HomeMy WebLinkAbout2008-03-03-R RESOLUTION NO.CO.
RESOLUTION AUTHORIZING AND APPROVING EXECUTION OF AN
EQUIPMENT LEASE-PURCHASE AGREEMENT WITH BANCORPSOUTH
EQUIPMENT FINANCE, A DIVISION OF BANCORPSOUTH BANK FOR THE
PURPOSE OF LEASE-PURCHASING CERTAIN EQUIPMENT
WHEREAS, the City Council of the City of Batesville, the Governing Body(the
"Governing Body") of City of Batesville, Arkansas (the "Lessee"), acting for and on the behalf of
the Lessee hereby finds, 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 BancorpSouth Equipment Finance, a division of BancorpSouth Band (the
"Leassor") for the purpose 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 "The City and County Government Development
Bond and Short-Term Financing Amendment"to the Constitution of the State of Arkansas to
• acquire tangible personal property with an expected useful life of more than one (1) year by
Lease-Purchase agreement and pay interest thereon by contract for a term not to exceed five (5)
years;
3. It is in the best interest of the residents served by Lessee that the Lessee acquire that
Equipment pursuant to and in accordance with the terms of the Agreement; and
4. It is necessary for the Lessee to approve and authorize the Agreement.
5. The Lessee desires to 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 form as
attached hereto as Exhibit "A"by and between the Lessor and the Lessee is hereby approved and
Mayor is hereby authorized and directed to execute said Agreement on behalf of the Lessee.
Section 2. The Agreement is being issued in calendar year 2008.
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 governmental unit, except for such use as a member of the general
public.
Section 4. No portion of the rental payments identified in the Agreement (a) is 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 (b) is to 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 until.
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 a governmental unit.
Section 6. Lessee hereby designates the Agreement as a qualified tax-exempt obligation
for purposes of Section 265 (b) of the Code.
Section 7. In calendar year 2008, Lessee has designated $926,300.00 of tax-exempt
obligations (including the Agreement) as qualified tax-exempt obligations. Including the
Agreement herein so designated, Lessee will not designate more $10,000,000 of obligations
issued during calendar year 2008 as qualified tax-exempt obligations.
Section 8. Lessee reasonably anticipates that the total amount of tax-exempt obligations
(other than private activity bonds) to be issued by Lessee during calendar year 2008 will not
exceed $10,000,000.
Section 9. 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 10. The assessed value of taxable property located within the municipality or
county is $ 87,998,095.00 as determined by the last completed tax assessment.
Section 11. The aggregate principal amount of short-term financing obligations incurred
by Lessee, including the obligations under the Agreement, does not exceed five percent(5%), if
Lessee is a municipality, or two and one-half percent (2 '/2 %), if Lessee is a county, of the
assessed value of taxable property located within the municipality or county, as determined by
the last completed tax assessment.
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.
Following the reading of the foregoing resolution, moved that the
foregoing resolution be adopted,^ seconded the motion for its adoption. The
,QrL put the question to a roll call vote and the result was as follows:
Voted:
Voted:
Voted:
Voted: C
LIa, Voted:
A ¢, Voted:
Voted:
Voted:
The motion having received the affirmative vote of all members present, the
r declared the motion carried and the resolution adopted this the
d4 of
Rick Elum or
ATTEST:
Lot
Denise Johnston, City Cler
• EQUIPMENT LEASE-PURCHASE AGREEMENT 7495 70570-001
This Equipment Lease-Purchase Agreement (the "Agreement") dated as of
is entered into between BancorpSouth Equipment Finance, a division
of BancorpSouth Bank (the "Lessor"), whose Principal Office (herein so called) is located at
Hattiesburg, Mississippi and City of Batesville, Arkansas , (the "Lessee"), acting by and through
, the Governing Body of the Lessee.
1. Agreement 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 Exhibit B upon the terms and conditions set forth in this Agreement, as
supplemented 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 and 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 upon the full
performance and observance of each and every term, condition, and covenant contained herein,
each Schedule hereto and any extensions thereof. 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 on the last day of the term stated in such Equipment
Schedule.
3. Rental Payments. The rent for the Equipment described in each Equipment
Schedule shall be the total sum stated on such Equipment Schedule, in installments, 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; /provided however such interest
component is subject to change as provided in Paragraph 12 hereof. Such rent shall be payable
from legally available funds of 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 shall constitute a current expense of Lessee and shall not in any way be construed to
be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or
requirements concerning the creation of an indebtedness by Lessee.
4. Continuation of Lease by Lessee. Lessee intends to comply with each term,
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 fiscal year during the term of this Agreement all rent payments due hereunder and to do
all other things necessary and lawfully within its power to have such portion of the budget
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approved to obtain and provide for funds to a its obligations due hereunder. In the event that
pp P pay
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 Lessee's intent to make rental
payments for the full term of this Agreement 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 and that the functions performed by the Equipment could not and will not be
transferred to other equipment now available or which may be subsequently acquired for use by
Lessee during the terms of this Agreement.
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 or 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 and 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 delay in such delivery shall not affect the validity of this Agreement. Lessee
shall have 30 days from the date of delivery to accept such Equipment and deliver an executed
Equipment Acceptance Notice in the form attached hereto as Exhibit C. Notice of any defects
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 and
exercise any and all rights accruing under applicable law and under this Agreement. Subject to
the conditions set forth in this paragraph, upon delivery 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 request 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 the 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 purchase 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.
(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 stated in such
opinion, which conclusions shall include the following:
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(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;
(iii) there are no pending or threatened actions or proceedings before any
court, administrative agency or other tribunal or body against Lessee which may materially affect
Lessee's financial condition or operations, or which could have any effect whatsoever upon the
validity,performance, or enforceability of this Agreement;
(iv) the Agreement is a conditional sales agreement which qualifies as an
obligation for purposes of Section 103(a) of the Internal Revenue Code of 1986, as amended,
(the "Code") and Treasury regulations and rulings thereunder and the interest portion of the
rental payments due hereunder is exempt from federal income taxation pursuant to Paragraph
103(a) of the Code and the Treasury regulations and rulings thereunder;
(v) The Lessee is a fully constituted political subdivision or agency of the
State where the Equipment is located as set forth herein and is authorized by the Constitution and
laws of the State of Arkansas (the "State") and its own internal or administrative procedure to
enter into the transactions contemplated by this Agreement and to carry out its obligations
hereunder; and
(vi) the 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 have occurred that are necessary to ensure the enforceability of this Agreement,
including Lessee's compliance with any applicable public bidding requirements; and
(vii) such other matters as Lessor may reasonably request.
(d) On the date thereof, no default (as defined in Paragraph 23 hereof), 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 true and
correct in all material respects on the date thereof.
(f) A financing statement, in form and substance satisfactory to Lessor, in respect
of such Equipment shall have been executed and filed in the appropriate offices.
(g) Lessor shall have received from Lessee written notice of acceptance of the
Equipment.
(h) Lessor shall have received all other documents, instruments, certificates,
opinions, and evidences as Lessor may reasonably request.
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6. Representations and Warranties of Lessee. Lessee represents, warrants and
covenants to Lessor that:
(a) The Lessee is a fully constituted political subdivision or agency of the State
where the Equipment is located as set forth herein and is authorized by the Constitution and laws
of the State.
(b) 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 have occurred that are necessary to ensure the enforceability of this Agreement,
including Lessee's compliance with any applicable public bidding requirements.
(c) This Agreement constitutes a legal, valid and binding obligation 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.
(d) 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 the validity, performance, or
enforceability of the terms of this Agreement.
(e) No consent, approval, or authorization of, registration with, or declaration to
any agency or authority is required in connection with the execution and delivery of this
Agreement.
(f) Lessee is not in default (nor has any event occurred which, with notice or lapse
of time, or both, would constitute a default) under any agreement or instrument to which Lessee
is a party or under which Lessee or any of its assets is bound which could have any effect
whatsoever upon the validity,performance, or enforceability of the terms of this Agreement.
(g)There are no outstanding or unpaid judgments against Lessee.
(h) Lessee has furnished to Lessor a copy of current financial statements and
except for transactions directly related to, or specifically contemplated by, this Agreement and
transactions heretofore disclosed in writing to Lessor, since the dates 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 fiscal year during the term of this Agreement 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 unaudited) shall be prepared in accordance with generally
accepted accounting principles consistently applied and fairly present the financial condition and
kresults of operations of Lessee at the dates and for the periods indicated therein.
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(i) 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-lending or similar laws.
0) Lessee acknowledges and agrees that the 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 paying, to the extent of available funds, amounts, if
any, required to be rebated to the United States pursuant to Paragraph 148(f) of the Code.
(k) Lessee acknowledges and agrees that the total annual rental payments in each
fiscal year shall be charged against and paid from the general revenues for such fiscal year.
(1) The aggregate principal amount of short-term financing obligations incurred by
Lessee pursuant to Section 2 of "The City and County Government Development Bond and
Short-Term Financing Amendment" to the Constitution of the State of Arkansas does not exceed
five percent (5%) of the assessed value of taxable property located within the municipality, if
Lessee is a municipality, or two and one-half percent (2'/s%) of the assessed value of taxable
property, if the Lessee is a county, as determined by the last tax assessment completed before the
obligations were incurred by the Lessee under this Agreement.
�. Lessee acknowledges that the representations, covenants and warranties set forth
in Paragraphs 60), 6(k), 6(1) 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
warranties at any time.
7. Tax Exemption.Lessee acknowledges that Lessor has agreed to enter into this
Agreement on the condition that a certain exemption from non-deductibility of interest expense
under Section 265(b) of the Code is available. Said exception is subject to certain conditions
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.
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(d) The Agreement is hereby designated 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 Property: Encumbrances. Upon acceptance of the Equipment
covered by an Equipment Schedule hereto by Lessee hereunder and satisfaction of all conditions
precedent for purchase and 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
situated, 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 Lessee 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 item of Equipment at all times free and clear from all
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 or 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.
�r 10.Use: Repairs. Lessee shall use the Equipment in a careful manner and shall comply
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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 furnish all parts, mechanisms and devices required
therefore.
11.Taxes. 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 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 the after-tax cost of the tax, assessment, fee or other
governmental charge paid by the Lessor.
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12.Exemption from Federal Taxation. The Lessor has entered into this Agreement
g ent
contemplating that the interest portion of rental payments will be exempt from income taxation.
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 103(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 affiliated group of
which Lessor is a member) then Lessee agrees to pay rents with an interest factor equal to the
maximum rate of interest which, under applicable law, Lessor is permitted to charge,
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 subsequently 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 Lessee 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 administrative action is taken by the Lessor to
secure the tax treatment intended to be taken by Lessor under this Agreement or any other lease
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which in the opinion of Lessor's counsel will be determinative of the tax treatment under this
Agreement whether such action is successful or not. Lessee's pro-rata 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 with 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, or
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:
(a) each item of the Equipment is of a size, design, capacity and manufacture
selected by Lessee;
(b) Lessee is satisfied that the Equipment, and each component thereof, is suitable
for its purpose;
(c) Lessor is not the manufacturer of the Equipment nor a dealer in property of
such kind;
(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 power, 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
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• in good operating order, repair, condition, and appearance, and keep the same protected 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 minimum 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 may be a supplier) approved by the
manufacturer providing for the maintenance of the Equipment(or specified items of Equipment).
In the event Lessee is requested to enter into 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; and Lessor hereby authorizes such other parry
thereto to accept the direction of Lessee in respect to such Maintenance Agreement. All
maintenance and service 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 or any component thereof which
interferes with the normal and satisfactory 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 readily removable by Lessee without causing material damage to the Equipment).
17.Disclaimer of Warranties; Exclusion of Liabilily., LESSOR, NOT BEING THE
MANUFACTURER OF THE EQUIPMENT NOR THE MANUFACTURER'S AGENT,
MAKES NO EXPRESS OR IMPLIED WARRANTY OF ANY KIND WHATSOEVER WITH
RESPECT TO THE EQUIPMENT, INCLUDING BUT NOT LIMITED TO; THE
MERCHANTABILITY OF THE EQUIPMENT OR ITS FITNESS FOR ANY PARTICULAR
PURPOSE; THE DESIGN OR CONDITION 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 WITH THE REQUIREMENTS OF ANY LAW, RULE, SPECIFICATION OR
CONTRACT PERTAINING THERETO; PATENT INFRINGEMENT; OR LATENT
DEFECTS. AS TO LESSEE, LESSOR LEASES THE EQUIPMENT "AS IS." Lessor 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 any 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 name any warranty, representation or other claim
enforceable against the manufacturer. Lessor assumes no responsibility for shipment, delivery,
• installation or maintenance and all claims of Lessee with respect thereto, whether for delay,
9
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
absolute 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 the 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 an 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 destruction.
19.Insurance. Lessee shall keep the Equipment insured against loss, theft, damage or
destruction from every cause whatsoever for not less then full replacement value thereof, and
shall carry public liability and property damage insurance covering the Equipment and its use
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 termination, 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.Indemnification. Lessee assumes liability for, and hereby agrees to indemnify,
protect, keep harmless and defend Lessor, its agents, employees, officers, directors, successors
and assigns from and against, any and all liabilities, obligations, losses, damages, injuries,
claims, demands, penalties, actions, costs and expenses, including reasonable court costs and
attorneys' fees, of whatsoever kind or nature, arising out of, connected with, or resulting from
this Agreement, the Equipment or its manufacture, selection, transportation, delivery, possession,
10
• use, condition (including, but not limited to, latent and other defects and whether or not
discoverable by Lessee or Lessor), operation, ownership, leasing or return, regardless of where,
how and by whom operated, or any failure on the part of Lessee to perform or comply with any
conditions of this Agreement. Lessee's obligations contained in this paragraph shall survive the
termination or cancellation of this Agreement or the expiration of the term of any schedule.
In addition to other payments to be made pursuant to this Agreement, Lessee shall
indemnify and hold Lessor harmless from and against, and shall pay Lessor, as additional
payment, on demand, an amount equal to, all license, assessments, sales, use, real or 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 authority 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.Prepayment Purchase. At the end of the lease term for Equipment covered by an
Equipment Schedule, provided all rental payments 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 may 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 (or any substitute amortization schedule 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
(c)the cost of any repairs, modifications, or adjustments required as a result of the
inspections, examinations,or certifications referred to in(b)above.
Such option shall be exercisable by written notice to Lessor not less than thirty
(30) days prior to the prepayment purchase date. The closing shall be held on the specified
prepayment purchase date, or on the next following business day if such day is a Saturday,
Sunday or legal holiday, at the Principal Offices of Lessor, at which time Lessor shall deliver to
Lessee a release 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 Schedule 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 Equipment Schedule for which payment in full has not
• been made.)
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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 and 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 Arkansas 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 shall dissolve or become insolvent or bankrupt, commit any act of
bankruptcy, 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 whereby any of the Equipment or any substantial part
of Lessee's property may be taken or restrained;
(f) 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
understanding;
(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
five (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
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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 cancellation of this
Agreement as to all items of Equipment. Said default and cancellation, 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
Agreement to be immediately due and payable without notice or demand;
(b) cancel 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 designate, in the condition set forth above;
(e)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 Agreement;
(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 as Lessor may determine, 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 reasonable notice thereof,
(g)proceed by appropriate action either at law or in equity to enforce performance
by Lessee of the applicable covenants of this Agreement or to recover damages for the breach
thereof; or
(h) exercise any and all rights accruing to Lessor under any applicable law upon a
default by Lessee, including but not limited to those provided in Ark. Code Ann. § 4-9-101 et
seq. 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:
L (i) all unpaid rent or other sums which are due and payable up to the date the
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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 proceeding. 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 remedies of Lessor under this Agreement are intended to be exclusive,
but each shall be cumulative and in addition to 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
• notice 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.Reports. Lessee shall:
(a) immediately notify Lessor of any materially defective, improper, or
malfunctioning item of Equipment,the nature of the 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 Lessee 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 demand, for all attorneys' fees, court costs, and other
fees,costs,and expenses incurred by Lessor in connection 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.
•
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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 terminated 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 may or are required to be given
to another party hereunder shall be in writing, and 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:
BancorpSouth Equipment Finance
division of BancorpSouth Bank
P. O. Box 15097
302 Second Avenue
Hattiesburg, MS 39404-5097
Attention: Ms. Elaine D. Temple, President
If to the Lessee:
City of Batesville, Arkansas
500 East Main
Batesville,AR 72501
A duplicate copy of each notice, certificate or other communication given under this
Agreement to any 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.
30.Consents. The consent or approval by any party to or of any act by the other party
requiring such consent or approval shall not be deemed to waive or render unnecessary consent
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
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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.Counter2arts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original for all 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 of its
terms modified only by written consent 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) executing a Purchase
Order for such equipment; (ii) executing an acceptance certificate of the equipment; and (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 binding
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 described in the delivery order, and supporting documentation such as, e.g.,
opinions of counsel and insurance certificates.
34.Severabili1y 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 provision 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
terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid,
and enforceable.
35.Persons Bound by Agreement. The conditions, terms, provisions, and covenants
contained in this Agreement shall apply to, inure to the benefit of, and be binding upon Lessee,
and its successors, assigns, agents, and servants. The Lessee has no interest in the Equipment
other than the possession and use thereof during the lease 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, inure to the benefit of, and
be binding upon Lessor, and its successors, assigns, agents, and servants, and, where the context
16
so requires, any person accepting an assignment of the rights of Lessor hereunder, an
g g d 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.Assi nment. (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 employees.
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 security
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
time to time. During the term of this Agreement, Lessee shall keep a complete 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, Lessor will cause
written notice of such assignment to be sent to Lessee and, upon receipt of such notice of
assignment, 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.
No further action will be required by Lessor or by Lessee to evidence the assignment. No such
assignment shall become effective without recordation of the assignment in said "book entry
system."
37.Waivers: Cumulative Rights. No waiver by Lessor of any default shall be deemed
to be a waiver of any other then existing 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.
38.GoveminQ Law. The substantive laws of the State of Arkansas shall govern the
validity, construction, enforcement, and interpretation of this Agreement, the rights and remedies
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
17
releasing any obligation or default 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 permitted
by applicable law, will be paid by Lessee to Lessor on demand.
40.Survival. Lessee's obligations contained in this Agreement shall survive the
termination or cancellation of this Agreement or the expiration of the term of any schedule.
41.Special Stipulations. Any amendment to standard language will be set forth in
Exhibit A attached hereto ("Special Stipulations").
42.Maximum 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 Rate. "Maximum
Permissible Rate" means the rate of interest on an amount that if exceeded could, under law,
result in civil or criminal penalty being imposed on the Lessor or result in the 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.
The parties have caused this Agreement to be executed by their duly authorized
representatives as of the day and year first above written.
LESSOR: LESSEE:
BancorpSouth Equipment Finance, a division City of Batesville,Arkansas
of BancorpSouth Bank
By: By:
Title: Title:
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