1989-01676-Resolution No. 89-007 Recorded 1/25/198989-01676
1 REVIEWED
i-c,VcCUNSEt
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, UKtuON
A Resolution Authorizing the
Lease of a John Deere
Front -End Loader.
RESOLUTION NO. 89 -007
0605 0458
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1. That Deschutes County, an Oregon municipal
corporation, lease from First Interstate Bank of Oregon, N. A.,
hereinafter referred to as "Lessor," such items of personal
property shown on the form of lease marked Exhibit "A," attached
hereto and by this reference incorporated herein, upon the terms
and conditions set forth therein.
Section 2. That Lois Bristow Prante, Commissioner, Tom
THroop, Commissioner, acting together with Dick Maudlin, Chairman
of this municipal corporation be, and they hereby are, autho-
rized, directed and empowered, in the name of this corporation,
to execute such lease.
Section 3. That Dick Maudlin, Chairman, be hereby autho-
rized, directed and empowered, in the name of this municipal
corporation, to do or cause to be done all such further acts and
things as they shall deem necessary, advisable, convenient, or
proper in connection with the execution and delivery of any such
lease and in connection with or incidental to the carrying of the
same into effect, including, without limitation on the scope of
the foregoing, the execution, acknowledgement, and delivery of
any and all instruments and documents which may reasonably be
required by Lessor under or in connection with any such lease.
Section 4. I, Dick Maudlin, Chairmen of the Board of County
Commissioners of Deschutes County, Oregon, a municipal corpora-
tion organized under the laws in the State of Oregon, do hereby
certify that the foregoing is a full, true and correct copy of
the resolution of the Board of Commissioners of the said munici-
pal corporation, duly and regularly passed and adopted at a
meeting of the Board of Commissioners of said corporation which
was duly and regularly called and held in all respects as
required by law at the office thereof on the 18th day of January,
1989, at which meeting a majority of the Board of Commissioners
of said corporation was present and voted in favor of the said
resolution. I further certify that said resolution is still in
full force and effect and has not been amended or revoked and
that the specimen signatures appearing below are the signatures
of the officers authorized to sign for this corporation by virtue
of the said resolutions.
1 - RESOLUTION NO. 89 -007
DATED this
day of
001' O4 ^9
1989.
OARD OF •UNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
TOW PRANTE, Commissioner
TOM/ OOP,,V Commissioner
Recording S cretary DICK MAUDLIN, Chairman
2 - RESOLUTION NO. 89 -007
r
First Interstate Bank
LEASE- PURCHASE CONTRACT
O 5 0860
THIS LEASE - PURCHASE CONTRACT (the "Contract ") is entered into by the parties named below on tha date set forth below:
The lessor/vendor is:
FIRST INTERSTATE BANK OF OREGON, N. 9.
Equipment Leasing Department, —3
P. 0. Box 3131
Portland, OR 97208
(the "Bank ")
The lessee /purchaser is:
DESCHUTES COUNTY
Administration Building
1164 N. W. Bond Street
Bend. OR 97701
(the "Municipality ")
The date of this Contract is:
SECTION 1. LEASE - PURCHASE,
(a) Subject to the terms and conditions set forth below and for and in consideration of the Lease - Purchase Payments and the
covenants and agreements set forth in this Contract, the Bank hereby leases to the Municipality, and the Municipality hereby hires and leases
from the Bank, the items of personal property described in Exhibit A attached hereto (the "Equipment ").
(b) In connection with and in consideration of the foregoing lease of the Equipment, the Bank does further grant unto the
Municipality an option to purchase the Equipment, such option to be exercisable at the price, in the manner and on the terms and conditions
set forth in Section 17 of this Contract.
SECTION 2. I RM OF LEASE. The term of the lease of the Equipment shall commence on the Commencement Date set forth
below and shall expire on the Expiration Date set forth below unless sooner terminated as provided in Sections 6 or 19 of this Contract:
Commencement Date: Expiration Date;
SECTION 3. LEASE - PURCHASE PAYMENTS. Subject to the limitations set forth below, the Municipality hereby agrees to pay to
the Bank the Lease - Purchase Payments set forth in Exhibit B attached hereto and by this reference made a part of this Contract, which
Lease - Purchase Payments shall consist of principal (the "Principal Installments ") plus interest on the unpaid Principal Installments at the
Interest Rate described in Section 4 of this Contract (the "Interest Installments ") and which Lease - Purchase Payments shall be payable in the
amounts and on the dates set forth in Exhibit B (each an installment Payment Date ").
SECTION 4. INTEREST RATE,,
(a) The unpaid Principal Installments shall bear interest at the rate per annum set forth below (the "Base Rate "), subject to
adjustment from time to time as provided in the following Sections 4(b), 4(c) and 4(d) (said Base Rate as adjusted from time to time pursuant
to Sections 4(b), 4(c) and 4(d) of this Contract shall be called the "Interest Rate ").
The Base Rate per annum is
percent( %).
(b) The Base Rate is calculated using tax assumptions based on the Tax Reform Act of 1986 to produce the Bank's fully
taxable equivalent yield on the Principal Installments provided for under this Contract. The Bank's fully taxable equivalent yield on Principal
Installments under this Contract is % per annum (the "Fully Taxable Equivalent Yield "). Federal legislation may be
considered in the future, which may revise key variables employed by the Bank in the calculation of the Base Rate in order to produce the
Fully Taxable Equivalent Yield. In the event there is any amendment (an "Amendment ") to the Internal Revenue Code of 1986, as amended
(the "Code "), which (a) changes the Bank's Federal Tax Rate, or (b) otherwise causes the Bank's Fully Taxable Equivalent Yield to be
affected (increased or decreased), then the Interest Rate under this Contract shall be changed (increased or decreased) to obtain the Fully
Taxable Equivalent Yield on the Principal Installments provided for under this Contract.
As used herein, the term "Federal Tax Rate" shall mean the highest then existing federal income tax rate to which the Bank
may be subject under the Code.
Any such changes in Interest Rate shall be determined in such reasonable manner as shall be selected by the Bank in order to
maintain its Fully Taxable Equivalent Yield.
#2009A 11 -88
— 1 —
005 0461
As of the end of the Bank's tax year in which any such Amendment becomes applicable, and within 90 days thereafter, the
Bank shall deliver to the Municipality its written notice of the Interest Rate as adjusted pursuant to this Section 4(b) and a revised Exhibit B
setting forth the Lease - Purchase Payments required under this Contract based on the Interest Rate as so adjusted, together with such
supporting financial statements and calculations as the Municipality shall reasonably request. and such adjusted Interest Rate shall be
applicable to all Principal Installments which remain outstanding as of the first day of the Bank's tax year (or part thereof) in which such
Amendment takes effect, unless or until a further adjustment shall again be required pursuant to this Section.
(c) If the Municipality has designated its obligation under this Contract as a qualified tax - exempt obligation pursuant to
Section 265 (b) (3) of the Code, then the Base Rate is calculated based on the Bank's ability to deduct that portion of the interest expense
allocable to the Interest Installments. In the event the Municipality's obligation under this Contract loses its status as a qualified tax - exempt
obligation as a result of the Interest Installments provided for in this Contract becoming includable for federal tax purposes in the gross
income of the Bank, then the terms of the following Section 4(d) shall apply. In the event the obligation under the Contract loses its status as
a qualified tax - exempt obligation for any other reason, then the Interest Rate under this Contract shall be increased to obtain the Fully
Taxable Equivalent Yield on the Principal Installments provided for under this Contract. In addition, the Municipality shall reimburse the Bank
for any costs incurred by Bank, including interest assessments or penalties imposed by a taxing authority, resulting from the loss of the
qualified tax - exempt status of the obligation under the Contract ".
(d) In addition to any adjustments that may be required pursuant to the preceding Section 4(b), in the event the Interest In-
stallments provided for in this Contract become includable for federal income tax purposes in the gross income of the Bank, then from and
after the date upon which the Interest Installments first become so includable in gross income. the outstanding Principal Installments provided
for under this Contract shall bear interest at the Fully Taxable Equivalent Rate of To per year (the "Fully Taxable
Equivalent Rate"). Interest at the Fully Taxable Equivalent Rate shall be computed on the basis of a 365- or 366 -day year, as applicable, and
the actual number of days elapsed.
(e) Notwithstanding anything expressed or implied in this Contract to the contrary, at no time shall the outstanding Principal
Installments bear interest at a rate in excess of the maximum rate permitted by law.
SECTION 5. LAIM FOR TAX - EXEMPT STATUS UNDER ORS 307.112.
(a) It is hereby acknowledged and agreed by the Municipality and the Bank that the Lease- Purchase Payments payable
under this Contract have been negotiated and established to reflect the savings resulting from the exemption of the Equipment from property
taxes under the laws of the State of Oregon.
(b) The Municipality hereby agrees to file a claim for exemption with respect to the Equipment pursuant to ORS 307.112, as
amended. In the event the Municipaltiy fails to duly file such a claim for exemption, or in the event the Equipment fails to qualify for such
exemption, or in the event such exemption is lost due to a change in use of the Equipment, the Municipality agrees to pay or to reimburse the
Bank (together with interest thereon at the then applicable Interest Rate), promptly upon demand, any and all property taxes owing with
respect to the Equipment under the laws of the State of Oregon resulting from the failure of the Equipment to be or remain exempt from such
taxes.
(c) The Municipality agrees to pay, or to reimburse the Bank (together with interest thereon at the then applicable Interest
Rate), promptly upon demand, any and all property taxes owing with respect to the Equipment under the laws of the State of Oregon as a
result of the loss of such tax - exempt status due to the termination or expiration of this Contract before July 1 of any year.
SECTION 6. ANNUAL APPROPRIATIONS: TERMINATION OF CONTRACT,
(a) It is expressly understood and agreed by the Bank that the Municipality's obligation to pay any Principal Installment or
Interest Installment provided for under this Contract shall be subject to the due appropriation by theMunicipality, in accordance with its
budgeting process, of funds sufficient to pay such installments at the times and in the amounts provided in this Contract; provided that, once
funds have been so appropriated with respect to any particular Principal Installments or Interest Installments, the Municipality's obligation to
pay such installments shall be and remain absolute and unconditional. The Municipality represents and warrants that it intends to take such
action as may be necessary or advisable to appropriate sufficient funds to pay when due all Lease- Purchase Payments provided for
hereunder. The Municipality covenants and agrees that it will immediately notify the Bank in writing in the event the Municipality, for any
reason, fails to appropriate funds sufficient to pay any Lease - Purchase Payments provided for under this Contract, which notice shall specify
the Principal Installments and Interest Installments for which funds have not been or will not be duly appropriated.
(b) This Contract shall automatically terminate in the event the Municipality, for any reason, fails to appropriate sufficient
funds to pay when due and in full any Principal Installment or Interest Installment, any such termination to be effective on the last Installment
Payment Date on which a Principal Installment and /or Interest Installment is due and for full payment of which the Municipality has duly
appropriated sufficient funds. Upon any such termination, the Municipality shall promptly surrender the Equipment to the Bank as provided in
Section 12 of this Contract.
SECTION 7. INSPECTION QF EQUIPMENT BY MUNICIPALITY. The Municipality shall inspect the Equipment within 48 hours
after receipt thereof. Unless the Municipality within that period of time gives written notice to the Bank specifying any defect in or other proper
objection to the Equipment, the Municipality agrees that it shall be conclusively presumed, as between the Bank and the Municipality, that the
Municipality has fully inspected and acknowledged that the Equipment is in good condition and repair, and that the Municipality is satisfied
with and has accepted the Equipment in such condition and repair.
SECTION 8. INSPECTION BY BANK AND SUFPLIEj3,_The Bank shall, at any reasonable time, have the right to enter into and
upon the premises where the Equipment may be located for the purpose of inspecting the same or observing its use.
SECTION 9. ALTERATIONS. The Municipality shall have the right to make alterations, additions or improvements to the Equipment,
so long as the value of the Equipment is not reduced thereby. All additions and improvements of whatsoever kind or nature made to the
Equipment shall immediately become the property of the Bank and subject to the terms of this Contract.
SECTION 10. MAINTENANCE AND REPAIR. The Municipality, at its own cost and expense, shall keep the Equipment in good
repair, condition and working order and shall furnish any and all parts, mechanisms and devices required to keep the Equipment in good
mechanical and working order.
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SECTION 11. LOSS AND DAMAGE. The Municipaltiy assumes and shalt bear the entire risk of Toss and damage to the Equipment
from any and every cause whatsoever. No loss or damage to the Equipment or any part of it shall impair any obligation of the Municipality
under this Contract which shall continue in full force and effect.
In the event of loss or damage of any kind whatever to the Equipment, or any part thereof, the Municipality, at the Bank's
option, shall either:
(a) Place the same in good repair, condition and working order; or
(b) Replace the same with like property in good repair, condition and working order; or 00 85 0A6
(c) Pay the Bank therefor in cash the "Stipulated Loss Value" as set forth below. Upon such payment this Contract shall
terminate with respect to the Equipment or part thereof so paid for and the Municipality thereupon shall become entitled to such Equipment.
As used herein, the phrase "Stipulated Loss Value" shall mean the unpaid Principal Installments plus accrued and unpaid
interest thereon at the then applicable Interest Rate to the date of payment to the Bank.
SECTION 12. SURRENDE)q OF EQUIPMENT. Upon the expiration or earlier termination of this Contract, the Municipality shall
return the Equipment to the Bank free and clear of all liens and encumbrances and in good repair, condition and working order, ordinary wear
and tear resulting from proper use thereof alone excepted. In the event the Equipment is not in good repair, condition or working order, the
Municipality at its own cost and expense shall, by the expiration or earlier termination of this Contract, restore the Equipment to good repair,
condition and working order. Surrender of the Equipment may be accomplished in the following manner as may be specified by the Bank:
(a) By delivering the Equipment at the Municipality's expense to such place as the Bank shall specify within the county in
which the same was delivered to the Municipality or to which the same was moved with the written consent of the Bank, or
(b) By loading the Equipment at the Municipality's cost and expense on board such carrier as the Bank shall specify and
shipping the same, freight collect, to the destination designated by the Bank.
SECTION 13. INSURANCE, The Municipality, at its own expense, shall insure the Equipment for such risks and in such amounts as the
Bank shall require with carriers acceptable to the Bank, shall maintain a loss payable endorsement in favor of the Bank affording to the Bank such
additional protection as the Bank shall require, and shall maintain liability insurance satisfactory to the Bank. All such insurance shall name the
Bank as insured, and the olicies shall provide that they may not be cancelled or altered without at least 30 days' prior written notice to the Bank
and the loss payable endorsement shall provide that all amounts payable by reason of loss or damage to the Equipment shall be payable only to
the Bank. The Municipality shall deliver to the Bank evidence satisfactory to the Bank of all such insurance. If loss or damage occurs, insurance
proceeds will be paid to the Bank and applied as directed by the Bank in accordance with Section 11 of this Contract.
SECTION 14. MUNICIPALITY'S FAILURE TO MAINTAIN INSURANCE. Should the Municipality fail to maintain insurance as herein
provided, then the Bank shall have the right, after demand upon the Municipality, and without releasing the Municipality from any obligation
hereunder, to effect the same, and to pay and expend whatever amounts in its absolute discretion it may deem necessary therefor. All sums so
paid or expended by the Bank shall be added to and become a part of the Principal Installments due and payable by the Municipality and shall
bear interest at the then applicable Interest Rate.
SECTION 15. WARRANTIES, The Municipality acknowledges that the Equipment is of a size, design, capacity and manufacture selected
by the Municipality. THE BANK IS NOT A MANUFACTURER OF THE EQUIPMENT OR A DEALER IN SIMILAR EQUIPMENT AND HAS
NOT MADE AND DOES NOT MAKE ANY REPRESENTATION, WARRANTY, OR COVENANT, WITH RESPECT TO THE CONDITION,
QUALITY, DURABILITY, SUITABILITY OR MERCHANTABILITY OF THE EQUIPMENT IN ANY RESPECT, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED. THE MUNICIPALITY ACCEPTS THE EQUIPMENT "AS
IS." The Bank will, however, take any steps reasonably within its powerto make available to the Municipality any manufacturer's or similar warranty
applicable to the Equipment. The Bank shall not be liable to the Municipality for any liability, loss or damage caused or alleged to be caused directly
or indirectly by the Equipment by any inadequacy thereof or deficiency or defect therein or by any incident whatsoever in connection therewith.
SECTION 16. INDEMNITY. The Municipality shall indemnify the Bank against, and hold the Bank harmless from, any and all claims,
actions, suits, proceedings, costs, expenses, damages and liabilities, including attorneys'fees at trial and on appeal, arising out of, connected with
or resulting from the Equipment, including without limitation the manufacture, selection, delivery, possession, use, operation or return thereof.
SECTION 17. MUNICIPALITY'S PURCHASE OPTION. The Bank hereby grants unto the Municipality the option to purchase the
Equipment, said option to be exercisable at the times, in the manner and for the price set forth in this Section 17. The Municipality may exercise
such purchase option at any time prior to the expiration or termination of this Contract by giving not less than 30 days' written notice to the Bank
of the exercise of such option, which notice shall specify the date upon which the Equipment shall be purchased (which date shall not be later than
the Expiration Date specified in Section 2 hereof). The purchase price of the Equipment shall be an amount equal to (i) all unpaid Principal
Installments; plus (ii) accrued and unpaid interest thereon at the then applicable Interest Rate to the date of purchase; plus (iii) either: (A) in the
event such purchase option is exercised prior to the Expiration Date specified in Section 2 hereof, the amount of One (1) % of all unpaid
Principal Installments, or (B) in the event such purchase option is exercised at the end of the lease term, the amount of OD Q0
Upon the payment of such purchase price, the Bank shall deliver to the Municipality a bill of sale (or certificate of title, if applicable) conveying title
to the Equipment to the Municipality, subject to such liens, encumbrances and charges as may have come into existence during the term of this
Contract (other than any lien, encumbrances or charges resulting from any affirmative act of the Bank). THE PURCHASE OF THE EQUIPMENT
BY THE MUNICIPALITY SHALL BE "AS IS" WITHOUT WARRANTY OF ANY KIND FROM THE BANK, INCLUDING BUT NOT LIMITED
TO ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 18. OTHER CONVNANTS OF MUNICIPALITY. The Municipality covenants and agrees as follows:
(a) The Equipment will at all times be kept within the jurisdictional limits of the Municipality and will not be removed therefrom
without the prior written consent of the Bank.
(b) The Equipment will at all times be used solely and exclusively by the Municipality for its governmental purposes. The
Municipality will not allow the Equipment to be used by any person other than a governmental unit, regardless of whether such use is pursuant
to a formal or informal arrangement.
0463
(c) The Municipality shall, promptly upon the request of the Bank, take any and all actions necessary or desirable to preserve
and protect the rights and interests of the Bank under this Contract and in and to the Equipment. including but not limited to the execution and filing
of Uniform Commercial Code financing statements and the labeling of the Equipment so as to give notice of the Bank's interest therein.
(d) The Municipality will, promptly upon the request of the Bank, take any and all actions necessary or desirable in orderto insure
that the Interest Installments shall be and remain excludable for federal income tax purposes from the gross income of the holder of this Contract,
Including but not limited to providing information and filing any reports required to be filed with the Internal Revenue Service.
SECTION 19. DEFAULT. The occurrence of any of the following events shall constitute a default hereunder:
(a) The nonpayment by the Municipality for a period of thirty days of any sum provided for under this Contract; or
(b) The default by the Municipality under any other term, covenant or condition of this Contract which is not cured within
ten days after notice thereof from the Bank; or
(c) The filing of a petition in bankruptcy by the Municipality under the Federal Bankruptcy Code or any similar act which may
hereafter be enacted; or the commencement by the Municipality of proceedings under any insolvency or similar law; or an assignment by the
Municipality for the benefit of its creditors.
Upon the happening of any of the above events, the Bank may, in its discretion and without notice to or demand uponthe Municipality:
(i) Take possession of the Equipment and lease the same or any portion thereof, for such period, rental and to such persons
as the Bank shall elect and apply the proceeds of any such renting, after deducting all costs and expenses incurred in connection with the recovery,
repair, storage and renting of the Equipment, in payment of the obligations due from the Municipality to the Bank under the Contract, with the
Municipality remaining responsible for any deficiency; or -
(ii) Take possession of the Equipment and sell the same or any portion thereof at public or private sale and without demand
or notice of intention to sell, and apply the proceeds of any such sale, after deducting all costs and expenses incurred in connection with the
recovery, repair, storage and sale of the Equipment, to the balance of the obligations due under the Contract from the Municipality to the
Bank, with the Municipality remaining responsible for any deficiency; or
(iii) Pursue any other remedy available at law or in equity.
All remedies, either under this Contract or by law, or otherwise afforded to the Bank, shall be cumulative and not alternate.
SECTION 20. EFFECT OF WAIVER. No delay or omission to exercise any right, power or remedy accruing to the Bank upon any
breach or default by the Municipality under this Contract shall impair any such right, power or remedy of the Bank nor shall it be construed to
be a waiver of any such breach or default or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall
any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of the Bank of any breach or default under this Contract, or any waiver on the
part of the Bank of any provision or condition of this Contract, must be in writing signed by the Bank and shall be effective only to the extent
specifically set forth in such writing.
SECTION 21. ATTORNEYS' FEES. In the event of suit or action under this Contract, the prevailing party shall be entitled to recover
at trial or on appeal such sum as the court may adjudge reasonable as the prevailing party's attorneys' fees incurred therein, in addition to
statutory costs and necessary disbursements.
SECTION 22. OWNER$HIPt The Equipment is and shall at all times be and remain the sole and exclusive property of the Bank, and
the Municipality shall have no right, title or interest in or to the Equipment except as expressly set forth in this Contract.
SECTION 23. J•IOTIES. Any notices permitted or required to be given hereunder or in connection herewith shall be in writing and
mailed, first -class mail, postage prepaid, to the Bank or the Municipality (as appropriate) at their respective addresses first set forth above or
at such other addresses as may be subsequently specified in writing.
SECTION 24. FINANCING LEASE. It is expressly understood and agreed that this Contract is intended to be, and for all purposes
shall be interpreted and construed as, a financing lease and not a true lease.
SECTION 25. GOVERNING LAW. This Contract shall be governed by and construed in accordance with the laws of the State of
Oregon.
SECTION 26. AMENDMENTS. This Contract may not be amended, modified or supplemented by any action, course of conduct or
dealings, or inaction or acquiescence on the part of either or both parties hereto, but may only be amended, modified or supplemented by
means of a writing duly executed and delivered by the Bank and the Municipality.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have executed and delivered this
Contract as of the date first set forth above.
THE MUNICIPALITY
DESCHUTES COUNTY
(NAME OF MUN AUTY(
By 712eLl,/'s^.
Its ,,�
By ! lVl( 1t'
Its q
6„
Its
—4—
Approved as to form:
ATTORNEY FOR THE MUNICIPALITY
FIRST INTERSTATE BANK OF OREGON, N. A.
By Municipal Leasing Officer
Its
EXHIBIT A
DESCRIPTION OF EQUIPMENT
One (1) Articulated Type
Front -End Loader
00 5 0464
Serial Number or
1512LIaliagadsilt
