HomeMy WebLinkAboutRes1989-144
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Sponsored by: Schaefermever
CITY OF SEWARD, ALASKA
RESOLUTION NO. 89-144
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, AUTHORIZING THE EXECUTION OF AN EQUIPMENT
LEASE/PURCHASE AGREEMENT BY AND BETWEEN THE CITY AND SECURITY
PACIFIC BANK ALASKA, N.A., AND PROVIDING FOR RELATED MATTERS
WHEREAS, the City of Seward, Alaska (the "City"), is a home
rule city and under Section II of Article X of the Alaska Constit-
ution may exercise all legislative power not prohibited by law or
by the Charter of the City, and it has been determined that the
matters set forth in this Resolution are not prohibited by law or
the Charter; and
WHEREAS, the City desires to lease certain equipment,
described in Attachment A hereto (the "Equipment") from Security
Pacific Bank Alaska, N.A. (the "Lessor"), and the Lessor desires
to lease the Equipment to the City; and
WHEREAS, the City considers that the acquisition and leasing
of the Equipment from the Lessor is in the best interest, and will
promote the pUblic purpose of the City; and
WHEREAS, there has been presented to the City the form of an
Equipment Lease/Purchase Agreement (the "Agreement") which the City
proposes to enter into in connection with the leasing of the
Equipment; and
WHEREAS, it appears that the Agreement, which now is before
the City, is in appropriate form and is an appropriate instrument
for the purposes intended;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The leasing by the City of the Equipment from the
Lessor under the Agreement is hereby approved. The aggregate
principal component of rent payable under the Agreement shall not
exceed $126,236.00 and said amount shall bear interest at a rate
per annum not exceeding 7.90%.
Section 2. The form and content of the Agreement be and the
same hereby are in all respects authorized, approved and confirmed,
and the Mayor, City Manager and Assistant City Manager be and each
hereby is authorized, empowered and directed to execute and deliver
said document to the counterparty for and on behalf of the City in
substantially the form and content now before this meeting but with
such changes, modifications, additions and deletions therein shall
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 89-144
to them seem necessary, desirable and appropriate, the execution
thereof to constitute conclusive evidence of the approval of any
and all changes, modifications, additions or deletions therein from
the form and content of the said document now before this meeting,
and that, from and after the execution and delivery of the said
document, the Mayor, city Manager, Assistant city Manager and the
city Clerk are hereby authorized, empowered and directed to do all
such acts and things and to execute all documents as may be
necessary to carry out and comply with the provisions of the
document as executed.
section 3. The Mayor, city Manager, Assistant city Manager,
City Clerk or any other person authorized by the city be and each
hereby is authorized to execute and deliver for and on behalf of
the City any and all additional certificates, documents, opinions
or other papers and perform all other acts as they may deem
necessary or appropriate in order to implement and carry out the
intent and purposes of this Resolution.
section 4. The City covenants that it will not use any of the
proceeds of the Agreement in such manner, or take or omit to take
any other action in such manner, as to impair the exemption of the
interest component of rent payable under the Agreement from federal
income taxation. The Agreement is hereby designated as a "qualifi-
ed tax exempt obligation" for purposes of section 265 (b) (3) of the
Internal Revenue Code of 1986 (the "Code"). The City hereby
covenants that it shall not issue during the calender year 1989
more than $10,000,000.00 in aggregate principal amount of tax-
exempt obligations other than tax-exempt obligations described in
section 265(b) (3)(C) (ii) of the Code. The City further covenants
that no part of the proceeds of the Agreement or any other funds
of the City shall at any time be used directly or indirectly to
acquire securities or obligations, the acquisition of which would
cause the Agreement to be or become an "arbitrage bond" as defined
in Section 148 of the Code. The City shall not permit any of the
proceeds of the Agreement, or any products purchased with such
proceeds, to be used in any manner that would cause the Agreement
to constitute a "private activity bond" within the meaning of
section 141 of the Code.
Section 5. The provisions of this Resolution are hereby
declared to be separable and if any section, phrase or provision
shall for any reason be declared to be invalid, such declaration
shall not affect the validity of the remainder of the sections,
phrases or provisions.
Section 6. Upon adoption of this Resolution, the Clerk of the
city shall cause a true copy of same to be posted on the City Hall
bulletin board as provided in Seward City Code section 2.15.035 (d) .
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 89-144
Section 7. This Resolution shall become effective upon
passage and approval in accordance with Seward City Code section
2.l5.050(c) .
PASSED AND APPROVED by the City council of the city of Seward,
Alaska, this 27th day of November, 1989.
THE CITY OF SEWARD, ALASKA
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Wllliam C. Noll, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
Burgess, Dunham, Hilton, Meehan, Noll, Sieminski
None
Simutis
None
ATTEST:
APPROVED AS TO FORM:
Perkins Coie, Attorneys for the
city of Seward, Alaska
p~ ~.l~
Patricia J. Jones
Acting City Clerk
7~N~
Fred B. Arvidson
City Attorney
(City Seal)
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SENT BY:wCHLFORTH, ARGETSINGER :11-21-c9 4:09PM
9072765093"
2243245::; _
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EQUIPMENT LEASE/PURCHASE AGREEMENT
This Equipment Lease/Purchase Agreement dated as of the
1st day of December, 1989, 1s entered into between Security
Pacific Bank Alaska, N.A. ("Lessor") and the City of ~eward,
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Alaska ("Leesee"), a home rule municipal corporation prqanized
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and exil!tinQ under the laws of the State of Alaska,
WIT N E SSE T H:
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WHEREAS, Lessor desires to lease the Equipment, as
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hereinafter defined, to Lessee, and Leaeee desires to lease the
Equipment from Leesor subject to the terms and cond1t~ons of and
for the purposes set forth in this Leasei and
WHEREAS, Lessee is authorized under the Con~titution
and laws of the State of Alaska to enter into this Lease for the
purposes set forth hereini
NOW THEREFORE, for and in consideration of the premises
hereinafter contained, the parties hereby aqree ae fo~lows:
ARTICLE I
Covenants of Lessee
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Lessee represents, covenants and warrants for the
benefit of L~fteor and its assiqns as follows:
A. Lessee is a home rule city duly orQaniz.d and
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existinq under the Constitution and laws of the State of Alaeka.
SENT 3Y:wCHLFORTH, ;'RGETSINGER ; 11-21-89 4: J9PM
9072765093....
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B. Lessee is authorized under the Constitution and
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laws of the State of Alaska and under the charter and ordinances
of Lessee to enter into this Lease and the transactio~s
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contemplated hereby, and it intends to perform all of its
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obligations hereunder.
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C. Lessee has been duly authorized to execute and
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deliver this Lease and all requirements have been met and
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val1d~ ty
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of this
procedures have occurred in order to ensure the
Lease.
D. Lessee will make no use of the proceeds of this
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Lease which will cause this 'Lease to be "arbitraqe bonds" subject
to Federal income taxation by reason cf Section 148 o~ the
Internal Revenue Code of 1986 (the "C,;)de"). To that end, 60 lon<;y
as this Lease is outstanding, the Lessee, with respect to the
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proceeds of this Lease, shall comply with all requirepente of
said Section 148 and of all regulations of the Un1t8d States
Department of the Treaeury applicable thereto. Lessee will not
permit any of the proceeds of this Lease to be used in any manner
that would cause the Leaee to become a "private activity bond"
within the meaning of Section 141 of the Code. The Leaae 18
hereby designated as a "qualified tax exempt obligation" for
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purposes of Section 265(b)(3) of the Code. Leasee will not i~5ue
during the calendar year 1989 more than $10,000,000 in aggregate
principal amount of tax exempt obligations other than tax exempt
obligations described in Section 265(b)(3)(C)(ii) of the Code.
E UIPMENT LEASE PURCHASE AGREEMENT
S~NT BV;woHLFCRT"', A.RGi:n:NGER ; 1 ;-2;-:;9 4:C9~:i1
9J72765093~
'2243~43;;; ..
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ARTICLE II
Dafini tions
The following term3 will have the meanings indicated
below unless the context clearly re<:;I1.lires otherwise:
A. "Corporate Tax Rate" ehall mean the highest
marginal rate at which Federal Corporate Income Taxes are payable
by Lessor.
B. "Emerqency" meane a situation requiring action
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necessary for the immediate preservation of the publib peace,
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health, safety or general welfare.
C. "Equipment" means the property which is the
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subject of this Lease, identified in 6chedulee attached to this
Lease from time to time.
D. "Lease" means this E<lUipment Lease/Purchase
Aqreement, including the schedulee attached hereto.
E.
"Leeeee" means the City of Seward.
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"Lessor" means (1) Security Pacific Bank Alllska,
N.A., acting as Lessor hereunder, and (2) anyeurvivipg,
resulting or transferee corporation or an assignee of all or any
portion of Lessor's intereat under this Lease.
G. "Option Purchase Price" means the total unpaid
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Lease plus accrued interest on that principal
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Equipment under this
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balanc~ to the date
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principal balance with respect to an item of
of pu~cham$, calculatQd under Article VII.
H. "Principal Amount" means the portion of the
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Project Coat to be repaid under this Lease.
SENT SY:~OHLF'JRT1' ~.RGETS:NGER :11-21-39 4:~QPM
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224324.5;; :,
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I. "Project Cost" meana the contract price for an
item of Equipment to be paid to a Vendor or Vendors in accordance
with the purchase orders or contracts therefor, accordance with
the purchase orders or contracts therefor, any additional amount
due any Vendor by reason of change orders thereto apPFoved by
Leasor; and administrative, engineering, legal, financial and
other costs incurred by Leaaor or Lessee in connection with the
acquisition, installation, delivery and financing of that item of
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Equipment.
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J. "Rental Payments" mean the amounts pay~ble by
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Lessee under this Lease during the Le~ae term in consideration of
the riqht of Lessee to use the Equipment during the then current
portion of the Leaae term. Rental Payments shall be ~ayable by
Leseee to Leesor or its al!leignee in the amounts and at the times
during the Lease term set forth in Article VII of this Lease.
K. "Start Date" shall mean the firest day o! the first
calendar month commencinq no lees than 90 days after the date of
execution of thie Lease.
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L. "Vendor" with respect to an item of Eq\lipment
means the manufacturer of that item of Equipment and ~ny agent or
dealer of the manufacturer, or Any otnar person or entity from
whom Lessor or Lessee purchased or 1s purchasin~ that item of
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Equipment.
'PURCHASE
SE~n BY:~OHLFo,r;r;H, .t;R'.iETSINGER ; 11-21-89 4; 1 GFM
8072765Q93-.
2243,4e~: :;
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ARTICLE I II
Eauioment Acauisition
Section 3.01 Credit Advances. Subject to the term8 and
conditions hereof, Lessor agrees to make available, from time to
time, for Lessee's use to acquire Equipment under thi~ Lease and
upon the written request of Leasee in accordance with, Section
3.02, advances in an aggreqate amount which shall not exceed
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after the earlier of (1) the occurrenCe of an Event of Default
and (11) the occurrence of an event which but for the, passaqe of
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time or the giving of notice, or both, would constitute an Event
of Default.
Section 3.02 Ac~ieltion of the Equ1bment. Upon
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receipt of a request for an advance from the Lessee (i)
1dentifyinq in a manner satisfactory to Leesor one or,more items
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of ~quipment1 and (ii) etating the Project Cost that tessee
expecte to pay with respect to that item or items of Equipment;
Leesor, sUbject to the limit on the aggregate amount pf advances
in Section 3.01, ehall purchase the Equipment from Vendors
selected by Lessee. Lessee shall notify Lessor in writing that
the Equipment has been delivered and installed to its
satisfaction. Lessor shall pay the Project Cost for the
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Equipment upon w~1tt~n ce~t1fication by the Lesaee in a form
satisfactory to Lessor. Lessor shall pay the Project Cost
directly to the payee specified in the certification by the
Lessee.
SENT 9Y :"OHLFORTH, -'lRGET3 INGER ; ~ 1-21-39 4: ~ 1 ~~,
9072~55G9~""'
224324:;:; c
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Section 3.03 Administration of Contracts. Lessor
hereby appoints Lessee as ite agent to carry out all phases of
any acquisition and installation of the Equipment. Leasee will
hav~ full reeponaiQility for preparing, administering, amending
and enforcing all contracts for the acquisition and installation
of the Equipment and litigating or aettlinq claims thereunder and
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will be entitled to all warrantiee, guaranties and indemnities
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provided under the contracts and by law. The failure. of any
Vendor to perform accord1nq to the terms of any contr~ct or
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purchase order ahall not affect the Leesee's obligatipn to make
any Rental Payment in accordance with Section 7.04.
Section 3.04 Leeeor' s Respor,eibi 11 ties Limi 'Fed. Lessor
shall be reepone1ble for the payment cf monies in accordance with
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this Article, and shall not be responsible for the authenticity
or accuracy of the certifications, or the application of amounte
paid pursuant to such certifications by the persons o~ entities
to which they are paid.
ARTICLE IV
Aqreement to Leaee
Lessor hereby leases to Lesses, and Lessee leaeea from
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Leseor, the Equipment in accordance with this Leaee. .The
Equipment is leased as an entire package. Lessee shall lease and
pay for all of the Equipmen~ whether or not it is used by Lessee.
E: UIPMENT LEASE
AR~~~~' "G~~
SE:Y~. BY: ...oI"1LFCRT~~. IJt. ~':'i~ ~::;\
;~:-2i-~9
to: i i?M
9S7216SD93~
224~2':: '.
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ARTICLE V
LElaee Term
Section 5.01 Commencement of Lease Term. The term of
this Lease shall co~~ence on the date of its executiqn, and ~hall
expire on the date ____ months after the start date.
Section 5.02 Termination of Lease Term.
This Lease
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will terminate upon the earliest of the following evepte:
A. the expiration ot the term of this Leae~ with
respect to all items of Equipment under this Lease;
B. damage to or the deetruction of the Equ~pment as
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provided in Section 10.02;
Co a default by Leesee and Leesor's electi?n to
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terminate this Lease under Article XII;
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O. the payment by Leaeae of all Rental Pa~ents
authorized Or required to be paid by Leesee hereunder;
I. at the option of Leeeee upon a breach of Section
6.01;
F. the non-appropriation of lunds as provided in
Section 7.07; or
G. payment of the Option Purchase Price with respect
to all items of Equipment under this Lease.
If this Lease is terminated as to part of t~e
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Equipment, this Lease shall remain in full force and effect as to
the remaininq Equipment.
n"-T~ ,,,,,rc " 1 . 1 "9 11: ~ 2PM
SE~~T aY;'lioHLFO,~Trlj ~"Jt: ~.L!~\J=r. I ii-I.. !-".
8072765J93~
L243'24a:; ""
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ARTICLE VI
En10vment of Eauipment
Seetion 6.01 Use Covenant. During the Lease term and
for so long as Lessee is not in default under this Lease, Leeser
hereby covenants to provide Leasee with ~~iet use and enjoyment
of the Equipment.
Section 6.02 Leesor's Inspection. At all reasonable
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times during business hours, Lessor or its nominees may enter
into and upon the property of Lessee to inapect the Equipment.
ARTICLE VII
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Rental Payment and Purchase O~tion
Seetion 7.01 Rente,l Pavmenta 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 Lassee and shall not in any way
be construed to be a debt of Lessee in contravention of any
applicable constitutional or statutory limitation or ~equirement
concerning the creation of indebtedness by Lessee, no~ shall
anything contained herein constitute a pledqe of the ~eneral tax
revenues, funds or monies of Lessee.
Section 7.02 Payment of Rental Payments.
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A. Le8see shall pay Rental Payments monthly in arrears
and each Rental Payment for a calendar month shall be due and
payable no later than the first day of the month, with the first
Rental Payment due on the start date.
Rental Payments shall be
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paid solely from legally available funds of the Lessee, in lawful
~OUIPMENT LEASE/PURC?~SE AGREEMENT
Sc'~~T BY:"~CHLfORT'i, ~RGETSii~GER : 1, 1-21-~S 4; 120\1
gO"2155083'"
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L':::...,j,~';:',,,, -.'
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money of the United states to Lessor or its aseiqnee at such
location as may be deelqnated in writing to Lessee f~om time to
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time by Lessor.
B. Each Rental Payments shall consist of principal and
interest components. The principal component of a Rental Payment
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shall be the mont.~ly amount necessary to amortize the amount due
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with respect to the ~quipment over the remainder of tpe term of
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this Lease in approximately equal monthly payments. The interest
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eomponent of each Rental Payment ~hall be equal to th~ intereet
on unpaid principal at the applicable interest rate. Interest
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shall accrue on unpaid principal at a rate of 7.90% p~r annum.
Interest shall be subject to adjustment as provided ip Section
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7.03. I
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Section 7.03 Ad1uBtment of Interest. Lesse~ covenants
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and aqreee that if at any time (whether before or after maturity,
redemption or other payment or prepayment of this Lea$e or any
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sale or other tranefer of thie Lease to any other person, firm or
corporation), as a result of a change in the Internal Revenue
Code. of 1986, as amended (the "Code") or any ad.min1st~at1ve or
judicial interpretation thereof, (a) Any payment of i~terest or
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principal or any amount in respect of or measured in Whole or in
part by reference to interest on indebtedness attributable or
deemed to be attributable directly or indirectly to t~e purchase
or carrying of this Lease, is, in the opinion of counfel for
Leesor, subject to or affected by a preference tax, an excess
profits tax or other federal tax which changes the ba,is of
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EQUIPMENT LZASE/PURCHASE AGREEMENT
SENT 8Y:woHLFCRTHI ~R3ET3INGE~ ;'1-21-33 4:13PM
90727e5093~
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taxation of the paymenta of intereet on or principal of this
Lease, or interest on indebtedness attributable or deemed to be
attributable directly or indirectly to the purchase or carrying
of this Lease, to tessor, or affects any method used ~r
calculation involved in determininq any federal tax, or (b) the
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deductibility or other tax treatment of any amount attributable
or deemed to be attributable, directly or indirectly, to the
purchasing or carrying of this Leaee 18 adversely affected, then,
upon written notice to such effect from Lessor to Lessee, wh1ch
notice shall set forth the date as of which
any payment or
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excess profits
amount
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may have become subject to euch preference,
other
federal tax or such deductibility or ~~~er tax treatment shall
have been affected, the Lessee shall pay to Leesor additional
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interest which, after reduction by the amount of all taxes, if
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any, attributable to the inclusion of such add1t1onal interest in
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the groBs income of Leesor under the laws of any fede~al, state
or local governmental or other tax1nq authority (comp~ted on the
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assumption that federal taxes are payable by Lessor at the
Corporate Tax Rate (after takinq into account deductions
attributable to the imposition of state and local tax~s) and that
state and local taxes are payable by Lassor at the highest
marqinal statutory ratee then applicable to banking corporations
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without allocation or apportionment to any other jurisdiction)
shall be equal to the amount of any auch preference, excess
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profits or other federal taxes any any interest, penalties and
additions to tax which are payable by Lessor as a consequence of
E UIPMENT LEASE PURCHP.SE AGREEMENT
;;;:::~: 3Y:fj,)hLFOR~H, ~F\i3E'!Sli\GE,~ ;:1-21-eg ~:13?M
~J72755C93'"
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such change (computed on the Aeeumption that federal taxes are
payable by Lessor at the Corporate Tax Rate) it being the intent
and purpoee of the parties hereto that the profit of Lessor with
respect to the payment of interest to it on this Lease shall not
be diminiehed by any such change 1n the Code or any
adminietrative or judicial interpretation thereof (wh~ther
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through or ae a result of direct or indirect Federal ~axation of
the interest or principal of this Lease, the disallow~nce of
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direction or otherwise.
Notwithstanding the foreqoing provisions, np payment by
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Leeeee shall be re~~ired 1n respect to a preference, excess
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profits or other federal tax to which the foregoing p~ovisions
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relate to the extent that euch tax i~ imposed and computed
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without regard to whether interest in this Lease 1s or may be
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exempt from tax under the provisions of Section 103 of the Code,
any other prov1eion of law or any successor provision~ thereto.
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Section 7.04 Rental Payments to be Unconditiona1. The
obliqation of Lessee to make the Rental Payments required under
this Article VII and other sections hereof and to perform and
observe the other covenants and agreements contained ~ere1n shall
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be absolute and unconditional in all events, except as expressly
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provided under this Lease. Notwithstanding any diapute between
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Lessee and Lessor, any Vendor, o~ any other pereon, Leeeee shall,
so long as Leeeea's use of the Equipment is not disturbed by
tessor, make all Rental Payments when due and ahall not witr~old
any Rental Payments pending final resolution of such dispute, nor
UIPMENT LEASE PURCHASE AGREEMENT
SENT BY: "OHl.r=OR7i", .ARGETSI~GER : 11-21-59 .t: 14?'o1
8872765093'"
'~24J2~S ;;;";
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shall Lessee assert any right of eet-off or counter-claim aqainet
its obliqation to make Rental Payments under this Lease.
Lessee'e obligation to make Rental Payments during the Lease Term
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shall not be abated through accident or unforeseen circumstances.
Lessee a~rses not to withhold or abate any portion of the
payments required pursuant to this Lease by reason of' any
defects, malfunctions; breakdowns or infirmities of the
Equipment.
Section 7.05 Continuation of Lease bv Leesee. Lassee
intends to con~inue this Laaee and to pay the Rental
Payments
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funcle of
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hereunder. LeeB~e represents that leqally available
amount sufficient to make all Rental Payments during the Lease
term with respect to each item of Equipment can be obtained.
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Section 7.06 Indemnification. Lesses shall indemnify,
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save and keep harmless Lessor and its assigns from and against
any and all liability, obligations, penalties, lossee, claims and
damaqee whatsoever, regardless of the cause thereof, and expenses
in connection herewith, 1ncludin9, but not limited to counsel
feee, costs and interest, arising out of or resultin~ from the
execution or performance of this Lease, the ownershi~ of any item
of the Equipment by Lessor; Or the acquil3ition, use, 'operation,
condition, or purchase by Lessee of any item of the Bquipment,
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resultinq in damage to property or injury or death to any pereon.
The indemnification ari~ing under this Section shalleontinue in
full force and effect notwithstanding the full payment of all
obligations under this Lease or the termination of this Lease.
PURCHA~~ AGREEMENT
SENT BY:woHLFORTH, ARGE7SI~3=~ :~1-21-c9 ':~4PM
9C72765093~
224324~:;14
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Section 7.07 Non-appropriation. If sufficient funds
are not appropriated to make Rental Payments required under this
Lease, and if Lessee hae no funds ava1lable for Rental Fayment6
from other sources, this Lease shall terminate and Laesee shall
not be obligated to make Rental Payments under this Lease beyond
the then current fiscal year for which funds have been
appropriated. Lessor shall, upon the occurrence of such
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nonappropriation, have all ri~hte and remedies to take possession
of the Equipment. Lessee shall notify Leeeor and its ass1qnee in
writinq within seven (7) days after the failure of the City
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Council of Lessee to appropriate funde sufficient for the payment
of the Rental Payments. ~essee has an immediate need for and
expects to make immediate use of subBt~ntially all the Equipment,
which need is not temporary or expected to diminish in the
foreseeable future; specifically, Lessee will not qive priority
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or parity in the appropriation of funds for the acquisition of
any property or service. Eor purposes or functions ~hich would
replace those fulfilled by the Equipment.
If the City Council fails to appropriate funds for
Rental Payments under this Lease for an item of equipment, for
the remainder of the Lease term for that item of Equipment Lessee
shall not expend any funde for the purchase or use of equipment
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similar to that item of Equipment, other than for an Emergency.
Section 7.08 Option to Purchase. Lessee ahall have the
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option to purchase the Equipment in whole or in part upon thirty
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E UIPMENT LEASE PURCHASE AGREEMENT
SENT BY:,.,oHL.rORTH, .If\3::T3Ir.3:R :' '-2;-89 4: i5P',1
9072765C93-.
22'-3201.3: :;A,-:
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(30) days written notice to Lessor by payin~ Lessor the Option
Purchase Price with respect to the Equipment to be purchased.
ARTICLE VII I
Title to Equipmenti
Personal PropertYi Security Interesti
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Transfer or Retirement of Equipment
Section 8.01 Title to the Eauicment. During the term
of this Lease with respect to an item of Equipment, ownership of
that item of Equipment and any and all additione, repaire,
replacements or ~odifications will be Lessor's, except that
solely for the mutual convenience of the partiee, Equipment
subject to re9istrat1on of title may be reqietered in the name of
Lessee. In the event of default as eet forth in Article XII,
Laesee will surrender poesession of the Equipment to Lessor or
its assignee. Upon payment of all the Rental Payments for an
item of Equipment over the term of this Lease or upon payment of
the Option Purchase Price for that item of Equipment 1 the title
for said Equipment shall be traneferred to Lessee and Lessor
shall execute such documents a8 are necessary to convey title to
Leeeee free and clear of all liens and encumbrances created by or
arisinq through Leesor.
,
Section 6.02 Personal Property. The Equipment is, and
.
shall at all times be and remainl personal property
notwithstanding that the Equipment or any part thereof may be, or
may hereafter become 1 in any manner affixed or attached to or
imbedded inl or permanentlY restinq upon, real propetty or any
EQUIPMENT LEASE/PURCHASE AGREEMENT
3ENT 3Y:~cH:...,::ORTH,AR3E~S~NSER :~<j-2~-59 .1:1S;M
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buildings thereon or any fixtures, or attached in any manner to
what 1e permanent, by means of c&ment, plaster, nails, bolts,
screws or otherwise.
Section 8.03 Security Interest.
A. To secure the performance of all of Lessee's
obligations under this Lease, Lessee grants to tessor and its
assiqnees a security interest constituting a first lien on
Lessee's interest in the Equipment and in all additions,
attachmente, alterations and accessions to the Equipment and on
.
any proceeds of the Equipment. The security interest shall cover
all property which the Lessee acquires durinq the Lease term with
respect to an item of Equipment to replace or substitute for that
item of Equipment.
B. Lessee shall execute any additional documents,
including affidavite, notices and similar instruments, in a form
I
satisfactory to Lessor, which Lessor deems necessary or
appropriate to eetablieh and maintain a eecur1ty interest in the
Equ1pment for Leesor or any assiqnee of Lessor.
Section 8.04 Transfer or Retirement of Eauipment.
Lessee shall not transfer any interest in any item of Equipment
~urinq the term of this Lease with respect to that Equipment
.
without the written consent of Lessor. Lessee may retire an item
of Equipment from I!lervice during the Lease term only it the
current market value of: (1) the Equipment thereafter remaininq
in service, and (2) any other property of Leesee in Which Lessor
has accepted a 6ecurity interest under this Leaee, exceeds the
~IPMENT LEASE/PURCHASE AGREEME~T
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.
Option Purchase Price for the Equipment thereafter remaining in
eervice.
ARTICLE IX
Maintenance; Taxes; Insurance and Other Chargee
Section 9.01 Maintenance, Taxes, Other Exoens88. Lessee
shall keep and maint~in the Equipment in good condition and
.
working order, shall use, operate and maintain the !quipment in
conformity with all laws and requlations concernlng the
Equipment's ownership, possession, uee and ma1ntenanc~, shall
keep the Equipment free and clear of all liens and c141ms, shall
pay all taxes and other charges related to the Equipm~nt, ahall
pay all utility charqee incurred in the usa and maintenance of
the Equipment, and ahall pay all coate and expenses of every kind
occasioned by or arising out of the use and maintenance of the
!quipment. If any taxes are assessed on ~~e Equipment, Leesee
promptly shall notify Leseor in writing of the assessment and
,
provide proof of payment or protest under proper procedures not
involving any danger of sale, forfeiture or loss of the
Equipment.
Section 9.02 Insurance. At its own expense, Lessee
shall maintain pol1ci.u of cuual ty, public l1abili ty and
property damage insurance covering the Equipment, or if Lessee
self insures similar property, demonstrate to the satisfaction of
.
Lessor that the Equipment is covered by equivalent self
insurance. The insurance Bhall be 8ufficient to protect the full
insurance value of the !quipment, and to protect Les80r from
EQUIPME~T LEASE/PURCHASE AGREEMENT
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liability in all events. Lessee shall provide Lessor with
certificates evidencing the insurance coverage req~ired by this
Section, and provide Lessor with certificate8 evidencing a
renewal of the insurance for each annual period of the Lease term
with respect to any item of Equipment.
Any insurance policy provided under this Section shall
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be written or endorsed to make losses payable to LessQe and
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Lessor as their respective interests may appear. The net
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proceeds of the ineurance required in this Section shall be
applied as provided in Sections 10.01 and 10.02. Each insurance
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policy provided under this Section shall provide that the
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insurance company shall not cancel the policy or modify it
materially except after giving ten daY9 written notice to Les8or.
ARTICLE X
Damage, Destruction and Use of Net Proceeds
Section 10.01 Damaqe or Destruction. If an'item of
Equipment or any portion thereof is destroyed or dama~ed by fire
or other casualty during the Lease term with respect to that item
I
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of Equipment, Lessee and Lessor will apply the net proceeds of
any insurance claim to the prompt repair or restoration of that
item of Equipment. Any balance of the net proceede remaining
after payment for such work shall be paid to Leesee.
For purposes of Section 9.02 and this Artic~e, the term
"Net Proceeds" shall mean the amount remaininq from the gross
proceeds of any insurance claim after deducting all expenses,
EQUIPMENT LEASE{PURCHASE AGREEMENT
SENT BY:~CriL~O~Tr< ~,R3E~SING~R : 1 :-21-a3 4; ': 7Pi',~
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.
includinQ costs and attorney's feee, incurred 1n the collec~ion
of such claim.
Section 10.02 Ineufficiencv of Net Proceeds. If the
Net Proceeds are insufficient to pay the full cost ofrepa1r or
I
restoration under Section 10.01, Lessee shall either (a) complete
I
the work and pay any cost in excess of the amount of the Net
Proceeds, or (b) pay to Leesor the amount of the Option Purchase
Price for the affected Equipment, and upon such payment this
Lease as to the affected Equipment shall terminate and Lessor
I
ehall release its interest in the Equipment to Lessee~ No
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payment by Lessee under Section 10.02(a) shall relieve Lessee of
its obligation to make Rental Payments in accordance with Article
VII. The Amount of Net Proceeds in excess of the Option Purchase
I
Price paid under Section 10.02(b) may be retained by Leeeee.
Lessee's obligations under this Section are subject to the
availability of funds lawfully appropriated therefor.
ARTICLE XI
Vendor' 8 Warranties
Leesor hereby appoints Lessee its agent and
attorney-in-fact during the Lease term, so long ae Lessee shall
not be in default hereunder, to assert from time to time whatever
.
claims and rights, including warranties of the Equipment, which
Lessor may have against any Vendor of the Equipment. Lessee's
sole remedy for the breach of such warranty, indemnification or
representation shall be aqainst the Vendor of the Equipment, and
not a9ainst Le~8or. Lessee acknowled98s and agrees that the
EQUIPMENT LEASE/PURCHASE AGREEMENT
SENT BY:~OfiLFS'RTrl,t;,"GET5IN'3ER ;~'-2'-33 4::7;:M
9 J 72 765 J 9 3"
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.
Equipment is of eize, design, and capacity selected by Lessee,
that Lessor is neither a manufacturer nor a vendor of such
Equipment, and that Lessor has not madel and does not hereby
make, any representation, warranty, or covenant, express or
implied, with respect to the merchantability, condition, quality,
durability, design, operation, fitness for use, or suitability of
the Equipment in any respect whatsoever or in connection with or
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for the purposes and uses of Leesee, or any other rep~esentation,
warranty, or covenant of any kind or character, exprees or
I
implied, with respect thereto, and Lessor shall not be obligated
.
or liable for actual, incidental, consequential, or other damages
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of or to Lessee or any other person or entity arising out of or
in connection with the use or performance of the Equipment and
the maintenance thereof.
ARTICLE XI I
Events of Default and Remedies
,
Section 12.01 Events of Default Defined. The following
shall be events of default under this Lease and the terms "Events
of Default" and "Default" shall mean, whenever they are used in
this Lease, anyone or more of the followinq events:
A. Failure by Leesee to make any Rental Payment or
other payment A8 required by this Leaee.
B. Failure by Lessee to observe and perform any
.
covenant, condition or agree~ent on ite part to be oQserved or
performed, other than as referred to in Section 12.01(A), for a
period of thirty (30) daye after written notice specifying such
LEASE/PURCHASE AGREEMENT
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.
failure and requesting that it be remedied is qiven to Lessee by
Lessor, unlea. Lessor shall agree in writing to an extension of
Buch time prior to its expiration; provided, however, if the
failure stated in the notice cannot be corrected within the
applicable period, Lessor will not unreasonably withhold ita
consent to any extension of such time if corrective action is
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instituted by Lessee within the applicable period and diligently
pursued until the default is corrected.
The foregoinq provisions of this Section 12.'01 are
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subject to the following limitation: if by reason of force
.
maieure Lessee is unable in whole or in part to carry out ita
agreement other than the obligations on the part of Leseee
contained in Article VII hereof, Lessee shall not be deemed in
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default during the continuance of such inability. The term
"force majeure" as used herein shall mean, without limitation,
the following: acts of GOdi strikes, lockouts or other
industrial disturbances; acts of public enemiesi ordefs or
restraints of any kind of the government of the United States or
of the State of Alaska or any of their departments, agencies or
officials, or any civil or military authoritYi insurrections,
riots, landslides, earthquakes, fires, storms, droughts, floods,
explosions, breakage or accident to machinery, transmission pipes
or canals; or any other cause or event not reasonably within the
.
control of ~essee.
Section 12.02 Remediee on Default. Whenever any event
of default referred to in Section l2.01 hereof shall have
EQUIPMENT LEASE/PURCHASE AGREEMENT
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happened and be continuing, Lessor shall have the right at its
option, wit~out any further demand Or notice, to take either or
both of the followin~ remedial steps!
A. With or without terminatin~ this Lease, retake
poseession of the E~~ipment and eel1, lease or sublease the
Equipment for the account of Lessee, holdinq Lessee liable for
the difference between (i) the rente and other amounts payable by
Lessee hereunder and (ii) the purchase price, rent or .other
,
amounts paid b@ a purchaser, lessee or sublessee of the Equipment
!
pursuant to such eale, lease or sublease.
B.
Take whatever action at law or in equity may appear
I
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necessary or desirable to enforce its ri9hts as holder of a
security interest in the Equipment.
The remedies recited herein requiring the payment of
money by Lessee are subject to the appropriation of funds
I
,
therefor.
Section 12.03 No Remedy Exclusive. Each remedy of
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Lessor under this Lease shall be cumulative and in ad~ition to
every other remedy of Leeeor under this Laase. A delay or
!
omission to exercise any right or power accruinQ
shall not impair any such right Or power, or be
upon any
!
construed
,
default
to be a
waiver thereof, but any such right or power may be exercised from
.
time to time and as often as may be deemed. expedient. I In order
to entitle Lessor to exerciee any remedy reserved to it in this
Article XII, it shall not be necessary to give any not~ce, other
than such notice ae may be required in this Article XII.
EOUIPMENT LEASE/PURCHASE hGREEMENT
Pa e 21
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.
ARTICLE XIII
Miscellaneous
Sec~ion 13.01 Notices. All notices, certificates or
other communications hereunder shall be sufficiently given and
shall be deemed given when delivered or mailed by certified mail,
postage prepaid, return receipt requested, to the parties at
their respective places of business.
Section 13.02 21ndinq Effect. Thia Lease shall inure
,
to the benefit of and shall be binding upon Lessor and Los$ee and
their respective successors and assigns.
.
Section 13.03 Severabilitv. In the event anr provision
of this Lease ehall be held invalid or unenforceable by any court
I
of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provisions hereof.
Section 13.04 Amendments, Changes and Modifications.
This Lease may be amended by Lessor and Lessee in writ~ng signed
by both parties.
Section 13.05 Execution in Counterparts. This Lease
may be simultaneously executed in several counterparts, each of
which shall be an original and all of which ehall constitute but
one and the same in"trument.
Section 13.06 Applicable La~L Jurisdiction. Thi$ Lease
shall be governed by and eonstrued in accordance with the laws of
.
the State of Alaska. Any civil action brought by any party under
this Lease ehall be co~~enced and maintained in the Superior
Court, Third Judicial District, State of Alaeka, at Anchorage.
LEASE/PURCHASE AGREEMENT
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.
Section lj.07 Captions. The captions or headinqs in
this Lease are for conven1~nce only and no way define, limit or
describe the ecope or intent of any provieions or sections of
this Leaee.
Section 13.08 Ass1qnment. The interest of Lessor in
this Lease shall be recorded on the books of Lessee. Leeeor may
assign its interest under this teaee, but the aeeiqnment shall
not be effective until Lessee is notified of the name and address
I
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of the assignee and the assiqnment 1s recorded on the books of
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Lessee.
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IN WITNESS WHEREOF, the parties have executed this
I
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contract as of the date first written above.
CITY OF SEWARD
SECURITY PACIFIC BANK
ALASKA, N.A.
Darryl Schaefermeyer
City Manaqer
Kristi M. Lewis
Assistant Vice President
A T T EST:
Patricia J. Jones
Actinq City Clerk
.
EQUIPMENT LEASE/PURCHASE AGRI!:EMEN~
Paqe 23
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