HomeMy WebLinkAboutFIRST CONTINENTAL LEASING
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657570471-001
EQUIPMENT LEASE-PURCHASE AGREEMENT
quipment Lease-PurcImse Agreement (the "Agreement") dated as of
is entered into between First Continental Leasing, a division of
orpSo Bank (the "Lessor"), whose Principal Office (herein so called) is located at
Hattiesburg, Mississippi and Augusta-Richmond County, Georgia, (the "Lessee"), acting by and
through the Board of Commissioners. the Governing Body of the Lessee.
I. A~reement to Lease. In consideration of the rental provided herein, and the other
covenants contained herein, Lessor hereby agrees to lease and rent to Lessee. and Lessee hereby
agrees to lease and rent from Lessor. all the machinery. equipment and other personal property
("Equipment'') described in Equipment Lease Schedule(s) ("Equipment Schedules") now or
hereafter executed by Lessor and Lessee and attached hereto and incorporated herein by
reference as Exhipit B upon the terms and conditions set forth in this Agreement, as
~upplemented by the terms and conditions set forth in the appropriate Equipment Schedule
identifying such item of Equipment and such other Equipment Schedules as may be executed by
Lessor and Lessee ~d attached hereto and incorporated .herein by reference.
2. Lease Term. The obligations of Lessor and Lessee under this Agreement will
commence upon the execution hereof by Lessor and Lessee and will end at the close of the
calendar year of execution' and at the close of each sucCeeding calendar year for which the
agreement may be renewed as provided for in Section 36-60-13 of the Official Code of Georgia
Annotated. The rental term of the Equipment listed in each Equipment Schedule shall commence
on the date that the rental payment is due as provided in the Equipment Schedule and shall
terminate at the close of the calendar year in which the rental payment is due and at the end of
each succeeding calendar year as provided in the Equipment Schedule in accordance with V"
Section 36-60-13 of the Official Code of Georgia Annotated. This Agreement shall be
automatically renewed on a year-to-year basis except upon cancellation by Lessee as provided
for in Paragraph 4.
3. Rental Payments. The rent for' the Equipment described in each Equipment
Schedule shall be the total sum stated on such Equipment Schedule. in insuillments. and shall be
due and payable on the dates set forth therein. A portion of each such rental payment is paid as,
and represents a payment of interest and each Equipment Schedule sets' forth the applicable
interest rate and interest component of each rental payment; Iprovided however such interest
component is subject to change as provided in Paragraph 12 hereof. Such rent shall be payable
from legally available funds 9f the Lessee in lawful money' of the United States. without notice
or demand. at the Principal Office-of the Lessor or its assigns (or at such other place as Lessor
may from time to time designate in writing). The receipt of any check or other item on account
of any rental payment will not be considered as payment thereof until such check or other item is
honored when presented for payment All rental payments shall be made by the Lessee without
abatement, setoff, or deduction of any amounts whatsoever. The obligations of Lessee to pay rent
hereunder sh~l 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 limitation or
requirements concemin~ the creation of an indebtedness by Lessee.
4. Continuation .of Lease by - Lessee. (a) Lessee intends to comply with each term,
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condition and covenant of this Agreement during the term hereof and to pay the rent due
hereunder. Lessee reasonably" believes that legally available funds of an amount sufficient to
make all rent payments due hereunder shall be obtained. Lessee agrees to include in its budget
for each calendar year during the term of this Agreement all rent payments due hereunder for the
calendar year and to do all other things necessary and lawfully within its power to have such
portion of the budget approved to obtain and provide for funds to pay its obligations due
hereunder. In the event that such portion of the budget that provides for rent payments due under
this Agreement is not approved, the Lessee agrees, at its expense, to exhaust all available reviews
and appeals to have the rent payments reinstated and approved in the budget. It is ~ssee's intent
to make rental payments for the full term of this Agreement until terminated if funds are legally
available therefor and in that regard Lessee represents that the use of the Equipment is essential
to its proper efficient and economic operation.
(b) In the event no .funds or insufficient funds are appropriated or oth~rwise
available by any means whatsoever in any calendar year for rental payments due under this
Agreement, then the Lessee shall immediately notify Lessor or its assignee of such occurrence
. and .this Agreement shall create no further obligation of Lessee as to such calendar year and shall
be null and void, except as to the portions of rental payments for which funds shall have been
appropriated and budgeted. In such event, this Agreement shall terminate on the last day of the
calendar year for which appropriations were received without penalty or expense to Lessee of
any kind whatsoever. Subsequent to such termination of this Agreement, Lessee shall have no
continuing obligation to m*e rental payments under this Agreement No right of action or
damages shall accrue to the benefit of Lessor. or its assignee. as to that portion of this Agreement
which may so terminate except ~ specifically provided in the last paragraph of this Paragraph. In
the event of such termination, Lessee agrees to peaceably surrender possession 9f the Equipment
to Lessor or its assignee on the date of such termination, packed for shipment in accordance with
manufacturer specifiCations and freight prepaid and insured to any location in the continental
United States designated by Lessor. Lessor shall have all legal and equitable rights and remedies
to take possession of . the Equipment.
(c) Notwithstanding the foregoing, Lessee agrees
. (i) that it will not cancel this Agreement under the provisions of subparagraph
(b) above if any funds are appropriated to it, or by it, for the acquisition, retention or operation of
the Equipment, and
(ii) that it will not during the term of this Agreement give priority in the V-
application of funds to any other fimctionally similar equipment or services.
5. Purchase and Installation. Lessee will select the type. quantity and supplier of each
item of Equipment and in reliance thereOn Lessor will either order such Equipment from such
supplier ~r accept an assignment of any existing purchase order (the "Purchase Order") therefor.
The Equipment so ordered shall be delivered to Lessee' by the supplier thereof. Lessee shall
accept such Equipment when an,d if delivered and placed in good repair and working order and
hereby authorizes Lessor to add to this Agreement the serial number of each item of Equipment
so delivered. Any dela in such delive . shall not affect the vaiidi of this A eement. Lessee
s a ave ys om e a 0 e IVery 0 accep suc qUlpmen an ever an execu e
Equipment Acceptance Notice in the form. attached hereto as Exhibit C. Notice of any defe({ts
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must be given to Lessor within 30 days of delivery. In the event the Equipment is not accepted
by the Lessee within 30 days from the date of delivery and such acceptance is unreasonably
withheld by Lessee, Lessor. at Lessor's option. shall have the right to cancel this Agreement.
Subject to the conditions set forth in this paragraph, upon d~livery of the Equipment to Lessee,
payment will be. made by Lessor for the balance due and owing for the Equipment, and.
notwithstanding any defect in or failure of the Equipment, Lessee will. upon payment .of any
amount by Lessor at the ~quest of Lessee (whether down payment, deposit, or full purchase
price), become fully and completely liable under this Agreement with respect to the Equipment
'until such time as this Agreement expires by its terms. Lessor shall have no liability for any
delay in delivery or failure by the supplier to fill the Purchase Order or meet ~e conditions
thereof. Lessee, at its expense, will pay all taxes, duties and expenses of packing, transportation,
installation. testing and other charges in connection with the delivery. installation. and use of the
Equipment.
Lessor's obligation to purch~e and lease-purchase Equipment under this Agreement is
subject to the fulfIllment, to Lessor's reasonable satisfaction. of the following conditions
precedent: .
(a) Lessor shall have received a full warranty bill of sale satisfactory to Lessor,
executed by the supplier in favor of Lessor. covering such item of Equipment. .
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(b) LeSsor shall have received an invoice describing such item of Equipment, all
material components thereof and the purchase price payable to supplier in respect thereof.
(c) Lessor shall have received an opinion of counsel to Lessee in form and
substance satisfactory to Lessor;to the effect that Such counSel has examined this Agreement and
such other documentS and matters as he deemed necessary to reach the conclusions stilted in such
opinion, which conclusions shall include the following:
(i) the representations and warranties of Lessee contained in. this Agreement
are true and correct on the date thereof;.
(ii) this Agreement has been duly authorized, executed and delivered by
Lessee. and constitutes a valid and binding obligation of Lessee enforceable in accordance with
its terms;
(ill) there are no pending or threatened actions or proceedings before any
court, administrative agency or other tnlmnal.or body against Lessee which may materially affect
Lessee's financial condition or operations. or which could have any effect whatsoever upon the
vali~ity. performance. or enforceability of this Agreement;
(iv) the interest portion "Of the rental payments due hereunder is exempt from
federal income taxation pursuant to Paragraph 103(a) of the Internal Revenue Code of 1986, as
amended, and the Treasury regulations and rulings thereunder (the "Code"); .
( .) llL l._~~wv :~ _ Lll) w~uGL-1_d !,vl:~v.J u_hJ::l.. :u:v~ v. -b-~- J vf ~.w
State where the Equipment is located as setforth herein and is authorized by the Constitution and
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laws of the State of Georgia (the "State") and its own internal or administrative procedure to
enter into the transac.tions contemplated' by this Agreement and to carry out its obligations
hereunder; and
. (vi) such other matters as Lessor may reasonably request.
. (d) On the date thereof, no default (as defined in Paragraph 23 hereot), and no
event which with notice or lapse of time, or both, would become a default, shall have occurred.
and be continuing hereunder.
(e) All representations and warranties of Lessee made herein shall be we and
c~rrect in all material respects ~n the date thereof.
(t) A financing statement, in. form and substance satisfactory to Lessor, in respect
of such Equipment shall have been executed and f1led in the appropriate offices.
Equipment.
(g) Lessor shall have received .from Lessee written notice of acceptance of the
(h) Lessor shall have received all other documents. instnunents, certificates,
opinions, and evidences as Lessor may reasonably request.
6. Representations and Warranties of Lessee. Lessee represents. warrants and
covenants to Lessor that:
(a) Lessee has been duly authorized by all necessary action on the part of the
Lessee, its governing body or other appropriate governing bodies and. officials 'to execute,
deliver, and perform the terms of this Agreement and further represents that all requirements and
procedures h.ave occurred that are necesslUY to ensure the enforceability of this Agreement,
including Lessee's compliance with any applicable public bidding requirements.
(b) This Agi-eement constitutes a legal, valid and binding obligatio~ of Lessee,
enforceable in accordance with its terms and does not contravene any lease, indenture. credit
agreement or other agreement to which Lessee is a party or by which it is bound.
(c) There are no pending or threatened actions or proceedings before any court,
administrative agency or other body. which may materially affect Lessee's financial condition or
operations or which' could have any effect whatsoever upon ~e validity, performance, or
enforceability of the terms of this Agreement.
(d) No consent, approval. or authorization of, registration with, or declaration to
any agency or authority is required in connection wjth the execution and delivery of this
Agreement. ..
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whatsoever upon the validity, performance, or enforceability of the terms of this Agreement
(f) There are no outstanding or unpaid judgments against Lessee.
(g) Lessee has furnished to Lessor a copy of current financial statements and
except for transactions directly related to, or specifi~ally contemplated by, this Agreement and
transactions heretofore disclosed in writing to Lessor, since' the 9ates of such financial
statements, there have been no changes in the financial condition and operations of Lessee from
that shown.in such financial statements through the date hereof which would have any effect
whatsoever upon the validity. performance. or enforceability of the terms of this Agreement and
there is no significant material fact or condition relating to the financial condition or business
operations of Lessee which has not been related, in writing. to Lessor. Lessee shall furnish to
Lessor within 90 days of the close of its calendar year during the term of this Agreemeni audited
financial statements and. such other financial statements as the Lessor may request from time to'
time during the terms of this Agreement. Any financial statements furnished or to be furnished to
Lessor by Lessee (whether audited or ~audited) shall be prepared in accordance with generally
accepted accounting principles' consistently applied and fairly present the financial condition and
results of operations of Lessee at the dates and for the periods indicated therein.
(h) Lessee is not leasing the Equipment for the purpose of putting, and does not
intend to put, the Equipment to any consumer use within the meaning' of any applicable
truth-in-Iending or similar laws.
(i) Lessee acknowledges and agrees that th~ rental payments have been calculated
by Lessor assuming that the interest portion of each rental payment is exempt from federal
income taxation. Lessee will do or refrain from doing all things necessary or appropriate to
insure that the interest portion of the rental payment is exempt from federal income taxation,
including, but not limited to. executing and filing all information statements required by
Paragraph 149(e) of the Code and timely payi~g, to the extent of available funds, amounts. if
any, required to be rebated to the United States pursuant to Paragraph 148(t) of the Code.
G) The principle portion of the Agreement, when added to the amount of debt
incurred by Lessee pursuant to Article IX, Section IV, Paragraph I of the Constitution of
Georgia, -does not exceed 10% of the assessed value of all taxable property of Lessee.
(k) The Agreement and the equipment contemplated to be fmanced has not been
the subject of a referendum which failed to 'receive the approval of the voters of Lessee's
jurisdiction within the immediately preceding four years.
Lessee acknowledges that the representations. covenants and warranties set forth
in Paragraph 6 and 7 shall survive the expiration of this Agreement and that Lessor may pursue .
any applicable remedies for the breach of such representations, covenants and waiTanties at any
time.
7. Tax Exemption. Lessee acknowiedges that Lessor has agreed to. enter into this
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under Section 265(b) of ~e Code is available. Said exception is subject to certain conditions
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relating to Lessee's use of the Equipment and to Lessee's issuance of tax-exempt obligations. In
that regard, Lessee represents, covenants and warrantS that:
(a) The Equipment will not be used, directly or indirectly in a trade or business
carried on by any person other than a governmental unit, except for such use as a member of the
general public.
(b) No portion of the rental payments payable hereunder: (i) will be secured,
directly or indirectly, by property used or to be used in a trade or business carried on by a person
other than a governmental unit, except for such use as a member of the general public, or by
payments in respect of such property; or (ii) will be derived from payments, whether or not to
Lessee. in respect of property or borrowed money used or to be used for a trade or business
carried on by any person other than a governmental unit .
(c) No portion of the gross proceeds of the Agreement will be used (directly or
indirectly) to make or finance loans to persons other than governmental units.
(d) The Agreement is hereby designate4 as a qualified tax-exempt obligation for
the purposes of Section 265(b) of the Code.
(e) Lessee reasonably anticipates that the amount of qualified tax-exempt
obligations to be issued by Lessee (together with qualified tax-exempt obligations issued by any
.entity from which Lessee derives its issuing authority or any entity which has substantial control
over Lessee or any subordinate entity deriving its issuing authority from Lessee or any
subordinate entity subject to substantial control by Lessee) during the current calendar year shall
not exceed $10,000,000.
8. Title: Personal Properc;y:. Encumbrances. Upon acceptance of the Equipment
covered by an Equipment Schedule hereto by Lessee hereunder and satisfaction of all conditions
precedent for putchase arid lease-purchase of such Equipment by Lessor as provided in
Paragraph 5 hereof: title to such Equipment and any and all additions, repairs, replacements or
modifications will vest in Lessee and for purposes of laws governing taxation and conditional
sales, title to the Equipment shall be deemed to be in Lessee; provided, however. that (i) in the
event of termination of this Agreement or of an Equipment Schedule which covers such
Equipment in accordance with Paragraph. 4 hereof, or (ii) upon the occurrence of an Event of
Default hereunder, and as long as such event of Default is continuing. title will. upon written
notice from Lessor to Lessee, immediately vest in Lessor or its assignee.
Each item of the Equipment subject to this Agreement is and shall remain personal
property and shall not be deemed to be affixed to or a part of the real estate on which it is
situate4, notwithstanding that the Equipment or any part thereof may be or hereafter become in
any manner physically affixed or attached to real property or any building thereon. Lessor may'at
any time and from time to time require Lessee to obtain. and Les.see shall obtain and deliver to
LeSsor? a waiver of any interest in the Equipment by any present or future landlord. owner, or
mortgagee of such real estate. .
Lessee agrees to keep each itetIl of Equipment at aJI times free and clear from all
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claims, levies, liens, and process other than those in favor of Lessor pursuant to this Agreement.
Lessee will not attempt to sell, assign, transfer, sublease, loan, part with possession of, conceal,
mortgage, encumber, or otherwise dispose of any of the Equipment or the interest therein. or'
permit any lien, attachment. levy or execution of any of its creditors to become effective thereon
(if any such lien, charge, claim OJ' encumbrance should arise at any time, Lessee shall promptly,
. at its own expense, take such action as may be necessary to duly discharge same) ; provided,
however. Lessee may deliver possession of any item of Equipment to the manufacturer or
supplier thereof for testing or other similar purposes or to any person or company for service,
repair. maintenance, or overhaul work on such item of Equipment or for alterations or
modifications or additions to such item of Equipment to the extent required or permitted by any
provision of this Agreement. Lessee, at its expense, will protect and defend title to the
Equipment.
. 9.. Location. The Equipment shall be delivered to the location specified 'in the
applicable Equipment Schedule and shall not be removed from. such location without the prior
written consent of LeSsor.
10. Use: Rqlairs. Lessee shall use the Equipment in a careful manner and shall comply
with all laws. ordinances and regulations relating to, and shall pay .all costs, claims, damages..
fees and charges arising out of its possession, use or maintenance. Lessee, at its expense, shall
keep the Equipment in good repair and ftJrp.ish all parts,. mechanisms and devices required
therefor.
11. ~ Lessee agrees to pay, promptly when .due. all assessments, license and
registration fees, taxes (including sales. use. excise, personal property, ad valorem, stamp,
documentary and other taxes) and all. other governmental charges. fees,. fines or penalties
whatsoever. whether payable by Lessor or Lessee. on or relating to the Equipment, or the
purchase. ownership, possession, leasing, operation, use or disposition thereof, and on or relating
to this Agreement for the rent or other payments hereunder (excluding taxes on or measured by
the net income of Lessor and excluding any sales or use tax payable to the supplier or
manufacturer or the State of Georgia by the Lessor on the acquisition of the Equipment and for
which a credit is allowable under Title 48 of the Official Code of Georgia Annotated, as .
amended, ag~ sales taxes collected by the Lessor from the Lessee on the periodic rental
payments) and to prepare and file promptly with the appropriate office any and all returns
required to be filed with respect thereto (sending copies thereof to Lessor) or, if requested by
Lessor, to notify Lessor of such requirement and furnish Lessor with all information required by
Lessor so that it may effect such. filing. If Lessee fails to pay said charges and taxes when due.
Lessor shall have the right, but shall not be obligated. to pay' said charges and taxes. If Lessor
pays any taxes, assessments, fees, or other governmental charges for which Lessee is responsible
or liable pursuant to the foregoing, Lessee shall reimburse Lessor therefor within 5 days after
demand by Lessor. All amounts under this paragraph (other than interest) payable to Lessor shall
be computed on an "after tax" basis so that such payments shall be in an amount which. when
reduced by the. increase in the income tax. liability or liabilities of Lessor. if any, as a result of
such payment by Lessee; shall equal tb~after-tax. cost of the tax, assessment, fee or other
governmental charge paid by the Lessor.
u. ~xempnon.Irom .l'eaeral laxanoD. IDe Lessor nas enlerea mto totS Agreement
contemplating that the interest portion of rental payments will be exempt from income taxation.
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In the event any governmental taxing authority successfully imposes tax treatment, under this
Agreement or any other lease of the Lessor which, in the opinion of Lessor's counsel, will be
determinative of the tax treatment under this Agreement, which differs from the tax treatment
contemplated to be taken by the Lessor hereto at the inception of this Agreement or which
effectively denies to the Lessor the use or benefit of such tax treatment as contemplated,
(including. but not limited to, the taxability of the interest portion of the rental payments caused
by the non-applicability of Code Section I03(a) or the denial under Code Section 265(b), of a
deduction for a portion of interest expense of Lessor, the affiliated group (as defined in Code
. Section 1504(a) of which Lessor is a member, or any separate member of the afflliated group of
which Lessor is a member) then Lessee agrees to pay tents with an interest factor equal to the
maximum rate of interest which, under applicable law, Lessor is permitted to charg.e,
retroactively from the effective date of imposition of the change of tax treatment through the
term of this Agreement during which the change of tax treatment is imposed, with credit being
given for rental payments having already been made by Lessee during the period for which the
change is Imposed, and sub~ently thereto, as rental payments would otherwise become due.
until the end of the lease term. Any retroactive payments of rent under this paragraph shall be
due and payable at the date that Lessor gives notice to Le~ee of imposition of the change of tax
treatment
Lessee agrees to pay its pro-rata share of attorney's fees that may reasonably be
incurred by Lessor in the event legal action or ~dministrative action is taken by the Lessor to
secure the tax treatment intended to be taken by Lessor under this Agreement or any other lease
which in the opinion of Lessor's counsel will be de~ative of the tax treatment under this
Agreement whether such action is successful or not. Lessee~s pro-~ta share shall be determined
by the percentage that the Lessor's original cost of the Equipment bears to the total original' cost
of leased equipment for all other similar leases of the Lessor involving similar issues of fact or
law. In the event the Lessor is successful in securing the tax treatment intended to be taken by
Lessor. Lessor shall refund to Lessee the total amount of increased interest (as hereinabove
provided) which has been paid by Lessee and rental payments for the remainder of the lease term
shall be the original rentals as specified in the Equipment Schedules.
13. Use of Equipment: Inspections. Lessee may possess and use the Equipment in
accordance wi~ this Agreement, provided that any such use is in conformity with all applicable
laws, regulations, ordinances, any insurance policies and any warranties of the manufacturer or
supplier With respect to the Equipment. Lessee will not use or operate any item of Equipment
other than in a manner and for the use contemplated by the manufacturer or supplier thereof. Qr
permit any person other than the Lessee's authorized agents or employees to operate the'
. Equipment
Lessor or Lessor's agent shall have the right upon reasonable prior notice to the Lessee
and during the Lessee's regular business hours to inspect the Equipment at the premises of the
Lessee or wherever the Equipment may be located. Lessee shall promptly notify Lessor of all
details arising out of any change in location of the Equipment, any alleged encumbrances
thereon, any accident allegedly resulting from the use or operation thereof. or any materially
defective, improper or malfunctioning item of Equipment and any claim or demand involving or
relating thereto.
14. Acceptance. Lessee acknowledges and agrees that:
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(a) each item of the Equipment is of a size. design, capacity and manufacture
selected by Lessee;
(b) Lessee is' satisfied that the Equipm~nt, and each component thereof, is suitable
for its purpose; .
such kind;
(c) Lessor is not the manufacturer' of the Equipment nor a. dealer in property of
(d) Lessor shall have no obligation to accept any item of the Equipment from any
seller thereof until that item of Equipment is accepted by Lessee; and
(e) the foregoing notwithstanding, Lessee shall indemnify Lessor and hold Lessor
harmless from and against any and all losses and liabilities which may arise from Lessee's failure
for any reason to accept any item of the Equipment.
15. Maintenance. Lessee will pay for and provide all utilities consumed by or required.
for the Equipment or use thereof. including; but not limited to, water. gas, electrical. powef. oil,
gasoline, and lubricants. Lessee. at its sole expense. at all times during the term of this
Agreement, shall maintain the Equipment and all additions. attachments and accessions thereto
in good operating order, repair, condition. and appearance, and keep the same prot~cted from the
elements, ordinary wear and tear resulting from authorized use thereof alone excepted and shall
make all 'necessary repairs and replacements to the Equipment. If the manufacturer of the
Equipment has provided Lessee with. a standard maintenance schedule~ such schedule will
constitute minimwq maintenance compliance and Lessee upon request, will furnish Lessor with
satisfactory evidence of such compliance. In furtherance of the maintenance of the Equipment,
Lessee agrees, if requested by Lessor, to enter into and maintain in force a Maintenance
Agreement with the manufacturer or a person (who ~ay be a' supplier) approved. by the
manufacturer provjding for the maintenance of the Equipment (or specified items of Equipment).
In the event Lessee' is requested to enter juto such a Maintenance. Agreement, Lessee agrees to do
all things within its power to cause such Maintenance Agreement to be complied with in all
respects by Lessee. and the other party thereto; ~d Lessor hereby authorizes such other party
thereto to accept the direction of Lessee in respect to such Maintenance Agreement All
maintenance and semce charges, whether pursuant to such Maintenance' Agreement or
otherwise. shall be borne by Lessee.
16. Alterations and Repairs. Lessee shall not, without the prior written consent of
Lessor (which may be withheld with or without cause), make any repair or alteration to or install
any accessory, equipment, or device. on the Equipment Of any component thereof which
interferes with the normal and sa~sfactory operation or maintenance thereof, or creates a safety
hazard. or which might result in the creation of mechanic's or materialman's lien with-respect
thereto. All parts and attachments (whether new or replaced) at any time installed in or affixed to
the Equipment shall constitute accessions thereto and shall be the property of Lessor (except
items which are furnished or affixed by Lessee and may be removed without.. in any way
affecting or impairing the original intended function or use of the' Equipment or any component
thereof and are readilv removable bv Lessee without causing material damage to the Eauioment).
17. Disclaimer of WarrantieS:' Exclusion of Liability. LESSOR, NOT BEING' THE
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MANUFACTURER OF THE EQUIPMENT NOR THE MANUFACTURER'S AGENT,
MAKES NO EXPRESS OR IMPLmD WARRANTY OF ANY KIND WHATSOEVER WITH
RESPECf TO THE EQUIPMENT, INCLUDING Bur NOT LIMITED TO; THE
MERCHANTABILITY OF THE EQUIPMENT OR ITS FITNESS FOR ANY PARTICULAR
PURPOSE; THE DESIGN OR CONDmON OF THE EQUIPMENT; THE QUALITY OR-
CAPACITY OF THE EQUIPMENT; THE PERFORMANCE OF THE EQUIPMENT; THE
WORKMANSHIP OR MATERIAL IN THE EQUIPMENT; COMPLIANCE OF THE
EQUIPMENT WTIlI THE REQUIREMENTS OF ANY LAW, RULE, SPECIFICATION OR
CONTRACT' PERTAINING THERETO; PATENT INFRINGEMENT; OR LATENT
. DEFECfS. AS TO LESSEE, LESSOR LEASES THE EQUIPMENT" AS IS." ~sor shall have
no obligation to accept any item of Equipment from any supplier thereof until that item of
Equipment is accepted by Lessee. Lessor hereby assIgns to Lessee, for and during the term of
this Lease, applicable factory warranties, if any, express or implied, issued with respect to the'
Equipment and each component thereof, and Lessee will be subrogated to Lessor's claims, if any,
against the manufacturer or. supplier of the Equipment for breach of ~ warranty or
representation with respect thereto. Lessor authorizes' Lessee to obtain the customary services
furnished in connection with such warranties and guarantees at Lessee's expense. Lessor
authorizes Lessee to enforce in its own ~e .any warranty, representation or other claim
enfo~eable against the manufacturer. Lessor assumes no responsibility for shipment, delivery,
installation or maintenance and all claims of Lessee with respect thereto. whether for delay.
. damage or otherwise. shall be made against supplier. Lessor. at its option, may provide in. its
Purchase Order that supplier agrees that any of such claims may be made. by Lessee directly
against suppliers: The obligation of Lessee to pay the rental payments shall not be abated,
impaired or reduced by reason of any claims of the Lessee With respect to Equipment. condition,.
quality, workmanship, delivery. shipment, installation, defects or otherwise. Notwithstanding the
foregoing. Lessee's obligations to pay the rentals or otherwise under this Lease shall be and are
abso,ute and unconditional. All proceeds of any such warranty recovery from the manufacturer
or supplier of the Equipment shall be first used to repair the affected Equipment In nO'event
shall Lessor be liable to Lessee for loss of anticipatory profits or any other direct, indirect,
special or consequential damages. .
18. Risk of Loss. All risk of loss. theft, damage or destruction to each item of
Equipment shall be borne by Lessee. No such loss, theft, damage or destruction of the
Equipment, in whole or in part, shall impair the obligations of Lessee under this Agreement, all
of which shall continue in full force and effect, and Lessee, at Lessor's option, shall either:
(a) place ~e affected Equipment in good repair, condition and working order;
(b) replace the same with like Equipment in good repair, condition and working
order (with-documentation establishing clear title therein in Lessor); or
(c) pay to Lessor ap amount equal to the purchase option price as prescribed in
Paragraph 21 hereof: less the net amount of the recovery, if any, actually received by Lessor
from insurance or otherwise for such loss, theft, damage or destructi~n.
19. Insurance. Lessee shall keep the Equipment insured against loss, theft, damage or
UCl>UUl,;dVll llVW e;;vcay ~lI.Ul>e;; Wnll.Ll>Oe;;Ver lor nUL lesS men lUll replacement vaLUe tnereoI. ana
shall carry public liability and property damage insurance covering the Equipment and its use
10
I .
with companies approved by the Lessor.' All such insurance shall be in the joint names of Lessor
and Lessee, with Lessor and Lessee named as loss payees,. as their interests may appear, shall
provide that Lessor shall receive not less than 30 days' notice of. any termin~tion. cancellation or
alteration of the terms thereof and that the coverage afforded Lessor shall not be rescinded,
impaired or invalidated by any act or neglect of Lessee. and otherwise .shall be in form and
amount and with companies approved by Lessor. Lessee shall pay the premiums therefor and
delivery said policies, or duplicates thereof or certificates of coverage thereunder. to Lessor. The
proceeds of hazard insurance shall. at the option of Lessor. be applied toward the repair or
replacement of the Equipment or the payment of the obligations of Lessee hereunder, as set forth
in Paragraph 18. The proceeds of any public liability or property damage insurance shall be
payable first to Lessor to the extent of its liability. if any. and the balance to Lessee. Lessee
hereby appoints Lessor as Lessee's attorney-in-fact to make claim for. receive payment of, and
execute or endorse all documents. checkS or drafts for loss or damage under any such policy.
. .
20. License and Taxes. In addition to other payments to be made pursuant to this
Agreement, Lessee shall pay Lessor. as additional payment, on demand, an amount equal to, all
license, assessments, saleS, use, real pr personal property, gross receipts or other assessments,
taxes, levies, imposts, duties and charges, if any together with any penalties, fines or interest
thereon imposed.against or on Lessor. Lessee'or the Equipment by any governmental au~ori~
upon or with respect to the Equipment or the purchase, ownership, possession, operation, return
or sale of, or receipt of payments for. the Equipment, except any Federal or state income taxes.. if
any, payable by Lessor. Lessee may contest any such taxes prior to. 'payment provided such
contest does not involve any risk of sale, . forfeiture or loss of the Equipment or any interest
therein.
21. Pre.payment Purchase. At the end of the lease term for Equipment covered by an
Equipment Schedule.. provided all rental payme~ts have been made under such Equipment
Schedule and there is no default or event which with the giving of notice or lapse of time, or
both, could become a default under the Agreement, any interest. of Lessor to the Equipment
subject to such Equipment Schedule shall be transferred to the Lessee or released. Provided all
rental payments under this Agreement are paid to date. Lessee ~y prepay' for Equipment under
an Equipment Schedule and purchase the interest of Lessor in the Equipment at the end of any
month during the lease term by payment of:
(a) the outstanding principal balance due under the Amortization Schedule
attached to the applicable Equipment Schedule (oJ:: any substitute amortization schedQle in effect
in accordance with Paragraph 12) plus accrued interest to date; .
(b) the cost of. anY.required inspections. examinations. or certifications of the
Equipment; and I
\
( c) the cost of any repairs. modifications. or adjustments required as a result of the
inspections, examinations, or certifications referred to in (b) above.
11
of any interest of the Lessor in the Equipment subject to such Equipment Schedule to Lessee.
Upon payment in full of all amounts due with respect to all Equipment identified in a particular
Equipment Sche<;lule and release.of any interest by the Lessor of its interest in such Equipment to
the Lessee, this Agreement shall terminate with respect to such Equipment for which payment
has been made in full (but shall remain in force with respect to any other Equipment identified in
another EquipmeIit Schedule for which payment in full has-not been made).
. . 22. Security Interest. To secure all of its obligations hereunder Lessee grants to Lessor
a first and prior security interest in any and all right an<,l interest of Lessee in the Equipment. the
Agreement and payments due under this Agreement, agrees that this Agreement may be filed as
a financing statement evidencing such security interest, and agrees to execute and deliver all
financing statements and other instruments necessary or appropriate to evidence such security
interest Lessee further agrees that the Uniform Commercial Code of the State of Mississippi
shall apply as between the parties hereto and assignees of Lessor.
23. Default. The Lessee shall be in default under this Agreement upon the occurrence
of any of the folloWing events:
(a) nonpayment when due or within 6 days thereafter of any installment of rent or
other sum owing hereunder;
(b) breach of any other covenant or agreement in this Agreement and the
continuance of such breach for a period of 10 consecutive days following Lessee's receipt of
written notice thereof from Lessor; . .
(c) if any representation or warranty made by Lessee or by any agent or
representative of Lessee herein or in any document or certificate furnished Lessor in connection
herewith or pursuant hereto proves to be incorrect at.any time in any material respect;
(d) if Lessee s~ dissolve or become insolvent or bankrupt, commit any' act of
bankmptcy, make any assignment for the benefit of: or enter into an arrangement or composition
with creditors. suspend or terminate the transaction of its usual business or consent to the
appointment of a trustee or receiver of if a trustee or receiver shall be appointed for Lessee or for
a substantial part of its property, or if bankruptcy, reorganization arrangements or similar
proceedings shall be instituted by or against Lessee;
(e) if any order, judgment or decree shall be entered against Lessee by a court of
competent jurisdiction and such order, judgment or decree shall continue unpaid or 'unsatisfied
for any.period in excess of 60 consecutive days without a stay of execution, or if a writ or order
of attachment, execution or other legal process shall be issued in connection with any action or
proceeding against Lessee or its property ~ereby any of the Equipment or any substantial part
of Lessee's property may be taken or restrained;
(t) if Lessee shall default in the performance of any obligation or in the payment
of any sum due to the Lessor under any other lease, contract, agreement, arrangement or
nnderl'ltllndinp. '
12
(g) if any indebtedness of Lessee for borrowed money shall become due and
payable by acceleration of the maturity date thereof; or
(h) if Lessor, in the exercise of reasonable judgment, shall determine that Lessee is
generally not paying its debts as such debts become due. In addition, Lessee shall give Lessor 5
days' written notice prior to the filing of any voluntary petition of bankruptcy. written notice
upon commencement of an involuntary bankruptcy proceeding, or written notice prior to taking
any action with respect to the Equipment in bankruptcy proceedings, and shall include in said
written notice the venue of the anticipated proceedings and a copy of any relevant pleadings with
respect thereto. Failure to give said written notice within the time as specified shall constitute an
event of default hereunder and shall cause an immediate termination of this Agreement.as to all
items of Equipment. Said default and termination, however. shall not constitute an election of
remedies and Lessor shall retain its rights to such other remedies as may be set forth in this
Agreement.
24. Remedies. Upon the occurrence of any event of default and at any time thereafter,
Lessor, acting alone and/or through its agents; may, without any further notice, exercise one or
more of the following remedies as Lessor in its sole discretion shall elect:
(a) declare the unpaid principal balance plus accrued interest to date under this
Agree~ent to be immediately due and payable without notice or demand;
(b) terminate this Agreement as to any or all items of Equipment;
(c) without notice. demand, liability or legal process. enter into any premises of or
under control or jurisdiction of Lessee or any agent of Lessee where the leased Equipment may
be, or is believed to be by Lessor. and repossess all or any item thereof, disconnecting and
separating all or so much thereof as may be required to disconnect or separate same from any
other property, Lessee hereby expressly waiving all further rights to possession of the Equipment
and all claims for injuries suffered through or loss caused by such repossession;
(d) cause Lessee, at its expense, promptly to return the Equipment to Lessor. at
such place as Lessor may des~gnate, in the condition set forth above;
(~) use. hold, sell, lease or otherwise dispose of the Equipment or any item thereof
on the premises of Lessee Or at any other location without affecting the obligations of Lessee as
provided in this Agteement;
(f) sell or lease the Equipment or any part thereof, at"public auction or by private
sale or lease at such time or times and upon such terms al;l Lessor may detenmne, free and clear
of any rights of Lessee, and, if notice thereof is required by law, any notice in writing of any
such sale or lease by Lessor to Lessee not less than 10 days prior to the date thereof shall
constitute reasonab~e notice thereof;
(g) proceed by appropriate action either at law or in equity to enforce performance
'hJrT ~C"C:OA~ n~ "lu'!o ~pp,:~.,:J",lA ^n'YPlll,","_~t'I n..r ........:n A fr.....o--..o....... _.. ",.. "^"-^"I'J'..o.. ri...._^S"... 4"'__ +1...... k_:...........1.
thereof; or .
B
- (h) exercise any and all rights accruing to Lessor under any applicable law upon a
default by Lessee. In addition, Lessor shall be entitled to recover immediately as liquidated
damages for the loss of a bargain and not as a penalty, a sum equal to the aggregate of the
following:
(i) all unpaid rent or other sums which ar~ due and payable up to the date the
Equipment is returned to or repossessed by Lessor,
(ii) any expense paid or incurred by Lessor in connection with the
repossession, holding, repair and subsequent sale, lease or other disposition of the Equipment,
including attorneys' fees and legal expenses, and
(iii) the purchase option price as prescribed in Paragraph 21 hereof, less the
net amount of the recovery, if any, actually received by Lessor from insurance or otherwise.
Additionally. the measure of liquidated damages as set forth hereinabove shall be applicable to
fix the damages accruing for the' unexpired portion of the lease term if this Agreement is not
assumed by the Lessee in a bankruptcy prQceeding. Should Lessor, however, estimate its actual
damages to exceed the foregoing, Lessor may, at its option, recover its actual damages in lieu of
or in addition thereto. .
None of the rc;:medies of LeSsor under this Agreement !lTe intended to be exclusive,
but each shall be cumulative and in addition ~ any other remedy referred to herein or otherwise
available to Lessor at law or in equity. Lessee agrees to pay Lessor all attorneys' fees and all
costs and expenses incurred by Lessor in connection with the enforcement of the terms of the
Agreement or any right or remedy hereunder. Any repossession or subsequent sale or lease by
the Lessor of any item of Equipment shall not bar "an action for a deficiency as herein provided
and the bringing of an action or the entry of a judgment against the Lessee shall not bar the
Lessor's right to repossess any or all items of. Equipment Lessee waives any and all rights to
nQtice and to a judicial hearing with respect to the repossession of the Equipment by Lessor in
the event of a default hereunder by Lessee.
25. Rqx>rts. Les~ee shall:
(a) i~ediately notify Lessor of any materially defective, improper, or
malfunctioning item of Equipment, the nature ~fthe defect or malfunction, the name and address
of the manufacturer of the item of Equipment, and such other information as may be known;
(b) promptly advise Lessor of all correspondence, papers, notices, and documents
whatsoever received by Lessee in connection with- any claim or demand involving or relating to
materially improper manufacturing, operation, use, or functioning of any item of Equipment or
charging Lessor or Less~ with liability, and aid in the investigation .and defense of all such
claims and in the recovery of damages from third persons liable therefore;
(c) notify Lessor in writing within 10 days after any day on which any tax lien
shall attach to any item of Equipment; and "
(d) reimburse Lessor, upon d. emand, for all attorneys' fees, court costs, and other
. . -
14
fees, costs, and expenses incun:ed by Lessor in connec~on with.the foregoing.
26. Further Assurances. Lessee will promptly execute and deliver to Lessor such
further documents and take such further action as Lessor may reasonably request in order to
more effectively carry out the intent and purposes hereof. .
27. Lessee's Obligations Unconditional. Lessee hereby agrees that Lessee's obligation
to pay all rent and other amounts owing hereunder shall be absolute and unconditional under all
circumstances. This Agreement may not be cancelled or tein1inated except as expressly provided
herein. . .
28. Relationship of Parties. The relationship of Lessor and Lessee is that of Lessor and
Lessee only, and nothing contained herein shall be deemed or construed by Lessor and Lessee, or
by any third party. or by any court, as creating the relationships of employer and employee,
principal and agent, partnership, or joint venture.
29. Notices. All notices, demands and requests which mayor are required to be given
to another party hereunder shall be in writing, l;IDd' each shall be deemed to have been properly
given when served personally on an executive officer of the party to whom such notice is to be
given, or when sent postage prepaid by first class mail, registered or certified.. return receipt
requested;. by deposit thereof in a'duly constituted United States Post Office or branch thereof
located in one of the states of the United States of America in a sealed envelope addressed as
follows: .
If to the Lessor: .
First Continental Leasing.
a division of Ban corp South Bank
P. O.Box 15097
302 Second Avenue .
Hattiesburg, MS 39404-5097
Attention: Ms. Elain~ D. Temple. President
If to. the Lessee:
Augusta.Richmond COunty, Georgia
530Greene Street, Room 105
Augusta, GA 30911- . .
A duplicate copy of each notice, certificate or other communication given under this
Agreement to ~y party thereunder shall also be given to any other parties indicated in this
Paragraph. The Lessor and Lessee, by notice given hereunder, designate any further or different
. addresses and to which subsequent notices, certificates or other communications shall be sent.
J.Q. ev.u.~",.Ll~.. '"fl....'" ,",ULlO"'UI. VI. LLPP.LVyd! h)' U.U} }I<UI.] ,"v U~ vI au.} "v" bJ d...\"o va..."",... }'u.'u.}
requiring such consent or approval shall. not be deemed to waive or render unnecessary consent
15
to or approval of any subsequent similar act. No custom or practice of the parties shall constitute
a waiver of any party's rights to insist upon strict compliance with the terms hereof.
. 31. Entirety of Agreement. This Agreement contains the entire agreement between
Lessor and Lessee) and supersedes all prior agreements and understandings relating to the subject
matter hereof. No other agreement shall be effective to change, modify, or terminate this
Agreement in whole or in part unless such agreement is in writing and duly signed by the party
against' whom enforcement of such change, modification. or termination is sought. No
representations, inducements, promises, or agreements, oral or otherwise, which are not
embodied herein shall be of any force or effect.
32. Counter,parts. This Agreement may be executed in multiple cOlUlterparts, each of
which shall be deemed an original for aU purposes, and.all of which shall constitute, collectively.
one agreement, but, in making proof hereof, it shall never be necessary to exhibit more than one
such counterpart.
. .33. Amendments and Addendums. ThiS Agreement may be amended or 'any onts
terms modified only by written cons~t of Lessee and Lessor or its assignee. In the event Lessee
desires to buy other equipment, the parties may execute an addendum to this Agreement with
respect to such other equipment by (i) executiDg a Purchase Order for such equipment; (il)
executing an acceptance certificate of the equipment; ana'(iii) obtaining new opinions and other
supporting documentation'as required or permitted by this Agreement. For purposes of
construing subsequent transactions concerning other equipment as an integrated contract. the
following shall be .considered a single transaction or legal and bill.ding agreement
(a) This Agreement, which provides basic terms and conditions;
(b) An executed Purchase Order and acceptance certificate; and
(c) Schedules. exhibits, and other attachments to such documents that pertain to
.the equipment descn"bed in the delivery order, and supporting documentation such as. e.g..
opwons Qf counsel and insurance certificates.
34. Severability Provisions. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future. laws effective during the term of this
Agreement, such provisi9n shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid, or Unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement. Furthermore. in lieu of each such illegal, invalid, or unenforceable
provision there shall be added automatically as a part of this Agreement a provision as similar in
tenDS to'such illegal, invalid. or unenforceable provision as may be .possible and be legal, valid,
and enforceable.
35. Persoos Bound by Agreement. The conditions, terms, provisions, and covenants
l'nnrninp.tl in thi!: Aori'>i'>TnP.11t <:h!lll1.1nnlv to innrp. to thf' hf'nf'fit of !Inri hi'> hinrlino npn" T ~<:<:"P.
and its successors. assigns, agents, and servants. The Lessee has no interest in the Equipment
16
other than the possession and use thereof during the le~e term and cannot pledge, mortgage. or
grant a security interest in the Equipment or any item of Equipment The conditions, terms.
provisions, and covenants contained in this Agreement shall apply to, 4ture to the benefit of, and
be binding upon Lessor, and its successors, assigns. agents,. and servants, and, where the context
so requires. any person accepting an assignment of the rights of ~sor hereunder. and their
respective succesSors, assigns, agents. and servants, and with respect to any indemnification
provisions hereof, Lessor and any holder of obligations of Lessor issued in connection with this
Agreement, and their respective successors, assigns. agents, and servants, shall each be entitled
to indemnification hereunder without regard to the actions of any other person hereunder.
36. Assigmnent. (a) Without Lessor's prior consent, Lessee shall not either (i) assign,
transfer. pledge, hypothecate, grant any security interest in or otherwise dispose of this
Agreement or the Equipment or any interest in this Agreement or said Equipment, or (ii) lease' or
lend the Equipment or permit it to be used by anyone other than Lessee or Lessee's empl~yees.
LessOr may. without the consent of Lessee, assign its rights, title and interest in and to this
Agreement, and all attachments hereto including the Purchase Order(s). to various
assignee/investors or their agents or trustees. and/or grant or assign a security interest in this
Agreement or the Equipment, in whole or in part and its assignee may reassign .this Agreement
Lessee agrees that this Agreement may become a part of a pool of contract obligations at
Lessor's option, and Lessor or its assignees may assign or further assign either the entire pool. or
a. fractionalized interest therein. Each such assignee shall have all of the rights of Lessor under
this Agreement. Lessee shall recognize and acknowledge each such assignment and/or sec.urity
interest Subject to the foregoing, this Agreement inures to the benefit of and is binding upon the .
heirs, executors, administrators, successors and assignees of the parties hereto.
(b) This Agreement and any interest herein may be transferred only through a book
entry system as prescribed by Section 149(a) of the Code, as the same may be amended from
tim~ to time. During the term of this Agreement, Lessee shall keep a comp~ete and accurate
record of all assignments and other transfers in form and substance necessary- to comply with
Section 149(a) of the Code. Upon assignment of Lessor's interest herein, Les::;or will cause
written notice of such assignment to be sent to Lessee and. upon receipt of such notice of
assigiunent, Lessee shall: (i) acknowledge the same in writing to Lessor; and (ii) record the
assignment in Lessee's "book entry system" as that term is defined in Section 149(a) of the Code.
Na further action will be required by Lessor or by Lessee to evidence the assignment. No such
assignment shall become effective without recordation of the assignm~nt in said ''book entry
system."
37. Waivers: Cumulative Rights. No waiver by Lessor 9f any default shall be deemed
. to be a waiver of any other then eJ(isting or subsequent default. nor shall any such waiver by
Lessor be deemed to be a continuing waiver. No delay or omission by Lessor in exercising any
right, power, privilege. or remedy hereunder, or at law or in equity, or otherwise shall impair any
such right, or be construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any right preclude other or further exercise thereof, or the exercise of any
other right. All rights shall be cumulative of and in addition to all other rights, and may be
exercised from time to time, and as often as may be deemed expedient by Lessor.
)8. dVVCJulI1\;: .L<lw. UJ~ I>UbI>14I1UV~ l<lWI> VI we;; i)I.i:lLe;; Ul ue;;ulgJ<l lilli:l.lJ guvl;;UJ WI;;
validity, construction, enforcement, and interpretation of this Agreement, the rights and remedies
17
of the parties hereunder, and the ownership rights in and to the Equipment
39. Right to Perform Covenants. If Lessee shall fail to make any payment or perform
any act required to be made or performed by Lessee hereunder, Lessor, without waiving or
releasing any obligation or defali.lt on the part of Lessee, may (but will be under no obligation to)
at any time thereafter make such payment or perform such act for the account and at the expense
of Lessee, and may take all such action as may be necessary therefore. All sums so paid by
Lessor and all expenses (including, without limitation, reasonable attorneys' fees) so incurred,
together with interest thereon from the date of payment or incurring at the highest rate permitt~d
by applicable law, will be paid by Lessee to Lessor on demand.
. .
40. Survival. Lessee's obligations contained in this Agreement shall s~ive the
termination or cancellation of this Agreement or the expiration of the term of any schedule.
.41. Special Stipulations. Any amendment to standard language wil~ be set forth in
Exhibit A attached hereto ("Special Stipulations").
42. Maxirniun Interest Rate. Nothing contained in this Agreement .shall require the
. Lessee to pay interest at 'a rate exceeding the' Maximum Permissible Rate. If the amount of
interest payable to the Lessor for any period would otherwise exceed the Maximum Permissible .
. Amount for such period, such amount shall be automatically reduced to the Maximum
Permissible Amount for such period, and the amount of intereSt payable to the Lessor for.any
subsequent period, to the extend less than the Maximum Permissible Amount for such
subsequent period, shall, to the extent, be increased by the amount of such reduction. The Lessee
shall give the Lessor notice of any law or change in law that may result in such reduction or
increase promptly after becoming aware of such law or change. "Maximum Permissible
Amount" means, with respect to interest on any amount for any period, the maximum amount of
interest that can be payable with .respect to such amount for such period without causing the rate
of interest on such amount for such period to 'exceed the Maximum Permissible Rat~. "Maximum
Pennissible Rate" means the rate of interest on an amount that if exceeded could; uilder law.
result in civil or criminal penalty being imposed on the Lessor or result in th~ Lessor's being
unable to enforce payment or repayment of all or part of the rental payments due under this
Agreement, including portions allocable to interest due or to become due on such amount
43. Effective Date. This Agreement shall become effective upon execution by all of
the parties hereto.
. .
1Jle parties have caused this Agreement to be executed by their duly authorized
. representatives as of the day and year first above written.
LESSOR:
LESSEE:
First Continental Leasing; a division of Augusta-Richmond County, Georgia
DaneotpSouth Bank ,~
Bv: ~ D: r(2d-<irF
Title:' . ". Title: thtf-(V'Y!-
18 &ilh~.
J),;J-J fiIT ! 1'(
1"1 II Cc1111. f"\ I ,f6~ ,I-J
657570471-001
RESOLUTION AUTHORIZING AND APPROVING EXECUTION
OFANEQmPMENTLEASE~URCHASEAGREEMENT~TH
FIRST CONTINENTAL LEASING, A nMSION OF BANCORPSOUTH BANK
FOR THE PURPOSE OF LEASE-PURCHASING CERTAIN EQUIPMENT
WHEREAS. the Board of Commissioners, the Governing Body (the "Governing
Body") of Augusta-Richmond COunty3 Georgia (the "Lessee"). acting for and on the behalf of the
Lessee hereby fmds. determines and adjudicates as follows:
1. The Lessee desires to enter into an Equipment Lease-Purchase' Agreement with the
Exhibits attached thereto in substantially the same form as attached hereto as Exhibit "A" (the
"Agreement") with First Continental Leasing, a division of BancorpSouth Bank (the "Lessor")
for the puipose of presently purchasing the equipment as described therein for the total cost
specified therein (collectively the "Equipment") and to purchase such other equipment from time
to time in .the future upon appropriate approval;
2. The Lessee is authorized pursuant "to Section 36-60-13 of the Official Code of Georgia
Annotated, as amended, to acquire equipment and furniture by Lease-Purchase agreement and
pay interest thereon by contract for a term of one (1) year, with renewable one (1) year terms;
3. It is in the best interest of the residents served by Lessee that the Lessee acquire the
Equipment pursuant to and in accordance with the terms of the Agreement; and
4. Ii is necessary for the Lessee to approve llI)d authorize the Agreement and enter same Qn
the minutes of the Governing Body pursuant to Section 36-10-1 of the Official Code of Georgia
Annotated.
5. The Lessee desires t~ designate the Agreement as a qualified tax-exempt obligation of
Lessee for purposes of Section 265(b )(3) of the Internal Revenue Code of 1986 (the "Code").
.NOW. THEREFORE, BE IT RESOLVED by this Governing Body for and on behalf of the
Lessee as follows: .
Section 1. The Agreement and Exhibits attached thereto in substantially the same forni as
ched ~o a Exhibit i A" by . d between the Lessor and the Lessee is he~eby approved and
b . "'l (the 'rAuthorized Officer") is hereby authorized and
irected to execute aid Agreement on behalf of the Lessee.
Section 2. The Agreement' is being issued in calendar year~ and shall be entered" on
the minutes of the Governing Body.
Section 3. Neither any portion of the gross proceeds of the Agreement nor the Equipment
identified to the Agreement shall be used (directly or indirectly) in a trade or business carried on
by any person other than a govermnental unit, except for such use as a member of the general
public.
Lessee) in respect of property or borrowed money used or to be used for a trade or business
carried on by any person other than a governmental unit.
Section 5. No portion of the gross proceeds of the Agreement are used (directly or indirectly)
to make or finance loans to persons other than governmental units.
Section 6. The principle portion of the Agreement, when added to the amount of debt
incurred by Lessee pursuant to Article IX, Section IV, Paragraph I of the Constitution of
Georgia, does not exceed 1 0% ~f tlle assessed value of all taxable property of Lessee.
Section 7. The Agreement and the equipment contemplated to be financed lias not been the
subject ofa referendum which failed to receive the approval of the voters of Lessee's jurisdiction
within the immediately precedirig four years.
Section 8. Lessee hereby designates the Agreement as a qualified tax~exempt obli.gation for
purposes of Section 265(b) of the Code.
Section 9. In calendar year ~ty(_ Lessee h8s desigt!ated
tax-exempt obligations (including~' . -exempt
the Agreement herein so designa ,Lessee will no designate more ,
obligations ~sued during calendar ear ? 00 h as alified tax-e e t ol>ligations.
Section 10. Lessee reasonably an c pa es that the total amount of tax-exempt obligations
(other than private activity bonds) to be issued by Lessee during ~en~ year ~O C will
not exceed $10,000,000. '. .
Section 11. For purposes of this resolution, the amount of Tax-exempt obligations stated as
either issued or designated as qualified tax-exempt obligations includes tax-exempt obligations
issued by all entities deriving their issuing authority from Lessee or by an entity subject to
substantial control by Lessee, as provided in Section 265(b)(3)(E) of the Code. .
Section 12. The Authorized Officer is further authorized for and on behalf of the Governing
Body and the Lessee to do all things necessary in' furtherance of the obligations of the Lessee
pursuant to the Agreement, including execution and delivery of all. other documents necessary or
appropriate to carry out the transactions contemplated thereby in accordance with the terms and
provisions thereof.
. ').(1 tg
Georgia this ~day of
Duly adopted by the Augusta-Richmond County Commission.
11.~ ,200(P'.,
AUGU~TtJRICHMOND COUNTY COMMISSION
QW~ u/.:-(l4 V
'. ~. As its Mayor .. .
l11 i~/!If/
(SEAL)
FolloWing the reading of the' forego~ resolqtion. U> 11 M . Hh~ ~ moved
that the foregoing resolution be adopted, ~ t1 . C ~ u::x.o:v~econded the motion for
its adoption. The H.+1o~ put the question to a roll ~.dl ~ote and the result
was as follows:
t1 0 j; ~ Jhl;nf-..,e
~
Voted:
Voted:
Voted:
Voted:
Voted:
}!!{ft!OJ\ having received the affIrmative vote of all members present, the
U<-' declared the motion carried and the resolution adopted this the
.~dayof f'1 ~cf-( , ~{) {D. .
.1
..'
1~ ~1~ ~f.t-
~C,K dJi?afJ/~ w
IJ (SEAL) .
&
~
AUGUSTA-RICHMOND COUNTY COMMISSION
A
STEPHEN E. SHEPARD
County Attorney
Augusta Law Department
DAVID S. COPENHAVER
Mayor
STAFF ATTORNEY
Vanessa Flournoy
Betty Beard
Marion Williams
Joe Bowles
Keith Brown
Calvin Holland, Sr.
Andy Cheek
Jerry Brigham
Jimmy Smith
J. R. Hatney
Don Grantham
Marion Williams
Mayor Pro Tern
Frederick L. Russell
Administrator
June 6. 2006
Please Reply to:
701 Greene Street, Suite 104
Augusta, Georgia 30901
First Continental Leasing,
a division of Ban corp South Bank
P.O. Box 15097
Hattiesburg, MS 39404-5097
Re: Lease-Purchase of Equipment by Augusta-Richmond County, Georgia
Schedule No. 01 to Master Lease No. 6575
Ladies and Gentlemen:
Pursuant to your request, we hereby render the following oplIDon regarding the
Equipment Lease-Purchase Agreement (the "Agreement") between Augusta-Richmond County,
Georgia (the "Lessee") and the Board of Commissioners (the "Governing Body") and First
Continental Leasing, a division of BancorpSouth Bank (the "Lessor")
dated June 6, 2006.
We have acted as counsel to the Lessee and the Governing Body with respect to certain
legal matters pertaining to the Agreement. and to the transactions contemplated thereby. We are
familiar with the Agreement and we have examined such agreements, schedules, statements,
certificates, records, inCluding minutes of the Governing Body of the Lessee and other
instruments of public officials. Lessee, and other persons as we have considered necessary or
proper as a basis for the opinions hereinafter stated.
Based on such examination, we are of the opinion that:
1. Lessee and the Governing Body have full power, authority and legal right to
execute. deliver and nerfonn the tenn~ of the APTeement The AV"eement h~c;: heen rlnly
authorized by all necessary action on the part of Lessee and the Governing Body and any other
governing authority and does not require the approval of,. or the giving of notice to any other
federal, state, local, or foreign governmental authority and does not contravene any law binding
Augusta Law Department County Attorney
501 Greene Street, Suite 302, Augusta, Georgia 30901 701 Greene Street, Suite 104, Augusta, Georgia 30901
(706) 842-5550 - Fax (706) 842-5556 (706) 724-6597 - Fax (706) 722-4817
on Lessee or the Governing Body or contravene any indenture, credit agreement or other
agreement to which Lessee or the Governing Body is a party or by which it is bound.
2. The Agreement has been duly authorized, executed and delivered and constitutes
a valid and binding obligation of Lessee and the Governing Body enforceable in accordance with
its terms.
3. All required procedures for execution of the Agreement, including competitive
bidding, if applicable, have been complied with, and all rentals will be paid out of funds which
are legally available for such purposes.
4. With respect to the tax-exempt status of the interest portion of rental payments
under the Agreement, under present law:
(a) The Agreement is a conditional sales agreement which qualifies as an
obligation for purposes of Section I 03 (a) of the Internal Revenue Code of 1986. as amended (the
"Code'), and Treasury Regulations and rulings hereunder.
(b) The interest portion of the rental payments under the terms of the
Agreement is exempt from federal income taxation pursuant to Section 103(a) of the Code and
the Treasury Regulations and rulings thereunder.
5. There are no pending or threatened actions or proceedings before any court,
administrative agency or other tribunal or body against Lessee or the Governing Body which
may materially affect Lessee's or the Governing Body's financial condition or operations, or
which could have any effect whatsoever upon the validity, performance or enforceability of the
terms of the Agreement or any action taken or to be taken in connection with Lessee's
obligations contemplated in the Agreement.
6. At origination, the Agreement complied in all material respects with all
requirements of federal, state and local laws. including. without limitation. laws relating to usury
or the origination of the Agreement.
7. The principal nortion of the Agreement. when added to the amount of debt
incurred by Lessee pursuant to Article IX, Section IV. Paragraph I of the Constitution of
Georgia, does not exceed 10% of the assessed value of all taxable property of Lessee.
8. The Agreement and the equipment contemplated to be financed has not been the
subject of a referendum which failed to receive the approval of the voters of Lessee's jurisdiction
within the immediately preceding four years.
This opinion is being furnished to you in connection with the above-referenced
transaction and the opinions expressed herein are for the sole benefit of, and may be relied upon
by the Lessor and its assigns and are not to be delivered to or relied upon by any other party
without our prior written consent.
SES:mdh
smooret-
Stephen E. Shepard
6575 "10471-001
SPECIAl, STIPULA nONS
LESSOR: .Fir~t Continental LeasingT
a division of BancorpSouth Bank
P.O, Box 15097
302 Second Avenue
Hattiesburg, MS 39404-5097
By;
Title: r\ rs + \J P
Date; -....10 .- '2 q rOb __-___ ,.,..
LESSEE: Augusla-Richmond County, Georgia
530 Greene StreetT Room 105
Augusta; GA 30911
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I
Date: & -.-t?7' -0;6
-NONE--
EXtlll3.rI..A
657570471-001
EQUlPMENTLEASESCBEDULE
Lease Schedule Number 01
is Lease chedule No.rOl to the Equipment Lease-~h~se Agre~ment dated. as of
V ~the "Agreem~tn) between FtrSt Continental Leasmg, a
division of B co outh Bank, a Mississippi Corporation (the "Lessor") aild
Augusta-Richmond County, Georgia (the "Lessee"), acting by and through the Board of
Commissioners, the Governing Body of the Lessee, is made as of this date.
1. Description of the EqJ1ipment The quantity. item, manufacturer, and model and serial
number of the 'Equipment subject to the Agreement are as. appear on Exhibit liB_I" attached
hereto and made a part hereof.
2. Location of the Eq)li,pment The Equipinent is to be located and delivered to Lessee's
premises at 23 \l.. ~~cc ROAD A..\J6us"};A GA. 30qO~
, ,.
. 3. Original Rental Term. The term of the Agreement shall be one (1) year, which renewable
for 3. succeeding one (1) year terms except if terminated by Lessee.
4. Rental Payments. The Lessee agrees to pay the Lessor the original cost of $351,378.00 for
the Equipment hereof described in Exhibit "B-1" attached hereto, upon the terms. and at the
times as provided in the Payment Amortiiation Schedule, attached hereto as Exhibit "B-2" and
mage .a part hereof, with an interest rate of 4.05 percent per annum as provided thereby. The
principle portion of the Agreement. when added to the amount of debt incurred by Lessee
pursuant to Article IX, Section IV, Paragraph I of the Constitution of Georgia, does not exceed
10% of the assessed value of all taxable property of Lessee.
5. ~he Agreement and the equipment coqtemplated to be financed has not been the subJect of
a referendum which failed to receive the .approval of the voters of Lessee's jurisdiction within
the immediately preceding four years.
6. This Schedll1e and its terms and conditions are hereby incorporated by reference in the
. Agreement. . .
/'~
DATED, this the U -day of' ~
, ?rP G,
LESSOR:
LESSEE:
First Continental Leasing, a division of . Augusta-Richmond County. Georgia
Bancorp uth Bank .0'
t)~y:
EXHIBIT B-1
Augusta-Richmond County, Georgia
Master Lease Number: 6575
Schedule Number: 01
CATERPILLAR 140H MOTOR GRADER, SIN: APM02892
CATERPILLAR 140H MOTOR GRADER, SIN: APM02905
Prepared by: International Decision Systems, Inc. InfoAnalysis 6/29/200610:08:03 AM
Payment Amortization Report File Name: infoa.iad
Customer. Augusta-Richmond County, Georgia
Quote ID: 013-805-013-005
Quote Entered Date: 2/15/06
Interest Rate: 4.0500% (Monthly)
Principal Accrued Accrued
Per Date Payment Principal Interest Balance Interest IntBal Net Balance
0 6/15/06 3,074.67 3,074.67 0.00 348,303.33 0.00 0.00 348,303.33
1 7/15/06 3,074.67 1,899.15 1,175.52 346,404.18 1,175.52 0.00 346,404.18
2 8/15/06 3,074.67 1,905.56 1,169.11 344,498.62 1,169.11 0.00 344,498.62
3 9/15/06 3,074.67 1,911.99 1,162.68 342,586.63 1,162.68 0.00 342,586.63
4 10/15/06 3,074.67 1,918.44 1,156.23 340,668.19 1,156.23 0.00 340,668.19
5 11115/06 3,074.67 1,924.92 1,149.76 338,743.27 1,149.76 0.00 338,743.27
6 12/15/06 3,074.67 1,931.41 1,143.26 336.811.86 1,143.26 0.00 336.811.86
2006 21.522.71 14,566.14 6,956.56 6,956.56
7 1/15/07 3,074.67 1,937.93 1,136.74 334,873.92 1,136.74' 0.00 334,873.92
8 2/15/07 3,074.67 1,944.47 1,130.20 332,929.45 1,130.20 0.00 332.929.45
9 3115107 3.074.67 1,951.04 1,123.64 330.978.41 1,123.64 0.00 330,978.41
10 4/15/07 3.074.67 1,957.62 1,117.05 329,020.79 1,117.05 0.00 329,020.79
11 5/15/07 3,074.67 1,964.23 1,110.45 327,056.57 1,110.45 0.00 327,056.57
12 6115107 3,074.67 1,970.86 1,103.82 325,085.71 1,103.82 0.00 325,085.71
13 7115107 3,074.67 1,977.51 1,097.16 323,108.20 1.097.16 0.00 323,108.20
14 8/15/07 3,074.67 1,984.18 1,090.49 321,124.02 1,090.49 0.00 321,124.02
15 9115/07 3,074.67 1,990.88 1,083.79 319,133.14 1,083.79 0.00 319,133.14
16 10115/07 3,074.67 1,997.60 1 ,077.07 317,135.54 1 ,077.07 0.00 317,135.54
17 11115/07 3,074.67 2,004.34 1,070.33 315,131.20 1,070.33 0.00 315,131.20
18 12/15/07 3,074.67 2,011.10 1,063.57 313,120.10 1,063.57 0.00 313,120.10
2007 36,896.07 23,691.76 13,204.31 13,204.31
19 1115108 3,074.67 2,017.89 1 ,056.78 311,102.20 1,056.78 0.00 311,102.20
20 2/15108 3,074.67 2,024.70 1 ,049.97 309,077.50 1,049.97 0.00 309,077.50
21 3/15/08 3,074.67 2,031.54 1,043.14 307,045.97 1,043.14 0.00 307,045.97
22 4115/08 3,074.67 2,038.39 1,036.28 305,007.57 1,036.28 0.00 305,007.57
23 5115108 3.074.67 2,045.27 1.029.40 302.962.30 1,029.40 0.00 302.962.30
24 6115/08 3,074.67 2,052.17 1,022.50 300,910.13 1,022.50 0.00 300,910.13
25 7115/08 3,074.67 2,059.10 1,015.57 298,851.03 1,015.57 0.00 298,851.03
26 8115/08 3,074.67 2,066.05 1,008.62 296,784.98 1,008.62 0.00 296,784.98
27 9115/08 3,074.67 2,073.02 1,001.65 294,711.95 1,001.65 0.00 294,711.95
28 10115/08 3,074.67 2,080.02 994.65 292,631.93 994.65 0.00 292,631.93
7Q 11/1 !;InR "l 07" R7 7 nR7 0" OQ7 ~~ "on C:::AA on 'no~c., n n" "nn ~ A A nn
30 12/15/08 3,074.67 2,094.08 980.59 288,450.81 980.59 0.00 288,450.81
2008 36,896.07 24,669.29 12,226.78 12,226.78
31 1115/09 3,074.67 2,101.15 973.52 286,349.66 973.52 0.00 286,349.66
Version 7.3b Page 1
Prepared by: International Decision Systems, Inc. InfoAnalysis 6/2912006 10:08:03 AM
Payment Amortization Report File Name: infoa.iad
Customer: Augusta-Richmond County, Georgia
Quote 10: 013-805-013-005
Quote Entered Date: 2/15/06
Interest Rate: 4.0500% (Monthly)
Principal Accrued Accrued
Per Date Payment Principal Interest Balance Interest IntBal Net Balance
32 2/15/09 3,074.67 2,108.24 966.43 284,241.42 966.43 0.00 284,241.42
33 3/15/09 3,074.67 2,115.36 959.31 282,126.06 959.31 0.00 282,126.06
34 4/15/09 3,074.67 2,122.50 952.18 280,003.56 952.18 0.00 280,003.56
35 5/15/09 3,074.67 2,129.66 945.01 277,873.90 945.01 0.00 277 ,873.90
36 6/15/09 3,074.67 2,136.85 937.82 275,737.05 937.82 0.00 275,737.05
37 7/15/09 3,074.67 2,144.06 930.61 273,592.99 930.61 0.00 273,592.99
38 8/15/09 3,074.67 2,151.30 923.38 271,441.70 923.38 0.00 271,441.70
39 9/15/09 3,074.67 2,158.56 916.12 269,283.14 916.12 0.00 269,283.14
40 10/15/09 3,074.67 2,165.84 908.83 267,117.30 908.83 0.00 267,117.30
41 11/15/09 3,074.67 2,173.15 901.52 264,944.14 901.52 0.00 264,944.14
42 12/15/09 3,074.67 2,180.49 894.19 262,763.66 894.19 0.00 262,763.66
2009 36,896.07 25,687.15 11,208.92 11,208.92
43 1/15/10 3,074.67 2,187.85 886.83 260,575.81 886.83 0.00 260,575.81
44 2/15/10 3,074.67 2,195.23 879.44 258,380.58 879.44 0.00 258,380.58
45 3/15/10 3,074.67 2,202.64 872.03 256,177.95 872.03 0.00 256,177.95
46 4/15/10 3,074.67 2,210.07 864.60 253,967.87 864.60 0.00 253,967.87
47 5/15/10 3,074.67 2,217.53 857.14 251,750.34 857.14 0.00 251,750.34
48 6/15/10 252,600.00 251,750.34 849.66 0.00 849.66 0.00 0.00
2010 267,973.36 262,763.66 5,209.70 5,209.70
Totals: 400,184.29 351,378.00 48,806.29 48,806.29
Version 7.3b
Page 2
657570471-001
EQUIPMENT ACCE~TANC:E NOTICE
TO: First Continental Leasing, a division of BancorpSouth Bank
RE: Equipment Lease-Purchase Agreement dated as of U~ <r:.:J.a 0 (" .
Augusta-Richmond County, Georgia (the "Lessee"), acting by and through the Board of
Commissioners, the Governing Body of the Lessee, hereby acknowledge receipt in good
condition and working order 'of the equipment (the ''Equipment") as listed on Exhibit "C-I"
attached hereto and made a part hereof and further described in the invoices attached hereto and
made ~ hereof. The ffuipment is subject to the Equipment Lease-Purchase Agreement dat~
as of ~ s-; ~ 0 (" ~ between Lessor and Lessee. Lessee certifies to Lessor
that the Lessee has Inspected the Equipment and that the Equipment is acceptable and approves
. supplier(s) invoices for the Equipment and requests that Lessor make payment of such invoices.
. .
Lessee further acknowledges that it selected the Equipment so received. LEsSEE AGREES
THAT J;.ESSOR MADE NO REPRESENTATIONS AND WARRANTIES WHATEVER.
DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO TIIE SUIT.ABILITY,
DURABILITY, FITNESS FOR USE, MERCHANTABILITY, CONDITION. QUALITY, OR
OTIIERWISE OF SUCH EQUIPMENT. LESSEE SPECIFICALLY WAIVES ALL RIGHT TO
MAKE ANY CLAIM AGAINST LESSOR ITS ASSIGNS FOR. BREACH OF ANY
WARRANTY. OR TO INTERPOSE OR ASSERT ANY SUCH DEFENSE, COUNTERCLAIM
OR SETOFF.
LESSEE:
Augusta-Richmond County, Georgia
BY:..~.~
Title: f"ted- /11 &.,di!!"~
Date: h -t,?; - 06
EXHffiIT C