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O-09-01 02/12/2001VILLAGE OF LEMONT ORDINANCE � 06! r7 I AN ORDINANCE AUTHORIZING ADOPTION OF A LEASE - PURCHASE AGREEMENT WITH KANKAKEE FEDERAL SAVINGS BANK ADOPTED BY THE PRESIDENTAND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT Published in pamphlet form By authority of the President And Board of Trustees of the Village of Lemont, Counties Of Cook, Will and DuPage, Illinois this jai`'' day of %i ,2001. ORDINANCE AN ORDINANCE AUTHORIZING ADOPTION OF A LEASE/PURCHASE AGREEMENT WITH KANKAKEE FEDERAL SAVINGS BANK WHEREAS, on October 9, 2000, the Village Board approved the purchase of a 2001 International 4900 Dump Truck through the State Purchasing Program for $74,330.00 and WHEREAS, it is necessary to adopt a formal lease agreement to complete delivery of the vehicle. THEREFORE, BE IT ORDAINED by the President and Board of Trustees that the attached Lease/Purchase Agreement with Kankakee Federal Savings Bank. PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL AND DUPAGE, ILLINOIS, on this lots" day of 4 ru , 2001. AYES NAYS PASSED ABSENT John Benik Debby Blatzer Keith Latz Connie Markiewicz Rick Rimbo Mary Studebaker 44 l EEN SMOLLEN, Village Clerk r,� Approved by me this !� day of �� ,�,,th, _ 2001. Attest: , Village CHARLENE SMOLLEN, Village Clerk Approved to form: JOHN ANTONOPOULOS,Village Attorney ident KKankakee Federal Savings Bank 1708 S. Philo Rd. (217) 337 - 6829 Urbana, Illinois 61802 January 18, 2001 Joel Evert Department of Public Works Village of LeMont 14574 127th Street LeMont, I L 60439 RE: Lease /Purchase 2001 International 4900 Dump Truck Dear Ms Evert: Enclosed are the Municipal Lease and Option Agreement documents to Lease /Purchase the Truck mentioned above from Prairie International Trucks, Inc.. I have indicated where signatures are required on the Agreement and related Exhibits. Exhibit "H" Legal Counsel is an optional document. Please have the documents executed by the authorized signor and return to our office the documents, current financial statement and budget along with your first payment of $26,757.08 which includes $300 for documentation. Upon receipt of the documents and your acceptance of the equipment we will pay the total invoice due Prairie International Trucks, Inc. Thereafter, you will receive (2) annual payment notices (30) days in advance for $26,457.08 to be paid on March 5th, each year. If you should have questions or concerns, do not hesitate to call my office at 217 -344- 2037. Please return the signed documents and requested information to: Kankakee Federal Savings Bank, 1708 S. Philo Rd., Urbana, IL 61802. Sincerely, KANKAKEE F i VINGS BANK W. Eric Volkmann Vice President WEV /wev Enclosures MU N C IPAL LEASE AND OPTION AGREEMENT Agreement #534468 Dated March 5, 2001 Lessor: Kankakee Federal Savings Bank 1708 South Philo Road Urbana, Illinois 61802 Lessee: Village of LeMont Address: 14574 127th Street City, St, Zip: LeMont, Illinois 60439 This Municipal Lease and Option Agreement (the "Agreement") entered into between Kankakee Federal Savings Bank ( "Lessor") a Corporation organized under the laws of the United States of America, and Village of LeMont ( "Lessee ") a body corporate and politic duly organized and existing under the laws of the State of Illinois ( "State "); WITNESSETH: WHEREAS, Lessor desires to lease the Equipment, as hereinafter defined, to Lessee, and Lessee desires to lease the Equipment from Lessor, subject to the terms and conditions of and for the purposes set forth in this agreement; and WHEREAS, Lessee is authorized under the Constitution and Laws of the State to enter into this Agreement for the purpose set forth herein; NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE >I COVENANTS OF LESSEE Lessee represents, covenants and warrants, for the benefit of Lessor and its assignees, as follows: (b(a) Lessee is a public body, corporate and politic, duly organized and existing under the Constitution and laws of the State. ) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. © Lessee is authorized under the Constitution and laws of the State to enter into this Agreement and the transaction contemplated hereby, and to perform all of its obligations hereunder. (d) Lessee has been duly authorized to execute and deliver this Agreement under the terms and provisions of the resolution of its governing body, attached hereto as Exhibit A, or by other appropriate official approval, and further represents, covenants and warrants that all requirements have been met, and procedures have occurred in order to ensure the enforceability of this Agreement, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment hereunder. Lessee shall cause to be delivered to Lessor in an opinion of its counsel substantially in the form attached hereto as Exhibit B. (e) During the term of this Agreement, the Equipment will be used by Lessee only for the purpose of performing one or more governmental or proprietary functions of Lessee consistent with the permissible scope of Lessees authority and will not be used in a trade or business of any person or entity other than the Lessee. (f) During the period this Agreement is in force, Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing fiscal year and such other financial information relating to the ability of the Lessee to continue this Agreement as may be reasonably requested by Lessor or its assignee. (g) The Equipment will have a useful life in the possession of the Lessee that is substantially in excess of the Original Term and all Renewal Terms. (h) The Equipment is, and during the period this Agreement is in force will remain, personal property and when subjected to use by the Lessee under this Agreement, will not be or become fixtures. ARTICLE II DEFINITIONS The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Agreement" means this Municipal Lease and Option Agreement, including the Exhibits attached hereto, as the same may be supplemented or amended from time to time in accordance with the terms hereof. "Commencement Date" is the date when the term of this Agreement begins and Lessee's obligation to pay rent accrues, which date shall be the date on which the Equipment is accepted by Lessee as indicated on the Certificate of Acceptance attached hereto as Exhibit F. "Equipment" means the property described in Exhibit D and which is the subject of this Agreement. "Lease Term" means the Original Term and all Renewal Terms provided for in this Agreement under Section 4.01. "Lessee" means Village of LeMont which is described in the first paragraph of this Agreement and which is leasing the Equipment from Lessor under the provisions of this Agreement. "Lessor" means (1) Kankakee Federal Savings Bank acting as Lessor hereunder; (ii) any surviving, resulting or transferee corporation; and (iii) except where the context requires, any assignee(s) of Lessor. "Purchase Price" means the amount which Lessee may, in its discretion, pay to Lessor in order to purchase the Equipment, as set forth in Exhibit E hereto. "Renewal Terms" means the automatic renewal terms of this Agreement as provided for in Article IV of this Agreement, each having a duration of one year and a term co- extensive with the Lessee's fiscal year except the last of such automatic renewal terms which shall end on the due date of the last Rental Payment set forth in Exhibit E to this Agreement. "Rental Payments" means the basic rental payments (including late payment penalties) payable by Lessee pursuant to the provisions of this Agreement during the Lease Term, payable in consideration of the right of Lessee to use the Equipment during the then current portion of the Lease Term. Rental Payments shall be payable by Lessee to the Lessor or its assignee(s) in the amounts and at the times during the Lease Term, as set forth in Exhibit E of this Agreement. "Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing the Equipment. ARTICLE" III LEASE OF EQUIPMENT Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor, the Equipment, in accordance with the provisions of this Agreement, to have and to hold for the Lease Term. ARTICLE IV LEASE TERM Section 4.01. Commencement of Lease Term. The Original Term of this Agreement shall commence on the Commencement Date as indicated in Exhibit F and shall terminate the last day of the Lessee's current fiscal year. The Lease Term will be automatically renewed at the end of the Original Term or any Renewal Term for an additional one year, unless the Lessee gives written notice to Lessor not less than ninety (90) days prior to the end of the Original Term or Renewal Term then in effect, or such greater notice as may be provided in Article VI, of Lessee's intention to terminate this Agreement at the end of the Original Term or the then current Renewal Term pursuant to Article XI or Article VI as the case may be. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in Exhibit E of this Agreement. Section 4.02. Termination of Lease Term. The Lease Term will terminate upon the earliest of any of the following events: (a) the expiration of the Original Term or any Renewal Term of this Agreement and the nonrenewal of this Agreement in the event of nonappropriation of funds pursuant to Section 6.06. (b) the exercise by Lessee of the option to purchase the Equipment granted under the provisions of Articles IX or XI of this Agreement; © a default by Lessee and Lessor's election to terminate this Agreement under Article XIII; or (d) the payment by Lessee of all Rental Payments authorized or required to be paid by Lessee hereunder. ARTICLE V ENJOYMENT OF EQUIPMENT Lessor hereby covenants to provide Lessee during the Lease Term with quiet use and enjoyment of the Equipment, and Lessee shall during the Lease Term peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Agreement. Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of Lessee for the purpose of inspecting Equipment. ARTICLE VI RENTAL PAYMENTS Section 6.01. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intent that the obligation of Lessee to pay Rental Payments 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 limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or monies of Lessee unless specifically authorized under State law with which the Lessee has fully complied. Pursuant to Section 13 of the Local Government Debt Reform Act (30 ILCS 350/13) the Lessee hereby pledges its general fund to the payment of Rental Payments hereunder. Section 6.02. Payment of Rental Payments. Lessee shall pay Rental Payments, exclusively from legally available funds, in lawful money of the United State of America to Lessor, or in the event of assignment by Lessor, to its assignee(s), in the amounts and on the dates set forth in Exhibit E hereto. Section 6.03. Interest and Principal Components. A portion of each Rental Payment under this Agreement is paid as, and represents payment of, interest and the balance of each Rental Payment is paid as, and represents payment of, principal. Exhibit E hereto sets forth the interest component and the principal component of each Rental Payment during the Lease Term. Section 6.04. Rental Payments to be Unconditional. The obligations of Lessee to make payment of the Rental Payments required under this Article Viand other sections hereof, and to perform and observe the covenants and agreements contained herein. shall be absolute and unconditional in all events, except as expressly provided under this Agreement. Notwithstanding any dispute between Lessee and Lessor, any Vendor or any other person, Lessee shall make all payments of Rental Payments when due and shall not withhold any Rental Payments pending final resolution of such dispute, nor shall Lessee assert any right of set -off or counter claim against its obligation to make such payments required under this Agreement. Lessee's obligation to make Rental Payments during the Original Term or the then current Renewal Term shall not be abated through accident or unforeseen circumstances. Section 6.05. Continuation of Lease Term by Lessee. Lessee intends, subject to the provisions of Section 6.06, to continue the Lease Term through the Original Term and all of the Renewal Terms and to pay the Rental Payments hereunder. Lessee reasonably believes that legally available funds of an amount sufficient to make all Rental Payments during the Original Term and each of the Renewal Terms can be obtained. Lessee further intends to do all things lawfully within its power to obtain and maintain funds from which the Rental Payments are to be made, including making provisions for such payments to the extent necessary in each duly enacted budget, or as applicable, appropriation documents, submitted and adopted in accordance with applicable provisions of State law, to have such portion of the duly enacted budget or as applicable, appropriation documents, approved, and, as applicable, to exhaust all available reviews and appeals in the event such portion of the budget or appropriation is not approved. Section 6.06. Nonappropriation. In the event sufficient funds shall not be appropriated for the payment of the Rental Payments required to be paid in the next occurring Renewal Term, and if Lessee has no funds legally available for Rental Payments from other sources, this Agreement shall terminate at the end of the then current Original Term or Renewal Term, and Lessee shall not be obligated to make payment of the Rental Payments provided for in this Agreement beyond the then current Original or Renewal Term. Lessee shall advise Lessor at least ninety (90) days prior to the end of the then current Original or Renewal Term of any such anticipated termination. If this Agreement is terminated under this Section 6.06. Lessee agrees peaceably to deliver the Equipment to Lessor at the location specified by Lessor. TO THE EXTENT LAWFUL, and not otherwise, Lessee shall not, until the date on which the next occurring Renewal Term would have ended, expend any funds for the purchase or use of equipment similar to the Equipment subject to this Agreement, and if this Agreement is terminated pursuant to this provision of non - appropriation prior to making all the Rental Payments due hereunder, to the extent lawful and not otherwise, Lessee will not replace the Equipment with the same or similar property or retain others to provide the same or similar services until after the date on which the next occurring Renewal Term would have ended. In the event of non - appropriation, Lessor shall have the right to recover the interest which shall have accrued on the principal balance outstanding as of the preceding Rental Payment due date as set forth in the specific Exhibit E "Schedule of Payments" as attached for which such appropriation applies. ARTICLE 'VII TITLE TO EQUIPMENT; SECURITY INTEREST Section 7.01. Title to the Equipment. During the term of this Agreement, title to the Equipment and any and all additions, repairs, replacements or modifications shall vest in Lessee, subject to the rights of Lessor under this Agreement. In the event of default as set forth in Section 13.02 or nonappropriation as set subject in Section 6.06, title to Equipment, shall immediately vest in Lessor, and Lessee will promptly surrender possession of the Equipment to Lessor. Section 7.02. Security Interest. To secure the payment of all of the Lessee's obligations under this Agreement, Lessee grants to Lessor a security interest constituting a first lien on the Equipment and all additions, attachments, accessions, and substitutions thereto, and on any proceeds therefrom, and upon Lessor's request, Lessee agrees to execute such additional documents, including financing statements, affidavits, notices and similar instruments, in the form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain its security interest, and upon assignment of this Agreement, the security interest of any assignee(s) of Lessor, in the Equipment. ARTICLE VIII MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES Section 8.01. Maintenance of Equipment by Lessee. Lessee agrees that at all times during the Lease Term Lessee will, at Lessee's own cost and expense, maintain, preserve and keep the Equipment in good repair, working order and condition, and that Lessee will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. Lessor shall have no responsibility in any of these matters, or for the making of improvements or additions to the Equipment. If requested by Lessor, Lessee will enter into a maintenance contract for the Equipment with Vendor or such other maintenance supplier that Lessor approves. Section 8.02. Taxes, Other Governmental Charges and Utility Charges. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and, therefore, that the Equipment will be exempt from all taxes presently assessed and levied with respect to personal property. In the event that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form, Lessee will pay during the Lease Term, as the same respectively come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal or replacement of or a modification, improvement or addition to the Equipment, as well as all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during the time this Agreement is in effect. If and to the extent that any state, county, municipal or other fees and taxes of whatever nature, including but not limited to license, qualification, franchise, sales, use, gross receipts, ad valorem, business, excise, motor vehicle, and occupation fees and taxes, and interest and penalties thereon, are assessed, levied against or payable by the Lessor or otherwise with respect to the Equipment or the acquisition, purchase, sale, use, rental, operation, control, ownership or disposition of the Equipment or measured in any way by the value thereof or by the business of the Lessor with the respect thereto, excepting only income taxes, federal or state, Lessee shall, upon notice from the Lessor, reimburse Lessor for any such amounts or shall pay such amounts directly unless such amounts are included in original principal component of the Rental ayments set forth in Exhibit E. Lessee and Lessor assume that Lessor or its assigns can, and intend that Lessor will be able to, exclude the interest component of the Rental Payments as set forth in Exhibit E from its Federal gross income and that this Agreement constitutes, and is hereby designated by the Lessee, a "qualified tax - exempt obligation" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Lessee covenants and agrees that it will (1) rebate an amount equal to any "excess earnings" to the Federal government if required by, and in accordance with, Section 148 (f) of the Internal Revenue Code, as amended by the Tax Reform Act of 1986 (the "Code ") and to make the annual determination and maintain the records applicable thereto; (2) use a book -entry system to record the identity of any assignee(s) known to the Lessee as to meet the requirements of Section 149(a) of the Code; (3) timely file a form 8038 -G or 8038 -GC with the Internal Revenue Service in accordance with Section 149(e) of the Code; (4) not to permit the proceeds of the Agreement to be directly or indirectly used for private business use within the meaning of Section 141 of the Code; (5) ensure that action will not be taken which will result in the obligation represented in this Agreement be treated as an "arbitrage bond" or "federally guaranteed bond" within the meaning of Section 148(a) or Section 149(b) of the Code; respectively; (6) comply with all provisions and regulations applicable to excluding interest from Federal gross income pursuant to Section 103 of the Code; and (7) cause to be executed and delivered to Lessor or its assigns a certificate with respect to "qualified tax - exempt obligation" attached hereto as Exhibit G. If Lessor either (1) receives a notice, in any form, from the Internal Revenue Service or (2) reasonably determines, based on an independent tax counsel selected by Lessor and approved by Lessee, which approval Lessee shall not unreasonably withhold, that Lessor may not exclude interest from Federal gross income because Lessee broke a covenant set forth in Section 8.02, then, subject to Section 6.06 in connection with due appropriation, to the extent lawful, Lessee shall pay to Lessor, within thirty (30) days an amount equal to the sum of (x) penalties, fines, interest and additions to tax (including taxes imposed on the interest payments paid under this Agreement through the date of such event) that are imposed on Lessor as a result of the loss of the exclusion and that Lessor cannot deduct in computing its Federal income tax liability divided by one minus the highest Federal regular marginal tax rate in effect for the tax period for which Lessor lost the exclusion plus (y) penalties, fines, interest and additions to tax that are imposed on Lessor as a result of the loss of exclusion that Lessor can deduct in computing its Federal income tax liability; and additionally, Lessee shall pay as additional interest to Lessor on each succeeding Rental Payment due date under this Agreement such amounts as will maintain Lessor's after -tax yield evidenced by this Agreement. Section 8.03. Provisions Regarding Insurance. Subject to Section 6.06 in connection with due appropriation, at its own expense Lessee shall cause casualty, public liability, and property damage insurance to be carried and maintained, or shall demonstrate to the satisfaction of Lessor that adequate self- insurance is provided with respect to the Equipment, which shall have minimum insurance coverage required, as set forth in Exhibit H, or sufficient to protect the Full Insurable Value (as that term is hereinafter defined) of the Equipment, and to protect Lessor from liability in all events. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. Lessee shall furnish to Lessor certificates evidencing such coverage throughout the Lease Term. Alternatively, Lessee may insure the Equipment under a blanket insurance policy or policies which cover not only the Equipment but other properties. If Lessee shall insure similar properties by self- insurance, Lessee will insure the Equipment by means of an adequate insurance fund. The Lessee shall advise Lessor immediately in the event (i) such insurance is not in effect of (ii) will no longer be in effect. The term "Full Insurable Value" as used herein shall mean the full replacement value of the Equipment. The full replacement value shall be the applicable Purchase Price as of the date of the loss or other casualty. Any insurance policy pursuant to this Section 8.03 shall be so written or endorsed as to make losses, if any, payable to Lessee and Lessor as their respective interest may appear. The Net Proceeds (as defined in Section 9.01) of the insurance required in this Section 8.03 shall be applied as provided in Article IX hereof. Each insurance policy provided for in this Section 8.03 shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interest of Lessor without first giving written notice thereof to Lessor at least 10 days in advance of such cancellation. Section 8.04. Advances. In the event that Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Equipment in good repair and operating condition, Lessor may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by Lessor shall become additional rent as of the date of Lessor's advance for the then current Original Term or Renewal Term, which amounts, together with interest thereon, Lessee agrees to pay. ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION: USE OF NET PROCEEDS Section 9.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided herein, if prior to the termination of the Lease Term (a) the Equipment or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or (b) title to, or the temporary use of the Equipment or any part thereof shall be taken under the exercise of the power of eminent domain by any govemmental body or by any person, firm or corporation acting under governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award to be applied to the prompt repair, restoration, modification, or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. For purposes of Section 8.03 and this Article IX, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award after deducting all expenses (including attorney fees) incurred in the collection of such claims or award. Section 9.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 9.01 hereof, subject to Section 6.06 in connection with due appropriation, Lessee shall either (a) complete the work and pay any cost in excess of the amount of Net Proceeds, and Lessee agrees that if by reason of any such insufficiency of the Net Proceeds, Lessee shall make any payments pursuant to the provisions of this Section 9.02. Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article VI hereof, or (b) if Lessee is not in default hereunder, Lessee shall pay to Lessor the amount of the then applicable Purchase Price, and upon such payment, the Lease Term shall terminate and the Lessor's security interest in the Equipment shall terminate as provided in Article XI of this Agreement. The amount of the Net Proceeds in excess of the then applicable Purchase Price, if any, may be retained by Lessee. ARTICLE X DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE EQUIPMENT Section 10.01. Disclaimer of Warranties. AS BETWEEN LESSOR AND LESSEE, DELIVERY OF EQUIPMENT TO LESSEE AND EXECUTION BY LESSEE OF EXHIBIT F, ACCEPTANCE CERTIFICATE WITH RESPECT THERETO SHALL CONSTITUTE LESSEE'S ACKNOWLEDGEMENT THAT THE EQUIPMENT IS IN GOOD ORDER AND CONDITION AND IS OF THE MANUFACTURER, DESIGN AND CAPACITY SELECTED BY THE LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME IS SUITABLE FOR ITS PURPOSE, AND THAT FOR PURPOSES OF THIS LEASE AGREEMENT LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED WITH RESPECT TO EQUIPMENT, INCLUDING WITHOUT LIMITATION, AS TO THE VALUE, DESIGN, CAPACITY, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT. OR WARRANTY WITH RESPECT THERETO AND LESSOR AND ITS ASSIGNEES HEREBY DISCLAIM ALL SUCH REPRESENTATIONS AND WARRANTIES. THIS SECTION IS INTENDED TO APPLY BETWEEN LESSOR AND LESSEE ONLY TO THE EXTENT OF THE FINANCING CONTEMPLATED HEREIN AND IN NO EVENT INTENDED TO AFFECT THE WARRANTIES OR REPRESENTATIONS CONTAINED IN OR INCLUDED WITHIN ANY CONTRACT ENTERED INTO FOR THE ACQUISITION OF THE EQUIPMENT EITHER WITH THE LESSOR, OR ANY OTHER VENDOR. NOTWITHSTANDING THE FOREGOING, IN THE EVENT LESSOR IS THE VENDOR, LESSEE SHALL BE ENTITLED TO APPLICABLE VENDOR WARRANTIES AS TO THE EQUIPMENT, PROVIDED SUCH RIGHTS SHALL PERTAIN SOLELY TO LESSOR AS VENDOR, AND NOT TO ANY SUCCESSORS OR ASSIGNS OF LESSOR UNDER THIS LEASE. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement or the existence, furnishing, functioning or Lessee's use of any item or products or services provided for in this Agreement. Section 10.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney -in -fact during the Lease Term so long as Lessee shall not be in default hereunder, to assert from time to time whatever claims and rights, including warranties of the Equipment, which Lessor may have against the Vendor of the Equipment. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Equipment, and not against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representation or warranties whatsoever as to the existence or availability of such warranties from the Vendor of the Equipment. Section 10.03. Use of the Equipment. Lessee will not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Agreement. Lessee shall provide or otherwise obtain all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each item of the Equipment) with all laws of the jurisdiction in which its operation involving any item of Equipment may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Equipment; provided, however, that Lessee may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of Lessor, adversely affect the estate of Lessor in and to any of the items of the Equipment or its interest or rights under this Agreement. ARTICLE XI OPTION TO PURCHASE At the request of Lessee, Lessor's security interest in the Equipment will be terminated and this Agreement shall terminate: (a) at the end of the Lease Term (including Renewal Term(s)), upon payment in full of Rental Payments due hereunder; (b) at the end of the Original Term or any Renewal Term, upon payment by Lessee of the then applicable Purchase Price; or (c) if the Lease Term is terminated pursuant to Article IX of this Agreement, in the event of total damage, destruction or condemnation of the Equipment and, if Lessee is not on such date in default under this Agreement, upon payment of the then applicable Purchase Price to Lessor. or ARTICLE XII > ). ASSIGNMENT, SUBLEASING, INDEMNIFICATION MORTGAGING AND SELLING Section 12.01. Assignment by Lessor. This Agreement, and the obligations of Lessor to receive and Lessee to make payments hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor at any time subsequent to its execution, without the necessity of obtaining the consent of Lessee; provided however, that no such assignment or reassignment shall be effective unless and until (i) Lessee shall have received notice of the assignment or reassignment disclosing the name and address of the assignee(s) or subassignee(s), and (ii) in the event that such assignment or reassignment is made to a bank or trust company as trustee for holders of certificates representing interests in this agreement, such bank or trust company agrees to maintain, or cause to be maintained, a book -entry system by which a record of the names and addresses of such holders as of any particular time is kept and agrees, upon request of Lessee, to furnish such information to Lessee. Upon receipt of sufficient notice of assignment, Lessee agrees to reflect in a book -entry the assignee designated in such notice of assignment, and to make all payments to the assignee designated in the notice of assignment, notwithstanding any claim, defense, set -off or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise) that Lessee may from time to time have against Lessor, or the assignee(s). Lessee agrees to execute all documents, including notices of assignment or financing statements which may be reasonably requested by Lessor or its assignee(s) to protect their interest in the Equipment and in this Agreement. Section 12.02. No Sale, Assignment or Subleasing by Lessee. This Agreement and the interest of Lessee in the Equipment may not be sold, assigned or encumbered by Lessee without the prior written consent of Lessor. Section 12.03. Release and Indemnification Covenants. To the extent permitted by and subject to applicable law and the Constitution of the State, including Section 6.06, as applicable, Lessee shall protect, hold harmless and indemnify Lessor from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as result of the entering into this Agreement, the ownership of any item of the Equipment, the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Equipment or any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury or the death of any person. The indemnification arising under this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason. Lessee agrees not to withhold or abate any portion of the payments required pursuant to this Agreement by reason of any defects, malfunctions, breakdowns or infirmities of the Equipment. ARTICLE XIIT' EVENTS OF DEFAULT AND REMEDIES Section 13.01. Events of Default Defined. The following shall be "events of default" under this Agreement and the terms "event of default" and "default" shall mean, whenever they are used in this Agreement any one or more of the following events: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time specified herein; or (b) Failure by Lessee to observe and perform any covenant, condition or Agreement on its part to be observed or performed, other than as referred to in Section 13.01 (a), for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied as given to Lessee by Lessor, unless Lessor shall agree in writing to an 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 unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; or (c) The termination of existence or business failure of, or the making of an assignment for the benefit of creditors by, the Lessee; or (d) The institution of bankruptcy, reorganization, liquidation or receivership proceedings by or against the Lessee and, if instituted against the Lessee, its consent thereto or the pendency of such proceedings for thirty (30) days. The foregoing provisions of this Section 13.01 are subject to (i) the provisions of Section 6.06 hereof with respect to nonappropriation; and (ii) if by reason of force majeure Lessee is unable in whole or in part to carry out its agreement on its part herein contained, other than the obligations on the part of the Lessee contained in Article VI hereof, Lessee shall not be deemed in default during the continuance of such inability. The term "force majeure" as used herein shall mean, without limitation, the following: acts of God, strikes, lockouts or other industrial disturbances; acts of public enemies, orders of restraints of any kind of the government of the United States of America or the state wherein Lessee is located or any of their departments, agencies or officials, or any civil or military authority; insurrection; riots; landslides; earthquakes; fires; storms; droughts; floods; or explosions. Section 13.02. Remedies on Default. Whenever any event of default referred to in Section 13.01 hereof shall have happened and be continuing, Lessor shall have the right at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) With or without terminating this Agreement, retake possession of the Equipment and sell, lease or sublease the Equipment for the account of Lessee, holding Lessee liable for the rents and other amounts payable by Lessee hereunder to the end of the Original Term or the then current Renewal Term; and (b) Take whatever action at law or in equity may appear necessary or desirable to enforce its rights as the owner of Equipment. Section 13.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. ARTICLE XIV MISCELLANEOUS Section 14.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, to the parties at their respective places of business. Section 14.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 14.03. Severability. In the event any provisions of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 14.04. Amendments. The terms of this Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the Lessor and the Lessee; nor shall any such amendment that affects the rights of Lessor's assignee(s) be effective without such assignee's consent. Section 14.05. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be original and all of which shall constitute but one and the same instrument. Section 14.06. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State. Section 14.07. Captions. The captions or heading in this Agreement are for the convenience only and no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. Section 14.08. Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein regarding this Agreement or the Equipment leased hereunder. Any terms and conditions of any purchase order or other document (with the exception of Supplements) submitted by Lessee in connection with this Agreement which are in addition to or consistent with the terms and conditions of this Agreement will not be binding on Lessor and will not apply to this Agreement. Lessee by the signature below of its authorized representative acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and conditions. IN WITNESS WHEREOF, Lessor has executed this Agreement in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers, and Lessee has caused this Agreement to be executed in its corporate name with, as applicable, its corporate seal hereunto affixed and duly attested by authorized officers. All of the above occurred as of the date first written below. LESSOR:Ka ake ings Bank By: W. Eric Volkmann, Vice President 1708 S. Philo Road Urbana, IL 61802 LESSEE: Village of LeMori By: Its vary mimes Village Manager By:��jl`2��f.� %% %��-� Charlene Smollen Its Village Clerk (SEAL) Attest: l( CL.– C CL1(— Attest: Its STATE OF ILLINOIS COUNTY OF Cook } } ss } I, the undersigned Notary Public, in and for said County, in the State aforesaid, do hereby certify that [AcI es iCirnrkoe ..Srnclie,l personally known to me to be the same person[s] whose name[s] is [are] subscrib-d to the 'foregoing instrument, having executed the same on behalf of the Lessee, appeared before me this day in person and acknowledged that he /she /they signed, sealed and delivered the said instrument of writing as his /her /their free and voluntary act for the Lessee for the uses and purposes therein set forth. Given under my hand and notarial seal this i2"' day of rv,1.ij; !Air P�rVrt3..'v Notary Public OFFICIAL SEAL ROSEMAY YATES NOTARY PUBLIC. STATE OF ILLINOIS MY COMMISSION EXPIRES 6.12.2004 , 240i MUNICIPAL LEASE EXHI BIT A ORDINANCE /RESOLUTION OF GOVERNING BODY EXTRACT FROM MINUTES A(N) ORDINANCE /RESOLUTION OF Village of LeMont AUTHORIZING A MUNICIPAL LEASE AND OPTION AGREEMENT RESOLVED, whereas the Village of LeMont, in Cook County(ies), Illinois, as "Lessee ", has determined that a true and very real need exists for the acquisition of the Equipment described in the Municipal Leases and Option Agreement, dated March 5, 2001 (the "Agreement "), presented to this meeting; and WHEREAS,the Lessee has taken the necessary steps, including any legal bidding requirements under applicable law to arrange for the acquisition of such Equipment. NOW THEREFORE BE IT RESOLVED /ORDAINED, by the Village Board of Trustees [governing body] of the Village of LeMont, Cook County, Illinois, that the terms of such Municipal Lease and Option Agreement are in the best interest of Lessee for the acquisition of such Equipment, the Lessee hereby designates, authorizes and confirms the following persons to execute and deliver, and to witness (or attest), respectively, the Municipal Lease and Option Agreement and any related document necessary to the consummation of the transactions contemplated by such Agreement, including Exhibits A and C through H to this Resolution: Richard A. Kwasneski Gary Holmes Charlene Smollen [name], its [name], its Village President Village Administrator Village Clerk Upon motion by Blatzer , seconded by Studebaker adopted this 12th day of February Ayes: Nayes: 0 Absent: Rimbo [title] [title] , by roll call vote, as follows: Benik, Blatzer, Latz, Markiewicz, Studebaker ATTEST: (SEAL) By Title Village Clerk STATE OF ILLINOIS ) ss COUNTY OF Cook ) By Titl Alt Al =il'e esident The undersigned further certifies that the attached is a true, complete and correct copy of such ordinance /resolution and such ordinance /resolution has not been repealed or amended and remains in full force and effect and further certifies that the above and foregoing Municipal Lease and Option Agreement with Kankakee Federal Savings Bank is the same as presented at said meeting of the Village Board of Trustees or Lessee. Clerk /Secretary Date: CERTIFICATE AS TO ARBITRAGE I, the undersigned officers of Village of LeMont (the "Lessee ") being the person duly charged, with others, with responsibility for issuing the Lessee's obligation in the form of that certain agreement entitled "Municipal Lease and Option Agreement" (the "Agreement," with respect to which undefined terms herein shall have the meaning therein), dated March 5, 2001 and issued as of that date HEREBY CERTIFY that: 1. The Agreement was issued by the Lessee under and pursuant to applicable law to finance the acquisition of the Equipment described therein. 2. Pursuant to the Agreement, the Lessee is entitled to receive the Equipment in consideration for the obligation of the Lessee under the Agreement. The Equipment will be used in furtherance of the public purposes of the Lessee. The Lessee does not intend to sell the Equipment or to otherwise dispose of the Equipment during the term of the Agreement. The Lessee will not receive any monies, funds, or other "proceeds" as a result of the Agreement. 3. The Lessee expects to make payments under the Agreement from its general funds on the basis of annual appropriations in amounts equal to the required payments under the Agreement. The remaining general funds of the Lessee are not reasonably expected to be used to pay principal and interest on the Agreement. 4. The Lessee has not received notice that its arbitrage certifications may not be relied upon with respect to its own obligations nor has it been advised that any adverse action by the Commissioner of Internal Revenue is contemplated. 5. The Lessee certifies that the Equipment is or will be owned and operated by the Lessee and will not be used in the trade or business of any other person on the basis different from the general public. To the best of my knowledge, information and belief the expectations herein expressed are reasonable and there are no facts, estimates or circumstances other than those expressed herein that would materially affect the expectations herein expressed. IN WITNESS WHEREOF, I have hereunto set my hand this day of LESSEE: Village of LeMont By: Its: Garyf/Holmes Village Manager Charlene Smollen Its: Village Clerk MUNICIPAL LEASE EXHIBIT C DESCRIPTION OF EQUIPMENT The Equipment which is the subject of the attached Municipal Lease and Option Agreement is as follows: 2001 International 4900 Dump Truck 4X2 1 HTSDAAR31 H370882 Together with all additions, accessions and replacements thereto. Lessee hereby certifies that the description of the personal property set forth above constitutes an accurate description of the "Equipment ", as defined in the attached Municipal Lease and Option Agreement. LESSEE: Village of LeMont By: Gary &1olmes Its Village Manager By: Charlene Smollen Its: Village Clerk Date: March 5, 2001 Location of Equipment: Address: City, State, Zip: Tel: Fax: MUNICIPAL LEASE EXHIBIT D SCHEDULE OF PAYMENTS PAYMENT SCHEDULE Lease Account Information Village of LeMont Address: 14574 127th Street City, State: LeMont, IL Zip: 60439 Telephone: 630- 257 -2532 Lease Reference: #534468 Lease Document Date: March 5, 2001 Original Lease Date: Delivery Date Number of Payments /Year: 1 Number of Payments: 3 Amort Period: 3 First Payment Date: On Delivery Payment due date: March 5th each year until paid in full Lease Payment: $26,457.08 First Payment due on delivery and yearly there after on that date. Please phone Lessor for Buyout Option. If a payment is 10 or more days late, there will be a late charge of 5.00% of the regularly scheduled payment. LESSEE: Village of LeMont By: Its By: Its Village Clerk Date: Gakj/ Holmes Village Manager Charlene Smollen MUNICIPAL LEASE EXHIBIT E ACCEPTANCE CERTIFICATE The undersigned, for the Lessee under the Municipal Lease and Option Agreement (the "Agreement," with respect to which undefined terms herein shall have the meaning therein) dated March 5, 2001 with Village of LeMont ( "Lessee "), acknowledges receipt in good condition of all of the Equipment described in the Agreement and in Exhibit D thereto and hereby reaffirms for the Lessee all of its covenants and obligations required under the Agreement. Lessee confirms that the Commencement Date of the Agreement is March 5, 2001 and it will commence payments in accordance with Article VI of the Agreement. The undersigned officer of the Lessee hereby reaffirms in all respects the Certificate as to Arbitrage attached as Exhibit C to the Agreement, and represents that, to the best of his or her knowledge, information and belief, the expectations therein expressed were reasonable as of the date on which they were made, and are reasonable as of the Commencement Date, and that there were, and are as of the Commencement Date, no facts, estimates or circumstances other than those expressed therein that would materially affect the expectations expressed therein. LESSEE: Village of LeMont By: �� e.,44.00x.e) Its: By: Its: Village Clerk Ga Holmes Village Manager // Le- ei _ % / / /.1, Charlene Smollen Date: March 5, 2001 MU NICIPAL LEASE EXHI BIT -F CERTIFICATE WITH RESPECT TO QUALIFIED TAX- EXEMPT OBLIGATION We, the undersigned, hereby certify that We are duly qualified Village Manager & Village Clerk [titles] of Village of LeMont ( "Lessee "); and, with respect to the Municipal Lease and Option Agreement dated as March 5, 2001 (the "Agreement," with respect to which undefined terms herein shall have the meaningtherein) by and between Lessee and Kankakee Federal Savings Bank ( "Lessor "), are duly charged with the executing that certain Agreement and do hereby certify as follows: 1. Lessee certifies that it does reasonably anticipate that not more than $10,000,000 of "qualified tax - exempt obligations" [as that term is defined in Section 265 (b)(3)(d) of the Internal Revenue Code, as amended by the Tax Reform Act of 1986, (the "Code ")] will be issued by it and any subordinate entities during the year 2001. 2. Further, Lessee agrees, in accordance with Section 265 (b)(3)(d) of the Code, that it will not designate more than $10 million in aggregate issues to be designated as "qualified tax - exempt obligation" eligible for the exception contained in Section 265 (b)(3)(d) of the Code, allowing for an exception to the general rule of the Code which provides for a total disallowance of a deduction for interest expense allocable to the carrying of tax exempt obligations. 3. The Lessee hereby designates the Agreement as a "qualified tax - exempt obligation" under such Section 265(b)(3) of the Code. 4. Attached hereto, as applicable, is a completed From 8038- [ "G" or "GC "] in connection with the Agreement. IN WITNESS WHEREOF, the parties have caused this Exhibit G to Agreement to be executed by their respective officers thereunto duly authorized, all as of the date and year first above written. LESSEE: Village of LeMont By: Gary`' olmes Its: Village Manager By: Charlene Smollen Its: Village Clerk MUNICIPAL LEASE ................ ............................... TO: INSURANCE COVERAGE REQUIREMENTS Kankakee Federal Savings Bank SUBJECT: INSURANCE COVERAGE REQUIREMENTS 1. In accordance with Section 8.03 of the Agreement, we have instructed the insurance agent named below (please fill in name, address and telephone number) IRMA, One Oakbrook Terrace, Suite 412 nakbrnok TPrrare, TT. 60181 to issue: (630) 932 -4762 a. All Risk Physical Damage Insurance on the leased equipment evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming Lessor and /or its assigns as Loss Payee. Coverage Required: Full Replacement Value b. Public Liability Insurance evidence by a Certificate of Insurance naming Lessor and /or its assigns as an Additional Insured. OR 2. Pursuant to Section 8.03 of the Agreement, we are self- insured for all risk, physical damage, and public liability and will provide proof of such self- insurance in letter form together with a copy of the statute authorizing this form of insurance. 3. Proof of insurance coverage will be provided to Lessor or its assigns prior to the time that equipment is delivered. LESSEE: By: Its: iI age Manager Village of Le ont 11 Gary ,Imes By: Its: Village Clerk MUNIC1PAL LEASE COUNSEL [On Legal Counsel Letterhead] Lessee: Village of LeMont Lessor: Kankakee Federal Savings Bank Ladies and Gentlemen: I am counsel for the Lessee, and I have reviewed the Municipal Lease and Option Agreement (the "Agreement," with respect to which undefined terms shall have the meaning therein) dated March 5, 2001 by and between Kankakee Federal Savings Bank, a Corporation organized under the laws of the United States of America (the "Lessor ") and Village of LeMont (the "Lessee "). Based on the examination of the Agreement and such other documents, records and papers as I deemed to be relevant and necessary as the basis for my opinions set forth below, it is my opinion that: 1. The Lessee is a duly constituted political subdivision or agency of the State of Illinois and is authorized by the Constitution and laws of the State of Illinois to enter into the transactions contemplated by the Agreement and to carry out the obligations thereunder. 2. The Agreement set forth above, has been duly authorized, executed and delivered by the Lessee and constitutes a valid, legal and binding agreement enforceable in accordance with its terms. 3. No further approval, consent or withholding of objections is required from any federal, state or local governmental authority with respect to the entering into or performance by the Lessee of the Agreement and the transactions contemplated thereby. 4. The entering into and performance of the Agreement and other related documents will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon any assets of the Lessee or the Equipment pursuant to any indenture, mortgage, deed of trust, bank loan, credit agreement or other instrument by which the Lessee is a party or by which it or its assets may be bound. 5. There is no litigation pending or threatened in any court or other tribunal, state or federal, in any way questioning or if adversely determined will affect the validity of the Agreement. 6. The Equipment is personal property and, when subject to use by Lessee, will not be or become fixtures under the laws of the State of Illinois. 7. All required or applicable bidding procedures regarding the award of the Agreement and acquisition of the Equipment thereby have been followed by Lessee. 8. Lessee has affirmed that it will have, as the installments mature, sufficient monies available to pay all Rental Payments and other amounts due under the Agreement. It is understood and agreed that independent bond counsel may rely on this opinion in rendering their opinion as to the exemption from federal income taxation of the interest component of payments made by the Lessee pursuant to the Agreement, and may attach a copy of this opinion to their opinion.