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HomeMy WebLinkAboutReso 93-398 - Authorize entering into and the execution & delivery of a Municipal Lease & Option agreement with United Financial of Illinois, Inc. for the purchase of Fire Dept, Infor Systems, Rec & Parks, & Solid Waste Dept 1 RESOLUTION NO. 93-- A 3--A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING ENTERING INTO AND THE EXECUTION AND DELIVERY OF A MUNICIPAL LEASE AND OPTION AGREEMENT IN THE AMOUNT OF $420,757 WITH UNITED FINANCIAL OF ILLINOIS, INC. FOR THE PURCHASE OF THE EQUIPMENT SET FORTH BELOW. WHEREAS, in the November/December 1993 time-frame, the City is scheduled to purchase three vehicles for the Fire Department, a triple-wide office trailer for Information Systems, a boom truck and brush chipper for the Recreation and Parks Department, and a composting machine for the Solid Waste Department; and WHEREAS, appropriations for the equipment lease/purchase were included in the 1993/94 Budget; and WHEREAS, the City requested proposals for lease-financing packages from a number of lease providers; and the lowest interest cost proposal was received from United Financial of Illinois, Inc. ; NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Redding as follows: 1. It is found and determined to be in best interests of the City of Redding to acquire the above-mentioned equipment by entering into a Municipal Lease and Option Agreement in the amount of $420,757 with United Financial of Illinois, Inc. , in the form attached hereto. 2. The City Manager is hereby authorized to execute, acknowledge, and deliver the necessary lease/purchase agreement and any additional and subsequent documentation relating thereto, upon approval by the City Attorney, with any changes, insertions, \� and omissions therein as may be approved by the officers who execute the agreements, such approval to be conclusively evidenced by such execution and delivery of the lease/purchase i • agreement. The City Clerk is hereby authorized to affix the official seal of the City of Redding to the documentation and attest the same. 3 . The City Manager and the City Clerk are hereby authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits, and other documents, and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and the financing documents relating thereto. I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 16th day of November , 1993 , and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Anderson, Kehoe, Moss and Arness NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Dahl ABSTAIN: COUNCIL MEMBERS: None l CARL ARNESS, Mayor City of Redding A EST: CONNIE STROHMAYER City Clerk FO APPROVED: RANDALL A. HA S, City Attorney 2 MUNICIPAL LEASE AND OPTION AGREEMENI No. • Date: • LESSOR: LESSEE: Name: Name: Address: Address: City State Zip City State Zip Contact and Title: Contact and Title: Telephone No. Telephone No, LOCATION OF EQUIPMENT IF OTHER THAN ABOVE ADDRESS OF LESSEE. Address City County State TOTAL EQUIPMENT COST LEASE TERM COMMENCEMENT DATE NO./AMOUNT OF RENTAL PAYMENTS $e No.Payments attacheSchedule h eto and made a pule part ❑ Monthly ❑ First Pymt.Due hereof("Payment Schedule"). $ ❑ Annual ❑ Advance ❑ Other ❑ Arrears Lessor hereby leases to Lessee the Equipment for the purposes and upon the following terms and conditions: ARTICLE 1:COVENANTS OF LESSEE. ARTICLE V:LEASE PAYMENTS. Lessee represents,covenants end warrants,for the benefit of Lessor and its assigns,as Section 5.01:In consideration of the mutual promisesand the agreements on the part of follows: Lessor hereinafter Contained,and for Lessee's use of the Equipment during the Term. Section 1.01:Lessee is public body.corporate and politic,or an authorized On-Behalf Lessee hereby agrees to pay Lease Payments in lawful money of the United States of -Of Agency within the meaning Of the Internal Revenue Code of 1986,as amended and America,without further notice Or demand,to Lessor's Office or such Other address as :he regulations promulgated thereunder(the Code).duly organized and existing under may be designated by Lessor or its assigns,in the amounts and on the dates set forth,n :he Constil uti0n and laws Of the State in which it is domiciled("State")and will do or Schedule B—Payment Schedule attached to this Agreement.Each Lease Payment is cause to be done all things necessary to preserve and keep in lull force and effect its comprised of, and represents payment of, interest and principal, respectively as existence as a body corporate and politic or an On-Behalf-Of Agency. described in Schedule B—Payment Schedule. Section 1.02:Lessee has been duly authorized to execute,deliver and perform this Section 5.02:Subject to Section 5.03,the obligation of Lessee to make payment of Municipa l Lease and Option Agreement("Agreement")under the Constitution and laws Lease Payments and Other amounts payable by Lessee under this Agreement shall be ofthe State and under the terms and provisions of the resolution of its governing body, absolute and unconditional in all events.Lessee shall make all such payments when due Or by other appropriate official approval.Lessee further represents,covenants and and shall not withhold any such payments as a result of any disputes arising among warrants that all requirements have been met,and procedures have occurred in order to Lessee and Lessor,any Vendor or any other person,nor shall Lessee assert any right of ensure the enforceability of this Agreement,and Lessee has complied with such public set-off,defense or counter-claim against its obligation to make such payments or be bidding requirements as may be applicable to this Agreement and the acquisition by entitled to any abatement of such payments.In the event any Lease Payment is not paid Lessee of the Equipment hereunder.Lessee shall cause an opinion of its counsel inform within fifteen It5)days of its due date,the Lessee shall be subject to a late charge of the acceptable to Lessor to be executed and delivered to Lessor. lesser of(a)10%of the past due Lease Payment or(b)such maximum late charge as Section 1.03:During the Term,the Equipment will be used by Lessee only for lawful may be permitted by applicable law. purposes of performing one or more governmental or proprietary functions of Lessee Section 5.03:in the event insufficient funds are appropriated for the payment of the consistent with the permissible scope of Lessee's authority and will not be used in a Lease Payments hereunder and Lessee has no funds legally available for Lease trade or business of any person or entity other than the Lessee. Payments from other sources,then Lessee may terminate this Agreement at the end Of Section 1.04:During the Term,Lessee will annually provide Lessor or its assigns with its then current fiscal year,and after having returned the Equipment to Lessor,or its current financial statements,budgets.or proof of appropriation for the ensuing fiscal assigns, in accordance with Section 3.02, Lessee shall not be obligated to make year and such other financial information relating to the ability of Lessee to continue payment of subsequent Lease Payments.Lessee agrees to deliver notice to Lessor of :his Agreement as may be reasonably requested. such termination at least ninety(90)days prior to the end of its current fiscal year.If this Section 1.05:The Equipment is,and shall remain during the Term,personal property Agreement is terminated under this Section 5.03,Lessee agrees that,to the extent and when subject to use by Lessee under this Agreement.will not beorbecome fixtures lawful,it shall notappropriate or expend anyfunds forthe purchaseor useolequipment and will have a useful life in the hands of the Lessee that is substantially in excess of the or services similar to the Equipment subject to this Agreement until alter the end of the Term. next succeeding fiscal year or lesser period of time as permitted by applicable law. Sectlon 1.09: Lessee has not issued. and reasonably anticipates that it and its Section 5.04:Lessee herewith certifies that all lease payments due hereunder from the subordinate entities will not issue,tax-exempt obligations(including this Agreement)in Commencement Date through the end of Lessee's current fiscal year are available in an ;he amount of more than$10,000,000(other than private activity bonds and refunding unexhausted,unencumbered appropriation for payment thereof. bonds which do not have to be taken into account under Section 265(b)(3)Of the Internal Revenue Code of 1986.as amended'Code")during the current calendar year. ARTICLE VI:TITLE TO EQUIPMENT;SECURITY INTEREST. Lessee hereby designates this Agreement as a"qualified tax-exempt obligation within the meaning of Section 265(b)(3)of the Code;and agrees that it and its subordinate Section 6.01:During the Term,title to the Equipment and any and all additions.repairs. entities will not designate more than$10.000.000 of their Obligations as"qualified tax- replacements Or modifications shall vest in Lessee,subjectto therightsol Lessorunder exempt obligations"during the current calendar year. this Agreement.Upon the occurrence of an Event of Default asset forth in Section 13.01 or nonappropriation asset forth in Section 5.03,title to the Equipment shall immediately ARTICLE II:DEFINITIONS. vest in Lessor,and Lessee will,upon Lessor's request,reasonably surrender possession The following terms will have the meanings indicated below unless the context clearly of the Equipment to Lessor. Until the occurrence of an Event of Default or non. requires otherwise: appropriation Lessee shall be entitled to quiet enjoyment of use of the Equipment for Section 2.01"Equipment":means the equipment selected foracquisition and use bythethe Term. Lessee hereby irrevocably designates,makes,constitutes and appoints Lessee as more fully described in the attached Schedule A—Equipment List and all Lessor,and/or its agents and assigns,as Lessee's true and lawful attorney(and agent- replacement parts.substitutions,accessions,attachments and additions theretoin-fact)with power,at such time of default Or nonappropriation or times thereafter as Lessor in its sole and absolute discretion may determine,in Lessee's or Lessor's name Section 2.02"Lease Payment":means the periodic payment described in the attached to endorse the name o1 Lessee upon any Bill of Sale,document,instrument,invoice. Schedule B—Payment Schedule,required to be paid by Lessee to Lessor for the use of freight bill,bill of lading or similar document relating the Equipment in order to vest title the Equipment during the Term. in Lessor and transfer possession to Lessor. Section 2.03"Term":means the period of time this Agreement is in force as specified in the Schedule B—Payment Schedule. Section 6.02:To secure payment of all of Lessee's obligations under This Agreement, Y Lessee grants to Lessor a first security interest re the Equipment and all rifio . Section 2.04"Lasso/':means the entity designated on the face of this Agreement as attachments.accessions and substitutions thereto,and on any proceeee ds therefrom. Lessor hereunder. Lessee agrees to execute such additional documents,including financing statements. Section 2.05"Concluding Payment":means the concluding payment amount adjusted certificates of title,affidavits.notices and similar instruments.in form satisfactory to from period to period as set forth in the attached Schedule B—Payment Schedule Lessor or its assigns,which Lessor,or its assigns,deem necessary or appropriate to which Lessee may,at its option,pay to Lessor in order to purchase the Equipment in establish and maintain its security interest. accordance with the provisions Of Section 10.1 below. Section 2.06"Vendor":means the manufacturer of the Equipment and its agents or ARTICLE VII:MAINTENANCE;MODIFICATION;LOCATION;TAXES;INSURANCE. dealers from whom Lessor purchased or is purchasing the Equipment. Section 7.01:At all times during the Term,Lessee will,at its own cost and expense. ARTICLE III:COMMENCEMENT OF LEASE TERM. maintain, preserve and keep the Equipment in good repair, working order and Section 3.01:The Term snail Commence on the date specifiedabove("Commencement condition,and will from time t0 time make orcause t0 be madeall necessaryand proper repairs,replacements and modifications,provided however.Lessee shall not materially Date")and,unless earlier terminated asexpressly provided for in Article V,Section 5.03, modify or alter the Equipment without Lessor's prior written consent,if requested by will continue for the period specified in Schedule B—Payment Schedule, Lessor,Lessee will enter into a maintenance contract for the Equipment with Vendor or Section 3.02:In the event of termination in accordance with Section 5.03 hereof,Lessee such other firm as Lessee may choose subject to the express written approval of Lessor, agrees,at its expense,to peaceably surrender possession of the Equipment to Lessor, which approval shall not be unreasonably withheld, or its assigns,on the effective date of such termination,in good working condition, reasonable wear and tear excepted,assembled and packed for shipment in accordance Section 7.02:The parties to this Agreement contemplate that the Equipment will be with manufacturer's specifications and shipped at Lessee's expense to any location in located(permanently garaged in the case of vehicles)at the place specified above. in, continental United States so specified by Lessor or its assigns. which location shall not be changed without Lessor's prior written consent.and will be used for a governmental or proprietary purpose of Lessee and, therefore. the ARTICLE IV:INSPECTION AND IDENTIFICATION. Equipment will be exempt from all taxes presently assessed and levied with respect to SeCllon 4.01:Lessor and its assigns shall have the right,at all reasonable times tluring personal property.In the event the use,possession or acquisition of the Equipment is normal business hours.to enter into and upon the property of Lessee for the purpose of found to be subject to taxation in any form,Lessee will pay during that Term as the same • normatb the Equipment. come due,all taxes and governmental charges Of any kind whatsoever that may at any inspec9time be lawfully assessed or levied against or with respect to the Equipment and,to the Section 4.02:Lessor may,at its expense.affix labels brother markings to the Equipment extent permitted by law,file all required lax forms,returns and reports relating thereto. pertaining to Lessor's interest hereunder and Lessee agrees not to remove or obscure In all events,Lessee shall pay all gas,water,steam.electricity,heat,power,telephone. said labels or markings. (continued on back) THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS PRINTED ABOVE AND ON REVERSE SIDE WHICH ARE MADE A PART HEREOF. ACKNOWLEDGED AND AGREED Lessee acknowledges reading and receiving a copy of this Agreement and the Undersigned affirms that he has been duly authorized to execute this Agreement on behalf of the Lessee. Lessor Lessee Signature: Signature: Name Name Title Title Date Date 30 1193 LESSOR . -:+cep,f Ire Ec u:pc,enf Section 12.01:Lessee herewith certifies to Lessor and its assigns that funds advanced ' Be lion 7.03 Insurance:At its own expense Les•ae shall cause casualty,public liability hereunder will not be used M reduce Income for Lessee In violation of existing or and property damage Insurance in such send with such insurer as are propose IRS guidelines a the proceed.of the Municipal Lease and Option ecce GGtable to Lessor to be carnal and ed, or shall demonstrate to the Agreement will not De use manner that woultl cause the Agreement to De or satisfaction of Lessor that adequately funded I urance Is provided with reepeclto become "arbitrage bond." the meaning of Section 148(a)of the Code and - theEquipment, sufficient to protect the Fu;J Insurable Value (meaning the full regulations applicable hereto and that: - replacementvalue(new)of the Equipment or the then applicable Concluding Payment, A. The original proceeds of the Municipal Lease and Option Agreement will not exceed Win Is greater),and to protect Lessor from liab lityY In all events.Ail Insurance the amount necessary for the purpose for which the Ag9reement was issued and intra is proc eerie from casualty losses#hall be payable as provided In Article Vlll hereof.Lessee no overiseuence In contravention of Section 1.10313(b) (6) (Iv)of the Income Tax shall furnish to Lessor certificates and copies of policies In form acceptable to Lessor Regulations of the Code;and evidencing such coverage throughout the Term.Alternatively,Lessee may Insure the S. Except as to capitalized interest,If any,within six(8)months after the date hereof, Equipment under a blanket insurance policy or policies which cover not only the Lessee will have expended all of the proceeds for the purpose for which the Municipal Equipment but other properties If Lessee shall Insure similar properties by self- LeaseandOp tion Agreement was entered into and authorized,if proceeds are not spent Insurance,Lessee will Insure the Equlpment by means of an adequate Insurance fund. within said X1(8)month period,the proceeds will not be used to acquire hla her yleldiny All Insurance shall name Lessee and Lessor as assured&and lose payees as their Investments within the meaning of Section 148(x)of the Internal Revenue Codeof 1988 respective Interests may appear and shall provide for at least thirty(30)days prior (the"Code"). If the Lessee shall fall to comply with these restriction.,any amount written notice by the underwriter or Insurance company to the Lessor In the event of required to be rebated to the United States pursuant to Section 148(f)(3)of the Code, cancellation, expiration, or material Alleretion of the insurance coverage required shall be made by Lessee within the time provided In Section 148(f)(3)of the Code. herein. ARTICLE XIII:EVENTS OF DEFAULT AND REMEDIES. ARTICLE VIII:DAMAGE,DESTRUCTION AND CONDEMNATION PROCEEDS, %rceunderlion �'Ot: The following shell constitute an "Event 01 Default" as defined Section 5.01:Lessee Deere ell risk of loss,destruction,confiscation or condemnation of, A. Failure by Lessee t,0 pay any Lease Payment or other payment required to be paid or damage to the Equipment. If prior to the termination of the Leese Term (a�the hereunder at the time specified herein;of Equipment or any portion thereof IS destroyed or damaged by fire or other Cos us ly in B. Failure by Lessee to observe and perform any other covenant, condition or whole or In part;or(b)title to,or the temporary use of,the Equipment or any pert thereof agreement on Its part to be observeor performed Lessee d fd by under this Agreement or shall betaken under the exercise of the power of eminent domain by anyaCovernmenlal any other agreement by and between Leasee and Lessor,after having received thirty body or by any person,firm orcorporatlonacting under governmental out florlty,Lage ee 30)days prior written notice from Lessor;or shall Immediately notify Lessor in writing of such occurrence and Leasee and Leasor Breach of any material representation or warranty by Lessee under this Agreement; j will Ce use the proceeds of any insurancaclaim or condemnation award,After deducting or all expenses(Including attorneys fees)Incurred In the collection of such claim or award D. Commencement by Lessee of a case or proceeding under the Federal bankruptcy ('Net Proceeds"),to be applied to Lessee's obligations pursuant to Section 8.02 hereof. laws or filing by Lessee of any petition or answer admitting or not contesting the materiel allegations of a pot lion flied against Leasee In any such proceeding;or Section s not02:Provided the Equipment Is not deemed 10 la a total lose,Lessee shell,it E. A petition against Lessee In a proceeding under any existing or future bankruptcy, Lessee is not in default hereunder,cause Ina repair,replacement or restorallon of the insolvency or other similar law shall be filed and not withdrawn or dismissed within ; Equipment and pay the cost thereof.In the event of total destruction,confiscation,lose thirty(30)days thereafter. ; of,or damage to,the Equipment,whether or not Lessee is In default,at Lessor's option, Section 12.02:Upon the occurrence of an Event of Default,Lessor anal)have the right.at t Lessee shall pay to Lessor on the due date of the Lease Payment next succeeding the P 9 date of such lose the amount of the Concluding Payment applicable to such date,glue Its sole option without any further demand or notice,to exercise any one or more of the r. the Lease Payment due on such date,plus any additional interest which accrues ffor, foltowlnq remedies,end hold Lessee liable for all costa end expaneeathereof,Including, the date payment is due until the date payment is received,plus any other amounts but not milled to,court costs and attorneys feet: payable by Lessee hereunder,and,upon payment in full of such amount.,theTerm A. With or without terminating this Agreement,enter any promisee where Equipment shell terminate and Lessor's security interest In the Equipment shall terminate.Leeeee may be found and,without liability to any party for Said Act,with or without notice, agrees that If the Net Proceeds are Insufficient to pay in full Lessee's obligations retake possession of the Equipment and sell,lease or sublease the Equipments[public hereunder, Lessee shall make such payment to the Lessor In the amount of any or private sale,without notice to Lessee,with the net proceeds thereof to be applied to deficiency. Lessee's obligations hereunder,holding Lessee liable for the applicable Concluding Payment amount on the payment due date immediately preceding the date of Default, 1 plus the Lease Payment due on such dale,plus any accrued Interest plus any other amounts payable by Lessee hereunder. ARTICLE IX:LESSOR DISCLAIMERS,EQUIPMENT USE AND VENDOR WARRANTIES. B. Require Lessee at Lessee's risk and expense to promptly return the Equipment in the i Section 9.01: LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER manner and In the condition set to fin In Section 3.02 hereof; EXPRESS OR IMPLIED,OF ANY NATURE WHATSOEVER,INCLUDING THOSE AS C. Regardless of whether Lessor is able to repossess the Equipment,the Equipment y TO THE VALUE,DESIGN.CONDITION,MERCHANTABILITY OR FITNESSFORA shall be deemed a total loss and Leasee shell pay to Lessor the amount due pursuant to PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT,OR WAR- Section 8.02 hereof;and RANTY WITH RESPECT THERETO.IN NO EVENT SHALL LESSOR BE LIABLE FOR to Take whatever other action at few or In equity as may appear necessary ordesirable ANY INCIDENTAL,INDIRECT,SPECIAL OR CONSEQUENTIAL DAMAGE IN CON- to enforce Its rights as the owner of the Equipment. NECTION WITH OR ARISING OUT OF THIS AGREEMENT OR TI4E EXISTENCE, Section 13.03:No remedy herein conferred upon or reserved toLessorlsintendetltobe FURNISHING, FUNCTIONING OR LESSEE'S USE OF THE EQUIPMENT OR ANY exclusive and every such remedy shall be cumulative and shall be in addition to every ITEM THEREOF OR SERVICES PROVIDED FOR IN THIS AGREEMENT. LESSEE other remedy given under this Agreement now or hereafter existing at law or In equity. HEREWITH ACCEPTS THE EQUIPMENT ON AN"AS-IS,WHERE-IS"BASIS. No delay or omission to exercise any right or power accruing upon any Default shall Section 9.02:Lessee acknowledges that Lessor Is not the Vendor or its agent and that Impair any such right or power which maybe exercised from time to time and asoflares ) the selection of the Equipment has been made by Lessee at Its sole risk.Lessor herebymay be deemed expedient.No waiver by Lessor of any right or remedy it may have irrevocably appoints Lessee its agent and attorney-in-fact during the Term,so long ahereunder shall be deemed to constitute waiver of said right or remedy at any future Lessee shall not be In default hereunder,to assert from time to time whatever claim[and date or of any other right or remedy which Lessor may have. rights,Including warranties of the Equipment,which Lessor may have against the ARTICLE XIV:INCOME TAX STATUS. Vendor of the Equipment.Lessee's sole remedy for the breach of such manufacturers or vendors warranty,indemnification or representation shall be against the Vendor of the Section 14,01:The parties hereto assume and Intend that this Municipal Lease and Equipment. Lessee expressly acknowledges that Lessor makes,and has made,no Option Agreement has been entered into on the presumption that Income earned by the representation or warranties whalsover as to the existence or availability or enforce- Lessor shall be exempt from income for lax purposes In accordance with the Internal ability of such warranties of the Vendor, Revenue Code of 1988,as amended and that this Agreement will qquslityae a"qualified Section 9.03:Lessee will not,nor permit any party to,Install,use,operate or maintain tax exempt obligation"within the meaning of Section 285(8)(3)(8)o}the Code,as the Equipment Improperly,carelessly,In violation of anyapplicable law or In a manner amended. contrary to that contemplated by this Agreement.11 the Equipment is a motorvehicle,It Section 14.02 Lessee's Acts or OmIssiont:If,following any representation,actor failure shall not be used for transportation of persons for hire or for transportation or storage of to act of Lessee,Lessor shall not be entitled to the otherwise applicable exemption set toxic,radioactive,hazardous or flammable material..Lessee shall provide all permits forth In Section 265(b)(3)of the Code,as amended,or shall suffer a loss of the tax and licensee,if any,necessary for the Installation and operatlon of the Equipment.In exempt Income benefits under this Municipal Lease and Option Agreement because: addition.Lessee agrees to comply In all respects(Including,without limitation,with respect to the use,maintenance and operation of each Item of the Equipment)with all A.This Agreement tlitl not,or no longer complies with the bank eligibility calling criteria laws of the jurisdictions in which its operations,Involving any Item of Equipment,may set forth In the Tax Reform Act of 1988,as amended;or extend and any legislative,executive,administrative or judicial body exercising any S.Lessor must Include the Income earned under this Agreement In Its gross income for power or jurisdiction over the items of the Equipment. federal(and to the extent applicable state and local)Income tax purposes;then the remaining Lease Payments shall be Increased and an additional Lease Payment shall be due Immedlateiy upon demand to Lessor as a recapture of 1081 tax exempt i ARTICLE X:OPTION TO PURCHASE. Income benefits("Adjusting Payments"),Adjusting Payments shall be calculated as amounts which equal the sum of the aggregate amount of additional federal,state and Section 10.01:Provided Lessee Is not In default hereunder,Lessee may,upon giving local Income taxes payable by Lessor after deduction of all federal,state and local taxes Lessor not less than thirty(30)days prior written notice,elect to purchase all,but not required to be paid by Lessor with respect to the receipt of such Adjusting Payments, less than all,of the Equipment for the applicable Concluding Payment amount as set lus the aggregate amount of any interest,penalties or additions to faxes payable by forth In the attached Schedule B—Payment Schedule,which amount shall be due and Lessor as a result of its loss or disallowance of tax exempt income benefit..No payable on the next succeeding Lease Payment date together with the Lease Payment adjustment In payments shall to construed as a waiver by Lessor,or limitation of due on such date and all other amounts accruing hereunder to Lessor as of such date. Lessor's right to declare an event of default.Notwithstanding the foregoing,Lessee shall not be Obligated to make Any adjustment In Payments with respect to any disallowance,II such results solely from Lessor's failure to file its tax returns In a timely and Proper manner.As used In this Article XIV,Lessor shall mean Lessor as defined In ARTICLE XI:ASSIGNMENT AND INDEMNIFICATION. Section 2.04 plus Its successors end/or assigns. Section 11.01:This Agreement,and the obligations of Lessee to make payments here- under,may be assigned by Lessor and reassigned In whole or In part to one or more ARTICLE XV:MISCELLANEOUS. assignees at any time subsequent to Its execution,without the consent of Lessee. Section 16.01Notices:All notices,certificates or other communications hereundershall Lessor agrees to give notice of assignment to Lessee and upon receipt of such notice be sufficiently given and shall De deemed given when delivered pereonally or melted by Lessee agrees t0 make all payments to the assignee designated In the asslgnmA nt,and reglelered moll,postage prepaid,to the pertlet et their respective places of business. s. Lessee agrees that the Assignee shall have all of Lessor's rights without beln� responsible for Lessor's duties and obligations hereunder.Lessee agrees to execute all Section 18.02 Binding Effect This Agreement shell Inure to the benefit of and shall be documents, Including notices of assignment and chattel mortgages or financing binding upon Lessor and Lessee and their respective successors and assigns. statements which mayy be reasonably requested by Lessor or Its assignee to protect Section 16.03 Severablllty:In the event any provision of this Agreement shall be held their Interests in the Equlpment and in this Agreement. invalld or unenforceable by any court of competent jurisdiction,such holding shall not The Lessor's Interest In this Agreement may not be assigned or reassigned In whole or In invalidate or render unenforceable any other provision hereof. part unless (1) the document by which such assignment or reassignment Is made Section 15.04 Survival of Leesads Indemnifications:Any Indemnification,warranty or discloses the name and address of the assignee;and(ii)the Lessee covenants and covenant made by Lessee,except for the payment of Lease Payments as specifically agree,with the Lessor and each subsequent assignee of Lessor to maintain for the term provided herein,but specifically Including the Indemnifications contained In Section of this Agreement a complete and accurate written record of each such assignment and 11.03.shall survive the expiration or termination of the Term. reassignment In form necessary to comply with Section 149(.)of the 1988 Tax Reform Sectlon 15.06 Discharge of Lessee's Obligations:If Leeeee tails or refuses to discharge Act. amended, and the regulations proposed or existing from time to time Its obligations hereunder, Lessor me at its sole discretion but without obligation, promulgated thereunder, discharge any obligation of Lessee yhereunder and Lessee shall, upon demand, Section 11.02:THIS AGREEMENT,THE EQUIPMENTORANY INTEREST OF LESSEE reimburse Lessor for amounts paid on Lessee's behalf and said amounts shall be deemed IN THE EQUIPMENT MAY NOT BE SOLD,ASSIGNED,SUBLET,RENTED,LOANED payable hereunder. OR ENCUMBERED BY LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. Section 15.05 ApplIcabla Law:This Agreement shall be governed by and construed In accordance with the laws of the State,as deflned In Sectlon 1.01. Section Its a pe the extent permitted by the laws andConstitutionindemnify y the Stele,Lessee Section 15.07 Caption.:The captions or headings In this Agreement are for convenience snail, t Its expense,protect,defend,hold harmless and Indemnify Lessor Irom and only and In no way define,limit or describe the Scope or Intent of any provisions or against any and all thereof,obligations,ns. ilosses, tionClait and damages Including. without sections of this Agreement, regardless of cause thereof,expenses In connection therewith, Inclutlinp,without limitation,counsel fees and expenses,penalties and Interest arising out of or as the Section 15.08 Entire Agreement: This Agreement constitutss the entire agreement result of the entering into of this Agreement, the ownership of any Item of the between Lessor and Lessee and may not be amended,altered or modified except by Equipment,the ordering,acqulsitl0n,use,opo ration,condition,purchase,delivery, written Instrument signed by Lessor or Its assigns and Lessee.There are no under- rejection,storage or return of any item of the Equlpment or any accident In connection standings,agreements,representations or warranties,express or Implied,not specified with the operation,use,condition,possession,storage or return of any item of the herein regarding this Agreement or the Equipment leased hereunder.Lessee by the Equipment resulting In damage to property or Injury to,or death to any person.Lessee signature of its authorized representative acknowledges that It has read this Agreement, shall Immediately notify Lessor of the existence of any claim indemnified for herein. understands it,and agrees to be bound by Its terms and conditions.