HomeMy WebLinkAbout1994-295
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RESOLUTION NO.
94-295
2 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE
PURCHASE MASTER AGREEMENT FOR KOCH FINANCIAL CORPORATION, FOR THE
3 FURNISHING OF LEASE PURCHASE FINANCING.
4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
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SECTION 1.
That Equipment Lease-Purchase Master Agreement
with Koch Financial Corporation (the "Agreement"), a copy of which
is attached hereto and incorporated herein as Exhibit "A", is
approved by the City of San Bernardino for the furnishing of
Lease-Purchase Financing; pursuant to this determination, said
Master Lease-Purchase Agreement by the Mayor of the City of San
Bernardino.
SECTION 2. The City shall not be obligated under the
Agreement unless and until the Agreement is fully executed and no
oral agreement relating thereto shall be implied or authorized.
The authorization to execute the above referenced Agreement is
rescinded if the parties fail to execute it within sixty (60) days
of the passage of this resolution.
SECTION 3.
No transactions shall be initiated under the
Master Lease contained in the Agreement without the approval of
the Mayor and Common council.
SECTION 4. The City shall not be obligated until a lease-
purchase schedule transaction for material, equipment, supplies or
contracted services is executed with the vendor under this
Agreement.
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94-295
1 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE
PURCHASE MASTER CONTRACT FOR KOCH FINANCIAL CORPORATION FOR THE
2 FURNISHING OF LEASE PURCHASE FINANCING.
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SECTION 5. The Purchasing Agent, Director of Finance and the
4 City Attorney are hereby authorized to execute such documents as
5 necessary for the administration of transactions under the
6 Agreement.
7 I HEREBY CERTIFY that the foregoing resolution was duly
8 adopted by the Mayor and Common Council of the City of San
9 Bernardino at the
reGular
meeting thereof, held on the 3rd
10 day of October
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, 1994, by the following vote to wit:
COUNCIL MEMBERS
AYES
NAYS
ABSTAIN
ABSENT
NEGRETE
x
CURLIN
x
HERNANDEZ
x
OBERHELMAN
x
DEVLIN
x
POPE-LUDLAM
x
MILLER
x
J~
~
~~aJc
CI Y CLERK
of
The foregoing resolution is her
October ,1994. ~~
day
this 5th
4/tf"\..
om Minor, Mayor
City of San Bernardino
23 Approved as to form
and legal content:
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JAMES F. PENMAN
City Attorney
B~~~
2
94-295
Cuplic~te oriqinal
EQUIPMENT LEASEIPURCHASE AGREEMENT
No,
DATED,
NAME AND ADDRESS OF LESSOR
Koch Financial Corporation
4111 East 37th S..... North
Wichita., KS 67220
NAME AND ADDRESS OF LESSEE .
C,T I" "p 71'911/ ;3rfi AJMril1tJ d
.300 1J,"p" sr. .
5A-N P->eA,v/H2J., ill 0, (11-. ?:;. <lIt?
DESCRIPTION OF EQUIPMENT
Quantity
Dcscriplton
Model#
8malN
Location of Equipment:
RENTAL PAYMENTS
Renlal Payment Pcnods shall be (monthly) (quarterly) (sermannual) (annual). Rental Payments shall be made m accordance WIth Section 4.01 and the Schedule of Rental
Payments attached hereto as .Exhibit A. The maximum Lease Term of this Agreement is years and months.
TERMS AND CONDITIONS
THE TERMS AND CONDITIONS OF THIS AGREEMENT SET FORTH ON PAGES TWO THROUGH
FIVE SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE,
IN WTrnESS WHEREOF. Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as ofthc date 'Mitten
aboVe.
(LESSOR)
Koch Financial COrporation
By 'f2.p~t. L-
t/. C-e.- 7.-v:> s 1-"'" . 7.
(LESSEE)
Title
~~I.~()[~~7/d
(SEAL)
ATTEST,
Title:
CERTIFICATE OF CLERK OR SECRETARY OF LESSEE
I. the undersigned. do hereby certifY el) that the offIcer of Lessee who executed the foregomg Agreement on behalf of Lessee and whose genume signature appears
thereon. is the duly qualified and acting officer of Lessee as stated b.:neath his Of her signature and has been authorized to execute the foregoing Agreement on behalf of Lessee,
and (ii) that the budget year ofLessec is from to
Dated:
By
Title:
OPINION OF COUNSEL
As legal coumel to Lessee, I have exammed (a) the foregoing Agreement whiCh, among other thin&'. proV1des for the sale to and purchase by the Lessee of the
Equipment, (b) an exewted counterpart of the ordinance or resolution of Lessee which, among other things, authorizes Lessee to execute the Agreement and (c) such other
opinions., documents and matters of law as I have deemed necessary in connection with the following opinions. Based on the foregoing. I am of the following opinions: (1) Lessee
is a public body corporate and politic, duly organized and existing under the laws of the State, and has a substantial amount of one or more of the following sovereign powen: (a)
the power to tax, (b) the power of eminent domain, and (c) police power, (2) Lessee has the requisite power and authority to purchase the Equipment and to exewte and deliver the
Agreement and to perfonn its obligations under the Agreement; (3) the Agreement and the other documents either attached thereto or required therein have been duly authorized,
approved and executed by and on behalf of Lessee, and the Agreement is a valid and binding obligation of l..essee enforceable in accordance with its terms; (4) the authorization,
approval and execution of the Agreement and all other proceedings of Lessee relating to the transactions contemplated thereby have been perfonned in accordance with all open
meeting laws, public bidding laws and all other applicable state and federal laws; and (S) there is no proceeding pending or threatened in any court or before any governmental
authority or arbitration board or tribunal that., if adversely determined, would adversely affect the transactions contemplated by the Agreement or the security interest of Lessor or
its assigns., as the case may be, in the Equipment All capitalized terms herein shall have the same meanings as in the foregoing Agreement Lessor. its sucecssors and assigns,
including without limitation any Registered OwneTS, and any counsel rendering an opinion on the tax<xempt status of the interest components of Rental Payments an: entitled to
rely on this opinion.
Printed Name: ~ ~n",.t A. 13.rh.,.J Dated: ,4.,;,.,;cr .iO. / 9 ,.,,/
" .
Address: S'D A/~ ~ t~~~ Si~~~f2
.g... &w....~.;.. t:A 9.>-117'
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Telephone No.: a~.,) $N.r>l:"J:'"
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ARTICLE I
Section 1.01. Definitions. The [ollowing lenns will have the meanings indicated below unless the context clearly requires otheTWise.
"Agent" means any agent for the Registered Owners. if any, to which all or a portion of Lessor's right., tille and interest in. to and under this Agreement and the Equipment may be
assigned for the benefit of the Registered Owners.
"Agreement" means pages onc through five of this Equipment LeaselPurchase Agreement., the Tax Designations and Covenants and any other schedule, exhibit or escrow
agreement made a part hereof by the parties hereto, together with any amendments to the Agreement made pursuant to Section 13.06.
"Code" means the Internal Revenue Code of 1986.
"Commencement Date" is the date when the tenn of this Agreement and Lessee's obligation to pay rent corrunences. which date shall be the earlier of (i) the date on which the
Equipment is accepted by Lessee in the manner described in Section 5.01, or (ii) the date on which sufficient moneys to purchase the Equipment are deposited for that
purpose with an escrow agent
"Equipment" means the property described on the front of this Agreement and all replacements, repairs, restorations, modifications and improvements thereof or thereto made
pursuant to Article VIII.
"Event of Default" means an Event of Default described in Section 12.01.
"Lease Participation Certificates" means certificates evidencing a right to receive a pro rata share of Rental Payments and Purchase Price payments.
"Lease Tenn" means the Original Tenn and all Renewal Tenns.
"Lessee" means the entity described as such on the front of this Agreement, its successors and its assigns.
"Lessor" means the entity described as such on the front of this Agreement, its successors and its assigns.
"Original Tenn" means the period from the Commencement Date until the end of the budget year ofL=ssee in effect at the Commencement Date.
"Purchase Price" means the amount designated as such on Exhibit A hereto that Lessee may, in its discretion, pay to Lessor to purchase the Equipment.
"Registered Owners" means the registered owners of Lease Participation Certificates.
"Renewal Terms" means the renewal terms of this Agreement. each having a duration of one year and a tenn c~xtensive with Lessee's budget year.
"Rental Payments" means the basic rental payments payable by Lessee pursuant to Section 4.01.
"Rental Payment Period" means the period begiMing on the day a Rental Payment is due and ending the day before the ne~1 Rental Payment is due. The first Rental Payment
Period shall begin on the Commencement Date in all cases. If Rental Payment Periods are monthly, subsequent Rental Payment Periods shall begin on the same day of
each month after the Commencement Date. If Rental Payment Periods are quarterly, subsequent Rental Payment Periods shall begin on the same day of each third
month after the Commencement Date. If Rental Payment Periods are semiaMual, subsequent Rental Payment Periods shall begin on the same day of each sixth month
after the Commencement Date. If Rental Payment Periods are annual, subsequent Rental Payment Periods shall begin on the anniversary of the Commencement Date
in each year. If the Commencement Date is the 29th., 30th or 31st day of a month, any subsequent Rental Payment Period that would otherwise begin on the 29th.,
30th or 31st ofa month that does not include such a date shall begin on the last day of the month.
"State" means the state in which Lessee is located.
"Tax Designations and Covenants" means the document entitled "Tax D.:signations and Covenants," if any, executed by Lessee and attached hereto.
"Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing the Equipment
ARTICLE II
Section 2.0 I Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor and any Registered Owners (as
hereinbefore defined) as follows:
(a) Lessee is a public body corporate and politic duly organized and existing under the constitution and laws of the State with full power and authority to enter into this
Agreement and the transactions contemplated hereby and to perfonn all of its obligations hereunder.
(b) Lessee has duly authorized the execution and delivery of this Agret..'Tllent by proper action by its governing body at a meeting duly called.. regularly convened and
attended throughout by the requisite majonty of the members thereof or by other appropriate official approval. and all requirements ha....e been met and procedures have occurred
in order to ensure the validity and enforceability oflhis Agreement.
(c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute. an Event of Default exists at the date hereof.
(d) Lessee has. in accordance with the requirements oflaw. fully budgeted and appropriated sufficient funds for the current budget year to make the Rental Payments
scheduled to come due during the Original Term. and to meet its other obligations for the Original Tenn, and such funds have not been expended for other purposes.
(e) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic.
(f) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment.
(g) During the Lease Tenn. the Equipment will be used by Lessee only for the purpose of penonning essenlial govenunental or proprietary functions of Lessee
consistent with the permissible scope of Lessee's authority.
(h) Lessee will annually provide Lessor with current financial statements, budgets, proofs of approprialion for the ensuing budget year and such other financial
infonnalion relating to the ability of Lessee to continue this Agreement as may be requested by Lessor.
(i) Lessee will comply with all applicable provisions of the Code, including without limitation Sections 103 and 1481hereof, and the applicable regulations of the
Treasury Department to maintain the exclusion of the interest components of Rental Payments from gross income for purposes offederal income taxation.
(j) Lessee will use the proceeds of this Agreement as soon as practicable and with all reasonable dispatch for the purpose for which the Agreement has been entered
into. No part of the proceeds of the Agreement shall be invested in any securities, obligations or other investments or used.. an any time, directly or indirectly, in a manner which. if
such use had been reasonably anticipated on the date of issuance of the Agreement would have caused any portion of the Agreement to be or become "arbitrage bonds" within the
meaning of Section 103(bX2) or Section 148 of the Code and the applicable regulations of the Treasury Department
Section 2.02. Certlf1clltlon as 10 Arbitrage. Lessee hereby represents as follows;
(a) The estimated total costs of the Equipment will not be less than the total principal amount of the Rental Payments.
(b) The Equipment has been ordered or is e~-pected to be ordered within six months of tile Commencement Date, and the Equipment is expected to be delivered and
installed. and the Vendor fully paid. within one year of the Commencement Date.
(c) Lessee has not created or established., and does not expect to create or establish, any sinking fund or other similar fund (i) that is reasonably expected to be used to
pay the Rental Pa:-ments, or (ii) that may be used solely to prevent a default in the payment oflhe Rental Payments.
(d) The Equipment has not been and is not expected to be sold or otherwise disposed of by Lessee, either in whole or in major part, prior to the last maturity of the
Rental Payments.
(e) To the best of Lessee's knowledge, information and belief. the above expectations are reasonable.
(f) Lessee has not been notified of any listmg or proposed listmg of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon.
ARTICLE III
Section 3.01. Lease of Equipment. Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor. the Equipment in accordance with
this Agreement for the Lease Term. The Lease Term may be continued, sokly at the option ofussee. at the end of the Original Tenn or any Renewal Tenn for an additional
Renewal Tenn up to the maximum Lease Tenn. At the end of the Original Term and at the end of each Renewal Tenn until the maximum Lease Term has been completed. Lessee
shall be deemed to have exercised its option to continue this Agreement for the nex1 Renewal Tenn unless Lessee shall have tenninated this Agreement pursuant to Section 3.03 or
purchased the equipment pursuant to Section 10.01. The terms and conditions during any Renewal Tenn shall be the same as the tenns and conditions during the Original Tenn.
except that the Rental Payments shall be as provided on Exhibil A hereto.
Section 3.02. Continuation of Lease Ternl. Lessee intends. subject to Section 3.03, to continue the Lease T.:nn through the Original Tenn and all Renewal Tenns
and to pay the Rental Payments hereunder. Lessee reasonably bdievcs lhallegally available funds in an amounL sufficient to make all Rental Payments during the entire Lease
94295
T.:rm can be obtained. Lessee further intends to do all things lawfully within its power to obtain and maintain funds from which the Rental Payments may be made. including
making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, to
have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request
is not approved.
Section 3.03. Nonappropriatton. Lessee is obligated only to pay such Rental Payments under this Agreement as may lawfully be made from funds budgeted and
appropriated for that purpose during Lessee's then current budget year. Should Lessee fail to budget., appropriate or otherwise make available funds to pay Rental Payments
following the then current Original Term or Renewal Term, this Agreement shall be d~emed terminated at the end of the then current Original Term or Renewal Tenn. Lessee
agrees to deliver notice to Lessor of such tennination at least 90 days prior to the end of the then current Original Termor Renewal T enn, but failure to give such notice shall not
extend the term beyond such Original Term or Renewal Term. If this Agreement is t~rminat~d in accordance with this Section, Lessee agrees to peaceably deliver the Equipment
to Lessor at the location(s) to be specified by Lessor.
Section 3.04. NOlUubstltution. To the extent permitted by law, Lessee agrees that if this Agreement is t.enninated in accordance with Section 3.03 Lessee will not
purchase,lease or rent equipment petfonning functions similar to those performed by the Equipment for a period of90 days following the end of the then current Original Term or
Renewal Term; provided this restriction shall not be applicable in the event the Equipment shall be sold. re-Ieased or otherwise disposed of by Lessor and the amount received from
such disposition, less all costs of such sale or disposition, is sufficient to pay the th~n applicable Purchase Price. This Section shall remain in full force and effect notwithstanding
the termination of this Agreemenl
ARTICLE IV
Section 4.01. Rental Payments. Lessee shall promptly pay Rental Payments. exclusively from legally available funds. in lawful money of the United States of
America to Lessor on the Commencement Date and on the first day of each Rental Payment Period thereafter. in such amounts as described on Exhibit A hereto. Lessee shall pay
Lessor a charge on any Rental Payment not paid on the date such payment is due at the rate of 18% per annum or the maximum amount permitted by law, whichever is less. from
such date. A portion of each Rental Payment is paid as, and represents payment of. interest, as set forth on Exhibit A hereto.
Section 4.02. Rental Pa}menls to Constitute a Current Expense of Le.uee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental
Payments hereunder shall constitute a curr~nt ~"-p.:nse of Lesse~ and shall not in any way be constru~d to be a debt of L..'"SSee in conlravention of any applicable constitutional or
statutory limitation or requirement concerning the creation of indebtedness by Lcsse~. nor shall anything contained herein constitute a pledge of the general tax revenues. funds or
moneys of Lessee.
Section 4.03. RENTAL PAY;\IENTS TO BE UNCONDITIONAL. EXCEPT AS PROVIDED l~ SECTION 3.03, THE OBLIGATIONS OF LESSEE TO
MAKE RENTAL PAYMENTS AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED HEREIN SHALL BE
ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION. DEDUCTION, SET.QFF OR DEFENSE. FOR ANY REASON.
INCLUDING WITHOUT LIMITATION ANY FAILURE OF THE EQUIPMENT TO BE DELIVERED OR INSTALLED, ANY DEFECTS, MALFUNCTIONS.
BREAKDOWNS OR INFIRMITIES IN THE EQUIPMENT OR ANY ACCIDENT. CONDEMNATION OR UNFORESEEN CIRCUMSTANCES,
ARTICLE V
Section 5.01. DeUvery, Installation and Acceptance of the Equipment. Lessee shall order the Equipm.:nL cause the Equipm.:nt to be delivered and installed at the
location specified on the front of this Agreem~nt and pay any and all deliv~ry and installation costs in cOM~ction therewith. Wh.:n the Equipment has been delivered and installed,
Lessee shall immediately accept the Equipment and evidence said acceptanc~ by executing and delivering to L..'SSor an acceptance certificate acceptable to Lessor.
Section 5.02. Enjoyment of Equipment. Lessor shall provide Lessee with quiet use and enjoyment of the Equipment during the Lease Term. and Lessee shall
peaceably and quietly have, hold and enjoy the Equipment during th~ Lease Term. without suit, trouble or hindrance from Lessor. except as otherwise expressly set forth in this
AgreemenL No Registered Chmer shall interf~re with such quiet use and enjoyment during the Lease Tenn so long as Lessee is not in default under this Agreement.
Section 5.03. Location; Inspection. Once installed, the Equipment will not be mov~d from the location specified on the front of this Agreement without Lessor's
consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of
Lessee for the purpose of insp~cting th~ Equipment.
S~ction 5.04. Use and !\taintenance of the Equipment. Lessee will not install, use. operate or maintain th~ Equipment improperly, carelessly, in violation of any
applicable law or in a manner contrary to that contemplated by this Agreement. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of
the Equipment In addition. Lessee agrees to comply in all respect with all applicable laws. regulations and rulings of any I.;:gislatjv~, executive, adminislrative or judicial body;
provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonabl~ manner that does not, in the opinion of Lessor.
adv~e1y affect the interest of Lessor in and to the Equipment or its interest or rights under this Agreement Lessee agrees that it will, at Lessee's own cost and expense.
maintain. preserve and keep the Equipment in good repair and working order. Lessor shall hav~ no responsibility to maintain. repair to mak~ improvements or additions to the
Equipm~nt. Upon the request of Lessor, Lessee will enler into a maintenance contract for the Equipment with Vendor.
ARTICLE VI
Section 6.01. Title to the Equipment. Upon acceptance of the Equipment by Lessee, title to the Equipment shall vest in Lessee subject to Lessor's rights under this
Agreement; provided that title shall thereaft.;:r immediately and without any action by Lessee vest in Lessor. and Lessee shall immediately surrender possession of the Equipment to
Lessor upon (a) any termination of this Agreement other than tennination pursuant :0 Section lO.O I or (b) the occurrence of an Event of Default. It is the intent oflhe parties
hereto that any transfer of title to Lessor pursuant to this Section shall occur automatically without th~ necessity of any bill of sale, certificate of title or other instrument of
conveyance. Lessee shall. nevertheless. execute and deliver any such instruments as Lessor may r~quest to evid~nce such transfer.
Section 6.02. Security Interest. To secure the payment of all of Less~e's obligations und~r this Agr~ement. Lessee hereby grants to Lessor a security interest
constituting a first lien on the Equipment and on all additions. anachm~nts and accessions thereto. substitutions th~efor and proce~ds therdrom. Lessee agrees to execute such
additional documents. in form satisfactory to Lessor. which Lessor d~~ms n~cessary or appropriate to ~stablish and maintain its security interest and the s~curity interest of any
assignee ofLes.sor in the Equipment
Section 6.03. Penonal Property. The Equipment is and will remain personal property. The Equipment will not b.;: de~med to b~ affixed to or a part of the real estate
on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or anached to such real estate or
any building thereon. Upon the request of Lessor, Lessee will. at Lessee's e"-pense, furnish a waiver of any interest in the Equipment from any party having an interest in any such
real estate or building.
ARTICLE VII
Section 7.01. Liens., Taxes.. Other Governmental Charges and Utility Charges. Lessee shall keep the Equipm~nt free of all levies, liens and encumbrances except
those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a gov~nunental or propri~tary purpose of Lessee and that the
Equipment will therefore be exempt from all property taxes. If the use. possession or acquisition of the Equipment is nevertheless dclennin~d to be subject to taxation. Lessee shall
pay when due all taxes and govenun~nlal charges lawfully assessed or levied against or with respect to the Equipment. Less~e shall pay all utility and other charges incurred in the
use and maintenance of the Equipmenl Lessee shall pay such taxes or charges as the same may become due; prO\ided that. wilh resp~ct to any such taxes or charges that may
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la....fully be paid in installments over a period of years. Lessee shall be obligated to pay only such installments which accrue during the Lease Term.
Section 7.02. Insurance. At its own ell.l'ense, Lessee shall maintain (a) casualty insurance insuring the Equipment against loss or damage by fire and all other risks
covered by the standard extended coverage endorsement then in use in the State and any other risks reasonably required by Lessor in an amount at least equal to the then applicable
Purchase Price aClhe Equipment, (b) liability insurance that protects Lessor from liability in all events in fonn and amount satisfactory to Lessor, and (c) workers' compensation
coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may self.insure against the risks described in clauses (a) and (b). All
insurance proceeds from casualty losses shall be payable as hereinafter provided. Lessee shall furnish to Lessor certificates evidencing such coverage throughout the Lease Term.
All such insurance shall be with insurers that are acceptable to Lessor. shall name Lessee and Lessor as insureds and shall contain a provision to the dfect that such insurance shall
not be cancelled or modified materially without first giving \Witten notice therofto Lessor at least 10 days in advance of such cancellation or modification. All such casualty
insurance shall contain a provision making any losses payable to Lessee and Lessor as their respective interests may appear.
Section 7.03. Advances. In the event Lessee shall fail to either maintain the insurance required by this Agreement or keep the Equipment in good repair and working
order. Lessor may. but shall be under no obligation to. purchase the required insurance and pay the cost of the premiums thereof and maintain and repair the Equipment and pay
the cost thereof All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay
such amounts so advanced by Lessor with interest thereon from the due date until paid at the rale of 18% per annum or the maximum amount pennitted by law, whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. 1f(a) the Equipment or any portion thereof is destroyed. in whole or in part, or is damaged by fire or other
casualty or (b) title to. or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental
body or by any person. finn or corporation acting pursuant to govenunental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim. condemnation award
or sale under threat of condemnation to be applied to the prompt replacement, repair. restoration. modification or improvement of the Equipment, unless Lessee shall have
exercised its option to purchase the Equipment pursuant to Section 10.01. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee.
For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim., condemnation award or sale under threat of
condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cos t of any repair, restoration. modification or improvement
referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of
the Net Proceeds. or (b) purchase Lessor's interest in the Equipment pursuant to Section 10.01. The amount of the Net Proceeds. if any, remaining after completing such repair.
restoration. modification or improvement or after purchasing Lessor's interest in the Equipment shall be retained by ~ee. If Lessee shall make any payments pursuant to this
Section. ~ee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entith:d to any diminution of the amounts payable under Article IV,
ARTICLE IX
Section 9.01. DISCLAIl\IER OF WARRANTIES, LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR n.fPLlED. AS TO
THE VALUE. DESIGN. CONDITION. MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR
WARRANTY WITH RESPECT THERETO Al'm IN NO EVENT SIIALL LESSOR BE LIABLE FOR ,-\.'JY INCIDE:-1TAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR TilE EXISTENCE. FlJR~lSHING. FUNCTIONING OR
LESSEE'S USE OF ANY ITEM. PRODUCT OR SERVICE PROVIDED FOR IN nlls AGREEMENT,
Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney~in.fact during the Lease Tenn. so long as Lessee shall not be in
default hereunder, to assert from time to time whatever claims and rights (including without limitation warranties) related to thi: Equipment that Lessor may have against the
Vendor, Lessee's sole remedy for the breach of such warranty, ind...'1TUlification or representation shall be against the Vendor of the Equipment and not against Lessor, Any such
matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to this AgreemenL including the right to receive full and timely payments
hereunder. Lessee expressly acknowledges that Lessor makes. and has made. no representations or warranties whatsoever as to the existence or the availability of such walTanties
by the Vendor of the Equipment
ARTICLE X
Section 10.01. Purchase Option. Lessee shall have the option to purchase Lessor's interest in the EquipmenL upon giving 'Mitten notice to Lessor at least 60 da~
before the date of purchase. at the following times and upon the following terms and upon such exercise of the purchase option by u>ssee to all the equipment, this Agreement shall
tenninate:
(a) On the last day of the Original Tenn or any Renewal Tenn then in effect. upon pa)ment in full of the Rental Payments lhen dLie hereunder plus the then applicable
Purchase Price plus $1.00 to ~or, or
(b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipmenl on the day L:ssee specifies as the purchase date in
Lessee's notice to Lessor of its exercise of the purchase option. upon payment in full of the Rental Pajments then due hereunder plus lh<: then applicable Purchase Price to Lessor.
ARTICLE XI
Section 11.01. Assignment by Lessor. Lessor's right. title and interest in. to and under this Agreement and the Equipment may be assigned and reassigned in whole or
in part to one or more assignees or subassignees by Lessor and. to the extent of his int~rest, by any Registered O.....T1er. without the necessity of obtaining the consenl of Lessee;
provided that (a) any assignment.. other than an assignment to or by a Registered Owner. shall not be effective until Lessee has received written nolice. signed by the assignor, of
the name, address and tax identification number of the assignee. and (b) any assignment to or by a Registered Owner shall not be effective until it is registered on the registration
books kept by the Agent as agent for Lessee. Lessee shall retain all such notices as a register of all assignees (other than Registered Owners) and shall make all payments to the
assignee or assignees designated in such register or. in the case of Registered O.....T1eTS. to the Agent. Lease Participation Certificates may be executed and delivered by the Agent to
Registered Owners, if any, Lessee agrees to execute all documents, including notices of assignment and chattd mortgages or financing statements, that may be reasonably
requested by Lessor or any assignee to protect its interests in the Equipmllnt and in this Agreement. Lessee shall not have the right to and shall not assert against any assignee or
Registered Owner any claim. counterclaim or other right Lessee may have against Lessor.
Section 11.02. Assignment anti Subleasinc b)' Lessee. None of Lessee's right, tille and interest in. to and under this Agreement and in the Equipment may be
assigned or encumbered by Lessee for any reason. except that Lessee may sublease all or part of the Equipment if Lessee obtains the prior 'Mitten consent of Lessor and an opinion
of nationally recognized counsel in the area of tax exempt municipal obligations satisfactory to Lessor that such subleasing will not advel"3ely affect the exclusion of the interest
components of the Rental Payments from gross income for federal income tax purposes. Any such sublease of all or part of the Equipment shall be subject to this Agreement and
the rights of the Lessor in. to and under this Agreement and the Equipment.
ARTICLE XII
Section 12.01. Events of Default Defined. Subject to the provisions of Section 3.03. any of the following events shall constitute an "Event of Default" under this
Agreement:
(a) Failure by Lessee to pay any Rental Payment or other paYlllllnt r~quired to be paid h.::reunder at thi:: time specifilld herein;
(b) Failure by Lessee to observe and perfonn any covenant. condition or agreement on its part to be observed or p<:rformed. otbcr than as ref.med to in subparagraph
':94' 295
(a) above. for a period of30 days after ....TiU.::n notice specifying such failure and requesting that it b.:: ft:medied is given to L..'SSee by l....essor. unless ~'SSOr shall agree in \\Titing to
an cX1ension of such time pnor to its cx-piration; provided that. if the failure stated in th.:- notice cannot be corrected within the applicable penod. Lessor will not unreasonably
withhold its consent to an e:l.1ension of such time jf com:ctive action is instituted by L...=ssee within the applicable p.:-riod and dilig.:nlty pursued until the default is corrected;
(c) Any statement representation or warranty made by Lessee in or pursuant to this Agreement or its execution, d.:1ivery or performance shall prove to have been false,
incorrect, misleading or breached in any material respect on the date when made;
(d) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee. custodian or liquidator of Lessee. or of all or a substantial part of the assets of Lessee,
(ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors. (iv) have an order for
relief entered against it under applicable bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with
creditors or taking advantage of any insolvency law or any answer admining the matcrial alkgations of a petition filed against Lessee in any bankruptcy, reorganization or
insolvency proceeding; or
(e) An order, judgment or decree shall be entered by any court of competent jurisdiction. approving a petition or appointing a receiver, trustee, custodian or liquidator
of Lessee of all Of a substantial part of the assets of Lessee. in each case without its applicalion, approval or consent.. and such order, judgment or decree shall continue unstayed
and in effect for any period ofJO consecutive days.
Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shan have the right. at its sole option without any further demand or notice, to
take one or any combination of the following remedial steps:
(a) By written notice to Lessee. Lessor may declare all Rental Payments and other amounts payable by 1...essee hereunder to the end of the then current Original Term
or Renewal Term to be due;
(b) With or without terminating this Agreement. Lessor may enter the premises where the Equipment is located and retake possession of the Equipment or require
Lessee at Lessee's expense to promptly return any or all of the Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease
the Equipment or, for the account of Lessee. sublease the Equipment. continuing to hold Lessee liable for the difference between (i) the Rental Payments and other amounts
payable by Lessee hereunder to the end of the then current Onginal Tenn or Renewal Term. and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all
expenses of Lessor in exercising its remedies underthis Agreement. including without limitation all expenses of taking possessIOn. sloring, reconditioning and selling or leasing the
Equipment and all brokerage, auctioneers' and attorneys' fees); and (c) Lessor may take whatever action at law or in equity may appear necessary or deSirable to enforce its rights
as the owner of the Equipment.
Section 12.03. ~o Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended 10 be exclusive and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiwr thereof. but any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice
as may he required in this Article.
ARTICLE XIII
Section 13.01. ;'IioUces. All notices, cenificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
registered mail, postage prepaid, to the parties hereto at the addresses on the front of this agreement (or at such other address as either party hereto shall designate in writing to the
other for notices to such party), to any assignee at its address as it appears on the registration books maintained by Lessee or the Agent.
Section 13.02. Release and Indemnification. To the e~1ent pennittcd by law. Lessee shall indemnify. protect. hold hannless, save and keep harmless Lessor from and
against any and all liability, obligation, loss, claim. tax and damage whatsoever. regardless of cause thereof. and all e~,:penscs in connection therewith (including without limitation
counsel fees and expenses and any federal income tax and interest and penalties connected therewith imposed on interest received) arising out of or as the result of (a) the entering
into oflhis Agreement., (b) the ownership of any it.ml of the Equipment. (c) the ordering. acquisition. use. operation, condition. purchase. delivery. rejection. storage or return of
any item of the Equipment. (d) any accident in connection wilh the operation. use, condition. possession. storage or return of any item of the Equipment resulting in damage to
property or injury to or death to any pCf'Son, and/or (e) the breach of any covenant herein or any material misrepresenlation cont.ained herein. The indemnification arising under
this section shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason.
Section 13.03. Entire Agreement. This Agreement constitutes the entire agreement between L...--ssor and Lessee.
Section 13.04. Blnding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and t..:ssee and their respective successors and assigns.
Section 13.05. Severability. In the event any provision of this Agreement shall be held invalid or unenforc~able by any court of competent jurisdiction. such holding
shall not invalidate or render unenforceable any other provision hereo[
Section 13.06. Amendments. Changes and Modifications. This Agreement may be amended by Lessor and u--ssee; provided thai no amendmenl that affects the
rights of the Registered O....ners shall be effective unless it shall have been consented to by the Registered Ov.ners of a majority. in principal amount, of the Lease Participation
Ccrtificates. if any, then outstanding.
Section I3.07. Execution In Counterparts. This Agreement may be simultaneously executed in several count~3rts. each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 13.08. Applicable Law, This Agreement shall be governed by and constnled in accordance with the laws of the State.
Section 13.09. Captions. The captions or headings in this Agreement are for convenience only and in no way define. limit or describe the scope or intent of any
provisions or sections of this Agreement
,l"!\,.t(.
'94 295
Rental Pavrnenl
Number
EXHIBIT A TO EQUlP;\IENT LEASF.1PURCHASE AGREEMENT
Rental Pa)Tnenl
~
SCHEDULE OF RENTAL PAYMENTS
Interest
Portion
Principal
~
Purchase
Price
t4 .;%gS' .."
EXIIIBlT A TO EQUIPMENT LEASFJPURCIlASE AGREEMENT
(CONTINUED)
SCHEDULE OF REi"TAL PAYl\1E~TS
Rental Payment
Number
Rental PaYment
Amo~nt
Inlerest
l!!!!!!m
Principal
f!!!!i2!!
Purchase
~
"~" +
. 94 295
ACCEPTA:--;CE CERTIFICATE
Koch Financial Corporation
4111 East 37th Street North
Wichita. Kansas 67226
Re:Equipment Lease!Purchase Agreement. dated as of
and "(L=ee")
, 19 _ (the "Agreement"). between Koch Financial Corporation ("Lessor")
Ladies and Gentlemen:
In accordance with the Agreement, the undersigned Lessee hereby certifies and represents to, and agrees with, Lessor as follows:
(1) All of the Equipment (as defined in the Agreement) has been delivered. installed and accepted on the date hereoC
(2) Lessee has conducted such inspection amI/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the
Equipment for all purposes.
(3) Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement
hereof.
(4) No event or condition that constitutes. or with notice or lapse oftime, or both. would constitute. an Event of Default (as defined in the Agreement) exists at the date
Dated:
LESSEE
[SEAL]
By
Title:
.. "#~,!'! C'"
$J ,~, . "",:'," ..'
-',I-'
94 :?~5
{CROSS OUT ANY INAPPLICABLE PARAGRAPHS. I}JCLUDE PARAGRAPHS I. 2 AND 3 TO DESIG~ATE THE AGREEMENT AS A "QUALIFIED T A..X-EXE~IPT
OBLIGATION"; INCLUDE PARAGRAPHS 1,4 A..'lD 5 TO QUALIFY FOR ARBITRAGE REBATE EXCEPTION FOR SMALL GOVERNMENTAL UNITS}
TA.'X DESIGNATIONS ANI> COVENANTS
1. The covenants and designations hereinafter set forth are intended to be, and hereby are, incorporated into the Equipment Lease/Purchase Agreement., dated
19_ (the "Agreement"), between ("Lessor) and
("Lessee"). and except as otherwise defined herein, all terms defmed In the Agreement shall
have the samerneanmg herein as in the Agreement. The Commencement Date of the Agreem~nt is or will be in the calendar year 19_ (the ~Issuance Year").
2. Lessee hereby designates the Agreement as a "qualified tax-exempt obligation" as defined in Section 265(bX3XB) of the Code. The aggregate face amount of all
tax-exempt obligations (excluding private activity bonds other than qualified SOl(cX3) bonds) issued or to be issued by Lessee and all subordinate entities thereof during the
Issuance Year is not reasonably expected to exceed $10,000,000.
3. Lessee hereby covenants that Lessee and all subordinate entities thereof will not issue in excess of SI0,000,000 of qualified tax-exempt obligations (including the
Agreement but excluding private activity bonds other than qualified SO I (cX3) bonds) during the Issuance Year without first obtaining an opinion of nationally recognized counsel
in the area oftax-cxempt municipal obligations acceptable to Lessor that the designation of the Agreement as a "qualified tax-exempt obligation" will not be adversely affected.
4. I...essee represents and warrants that it is a governmental unit under the laws of the State with general taxing powers: the Agreement is not a private activity bond as
defined in Section 141 of the Code; 95% or more of the net proceeds of the Agreement will be used for local govenunental activities of Lessee; and the aggregate face amount of
all tax-exempt obligations (other than private activity bonds) issued or to ~ issued by the Lessee and all subordinate entities thereof during the Issuance Year is not reasonably
expected to exceed S5,OOO,000.
5. Lessee hereby covenants that Lessee and all subordinate entities thereof will not issue in excess ofS5,000.000 of tax exempt bonds (including the Agreement but
excluding private activity bonds) during the Issuance Year without first obtaining an opinion of nationally recognized counsel in the area of tax-exempt municipal obligations
acceptable to Lessor that the excludability of the interest on the Agreement from gross income for federal tax purposes will not be adversely affected.
Dated:
[SEAL]
LESSEE
A TrEST,
By,
Title:
CERTIFICATE OF CLERK OR SECRETARY OF LESSEE
I, the undersigned, do hereby certify that (i) the foregoing Tax Designations and Covenants were adopted and approved by action of the governing body of Lessee at a
meeting duly called. regularly convened and attended throughout by the requisite majority of the members thereof, (ii) the officer of Lessee who executed the foregoing Tax
Designation and Covenants on behalf of Lessee and whose genuine signature appears thereon is the duly qualified and acting officer of Lessee as stated beneath his or her
signature. and (iii) said officer has been authorized to execute the foregoing Tax DeSignations and Covenants on b.::half of Lessee.
Dated:
Title:
94-295 duplicate original
94 295
ESSE~TL\L USFJSOURCE OF FV:"DS LETTER
Koch Financial Corporation
4111 East 37th St North
Wichita, KS 67220
Re: Equipment Lease Agreement No.
Gentlemen:
This confirms and affirms that the Equipment described in the Equipment Lease Agreement referred to above (the" Agreement") is essential to the function of the
undersigned or to the service we provide to our citizens.
Further, we have an immediate need for, and e>..-pect to make immediate use of, substantially all such Equipment., which need is not temporary or expected to diminish
in the foreseeable future. Such Equipment will be used by us only for the purpose of perfonning one or more of our governmental or proprietary functions consistent with the
permissible scope of our authority. Specifically, such Equipment was selected by us to be used as follows:
The estimated useful life of such Equipment based upon manufacturers representations and our projected needs is
years.
Our source of funds for paymenls of the rent due under the Agreement for the CUTTent fiscal year is
We expect and anticipate adequate funds to be available for all future paymenls of rent due after the current fiscal year for the following reasons:
Very truly yours,
Lessee
By:
(Signature and Title)
Date:
-