OWNERSHIP OF THE EQUIPMENT. (a) Lessor and Lessee intend that (i) for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an "operating lease" pursuant to Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and lessor of the Equipment and (C) Lessee will be treated as the lessee of the Equipment but (ii) for federal, state and local income tax and state law purposes (A) this Lease will be treated as a financing arrangement, (B) the Securityholders will be treated as senior lenders making loans to Lessee in an amount equal to the principal amount of the Securities, which Securities will be secured by the Equipment, (C) the Certificate Holders will be treated as subordinated lenders making loans to Lessee in an aggregate amount equal to the Certificate Holder Contribution, which loans are secured by the Equipment, and (D) Lessee will be treated as the owner of the Equipment and will be entitled to all tax benefits ordinarily available to an owner of property like the Equipment for such tax purposes. (b) Lessor and Lessee further intend and agree that, for the purpose of securing Lessee's obligations for the repayment of the above-described loans, (i) this Lease shall also be a security agreement (as defined in Section 1-201(37) of the Uniform Commercial Code) and financing statement within the meaning of Article 9 of the Uniform Commercial Code; (ii) the conveyance provided for in Section 2 shall be deemed a grant of, and Lessee hereby grants to Lessor, a security interest in Lessee's right, title and interest in the Equipment and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, for the benefit of the Lessor to secure the Lessee's payment of all amounts owed by, and the performance of all obligations of, the Lessee under this Lease and the other Operative Agreements and Lessor holds title to the Equipment so as to create and grant a first lien and prior security interest in the Equipment (A) pursuant to this Lease for the benefit of the Collateral Agent under the Assignment of Lease, to secure to the Collateral Agent the obligations of the Lessee under the Lease for the benefit of the Securityholders and the Certificate Holders and (B) pursuant to the Security Agreement to secure to the Collateral Agent the obligations of the Lessor under the Indenture and the Notes for the benefit of the Securityholders and the Certificate Holders; (iii) the possession by Lessor or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-313 of the Uniform Commercial Code; and (iv) notifications to Persons holding such property, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to have been given for the purpose of perfecting such security interest under applicable law. Lessor and Lessee shall take such actions as may be necessary to ensure that such security interest is a perfected security interest of first priority under applicable law and will be maintained as such throughout the Term. Nevertheless, Lessee acknowledges and agrees that none of Lessor, Certificate Holders, Trustee, the Trust Company, Indenture Trustee, or any Securityholder has provided or will provide tax, accounting or legal advice to Lessee regarding this Lease, the Operative Agreements or the transactions contemplated hereby and thereby, or made any representations or warranties concerning the tax, accounting or legal characteristics of the Operative Agreements, and that Lessee has obtained and relied upon such tax, accounting and legal advice concerning the Operative Agreements as it deems appropriate. (c) Lessor and Lessee further intend and agree that in the event of any insolvency or receivership proceedings or a petition under the United States bankruptcy laws or any other applicable insolvency laws or statute of the United States of America or any State or Commonwealth thereof affecting Lessee or Lessor, the transactions evidenced by this Lease shall be regarded as loans made by an unrelated third party lender to Lessee.
Appears in 2 contracts
Samples: Lease Agreement (Hanover Compressor Co /), Lease (Hanover Compressor Co /)
OWNERSHIP OF THE EQUIPMENT. (a) Lessor and Lessee intend that (i) for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an "operating lease" pursuant to Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and lessor of the Equipment and (C) Lessee will be treated as the lessee of the Equipment Equipment, but (ii) for federal, state and local income tax and state law purposes (A) this Lease will be treated as a financing arrangement, (B) the Securityholders Lenders will be treated as senior lenders making loans to Lessee in an amount equal to the principal amount of the SecuritiesLoans, which Securities Loans will be secured by the Equipment, (C) the Certificate Holders Lessor will be treated as a subordinated lenders lender making loans a loan to Lessee in an aggregate amount equal to the Certificate Holder Investor Contribution, which loans are loan is secured by the Equipment, and (D) Lessee will be treated as the owner of the Equipment and will be entitled to all tax benefits ordinarily available to an owner of property like the Equipment for such tax purposes.
(b) Lessor and Lessee further intend and agree that, for the purpose of securing Lessee's obligations for the repayment of the above-described loans, (i) this Lease shall also be a security agreement (as defined in Section 1-201(37) of the Uniform Commercial Code) and financing statement within the meaning of Article 9 of the Uniform Commercial Code; (ii) the conveyance provided for in Section 2 shall be deemed a grant of, and Lessee hereby grants to Lessor, of a security interest in Lessee's right, title and interest in the Equipment (including the right to exercise all remedies as are contained herein upon the occurrence of a Lease Event of Default) and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, for the benefit of the Lessor to secure the Lessee's payment of all amounts owed by, and the performance of all obligations of, by the Lessee under this Lease and the other Operative Agreements and Lessor holds title to the Equipment so as to create and grant a first lien and prior security interest in the Equipment (A) pursuant to this Lease for the benefit of the Collateral Agent under the Assignment of Lease, to secure to the Collateral Agent the obligations of the Lessee under the Lease for the benefit of the Securityholders and the Certificate Holders and (B) pursuant to the Security Agreement to secure to the Collateral Agent the obligations of the Lessor under the Indenture Credit Agreement and the Notes for the benefit of the Securityholders and the Certificate HoldersNotes; (iii) the possession by Lessor or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-313 305 of the Uniform Commercial Code; and (iv) notifications to Persons holding such property, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to have been given for the purpose of perfecting such security interest under applicable law. Lessor and Lessee shall take such actions as may be necessary to ensure that such security interest is a perfected security interest of first priority under applicable law and will be maintained as such throughout the Term. Nevertheless, Lessee acknowledges and agrees that none of Lessor, Certificate Holders, TrusteeInvestor, the Trust Company, Indenture TrusteeAgent, or any Securityholder Lender has provided or will provide tax, accounting or legal advice to Lessee regarding this Lease, the Operative Agreements or the transactions contemplated hereby and thereby, or made any representations or warranties concerning the tax, accounting or legal characteristics of the Operative Agreements, and that Lessee has obtained and relied upon such tax, accounting and legal advice concerning the Operative Agreements as it deems appropriate.
(c) Lessor and Lessee further intend and agree that in the event of any insolvency or receivership proceedings or a petition under the United States bankruptcy laws or any other applicable insolvency laws or statute of the United States of America or any State or Commonwealth thereof affecting Lessee or Lessor, the transactions evidenced by this Lease shall be regarded as loans made by an unrelated third party lender to Lessee.
Appears in 1 contract
Samples: Lease (Hanover Compression Inc)
OWNERSHIP OF THE EQUIPMENT. (a) Lessor and Lessee intend that (i) -------------------------- for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an "operating lease" pursuant to Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and lessor of the Equipment and (C) Lessee will be treated as the lessee of the Equipment Equipment, but (ii) for federal, state and local income tax and state law purposes (A) this Lease will be treated as a financing arrangement, (B) the Securityholders Lenders will be treated as senior lenders making loans to Lessee in an amount equal to the principal amount of the SecuritiesLoans, which Securities Loans will be secured by the Equipment, (C) the Certificate Holders Lessor will be treated as a subordinated lenders lender making loans a loan to Lessee in an aggregate amount equal to the Certificate Holder Investor Contribution, which loans are loan is secured by the Equipment, and (D) Lessee will be treated as the owner of the Equipment and will be entitled to all tax benefits ordinarily available to an owner of property like the Equipment for such tax purposes.
(b) Lessor and Lessee further intend and agree that, for the purpose of securing Lessee's obligations for the repayment of the above-described loans, (i) this Lease shall also be a security agreement (as defined in Section 1-1- 201(37) of the Uniform Commercial Code) and financing statement within the meaning of Article 9 of the Uniform Commercial Code; (ii) the conveyance provided for in Section 2 shall be deemed a grant of, and Lessee hereby grants to Lessor, of a security interest in Lessee's right, title and interest in the Equipment (including the right to exercise all remedies as are contained herein upon the occurrence of a Lease Event of Default) and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, for the benefit of the Lessor to secure the Lessee's payment of all amounts owed by, and the performance of all obligations of, by the Lessee under this Lease and the other Operative Agreements and Lessor holds title to the Equipment so as to create and grant a first lien and prior security interest in the Equipment (A) pursuant to this Lease for the benefit of the Collateral Agent under the Assignment of Lease, to secure to the Collateral Agent the obligations of the Lessee under the Lease for the benefit of the Securityholders and the Certificate Holders and (B) pursuant to the Security Agreement to secure to the Collateral Agent the obligations of the Lessor under the Indenture Credit Agreement and the Notes for the benefit of the Securityholders and the Certificate HoldersNotes; (iii) the possession by Lessor or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-313 305 of the Uniform Commercial Code; and (iv) notifications to Persons holding such property, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to have been given for the purpose of perfecting such security interest under applicable law. Lessor and Lessee shall take such actions as may be necessary to ensure that such security interest is a perfected security interest of first priority under applicable law and will be maintained as such throughout the Term. Nevertheless, Lessee acknowledges and agrees that none of Lessor, Certificate Holders, TrusteeInvestor, the Trust Company, Indenture TrusteeAgent, or any Securityholder Lender has provided or will provide tax, accounting or legal advice to Lessee regarding this Lease, the Operative Agreements or the transactions contemplated hereby and thereby, or made any representations or warranties concerning the tax, accounting or legal characteristics of the Operative Agreements, and that Lessee has obtained and relied upon such tax, accounting and legal advice concerning the Operative Agreements as it deems appropriate.
(c) Lessor and Lessee further intend and agree that in the event of any insolvency or receivership proceedings or a petition under the United States bankruptcy laws or any other applicable insolvency laws or statute of the United States of America or any State or Commonwealth thereof affecting Lessee or Lessor, the transactions evidenced by this Lease shall be regarded as loans made by an unrelated third party lender to Lessee.
Appears in 1 contract
Samples: Lease (Hanover Compressor Co /)
OWNERSHIP OF THE EQUIPMENT. (a) Lessor and Lessee intend that (i) for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an "operating lease" pursuant to Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and lessor of the Equipment and (C) Lessee will be treated as the lessee of the Equipment Equipment, but (ii) for federal, state and local income tax and state law purposes (A) this Lease will be treated as a financing arrangement, (B) the Securityholders Lenders will be treated as senior lenders making loans to Lessee in an amount equal to the principal amount of the SecuritiesLoans, which Securities Loans will be secured by the Equipment, (C) the Certificate Holders Lessor will be treated as a subordinated lenders lender making loans a loan to Lessee in an aggregate amount equal to the Certificate Holder Investor Contribution, which loans are loan is secured by the Equipment, and (D) Lessee will be treated as the owner of the Equipment and will be entitled to all tax benefits ordinarily available to an owner of property like the Equipment for such tax purposes.
(b) Lessor and Lessee further intend and agree that, for the purpose of securing Lessee's obligations for the repayment of the above-described loans, (i) this Lease shall also be a security agreement (as defined in Section 1-201(37) of the Uniform Commercial Code) and financing statement within the meaning of Article 9 of the Uniform Commercial Code; (ii) the conveyance provided for in Section 2 shall be deemed a grant of, and Lessee hereby grants to Lessor, of a security interest in Lessee's right, title and interest in the Equipment (including the right to exercise all remedies as are contained herein upon the occurrence of a Lease Event of Default) and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, for the benefit of the Lessor to secure the Lessee's payment of all amounts owed by, and the performance of all obligations of, by the Lessee under this Lease and the other Operative Agreements and Lessor holds title to the Equipment so as to create and grant a first lien and prior security interest in the Equipment (A) pursuant to this Lease for the benefit of the Collateral Agent under the Assignment of Lease, to secure to the Collateral Agent the obligations of the Lessee under the Lease for the benefit of the Securityholders and the Certificate Holders and (B) pursuant to the Security Agreement to secure to the Collateral Agent the obligations of the Lessor under the Indenture Credit Agreement and the Notes for the benefit of the Securityholders and the Certificate HoldersNotes; (iii) the possession by Lessor or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-313 305 of the Uniform Commercial Code; and (iv) notifications to Persons holding such property, and acknowledgmentsacknowledgements, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to have been given for the purpose of perfecting such security interest under applicable law. Lessor and Lessee shall take such actions as may be necessary to ensure that such security interest is a perfected security interest of first priority under applicable law and will be maintained as such throughout the Term. Nevertheless, Lessee acknowledges and agrees that none of Lessor, Certificate Holders, TrusteeInvestor, the Trust Company, Indenture TrusteeAgent, or any Securityholder Lender has provided or will provide tax, accounting or legal advice to Lessee regarding this Lease, the Operative Agreements or the transactions contemplated hereby and thereby, or made any representations or warranties concerning the tax, accounting or legal characteristics of the Operative Agreements, and that Lessee has obtained and relied upon such tax, accounting and legal advice concerning the Operative Agreements as it deems appropriate.
(c) Lessor and Lessee further intend and agree that in the event of any insolvency or receivership proceedings or a petition under the United States bankruptcy laws or any other applicable insolvency laws or statute of the United States of America or any State or Commonwealth thereof affecting Lessee or Lessor, the transactions evidenced by this Lease shall be regarded as loans made by an unrelated third party lender to Lessee.
Appears in 1 contract
Samples: Lease (Hanover Compressor Co)
OWNERSHIP OF THE EQUIPMENT. (a) Lessor and Lessee intend that (i) for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an "operating lease" pursuant to Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and lessor of the Equipment and (C) Lessee will be treated as the lessee of the Equipment Equipment, but (ii) for federal, federal and all state and local income tax and state law purposes (A) this Lease will be treated as a financing arrangement, (B) the Securityholders Lenders and the Investor will be treated as senior lenders making loans to Lessee in an amount equal to the principal amount of Loans and the SecuritiesInvestor Contribution, which Securities will be secured by the Equipment, (C) the Certificate Holders will be treated as subordinated lenders making loans to Lessee in an aggregate amount equal to the Certificate Holder Contributionrespectively, which loans are secured by the Equipment, Equipment and (DC) Lessee will be treated as the owner of the Equipment and will be entitled to all tax benefits ordinarily available to an owner owners of property like the Equipment for such tax purposes. Lessee agrees that neither it, any affiliate of Lessee, nor any permitted sublessee or user of the Equipment will, directly or indirectly, at any time during the term of the Lease take any action or fail to take any action or file or fail to file any returns, certificates, or other documents if such action, failure to act, filing or failure to file would be inconsistent with the foregoing characterization of the transaction, unless otherwise required by applicable law. Lessee agrees further that it will file such returns, take such action, execute such documents, and keep and make available to Lessor such records as may be reasonable and necessary to facilitate accomplishing the foregoing. Lessor agrees that neither it nor any affiliate of Lessor will, directly or indirectly, at any time during the Term of the Lease take any action or fail to take any action or file or fail to file any returns, certificates or other documents if such action, failure to act, filing or failure to file would be inconsistent with the foregoing characterization of the transaction, unless otherwise required by law.
(b) Specifically, without limiting the generality of Section 7.1(a) above, Lessor and Lessee further intend and agree that, for that with respect to the purpose of securing Lessee's obligations for the repayment nature of the above-described loans, (i) transactions evidenced by this Lease shall also be a security agreement (as defined in Section 1-201(37) the context of the Uniform Commercial Code) and financing statement within the meaning exercise of Article 9 of the Uniform Commercial Code; (ii) the conveyance provided for in Section 2 shall be deemed a grant of, and Lessee hereby grants to Lessor, a security interest in Lessee's right, title and interest in the Equipment and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, for the benefit of the Lessor to secure the Lessee's payment of all amounts owed by, and the performance of all obligations of, the Lessee remedies under this Lease and the other Operative Agreements and Lessor holds title to the Equipment so as to create and grant a first lien and prior security interest in the Equipment (A) pursuant to this Lease for the benefit of the Collateral Agent under the Assignment of Lease, to secure to the Collateral Agent the obligations of the Lessee under the Lease for the benefit of the Securityholders and the Certificate Holders and (B) pursuant to the Security Agreement to secure to the Collateral Agent the obligations of the Lessor under the Indenture and the Notes for the benefit of the Securityholders and the Certificate Holders; (iii) the possession by Lessor or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-313 of the Uniform Commercial Code; and (iv) notifications to Persons holding such property, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to have been given for the purpose of perfecting such security interest under applicable law. Lessor and Lessee shall take such actions as may be necessary to ensure that such security interest is a perfected security interest of first priority under applicable law and will be maintained as such throughout the Term. Nevertheless, Lessee acknowledges and agrees that none of Lessor, Certificate Holders, Trustee, the Trust Company, Indenture Trustee, or any Securityholder has provided or will provide tax, accounting or legal advice to Lessee regarding this Lease, the Operative Agreements or the transactions contemplated hereby and thereby, or made any representations or warranties concerning the tax, accounting or legal characteristics of the Operative Agreements, and that Lessee has obtained and relied upon such taxincluding, accounting and legal advice concerning the Operative Agreements as it deems appropriate.
(c) Lessor and Lessee further intend and agree that without limitation, in the event case of any insolvency or receivership proceedings or a petition under the United States bankruptcy laws or any other applicable insolvency laws or statute of the United States of America or any State or Commonwealth thereof affecting Lessee Lessee, Lessor, the Investor or Lessorany Lender or any enforcement or collection actions, the transactions evidenced by this Lease shall be regarded as are loans made by an the Investor and the Lenders as unrelated third party lender lenders to LesseeLessee secured by the Equipment (it being understood that Lessee hereby grants a security interest in the Equipment to Lessor, on behalf of the Investor and the Lenders, to secure such loans, effective on the Initial Closing Date).
Appears in 1 contract