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HomeMy WebLinkAboutReso. 1984 - 208 - Authorizing the execution and delivery of an equipment lease/purchase agreement i r RESOLUTION NO. .' /O A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING THE EXECUTION AND DELIVERY OF AN EQUIPMENT LEASE/PURCHASE AGREEMENT AND RELATED INSTRUMENTS AND DETER- MINING OTHER MATTERS IN CONNECTION THEREWITH. WHEREAS , the City Council of the City of Redding ( "Lessee" ) has determined that a true and very real need exists for the equipment (the "Equipment" ) described in the Equipment Lease/- Purchase Agreement (the "Agreement") presented to this meeting; and WHEREAS, Lessee has taken the necessary steps, including those relating to any applicable legal bidding requirements, to arrange for the acquisition of the Equipment; and WHEREAS, Lessee proposes to enter into the Agreement sub- stantially in the form presented to this meeting; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as follows: Section 1 . It is hereby found and determined that the terms of the Agreement in the form presented to this meeting and incorporated in this resolution are in the best interests of Lessee for the acquisition of the Equipment. Section 2 . The Agreement is hereby approved. The Mayor and Clerk of Lessee hereby are authorized to execute, acknowledge and deliver the Agreement with any changes , insertions and omissions therein as may be approved by the officers who execute the Agreement, such approval to be conclusively evidenced by such execution and delivery of the Agreement. The City Clerk of 9 . , , III III Lessee is hereby authorized to affix the official seal of Lessee to the Agreement and attest the same. Section 3 . The Mayor and Clerk of Lessee are hereby author- ized and directed to execute and deliver any and all papers, instruments, opinions , certificates, affidavits and other docu- ments 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 Agreement. The undersigned further certifies that the above resolution has not been repealed or amended and remains in full force and effect and further certifies that the within Equipment Lease/- Purchase Agreement is the same as presented at said meeting of the City Council of Lessee. I HEREBY CERTIFY that the foregoing resolution was intro- duced and read at a regular meeting of the City Council of the City of Redding on the 17th day of September , 1984 , and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Demsher, Fulton, Gard NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Pugh, Kirkpatrick ABSTAIN: COUNCIL MEMBERS: None / l ' # � ,/ ;r I / / - i :A. A ALLEN GARD, Vi e Mayor City of Redding A ES • / '07 ./ - y ► �THEL A. I HOLS, _y C erk FORM ROVED: Ari -/ d "/' . RA 'ALL A. HAYS, i,'y Attorney -2- 110 4 16Sal EQUIPMENT LEASE/PURCHASE AGREEMENT THIS EQUIPMENT LEASE/PURCHASE AGREEMENT is made as of the day of , 198 , by and between MARYLAND NATIONAL LEASING CORPORATION ( "Lessor" ) and ( "Lessee" ) . Lessee has determined that a present need exists for the Equipment (as such term is hereinafter defined) and is authorized under the Constitution and laws of the State of ( the "State" ) to enter into this Agreement for the purposes set forth herein. In consideration of the mutual covenants, terms and conditions hereinafter contained, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor , for the purposes set forth herein, the property, together with all components , parts , additions, accessions and attachments now or hereafter incorporated therein (all such property hereinafter collectively referred to as the "Equipment" ) described in Exhibit A attached hereto, subject to the terms and conditions set forth herein. This Agreement is made upon the following terms and conditions: 1 . LEASE TERM. (a ) Commencement of Lease Term. The lease term under this Agreement shall commence on the date on which the Equipment is accepted by Lessee as indicated on the Certificate of Acceptance attached hereto as Exhibit B ( the "Commencement Date" ) , and shall terminate on the last business day of Lessee ' s then current fiscal budget period ( such period being hereinafter referred to as the "Original Term" ) ; provided, however, that this Agreement shall be effective from and after the date of execution hereof . As used herein, "business day" means any day on which commercial banks are open for the purpose of carrying on a commercial banking business in the State. (b) Renewal of Lease Term. The Original Term will be automatically and successively renewed at the end of the Original Term for such number of successive renewal periods as is set forth on Exhibit C attached hereto, except the last of such renewal periods which shall end on the last day of the Full Lease Term (as specified on Exhibit C) ; unless Lessee gives written notice to Lessor not less than sixty (60 ) days prior to the end of the then current term of Lessee 's intention to terminate this Agreement at the end of the then current term pursuant to sub-part (e) of this Section or Section 10 hereof, as the case may be. • • Each renewal period is hereinafter referred to as a "Renewal Term" and all Renewal Terms, together with the Original Term, are hereinafter referred to as the "Lease Term" . Notwithstanding the foregoing, in all events the Lease Term shall not exceed the Full Lease Term as specified on Exhibit C. The terms and conditions applicable to any Renewal Term shall be the same as the terms and conditions applicable to the Original Term, except that the rental payments shall be as provided in Exhibit C to this Agreement. ( c) Termination of Lease Term. The Lease Term will terminate upon the earliest to occur of any of the following events: ( 1) The expiration of the Original Term or any Renewal Term and the nonrenewal thereof in accordance with the terms and conditions of this Agreement; ( 2 ) The purchase of the Equipment by Lessee under the provisions of Sections 8( b) or 10 of this Agreement; ( 3 ) A default by Lessee and Lessor ' s election to terminate this Agreement under Section 13; or ( 4 ) The payment by Lessee of all rental payments authorized or required to be paid by Lessee hereunder . (d) Continuation of Lease Term by Lessee. Lessee intends, subject to the provisions of sub-part ( e) of this Section, to continue the Lease Term through the Original Term and all Renewal Terms for the Full Lease Term and to pay the rental payments hereunder . Lessee reasonably believes that legally available funds in an amount sufficient to make all rental payments for the Full Lease Term can be obtained. Lessee further intends and hereby covenants 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 rental payments to the extent necessary in each budget submitted and adopted in accordance with law, to use its bona fide best efforts to have such portion of the budget approved, and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. (e) Nonappropriation. In the event sufficient funds are not appropriated for the payment of the rental payments required to be paid in the next succeeding Renewal Term, and Lessee has no funds legally available for rental payments from other sources, then Lessee may terminate this Agreement at the end of the Original Term or the then current Renewal Term, as the case may be, and Lessee shall not be obligated to make payment of the rental payments provided for in this Agreement beyond the then current term. Lessee agrees to deliver notice to Lessor of such termination at least sixty (60 ) days prior to the end of the then current term. If this Agreement is - 2 - terminated under this sub-part, Lessee agrees, at Lessee ' s cost and expense, peaceably to deliver the Equipment to Lessor at the location specified by Lessor . To the extent lawful , Lessee covenants that it will not, until the date on which the next succeeding Renewal Term would have ended, expend or commit any funds for the purchase or use of equipment to be used for the same purpose as , or a purpose functionally equivalent to, the Equipment. Notwithstanding anything in this Agreement to the contrary, the provisions of this sub-part shall survive termination of this Agreement. 2 . RENTAL PAYMENTS. (a ) Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay rental payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or monies of Lessee. (b) Payment of Rental Payments. Lessee shall pay rental payments exclusively from legally available funds, in lawful money of the United States of America, to Lessor in the amounts and on the rent payment due dates set forth in Exhibit C attached hereto. (c) Interest and Principal Components . As set forth in Exhibit C, a portion of each rental payment is paid as , and represents payment of, interest, and the balance of each rental payment is paid as , and represents payment of, principal . (d) Rental Payments to be Unconditional. The obligation of Lessee to make payment of the rental payments required hereunder , and to perform and observe the covenants and agreements contained elsewhere in this Agreement, shall be absolute and unconditional in all events , except as expressly provided in this Agreement. Notwithstanding any dispute between Lessee and Lessor, and Vendor or any other person, Lessee shall make all rental payments when due and shall not withhold any rental payments pending final resolution of such dispute, nor shall Lessee assert any right of setoff or counterclaim against its obligation to make such payments required under this Agreement. Lessee 's obligation to make rental payments shall not be abated through accident or unforeseen circumstances. 3 . REPRESENTATIONS AND COVENANTS OF LESSEE. Lessee represents, covenants and warrants to Lessor as follows: (a ) Lessee is an entity described in Section 103(a ) ( 1) of the Internal Revenue Code of 1954, as amended (the "Code" ) . - 3 - • (b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as an entity described in Section l03 (a ) ( l) of the Code. (c) Lessee is authorized under the Constitution and laws of the State to enter into this Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder, and any applicable public bidding requirements have been met. (d) The execution and delivery of this Agreement by or on behalf of Lessee has been duly authorized by the resolution of the governing body of Lessee attached to this Agreement as Exhibit D, and Lessee has obtained such other approvals and consents as are necessary to consummate this Agreement. Lessee further represents , covenants and warrants that all requirements have been met, and procedures have occurred necessary to ensure the enforceability of this Agreement against Lessee, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment hereunder . Lessee shall cause to be executed and provided to Lessor an Incumbency Certificate and an opinion of its counsel , substantially in the forms attached to this Agreement as Exhibits E and F, respectively. (e ) During the term of this Agreement, the Equipment will be used by Lessee only for the purpose of performing one or more governmental functions of Lessee consistent with the permissible scope of Lessee ' s authority and will not be used in a trade or business of any person or entity. Lessee shall provide to Lessor a letter relating to the use of the Equipment for the performance of governmental functions of Lessee substantially in the form attached to this Agreement as Exhibit G. ( f ) During the period this Agreement is in force, Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing fiscal year and such other financial information relating to the ability of Lessee to continue this Agreement as may reasonably be requested by Lessor . (g ) The Equipment is, and shall remain during the period this Agreement is in force, personal property and when subject to use by Lessee under this Agreement, will not be or become fixtures . 4 . TITLE TO EQUIPMENT; SECURITY INTEREST. (a ) Title to the Equipment. During the term of this Agreement, title to the Equipment shall vest in Lessee, subject to the rights of Lessor under this Agreement. In the event of - 4 - a default as set forth in Section 13 hereof or nonappropriation as set forth in Section 1 (e) hereof, title to the Equipment shall immediately vest in Lessor, and Lessee will surrender possession of the Equipment to Lessor as required by Section 1( e ) hereof. (b) Security Interest. To secure the prompt payment and performance as and when due of all of Lessee 's obligations under this Agreement, and all other obligations of Lessee to Lessor, both now in existence and hereafter created, Lessee hereby grants to Lessor a first security interest in the Equipment, and all replacements, substitutions and alternatives therefor and thereof and accessions thereto and all proceeds (cash and non-cash) , including the proceeds of all insurance policies, thereof . Lessee agrees that with respect to the Equipment Lessor shall have all of the rights and remedies of a secured party under the Uniform Commercial Code as in effect in the State. Lessee may not dispose of any of the Equipment without the prior written consent of Lessor, notwithstanding the fact that proceeds constitute a part of the Equipment. 5 . USE AND MAINTENANCE. (a ) Use. Lessee shall use the Equipment solely in the conduct of its business and in a careful and proper manner consistent with the requirements of all applicable insurance policies relating to the Equipment. Lessee will not change the location of any Equipment as specified in Exhibit B without the prior written consent of Lessor, which consent shall not be unreasonably withheld. Lessee shall not attach or incorporate the Equipment to or in any other item of equipment in such a manner that the Equipment becomes or may be deemed to have become an accession to or a part of such other item of equipment. (b) Maintenance. Lessee, at its own expense, will keep and maintain, or cause to be kept and maintained, the Equipment in as good operating condition as when delivered to Lessee hereunder , ordinary wear and tear resulting from proper use thereof alone excepted, and will provide all maintenance and service and make all repairs reasonably necessary for such purpose. In addition, if any parts or accessories forming part of the Equipment shall from time to time become worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, Lessee, at its own expense, will within a reasonable time replace such parts or accessories, or cause the same to be replaced, by replacement parts or accessories which are free and clear of all liens, encumbrances or rights of others and have a value and utility at least equal to the parts or accessories replaced. All equipment, accessories, parts and replacements for or which are added to or become attached to the Equipment which are essential to the operation - 5 - • 411 of the Equipment or which cannot be detached from the Equipment without materially interfering with the operation of the Equipment or adversely affecting the value and utility which the Equipment would have had without the addition thereof, shall immediately be deemed incorporated in the Equipment and subject to the terms of this Lease as if originally leased hereunder , and subject to the security interest of Lessor in the Equipment. Lessee shall not make any material alterations to the Equipment without the prior written consent of Lessor, which consent shall not be unreasonably withheld. Upon reasonable advance notice, Lessor shall have the right to inspect the Equipment and all maintenance records with respect thereto, if any, at any reasonable time during normal business hours. 6. FEES; TAXES; OTHER GOVERNMENTAL AND UTILITY CHARGES. (a ) Fees. Lessee shall be liable to reimburse Lessor for, and agrees to indemnify and hold Lessor harmless from, all titling, recordation, documentary stamp and other fees, arising at any time prior to or during the Lease Term, or upon or relating to the Equipment or this Agreement. (b) Taxes, Other Governmental Charges and Utility Charges. The parties contemplate that the Equipment will be used for a governmental purpose of Lessee and that the Equipment will be exempt from all taxes presently assessed and levied with respect to personal property. In the event that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form (except for net income taxes of Lessor ) , Lessee will pay during the Lease Term, as the same respectively come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal or replacement of, or a modification, improvement or addition to the Equipment, as well as all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during the time this Agreement is in effect. 7 . INSURANCE. At its own expense, Lessee shall keep the Equipment insured against loss or damage due to fire and the risks normally included in extended coverage, malicious mischief and vandalism, for not less than the Full Insurable Value of the Equipment; and Lessee shall also carry public liability insurance, both personal injury and property damage, covering the Equipment, with a single limit of not less than Five Million Dollars ( $5 ,000,000 . 00 ) per occurrence, or such - 6 • • greater or lesser amount as Lessor may from time to time require on notice to Lessee. As used herein, "Full Insurable Value" means the full replacement value of the Equipment or the then applicable Purchase Price designated as such on Exhibit C attached hereto, whichever is greater . All said insurance shall be in form and amount and with companies reasonably satisfactory to Lessor . All insurance for loss or damage shall provide that losses, if any, shall be payable to Lessor and Lessee, as their interests may appear and Lessee shall utilize its best efforts to have all checks relating to any such losses delivered promptly to Lessor . Lessor shall be named as an additional insured with respect to all such liability insurance. Lessee shall pay the premiums therefor and deliver to Lessor the policies of insurance or duplicates thereof, or other evidence satisfactory to Lessor of such insurance coverage. Each insurer shall agree, by endorsement upon the policy or policies issued by it or by independent instrument furnished to Lessor, that (a ) it will give Lessor thirty ( 30 ) days ' prior written notice of the effective date of any material alteration or cancellation of such policy; and ( b) insurance as to the interest of any named additional insured or loss payee other than Lessee shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee with respect to such policy or policies. If Lessee insures similar properties against casualty loss by self-insurance, Lessee may satisfy its obligations with respect to casualty insurance hereunder by providing self-insurance with respect to the Full Insurable Value of the Equipment by means of an adequate insurance fund. Lessee shall carry workmen 's compensation insurance covering all employees working on, in, near or about the Equipment, or demonstrate to the satisfaction of Lessor that adequate self-insurance is provided, and shall require any other person or entity working on, in, near or about the Equipment to carry such coverage, and will furnish to Lessor certificates evidencing such coverage throughout the Lease Term. The Net Proceeds of the insurance required hereby shall be applied as provided in Section 8 hereof . As used herein, "Net Proceeds" means the amount remaining from the gross proceeds of any insurance claim or condemnation award after deduction of all expenses ( including attorneys ' fees ) incurred in the collection of such claim or award. 8 . DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS. (a ) Damage, Destruction and Condemnation. If prior to the termination of the Lease Term (1) the Equipment or any portion thereof is destroyed ( in whole or in part) or is damaged by fire or other casualty; or ( 2 ) title to, or the temporary use of, the Equipment or any part thereof or the estate of Lessee or Lessor in the Equipment or any part thereof - 7 - 111 • shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority; Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award to be applied to Lessee 's obligations pursuant to sub-part (b) of this Section. ( b) Insufficiency of Net Proceeds. Provided the Equipment is not deemed to be a total loss, Lessee shall, at its expense ( subject to application of the Net Proceeds ) , cause the repair , replacement or restoration of the Equipment. In the event of total destruction or damage to the Equipment, Lessee shall pay to Lessor on the rent payment due date (as set forth on Exhibit C attached hereto ) next succeeding the date of such loss the amount of the Purchase Price applicable to such rent payment due date, plus the rental payment due on such date, plus any other amounts then payable by Lessee hereunder . Upon such payment, the Lease Term shall terminate, any security interest of Lessor in the Equipment shall terminate, and Lessee will acquire full and unencumbered title to the Equipment as provided in Section 10 hereof . If Lessee is not then in default hereunder, any portion of the Net Proceeds in excess of the amount required to pay in full Lessee ' s obligations as set forth in this sub-part (b) shall be for the account of Lessee. Lessee agrees that if the Net Proceeds are insufficient to pay in full Lessee 's obligations as set forth in this sub-part ( b) , Lessee shall make such payments to the extent of any deficien- cy. 9 . DISCLAIMER OF WARRANTIES. LESSOR, NOT BEING A SELLER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS ENACTED IN THE STATE ) , NOR A SELLER 'S AGENT, HEREBY EXPRESSLY DISCLAIMS AND MAKES TO LESSEE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO: THE FITNESS FOR USE, DESIGN OR CONDITION OF THE EQUIPMENT; THE QUALITY OR CAPACITY OF THE EQUIPMENT; THE WORKMANSHIP IN THE EQUIPMENT; THAT THE EQUIPMENT WILL SATISFY THE REQUIREMENTS OF ANY LAW, RULE, SPECIFICATION OR CONTRACT PERTAINING THERETO; AND ANY GUARANTY OR WARRANTY AGAINST PATENT INFRINGEMENT OR LATENT DEFECTS, it being agreed that all such risks, as between Lessor and Lessee, are to be borne by Lessee. Lessor is not responsible or liable for any direct, indirect, incidental or consequential damage to or losses resulting from the installation, operation or use of the Equipment or any products manufactured thereby. All assignable warranties made by the manufacturer or supplier to Lessor are hereby assigned to Lessee for and during the Lease Term and Lessee agrees to resolve all such claims directly with the manufacturer or supplier. Provided that Lessee is not then in default hereunder, Lessor shall cooperate fully with Lessee with respect to the resolution of such claims, in good faith and by appropriate proceedings at Lessee 's expense. Any such claim shall not affect in any manner the unconditional obligation of Lessee to make rent payments hereunder. - 8 - 10 . PURCHASE OF EQUIPMENT BY LESSEE. Provided that Lessee is not then in default under this Agreement, any security interest of Lessor in the Equipment will be terminated, this Agreement will terminate and Lessee will acquire title to the Equipment free and clear of all liens and encumbrances created by, or arising through or under, Lessor: (a ) at the end of the Full Lease Term, upon payment in full of all rental payments and other amounts payable by Lessee hereunder for the Full Lease Term; or (b) at the end of the Original Term or any Renewal Term, upon payment by Lessee of the then applicable Purchase Price plus all other sums then due by Lessee hereunder . 11. ENJOYMENT OF EQUIPMENT. Lessor hereby covenants to provide to Lessee during the Lease Term quiet use and enjoyment of the Equipment, and Lessee shall during the Lease Term peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Agreement. 12 . ASSIGNMENT; SUBLEASING; INDEMNIFICATION. (a ) Assignment by Lessor. This Agreement, and the obligations of Lessee to make rental payments hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor at any time without the necessity of obtaining the consent of Lessee . Lessor agrees to give notice of assignment to Lessee and upon receipt of such notice, Lessee agrees to make all payments to the assignee designated in the assignment, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise ) that Lessee may from time to time have against Lessor or Lessor 's assignees . Lessee agrees to execute all documents , including notices of assignment and chattel mortgages or financing statements which may reasonably be requested by Lessor or its assignees to protect their interests in the Equipment and in this Agreement. (b) No Sale, Assignment or Subleasing by Lessee. This Agreement and the interest of Lessee in the Equipment may not be sold, assigned, sublet or encumbered by Lessee without the prior written consent of Lessor. ( c) Release and Indemnification Covenants. To the extent permitted by the laws and Constitution of the State, Lessee hereby assumes and agrees to indemnify, protect, save and keep harmless Lessor, its agents and employees, from and against any and all losses, damages, injuries, claims, demands and expenses, including legal expenses, of whatsoever kind and nature, arising on account of ( 1) the ordering, acquisition, delivery, installation or rejection of the Equipment; (2) the possession, maintenance, use, condition ( including without - 9 - • • limitation, latent and other defects and whether or not discoverable by Lessor or Lessee, any claim in tort for strict liability, and any claim for patent, trademark or copyright infringement ) or operation of any item of the Equipment (by whosoever used or operated) ; or ( 3 ) the loss, damage, destruction, removal, return, surrender, sale or other disposition of the Equipment, or any item thereof. It is understood and agreed, however, that Lessor shall give Lessee prompt notice of any claim or liability hereby indemnified against and that Lessee shall be entitled to control the defense thereof, so long as Lessee is not in default hereunder . The obligations of Lessee under this sub-part (c) , which accrue during the term of this Agreement, shall survive the termination of this Agreement. 13 . EVENTS OF DEFAULT AND REMEDIES. (a ) Events of Default. The following shall be "events of default" under this Agreement and the terms "event of default" and "default" shall mean, whenever they are used in this Agreement, any one or more of the following events: ( 1) failure by Lessee to pay any rental payment or other payment required to be paid hereunder at the time specified herein; or ( 2 ) failure by Lessee to observe and perform any other covenant, condition or agreement on its part to be observed or performed hereunder and such failure shall continue unremedied for a period of thirty ( 30 ) days after written notice specifying such failure and requesting that it be remedied, unless Lessor shall agree in writing to an extension of such time prior to its expiration; or ( 3 ) any certificate, statement, representation, warranty or audit contained herein or heretofore or hereafter furnished with respect hereto by or on behalf of Lessee proving to have been false in any material respect at the time as of which the facts therein set forth were stated or certified, or having omitted any substantial contingent or unliquidated liability or claim against Lessee; or ( 4 ) commencement by Lessee of a case or proceeding under the Federal bankruptcy laws or filing by Lessee of any petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, moratorium or similar relief under any existing or future bankruptcy, insolvency or other similar laws or an answer admitting or not contesting the material allegations of a petition filed against Lessee in any such proceeding; or ( 5 ) a petition against Lessee in a proceeding under any existing or future bankruptcy, insolvency or other - 10 - 111 similar laws shall be filed and not withdrawn or dismissed within sixty (60 ) days thereafter . ( b) Remedies on Default. Whenever any event of default shall have occurred and be continuing, Lessor shall have the right, at its sole option without any further demand or notice, to exercise any one or more of the following remedies: ( 1) with or without terminating this Agreement, retake possession of the Equipment and sell, lease or sublease the Equipment for the account of Lessee, with the net amount of all proceeds received by Lessor to be applied to Lessee 's obligations hereunder, holding Lessee liable for the excess ( if any) of ( i ) the rental payments and the amounts payable by Lessee hereunder to the end of the Original Term or then current Renewal Term, whichever is applicable, and any other amounts then payable by Lessee hereunder , including but not limited to attorneys ' fees, expenses and costs of repossession, over ( ii ) the net purchase price or rent and other amounts paid by a purchaser, lessee or sublessee of the Equipment pursuant to such sale, lease or sublease; provided that the excess ( if any) of the amounts referred to in clause ( ii ) over the then applicable Purchase Price and amounts referred to in clause ( i ) shall be paid to Lessee; ( 2 ) require Lessee at Lessee 's risk and expense promptly to return the Equipment in the manner and in the condition set forth in Sections 1 (e ) and 5(b) hereof; ( 3 ) if Lessor is unable to repossess the Equipment for any reason, the Equipment shall be deemed a total loss and Lessee shall pay to Lessor the amount due pursuant to Section 8 hereof; and ( 4 ) exercise any other right, remedy or privilege which may be available to it under applicable laws of the State or any other applicable law or proceed by appropriate court action to enforce the terms of this Agreement or to recover damages for the breach of this Agreement or to rescind this Agreement as to any or all of the Equipment. In addition, Lessee will remain liable for all legal fees and other costs and expenses, including court costs, incurred by Lessor with respect to the enforcement of any of the remedies listed above or any other remedy available to Lessor . (c ) No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall - 11 - • • impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 14 . LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to perform or comply with any of its agreements contained herein, Lessor shall have the right, but shall not be obligated, to effect such performance or compliance, and the amount of any out of pocket expenses and other reasonable expenses of Lessor incurred in connection with the performance of or compliance with such agreement, together with interest thereon at the rate of one hundred twenty (120 ) per cent of the Prime Rate on the date of payment by Lessor (or such lesser amount as may be permitted by law) , shall be payable by Lessee upon demand. As used herein, "Prime Rate" shall mean the rate of interest from time to time announced by Maryland National Bank, Baltimore, Maryland, as its prime rate, whether or not such rate is otherwise published. Lessee hereby irrevocably appoints Lessor as Lessee ' s attorney-in-fact to execute, endorse and deliver any deed, conveyance, assignment or other instrument in writing as may be required to vest in Lessor any right, title or power which by the terms hereof are expressed to be conveyed or conferred upon Lessor, including, without limitation, (a ) Uniform Commercial Code financing statements ( including continuation statements ) , real property waivers; (b) documents and checks or drafts relating to or received in payment for any loss or damage under the policies of insurance required by the provisions of Section 7 hereof, but only to the extent that the same relates to the Equipment; and (c ) 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, to endorse the name of Lessee upon any bill of sale, document, instrument, invoice, freight bill , bill of lading or similar document relating to the Equipment in order to vest title in Lessor and transfer possession to Lessor . 15 . MISCELLANEOUS . (a ) Notices. All notices (excluding billings and communications in the ordinary course of business ) hereunder shall be in writing, sent by certified mail, return receipt requested, addressed to the other party at its respective address stated below the signature of such party or at such other address as such party shall from time to time designate in writing to the other party; and shall be effective from the date of mailing. ( b) Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. (c) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall , as to such jurisdiction, be ineffective to the extent of such - 12 - • prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, Lessee hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in any respect. (d) Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. (e ) Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State. ( f ) Captions. The captions in this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. (g) Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing signed by both parties, and then such waiver , consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings , agreements, representations or warranties, express or implied, not specified herein regarding this Agreement or the Equipment leased hereunder . Any terms and conditions of any purchase order or other document (with the exception of supplements ) submitted by Lessee in connection with this Agreement which are in addition to or inconsistent with the terms and conditions of this Agreement will not be binding on Lessor and will not apply to this Agreement. Lessee by the signature below of its authorized representative acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and conditions . IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above set forth. - 13 - • • ATTEST: MARYLAND NATIONAL LEASING CORPORATION Lessor By: LJ 502 Washington Avenue Towson, Maryland 21204 ATTEST: Lessee By: Address - 14 - . • EXHIBIT A DESCRIPTION OF EQUIPMENT The Equipment which is the subject of the attached Equipment Lease/Purchase Agreement is as follows: Lessee hereby certifies that the description of the personal property set forth above constitutes an accurate description of the "Equipment" , as defined in the attached Equipment Lease/Purchase Agreement. LESSEE By. Date: ,1984 4 EXHIBIT B ACCEPTANCE CERTIFICATE The undersigned, as Lessee under the Equipment Lease/Purchase Agreement dated as of , 1984 (the "Agreement" ) , with MARYLAND NATIONAL LEASING CORPORATION ( "Lessor" ) , hereby certifies: 1 . The Equipment, as such term is defined in the Agreement, has been delivered and installed at the location and accepted on the date indicated below. 2 . Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes . 3. No event of default, as such term is defined in the Agreement, and no event which with the giving of notice or lapse of time, or both, would become an event of default, has occurred and is continuing on the date hereof. Lessee confirms that the Commencement Date of the Agreement is as of the date hereof, and it will commence payments in accordance with Section 2 of the Agreement. The Equipment is located at: LESSEE By: Date: , 1984 411 EXHIBIT C 111 The original lease term will be for a period of months commencing , and ending There will be renewal periods of year( s ) each and a final renewal period of months . Full Lease Term: years beginnning with the Commencement Date SCHEDULE OF PAYMENTS Rental payments are payable in advance (arrears ) of the period to which they relate. Rent Payment Date Rental Payments Principal Interest Purchase Price i • EXHIBIT D RESOLUTION OF GOVERNING BODY/EXTRACT OF MINUTES Lessee: Equipment Lease/Purchase Agreement dated: ,1984 At a duly called meeting of the governing body of Lessee held in accordance with all applicable legal require- ments, including open meeting laws, on the day of 198_, the following resolution was introduced and adopted: RESOLUTION AUTHORIZING THE EXECTUION AND DELIVERY OF AN EQUIPMENT LEASE/PURCHASE AGREEMENT, AND RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the governing body of ( "Lessee" ) has determined that a true and very real need exists for the equipment (the "Equipment" ) described in the Equipment Lease/Purchase Agreement (the "Agreement" ) pre- sented to this meeting; and WHEREAS, Lessee has taken the necessary steps, including those relating to any applicable legal bidding requirements , to arrange for the acquisition of the Equipment; and WHEREAS, Lessee proposes to enter into the Agreement substantially in the form presented to this meeting. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF LESSEE AS FOLLOWS : Section 1 . It is hereby found and determined that the terms of the Agreement in the form presented to this meeting and incorporated in this resolution, are in the best interests of Lessee for the acquisition of the Equipment. Section 2 . The Agreement is hereby approved. The of Lessee and any other officer of Lessee who shall have power to execute contracts on behalf of Lessee be, and each of them hereby is, authorized to execute, acknowledge and deliver the Agreement with any changes, insertions and ommissions therein as may be approved by the officers who execute the Agreement, such approval to be conclusively evidenced by such execution and delivery of the Agreement. The of the Lessee and any other officer of Lessee who shall have power to do so be, and each of them hereby is, authorized to affix the official seal of Lessee to the Agreement and attest the same. • ! Section 3 . The proper officers of Lessee be, and each of them hereby is, authorized and directed to execute and deliver any and all papers, instruments, opinions, cer- tificates, 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 Agreement. The undersigned further certifies that the above reso- lution has not been repealed or amended and remains in full force and effect and further certifies that the within Equipment Lease/Purchase Agreement is the same as presented at said meeting of the governing body of Lessee. Date: ,1984 (Secret. , (Seal ) • • EXHIBIT E INCUMBENCY CERTIFICATE I do hereby certify that I am the duly elected or appointed and acting Secretary/Clerk of , a body corporate and politic duly organized and existing under the laws of the State of , that I have custody of the records of such entity, and that, as of the date hereof, the individuals named below are the duly elected or appointed officers of such entity holding the offices set forth oppo- site their respective names . I further certify that ( i ) the signatures set opposite their respective names and titles are their true and authentic signatures and ( ii ) such offi- cers have the authority on behalf of such entity to enter into that certain Equipment Lease/Purchase Agreement dated , 1984 , between such entity and Maryland National Leasing Corporation. NAME TITLE SIGNATURE IN WITNESS WHEREOF, I have duly executed this cer- tificate and affixed the seal of such entity hereto this day of , 1984 . Secretary/Clerk SEAL ! I EXHIBIT F OPINION OF LESSEE 'S COUNSEL (To be prepared on letterhead of Lessee 's counsel ) , 1984 Maryland National Leasing Corporation 502 Washington Avenue Towson, Maryland 21204 Gentlemen: As counsel for ( "Lessee" ) , we have examined a duly executed original of the Equipment Lease/Purchase Agreement dated as of 1984, (the "Agreement" ) , between Lessee and Maryland National Leasing Corporation ( "Lessor" ) , and the proceedings taken by Lessee to authorize and execute the Agreement, including the Resolution attached hereto (the "Resolution" ) . Based upon such examination and upon such other examination of law and fact as we have deemed necessary or appropriate for purposes of the opinions set forth below, we are of the opinion that: 1. Lessee is an entity described in Section 103 (a ) ( 1 ) of the Internal Revenue Code of 1954 , as amended. 2 . The Agreement has been duly authorized, exe- cuted and delivered by Lessee pursuant to Constitutional , statutory and/or home rule provision and the Resolution. 3 . The Agreement is a legal, valid and binding obligation of Lessee, enforceable against Lessee in accor- dance with its terms . In the event Lessor obtains a judgment against Lessee in money damages, as a result of an event of default under the Agreement, Lessee will be obli- gated to pay such judgment. 4 . Any applicable public bidding requirements have been met . 5. There are no pending actions or proceedings to which Lessee is a party, and there are no other pending or threatened actions or proceedings of which Lessee has knowledge, before any public body, court, arbitrator or administrative agency, which, either individually or in the aggregate, would materially adversely affect the transaction contemplated by the Agreement or the ability of Lessee to perform its obligations under the Agreement, or question the validity of the Resolution. Further, Lessee is not in default under any material obligation for the payment of • • • borrowed money, for the deferred purchase price of property or for the payment of any rent under any lease agreement which, either individually or in the aggregate, would have the same such effect. 6 . The signatures of the officers of Lessee which appear on the Agreement are true and genuine; we know said officers and know them to hold the offices set forth below their names; and they have been duly authorized by the Resolution to execute and deliver the Agreement. 7 . The Equipment leased pursuant to the Agreement constitutes personal property and when subjected to use by Lessee will not be or become fixtures under applicable law. 8 . The Agreement is in full conformity with all laws relating to usury applicable thereto. We understand and agree that ( insert name of special tax counsel, if any) may rely on this opinion in rendering their opinion as to exemption from Federal (and state ) income taxation of the interest component of payments to be made by Lessee pursuant to the Agreement and may attach a copy of this opinion to their opinion. Sincerely yours,