchase and lease the Equipment is subject to the Acceptance Date being on or before the Latest Commencement Date. 4.EQUIPMENT LOCATION:____________________________________________________________________________________________________ . 5.SELLER:____________________________________________________________________________________________________________________ . 6.APPROPRIATIONS:Monies for all Rent and other payments due under the Lease for the Fiscal Period ending ___________ are available from Lessee's appropriated funds for such Fiscal Period and that appropriations and/or other funds have been encumbered or designated for the payment of all Rent and other payments that shall become due under the Lease in such Fiscal Period. 7.ADDITIONAL PROVISIONS: 8.FISCAL PERIOD: ___[Annual]_____________________ LESSOR AGREES TO LEASE TO LESSEE AND LESSEE AGREES TO LEASE FROM LESSOR THE EQUIPMENT DESCRIBED IN SECTION 1.A ABOVE. SUCH LEASE WILL BE GOVERNED BY THE MASTER AGREEMENT AND THIS SCHEDULE, INCLUDING THE IMPORTANT ADDITIONAL TERMS AND CONDITIONS SET FORTH ABOVE. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS SCHEDULE AND THE MASTER AGREEMENT, THE TERMS OF THIS SCHEDULE SHALL GOVERN. LESSEE HEREBY REPRESENTS AND WARRANTS THAT ON AND AS OF THE DATE HEREOF EACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY LESSEE IN THE MASTER AGREEMENT ARE TRUE, CORRECT AND COMPLETE. LESSEE: LESSOR: CITY OF SCHERTZ, TEXAS HEWLETT-PACKARD FINANCIAL SERVICES COMPANY2 By:__________________________________________________________ By: _______________________________________________________ _____________________________________________________________ __________________________________________________________ Name and Title Name and Title _____________________________________________________________ __________________________________________________________ Date Date 1 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. 2 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. Page 9 of 10 MOLA 10-01-05 Page 10 of 10 MOLA 10-01-05 Exhibit B to Master Agreement Master Agreement Number _________ Schedule Number _________ STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT ACCEPTANCE CERTIFICATE Hewlett-Packard Financial Services Company3 (“Lessor”) and________________, an agency, department or political subdivision of the State of __________ (“Lessee”) are parties to the State and Local Government Master Operating Lease Agreement (the “Master Agreement”) and Schedule under such Master Agreement (the “Schedule”) identified by the Master Agreement Number and Schedule Number, respectively, specified above. The Master Agreement and Schedule together comprise a separate Lease, that is being accepted and commenced pursuant to this Acceptance Certificate. All capitalized terms used in this Acceptance Certificate without definition have the meanings ascribed to them in the Master Agreement. 1. LEASE ACCEPTANCE.Lessee hereby acknowledges that the Equipment described in Section 1 of the Schedule, or if different, the Equipment described in the attached invoice or other attachment hereto, has been delivered to the Equipment Location specified below, inspected by Lessee and found to be in good operating order and condition, and has been unconditionally and irrevocably accepted by Lessee under the Lease evidenced by the Master Agreement and the Schedule as of the Acceptance Date set forth below. Lessee authorizes Lessor to adjust the Rent payments on the Schedule to reflect the Final Invoice Amount set forth on the attached invoice(s) if such amount is different than the Total Cost on the Schedule. 2. LESSEE ACKNOWLEDGEMENTS.Lessee hereby agrees to faithfully perform all of its obligations under the Master Agreement and the Schedule and reaffirms, as of the date hereof, its representations and warranties as set forth in the Master Agreement. Lessee hereby acknowledges its agreement to pay Lessor Rent payments, as set forth in the Schedule, plus any applicable taxes, together with all other costs, expenses and charges whatsoever which Lessee is required to pay pursuant to the Master Agreement and the Schedule, in each instance at the times, in the manner and under the terms and conditions set forth in the Master Agreement and the Schedule, respectively. 3. EQUIPMENT LOCATION.The Equipment has been installed and is located at the following Equipment Location: ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ . 4. REPRESENTATIONS AND WARRANTIES.Lessee hereby represents and warrants that on and as of the date hereof each of the representations and warranties made by Lessee in the Master Agreement are true, correct and complete. CITY OF SCHERTZ, TEXAS By: ________________________________________________________________ ___________________________________________________________________ Name and Title Acceptance Date: ____________________________________________________ 3 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. Incumbency Certificate 11-02 INCUMBENCY CERTIFICATE (State and Local Government Master Operating Lease Agreement) I, the undersigned, being the duly appointed and acting Secretary or Clerk of City of Schertz, Texas ("Lessee"),DO HEREBY CERTIFY that (i) I have custody of the records of Lessee; and (ii) based on an examination of such records of Lessee as of the date set forth below, the following persons in the respective capacities indicated opposite their names have been authorized to execute, with full authority to bind the Lessee, the State and Local Government Master Operating Lease Agreement between Lessee and Hewlett-Packard Financial Services Company as lessor ("Master Agreement"), and all other agreements, documents, and instruments executed and delivered and to be executed and delivered in connection therewith, including without limitation, the Master Agreement, any Schedules and Acceptance Certificates (as such terms are defined in the Master agreement; collectively referred to as the “Documents”); and (iii) the signature set forth opposite such individual's name and title/office is the true and authentic signature of that individual, (iv) each such individual has (and had on the date each such individual affixed his or her signature to the Lease) the authority to enter into the Lease on behalf of the Lessee. Name Title/Office Signature On behalf of Lessee, I hereby certify the due and effective ratification, approval, and confirmation of all such acts and things that any of the above-referenced persons has done or may do in connection with the matters outlined above prior or subsequent to the date of this Certificate.I do further certify that the foregoing authority shall remain in full force and effect, and Hewlett-Packard Financial Services Company shall be entitled to rely upon same, until written notice of the modification, rescission or revocation of same, in whole or in part, has been delivered to Hewlett-Packard Financial Services Company, but no such modification, rescission or revocation shall, in any event, be effective with respect to any documents executed or actions taken in reliance upon the foregoing authority prior to the delivery to Hewlett-Packard Financial Services Company of said written notice of said modification, rescission or revocation. The execution and delivery of the Documents for and on behalf of Lessee is not prohibited or in any manner restricted by any law, ordinance or regulation. IN WITNESS WHEREOF, I have duly executed this Incumbency Certificate and affixed Lessee's seal hereto this day of , 2012. Secretary/Clerk or duly elected or appointed and acting officer (or duly authorized designee of such officer) of SEAL THE CITY OF SCHERTZ, TEXAS Signature: Print Name: Title: _______ [PLEASE NOTE: THE GENERAL PURPOSE OF THIS DOCUMENT IS TO AUTHORIZE INDIVIDUALS TO SIGN THE LEASE DOCUMENTS. CONSEQUENTLY, THE PERSON PROVIDING THE AUTHORIZATION CANNOT HIM OR HERSELF BE ONE OF THE SIGNERS OF THE LEASE DOCUMENTS. – I.E. CANNOT AUTHORIZE HIM OR HERSELF]. Master Agreement Number 4453028924 Schedule Number 445302892400001 COUNTERPART NO. _______ OF _______. TO THE EXTENT THAT THIS SCHEDULE CONSTITUTES CHATTEL PAPER (AS DEFINED ON THE UCC), NO SECURITY INTEREST IN THIS SCHEDULE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1. STATE AND LOCAL GOVERNMENT MASTER OPERATING LEASE AGREEMENT SCHEDULE (Software and Support) Hewlett-Packard Financial Services Company1 (“Lessor”) and City of Schertz, Texas, an agency, department or political subdivision of the State of Texas (“Lessee”) are parties to the State and Local Government Master Operating Lease Agreement identified by the Master Agreement Number specified above (the “Master Agreement”). This Schedule (which shall be identified by the Schedule Number specified above) and the Master Agreement together comprise a separate Lease between the parties. The terms and conditions of the Master Agreement are hereby incorporated by reference into this Schedule. All capitalized terms used in this Schedule without definition have the meanings ascribed to them in the Master Agreement. 1.LEASE. A. Description of Items of Leased Equipment Total Cost HP VCX Connect 200 Unified Communication Server $42,809.32 (See attached Lan Comm Proposal # 1319) B. Initial Term:60 Months (plus the number of days from and including the Acceptance Date through and including the last day of the calendar month or quarter (depending on whether Rent is payable monthly or quarterly as specified in Section 3 below) in which the Acceptance Date occurs). 2.FINANCING. A.Description of Financed Items Total Cost Software, Services, Warranty and related softcosts $127,049.68 (See attached Lan Comm Proposal # 1319) B.Term:60 Months (plus the number of days from and including the Acceptance Date through and including the last day of the calendar month or quarter (depending on whether Rent is payable monthly or quarterly as specified in Section 3 below) in which the Acceptance Date occurs). 3.RENT: For Lease: $ 766.71 For Financing: $2,403.78 Total Rent: $3,170.49 RENT is payable: _X__in advance ___in arrears (check one) _X__monthly ___quarterly (check one) DAILY RENT: For Lease: __N/A____ (i.e., the Rent payment specified above expressed on a per diem basis, assuming a 360 day year and 30 day months) For Financing: _N/A__ (based on the Financing Rate, and interest only) For Financings, the “Financing Rate” generally equals the rate of interest that would cause the present value of the Rent payable over the Term, calculated as of the First Payment Date and assuming monthly or quarterly (as applicable) compounding, to equal the Total Cost of the Financed Items. Lessee shall pay Lessor (a) on the first day of each calendar month or calendar quarter (depending on whether Rent is payable monthly or quarterly as specified above) if Rent is payable in advance, or (b) on the last day of each calendar month or calendar quarter (depending on whether Rent is payable monthly or quarterly as specified above) if Rent is payable in arrears, the Rent payment specified above for the length of the Initial Term in the case of a Lease and for the length of the Term in the case of a Financing. The First Payment Date shall be the first day (if Rent is payable in advance) or the last day (if Rent is payable in arrears) of the month or quarter (as applicable) immediately following the month or quarter (as applicable) in which the Acceptance Date occurs. In addition, on the First Payment Date Lessee shall also pay Lessor (a) in the case of Leases an amount equal to the Daily Rent multiplied by (i) 15 days if Rent is payable monthly or (ii) 45 days if Rent is payable quarterly; 1 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. or (b) in the case of Financings an amount equal to the Daily Rent multiplied by the number of days from and including the Funding Date up to but excluding the first day of the month or quarter (as applicable) in which the First Payment Date occurs. for Financings, all payments of Rent will be deemed to be blended payments of principal and interest (which interest will be calculated and payable at the Financing Rate), other than (a) Daily Rent, which is interest only, and (b) if Rent is payable in advance, the first periodic payment of Rent which is principal only. All payments of Rent with respect to Financings will be applied first to accrued and unpaid interest and next on account of principal, with interest on overdue amounts calculated and payable in accordance with the Master Agreement. 4.LATEST COMMENCEMENT DATE: March 31, 2012. Lessor’s obligation to purchase and lease the Equipment or finance the Financed Items is subject to the Acceptance Date being on or before the Latest Commencement Date. 5.EQUIPMENT LOCATION:1400 Schertz Parkway, Schertz, TX 78154 6.SELLER: LAN COMM Technologies, Inc. 7.APPROPRIATIONS:Monies for all Rent and other payments due under the Lease for the Fiscal Period ending ___________ are available from Lessee's appropriated funds for such Fiscal Period and that appropriations and/or other funds have been encumbered or designated for the payment of all Rent and other payments that shall become due under the Lease in such Fiscal Period. 8.ADDITIONAL PROVISIONS: Upon the Effective Date of this Schedule, the Master Agreement is hereby amended as follows with respect to this Schedule only: A. General (a) Section 1 is hereby amended in its entirety to read as follows: “This Master Agreement sets forth the general terms and conditions upon which (a) Lessor shall lease to Lessee and Lessee shall lease from Lessor items of Hardware, Software or both (such Hardware and Software being collectively referred to as “Equipment”) and (b) Lessor shall provide financing to Lessee for software program license fees, maintenance fees, fees for other services, and other costs and one-time charges (“Financed Items”) Lessee desires to finance hereunder. If Lessor and Lessee agree to a lease of particular Equipment (a “Lease”) and/or a financing of particular Financed Items (a “Financing”) (Financings and Leases are collectively referred to herein unless otherwise indicated as “Leases”), each item of Equipment and each Financed Item will be described on a schedule in the form of Exhibit A, which schedule will incorporate this Master Agreement by reference (“Schedule”). (b) The following Sections are hereby amended to add “or financed” after the word “leased” in the indicated lines: Section 2(b): each of lines 3 and 4 of that Section. Section 14, line 10 Section 25 “Unit of Equipment”, in 3 places. Lines 1 and 2. B.Section 1 of the Master Agreement is amended to include within the definition of Financed Items, “construction costs, including without limitation, construction costs for building improvements at the Equipment Location related to use and installation of the Equipment”. C.Section 4 of the Master Agreement is deleted in its entirety and the following substituted therefor: LESSEE’S END-OF-LEASE-TERM OPTIONS;AUTOMATIC EXTENSION.Lessee shall have the following options in respect of each Lease at the end of each of the Initial Term, any Renewal Term and any optional extension of the Initial Term or any Renewal Term: a.Purchase Option.Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 120 days prior to the expiration of the Initial Term, any Renewal Term or any optional extension of the Initial Term or any Renewal Term, to purchase all, but not less than all Units of Equipment then subject to such Lease (other than items of Software that may not be sold by Lessor under the terms of any applicable License Agreement) for an amount equal to the Fair Market Value of such Units of Equipment as of the end of the Then Applicable Term, provided no Lessee Default shall have occurred and be continuing. In the event of such an election, Lessee shall pay such amount to Lessor, in immediately available funds, on or before the last day of the Then Applicable Term. If Lessee shall have so elected to purchase any of the Units of Equipment, shall have so paid the applicable purchase price and shall have fulfilled the terms and conditions of this Master Agreement, then on the last day of the Then Applicable Term (1) the Lease with respect to such Units of Equipment shall terminate and, except as provided in Section 26, Lessee shall be relieved of all of its obligations in favor of Lessor with respect to such Units of Equipment, and (2) Lessor shall transfer all of its interest in such Units of Equipment to Lessee “AS IS, WHERE IS,” without any warranty, express or implied, from Lessor, other than the absence of any liens or claims by or through Lessor. In the event Lessor and Lessee are unable to agree on the Fair Market Value of any Units of Equipment, Lessor shall, at Lessee’s expense, select an independent appraiser to conclusively determine such amount. b. Renewal Option.Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term, any Renewal Term, or any optional extension of the Initial Term or any Renewal Term, to renew the Lease with respect to all, but not less than all Units of Equipment then subject to such Lease (other than items of Software that may not be re-released by Lessor under the terms of any applicable License Agreement) for an amount equal to the Fair Rental Value of such Units of Equipment as of the end of the Then Applicable Term. In the event of such an election, Lessee shall enter into a mutually agreeable renewal agreement with Lessor (“Renewal Agreement”) on or before the last day of the Then Applicable Term confirming the Units of Equipment as to which the Lease is to be renewed, the period for which the Lease is to be renewed (the “Renewal Term”), and the amount of Rent and the times at which such Rent is to be payable during the Renewal Term. In the event Lessor and Lessee are unable to agree on the Fair Rental Value of any Units of Equipment, Lessor shall, at Lessee’s expense, select an independent appraiser to conclusively determine such amount. c.Return. Lessee may elect, by delivering to Lessor an End-of-Term Notice at least 90 days prior to the expiration of the Initial Term, any Renewal Term or any optional extension of the Initial Term or any Renewal Term, to return all, but not less than all of the Units of Equipment then subject to such Lease in accordance with Section 10 of this Master Agreement. d. Optional Extension.Lessee may elect, by omitting to deliver to Lessor an End-of-Term Notice at least 120 days prior to the expiration of the Initial Term or any Renewal Term, to extend the Initial Term or such Renewal Term, as the case may be. In that event, the Initial Term or such Renewal Term shall, without any additional notice or documentation, be automatically extended for successive calendar months with respect to all items of Equipment then subject to such Lease through the end of the calendar month falling at least 120 days after the date Lessee shall have delivered to Lessor an End-of-Term Notice with respect to such Lease. For each calendar month that the Then Applicable Term of such Lease is so extended, Lessee shall pay to Lessor Rent in an amount equal to the monthly Rent payment in effect immediately prior to such extension (or the appropriate pro rata portion of the Rent payment then in effect in the case of Rent payable other than on a monthly basis), and all other provisions of this Master Agreement and the applicable Schedule shall continue to apply. If Lessee shall have delivered to Lessor an End-of-Term Notice with respect to a Lease, but shall have subsequently failed to comply with its obligations arising from its elections specified therein (e.g., Lessee shall have failed, on or before the last day of the Then Applicable Term (1) to pay Lessor the purchase price for Equipment to be purchased in accordance with Section 4(a) above, (2) to execute a Renewal Agreement with respect to Equipment as to which the Lease is to be renewed in accordance with Section 4(b) above, or (3) to return to Lessor Equipment to be returned in accordance with Section 4(c) above), then the Then Applicable Term of such Lease shall, without any additional notice or documentation, be automatically extended for successive calendar months with respect to all items of Equipment as to which Lessee shall have so failed to comply with its obligations through the end of the calendar month in which Lessee shall have complied with such obligations. For each calendar month that the Then Applicable Term of any Lease is so extended, Lessee shall pay to Lessor Rent in an amount equal to the monthly Rent payment in effect immediately prior to such extension (or the appropriate pro rata portion of the Rent payment then in effect in the case of Rent payable other than on a monthly basis), and all other provisions of this Master Agreement and the applicable Schedule shall continue to apply. Notwithstanding any of the provisions of this Section 4 to the contrary, if any Lessee Default shall have occurred and be continuing at any time during the last 120 days of the Then Applicable Term of any Lease, Lessor may cancel any Renewal Term or optional or other automatic extension of the Then Applicable Term immediately upon written notice to Lessee. 9.FISCAL PERIOD: ___[Annual]_____________________ LESSOR AGREES TO LEASE TO LESSEE AND LESSEE AGREES TO LEASE FROM LESSOR THE EQUIPMENT DESCRIBED IN SECTION 1.A ABOVE, IF ANY, AND LESSOR AND LESSEE AGREE TO ENTER INTO A FINANCING OF THE FINANCED ITEMS DESCRIBED IN SECTION 2.A ABOVE, IF ANY. SUCH LEASE AND/OR FINANCING WILL BE GOVERNED BY THE MASTER AGREEMENT AND THIS SCHEDULE, INCLUDING THE IMPORTANT ADDITIONAL TERMS AND CONDITIONS SET FORTH ABOVE. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS SCHEDULE AND THE MASTER AGREEMENT, THE TERMS OF THIS SCHEDULE SHALL GOVERN LESSEE HEREBY REPRESENTS AND WARRANTS THAT ON AND AS OF THE DATE HEREOF EACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY LESSEE IN THE MASTER AGREEMENT ARE TRUE, CORRECT AND COMPLETE. LESSEE: LESSOR: CITY OF SCHERTZ, TEXAS HEWLETT-PACKARD FINANCIAL SERVICES COMPANY2 By: __________________________________________________________ By: ________________________________________ _____________________________________________________________ __________________________________________________________ Name and Title Name and Title _____________________________________________________________ __________________________________________________________ Date Date 2 Authorized to do business in the name of Hewlett-Packard Financial Services Company, Inc. in the states of Alabama and New York. MASTER OPERATING LEASE AGREEMENT ACCEPTANCE CERTIFICATE (Software) Hewlett-Packard Financial Services Company1 (“Lessor”) and City of Schertz, Texas (“Lessee”) are parties to the Master Operating Lease Agreement (the “Master Agreement”) and the Schedule under such Master Agreement (the “Schedule”) identified by the Master Agreement Number and Schedule Number, respectively, specified above. The Master Agreement and Schedule together comprise a separate Lease, a separate Financing, or a separate Lease and a separate Financing, as the case may be, that is being accepted and commenced pursuant to this Acceptance Certificate. All capitalized terms used in this Acceptance Certificate without definition have the meanings ascribed to them in the Master Agreement. 1. LEASE ACCEPTANCE.Lessee hereby acknowledges that the Equipment described in Section 1 of the Schedule, if any, or if different, the Equipment described in the attached invoice or other attachment hereto, in either case having an aggregate Total Cost of $42,809.32, has been delivered to the Equipment Location specified below, inspected by Lessee and found to be in good operating order and condition, and has been unconditionally and irrevocably accepted by Lessee under the Lease evidenced by the Master Agreement and the Schedule as of the Acceptance Date set forth below. 2. FINANCING ACCEPTANCE.Lessee hereby acknowledges that the Financed Items described in Section 2 of the Schedule, if any, or if different, the Financed Items described in the attached invoice or other attachment hereto, in either case having an aggregate Total Cost of $127,049.68, have been received or incurred by Lessee and have been unconditionally and irrevocably accepted by Lessee under the Financing evidenced by the Master Agreement and the Schedule, as of the Acceptance Date set forth below. 3. LESSEE ACKNOWLEDGEMENTS.Lessee hereby agrees to faithfully perform all of its obligations under the Master Agreement and the Schedule and reaffirms, as of the date hereof, its representations, warranties and covenants as set forth in the Master Agreement, including, without limitation, the representations and covenants set forth in clauses (i) through (m) in Section 17 of the Master Agreement. Lessee hereby acknowledges its agreement to pay Lessor Rent payments, as set forth in the Schedule, plus any applicable taxes, together with all other costs, expenses and charges whatsoever which Lessee is required to pay pursuant to the Master Agreement and the Schedule, in each instance at the times and in the manner set forth in the Master Agreement and the Schedule, respectively. 4.EQUIPMENT LOCATION.The Equipment has been installed and is located at the following Equipment Location: 1400 Schertz Parkway, Schertz, TX 78154 City of Schertz, Texas BY: Name and Title Acceptance Date: 1 Authorized to do business in the name of Hewlett-Packard Financial Services Company Inc. in the States of Alabama and New York. Master Agreement Number 4453028924 Schedule Number 44530289400001 Proposal Date 1/1/2012 Proposal # 1319 City Of Schertz 1400 Schertz Parkway Schertz, TX 78154 Account Representative RC Project Title SIP PBX Upgrade Accepted By: Acceptance Date:Total Subtotal Sales Tax (0.0%) 210-619-1181 it_coordinator@schertz.com This document contains proprietary information and is intended for the sole use of our customers. Installation pricing is based on using existing CAT6, CAT5e, CAT5 or CAT3 cable and jacks. Pre-installed cabling that cannot be re-used will incur additional expenses. This proposal does not include any expedite charges, and is limited to those services described herein. Additional work outside or beyond the scope of this document shall be billed at a per hour rate. Any and all configurations and proposals provided by LAN-COMM Technologies, Inc. and/or its authorized representatives are attempted in good faith. Any omissions and/or errors must be addressed and mutually resolved prior to a Purchase Order being accepted. ______________________ __________________________________________ Payment Terms: Net 15 on OAC, with approved credit. - Quotation prices are valid for 30 days and subject to change and/or revision without notice. ALL PURCHASES REQUIRE 1/2 DOW N PAYMENT AT THE TIME OF ACCEPTANCE, BEFORE EQUIPMENT IS ORDERED. - IP & Traditional Telephone Systems - LAN & WAN Networking Solutions - LAN & WAN Network Security Solutions - Enterprise & SMB Wireless LAN Solutions - Video & Audio Conferencing Solutions - Servers, PCs & Storage Solutions - IP Surveillance Solutions Item Number Item Description Qty Unit Cost Total JC518A HP VCX Connect 200 Unified Communications Primary Server, includes (25) Business phone licenses, (25) IP Messaging seat license, (25) Desktop Communicator softphone licenses, (25) Convergence Client softphone license, and (4) Analog licenses 1 7,769.00 7,769.00 JC519A HP VCX Connect 200 Unified Communications Secondary Server continuously replicates primary server for survivability and rapid failover for mission-critical communications 1 6,219.00 6,219.00 JC521A HP VCX 250G 3.5 Spare RAID Disk for Connect 200 Primary & Secondary 2 1,239.00 2,478.00 JE428BAE HP VCX CDR 9.x Server License 1 459.00 459.00 J9668A HP VCX IP Conference Server V7005 Platform w/ DL120 G6 Server 1 5,179.00 5,179.00 JC521A HP VCX 250G 3.5 Spare RAID Disk for IP Conf. Server 1 1,239.00 1,239.00 JE324BAE HP Presence and IP Conference Server Software, 300 users 1 3,409.00 3,409.00 JE302BAE HP Telecommuting Module 25 User (Software)2 1,369.00 2,738.00 JE424BAE HP VCX ACD 5 Agent Seat Bundle 2 1,139.00 2,278.00 JE331BAE HP VCX Business IP Phone License 250 Bundle 1 31,555.00 31,555.00 JE332BAE HP VCX Business IP Phone 50 Bundle 1 7,360.00 7,360.00 JC514BAE HP VCX IP Messaging License 250 Bundle 1 12,615.00 12,615.00 JC515BAE HP VCX IP Messaging Seat License 50 Bundle 1 2,840.00 2,840.00 JE336BAE HP VCX Desk Communicator Outlook Addition Soft Phone (50) E-LTU 1 3,499.00 3,499.00 JE286BAE HP VCX 7111 FXS Port License 72 52.00 3,744.00 JE376A HP VCX V7122 2-span E1/T1/PRI Digital VoIP Gateway 2 8,239.00 16,478.00 JE371A HP VCX V7111 (2) Port FXS Analog Gateway 36 329.00 11,844.00 JE369A HP VCX V7111 (4) Port FXO Analog Gateway 1 679.00 679.00 UW162E HP 3-year, parts only, next-day advance exchange, (Connect Primary Server)1 1,038.00 1,038.00 UW162E HP 3-year, parts only, next-day advance exchange, (Connect Secondary Server)1 1,038.00 1,038.00 UW162E HP 3-year, parts only, next-day advance exchange, (IP Conference Server)1 1,038.00 1,038.00 UW162E HP 3-year, parts only, next-day advance exchange, (T1/PRI Digital Gateway)2 1,038.00 2,076.00 Page 1 Proposal Date 1/1/2012 Proposal # 1319 City Of Schertz 1400 Schertz Parkway Schertz, TX 78154 Account Representative RC Project Title SIP PBX Upgrade Accepted By: Acceptance Date:Total Subtotal Sales Tax (0.0%) 210-619-1181 it_coordinator@schertz.com This document contains proprietary information and is intended for the sole use of our customers. Installation pricing is based on using existing CAT6, CAT5e, CAT5 or CAT3 cable and jacks. Pre-installed cabling that cannot be re-used will incur additional expenses. This proposal does not include any expedite charges, and is limited to those services described herein. Additional work outside or beyond the scope of this document shall be billed at a per hour rate. Any and all configurations and proposals provided by LAN-COMM Technologies, Inc. and/or its authorized representatives are attempted in good faith. Any omissions and/or errors must be addressed and mutually resolved prior to a Purchase Order being accepted. ______________________ __________________________________________ Payment Terms: Net 15 on OAC, with approved credit. - Quotation prices are valid for 30 days and subject to change and/or revision without notice. ALL PURCHASES REQUIRE 1/2 DOW N PAYMENT AT THE TIME OF ACCEPTANCE, BEFORE EQUIPMENT IS ORDERED. - IP & Traditional Telephone Systems - LAN & WAN Networking Solutions - LAN & WAN Network Security Solutions - Enterprise & SMB Wireless LAN Solutions - Video & Audio Conferencing Solutions - Servers, PCs & Storage Solutions - IP Surveillance Solutions Item Number Item Description Qty Unit Cost Total UW130E HP 3-year, parts only, next-day advance exchange, (4-Port FXO Gateway)1 102.00 102.00 UW130E HP 3-year, parts only, next-day advance exchange, (2-Port FXS Gateway)36 102.00 3,672.00 UW172E HP 3 year 24x7 Networks VCX level3 Software Support 2 425.00 850.00 UV742E HP 3 year 9x5 Networks Group 155 License Support (IP Conf. Software)1 1,251.00 1,251.00 HR476PE HP 1 year Next Day Exchange Hardware Support Post W arranty Extended service agreement- Primary Server, Secondary Server, Conference Server, T1/PRI Gateways 10 2,091.00 20,910.00 Discount GovEd Discount 1 -27,000.00 -27,000.00 Installation Installation, Setup, & Training 1 26,000.00 26,000.00 Professional Services LAN-COMM Professional Service Block of Hours, (24) hours per year for (5) years 120 83.35 10,002.00 HK647S This course provides practical, hands-on experience installing, configuring, operating, and maintaining VCX Connect solutions. This training is intended to prepare individuals for the VCX Connect Standard 9.0 Installation and Administration Professional (3IAP) Exam. Length 5 Days, Delivery method is Instructor-led training 2 3,250.00 6,500.00 Page 2 $169,859.00 $169,859.00 $0.00 0680.1MWK 1601517 BILLING INFORMATION REQUEST FORM – INVOICING INSTRUCTIONS Customer ID Number:4453028924 Schedule Number(s):445302892400001 IN ORDER FOR HEWLETT-PACKARD FINANCIAL SERVICES COMPANY TO PROPERLY BILL AND CREDIT YOUR ACCOUNT, IT IS NECESSARY THAT YOU COMPLETE THIS FORM AND RETURN IT WITH THE SIGNED DOCUMENTS. BILL TO ADDRESS :(CUSTOMER LEGAL NAME):City of Schertz, Texas Dept Name: _______________________________________________ Street: _________________________________________________________________ City, State & Zip: ________________________________________________________ BILLING CONTACT: First, M.I. and Last Name: _______________________________________________ Title: _________________________________________________________________ Phone Number: ________________________________________________________ Fax Number: ___________________________________________________________ Email: ________________________________________________________________ PURCHASING CONTACT: First, M.I. and Last Name: ____________________________________________ Title: _________________________________________________________________ Phone Number: ________________________________________________________ Fax Number: ___________________________________________________________ Email: ________________________________________________________________ PURCHASE ORDER NUMBER:__________________________ Do your Invoices require PO numbers:YES NO FEDERAL TAX ID NUMBER: __________________________ ARE YOU SALES/RENTAL TAX EXEMPT? YES (Please return a copy of your Sales and Use Tax Exempt Certificate with this Form).IF NOT, YOU WILL BE ACCESSED TAXES ACCORDINGLY NO POINT OF CONTACT FOR SURVEYS (from time to time we survey our customers to see HOW WE CAN BETTER SERVE THEIR NEEDS ETC) First, M.I. and Last Name: ____________________________________________ Title: _________________________________________________________________ Phone Number: ________________________________________________________ Email: ________________________________________________________________ EQUIPMENT LOCATION (If different from Billing Address): 1. ______________________________________________________ 2. ______________________________________________________ 3. ______________________________________________________ ADDITIONAL INFORMATION NEEDED ON INVOICE: ____________________________________________________________________________________ _____________________________________________________________________________________ SIGNATURE AND DATE: _________________ 0680.1MWK 1601517 INSURANCE INFORMATION REQUEST FORM Broker / Agent Name: Address: Contact: Telephone: Email:Fax: Insurance Broker / Agent: We have entered into a State and Local Government Master Operating Lease Agreement Number 4453028924 with Hewlett-Packard Financial Services Company for the lease/finance of computer equipment, components, accessories and related peripherals (the “Equipment”). Please insure the Equipment, issue a written endorsement naming Hewlett-Packard Financial Services Company as Additional Insured and Loss Payee, and state that each policy shall provide Hewlett-Packard Financial Services Company with at least thirty (30) days prior written notice of any material changes in coverage, cancellation or non-renewal. The policy should include the following endorsement: “The insurance under this policy shall be primary insurance and the company insurer shall be liable under this policyforthefull amount of the loss up to and including the total limits of liability herein without right of contribution from any otherinsuranceeffectedbyHewlett- Packard Financial Services Company under any policy with any insurance company covering a loss covered under this policy.” Please provide Hewlett-Packard Financial Services Company with proof of insuranceintheformofacertificateofinsurance. Thecertificate should include proof of the following: X Physical Damage (All Risk)in an amount not less than the replacement value of the Equipment leased or financedfromHewlett- Packard Financial Services Company under the State and Local Government Master Operating Lease Agreement Number referenced above X Bodily Injury and Property Damage Liability with limits of no less than $2,000,000.00 total liability per occurrence X Deductibles not to exceed $25,000.00 If Hewlett-Packard Financial Services Company requests additionalorupdatedcertificatesinthefuture,youshouldprovidesuchcertificates to Hewlett-Packard Financial Services Company. Forward certificate(s) of insurance to: Hewlett-Packard Financial Services Company 200 Connell Drive., Suite 5000 Berkeley Heights, NJ 07922 Attention: Public Sector Operations Lessee/Insured:City of Schertz, Texas By: __________________________________________________________ Print Name/Title: ________________________________________________ Date: ________________________, 2012_ [Please forward a copy of this Insurance Information Request Form to your Broker/Agent immediately and return the original with the executed lease documents.] Agenda No. 4 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: Police Subject: Resolution No. 2012-R-13 - Purchase of Colt 9mm Long Rifles BACKGROUND Goal: To provide a proven and uniform weapons system for the officers of the Schertz Police Department by issuing each officer a Colt AR Long Rifle. Community Benefit: To provide the officers of the Schertz Police Department with the added tools they need to perform their duties in protecting the community. Summary of Recommended Action: It is the recommendation of the Schertz Police Department to use the departments’ seizure funds to procure long rifles for the officers of the Schertz Police Department. FISCAL IMPACT Seizure funds will be used to purchase these rifles and this purchase will not have any fiscal impact on the City. RECOMMENDATION Approval of Resolution No. 2012-R-13 ATTACHMENT Resolution No. 2012-R-13 Long Rifle Purchase Proposal RESOLUTION NO. 12-R-13 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A PURCHASE AGREEMENT WITH U.S. AUTOWEAPONS, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City of Schertz Police Department desires to purchase forty Colt AR Long Rifles, and WHEREAS, the City Council (the “City Council”) of the City has determined that it is in the best interest of the City to purchase the forty Colt AR Long Rifles from U.S. Autoweapons, in order achieve this goal; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the attached quote from U.S. Autoweapons in the form attached as Exhibit A. The City Manager may agree to changes to the purchase which the City Manager, upon the advice of the City Attorney, determines are insubstantial changes in the nature of clarifying additions or corrections of clerical errors. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 14th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50448403.2 A-1 EXHIBIT A U.S. AUTOWEAPONS QUOTE Capt. Mark Bane Schertz Police Dept. Schertz, Texas We are please to submit this proposal to you department for the following items: 40- Colt AR 6950 9X19mm 16" semi-automatic carbines Included are two 32 round magazines per weapon. 40 X $958.00 ea. = $38,320.00 total. 14 Ruger Mini 14 trade-in at $260.00 ea. 14 X $260.00ea. = $3640.00 Recap: 40 Colt 6950..........................................$38,320.00 14 Ruger Mini........................................- $3640.00 Total..........................................................$34680.00 90 to 120 day delivery _____________________________ ________________________ Mark Petrucciani John Kessel, City Manager U.S. Autoweapons 1400 Schertz Parkway L.E. Sales Schertz, Texas 78154 14870 N. Northsight Blvd. #100 Scottsdale, Arizona 85269 Agenda No. 5 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: Police Subject: Resolution No. 12-R-14 - Purchase of Dispatch Center workstations BACKGROUND Goal: To purchase and install professional quality, 24 hour rated, ergonomic dispatch furniture in the 911/Dispatch Center. Community Benefit: To provide communications personnel of the Schertz Police Department 911/Dispatch Center with an upgraded work environment to better perform their duties. Summary of Recommended Action: It is the recommendation of the Schertz Police Department to use the Departments’ seizure funds to purchase workstations for the 911/Dispatch Center. FISCAL IMPACT No fiscal impact - Seizure funds will be used to purchase the workstations. RECOMMENDATION Approval of Resolution No. 2012-R-14 ATTACHMENT Resolution No. 2012-R-14 Dispatch workstation purchase RESOLUTION NO. 12-R-14 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE PURCHASE OF WORK STATIONS FOR THE POLICE DISPATCH CENTER WHEREAS, the City of Schertz desires to upgrade Dispatch Center workstations and WHEREAS, the City Council (the “City Council”) of the City has determined that it is in the best interest of the City to purchase five (5) dispatch workstations from Wright Line Technical Environment Solutions in order achieve this goal; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the attached Purchase Agreement with Wright Line Solutions in the form attached as Exhibit A. The City Manager may agree to changes to the purchase which the City Manager, upon the advice of the City Attorney, determines are insubstantial changes in the nature of clarifying additions or corrections of clerical errors. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 14th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50448403.2 A-1 EXHIBIT A WRIGHT-LINE PROPOSAL Qty Description Price 5 Workstations $31,170.77 Installation $4,403.78 TOTAL: $35,574.55 Agenda No. 6 CITY COUNCIL MEMORANDUM City Council Meeting: February 14, 2012 Department: Parks, Recreation and Community Services Subject: Resolution No. 12-R-15 - Discussion and action to consider a resolution to apply for a GVEC Power Up Grant to fund the proposed Schertz Parkway and Main Street Holiday Lighting Project in the amount of $18,400 with a $5,000 City cash match. BACKGROUND Parks, Recreation, and Community Services wants to apply for a Guadalupe Valley Electric Cooperative, Inc. Power Up Grant to fund the purchase of new holiday ornaments and power modules along the Festival of Angels Parade Route which include portions of Schertz Parkway and Main Street in the amount of $18,400 with a $5,000 City cash match. This part of a new GVEC grant program that will fund projects such as: • Education • Youth Programs • Health Care • Community Development • Civic and Community Outreach • Public Safety/Service Organizations The GVEC Power Up Program has two funding cycles due February 15 and August 15. GOAL: For FY 2012 – 2013, the Parks, Recreation, and Community Services Department is proposing a Work Plan called the Schertz Parkway and Main Street Holiday Lighting Program. Since no funding sources have been identified to date, staff is looking to pursue grant funding for all (or part) of this proposed work plan through the Civic and Community Outreach component of the Power Up Grant Program. COMMUNITY BENEFIT: • Enhance the Holiday Season experience for the citizens of the City of Schertz. • Reinstate (and expand) a tradition that was discontinued some five (5) years ago. • Replace the original, aging ornaments with new LED ornaments for both the Schertz Parkway and Main Street. City Council Memorandum Page 2 FISCAL IMPACT The request asks for funding of $18,400 with a $5,000 cash match from the City of Schertz, for the GVEC Power Up Grant Program to fund the Schertz Parkway and Main Street Holiday Lighting Program as follows: • Purchase forty (40) Holiday Season street light pole ornaments at a cost of approximately $450/each. Thirty (30) of the ornaments will be mounted on street light poles from Live Oak to Main Street along Schertz Parkway. Ten (10) ornaments will be hung on light poles on Main Street from Schertz Parkway to Aviation. Each ornament comes with its own pole mounting apparatus. The estimated cost to purchase the ornaments is $18,000. • Install power supply apparatus to fifteen (15) light poles on Schertz Parkway from Live Oak to Main Street (through the use of an Electrical Contractor). The estimated cost per pole is $360/ea. for a total of $5,400. • TOTAL ESTIMATED REQUEST FROM GVEC TO FUND THE PROGRAM = $18,400 • TOTAL COST TO CITY - $5,000 (ACCOUNT NO. 101-460-521000) RECOMMENDATION Staff recommends approval of Resolution No. 12-R-15 to pursue funding to support this proposed Work Plan through the Power Up Grant Program offered by GVEC. RESOLUTION NO. 12-R-15 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE PURSUIT OF A POWER-UP GRANT FROM THE GUADALUPE VALLEY ELECTRIC COOPERATIVE, INC. TO FUND THE PROPOSED SCHERTZ PARKWAY AND MAIN STREET HOLIDAY LIGHTING PROJECT WHEREAS, the City of Schertz desires to reinstate seasonal, holiday decorative lighting along Schertz Parkway and Main Street and, WHEREAS, the City Council (the “City Council”) of the City has determined that it is in the best interest of the City to pursue grant funding to initiate this project through the Guadalupe Valley Electric Cooperative, Inc. Power-Up Grant Program to do so; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the attached Power-Up Grant Application in the form attached as Exhibit A. The City Manager may agree to make changes to the grant application which the City Manager, upon the advice of the City Attorney, determines are insubstantial changes in the nature of clarifying additions or corrections of clerical errors. The City Council further authorizes a $5,000 City match from Account No. 101-460-521000. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 14th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50448403.2 A-1 EXHIBIT A POWER-UP GRANT APPLICATION In Memory of And In Honor of Saturday, March 3, 2012 4th Annual Brought to you by and •Race begins at 8:00 AM •Awards for best T-shirt design and most funds raised •In 2011, we raised $28,473.61 •Proceeds benefit VisitSchertz.com