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HomeMy WebLinkAboutRES 736 Draft 01 1980-1984 ~1_.~. County of Hawaii -State of Hawaii Resolution WHEREAS, Section 10-11 of -the County Charter provides that any contract, lease, or other obligation requiring payment of funds from appropriations of a later fiscal year or of more than one fiscal year be approved by resolution of the Council; and WHEREAS, the County wishes to acquire a new high-band radio communications system to be used by the Fire Department and other agencies and desires to pay for the system in 60 monthly installments; and WHEREAS, the County is financing the purchase of this system through Marquette Lease Services, Inc., by Lease Agreement, with option to purchase, dated August 25, 1983, a copy of which is attached hereto, marked Exhibit "A," and by this reference incorporated herein; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAII that it approves this Lease Agreement dated Auqust 25, 1983, with Marquette Lease Services, Inc., which provides for 60 monthly payments, and that sufficient funds shall be appropriated in future fiscal years to cover the obligation of the County. Dated: Hilo, Hawaii, September 21, 19.83 INTRODUCED BY: ' ~~ U"y,'~-t-0 COUNCIL MEMBER, COUNTY OF HAWAII COUNTY COUNCIL County of Hawaii Hilo, Hawaii I hereby certify that the foregoing RESOLUTION was by the vote indicated to. the right hereof adopted by the COUNCIL of the County of Hawaii on September 21, 1983 .................................................................................................................. ;; ATTEST: ~~~~ .~. COUNTY CL K~ AIRMAN & SIDING OFFICER ROLL CALL VOTE AYES N Dahlberg X De Luz. III x Domingo X Fujii X Hale X Kawahara X Lai X Schulte X Chr_ Vamaahiro X Reference: i`~- M.B. No. RESOLUTION N0. '736 83 . ~ LEASE W1T~OPTION TO PURCHASE AGREEMENT .` THIS LEASE MITH OPTION TO PURCHASE AGREEMENT dated ae of August 25 1983 (the Lease), by end between Marquette Lease Services, Inc. a corporation duly organized end existing under the laws of the state of Minnesota ae the lessor (Lessor) whose address is Sixth and Marquette Minneapolis. MN554$0 end the (;OUntY of Hawaii ae lessee (Lessee), whose eddresa is Cnunty Ruildina. 25 Auouni Street. Hilo. Hawaii (the Statel 96720_.___ _ _ ,; M I T N E s s E T H: NHEREAS, Lessee ie authorized by law to acquire such items of personal property as ere needed to carry out ire governmental end proprietary functions, and to acquire such personal property by entering into lease with option to purchase agreements; and NHEREAS, Lessee hee determined that it ie necessary for it to acquire under this Lease certain items of personal property described herein es Equipment; and WHEREAS, Lessor is willing to acquire such items of Equipment and to lease them to Lessee pursuant to this Leese; NON THEREFORE, in the point and mutual exercise of their powers, end in.coneideretion of the mutual rnvenante herein contained, the parties hereto recite and agree ee follows: ARTICLE I DEFINITIONS AND E1(HIBITS section 1.1. Definitions. Unlace the context otherwise requires, the terms defined in this Section shell, for all purpoaea of-ttFiis Leese end E~lhibita attached hereto have the meanings herein specified. Contractor: Each of the menufecturere or vendors from whom Lessee (or Laeaor et Lesaea'e request) has orders o~r~I order or with whom Lesaea (or Lessor et Lesaee'e request) hee contracted or will contract for the manufacture, delivery and/or instelletien of the Equipment. E ui ant: The personal property described in the attached Exhibit A which ie being leased with option to purchesaee purauent to this Leese. E ui ant Coat: Nith respect to the Equipment, the contract price to be paid to a Contractor therefor upon a every in accordance with the purchase order or contract therefor, end any additional amount due a Contractor by reason of any change orders thereto approved by Lessee. Fiscal Year: The twelve-month flacal period of Lessee, which commences an JUIy 1 in every year end ends on a o owing June 30 Independent Counsel: An attorney duly admitted to the practice of law before the highest court of the S to to vFo is not ~u7l-time employee of Leaeor or Lessee. Interest: The portion of any Rental Payment designated es end comprising interest es shown in the attached~Fii~it R. Nat Proceeds: Am ineurence proceeds or condemnation ewe rd, paid with respect to the Equipment, remaining after paymen erefrom of ell expenses incurred in the collection thereof; end, if end et such time ee Lessee elects to provide self-ineurence under sec tione 6.1, 6.2 end 6.3, any monies held in any self-insurance fund of Lessee which may lawfully be expended for the purpose for which such self-inau ranee ie provided. Non-a ro rietion: Tha failure of the COUntV. of_ Hawaii __ to appropriate money for any Fisce ear o esaee sufficient for a con roue per orme~~Tiis ease y Lessee, es evidenced by the passage of en ordinance or resolution apecificelly prohibiting Lessee from performing ire obligetiona under Chia Lease, and from using any monies to pay the Rental Payments due under this Lease fora designated Fiscal Year end all subsequent Fiscal Years. Payment Dete: The date upon which any Rental Payment is due end payable es provided in Exhibit B. Permitted Encumbrances: Ae of any particular time: (i) liens for taxes and assessments not then dalinquen , or w rc essee may, purauent to provisions of Section 7.3 hereof, permit to remain unpaid, (ii) this lease end emend manta hereto, (ill) Lessor's interest in the Equipment, and (iv) any mechanic's, laborer's, meterie Loan's, supplier's or vendor's lien or tight not filed or perfected in the manner prescribed by law, -1- mtb er than any lien arising throuph~a Contractor or which Lessee may, pursOuent to Article VIII heredf, permit to remain unpaid. (\J1 Principal: The portion of any Rental Payment designated as principal in the attached Exhibit 8. Purchase Dption Price: With respect to the Equipment, as of the Payment Dates specified in the attached c xhibit C, the amount so designated end set forth apposite such date in the attached Exhibit C. Rental Payment: The payment due from Lessee to Lessor on each Payment Dete during the Term of this Lease, ~s shown an Exhibit B. S ecifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered the quipmen rom a ontractor. State and Federal Law or Laws: The Constitution and any law of the State and any rule or regu le tion of ;any agency ar po iti ca sub ivision of the State; and any law of the United States, and any rule or regulation-_ mf any Federal agency. Term of this Lease or Lease Term: The period during which this Leese is in effect es specified in Section L.1. Section 1.2. Exhibits. The following Exhibits are attached to and by reference made a part of this Lease: ~~ Exhibit A: A description of the Equipment being leased by Lessee pursuant to this Lease, including the serial number thereof which shall be inserted when available. Exhibit B: A schedule indicating the date and amount of each Rental Payment coming due during the Lease Term and the amount of each Rental Payment comprising Principal and Interest. Exhibit C: A schedule showing as of each Payment Date the price at which Lessee may exercise its option to purc~~ssor's interest in the Equipment in accordance with Article X. Exhibit D: A Certificate of Acceptance of lessee indicating that the Equipment has been delivered and insta a rn accordance with the Specifications and has been accepted by Lessee; the date on which Rental Payments shown in Exhibit B shall commence; that Lessee has sufficient monies available to pay all Rental Payments coming due during its then current Fiscal Year; that Lessee has obtained the insurance or provided the self-insurance on or with respect to the Equipment required by this Lease; and certifying the absence of litigation. Exhibit E: An opinion of counsel to Lessee as to the powers of Lessee; the validity, execution and delivery oT'~Fiis lease and various related documenfs; the absence of litigation; and related matters. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1. Representations Covenants and Marrantiea of Lessee. Lessee represents, covenants and warrants as follows: (a) Lessee is a CDUf1L political subdivision a the State, du y organize en existing un er a ons itu ion an aws o the State. (b) Lessee is authorized under the Constitution and laws of the State to enter into this Lease and the transactions contemplated hereby, and to perform all of its obligations hereunder. (c) The officers of Lessee executing this Lease have been duly authorized to execute and deliver this Lease under the terms and provisions of a resolution of Lessee's governing body, or by other appropriate official action. (d) In authorizing and executing this Lease, Lessee has complied with all public bidding and other State and Federal laws applicable to this Lease and the acquisition of the Equipment by Lessee. (e) Lessee will not pledge, mortgage or assign this Lease, or its duties and obligations hereunder to any other person, firm or corporation except as provided under the terms of this Lease. (f) The Equipment will be used during the Term of the Lease only to carry out the governmental or proprietary purposes of Lessee. (g) Upon delivery and installation of the Equipment, Lessee will provide to Lessor a completed and executed copy of the Certificate of Acceptance attached hereto as Exhibit D. _p_ • (5) Upon the execution of this Lease, Lessee will provide to Lessor en opinion of ita~lagei counsel -in the form attached hereto of^\xhibit E. O Section 2.2. Repreeentetlons, Covenants end warranties of Lessor. Lessor represents, covenants end warrants ee follows: (a) Lessor is a corporation duly organized, existing and in good standing under end by virtue of the laws of the State of Minnesota, end is duly qualified end in good atending as a foreign corporation a uthotized to transact business in the Ste te; has power to enter into this Lease; is possessed of full power to own end hold reel and personal property, end to lease the same; end has duly authorized the execution end delivery of this Lease. i (b) Neither the execution end deliveryof this Lease, nor the fulfillment of or compliance with the terms end conditions thereof, nor the consummation of the transactions contemplated thereby, conflicts with or results in a breech of the terms, conditions or provisions of any restriction or any agreement or instrument to which Lessor ie now a party or by which Lessor ie bound, constitutes a default under any of the foregoing, or reaulte-in the creation or imposition of any lien, charge or encumbrance whatsoever upon - any of the property or easeta of Lessor, or upon the Equipment except Permitted Encumbrances. ARTICLE III LEASE OF EgUIPMENT Section 3.1. Leese. Lessor hereby leases the Equipment to lessee, end Lessee hereby leases the Equipment from Lessor, upon tiTe ~rme and conditions set forth in this Lease. Section 3.2. Possession and E^njo~men-t-. Lessor hereby covenants to provide Lessee during the Term of this Lease with the quta use en enloyme~ of the Equipment, end Lessee shell during the Term of the Lease peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except es expressly set forth in this Leese. Lessor will, et the request of Lessee end at Lessee's coat, join in any legal action in which Leases asserts its right to such possession end enjoyment to the extent Lessor lawfully may do so. Section 3.3. Lessor Access to Equipaent. The Lessee agrees that Lessor shell have the right et ell reasonable times to examine en inspect the Equipment. Lessee further agrees that Lessor shell have such .rights of eccesa to the Equipment as may be reasonably neceasery to cause the proper maintenance of the Equipment in the event of failure by Lessee to perform its obligetiona hereunder. ARTICLE IY TERtl OF LEASE Section 4.1. Leese Term. This Leese shell ba in effect for a Term commencing upon its date of execution end ending on the date ~e lest Rental Payment is due and payable as shown in Exhibit B, unless terminated by Lessee at the end of any Fiacel Year of Lessee occurring prior thereto in accordance with Section 4.2, or unless otherwise terminated ea provided in Section 4.6. Section 4.2. Ternination b Leaeee. In the sole event of Non-appropriation, Lessee shell have the right to terminate this Lease, in woe but not in pert, at the end of any Fiscal Year of Lessee, in the manner and subject to the terms specified in this Section and Sections 4.4 and 4.5. Lessee may effect such termination by giving Lessor a written notice of termination end by paying to Lessor any Rental Payments which ere due and have not been paid et or before the end of its then current Fiacel Year. lessee shell endeavor to give notice of termination not less then sixty (60) days prior to the end of such Fiscal Yeer, end shell notify Lessor of -any anticipated termination. In the event of tarminetion of this Lease as provided in this Section, Lessee shell deliver possession of the Equipment to Leaser in accordance with Section 12.3, end shell convey to Lessor or releeae ire interest in the Equipment within ten (10) days after the termination of the Leese. Section 4.3. Intent to Continue Lease Term• A ro rletiona. Lessee presently intends to continue this Leese far its entire arm an o pay .e en a aymen s specs ied in Exhibit R. Lessee will include in its budget request for each Fiscal Yeer the Rental Payments to become due in such Fiscal Year, and will use all reasonable end lawful means et ire diaposel to secure the appropriation of money for such Fiscal Yesr sufficient to pay the Rental Payments coming due therein. Lessee reasonably believes that monies in an amount sufficient to make ell such Rental Payments can end will lawfully be appropriated and made available for this purpose. Section 4.4. Effect of Termination. Upon termination of this Leese as provided in Section 4.2, lessee shell not be reaponaib a or the payment of any additional Rental Payments coming due with respect to succeeding Fiscal Years, but if Lessee hea net delivered possession of the Equipment to Lessor in accordance with Section 12.3 and conveyed to Lessor or released ire interest in the Equipment within ten (10) days after the termination of the Leese, the termination shall nevertheless be effective, but Lessee shell be responsible for the payment of damages in en amount equal to the amount of the Rental Payments thereafter coming due under Exhibit B which ere attributable to the number of days after such ten (10) day period during which Lessee fails to take such ectiona end for any other lase suffered by Leeaor ea a result of Lessee's failure to take ouch ectiona as required. -3- 'Secticn14.5. Nonaubetitution.~ If this Leaee is terminated by Les•-~~ in accordance with Section 4.2, lessee agrees not to pur-c asi~eTi:....or rant personal property to perfotm~. same functions ea, or functions taking the place of, those performed by the Equipment, and agrees net to permit such functions to be performed by ire own employeae or by any agency or entity affiliated with or hired by Lessee, for a period of Three Hundred Sixty-Five (365) days; provided, however, that these restrictions shell not be applicable in the event the Equipment shell be sold by Lessor and the amount received from ouch sale, less ell coats of such sale, is sufficient to pay the then applicable Purchase Option Price as set forth in Exhibit C; or if or to the extent that the application of these restrictions would effect the validity of this Leese. . Section 4.6. Termination of Leaee Term. The Term of this Lease will terminate upon the occurrence of the first of the following even s: (a) the termination thereof by Lessee in accordance with Section 4.2; (b) the exercise-by Lessee of its-option to purchase Lessor's`nterest in. the Equipment pursuant to Article X; (c) a default by Lesaea and Lessor's election to terminate this Lease pursuant to Article XII; or (d) the payment by Lessee of all Rental Peymenta authorized or required to be paid by Lessee hereunder. ARTICLE Y RENTAL PAYMENTS Section 5.1. Rental Peymenta. Lessee agrees to pay Rental Peymenta during the Term of the Leese, in the amounts end on the dates specified in Exhibit B. All Rental Payments shell be paid to Lessor et its offices at the address specified in the first paragraph of this Leaee, or to such other person or entity end et such other places as Lessor may from time to time designate by written notice to Lessee. Lessee shell pay the Rental Payments exclusively from monies legally available therefor, in lawful money of the United States of America, to Lessor or, in the event of assignment of the right to receive Rental Psymenta by Lessor, to its assignee. Section 5.2. Current Ex enae. The obligations of Lessee under this~Leesa, including its obligation to pay the Rental Paymen a ue wi respect to the Equipment, in any Fiscal Year for which this Leese is in effect, shell constitute a current expense of Leeaee for such Fiscal Yeer and shall not constitute an indebtedness of Lessee within the meaning of the Constitution and laws of the Stara. Nothing herein shell rnnatitute a pledge by Lessee of any taxes or other monies, other then monies lawfully~approprieted from time to time by or for the benefit of Lesaea in~the annual budget of the ~OUTIt Of Hawaii and the proceeds or Nat Proceeds of the Equipment, to the payment of any Ren a aymen or o er smoun coming due hereunder. Section 5.3. Interest Com onent. A portion of each Rental Payment is paid ea and represents the payment of Interest. Exhibi se s or a Interest component of each Rental Payment. Section 5.4. Rental Pa manta to be Unconditicnel. Except es provided in Section 4.2, the obligation of Lessee to make Ren a aymen a ar any o er peymen a required hereunder shell be absolute and unconditional in ell events. Notwithstanding any dispute between Lessee end Lessor or any other person, Lessee shall make all Rental Peymenta end other payments required hereunder when due and shell not withhold any Rental Payment or other payment pending final resolution of ouch dispute nor shell Lessee assert any right of set-off ar counterclaim against its obligation to make such Rental Payments or other payments required under this Lease. Lessee's obligation to make Rental Peymenta or other payments during the Lease Term shell not be abated through accident or unforeseen circumstances. However, nothing herein shell be construed to release Lessor from the performance of its obligations hereunder; end if Leaser should fail to perform any such obligation, Lessee may institute such legal action against Lessor es lessee may deem necessary to compel the performance of such obligation or to recover damages therefor. ARTICLE VI INSURANCE AND INDEMNIFICATION Section 6.1. Liabilit Insurance. Unless self-inaursnce is provided by Lessee, es evidenced bye written certificate specifying a erme~an amounts thereof delivered to Lessor, upon receipt of possession of the Equipment, Lessee shell take such measures ae may be necessary to insure that any liability for injuries to or death of any person or damage to or loos of property arising out of~or in any way relating to the condition or the operation of the Equipment or any part thereof, is covered by a blanket or other general liability insurance policy maintained by Lessee. The Net Proceeds of ell such insurance or self-insurance shell be applied toward extinguishment ar satisfaction of the liability with respect to which any Net Proceeds may be paid. Section 6.2. Property Insurance. Upon receipt of possession of the Equipment, lessee shell have end assume the risk of lose with respect thereto. Unless self-inaursnce is provided by Lessee, es evidenced by a written certificate specifying the terms and emounte thereof delivered to Lesacr, Lessee shell procure and maintain continuously in affect during the Term of the Leaee, ell-risk insurance, (including flood end -4- earthquake coverage), subject only A~"he standard exclueiona contained in the policy, in ouch amount Aa will destroyedsendutoipey the applicable Purchase OptionoPrice of1theeEquipment.~~chfineurence meyrbefprovided by a rider to an existing policy or under a separate policy. Such insurance may be written with cuetomery rod the bprompt urepair,hrestoretione or oreplacement of thefEquipmente orq to etheypurchesec of the aEqu ipment,les provided in Section 6.6. Any Nat Proceeds not needed for those purposes shell be paid to Lessee. Section 6.3. Worker's Cam eneati~o i Ienucerc~ficate specifyingythettermsaandaemaunta thereof delivered to provided by Lessee es evi ence y Lessor, Lessee shell carry Worker's Compenaetian Insurance covering ell employees on, in, near or about t e Equipment, end, upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Term of the Lease. Section 6.4. R virementa For All-Insurance. All insurance policies (or riders) required by this Attic e stateaboftthenUnitedn5tetea endequelifiedstondo bueinessein the Satate; ends shell cantainh a prov eion that the least tenh(10)ndeyeabeforarthevcancelletion orarevisionwbecomesgeffectivettendnshell nemehLessee endPLessor es insured parties. Lessee shell deposit with Lessor policies (and riders) evidencing any such insurance procured by it, ore certificate or certificates of the respective insurers 1sesseegshall furnishsto Lessor avid encef that end effect. Before the expiration of any such policy (or rider), suchpineurance ise o longer obtainable in ryihichteventoLesseeoahell1notifytLessorvoflthia fectls Article, unleae Section 6.5. Lessee's Negligence. Lessee easumea ell risks and liabilities, whether or not covered by arson or damage to any insurance, for loss- o~mege tom Equipment end for injury to or death of any p property, whether such injury or death be with respect to agents or employees of Lessee or of third parties, bydthe negl gent pconduct of Leaeee,titaeofficera,roemployeeatend agent y.o Leaseeaherebynasaumesxresponeibility for end egreea to reimburse Lessor for ell liebilitlea, obligations; losses, damages; penalties, claims, ectiona, costs end expeneee (including reesone6le attorney's fees) of whatsoever kind end nature, imposed on, incurred by or esaerted against Lessor that in any way relate to or arias out of a claim, suit or procee ing to sea and agents, to the based in whole or in part upon the negligent conduct of Lessee, its officers, amp Y maximum extent permitted by law. ._ __ ._ Section 6.6. Dane a to or Destruction oP E i ant. If, after delivery of the Equipment to Lessee, all- ot any part of the quipmen is oat, sto en, eatro((yye or damaged beyond repair, Lessee shell replace the aeme et Lessee's sole coat end expen ro rietenendorsemen30) difslesaee fails eornrefuseasto replace the Equipment substituted in this Leese by eDP D et its o lion, declare the applicable Purchase Option Price of the within the required period, Lessor may, P Equipment set forth in Exhibit C immediately due end payable, and Lessee shell be obligated to pay a same. The Net Procseda of ell insurance payable with respect to the Equipment shell be available to Lessee and shall be used to discharge Lessee's obligation under this Section. On sucWIPHOUTn NARRANT ES,SeEXPRESStOR lIMPLIEDa Lessee thereupon shell become entitled to the Equipment AS IS, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE, except that the Equipment shall not be subject to any lien or encumbrance created by or arising through Lessor. ARTICLE VII OTHER OBLIGATIONS OF LESSEE Section 7.1. Uae• Permits. Lessee shell exercise due cere~ in the inatelletion, use, operation end meintenence of the quipment, and shall not install, use or operate the Equipment improperly, carelessly, in violation of any State and Federal Lew or for a purpose or in a manner contrary to that contemplated by this for the inatelletion, operation, possession end Lease. lessee shell obtain all permits and licensee necessary use of the Equipment. Lessee shell comply with ell State end Federal Laws applicable to the installation, use, possession end operation of the Equipment, end if compliance with any such State end Federal Law requires changes or additions to be made to the Equipment, such changes or additions shall be made by Lessee et its expense. Section 7.2. Maintenance of E i ant b Leeaee. Lessee shell, et its own expense, maintain, preserv and keep the Equipmen in goo repair, wor ing or er end condition, and shell from time to time make a Y P ment in such condition. Lessor shall have no repeira end replacements neceaeer to kee the Equip responsibility for any of these repeira or replacements. Section 7.3. Taxeea Oellrtaxestra~ndnothenc~hargesnof enyiklnc wnQcr, arexet any time elewfullylassessedhor Section, Lessee shall p Y ment or any pert thereof, or which become due during the Term of levied against ar with respect to the Equip this Leese with respect therees~ weterhe steamel electricityMhheet, powers telephone, andacthet chercfes incurred shell also pay when due all g , a lien on the in the operation, meintenence,overnmentel body for publio improvementsmthat may belsecuredlbyssessments en charges lawfully made by any g _ Equipment; provided that with respect to special asaeasmenta or other governmental charges that may lawfully e -5- paid in instellmente over a period nyeere, Lessee shell be obligated to ^ay only ouch inatellmenta~ae are' required to be paid during the Ter,., of Chia Leese ea and when the same ~ oma due. Lessee shell not e \ / ift, franchise, required to pay any federal, state or local income, inheritance, estate, succession, transfer, g' gross receipts, profit, excess profit, capital eto ck, corporate, or other similar tax pay eb la by Lessor, its successors or assigns, unless ouch tax is made in lieu of or as a substitute for any tax, assessment or charge which is the obligation of Lessee under this Section. Lesaea may, et its own expense and in its own name, in goad fei th ermitethea taxes,heaseasments eormother utility end other charges and, in the event of any such contest, may p charges so contested to remain unpaid during the period of such contest sndment o penl sucheitem uthasintereat shell notify Lessee that, in the opinion of Independent Counsel, by noine~~ or en art thereof will ba subject of Lessor in the Equipment Gill be materially endangered or the Equip Y P Lesaorswithffulllsecurity-egai et anytloseswhichameypresultyfrom nonhpayment, in form aetisfactoryeto Lessor ,de $action 7.4. Advenocea.ated toes takeesuchaactionpesfmay bay ecesse y tog cure aeuchefailureArincludingsthe may, but shall not a g retenof 10X permennum ord rhea meximuml rate permitted by laweywhichever ievlesee fromatheddetetofltheradv ncetto the data of repayment. ARTICLE VIII TITLE Section 8.1. Title. During the Tarm of thin Leese, end so long ae Lessee ie not in default es provided in Article XII, of gaI- title to the Equipment end any end all repairs, replacements, substitutions end modifications to it shell ba in Lfull endUunen umbered llegel title to the Equipment ahellr pasan tos Lessor0d nd~ Section 4.6, Cleusea (e) and (c), Lessee shell have no further interest therein. In such event Lessee shall execute and deliver to Leaser suc terminetionaof Lesaee'syintereat therein,eend uponprequest by Lessortshell deliverEpoasessionoof the Equipment to Lessor in accordance with Section 12.3. Upon termination of this Lease for any of the reasons specified in Section 4.6, Cleuaes (b) end (d), Lessor's security or other interest in the Equipment shell terminate, end Lessor shell execute end deliver to Lessee such documents as Leases may request to evidence the termination of Lessor's security or other interest in the Equipment. Section 8.2. $ecurit uinmentet~theLproceedsa thereof end allalrepaira,u replecementst substitutionafend Commercial Code in a q P r a ment of all modifications thereto or thereof made pursuant to Section 8.5, in order to secure Lessee's p Y performedybynLessee. duLesseehwill rjainf w th Lessor in executingrsuch financing tstatementsa olr other documents EquipmentPe1Ifrrequestedtby Leasor9O Lessee shelltconepicuously mark the Equipmentlwitheapproprieterl tteringe labels or tags, end maintain such markings during the Term of the Leese, so ea clearly to disclose Lessor's security interest in the Equipment. create Section 8.3. Liens. During the Term of this Lease, Lessee shell not, directly or indirectly, r incur, assume or su er to exist any mortgage, pledge, lien, charge, encumhronce or claim on or with Btsitstown the Equipment, other then the respective rights of Lessor end Lessee as herein provided end Permitted led a lien, Encumbrances. Except ea expressly provided in Section 7.3 and this Article, Lessee shell prompt y, expense, take such action ea may be necessary duly to discharge or remove any such mortgage, p 9 expense incur ed by Lessor sin orderhto diachargel or riemove anyysuch mortgegeeapledga, lienbu charge gsencumb ranee or claim. Section 8.4. Inatelletion of Leaeee'e E i ant. Lessee may at any time end from time to time, in s sole discretion en a i a own expense, ins a other items of equipment in or upon the Equipment, wah d hmetemhe shall ba identified by toga or other symbols affixed thereto as property of Lessee. All such item so identified shell remain the sole property of Lessee, in which Lessor shell have no interest, thel Equipment resulting ~rom then in tellation,d modific tione ar hremovel aof any such itemaY a Nothing sin gthis ease or aleaseawith option from purcheselncontrect, Dora sub je tl atop eravendor ~a tlien$ortlaecur ty agreement ~nae security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shell attach to any part of the Equipment. Section 8.5. ModifoicateoLePeirsUi repnecementsee subati to tionssendnmod~ficationsetohelllorteny ofktheeperts to the Equipment, e thereof. All such work end any pert or component used of installed to make a repair or es a replacemen , substitution or modification, shell thereafter comprise pert of the Equipment end be subject to the provisions thanh thoses authorizedw underht a provisions of State end Federalm Le or those icontempleted by rthis please;tend Equipmentm immedieely~ptiorotoo the ycanmencementshofl such work~.eluA^yh Property tforswhichn a hrepleceme t for -6- substitution le made pursuant to this Section may ba disposed of by Lesse^~in such manner end on ouch terms ee are determined 6y Lessee. Lesar~,ill not permit any mecheni c's or of ~ lien to be eetebliahed or remain against the Equipment for labor oi~.eteriels furnished in connection with ~wiiy repair, replacement, eubsti to ti on or modification made by Lessee pursuant to this Section; provided that if any ouch lien is established end Lessee shell first notify Lessor of Lesaea's intention to do so, Lessee may in good faith contest any lien filed or established against the Equipment, end in such event may permit the items so contested to remain undischarged end unsatisfied during the period of such contest end any appeal therefrom unless Lessor shell notify Lessee that, in the opinion of Independent Counsel, by nanpsyment of any auchitem the interest of Lessor in the Equipment will be materially endangered or the Equipment or any pert thereof will be subject to lose or forfeiture, in which event Lessee shell promptly pay and cause to be satisfied end discharged ell such unpaid items or provide Lessor with full security against any such loss or forfeiture, in form satisfactory to Lessor. Lessor will cooperate fully with Lessee in any such contest, upon the request end et the expense of Lessee. Section 8.6. Personal Pro art The Equipment is and shell et.all times be and remain personal property. notwithatending the a quipmen or any pert thereof may be or hereafter become in any manner affixed of attached to or embedded in or permanently rested upon real property or any building thereon or attached in any manner to whet is permanent 6y means of cement, plaster, nails, bolts, screws or otherwise. ARTICLE IX EQUIPMENT WARRANTIES Section 9.1. Selection of E i ment. The Equipment and the Contractor have been selected by Lessee, and Lessor shall have no responaz i zty in connection with the selection of the Equipment, its suitability for the use intended by Lessee, the acceptance by the Contractor or its sales representative of the order submitted, or any delay ar failure by the Contractor or its salsa repreaentetive to manufacture, deliver or install the Equipment for use by Lessee. Lessee authorizes Lessor to add the serial number of the~Equipment to Exhibit A when available. Section 9.2. Installation end Maintenance of E i ant. Lessor shell have no obligation to install, erect, test, inapec , servzce or maintain a quipmen un er any circumstances, but such actions shell be the obligation of Lessee or the Contractor. Section 9.3. Contractor's Warranties. Leeaor hereby assigns to Lessee for and during the Term of this Leese, all of its in eras 1n a on rector's warranties and guarantees, express or implied, issued on or applicable to the Equipment, and Lessor hereby authorizes Lessee to obtain the customary services furnished in connection with such warranties and guarantees at Lessee's expense. Section 9.4. Patent Infrin ement. Lessor hereby assigns to Lessee for end during the Term of this Lease all of its interes in pe en in emnity protection provided by any Contractor with respect to the Equipment. Such assignment of patent indemnity protection by Lessor to Lessee shall constitute the entire liability of Lessor for any patent infringement by Equipment furnished pursuant to this Leese. Section 9.5. Disclaimer of Warranties. THE EgUIPMENT IS DELIVERED AS IS, AND LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITH E P LIE , AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED OY LESSEE OF THE EgUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TD THE EQUIPMENT. ARTICLE X OPTION .TO PURCHASE Section 10.1. When Available. Lessee shell have the option to purchase Lessor's interest in the Equipment on any Paymen e e or he than applicable Purchase Option Price set forth in Exhibit C, but only if Lesaee,ie not in default under this Lease, and only in the manner provided in this Article. Section 10.2. Exercise of 0 tion. Leesea shall give notice to Lessor of its intention to exercise its option net leas then it y eys prior to the Payment Dete on which the option is to be exercised end shell deposit with Lessor on the date of exercise an amount equal to all Rental Payments end any other amounts then due or past due end the applicable Purchase Option Price set forth in Exhibit C. The closing shell be on the Payment Dete on which the option is to be exercised et the office of Lessor. Section 10.3. Release of Leaeor'e Interest. Upon exercise of the Purchase Option by Lessee, Lessor shall convey or release to Lessee, all of its right, title end/or interest in end to the Equipment by delivering to Lessee such documents ae Lessee deems necessary for~this purpose. ARTICLE XI ASSIGNMENT, SURCEASING, MORTGAGING AND SELLING ' Section ll.l. Aasi nment 6 Leeaor. All of Lessor's right, title and/or interest in and to this Lease and the Equipment may a assigns en reassigned in whole or in pert to one or more assignees or aubeasignees -~- by ,Lessor et any time, without the consent of Lesaea. Such assignment shell not be affective with respect .to Lessee unless end until Lessee eha_!!~heve received a duplicate original ofi`he document by which the assignment is made. V (~/1 ' Section 11.2. Aaeignaent and Subleaeinc by Leeeee. Neither this Leese nor Lessea'e interest in the Equipment may be assigned by Lessee without the written consent of Lessor. However, the Equipment may be subleased by Lessee, in whole or in pert, without the consent of Lessor, subject, howa4er, to each of the following conditions: (i) Thia Lease and the obligation of Lessee to make Rental Payments hereunder, shell remain ob li gatione of Lessee. (ii) The aubleaeee shell eseume the obligations of Lessee hereunder to the extent of the interest subleased. (iii) Lessee shell, within thirty (30) days after the delivery thereof, furnish or~-causE to be furnished to Lessor a true end complete copy of such sublease. ~~ (iv) No sublease by Lessee shell ceuae the Equipment to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State. (v) No sublease shell cause 'the Interest component of the Rental Payments due with respect to the Equipment to become subject to Federal income taxes. Section 11.3. Restriction an Nort a e or Sele of E i ant b Leeeee. Except as provided in Section 11.2, Lessee will no mor gage, sa , assign, rans er or convey a quipment or any portion thereof during the Term of this Leese, or remove the aeme from ita~boundariea, without the written consent of Lessor. ARTICLE XII EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events of Default Defined. The following shell be "events of default" under this Leese end the terms "events o e au en eau shell mean, whenever they.are used in this Lease, with respect to the Equipment, any one or more of the following events: _ (i) Failure by Lessee to pay any Rental Payment ar other payment required to be paid under this Leese et the time specified herein end the continuation of said failure for a period of seven (7) days after telephonic or telegraphic notice given by Leaeor that the payment referred to in such notice has not been received, such telephonic or telegraphic notice to be subsequently confirmed in writing, or after written notice. (ii) Failure by Lesaea to observe end perform any covenant, rnndition or agreement an its pert to be observed or performed, other then ea referred to in Clause (i) of this Section, for a period of thirty (30) days after written notice specifying ouch failure and requesting that it ba remedied has been given to Leases by Lessor, unleea Lessor shell agree in writing to en extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreaeone6ly withhold its consent tq en extenaionof such time if corrective action ie instituted by Lessee within the applicable period end diligently pursued until the default ie corrected. (iii) The filing by~Lesaee of a voluntary petition in bankruptcy, or failure by Lessee promptly to lift any execution, garnishment ar attachment of such consequence as would impair the ability of Lessee to terry on ire governmental or proprietary function or adjudication of Lessee as a bankrupt, or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval bye court of competent jurisdiction of a petition applicable to lessee in any proceedings instituted under the provisions of the Federal Bankruptcy Statute, ae emended, or under any similar acts which may hereafter be enacted. The provisions of this Section 12.1 and Section 12.2 era subject to the following limitation: if by reason of force ma,jeure Lessee is unable in whole or in pert to carry out its obligations under this Lease with respect con inuance o euc inebr i y. a arm orce majeure" as used herein shell mean, without limitation, the following: acts of God; etrikea, lockouts or other labor disturbances; acts of public enemies; orders or restreinta of any kind of the government of the United States of America or the State or their respective depertmenta, agencies or officiele, of any civil or military authority; insurrections; riots; landslides; earthquakes; fires; storms; dtoughta; floods; explpeions; breakege.or accident to machinery, transmission pipes or canals; or any other ceuae or event not teeaonably within the control of Lessee end not resulting from its negligence. Lessee agrees, however, to remedy with ell reasonable dispatch the cause or causes preventing Lessee from carrying out its obligations under this Lease; provided that the settlement of strikes, lockouts and other labor disturbances shell be entirely within the discretion of Lessee end Lessee shall not be required to make settlement of etrikea, lockouts end other labor disturbances by acceding to the demands of the apposing party or parties when ouch course is in the judgment of Lessee, unfavorable to Lessee. -B- Section •12.2. Rmedies on Def.++lt. Whenever any event of default *-ferrad to in Section 12.1 hereof shell have happened en a continui '+i th respect to the Equipment, Leaso[ X311 have the right, et its option end without any further demand or no rice, to take one or any combination of`cne following remedial steps: (i) Lessor, with or without terminating this Lee ee, may declare ell Rental Payments due ar to become due during the Fiscal Yeer in effect when the default occurs to ba immediately due end payable by Lasaea, whereupon such Rental Peymenta shall ba immediately due end payable. (11) lessor, with or without terminating this Leese, may repoeaesa the Equipment by giving lessee written notice to deliver the Equipment to Lessor, whereupon Lessee shall do so in the manner provided in Section 12:3; or in the event Leesae fails to do so within ten (10) days after receipt of such potica, Leeaor may enter upon Lessee's premises where the Equipment is kept end take possession of the Equipment and charge leases far costa incurred in repoaseaeing the Equipment, including reaeoneble attorneys' fees. Lessee hereby expressly waives any demegea occasioned by such repossession. If the Equipment or any portion of it has been destroyed or damaged beyond repair, Lessee shall pay the applicable Purchase Option Price of the Equipment, ea set forth in Exhibit C (leas credit for Net Proceeds), to Lesacr. Natwithatending the fact that Lessor hoe taken possession of the Equipment, Lessee shall continue to be responsible for the Rental Payments due during the Fiscal Year then in effect. If the Leese has not been terminated, Leeaor shell return the Equipment to Lessee et Lessee's expense when the event of default is cured. .. (iii) If Lessor terminates this Leese and takes possession of the Equipment, Lessor shall, within thirty (30) days thereafter, use its best efforts to sell the Equipment or any portion thereof in e commercially reaeoneble manner et public or private sale in accordance with applicable State laws. Lessor shall apply the proceeds of such aele to~pay the following items in the following order: (a) all costs incurred in securing poasesalon of the Equipment; (b) ell expenaea incurred in campletinq the sale; and (c) the balance of any Rental Payments owed by Lessee during the Fiscal Year then in effect. Arty sale proceeds remaining after the requirements of Claueea (a), (b) end (c) have been met may be retained by Lessor. (iv) If the proceeds of sale of the Equipment ere not sufficient to pay the balance of any Rental Payments owed 6y Lessee during the Fiscal Year then in effect, lessor may take any other remedy available et law or in equity to require Lessee to perform any of ire obligations hereunder. Section 12.3. Return of E i sent. Upon the expiration qr termination of this Lease prior to the payment of all Rental Paymen s in eccor once with Exhibit R, Lessee shall return the Equipment to Leeaor in the condition, repair, appearance end working order required in Section 7.2, in the following manner ea may be specified by Lessor: (i) by delivering the Equipment at Lessee's cost end expense to such place within the State as Lessor shell specify; or (ii) by loading such portions of the Equipment es ere considered movable at Lessee's coat end expense, on board auch~carrier as lessor shall specify end shipping the same, freight prepaid, to the place specified by Lessor. If Lessee refuses to return the Equipment in the manner designated, Lessor may repoeaesa the Equipment end charge to Leesae the costs of such repossession or pursue any remedy described in Section 12.2. Section 12.4. No Rmed Exclusive. No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive, an every such rmedy shell be cumulative and shell be in addition to every other remedy given urxier this Lease. No delay ar omieaion to exercise any right or power accruing upon any default shell impair any such right ar power or shall be construed to be a waiver thereof but any such tight end power may be exercised from time to time and ae often ea may be deemed expedient by Lessor or its assignee. ARTICLE XIII ADMINISTRATIVE PROVISIONS Section 13.1. Notices. All notices, certificates, legal opinions or other communications hereunder shell be sufficiently given and shell be denied given when delivered or deposited in the United States mail in registered farm with postage fully prepaid to the addressee specified on the first page hereof; provided that Lessor and Lessee, by notice given hereunder, may designate different addreasea to which subsequent notices, certificates, legal opinions or other communigations will be sent. Section 13.2. Financial Information. During the Term of the Lease, Lessee annually will provide Lessor with current finencia s a amen s, u ge s, proof of appropriation for the ensuing Fiacel Yeer end such other financial information relating to the ability of Lessee to continue this Leese as may be requested by Lessor or its eseignee. Section 13.3. Bindin Effect. This Lease shell inure to the benefit of end shell be binding upon Lessor end Leesae and their respec iva auccesaora end assigns. Section 13.4. Severabilit In the event any provision of this Lease shell be held invalid or unenforceable by any cou~anpetent jurisdiction, such holding shell not invalidate or render unenforceable any other provision hereof. Section 13.5. Amend~ente Chen ee and Modifications. This Leese may be emended or any of its terms modified only by wri en ocumen u y au orize , execu a end delivered by Leeaor and Lessee. -9- ~~ Section 17.6. Ce.~tiona. Thy ^~eptiona or headings in this Leese e~ ^~or convenience only end in no Nay define, limit ar descri~ e e sco{:~)r intent of any provision, grticle, ;:~_ion or Cla use of this Lease. Section 13.7. Further Aeaurencee end Corrective Inatru~enta. Lessor end Lesaee agree that they will, from time to time, execute, acknowledge end deliver, or cause to be executed, acknowledged and delivered, ouch supplements hereto and such further inatrumente as may reasonably be required for correcting any inadequate or incorrect description of the Equipment hereby leased or intended so to be, for indicating the Canmencement Date end for carrying out the exp teased intention of this Leese. Section 13.8. Execution in Counter arts. This Lease may be simultaneously executed in several counterparts, each o w is s a e en original end all of which shell constitute but one and the same instYUment. Section 13.9. Applicable Law. This Lease shell be governed by and construed in accordance with the laws of the State. IN MITNESS WHEREOF, Leeaor has ceuaed this Lease to be executed in its corporate name by its duly authorized officers and sealed with its corporate seal; end Lessee has caused this Lease to ba executed in its name by its duly authorized officers, ea of the date first above written. Ma Lease Services. Inc. Lessor (SEAL) And By Its Vice President Its The Countv of Hawaii _ Lesaee By Ito _Mayor (SEAL) qnd Its -10- ' EJDIIBIT A O EQUIPMENT O The Equipment which ie the subject of the attached Leese rith Option to-Purchase Agreement ie es foil ore: quantity Description Serial Number (1) Fire Department communications system (Equipment listing attached) _11_