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HomeMy WebLinkAbout124-81 RESOLUTION• • • Ti.maa. Imp RESOLUTION NO. kvi -2I WHEREAS, the City of Fayetteville, Arkansas (the "City") desires to proceed with the construction of improvements to Fayetteville City Hospital (the "improvements") involving a total construction cost of $509,836.00;,and WHEREAS, the City has received a proposal from Mcllroy Bank & Trust, Fayetteville, Arkansas ("Mcllroy Bank & Trust") to provide financing for the constructionof the improvements through a lease agreement with option to purchase (the "Lease"); and WHEREAS, pursuant to Article 12, Section 3 of the Con- stitution and Section 19-1042 of the Arkansas Statutes Annotated (Supp. 1979), the City is authorized to exercise full legislative power in any and all matters pertaining to municipal affairs, and pursuant to Arkansas Statutes Annotated Section 19-2310 (Supp. 1979) the City is further authorized to buy, sell, convey and lease real and personal property for public or governmental uses and purposes; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the construction of the improvements at the total construction cost of $509,836.00 is hereby authorized. 1 Section 2. That the financing for the construction of the improvements shall be provided by entering into the Lease with Mcllroy Bank & Trust. The Lease shall be in such form and shall contain such provisions, subject to the terms of this Resolution, as shall be acceptable to the Mayor, the City Clerk, and the City Attorney, who are hereby authorized to confer with Mcllroy Bank & Trust in order to complete the Lease. The Lease shall be payable solely from current revenues of the City available during each fiscal year The Lease shall not constitute an indebtedness or a pledge of the faith and credit or taxing power of the City within the meaning of any constitutional or statutory limitation. Section 3. That the Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and'all things necessary to carry out the authority granted by this Resolution, including, without limitation, the execution and delivery of the Lease, and anyand all papers, documents, certificates and other instruments of any nature whatsoever, required for the carrying out of such authority or to evidence the exercise thereof. Section 4. Any and all resolutions in conflict herewith are hereby repealed to the extent of such conflict. Section 5. This Resolution shall be in full force and effect immediately upon passage hereof. -2- • PASSED AND APPROVED this /5. day of , .. 198. • CITY OF FAYETTEVILLE, ARKANSAS • • LEASE AGREEMENT WITH OPTION TO PURCHASE This Agreement, made this 15th day of December , 1981, between McILROY BANK & TRUST, an Arkansas banking corporation ("Lessor") and CITY OF FAYETTEVILLE, ARKANSAS, ("Lessee"), a duly constituted political subdivision of the State of Arkansas;, WITNESSETH: • WHEREAS, Lessee has determined that a need exists for improvements to Fayetteville City Hospital, (the "property"); and WHEREAS, Lessee is authorized by the laws of the State of Arkansas to enter into this Agreement; and WHEREAS, Lessee desires to lease the property from Lessor for the period set forth herein, thereafter acquiring title to the property, pursuant to the terms and conditions and for the purposes described herein; and WHEREAS, Lessee has requested Lessor to provide funding for the lease and construction of the improvements; NOW, THEREFORE, for and in consideration of the premises contained herein, the parties agree as follows: ARTICLE I DEFINITIONS Section 101. Definitions. For purposes of this Agreement and all related documents, the terms defined herein shall have the following meanings (unless the context clearly requires otherwise): "Agreement" - This Lease Agreement with Option to Purchase and any amendments or Supplements hereto, specifically including Schedule(s) attached hereto. "Property" - The lands, buildings, improvements and facilities covered by the Lease Agreement and described in the Schedule(s). "Initial Term" - The initial period of the term of this Agreement, commencing on the date specified in the first Schedule hereto and expiring at the end of Lessee's then - current fiscal appropriations period. EXHIBIT A "Lessee" - City of Fayetteville, Arkansas, a political subdivision of the State of Arkansas, with its offices at 113 West Mountain Street (Post Office Drawer F), Fayetteville, Arkansas 72701, which address shall be the address for all notices to be given to Lessee hereunder. "Lessor" - Mcllroy Bank & Trust, an Arkansas banking corporation with its offices at One Mcllroy Plaza, Fayetteville, Arkansas. 72701, or any surviving, resulting or transferee corporation of Lessor, or any successor or assign of Lessor. "Rent" - The basic payments payable by Lessee pursuant to the provisions hereof during the Term of this Lease. Rent shall be paid by Lessee in consideration of the right to use the property during the Term and in consideration of the acquisition of the property upon termination hereof. Basic Rent shall be payable in the amounts and at the times set forth in the Schedule(s), subject to the provisions hereof relating to sources of funds. "Successive Terms" - The periods of this Agreement commencing upon the expiration of the Initial Term and upon the expiration of the next preceding Successive Term there- after. Each Successive Term shall be coterminous with the future fiscal appropriation periods applicable to Lessee so that at no time shall the term of this Agreement exceed the term of Lessee's applicable fiscal appropriations period. ARTICLE II DEMISING CLAUSE, DURATION OF LEASE TERMS, RENTAL PROVISIONS, CONSTRUCTION AND EQUIPPING OF PROJECT Section 201. Lease of Property. Lessor, for and in consideration of the covenants and agreements herein contained, on the part of Lessee to be kept and performed, agrees to and does hereby lease to Lessee, and Lessee agrees to and does hereby lease, take and accept from Lessor the property, subject to the terms, conditions and obligations set forth herein, for the term hereof. Section 202. Initial Term. The Initial Term of this Agreement shall commence upon the execution date hereof. The Initial Term shall expire at the end of Lessee's current -fiscal appropriations period. • Section 203. Successive Terms. The Successive Terms shall commence as follows: (a) the first Successive Term shall commence immediately upon the expiration of the Initial Term and shall expire at the end of Lessee's then -current fiscal appropriations period. (b) all following Successive Terms shall commence immediately upon the expiration of the next preceding Successive Term and shall expire at the end of Lessee's then -current fiscal appropriations period or at such earlier date as provided in the applicable Schedule(s). It is the express intent of Lessor and Lessee, and the express purpose of this Section 203, that each Successive Term shall begin and end simultaneously with the applicable fiscal appropriations period of Lessee so that at no time shall the term of this Agreement exceed the term of Lessee's applicable fiscal appropriations period. Section 204. Renewal of Terms. Upon the expiration of the Initial Term hereof, and each following Successive Term, this Agreement shall be renewed for the period of the next following Successive Term. Such renewal shall be automatic and shall occur without requirement of notice to or from Lessor or Lessee. Notwithstanding the foregoing, however, if the provisions of Section 205 shall become applicable, then this Agreement may be terminated by Lessee as provided therein, and the renewal shall be of no further force and effect. Section 205. Fiscal Funding. If the Lessee shall fail to have available sufficient funds such that Lessee can pay the Rent required by the terms of this Agreement, during any Successive Term hereof, then Lessee may terminate this Agreement and the sole remedy of Lessor shall be the immediate repossession of the property. Lessee covenants, represents and agrees that: (a) Sufficient monies are available to Lessee to pay Rent during the Initial Term; (b) Any monies authorized or appropriated to Lessee for the rental and acquisition of the property dur-ing.theCnitial Term or any Successive Term shall be applied to the payment of Rent until such monies are exhausted; -3- • • • (c) Lessee has not and willnot directly or indirectly give priority or parity to the application of monies authorized or appropriated for rental and acquisition of the property to the rental, lease or acquisition of other property of any type functionally similar to the property; (d) Lessee has taken and will take such action as is necessary under applicable law to include, obtain and maintain budgeted and lawful funds sufficient and available to pay Rent throughout all Successive Terms hereof; and (e) In the event of applicability of this provision, but prior to termination of the Agreement, Lessee will use its best efforts to use any procedures available to find other appropriate uses for the property with other agencies so that, if reasonably possible, a termination of the Agreement may be avoided. Section 206. Rent. Lessee agrees to pay to Lessor, as rent for the .use 'of the property during the Term, the sums -designated as Rent in the Schedule(s). Section 207. Payment and Source of Revenue. - Payment of Rent and any other obligations hereunder shall be made, without notice or demand, in lawful money of the United States of America to Lessor at the address set forth in the invoices delivered by Lessor, or at addresses required by Lessor. THIS CONTRACT IS NOT A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF LESSEE WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION. THIS CONTRACT IS PAYABLE SOLELY FROM CURRENT REVENUES OF LESSEE AS AVAILABLE ON AN ANNUAL BASIS. LESSOR SHALL HAVE NO RIGHT TO COMPEL THE EXERCISE OF ANY TAXING POWER OF LESSEE TO MAKE PAYMENTS HEREUNDER, AND NO TAX REVENUES OR OTHER FUNDS OF LESSEE ARE PLEDGED TO THE MAKING OF PAYMENTS HEREUNDER. Section 208. Other Payments. Lessee agrees to pay to Lessor all amounts, liabilities and obligations that Lessee assumes hereunder or agrees to pay to Lessor or any other party or to otherwise discharge. If Lessee shall fail to pay or discharge any obligation due, then Lessor shall have the right to pay or discharge any -4- • such obligation and shall have all rights, powers and remedies provided herein or by law, and such failure to pay shall be treated as a failure to pay Basic Rent. Lessee hereby agrees to pay and perform all of its obligations under this Agreement at its sole cost andexpense and to pay all such sums at such times as they may be due to any party, without notice or demand. Section 209. Net Payments and Nonterminability. Lessee agrees that its obligation to pay any amount as Rent or otherwise under this Agreement and to perform its other obligations hereunder shall be separate and independent covenants, agreements and obligations. Lessee's obligation to pay such amounts shall be absolute and unconditional and shall at all times continue unaffected unless the requirement therefor shall have been modified or terminated pursuant to an express provision of this Agreement. Section 210. Constructing and Equipping of Project. The Lessor has acquired the lands to be included in the Project. Lessee has undertaken and will complete the acquiring, constructing and equipping of the Project in accordance with the plans and specifications attached hereto as Exhibit B, and has executed, or will execute necessary contracts and purchase orders therefor. All expenditures made by it in connection with the acquiring, constructing and equipping of the Project will be paid by Lessor. Title to the lands, improvements, equipment and facilities paid for by Lessor shall be placed in the Lessor. Lessee shall obtain all necessary approvals from any and all governmental agencies requisite to the constructing and equipping of the Project, and the Project shall be constructed and equipped in compliance with all State and local laws, ordinances and regulations applicable thereto. ARTICLE III TITLE AND PURCHASE OF PROPERTY Section 301. Title. Lessor shall retain title to the property until Lessee shall have made all the payments required hereunder and shall have kept and performed all its agreements contained herein,notwithstanding the possession and use ofthe property by Lessee as herein provided. -5- Section 302. Option to Purchase. Lessee shall have the option to purchase the property at any time as shown on the attached Schedule(s) upon payment of the amount specified as the Termination Value therein. Section 303. Passage of Title. Except as otherwise specifically provided herein, when Lessor shall have received from Lessee all payments of Rent, and other amounts required to be paid by Lessee hereunder, and all of Lessee's obligations herein contained shall have been performed, absolute right, title and interest in and to the property shall pass to and vest in Lessee free of all liens and encumbrances without any further payment by Lessee, and this Agreement shall thereupon terminate. It is the express intent of Lessor and Lessee that the purpose of this Agreement shall be the lease and purchase of the property by Lessee, and when the foregoing conditions have been satisfied, the closing of such purchase shall occur at the offices of Lessee, at which time Lessor shall deliver to Lessee a warranty deed conveying title to the property to Lessee free from any lien or encumbrance created by or rising through Lessor. ARTICLE IV COVENANTS AND INDEMNITY OF LESSEE Section 401. Authority and Status. Lessee represents, covenants and warrants that it is a duly constituted political subdivision of the State of Arkansas and is authorized by the Constitution and laws of the State of Arkansas to enter into the transaction contem- plated by this Agreement and to carry out its obligations hereunder. Lessee has been duly authorized to execute and deliver this Agreement and agrees that it will do or cause to be done all things as may be required in the reasonable judgment of Lessor necessary to preserve and keep this Agreement in full force and effect. Lessee further represents, covenants and warrants that all required procedures for execution and delivery of this Agreement have been met, and that Lessee has complied with all applicable bidding, negotiation and approval requirements where necessary, and by due notifica- tion has presented this Agreement for approval and adoption as a valid, binding and enforceable obligation on its part. -6- r Section 402. Indemnities of Lessee. Lessee agrees to indemnify, protect and hold harmless Lessor from and against all losses, damages, injuries, liabilities, claims, causes of action and demands whatso- ever, regardless of the cost thereof, and expenses in connection therewith, including counsel fees, arising out of the reten- tion by Lessor of title to the property, or out of the use and operation thereof during the period when title thereto remains in Lessor, any violation of this Agreement, any violation of any legal requirements or any agreements affecting the property, or any contest under any provision of this Agreement. This covenant of indemnity shall continue in full force and effect, notwithstanding the payment of all obligations hereunder and the vesting of title to the property in Lessee, as provided herein, or the termination of this Agreement in any manner whatsoever. Section 403. Risk of Loss. Lessee agrees that Lessee will bear the risk of loss applicable to the property, and shall not be released from its obligations hereunder in the event of any damage to or the destruction of the property. ARTICLE V INSURANCE Section 501. Required Insurance. A. Lessee shall, at Lessee's sole cost, keep the property insured against the perils of fire and the hazards ordinarily included under broad form extended coverage endorsements in an amount approved by Lessor. B. At all times during the initial term, and all successive terms, of this lease, Lessee shall, at no cost or expense to.Lessor, maintain or cause to be maintained: (i) general public liability insurance against claims for bodily injury or death occurring upon, in or about the leased premises, with such insurance to afford protection to the limits of not less than $500,000.00 in respect of bodily injury or death to any one person and to the limits of not less than $1,000,000.00 in respect of any one accident; and" (ii) property damage insurance against claims for damage to property occurring upon, in, or about -7- II • the leased premises with protection to the limits in respect of damages to owner. • • such insurance to afford of not less than $100,000.00 the property of any one C. Copies or certificates of the insurance provided for by this Article or elsewhere in this lease shall be delivered by Lessee to Lessor; and, in the case of expiring policies throughout the term, or successive terms, copies or certificates of any new or renewal policies shall be delivered by Lessee to Lessor. D. The policy of insurance provided for in Section 501A of this Article V shall name the Lessor and the Lessee as insureds as their respective interests may appear. E. All insurance required by this Section 501 shall be effective with insurance companies qualified to do business in the State of Arkansas selected by the Lessee and acceptable to Lessor. Lessee shall cause appropriate provisions to be inserted in each insurance policy making such policy non - cancellable without at least ten (10) days prior written notice to Lessor and Lessee. Also, it is agreed that no claim shall be made and no suit or action at law or in equity shall be brought by the Lessor or by anyone claiming by, through or under Lessor, against Lessee for any damage to the leased premises covered by the insurance provided for by this Article V, however caused, but nothing in this subsection E shall diminish Lessee's obligation to repair or rebuild as provided in Article XIV. The Lessee shall have the sole right and responsibility to adjust any loss with the insured involved and to conduct any negotiations in connection therewith. 1 ARTICLE VI MAINTENANCE AND. REPAIRS Section 601. Repairs, Maintenance and Alterations. Lessee shall throughout the initial term, and all successive terms, at no cost and expense to Lessor, maintain, or cause to be maintained, and in the event of termination hereof, yield up or cause to be yielded up, in good and tenantable repair, order and condition, reasonable wear and tear excepted, the improvements now or at any time erected on the lands included in the property and sidewalks adjoining the property; and promptly at no cost and expense to Lessor -8- r make or cause to be made all necessary repairs, interior and exterior, structural and non-structural, foreseen as well as unforeseen to such improvements. Lessee shall have the right from time to time to make additions, alterations and changes in or to the improvements constituting part of the property and shall have the right to construct new improvements. It is understood and agreed that in the event the Lessee makes any additions, alterations and changes in or to the improvements constituting part of the property as authorized by this Section, the Lessee shall be under no obligation to restore the property to their original condition prior to such additions, alterations or changes. All structural improvements and alterations made on the property by or on behalf of Lessee shall immediately upon completion thereof be and become the property of the Lessor without payment therefor by Lessor but subject to this Lease Agreement. All machinery and equipment, trade fixtures, movable partitions, furniture and furnishings and other property installed at the expense of Lessee shall remain the property of the Lessee with the right of removal, whether or not affixed and/or attached to the real estate, and the Lessee shall, so long as it is not in default hereunder, be entitled but shall not be obligated to remove the same, or any part thereof, during the initial term, or any successive terms, or within a reasonable time thereater, but Lessee shall at its own cost and expense repair any and all damages to the property resulting from or caused by their removal therefrom. ARTICLE VII TAXES AND ASSESSMENTS Section 701. Payment by Lessee. Lessee will pay promptly all taxes and special assessments or other impositions which may be imposed upon the property or upon Lessor solely by reason of its ownership thereof and will keep at all times all the property free and clear of all Impositions which might in any way affect the title of Lessor thereto or result in a lien upon the property; provided, however, that Lessee shall be under no obligation to pay any Imposition so long as it is contesting in good faith and by appropriate legal proceedings such Imposition, and the non- payment thereof does not, in the opinion -of Lessor; adversely affect the property or rights of Lessor hereunder. If any -9- • such Imposition shall have been charged or levied against Lessor directly and paid by Lessor, Lessee shall reimburse Lessor on presentation of invoice therefor. Lessee will furnish to Lessor, within 30 days after demand therefor, proof of payment of each such Imposition payable by Lessee hereunder. ARTICLE VIII USE, OPERATION -AND POSSESSION Section 801. Possession by Lessee. Lessee, so long as it shall not be in default under this Agreement, shall be entitled from and after the commencement hereof, to the possession of the property and the use thereof, but only upon and subject to all the terms and conditions of this Agreement. ARTICLE IX PROHIBITIONS AGAINST LIENS Section 901. Discharge of Liens. Lessee will pay or satisfy and discharge any and all sums claimed by any party, by through and under Lessee or its successors or assigns, which, if unpaid, might become a lien or other charge upon the property, but shall not be required to pay or discharge any such claims so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings in any reasonable manner, and the nonpayment thereof does not, in the opinion of Lessor, adversely affect the title, property or rights of Lessor hereunder. Lessee will promptly remove and discharge any charge, lien, security interest or encumbrance upon the property, any other sum payable hereunder which arises for any reason, including but not limited to all liens which arise out of the use, ownership, possession or leasing thereof, but not including any mortgage, charge, lien, security interest or encumbrance created by or resulting from act of Lessor. Section 902. Covenant of Lessee. Lessee covenants that it shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect -10- • to the property, except with respect to the respective rights of Lessor and Lessee as herein provided. However, this covenant shall not be deemed breached by reason of liens for taxes, assessments or governmental charges or levies, in each case not due and delinquent, or undetermined or inchoate materialmen's, mechanic's, workmen's, repairmen's or other like liens arising in the ordinary course of business and, in each case, not delinquent. ARTICLE X ASSIGNMENT Section 1001. Assignment by Lessee. Lessee. covenants and agrees that it shall not transfer or assign its rights under this Agreement without the prior written consent of Lessor, and any such attempted assignment shall be void. Lessor hereby consents to an assignment of Lessee's rights under this Agreement to Fayetteville City Hospital. Section 1002. Assignment by Lessor. All or any of the rights, benefits and advantages of Lessor in and to the property and under this Agreement, including the right to receive payments herein provided to be made by Lessee, may be assigned in whole or in part by Lessor, and by each person taking from Lessor by assignment or otherwise, and may be reassigned by any such person at any time and from time to time. No such assignment of any nature whatsoever shall relieve Lessee of its obligations hereunder. ARTICLE XI LESSOR MAY PERFORM LESSEE'S OBLIGATIONS Section 1101. If Lessee shall fail to keep or perform any of its obligations as provided in this Lease Agreement in respect of (a) maintenance of insurance; (b) repairs and maintenance of the property; (c) compliance with legal or insurance requirements; (d) keeping the property lien free; or (e) making of any other payment of performance of any other obligations, then Lessor may (but shall not be obligated to -11- • • do so), upon the continuance of such failure on Lessee's part for thirty (30) days after written notice to Lessee, and without waiving or releasing Lessee from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation (not under circumstances where such payment or performance would defeat any rights, herein specifically given to Lessee, to withhold such performance or to contest such obligation to the extent herein provided), and all sums so paid by Lessor and all necessary incidental costs and expenses incurred by Lessor in making such payment or performing such obligation shall be deemed Additional Rent and shall be paid to Lessor on demand, or at Lessor's option may be added to any installment of Basic Rent thereafter falling due, and if not so paid by Lessee, Lessor shall have the same rights and remedies as in the case of default by Lessee in the payment of the Basic Rent. ARTICLE XII PUBLIC UTILITIES AND CHARGES Section 1201. Lessee agrees to pay or cause to be paid all charges for water, gas, sewer, electricity, light, heat or power, telephone or other service used, rendered or supplied to or for the Lessee upon- or in connection with the property throughout the term of this Lease Agreement. ARTICLE XIII INSPECTION OF LEASED PREMISES Section 1301. Lessee shall permit Lessor or their respective authorized representatives, to enter the property at all reasonable times during usual business hours for the purpose of inspection and for the performance of any work therein made necessary by reason of Lessee's default under any of the provisions of this Lease Agreement. Lessor may, during the progress of any such work, keep and store on the property all necessary materials, supplies and equipment and shall not be liable for reasonable inconvenience, annoyance, disturbance, loss of business or other damage to Lessee suffered by reason of the performance of any such work or the storage of materials, supplies and equipment. -12- Pi • • ARTICLE XIV DAMAGE AND DESTRUCTION Section 1401. A. Lessee covenants and agrees that in the event of damage to or destruction of the property, or any part thereof, by fire or other casualty, the Lessee shall immediately notify the Lessor. In the event of such damage or destruc- tion, neither the term nor any of the obligations of either party under this lease shall be affected orreduced in any way, and, (i) Lessee shall proceed to repair, rebuild and replace the remaining part of the property as nearly as possible to the condition existing prior to such taking, to the extent that the same may be feasible, subject to the right on the part of the Lessee to make alterations which, in the reasonable judgment of Lessee, will improve the effeciency of the property for the purposes of the intended use, under this Lease Agreement; and (ii) Insurance money shall be paid to the Lessee, and the Lessor hereby assigns the same to the Lessee for the use of the Lessee in repairing, rebuilding and replacing as provided in (i) above. The net award shall be transferred to the Lessee upon receipt of a certificate signed by an officer of the Lessee: (a) requesting payment of a specified amount of such net award; (b) detailing the progress of the restoration and repair work; (c) stating that such specified amount does not exceed the estimated cost of the work and materials in connection with the restoration, including as part thereof the estimated fees of any architect or engineer, if any; and (d) stating that no part of such cost has pre- viously been made the basis of any request for the withdrawal under this Article. -13- f If the net award is in excess of the amount necessary to repair, rebuild and replace as specified in (i) above, such excess shall belong to and shall be paid to the Lessee. If the net award is less than the amount necessary for the Lessee to repair, rebuild and replace as set forth above, the Lessee shall nevertheless complete the repair, rebuilding and replacement work and pay the cost thereof. B. All insurance money paid on account of such damage or destruction shall be paid to the Lessor and applied as above set forth to the payment of the cost of the aforesaid restoration, repairs, replacements or rebuilding, including expenditures made for temporary repairs or for the protection of property pending the completion of permanent restoration, repairs, replacements, or rebuilding or to prevent interference with the business operated thereon (sometimes referred to as the "restoration"). ARTICLE XV CONDEMNATION Section 1501. A. If during the term of this Lease Agreement title to all or substantially all of the property shall be taken or condemned by a competent authority for any public use or purpose, the net amount awarded as damages or paid as a result of such taking (being the gross award less attorneys' fees and other expenses and costs incurred in the condemna- tion proceedings, hereinafter referred to as the "net award") shall be paid to Lessor for the account of Lessor and this Lease Agreement shall terminate andrents adjusted as of the date of taking. For purposes of this Article, "title to all or substantially all of the property shall be taken or condemned" shall be deemed to mean a taking of all of the property or a taking of such substantial portion of the property that the Lessee cannot reasonably operation in the remainder in substantially the same manner as before. B. If less than substantially all of the property shall be taken or condemned by a competent authority for any public use or purpose, neither the term nor any of the obligations of either party under this Lease Agreement shall be affected or reduced in any way, and -14- • (i) Lessee shall proceed to repair, rebuild and replace the remaining part of the property as nearly as possible to the condition existing prior to such taking, to the extent that the same may be feasible, subject to the right on the part of the Lessee to make alterations which, in the reasonable judgment of Lessee, will improve the effeciency of the property for the purposes of the intended use under this Lease Agreement; and (ii) The net award shall be paid to the Lessee, and the Lessor hereby assigns the same to the Lessee for the use of the Lessee in repairing, rebuilding and replacing as provided in (i) above. The net award shall be transferred to the Lessee upon receipt of a certificate signed by an officer of the Lessee: (a) requesting payment of a specified amount of such net award; (b) detailing the progress of the restoration and repair work; (c) stating that such specified amount does not exceed the estimated cost of the work and materials in connection with the restoration, including as part thereof the estimated fees of any architect or engineer, if any; and (d) stating that no part of such cost has pre- viously been made the basis of any request for the withdrawal under this Article. If the net award is in excess of the amount necessary to repair, rebuild and replace as specified in (i) above, such excess shall belong to and shall be paid to the Lessee. If the net award is less than the amount necessary for the Lessee to repair,rebuild and replace as set forth above, the Lessee shall nevertheless complete the repair, rebuilding and replacement work and pay the cost thereof. C. In the event of a taking under either A or B above, the Lessee shall have the right to participate in and to offer proof in the condemnation proceedings and to receive any award (by way of negotiation, settlement or judgment) which may be made for damages sustained by Lessee by reason of the condemnation. -15- • D. If the temporary use of the whole or any part of the property shall be taken by right to eminent domain, this Lease Agreement shall not be thereby terminated and the parties shall continue to be obligated under all of its terms and provisions and Lessee shall be entitled to receive the entire amount of the award made for such taking, whether by way of damages, rent or otherwise. ARTICLE XVI DEFAULT PROVISIONS Section 1601. The following shall be "events of default" under this Lease Agreement and the terms"event of default" or "default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events: (a) Failure by the Lessee to pay the Basic Rent or any part thereof when due and (i) continuation of said failure for a period of three (3) days after notice by mail given to it by the Lessor that the rent referred to in such notice has not been received or (ii) continuation of said failure for a period of seven (7) days. (b) Failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subsection (a) of this Section, (i) for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, given to the Lessee by the Lessor unless the Lessor shall agree in writing to an extension of such time prior to its expiration or (ii) for such longer period as may be reasonably necessary to remedy such default provided that the Lessee is proceeding with reasonable diligence to remedy the same. Section 1602. Whenever any event of default shall happen and then be continuing, the Lessor may take any of the following remedial steps: -16- (a) The Lessor may re-enter and take possession of the property without terminating this Lease Agreement, and sublease the property for the account of the Lessee, holding the Lessee liable for the difference in the rent and other amounts payable by the Lessee hereunder. (b) The Lessor may terminate the term, exclude the Lessee from possession of the property and use its best efforts to lease the property to another for the account of the Lessee, holding the Lessee liable for all rent and other payments due up to the effective date of any such leasing. (c) The Lessor shall have access to and inspect, examine and make copies of the books and records relating to the property. (d) The Lessor may take whatever action at law or in equity may appear necessary or desirable to collect the rent and any other amounts payable by Lessee hereunder, then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease Agreement. Any amounts collected pursuant to action taken under this Section shall be applied in accordance with the provisions of the lease. Section 1603. No remedy herein conferred upon or reserved to the Lessor is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. 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 or power may be exercised from time to time as often as may be deemed expedient. -17- Section 1604. The foregoing provisions of this Article the receipt of monies by Lessor as the result ation, upon a reletting or otherwise are each as providing that all such payments by Lessee shall be handled as provided in this Lease Ag the Lease. ARTICLE XVII relating to of an acceler- to be construed or others reement and in APPLICABLE STATE LAWS Section 1701. Compliance with State Law and Waiver. Any provision of this Agreement prohibited by any applicable law of the State of Arkansas shall be ineffective, without modifying the remaining provisions of this Agreement. Where, however, the conflicting provisions of any applicable state law may be waived, they are hereby waived by Lessee to the full extent permitted by law, to the end that this Agreement shall be deemed to be a lease agreement with option to purchase and enforced as such. Except as otherwise provided in this Agreement, Lessee, to.the full extent permitted by law, hereby waives all statutory or other legal requirements for any notice of any kind, notice of intention to take possession of or to sell the property, and any other requirements as to the time, place and terms of sale thereof, any other requirements with respect to the enforcement of Lessor's right hereunder and any and all rights of redemption. Section 1801 ARTICLE XVIII MISCELLANEOUS Extension Not A Waiver. Any extension of time for payment hereunder or other indulgence duly granted to Lessee in the discretion of Lessor shall not otherwise alter or affect Lessor's rights or the obligations of Lessee hereunder. Lessor's acceptance of any payment after it shall have become due hereunder shall not be deemed to alter or affect Lessee's obligation or Lessor's rights hereunder with respect to any subsequent payment or defaults with respect thereto. -18- Section 1802. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given when mailed by first class registered or certified mail, postage prepaid, addressed to Lessor and Lessee at their respective addresses set forth herein, or at such other address as Lessor or Lessee, as the case may be, shall have furnished in writing to the other. Notwithstanding the foregoing, however, when expressly required by the terms hereof, such notice shall not be in effect until received by the. appropriate party. Section 1803. Effect and Modification of Agreement. This Agreement and the Schedule(s) hereto exclusively and completely state the rights and agreements of Lessor and Lessee with respect to the property and supersede all other agreements, oral or written with respect to the property. No variations of this Agreement and no waiver of any of its provisions or conditions shall be valid unless made in writing and duly executed by and on behalf of Lessor and Lessee. Section 1804. Governing Law. The terms of this Agreement and all rights and obligations hereunder shall be governed by the laws of the State of Arkansas. Section 1805. Execution. This Agreement may be executed in any number of counter- parts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute but one and the same contract, which shall be sufficiently evidenced by any such original counterpart. Section 1806. Schedule(s) Controlling. In the event of any conflict between the terms hereof and those of any Schedule(s) attached hereto, the terms of the Schedule(s) shall control. -19- ARTICLE XIX TERMINATION Section 1901. Voluntary Termination. Lessee shall have the right (provided that no default shall have occurred and be continuing hereunder), at any time on or after the First Termination Date (if any) set forth in the applicable Schedules(s), upon not less than 90 days prior written notice to Lessor, to terminate this Agreement. Such termination shall be effective upon the date when the next succeeding payment of Rent shall be due (the "Voluntary Termination Date") next following the expira- tion of such 90 -day period. IN WITNESS WHEREOF, the parties hereto, each pursuant to due authority, have caused this instrument to be executed in their respective corporate names by duly authorized officers, all as of the date first above written, but actually on the dates opposite their respective signatures below. McILROY BANK & TRUST, LESSOR By $sold Vice President & Trust Offices (Title) CITY OF FAYETTEVILLE, ARKANSAS, LESSEE o/ f ` 'a y (Title fY .Y� r ATTEST: jr. 4O_ 4 Q -20- • LEASE AGREEMENT WITH OPTION TO PURCHASE SCHEDULE Lease Agreement with Option to Purchase Schedule No. 1. Lessor: Mcllroy Bank & Trust One Mcllroy Plaza Fayetteville, Arkansas 72701 Lessee: City of Fayetteville, Arkansas Post Office Drawer F Fayetteville, Arkansas 72701 Attention: City Manager 2. Location of Property: 221 S. School Avenue Fayetteville, Arkansas 72701 3. Legal Description of Property: A part of Block 37 as designated on the plat of the original town (now City) of Fayetteville, Arkansas, on file in the office of the Circuit Clerk and Ex -Officio Recorder of Washington County, and more particularly described as follows, to -wit: Beginning at a point 70 feet North of the S.W. corner of said Block 37 and running East thence 126 feet, thence North 81 feet; thence West 126_afeet; thence South 81 feet to the point of beginning. The description for this property includes only the basement renovation area beneath the South Geriatric Wing, approximately 6,000 square feet (see attached floor plan) and associated exterior property necessary to make the basement area accessible. 4. The aggregate original cost of the land, buildings, and facilities is $509,836.00. 5. Term: The Initial Term of this Lease Schedule shall commence on the 15th day of December , 1981, and, subject to the provisions of the Agreement, there shall be Successive Terms such that the total period of both the Initial Term and all Successive Terms shall be eigthy-four (84) months. Rent: The Monthly Rent for the property is $9,000.00. The Monthly Rent shall be paid for each month of the Term and shall continue until the expiration or termination of the Agreement or of this Lease Schedule. All payments of Rent shall be due upon the first day of each month of the term hereof. 7. Other Representations and Warranties: Lessee hereby confirms, represents, and warrants to Lessor and its successors and assigns as follows: (a) All representations and warranties made by Lessee in the Agreement or in any document or certificate furnished pursuant to the Agreement are true and correct as of the date hereof, with the same effect as though made on the date hereof; and (b) There has not occurred nor is there presently continuing any Event of Default under the terms of the Agreement or any other event which with the giving of notice or the lapse of time, or both, would become such an Event of Default. Agreement and Schedule This Lease Schedule is deemed to the Lease Agreement with Option to Pur above. All terms and conditions of th incorporated herein by reference. All not otherwise defined shall have the s forth in the Lease Agreement. If any between the terms of the Agreement and the terms of this Lease Schedule shall Miscellaneous: be an integral part of chase referenced• e Lease Agreement are terms used herein and ame meanings as set conflict shall exist this Lease Schedule, control. Any provisions of the Agreement to the contrary notwithstanding, Lessor and Lessee further agree as follows: "Termination Value" as defined and use in the Lease Agreement shall be the amount listed in the Schedule of Termination Values contained in Exhibit A attached hereto. -2- r IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement with Option to Purchase Schedule to be duly executed by their proper officers duly authorized, who so represent, this 15th day of December , 1981. McILROY BANK & TRUST LESSOR By nior Vice President & Trust Officer Title CITY OF FAYETTEVILLE, ARKANSAS LESSEE By. MAYn2 (Title)' -3- H T r 1_ S. I___ ' ___ _ __ 4 EXHIBIT A SCHEDULE OF RENTAL PAYMENTS AND OF TERMINATION VALUES Pmt. Amount o£ Termination No. Rent Due Value 1 $747,000.00 $505,934.36 2 738,000.00 501,993.70 3 729,000.00 498,013.69 4 720,000.00 493,993.78 5 711,000.00 489,933.72 6 702,000.00 485,835.06 7 693,000.00 481,691.39 8 684,000.00 477,508.30 9 675,000.00 473,283.38 10 666,000.00 469,016.21 11 657,000.00 464,706.37 12 648,000.00 460,353.43 13 639,000.00 455,956.96 14 630,000.00 451,516.53 15 621,000.00 447,031.70 16 612,000.00 442,502.02 17 603,000.00 437,927.04 18 594,000.00 433,306.31 19 585,000.00 428,639.37 20 576,000.00 423,925.76 21 567,000.00 419,165.02 22 558,000.00 414,356.67 23 549,000.00 409,500.24 24 540,000.00 404,595.24 25 531,000.00 399,641.19 26 522,000.00 394,637.60 27 513,000.00 389,583.98 28 504,000.00 384,479.82 29 495,000.00 379,324.62 30 486,000.00 374,117.87 31 477,000.00 368,859.05 32 468,000.00 363,547.64 33 459,000.00 358,183.12 34 450,000.00 352,764.95 35 441,000.00 347,292.60 36 432,000.00 341,765.39 37 423,000.00 336,183.05 38 414,000.00 330,544.88 39 405,000.00 324,850.33 40 396,000.00 319,098.83 • Pmt. No. 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 Amount of Rent Due $387,000.00 378,000.00 369,000.00 360,000.00 351,000.00 342,000.00 333,000.00 324,000.00 315,000.00 306,000.00 297,000.00 288,000.00 279,000.00 270,000.00 261,000.00 252,000.00 243,000.00 234,000.00 225,000.00 216,000.00. 207,000.00 198,000.00 189,000.00 180,000.00 171,000.00 162,000.00 153,000.00 144,000.00 135,000.00 126,000.00 117,000.00 108,000.00 99,000.00 90,000.00 81,000.00 72,000.00 63,000.00 54,000.00 45,000.00 36,000.00 27,000.00 18,000.00 9,000.00 0.00 Termination Value $313,289.82 307,422.72 301,496.95 295,511.92 289,467.04 283,361.71, 277,195.33 • 270,967.28 264,676.95 ,258,323.72 251,906.96 245,426.03 238,880.29 232,269.09 225,591.78 218,847.70 212,036.18 205,156.54 198,208.11 191,190.19 184,102.09 176,943.11 169,712.54 162,409.67 155,033.77 147,584.11 140,059.95 132,460.55 124,785.16 117,033.01 ,109,203.34 101,295.32 93,308.32 85,241.40 77,093.81 68,864.75 60,553.40 52,158.93 43,680.52 35,117.33 26,468.50 17,733.19 8,910.52 0.00 CERTIFICATE OF ACCEPTANCE With respect to and in consideration of that certain Lease with Option to Purchase, dated as of December 15 1981, (the "Agreement"), by and between McILROY BANK & TRUST ("Lessor") and CITY OF FAYETTEVILLE, ARKANSAS ("Lessee"), Lessee hereby certifies as follows: 1. At the time of execution and delivery thereof, Paul • Noland was the duly elected and acting Mayor of the Lessee, was duly charged with responsibility for issuing the. Lessee's obligation in connection with the Agreement, and has been duly authorized and empowered to execute the Agreement and • this Certificate on behalf of the Lessee. The Lessee hereby certifies that: a. The Agreement has been duly authorized, executed and delivered by a duly authorized official of the Lessee and the performance of the Lessee's obligations under the Agreement has been duly authorized by all required actions of the Lessee in accordance with all applicable statutory and regulatory requirements. b. The Agreement is in full force and effect as of the date hereof and has not been amended, changed, modified or waived in any respect, except for the assignment by Lessor of its interest as Lessor under the Agreement and such changes as may be effected by this Certificate. c. The Lessee claims no right, title or interest in or to the Property other than pursuant to the terms of the Agreement. d. As of the date hereof, the Lessor and the Lessee have each fully performed and complied with all covenants, obligations and agreements to be performed by them pursuant to the Agreement. e. Payments made and to be made by the Lessee pursuant to the Agreement have been, and will be, duly authorized and paid when due from legally available funds of the Lessee then on hand and, as of the date hereof, the Lessee has no reason to believe that such funds will not be available when, as and in the amounts required by the Agreement. EXHIBI11y 3 • f. The Lessee has not advanced or prepaid any amount due under the Agreement or deposited money or other property with any person or entity as security for the performance of any obligation of the Lessee pursuant to the Agreement, and the Lessee is not entitled to any credit, offset, or reduction in or against any payment or other obligation of the Lessee pursuant to the Agreement. g. The Agreement has been entered into in order to provide financing for the acquisition of the Property. The Property will be used during the term of the Agreement in furtherance of the public purposes of the Lessee. The Lessee has no intention of selling or. disposing of. the Property during the term of the Agreement,, and the Lessee will not receive any monies or other funds or "proceeds" as a result of entering into the Agreement. The Lessee has not been notified of any listing of it by the Internal Revenue Service as an issuer which may not certify its obligations, nor has it been advised that any such adverse action is contemplated. To the best knowledge, information and belief of the undersigned, the expectations herein expressed are reasonable and there are no facts, estimates or circumstances other than those expressed herein that would materially affect such expectations. 3. Attached hereto as Exhibit 1 is a true copy of the most recently available financial statements of Lessee. 4. As of the date hereof, there has been no material adverse change in Lessee's action revenues during the current fiscal year relative to the revenuesset forth in the financial statements attached hereto as Exhibit 1. 5. As of the date hereof, the Lessee is not a defendant in, and has no knowledge of; any lawsuits or administrative proceedings involving, or claims made against, it that would have a material adverse effect on its revenues. 6. Lessee hereby acknowledges that this Agreement has been executed in order to provide financing for the construction of the Property and that such financing has been provided with the understanding that Lessor, and its assigns, shall be able to treat a portion of the rents paid under the Agreement as interest that is exempt from taxation under Section 103(a) of the Internal Revenue Code of 1954, as amended. Lessee recites knowledge of Rev. Rul. 55-540, - 1955-2 C.B. 39 ("Rev; Rul. 55-540"), concerning the require- ments for tax-exempt treatment of a portion of payments made -2- 4-. under agreements of a type similar to the Agreement. With full intent to comply with all requirements of Rev. Rul. J'FU, LCJ ee portion retoo as i s erest ror purposes rees tnat Lessor may as "Interest" oExh federal income taxa treat FEDERAL INCOME TAXATION AND SHALL NOT BE DEEMED TO MAKE THE AGREEMENT A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF LESSEE WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION. THE AGREEMENT IS PAYABLE SOLELY FROM CURRENT REVENUES OF LESSEE AS AVAILABLE ON AN ANNUAL BASIS. LESSOR SHALL HAVE NO RIGHT TO COMPEL THE EXERCISE OF ANY TAXING POWER OF LESSEE TO MAKE PAYMENTS UNDER THE AGREEMENT, AND NO TAX REVENUES OR OTHER FUNDS OF LESSEE ARE PLEDGED TO THE MAKING OF PAYMENTS UNDER THE AGREEMENT. 7. The Agreement is hereby confirmed by the Lessee as being in full force and effect as of the date hereof. 8. For the purposes of rental payments, the Initial Term of the Lease Schedule to which this Certificate has reference shall commence upon December 15, 1981 and, subject to the provisions of the Agreement, there shall be Successive Terms such that the total period of both the Initial Term and all Successive Terms shall expire on December 14, 1988 Payment of Rent shall commence December 15; 1981__ Succeeding payments of Rent shat lbe due upon the first day of each succeeding month of the Term hereof except that the last such installment of Rent shall be due upon the last day of the Term, IN WITNESS WHEREOF, the Lessee has caused this Certificate of Acceptance to be executed as of the 15th day of December 1981. CITY OF FAYETTEVILLE, ARKANSAS LESSEE MAYOR STATE OF ARKANSAS ) COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged this 15th day of December , 1981, by Paul to me to the Mayors the City of Fayettevi Mycommission expires: -3-