MONTGOMERY COUNTY PUBLIC SCHOOLS

www.montgomeryschoolsmd.org
February 2, 2011
MARYLAND

1 am responding to your Maryland Public Information Act request for "copies of documents relating to

payments made by Montgomery County Public Schools (MCPS) to Deutsche Bank NYC." I am responding on behalf of the superintendent of schools who, as official custodian of records for the school system, is responsible for replies under the Maryland Public Information Act, Maryland State Government Article §§10-611, et seq. The enclosed documentation supports payments made to Deutsche Bank during fiscal year FY 2010. Deutsche Bank received payments from MCPS during FY 2010 as the collection and paying agent under the Master Lease agreement with First Southwest Leasing (Carlyle Financial Services). Annual lease payments are made to Deutsche Bank. Deutsche Bank then distributes the payments to the financing institution. The Master Lease Purchase Agreement dated June 25, 2004, along with individual payment invoices, are attached to document these payments as being made to Deutsche Bank in the capacity of collection and paying agent under the Master Lease (reference is Section 20, page 12). This agreement remained in effect for six years, ending in June 2010. The Board of Education used the Master Lease to finance acquisition of school buses, school technology modernization, maintenance vehicles and equipment, and classroom furniture. Each of the attached payments represents an annual lease payment under one of the acquisition financings (closings) with First Southwest Leasing. The documents responsive to your request are enclosed. Maryland law, Article §10-621, allows a government unit to recover costs incurred to search and prepare records. Montgomery County Public Schools (MCPS) charges a fee of 15 cents per page, therefore the cost of fulfilling your request is $2.55 (17 pages at 15 cents per page). Please make the check payable to Montgomery County Public Schools and send it to the Department of Public Information and Web Services, 850 Hungerford Drive, Room 112, Rockville, Maryland, 20850.
Respect full

ana M. 'I'ofig Director of Public Information a
DMT:bls Enclosures 850 Hungerford Drive* Rockville, Maryland 20850

eb Services

First Southwest Leasing Company
10/1/2009
Invoice #: 3636

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Richard Johnson 850 Hungerford Dr. Rockville, MD 20850 Master Equipment Lease/Purchase Agreement # 03.0195/04B Series 2004B Takedown No. 2, December 3, 2004

Payment # 6 of 6

Payment Due Date 12/3/2009

Payment Amount

$1,079,268.72 $0.00 $0.00 $0.00

Total Payment:

$1,079,268.72

Remit To:
Deutsche Bank National Trust Company ABAMMER NCUMMINIP Re: Montgomery County Board of Education Attn: Dennis Gillespie; 602-890-0113 Please note account number on remittance.

For information contact Linda Noah at

Tel: (214 953-8776 Email: lindafs_wleasina.corn

-

First Southwest Leasing Company
1/1/2010 Invoice #: 3940

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr. Rockville, MD 20850 Master Equipment Lease/Purchase Agreement # 03.0195/09A Series 2009A Takedown No. 7, March 11, 2009

Payment # 2 of 6

Payment Due Date 3/11/2010

Payment Amount $5,146,685.36 $0.00 $0.00 $0.00

Total Payment:

$5,146,685.36

Remit To:
Deutsche Bank National Trust Company

AB
NCM1111.10 Re: Montgomery County Board of Education 09A Attn: Dennis Gillespie; 602-890-0113 Please note account number on remittance.

_.

For inforrriation contact Linda Noah at Tel`:: (21-4)-953:877fi_

wt.

First Southwest Leasing Company
04/23/2010

Invoice #:

4422

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr. Rockville, MD 20850 Master Equipment Lease/Purchase Agreement # 03.0195/10A Series 2010A Takedown No. 8, May 5, 2010

Payment # 1 of 6

Payment Due Date 05/05/2010

Payment Amount $1,279,215.48 $0.00 $0.00 $0.00 $1,279,215.48

Total Payment:

Rem it To:
Deutsche Bank National Trust Company
ABA

NCONOM
Re: Montgomery County Board of Education Attn: Dennis Gillespie; 662 890 0113
-

Please note account number

on remittance.

For informatipn contact Linda Noah at
eft-

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(214).

First Southwest Leasing Company
3/1/2010 Invoice 4211

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr.
Rockville, MD 20850

Master Equipment Lease/Purchase Agreement # 03.0195/05A Series 2005A Takedown No. 3, May 9, 2005, Group 11

Payment # 6 of 6

Payment Due Date 5/12/2010

Payment Amount $113,121.71 $0.00 $0.00 $0.00
$113,121.71

.

TotatPayrnent

vOtei 67o Kg
Remit To:
Deutsche Bank National Trust Company

ABA
A/C AWN. Re: Montgomery County Board of Education 05A 890-0113 Attn: Dennis Gillespie; 6/ 67 on remittance. Please note account number

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Fan information contact
(2.14)' 953-877$:':

Li da Noah at
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First Southwest Leasing Company
04/01/2010

Invoice #:

4317

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr.
Rockville, MD 20850 Master Equipment Lease/Purchase Agreement # 03.0195/06A Series 2006A

Takedown No. 4, June 6, 2006

Payment # 5 of 6

Payment Due Date

Payment Amount

06/06/2010

$2,390,402.61 $0.00 $0.00 $0.00
$2,390,402.61

Total Payment:

Remit To:
Deutsche Bank National Trust Company

ABA
A/C 41.1.1b

Re: Montgomery County Board of Education Attn: Dennis Gillespie; 662-890-0113 Please note account number on remittance.

First Southwest Leasing Company
04/01/2010 Invoice #: 4318

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr. Rockville, MD 20850
Master Equipment Lease/Purchase Agreement # 03.0195/-07A Series 2007A Takedown No. 5, June 14, 2007

Payment # 4 of 6

Payment Due Date 06/14/2010

Payment Amount $5,766,024.63 $0.00 $0.00 $0.00

Total Payment:

$5,766,024.63

Remit To:
Deutsche Bank National Trust Company

ABA
A/C 4.1.11111 Re: Montgomery County Board of Education Attn: Dennis Gillespie; 662-890-0113
Please note account number on remittance.

For information contact Linda Noah at

First Southwest Leasing Company
04/01/2010 Invoice #: 4319

Board of Education of Montgomery County Division of Controller, Room 156 Attn: Robert J. Doody 850 Hungerford Dr. Rockville, MD 20850 Master Equipment Lease/Purchase Agreement # 03.0195/08A Series 2008A Takedown No. 6, June 18, 2008

Payment # 3 of 6

Payment Due Date
05/18/2000

Payment Amount
$6,207,544.23 $0.00 $0.00

$0.00 Total Payment: $6,207,544.23

Remit To:
Deutsche Bank National Trust Company ABA A/C iiii1110011 Re: Montgomery County Board of Education Attn: Dennis Gillespie; 662-890-0113 Please note account number on remittance.

For information contact Linda Noah at Tel: (214) 953-8776 Email: linda.noahfirstsw.com

.

.

Receipts {MC PS)- D-Iliqg.FT-0.45141C
--Receipt Payment Method 1ACH Receipt Number [513005582
Net Receipt Amount Receipt Type

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—Reference Type
r /14,2010 Receipt Date t05..„.

Number Customer is1me Customer Num

GL Date 105/14/2010
s•••••ss••••s••••••••ss•110

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Miscellaneous

113,121.71
1 I IK11. 7E...4

Maturity Date

Functional Amount

113,121.711

Location Taxpayer ID

Status iCleared

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Customer Bank

Name. iCarlyle Financial Ser Deutsche —Purpose
Activity Distribution Set Tax Code Tax Account Qescriptfon Comments
.•11•••1/11./dIRLITIlifri•altr: • •• • •

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Tax Amount Tax -Rate %

Server Payment Server ID 1 Approval Code

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Remittance Bank Name ,1,1 and T Bank Branch 'Baltimore Account

1 11111111.11111171

. Reference
Postmark Date

DOC Ric Johnson 05/13/2010

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Recelpt History.
a.

. : . Distributions_

-MASTMZ. EQUIPMENT LEASE PLRCEA..SE AGREEMENT
THLS MASTER. BQUIPMENT LEASE FURCHASE AGR2.EIYENT (the `1,ease") is dated as of

June 25, 2004, by and between Carlyle Financial Services, Inc., 325 North St. Paul, kite COO, Dallas, Texas 75201, as lessor (the "Lessor"), a Delaware corporation authorized .t.0 do business in the State of Maryland, and thc Board bf Education of Montgomery Coimty, goverrijng body of the Montgomery County Public
Schools, as lessee (the "Lessee"). The Lessee desires to enter into -arrangeraents for the lease purchase of various items of Equipment (defined below) and has entered or will enter into one more Acquisition Contacts (defined below) with one or more Vendors (cleaned below). The Lessor desires to proiride for the firmeing or refinancing of the Equipment Cast (defined below) by leasing such Equipment to the Lessee and the Lessee desires to lease such Equipment from the Lessor. The Lessee and the Lessor, for the consideraion specified, agree as follows:

Definitions. Unless the carte= otherwise requires, the terms de5aediathis Section 1 shall, for all purposes of this Leas; have the meanings herein specified:
x. - "Acceptance .Certificate means, with respect to any item of Equipmejt, an Acceptance substantially in the form of Exhibit C hereto, delivered in accarri2nc? with Section 3 hereof
-

cate

"Acquisition Contact" means one or more purchase orders or contracts with respect to an item of

Equipment. "Code" means the inte rnal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereund=

ccEquipnanne, means an item constituting pers On i property des enibed gen=ally in Exhibit A hereto, together with any and all additions and attachments thrtru,to (except as oche wise provided herein), Teplac5nae--and,part.,§,-facreaf-ancL -subsiitutions_thezcfor m; provvrlPrl, Tnwwv ar,..thiat dificationsTiup the tern 'Equipmenf'.shall not at.any time tuclude any such property theun=cumbered title to which 'has

been fully acquired by Lessee pursuant to Section .10, Section 17 or Section 19-of this Lease. :Equipment Cost" means, with respect to an item of Equipment, either the purchase price or
prepayment .option price, aA the case may be, payable to the rt.;speu'O.vo Vendor under the applicable

Contract(s), which Equipment Cost shall be payable in accordance with the temps and conditions of the Acquisition Contract. In no event shall the Equipment Cost for all Acquisition. Contracts exceed $89,802,753.00.
"Equipment Group" means the item or items of Equipza=t designated from time -to time by Lessee as an Equipment Group •tvi which are described in an Equipment Schedule, and which are being'-or will be leased with an option to purchase by Lessee pursuant to this Lease: An Equipment Group consists of all of
the particular items of Equipraoat listed vu any si 1e pdge

or like-numbered set of pages or - Exhibit A mid

so designated as an Equipment Group.

``Equipment Location" means, with respect to an item of Equipment, the location of that Equipment specified in the applicable Acceptance Certificate mad on Exhibit A hereto, "Equipment Schedule" means a schedule consisting of the separate but Bice--nu Thered pages of Exhilyit A and ExhibitB hereto which have been corapl nted with respect -to an Equipment Group and executed by Lessor and Lessee as indicated herein. "Event of D cfaalt" means any Event of Default specified in Sec on 2a hereof.

"Event of Nonappropriation" ratans the faillre of Lessee or the applicable governing body to appropriate money for any Fiscal Year of Lessee sufficiEnt for the payiaitnt of Lease Payments payable with respect to an Equipment Group in that Fiscal Year.
`fiscal Year" means the 12-month period of Lessee which commences in each year on July 1 and ends-on the succeeding June 30, or any other 12-month period adopted as -the fscal year of Lessee and of

which Lessee shall give Lessor no ti ce in wJ
"Interest Rate"- means, the interest-Tee _dztezmined in accordance with Section 3(b) hereto and inclicatd on F.xhfbit B to each Equipment Schedule.

"Lease" means, with respect to each Equipment Group, this Master Equipment Lease Purchase Agreement and the Equipment Schedule in which such Equipment Group is described, which small constittrte a separate contract relating to such Equipment Group, as amended, modified or supplemented from time to time in accordance herewith.
"LeasePayments" mean, with rasp ct to anEguipment Group, thepayments due frnm Lessee on. each • Payment Date as shown on.the Equipment Schedule relPting to such Equipment Group_ Each LeakPayment shall be denon-iinatP.d into a principal and an interest potion.

"Lessee" means Montgoraery County Public Schools, a governmental agency of fl -}P; State of . d, lviarylan duly org-anied and existing under the Consaadon and laws of the State ofMaryland, and its successors and permitted assigns. `Lessor" means Carlyle Financial Servi6es, T-nr,_, a corporation duly organized and thsting under theCaristithnon and laws of the S Lae of Delaware, PrIrT its successors and pitted assigns
"Net Proceeds" means any insirance proceeds or condemnation, awards paid with respect to any Equipment remaining after payment therefrom of all expenses incurred in the collection thereof. "Payment Date" means the date upon which any Lease- Payment is duc and payable as provided iti the applicable Equipment Schedule. . "Purchase Option Price" means, with respect to an Equipment Group, as of the payment dates specified in the Equipment Schedule relating thereto, the amount so designated and set forth opposite each

such date in such Equipment Schedule. "Tenn of this Lease" or "Lease Term" means, with respect to any Equipment Group, the period during which this Lease is in effect as specified in SectiOn 6.
2

“Vendor" means each of the man'uf'acturers or vendors from whonaLessee has ordered or will or with whom Lessee has contracted or will contract for the manufacture, delivery and/or installation of the Equipment.
2. E x hibits. Set forth below is a description of the Exhibits to this Lease.

Exhibit A: A s chedule 'executed by Lessor and Lessee desching the items of Equipment (=salting an Equipinezt Group being leased by Lessee plirslaalit to this Lease. Exhibit. shall be amended from time to time by attaching consecutively mi i end schedules thereto in accordance with Section 3 of this Lease (Le., A-14, A-1-2, A-1-3,.et,seq., A-2-1, A-2-2, A-2-3, eta). ,Exhibit B: A schedule executed by Lessor and Lessee with respect to •a.ia Equipment Group. 'd and setting forth the Lease Payments (denonaitate into . principal, interest, and total) payable With respect

to sack Equipment Group during the Term of this Lease, the applibable Paymezat Dates, and the Purchne OptionPrices at which Lessee may exercise its option to purchase Lessor's interest im such Equipment Group is accordance with Section 17 or Section 19 of this Lease. Bx}ribit B shall be arnaaded from tiro e to tine by attaching consecutively numbered schedules theieto in accordance with Sec -Hon 3 of this Lease (i.e., B-1-1, B-2-3,. etc.). etsaq,
Exhibit C: A form of Acceptance Certificate of Lessee indicating that the Equipment

domed therein has been delivered and installed and accepted by Lessee. All of the Exhibits to this Lease, as amended, modifed, supplemented or completed, shall be deemed to be
a part of tins Lease for all purposes of
fn-is Lease.

3..
Co sts.

Determination of Equipment Groups; Delivery ofEcluipme.nt; Payment of Equipment

inn-entered-iatu-orterinto -Coatactr ysLingaiding for the ee's Acxpisiti on contra= include or will delivery, installaticm an fpm of caolatem_ofEqL:dp:cipnt.Less without limitation, the right to purchase the Equipment in ac;u(IL danOG With th e tc,rni: thexerrF: T -en'sc3r include, ag,rees to make available funding for the total Egiprnent Cost evidenced by each Equipment Scherivie
- - - - (a-y- - -.Le,ssRe

entered into in connection with this Lease, subject to the provisions of seedon 3(h).
(b) Following the execriti cm and delivery of this Lease and subject to the provisions of Section 3(h) hereof,Lesscc inn), advise Lessor of its desire to lease Equipment constitathag an Equipment Ciro -up and of the desired amortization schedule for such Eqtipment Group. All items of Equipment -constituting an Equipment Group shall-be amortized over a lie period of years. Upon agreement by Lessor and Lessee as to the composition of any such Equipment Group and such amortization schedule, Lessor shaD - furnish to LC'S= a- proposed Exhibit A relating to such Equipment Group completed insofar as possible and a fully

completed Exhibit B relating to such Equipment Group. The aggregate Equipmerri . Cost of all items of Equipment constituting an Equipmmeut Group shall equal the aggregate principal per don. of the Lease Payments payable with respect to suuli Equipment Group, which challh,. girtort-i7nri in accordance with the insfractions of Lesee, as ageed to by. Lessor. The interest portion of each Lease Payment payable with respect to any such Equipment Group shall be indexed to the average Market Data "AAA" seal; b ased on the scale as published five (5) business days prior to the day on which the famdbig for an Egipment Group tRkes place and to be de,tenmined in accordance with the following schedule: . •

3

M-MD " .1kA..1 6

.."

Term 2 years . . .. 3 years 4 years , , 5 years 6 years 7 years
; .

I

Average Life - +0,94 to 1.5 year +0.84 to 2 year +0,95% to 2.5 year , , +0,95% to 3 year +0.99% to 3.5 year ..••... .+1,07% to 4 year
..

Upon determination of the applicable interest rate, the Lessor shall insert such rate z the space "Interest Rate" on the applicable page(s) of Exhibit B for such Equipment group and promptly complete Exhibit B using such interest rate to calmilste the Lease Payments payable with respect to such Equipment Group. On or after June 25, 2007, Lessor may submit a written request to the Lessee to revise the index as shown above, Any such waif en request subinitted by We Lessor must include written documentation - in support of such change. The Lessee may accept or reject any suclareqaest, of its rliscretion_
(c) Lessee shall order the Equipment constituting an Equiprat Group from the appropriate Vendor-or VbIlLICITZ.-

belonging to an EqtHpment Group to be delivered to Lessee (d) Lessee will cause the at the applicable Equipment Locations Ifnotprovided form the Equipment Cost ofsuchEquipmmt, Lessee will pay all trauspartation and other costs, H. any, incurred in connection with the delivery of the Equipment Lessee will accept the Equipment as and when each it= thereofhas been iv=-41 and is operational, or in the event that the Vendor allows a pre-acceptance test period, as soon as the test p.od has =pired. immediately following acceptance of any Equipment, Lessee will request that payment be (e) macIF: to the applicable Vendor or, in the event Lessee has already rligaP. payment of the =responding Equipment Cost to the applicable. Vendor, on a reimbursement basis to The Lessee, byforwarffing to Lessor - -a-payMeitt-itquest-that inclades_the.foB_owing_._ (1) (ii) (iii) (iv) (v) (vi) a true copy of the Vendor's statement or invoice; in the event Lessee is seeking reimbursement for payment made to a Vendor, evidence that Lessee has paid the applicable Equipment Cos a copy of the bill of sale for any component of the Equipment for which a bill of sale may be delivered; a true copy of the applicable purchase order, the nzme and address of the applicable payee (Vendor or Lessee); and an Acceptance Certifi cate is sulistznEr.ily the fo:ra set forth in Exhibit-C hereto.

Subject to compliance with the preceding subsection (e), Lessor shP1l make payment of the .(f) Equipment Cost within seven (7) business days following receipt of a payment request in accordance with . the preceding subsection (e).

4

In the event Lessee desires to refiTiance the Equipment Cost of any Equipment otherwise subject to another lease or similar age ement pursuant +.0 this Lease, Lessee will rep est th.2± payment be made to the applicable lessor, trustee, escrow agent or other provider or, in the . eve7at Lessee has already made payment of the corresponding equipment acquisition price to the applicable lessor, trustee, escrow agent or other provider, on a reirribursement basis to Lessee by forwarding to Lessor a payment request that includes the followhig;
a copy of the lease or other a,sreenlent evidencing such equipment acquisition price; (ii) b the event Lessee is seeking reimbursemcnt for .payment made to a 'Vendor,

(g)

evidence that Lessee has paid the applicable equipment accr.lisition price; (Hi)
satisfactory evidence that the pr-cvions I ess or, trustee, escrow agent or otherprovider has released or will release all of its right, title and interest in snrh Equipment upon payment of the.applicable equipment acquisition price (which satisfactory evidence may include the escrowing of the necessary documents with Lessor, Lessee or any third party); —for the applicable payee (Vendor Or the name crf, address and payment instructions Lessee); and a Uniform. Commmrial Code finpricin.g statement or amendment with respect to such -thp. Equipment bf..L2.3, refinanced. Lessor shall be responsible for filing any such financing statement or mn-tnr9-nicrrt at it s cost.

(iv)

(v)

notwithstanding the provisions of subsection (f) above, Lessor and Lessee may ratrt-nally agree writing that Less or shall make payment of any payment request provide_.,d for in this subsection (g) (-a) are complied with to at a specified nate,_place and tim_e, provided that pro -visions of clame...s

-the4casonable -satiori nfThe_Less.u.

The initial period daring which funaing for Equipent Costs slaall be available imde-r the (h) provisions of this Lease shall end on that date which is six (6) years from the date of emecution and delivery fir 'this Lease (which shall be evidenced by the Exc...oution Date set forth on the silatare page to this Lease). Lessee, at Lessee's option, shall have the right to extend the period of fonriing availability upon the same tr-ri-ns and conditions of this Lease. Lessee shall provide the Lessor with written notice of its election to extend the'period„pf finding availability not less than thirty (30) days prior to the expiration of the original
period of finding availalUity or the frst extension period, as the case maybe. Lessor shin have trcn (10) days .from the date of such notification to accept or reject such an extension is -ccrE.ting if Less or accepts any such extension, Lessor and Lessee shall enter into an amenrim Ent 'to this Lease evidencing such extension.. Limitation on Warranties. (a) Lessee acknowledges and agrees that the Equipment is of 4. a size, design, and capacity selected by Lessee; that Lessee is satisfied that the Equipment is suitable for its purpose; Lessor is neither a marrafactrxer nor a Vendor of the Equipment and that T7SSOR HAS NOT

MADE, AND D OBS-NOTEDEREBYM.AICE, ANY REPRESENTATION, W.A_RRANTY, OR COVENANT, EXPRESS ORB/21_31ED, WITH RESPECT TO THE MERCEANTABILITY, CONDrELONS, QUALITY, DURABILITY, DESIGN, OPERATION, FITNESS FOR. USE, OR SUITABILITY. OF TEE EQUIPMENT ..MI ANY RESPECT WHATSOEVER.

The obligations of Lessee to =Ire the Lease Payments due with respect to any Equipment (d) Gronpin any Fiscal Year for which this Lease is in effect shall constite a eurent expense of Lessee for such. Fiscal Year and shall not cons -ante an indebtedness of Lessee within the meFoing of the Constitution an d laws of the State of Maryland. Except as provided in Section 8 hereof, the obligation ofLessee to make the Lease Payments (e) required hereunder shall be absolute and unconditional in. all events. No•twithstandiag any dispute between Lessee and Lessor or any other person, Lessee shall make all Lease Paymmats required herein - der when due and shall not withhold any Lease Payznentpending fr-aresolution of such dispute nor shall Lessee assert any right of set-off or counterclaith against its obligation to make such Lease aymants required under this Lease. Lessee's obligation to make Lease Payments relating to an :Equipment Group dining the Lease Term shall not be abated through accident or mi -Foreseen circrmstances. Nonappropriation. (a) Upon an Event of Nonappropriation rela tion to any particular 8. Equipment Group, Lessee shall have the right to terminate this Lease with respect to such Equipment Group as of the end of the then current Fiscal Year. Lessee shall deliver written notice to Lessor of any such termination within thirty (30) days following the date of which Lessee has knowledge of such Event of Nonapproptiatim, speeifying the ;ff ec.-ve date of such tenni:nation (which oast be the end of the then currant atidit 715.:tIctaitt oflesseefto ,eve -the Fiscal YeEr), but in no vent later than the effective date Of notice required by this subsection (a) shall not give rise to or extend Lessee's obligation to make the Lease Payments payable with respect to such Equipment 'Group except to the extFmt provided in subsection (b) below. In the event of a temain.adon of this Lease with respect to any Equipment Group as provided in this Section 8, Lessee, at its cost, expense and risk, agrees to promptly and peaceably deliver the Equipment constituting such Equipment GrOup to Lessor -withal:I:tine:In:Hag any other or additional costs or liability under this Leas; except as provided in subsection (b) below. Following an Event ofNana-pplupri2.fion and the election by Lessee-toJ.n..±taate this Lease * Co) withrespect to the applicable Equipment Group, Lessee shall natbe obligated to pay the Lease Paynama- due =under Telating LtaLauchaTaipnient Grauszxcept to the extent funds have. been appropriated for si -th purpose and in no event beyond the date on which this Lease:terminates for nal:appropriation with respect to suchEquipment Group; provided, however, withrespectto suchTquipment Group and any allsums which have been appropriated previously for the purpose of =LPicing the Lease Payments payable with resnect to such Equipment Group but which have not been applied for such purpose as of such date, shall be paid. (c) • Notwithstanding anything in this Lease to the contrary, the provision of this Section 8 shall survive termination of This Lease. Representations and Covenants. (a) Lessee represents and covenants as ofthe date hereof 9. and at all times during the Lease Term that: Lessee is a body politic and corporate created under the Constitution and laws of the State
of Maryland;

the execution; delivery and perfoilLance by Lessee of this Lease (including the Exlaibits hereto) has been duly authorized by all necessary action on the part of Lessee; the entering into and performance of this Lease will.not violate any judgement, order, or regulation, applicable to Lessee or result in any breach of, or constitite a default hereunder, 7

or except as otherwise expressly provided this Lease, result in the creation of any lien,
charge,suitynof=ecmbraupnthEqieoraystfLe pursuant to any indenture, mortgage, deed of trust, bank ?can, credit agetment or other bastroment to which Lessee is a party cr by which it or its assets may be bount

. (iv)

there are no aetiouz, suits or proceedings pending or, to the knowledge ofLessee, fareatzned against or affecting Lessee in any Gault or before any governmental commission, board or authority, which, if adversely cleterraiTit-,d, will have a materLal, adverse effect on the ability of LeSSeC to perform its cbl4g4os under this Lease;
the Equipment is personal property and when .subj ect to us e by Lessee, will not be or become fixtures -under the laws of the State oflvf2ry.1...and;

(v)

(vi) (vii)

Lessee has observed and complied with all applicable external or inte=al public bidding procedures regarding the award cf the transactions contemplated in this Lease; Loss ee has prepared and included in its budget for the current Fiscal Year a request for ids to_malrethe_Lease Pay 47c!.4s and any other amounts payable herernder drzing such Fiscal Year the use of the Equipment by Lessee is essential to Lessee's proper, efficiant and econ.ornic operation; no portion of the Equipment will be used cFrrectly or indirectly in any trade or business carried on by any person other than. Lesse; except as otherwise erpa -P.sRly permitted in this Lease;

(viii)

(ix)

(x)

except as otherwise epressly permitted in this Lease, no portion of the Equipment will be . Section 501 (c) _(3) of the Code; cri rgani
.

(xi)

Lessee will file or will caused to be filed Forth-81I38-G/GC relating to -this. Lease aid each Equipment Schedule at the tinies and in the forms r ,-,qraired by the .Code. The Lessee covenants that it .w.ill not permit equipment with an acquisition price of more than five percent of the principal amount set forth in ExhibitA on which such equipment is listed to he used in aprivate bro:ness use (within the meaning of Section 141(b) of the Code) at any time during the period that be gins on the later of the date the Exhibit A is executed
or the date the equipment is placed in se' vice, and ending on the earlier of the last date of the reasonably expected economic ., life of such equipment or the last date any payments are due under such Exhibit A. The lessee covenants that it will not create any sill -king funds or pledged finds (within the meaning of-Income Tax Regulations section 1.148-(b)) except for a fund or funds that constitute a bona fide debt service fund (within the meaning o'fincome Tax Re ations section. 1.148-1(b)).. .

Title_ Mixing the Lease Term with respect to any Equipment Group, and so long as Lessee is actin default under S cc Li on 21 with respect to such Equipment•Group, legal title to such Equipment Group and any and all repairs, replaceraentg, substitutions and modifications to it shall b5 in Lessee.. Upon.

10.

termination df this Lcasewithrespect to any Equipment Group pursuant to Section 8 or upon the occurrence

8

(d) During the term of this Lease, the Lessee covenants that it shall keep a oon:Tiete RTI d a ccurate record of all assignments in form necessary to comply with Section 149(a) of the Internal Revenue Code of 1986, as amended.

21. Events ofD efault The following shall be "Events of1) efaulf under this Lease with respect to any Equipment Group and the Equipment Schedule relating thereto, dtizte te:.ras (Svents DfDe-f2 uit" and "default" 4:12,11 mean, whenever they are used in this Lease, with respect to any Equipment Group, any one or more of the following events:
Failure by Lessee to pay any Lease Paymontieciairad to be paid under this Lease, when due, (a) respect to such Equipment Group at the time specified herein and the contzpation of said fail .re for a period of fifteen (15) days,

Failure by Lessee to observe and perform any covenant, condition or agreement on its part (b) to be observed or performed-with respect -to such Equipment,Group, other than as refezred -to in: subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to Lessee by Lessor, unless Lessor shall agree in writirgto au extension of such provided, however, that timepriortoits expiration, or if the Lessee ofaerwise becomes aware of the if the r-F-ii-ole state d in the notice Ciatiot—be----..C-iii;ected Within - the applicable -pen-cd.; -Lessor -will -not unreasonably withhold its consent to an extension of such tune if conective action is instituted by Lessee within the applicable period and diligently pursued until the default is mu:mated_ The fling by Lessee of a voluntary petition in bazdauptcy, ar farlure by Lessee promptly to (c) lift any exepution, garnishment or attachment of such consequence as would impair the ability of Lessee:to carry on its government functions or adj -adication of Lessee as a IcRnkrupt, or assiTr -n!.. at. by Lessee for the agre-Tnent of courpoi on with creditors, or the approval benefit of creditors, or- the entry by Lessee by a court of competent jurisdiction of-a. petition appliathle to Lessee irranyproceedia institated -under_tlm provisionS: of the United States BankruptcyCode, as a:me-n(15d, car undex,m:Eysimilaz acts whielimay hereafter be enacted: The detemination by Lessor that any representation_ made by Lessee was untrue in any (d) material respect at the time this Lease was executed or at the time any Equipment Schedule hereto was executed.
Remedies. (a) Whenever any Event TiDefaultre,ferred to in S ection_2 1 s l3 have 'happened 22. ' and be continuing with respect to any Equipment &Cap Less= s.bal.11), --ive the tight, at its option and without

any further demand or notice, except as erpressly provided below, subject to the provi sions of Section 8 hereof, to take one or any combination of the follow - g remefiial steps:
(i)

by written notice to Lessee declare all remaining Lease Payments due with respect to such Equipment Group during the Lease Tem to be immediately due andpayable, whereupon the same shall become immediately due and payable; by written notice to Lessee, request Lessee to (and Lessee agrees that it shall), at Lessee's expense, promptly return to Lessor the Equipment belonging to such Equipment Group in good repair, working order and condition, and thereafter Lessor may be either (A) operate or (B) sell, lease or rnql,;-F.-, other disposition of the Equipment belonging to such Equipment Groulp for the account of Lessee, holding Lessee liable for all Lease Payments payable with 13

respect to such Bcpatpment Group due to the effective date of any such sale, 1east.g or other disposition and for the difference between the purchase price, rental or other amounts paid by the purchaser(s), lessee(s) or other beze5eiary(ies) of such dispcsitiori pursuant to such sale, leasing or other dispoition and the Lease Payments payable by Lessee hereunder with respect to such Equipment Group; and exercise any other right, remedy or privilege which may be available to it under appliOable laws or proceed by approp.ate court action to enforce the terms of this Lease with_ respect to such Equipment Group or to recover damages for the breach of this Lease or to rescind. -fhig Lease as td any or P11 of the Equipmezt belonging to such Equip:am:it Grapp.
Whenever any Event ofDefault re -fered to in subsections (b) cr (d) of.SeGOD 21 shall have (b) occurred and be confirming with respect to any Equipment Group, Lessor shall have th P right, at its option and without any further .demand or notice, subject to the provisions of Section 8 hereof, to proceed by appropriate court acti on to enforce the terms of this Lease with respect to such Equipment Group or to recover damages for the breach of this Lease_

23. Late urges. Whenever any Event of Default referred to in Section 21(a) Shall have bappened and be continuing with respect to anYlcliii -Pdient -Gro-up;Lessor -sle - hay e -fh et-right, at its option and without any f' her demand or notice and without providing a written invoice to Lessee, to require a late payment charge accruing after the fah business day ofnon-payment and corrtire- lent]. such late payment is received by Lessor equal to four percent (4%) of the delinquent amount, and Lessee siinT1 be obligated to pay the late charges of the tine that the payment is made; provided, however, that this Section 23 shall not be applicable if or to the extent that the application thereof would affect the validly of this Lease. For pirp oses of this S ecti on 23, the teem "Iv ess day" means any day onwhich b anis in the States of Maryland and Mississippi, and the Federal Reserve System, are open and opera 24Notices. All notices to be given =der -this Lease shall-be made in writi .s and 17 ail td by _certiileimaarretunirezeipt_reque=1 gr may be delivered by overnice.la delivery service or hand delivery (with an azlino wlecignent) to the other party at its address set forth below or at such address as the party na" ay r provide in writirT, from time to time. Anji such notice delivered -13y -cm-rbeed mad, return receipt requested, sh.all be deomed to have been received Eve (5) days sub equent to mailing, and any such notice delivered by overnight delivery service or hand delivery shall be deerned_to have beenreceived when. the aelmowledgment therefore is executed. Jf. to Lessee: Board of Education-of Montgomery County Division of Confroller, Room 156 • 850 Hanguiford Drive Rockville, Maryland 20850 Attention: Robert J. Doody Phone: 301-279-3115 Fax: 301-279-3031 Email: bob doody(B.mcusmd.org

14

If to Lessor:

Carlyle Financial Services, Inc.
325 North St. Paul, Suite 800 • Dallas, Texas 75201 Attention.: President Phone Number: 214/953-8860 Fax -Nur-Ibex: 2141953-4072 email; bfrieclinanraifirstsw.coin

if to Trustee: Detrtsclie Batik Natioral Trust CozupPny, as tustee 6810 Crampler Blvd., Suite 100 Dlive Brannh, hEssissippi 38654 Attorathm: Dennis D. Gillespie Phone Number, 662)890-0113 Fax Number. 662/890-0114
email: dennis-aillesoinZdh.com

Readings. All headings contained hereiD are for the convenience of reference only and are 25, _ _ notintencled to define or limit the scope of =37-provision of this Lease. Governing Law. This Lease shall be construed in accordance with, and governed by the 26. laws of, the State of Maryland. Fina ncial Statements; Notice of Material Events. Lessee amtes to fnr-nish Lessor PIM -Rai ivanciai statements of Lessee Nvi-fir one hundred and twenty (120) days after the tad of Lessee's Fiscal Year 27,
'Entire Agr earn ant; Waiver, "rni Lease, togeth= with-the ErEbits hereto, as Mich -R'Z''hibitS are completed, executed and dells eyed by Lessor and Lessee, constitutes -the entire aTeernent beLween -th_e ___Faddes_witlizespect.±0 -Th edeFRft-Dffh (1.thisrLease andthe _ , its herd, ce as expressly

28.

provided herein, shall not be modified., amended, altered, or changed except with the written consent of Lessee and Lessor. The Waiver by Lessor of arry -breacliby -Less6e of anyterm, covenrnt or condition hereof shall not operate as a waiver of any subsequent breach thereof
29_ Scverability. In the event any provision of this Lease shall be held invalid or -unenforceable by any court of competent jurisdiction, such holding stall not invalidate or render =enforceable any -other provision hereof -

Further Assurance and Corrective Instrument; Ludenanificat -ion. Lessor and Lessee 30. agree that they will, from time to time, execute, acloaowlecige and deliver, or ,cause to be executed, L acknowledged and delivered, such snppl-emeuts hereto and such fuz 4- her. instnunents as raay reasonably be required for correcting any inadequate or incorrect description of the Equipment hereby leased or intended 30 td be, or for rithal-cc.rise carrying out the expressed intention of this Lease; provided, however, that the provisions . of this Section 30 shall not require either party to this Lease to deliver an opinion of counsel as to the due, authorization or execution of this Lease, any Exhibit hereto, any Equipment Schedule herc'to or ziny Acceptance Certificate relating hereto.

15

31, EzemtinD in Cuxtg.parts. This Lease way be sinaultaaeously executed couatzpaits, each of which shall be an original and ift of which shall con titate but oaa and the
i32$ ta1111011t,

Canoe

Registration, Lessee herby designates Lessor to be its agent for the purposes of 32. rnajiltainitiz a registgtjon system idpntify-inz, th.e ownership of itterests in and to this Ltase, and Lessor hereby accepts its duidos as agent hereunder. [SIGNATURES APPEARING- ON NEXT PAGE.]

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LN WITNESS WIEEREOF, Lessor azd Lessee Lave executed this Master Equipment Lease Purchase Et AT:ten:cat as of the date fa- written above,
L4SSHE
LESSOR: CARYLE FLNANCIA_T., staviCES, IN C,

BOARD :OF I:DUCA LION _OF MONTGOMERY C0'UNTY

By: • Name:

01-14717,.Cox Prsici*Iit
s

Dairy L. Friedmaz Presicl=t

Title: Superiutend.mai

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