EXHIBIT 10.28
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT, dated as of Oct. 24, 1997 ("Agreement"), between
General Electric Capital Corporation, with an office at 0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000, Xxxxxx, XX 00000 (hereinafter called, together with its successors
and assigns, if any, "Lessor"), and New Century Mortgage Corporation, a
corporation organized and existing under the laws of the state of California
with its mailing address and chief place of business at 00000 Xxx Xxxxxx, Xxxxx
0000, Xxxxxx, XX 00000 (hereinafter called "Lessee").
WITNESSETH:
I. LEASING:
(a) Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("Equipment") described in Annex A to any schedule hereto ("Schedule") or, if
applicable, to Section A of any Schedule. Terms defined in a Schedule and not
otherwise defined herein shall have the meanings ascribed to them in such
Schedule.
(b) The obligation of Lessor to purchase Equipment from the manufacturer or
supplier thereof ("Supplier") and to lease the same to Lessee under any
Schedule shall be subject to receipt by Lessor, prior to the Lease Commencement
Date (with respect to such Equipment), of each of the following documents in
form and substance satisfactory to Lessor: (i) a Schedule relating to the
Equipment then to be leased hereunder, (ii) a Purchase Order Assignment and
Consent in the form of Annex B to the applicable Schedule, unless Lessor shall
have delivered its purchase order for such Equipment, (iii) evidence of
insurance which complies with the requirements of Section X, and (iv) such other
documents as Lessor may reasonably request. As a further condition to such
obligations of Lessor, Lessee shall, upon delivery of such Equipment (but not
later than the Last Delivery Date specified in the applicable Schedule) execute
and deliver to Lessor a Certificate of Acceptance (which may be in the form of
Annex C to the applicable Schedule) covering such Equipment, and, if requested
by Lessor, deliver to Lessor a xxxx of sale therefor (in form and substance
satisfactory to Lessor). Lessor hereby appoints Lessee its agent for inspection
and acceptance of the Equipment from the Supplier. Upon execution by Lessee of
any Certificate of Acceptance, the Equipment described thereon shall be deemed
to have been delivered to, and irrevocably accepted by, Lessee for lease
hereunder.
II. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder and Lessee's right to use the Equipment shall
commence on the date of execution by Lessee of the Certificate of Acceptance for
such Equipment ("Lease Commencement Date"). The term of this Agreement shall
be the period specified in the applicable Schedule. If any term is extended, the
word "term" shall be deemed to refer to all extended terms, and all provisions
of this Agreement shall apply during any extended terms, except as may be
otherwise specifically provided in writing.
(b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor. Payments of rent shall be in the amount set forth
in, and due in accordance with, the provisions of the applicable Schedule. If
one or more Advance Rents are payable, such Advance Rent shall be (i) set forth
on the applicable Schedule, (ii) due upon acceptance by Lessor of such Schedule,
and (iii) when received by Lessor, applied to the first rent payment and the
balance, if any, to the final rental payment(s) under such Schedule. In no event
shall any Advance Rent or any other rent payments be refunded to Lessee. If rent
is not paid within ten days of its due date, Lessee agrees to pay a late charge
of five cents ($.05) per dollar on, and in addition to, the amount of such rent
but not exceeding the lawful maximum, if any.
III. RENT ADJUSTMENT:
(a) The periodic rent payments in each Schedule have been calculated on the
assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers ("Effective Rate") will be thirty-five percent (35%)
each year during the lease term.
(b) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, (the "Code")), the Effective Rate is
higher than thirty-five percent (35%) for any year during the lease term, then
Lessor shall have the right to increase such rent payments by requiring payment
of a single additional sum equal to the product of (i) the Effective Rate
(expressed as a decimal) for such year less .35 (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Termination Value, divided by (iii) the difference between the
new Effective Tax Rate (expressed as a decimal) and one (1). The adjusted
Termination Value shall be the Termination Value (calculated as of the first
rental due in the year for which such adjustment is being made) less the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all subsequent years
of the lease term). Lessee shall pay to Lessor the full amount of the
additional rent payment on the later of (i) receipt of notice or (ii) the first
day of the year for which such adjustment is being made.
(c) Lessee's obligations under this Section III shall survive any expiration
or termination of this Agreement.
IV. TAXES: Except as provided in Sections III and XV(c), Lessee shall have no
liability for taxes imposed by the United States of America or any State or
political subdivision thereof which are on or measured by the net income of
Lessor. Lessee shall report (to the extent that it is legally permissible) and
pay promptly all other taxes, fees and assessments due, imposed, assessed or
levied against any Equipment (or the purchase, ownership, delivery, leasing,
possession, use or operation thereof), this Agreement (or any rentals or
receipts hereunder), any Schedule, Lessor or Lessee by any foreign, federal,
state or local government or taxing authority during or related to the term of
this Agreement, including, without limitation, all license and registration
fees, and all sales, use, personal property, excise, gross receipts, franchise,
stamp or other taxes, imposts, duties and charges, together with any penalties,
fines or interest thereon (all hereinafter called, "Taxes"). Lessee shall (i)
reimburse Lessor upon receipt of written request for reimbursement for any Taxes
charged to or assessed against Lessor, (ii) on request of Lessor submit to
Lessor written evidence of Lessee's payment of Taxes, (iii) on all reports or
returns show the ownership of the Equipment by Lessor, and (iv) send a copy
thereof to Lessor.
INITIALS: BAM
---
V. REPORTS:
(a) Lessee will notify Lessor in writing, within ten (10) days after any tax
or other lien shall attach to any Equipment, of the full particulars thereof and
of the location of such Equipment on the date of such notification.
(b) Lessee will within ninety (90) days of the close of each fiscal year of
Lessee, deliver to Lessor, Lessee's balance sheet and profit and loss statement,
certified by a recognized firm of certified public accountants. Upon request
Lessee will deliver to Lessor quarterly, within ninety (90) days of the close of
each fiscal quarter of Lessee, in reasonable detail, copies of Lessee's
quarterly financial report certified by the chief financial officer of Lessee.
(c) Lessee will permit Lessor to inspect any Equipment during normal business
hours.
(d) Lessee will keep the Equipment at the Equipment Location (specified in the
applicable Schedule) and will promptly notify Lessor of any relocation of
Equipment. Upon the written request of Lessor, Lessee will notify Lessor
forthwith in writing of the location of any Equipment as of the date of such
notification.
(e) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost or damaged (where the estimated repair costs would exceed ten
percent (10%) of its then fair market value), or is otherwise involved in an
accident causing personal injury or property damage.
(f) Within sixty (60) days after any request by Lessor, Lessee will furnish a
certificate of an authorized officer of Lessee stating that he has reviewed the
activities of Lessee and that, to the best of his knowledge, there exists no
default (as described in Section XII) or event which with notice or lapse of
time (or both) would become such a default.
VI. DELIVERY, USE AND OPERATION:
(a) All Equipment shall be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable federal,
state, and local laws and regulations.
(c) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT, OR
THE INTEREST OF LESSEE HEREUNDER, NOR SHALL LESSEE REMOVE ANY EQUIPMENT FROM THE
CONTINENTAL UNITED STATES, WITHOUT THE PRIOR WRITTEN CONSENT OF THE LESSOR.
(d) Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor.
VII. SERVICE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and tear excepted. Lessee shall, if
at any time requested by Lessor, affix in a prominent position on each unit of
Equipment plates, tags or other identifying labels showing ownership thereof by
Lessor.
(b) Lessee will not, without the prior consent of Lessor, affix or install any
accessory, equipment or device on any Equipment if such addition will impair the
originally intended function or use of such Equipment. All additions, repairs,
parts, supplies, accessories, equipment, and devices furnished, attached or
affixed to any Equipment which are not readily removable shall be made only in
compliance with applicable law, including Internal Revenue Service guidelines,
and shall become the property of Lessor. Lessee will not, without the prior
written consent of Lessor and subject to such conditions as Lessor may impose
for its protection, affix or install any Equipment to or in any other personal
or real property.
(c) Any alterations or modifications to the Equipment that may, at any time
during the term of this Agreement, be required to comply with any
applicable law, rule or regulation shall be made at the expense of Lessee.
VIII. STIPULATED LOSS VALUE: Lessee shall promptly and fully notify Lessor in
writing if any unit of Equipment shall be or become worn out, lost, stolen,
destroyed, irreparably damaged in the reasonable determination of Lessee, or
permanently rendered unfit for use from any cause whatsoever (such occurrences
being hereinafter called "Casualty Occurrences"). On the rental payment date
next succeeding a Casualty Occurrence (the "Payment Date"), Lessee shall pay
Lessor the sum of (x) the Stipulated Loss Value of such unit calculated as of
the rental next preceding such Casualty Occurrence ("Calculation Date"); and (y)
all rental and other amounts which are due hereunder as of the Payment Date.
Upon payment of all sums due hereunder, the term of this lease as to such unit
shall terminate and (except in the case of the loss, theft or complete
destruction of such unit) Lessor shall be entitled to recover possession of such
unit.
IX. LOSS OR DAMAGE: Lessee hereby assumes and shall bear the entire risk of
any loss, theft, damage to, or destruction of, any unit of Equipment from any
cause whatsoever from the time the Equipment is shipped to Lessee.
X. INSURANCE: Lessee agrees, at its own expense, to keep all Equipment insured
for such amounts and against such hazards as Lessor may require, including, but
not limited to, insurance for damage to or loss of such Equipment and liability
coverage for personal injuries, death or property damage, with Lessor named as
additional insured and with a loss payable clause in favor of Lessor, as its
interest may appear, irrespective of any breach of warranty or other act or
omission of Lessee. The insurance shall provide (i) liability coverage in an
amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00) total
liability per occurrence, unless otherwise stated in any Schedule, and (ii)
casualty/property damage coverage in an amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment; or at
such other amounts as may be required by Lessor. All such policies shall be with
companies, and on terms, satisfactory to Lessor. Lessee agrees to deliver to
Lessor evidence of insurance satisfactory to Lessor. No insurance shall be
subject to any co-insurance clause. *Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make proof of loss and claim for insurance, and to make
adjustments with insurers and to receive payment of and execute or endorse all
documents, checks or drafts in connection with payments made as a result of such
insurance policies. Any expense of Lessor in adjusting or collecting insurance
shall be borne by Lessee. Lessee will not make adjustments with insurers except
(i) with respect to claims for damage to any unit of Equipment where the repair
costs do not exceed ten percent (10%) of such unit's fair market value, or (ii)
with Lessor's written consent. Said policies shall provide that the insurance
may not be altered or canceled by the insurer until after thirty (30) days
written notice to Lessor. Lessor may, at its option, apply proceeds of
insurance, in whole or in part, to (i) repair or replace Equipment or any
portion thereof, or (ii) satisfy any obligation of Lessee to Lessor hereunder.
*In the event of default, BAM
---
XI. RETURN OF EQUIPMENT:
(a) Upon any expiration or termination of this Agreement or any Schedule,
Lessee shall promptly, at its own cost and expense: (i) perform any testing and
repairs required to place the affected units of Equipment in the same condition
and appearance as when received by Lessee (reasonable wear and tear excepted)
and in good working order for their originally intended purpose; (ii) if
deinstallation, disassembly or crating is required, cause such units to be
deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other service person as is satisfactory to Lessor; and
(iii) return such units to a location within the continental United States as
Lessor shall direct; (iv) ensure all Lessee installed markings which are not
necessary for the operation, maintenance or repair of the Equipment are
properly removed; (v) provide that all Equipment will be cleaned and
cosmetically acceptable, and in such condition as to be immediately installed
and put into use in a similar environment for which the Equipment was originally
intended to be used; (vi) remove all waste material and fluid from the Equipment
and dispose of in accordance with then current waste disposal laws; and (vii)
obtain and pay for a policy of transit insurance for the redelivery period in an
amount equal to the replacement value of the Equipment, and name Lessor as the
loss payee on all such policies of insurance.
(b) Until Lessee has fully complied with the requirements of Section XI(a)
above, Lessee's rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the lease term. Lessor may terminate such continued leasehold
interest upon ten (10) days notice to Lessee.
(c) At least ninety (90) days and not more than one hundred twenty (120) days
prior to lease termination, Lessee shall: (i) provide to Lessor a detailed
inventory of all components of the Equipment including model and serial
numbers; and (ii) provide an up-to-date copy of all documentation pertaining to
the Equipment including, but not limited to service manuals, blue prints,
process flow diagrams, operating manuals and maintenance records.
(d) At least one hundred twenty (120) days prior to and continuing up to lease
termination, Lessee shall, upon receiving reasonable notice from Lessor, make
the Equipment available for on-site operational inspections by potential
purchasers. Lessee shall provide personnel, power and other requirements
necessary to demonstrate electrical, hydraulic and mechanical systems for each
item of Equipment.
XII. DEFAULT:
(a) Lessor may in writing declare this Agreement in default if: Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; Lessee breaches any of its insurance
obligations under Section X; Lessee breaches any of its other obligations and
fails to cure that breach within thirty (30) days after written notice thereof;
any representation or warranty made by Lessee in connection with this Agreement
shall be false or misleading in any material respect; Lessee becomes insolvent
or ceases to do business as a going concern; any Equipment is illegally used; or
a petition is filed by or against Lessee or any Guarantor of Lessee's
obligations to Lessor under any bankruptcy or insolvency laws. Such declaration
shall apply to all Schedules except as specifically excepted by Lessor.
(b) After default, at the request of Lessor, Lessee shall comply with the
provisions of Section XI(a). Lessee hereby authorizes Lessor to enter, with or
without legal process, any premises where any Equipment is believed to be and
take possession thereof. Lessee shall, without further demand, forthwith pay to
Lessor (i) as liquidated damages for loss of a bargain and not as a penalty, the
Stipulated Loss Value of the Equipment (calculated as of the rental next
preceding the declaration of default), and (ii) all rentals and other sums then
due hereunder. Lessor may, but shall not be required to, sell Equipment at
private or public sale, in bulk or in parcels, with or without notice, and
without having the Equipment present at the place of sale; or Lessor may, but
shall not be required to, lease, otherwise dispose of or keep idle all or part
of the Equipment; and Lessor may use Lessee's premises for any or all of the
foregoing without liability for rent, costs, damages or otherwise. The proceeds
of sale, lease or other disposition, if any, shall be applied in the following
order of priorities: (l) to pay all of Lessor's costs, charges and expenses
incurred in taking, removing, holding, repairing and selling, leasing or
otherwise disposing of Equipment; then, (2) to the extent not previously paid by
Lessee, to pay Lessor all sums due from Lessee hereunder; then (3) to reimburse
to Lessee any sums previously paid by Lessee as liquidated damages; and (4)
any surplus shall be retained by Lessor. Lessee shall pay any deficiency in (1)
and (2) forthwith.
(c) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, defense or preservation of Lessor's rights and remedies
hereunder, or if prohibited by law, such lesser sum as may be permitted. Waiver
of any default shall not be a waiver of any other or subsequent default.
(d) Any default under the terms of this or any other agreement between Lessor
and Lessee may be declared by Lessor a default under this and any such
other agreement.
XIII. ASSIGNMENT: Lessor may, without the consent of Lessee, assign this
Agreement or any Schedule. Lessee agrees that if Lessee receives written notice
of an assignment from Lessor, Lessee will pay all rent and all other amounts
payable under any assigned Equipment Schedule to such assignee or as instructed
by Lessor. Lessee further agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by assignee. Lessee hereby waives and
agrees not to assert against any such assignee any defense, set-off, recoupment
claim or counterclaim which Lessee has or may at any time have against Lessor
for any reason whatsoever.
XIV. NET LEASE; NO SET-OFF, ETC: This Agreement is a net lease. Lessee's
obligation to pay rent and other amounts due hereunder shall be absolute and
unconditional. Lessee shall not be entitled to any abatement or reductions of,
or set-offs against, said rent or other amounts, including, without limitation,
those arising or allegedly arising out of claims (present or future, alleged or
actual, and including claims arising out of strict tort or negligence of Lessor)
of Lessee against Lessor under this Agreement or otherwise. Nor shall this
Agreement terminate or the obligations of Lessee be affected by reason of any
defect in or damage to, or loss of possession, use or destruction of, any
Equipment from whatsoever cause. It is the intention of the parties that rents
and other amounts due hereunder shall continue to be payable in all events in
the manner and at the times set forth herein unless the obligation to do so
shall have been terminated pursuant to the express terms hereof.
XV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor, its
agents, employees, successors and assigns from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature, in contract or tort, whether caused by
the active or passive negligence of Lessor or otherwise, and including, but not
limited to, Lessor's strict liability in tort rising out of (i) the selection,
INITIALS: BAM
---
manufacture, purchase, acceptance or rejection of Equipment, the ownership of
Equipment during term of this Agreement, and the delivery, lease, possession,
maintenance, uses, condition, return or operation of Equipment (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for patent, trademark or copyright infringement
or environmental damage) or (ii) the condition of Equipment sold or disposed of
after use by Lessee, any sublessee or employees of Lessee. Lessee shall, upon
request, defend any actions based on, or arising out of, any of the foregoing.
(b) Lessee hereby represents, warrants and covenants that (i) on the Lease
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of deduction and credit specified in Section C of the applicable
Schedule ("Tax Benefits") in the hands of Lessor (all references to Lessor in
this Section XV include Lessor and the consolidated taxpayer group of which
Lessor is a member), and (ii) at no time during the term of this Agreement will
Lessee take or omit to take, nor will it permit any sublessee or assignee to
take or omit to take, any action (whether or not such act or omission is
otherwise permitted by Lessor or the terms of this Agreement), which will result
in the disqualification of any Equipment for, or recapture of, all or any
portion of such Tax Benefits.
(c) If as a result of a breach of any representation, warranty or covenant of
the Lessee contained in this Agreement or any Schedule (x) tax counsel of Lessor
shall determine that Lessor is not entitled to claim on its Federal income tax
return all or any portion of the Tax Benefits with respect to any Equipment, or
(y) any such Tax Benefit claimed on the Federal income tax return of Lessor is
disallowed or adjusted by the Internal Revenue Service, or (z) any such Tax
Benefit is recomputed or recaptured (any such determination, disallowance,
adjustment, recomputation or recapture being hereinafter called a "Loss"), then
Lessee shall pay to Lessor, as an indemnity and as additional rent, such amount
as shall, in the reasonable opinion of Lessor, cause Lessor's after-tax economic
yields and cash flows, computed on the same assumptions, including tax rates
(unless any adjustment has been made under Section III hereof, in which case the
Effective Rate used in the next preceding adjustment shall be substituted), as
were utilized by Lessor in originally evaluating the transaction (such yields
and flows being hereinafter called the "Net Economic Return") to equal the Net
Economic Return that would have been realized by Lessor if such Loss had not
occurred. Such amount shall be payable upon demand accompanied by a statement
describing in reasonable detail such Loss and the computation of such amount.
(d) All of Lessor's rights, privileges and indemnities contained in this
Section XV shall survive the expiration or other termination of this Agreement
and the rights, privileges and indemnities contained herein are expressly made
for the benefit of, and shall be enforceable by Lessor, its successors and
assigns.
XVI. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE,
HAS NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO
THE EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY
OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR
OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All
such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following, regardless of
any negligence of Lessor (i) any liability, loss or damage caused or alleged to
be caused directly or indirectly by any Equipment, any inadequacy thereof, any
deficiency or defect (latent or otherwise) therein, or any other circumstance in
connection therewith; (ii) the use, operation or performance of any Equipment or
any risks relating thereto; (iii) any interruption of service, loss of business
or anticipated profits or consequential damages; or (iv) the delivery,
operation, servicing, maintenance, repair, improvement or replacement of any
Equipment. If, and so long as, no default exists under this Lease, Lessee shall
be, and hereby is, authorized during the term of this Lease to assert and
enforce, at Lessee's sole cost and expense, from time to time, in the name of
and for the account of Lessor and/or Lessee, as their interests may appear,
whatever claims and rights lessor may have against any Supplier of the
Equipment.
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee hereby represents and
warrants to Lessor that on the date hereof and on the date of execution of each
Schedule:
(a) Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies therein
provided may be limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is requited from any
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or By-Laws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or before
any commission, board or other administrative agency against or affecting
Lessee, which will have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each Balance Sheet and Statement of Income delivered to Lessor has been
prepared in accordance with generally accepted accounting principles, and
since the date of the most recent such Balance Sheet and Statement of Income,
there has been no material adverse change.
(h) Lessee is and will be at all times validly existing and in good standing
under the laws of the State of its incorporation (specified in the first
sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business
purposes.
XVIII. EARLY TERMINATION:
(a) On or after the First Termination Date (specified in the applicable
Schedule). Lessee may, so long as no default exists hereunder, terminate this
Agreement as to all (but not less than all) of the Equipment on such Schedule as
of a rent payment date ("Termination Date") upon at least ninety (90) days prior
written notice to Lessor.
(b) Lessee shall, and Lessor may, solicit cash bids for the Equipment on an AS
IS, WHERE IS BASIS without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall (i)
certify to Lessor any bids received by Lessee and (ii) pay to Lessor (A) the
Termination Value (calculated as of the rental due on the Termination Date) for
the Equipment, and (B) all rent and other sums due and unpaid as of the
Termination Date.
(c) Provided that all amounts due hereunder have been paid on the Termination
Date, Lessor shall (i) sell the Equipment on an AS IS BASIS for cash to the
highest bidder and (ii) refund the proceeds of such sale (net of any related
expenses) to Lessee up to the amount of the Termination Value. If such sale is
not consummated, no termination shall occur and Lessor shall refund the
Termination Value (less any expenses incurred by Lessor) to Lessee.
(d) Notwithstanding the foregoing, Lessor may elect by written notice, at any
time prior to the Termination Date, not to sell the Equipment. In that event,
on the Termination Date Lessee shal1 (i) return the Equipment (in accordance
with Section XI) and (ii) pay to Lessor all amounts required under Section
XVIII(b) less the amount of the highest bid certified by Lessee to Lessor.
XIX. PURCHASE OPTION:
(a) So long as no default exists hereunder and the lease has not been earlier
terminated, Lessee may at lease expiration, upon at least one hundred eighty
(180) days prior written notice to Lessor, purchase all (but not less than all)
of the Equipment in any Schedule on an AS IS WHERE IS BASIS, without recourse
to or warranty from Lessor, express or implied, for cash equal to its then Fair
Market Value (plus all applicable sales taxes).
(b) "Fair Market Value" shall mean the price which a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's-length transaction to a willing seller under no
compulsion to sell; provided , however, that in such determination: (i) the
Equipment shall be assumed to be in the condition in which it is required to be
maintained and returned under this Agreement; (ii) in the case of any installed
Equipment, that Equipment shall be valued on an installed basis; and (iii) costs
of removal from current location shall not be a deduction from such valuation.
If Lessor and Lessee are unable to agree on the Fair Market Value at least one
hundred thirty-five (135) days before lease expiration, Lessor shall appoint an
independent appraiser (reasonably acceptable to Lessee) to determine Fair Market
Value, and that determination shall be final, binding and conclusive. Lessee
shall bear all costs associated with any such appraisal.
(c) Lessee shall be deemed to have waived this option unless it provides
Lessor with written notice of its irrevocable election to exercise the same
within fifteen (15) days after Fair Market Value is determined (by agreement or
appraisal).
XX. MISCELLANEOUS:
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS LEASE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS LEASE
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) Unless and until Lessee exercises its rights under Section XIX above,
nothing herein contained shall give or convey to Lessee any right, title or
interest in and to any Equipment except as a lessee. Any cancellation or
termination by Lessor, pursuant to the provision of this Agreement, any
Schedule, supplement or amendment hereto, or the lease of any Equipment
hereunder, shall not release Lessee from any then outstanding obligations to
Lessor hereunder. All Equipment shall at all times remain personal property of
Lessor regardless of the degree of its annexation to any real property and shall
not by reason of any installation in, or affixation to, real or personal
property become a part thereof.
(c) Time is of the essence of this Agreement. Lessor's failure at any time to
require strict performance by Lessee of any of the provisions hereof shall not
waive or diminish Lessor's right thereafter to demand strict compliance
therewith. Lessee agrees, upon Lessor's request, to execute any instrument
necessary or expedient for filing, recording or perfecting the interest of
Lessor. All notices required to be given hereunder shall be deemed adequately
given if sent by registered or certified mail to the addressee at its address
stated herein, or at such other place as such addressee may have designated in
writing. This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
(d) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated, to effect
such compliance, in whole or in part; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance shall
constitute additional rent due to Lessor within five days after the date Lessor
sends notice to Lessee requesting payment. Lessor's effecting such compliance
shall not be a waiver of Lessee's default.
(e) Any rent or other amount not paid to Lessor when due hereunder shall bear
interest, both before and after any judgment or termination hereof, at the
lesser of eighteen percent (18%) per annum or the maximum rate allowed by law.
Any provisions in this Agreement and any Schedule which are in conflict with any
statute, law or applicable rule shall be deemed omitted, modified or altered to
conform thereto.
(f) Adjustment to Capitalized Lessor's Cost. Lessee hereby irrevocably
authorizes Lessor to adjust the Capitalized Lessor's Cost up or down by no more
than ten percent (10%) within each Schedule to account for equipment change
orders, equipment returns, invoicing errors, and similar matters. Lessee
acknowledges and agrees that the Rent shall be adjusted as a result of such
change in the Capitalized Lessor's Cost. Lessor shall send Lessee a written
notice stating the final Capitalized Lessor's Cost, if different from that
disclosed on the Schedule.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation New Century Mortgage Corporation
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- ---------------------------------
Name: XXXXXXXX X. XXXXXXXXX Name: XXXX X. XXXXXXX
------------------------------- -------------------------------
Title: REGION CREDIT MANAGER Title: CEO
------------------------------ ------------------------------
EQUIPMENT SCHEDULE
SCHEDULE NO. 1
DATED THIS OCT. 24, 1997
-------------
TO MASTER LEASE AGREEMENT
DATED AS OF OCT. 24, 1997
-------------
Lessor & Mailing Address: Lessee & Mailing Address:
------------------------ ------------------------
General Electric Capital Corporation New Century Mortgage Corporation
0000 Xxxxxx Xxxxxx Xxxxx Xxxxx 000 00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Capitalized terms not defined herein shall have the meanings assigned to them
in the Master Lease Agreement identified above ("AGREEMENT"; the Agreement as it
relates to this Schedule, together with this Schedule being collectively
referred to as "LEASE").
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees to
Lease to Lessee the Equipment described below (the "EQUIPMENT").
Number Capitalized Lessors
of Units Cost Per Unit Manufacturer Serial Numbers Model and Type of Equipment
-----------------------------------------------------------------------------------------------------------
Various Office Furniture, Fixtures and
Equipment all more completely described
on Schedule 'A' which is attached hereto
and made a part hereof and the Vendor
invoices.
Together with all other attachments,
accessories, additions, replacements and
substitutions now or hereafter attached
hereto and made a part thereof.
B. FINANCIAL TERMS
1. Advance Rent (if any): $42,479.98 plus tax. 5. Basic Term Commencement Date: Nov. 1, 1997.
--------------
2. Capitalized Lessor's Cost: $1,460,797.27. 6. Lessee Federal Tax ID No.: 00-0000000.
3. Basic Term (No. of Months): 34 Months. 7. Last Delivery Date: December 31, 1997.
4. Basic Term Lease Rate Factor. 2.90800%. 8. Daily Lease Rate Factor: .09693%.
9. First Termination Date: Thirty-six (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to the Basic Term Commencement Date ("Interim Period"), Lessee shall
pay as rent ("Interim Rent") for each unit of Equipment, the product of
the Daily Lease Rate Factor times the Capitalized Lessor's Cost of such
unit times the number of days in the Interim Period. Interim Rent shall
be due on Oct. 24, 1997.
-------------
11. Basic Term Rent. Commencing on Nov. 1, 1997 and on the same day of each
------------
month thereafter (each, a "Rent Payment Date") during the Basic Term,
Lessee shall pay as rent ("Basic Term Rent") the product of the Basic
Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
12. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on ________________ (the "Secondary Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for 6 months (the "Secondary Term"), Lessee shall pay
as rent ("Secondary Term Rent") the product of 3.486% (the "Secondary Term
Lease Rate Factor") times the Capitalized Lessor's Cost of all Equipment
on this Schedule.
C. TAX BENEFITS Depreciation Deductions:
INITIALS: BAM
---
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such
year will yield a larger allowance.
2. Recovery Period: Five (5) Years.
3. Basis: 100% of Capitalized Lessors Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN GEORGIA AND CALIFORNIA: Lessee agrees that it
will (a) list all such Equipment, (b) report all property taxes assessed
against such Equipment and (c) pay all such taxes when due directly to the
appropriate taxing authority until Lessor shall otherwise direct in writing.
Upon request of Lessor, Lessee shall promptly provide proof of filing and
proof of payment to Lessor.
PROPERTY TAX NOT APPLICABLE ON EQUIPMENT LOCATED IN ILLINOIS AND PENNSYLVANIA.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS XXXXXXXX INTERIORS; FIRST PRIORITY;, LUCENT
TECHNOLOGIES; INTERSERVICE; ADVANCED CABLE AND ENTERPRISE NETWORKING (THE
"SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES,
INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S),
WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART OF THE
CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO SUCH
EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN ACCURATE
AND COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY
DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES
CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR HEREAFTER
CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S
RIGHTS OR REMEDIES UNDER SECTION XII OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
stipulated
termination loss
# of value value
payments % of cost % of cost
1 103.555 107.884
2 101.608 106.354
3 99.612 104.774
4 97.591 103.171
5 95.546 101.543
6 93.478 99.891
7 91.387 98.216
8 89.272 96.518
9 87.133 94.796
10 84.969 93.049
11 82.781 91.278
12 80.569 89.482
13 78.331 87.661
14 76.069 85.816
15 73.782 83.946
16 71.470 82.050
17 69.131 80.128
18 66.773 78.187
19 64.421 76.252
20 62.048 74.296
21 59.653 72.317
22 57.235 70.316
23 54.793 68.291
24 52.328 66.243
25 49.839 64.170
26 47.326 62.074
27 44.789 59.954
28 42.227 57.809
29 39.641 55.640
30 37.030 53.445
31 34.394 51.226
32 31.732 48.981
33 29.045 46.710
34 26.331 44.414
35 23.587 42.086
36 20.232 39.148
37 16.845 36.177
38 13.425 33.174
39 9.972 30.138
40 6.486 27.069
*The Stipulated Loss Value or Termination Value for any unit of Equipment shall
be the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event the Lease is for any
reason extended, then the last percentage figure shown above shall control
throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. Section 1(b) of the Agreement is hereby deleted in its entirety and the
following substituted in its stead:
b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or prior
to the earlier of the Lease Commencement Date or Last Delivery Date therefor,
of each of the following documents in form and substance satisfactory to
Lessor: (i) evidence of insurance which complies with the requirements of
Section X, and (ii) such other documents as Lessor may reasonably request.
2. Section VI(a) shall be deleted and the following substituted in its
stead:
The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.
3. XXXX OF SALE
Lessee, in consideration of the Lessor's payment of the amount set forth in
B 2. above, which includes any applicable sales taxes (which payment Lessee
acknowledges), hereby grants, sells, assigns, transfers and delivers to Lessor
the Equipment along with whatever claims and rights Seller may have against the
manufacturer and/or Supplier of the Equipment, including but not limited to all
warranties and representations. At Lessors request Lessee will cause Supplier to
deliver to Lessor a written statement wherein the Supplier (i) consents to
the assignment to Lessor of whatever claims and rights Lessee may have against
the Supplier, (ii) agrees not to retain any security interest, lien or other
encumbrance in or upon the Equipment at any time, and to execute such documents
as Lessor may request to evidence the release of any such encumbrance, and
(iii) represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final purchase
price of the Equipment (or a specified portion of such purchase price) has been
paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant to
the Lease. Lessee represents and warrants to Lessor that (i) Lessor will acquire
by the terms of this Xxxx of Sale good title to the Equipment free from all
liens and encumbrances whatsoever; (ii) Lessee has the right to sell the
Equipment; and (iii) the Equipment has been delivered to Lessee in good order
and condition, and conforms to the specifications, requirements and standards
applicable thereto; and (iv) the equipment has been accurately labeled,
consistent with the requirements of 40 CFR part 82 Subpart E, with respect to
products manufactured with a controlled (ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and all
federal, state, municipal and local license fees and taxes of any kind or
nature, including without limiting the generality of the foregoing, any and all
excise, personal property, use and sales taxes, and from and against any and all
liabilities,
INITIALS BAM
---
obligations, losses, damages, penalties, claims, actions and suits resulting
therefrom and imposed upon, incurred by or asserted against Lessor as a
consequence of the sale of the Equipment to Lessor.
4. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above has
been delivered and installed (if applicable); (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier or the manufacturer; and (iii) Lessee accepts the Equipment for
all purposes of the Lease, the purchase documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the Lease; (ii) the representations and warranties made by Lessee
pursuant to or under the Lease are true and correct on the date hereof and (iii)
Lessee has reviewed and approves of the purchase documents for the Equipment, if
any.
5. EQUIPMENT SPECIFIC PROVISIONS
RETURN PROVISIONS: In addition to the provisions provided for in Section XI of
the Lease ("Return of Equipment"), and provided that Lessee has elected not to
exercise its option to purchase the Equipment, Lessee shall, at its expense:
(a) at least ninety (90) days and not more than one hundred twenty (120) days
prior to lease termination: (i) ensure Equipment has been maintained, and is
operating, within manufacturer's specifications; and; (ii) cause manufacturer's
representative or other qualified maintenance provider, acceptable to Lessor, to
perform a physical inspection and test of all the components and capabilities of
the Equipment and provide a full inspection report to Lessor, and that there
shall be no missing screws, bolts, fasteners, etc.; the furniture will be free
from all large scratches, marks, gouges, dents, discoloration or stains; all
drawers, runners, and locks will be in good working condition to include keys;
and there shall be no evidence of extreme use or overloading, i.e. bowed or
sagging shelves; (iii) if during such inspection the Equipment is found not to
be in compliance with the above, then Lessee shall remedy them per the Lease
Agreement and provide a follow-up inspection to verify the Equipment meets the
return provisions.
(b) Upon lease termination, Lessee shall (i) have the manufacturer's
representative or other person acceptable to Lessor de-install all Equipment
including all wire, cable, and mounting hardware; (ii) if applicable, ensure all
necessary permits and labor are obtained to deliver the Equipment; (iii) the
Equipment shall be packed properly and in accordance to the manufacturer's
recommendations; (iv) the Lessee shall provide for the transportation of the
Equipment in a manner consistent with the manufacturer's recommendations and
practices to any locations within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such locations; (v) at Lessor's
choice, either (1) allow Lessor, at Lessor's expense, and provided Lessor has
provided reasonable notice to Lessee, to arrange for an on-site auction of the
Equipment which will be conducted in a manner that will not interfere with the
Lessee's business operations, or (2) Lessee shall provide free safe storage for
the Equipment for a period not to exceed sixty (60) days from the Lease
expiration.
RETURN PROVISIONS: In addition to the provisions provided for in Section XI of
the Lease with respect to Computer Equipment only, ("Return of Equipment"), and
provided that Lessee has elected not to exercise its option to purchase the
Equipment, Lessee shall, at its expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90) days
prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and
serial number of each major component thereof), including, without
limitation, all internal circuit boards, module boards, and software
features;
(ii) a complete and current set of all manuals, equipment configuration,
setup and operation diagrams, maintenance records and other data that may
be reasonably requested by Lessor concerning the configuration and
operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance provider
acceptable to Lessor that the Equipment (1) has been tested and is
operating in accordance with manufacturers specifications (together with a
report detailing the condition of the Equipment), the results of such
test(s) and inspection(s) and all repairs that were performed as a result
of such test(s) and inspection(s) and (2) that the Equipment qualifies for
the manufacturers used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60) days
prior to the expiration or other termination of the Lease, make the Equipment
available for on-site operational inspection by persons designated by the
Lessor, who shall be duly qualified to inspect the Equipment in its operational
environment.
(c) All Equipment shall be cleaned and treated with respect to rust, corrosion
and appearance in accordance with manufacturers recommendations and consistent
with the best practices of dealers in used equipment similar to the Equipment;
shall have no Lessee installed markings or labels which are not necessary for
the operation, maintenance or repair of the Equipment; and shall be in
compliance with all applicable governmental laws, rules and regulations.
(d) The Equipment shall be deinstalled and packed by or under the supervision
of the manufacturer or such other person acceptable to Lessor in accordance with
manufacturer's recommendations. Without limitation, all internal fluids will
either be drained and disposed of or filled and secured in accordance with
manufacturers recommendations and applicable governmental laws, rules and
regulations.
(e) Provide for transportation of the Equipment in a manner consistent with
the manufacturer's recommendations and practices to any locations within the
continental United States as Lessor shall direct; and shall have the Equipment
unloaded at such locations.
RETURN PROVISIONS: In addition to the provisions provided for in Section XI
-----------------
of the Lease with respect to Telecommunications Equipment only, and provided
that Lessee has elected not to exercise its option to purchase the Equipment
Lessee shall, at its expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90) days
prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and serial
number of each major component thereof), including without limitation, all
internal circuit boards, module boards, and software features;
(ii) a complete and current set of all manuals, equipment configuration
diagrams, maintenance records and other data that may be reasonably
requested by Lessor concerning the configuration and operation of the
Equipment; and
(iii) a certification of the manufacturer or of a maintenance provider
acceptable to Lessor that the Equipment (1) has been tested and is
operating in accordance with manufacturers specifications (together with a
report detailing the condition of the Equipment), the results of such
test(s) and inspection(s) and all repairs that were performed as a result
of such test(s) and inspection(s) and (2) qualifies for the manufacturers
used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60) days
prior to the expiration or other termination of the Lease, make the Equipment
available for on-site operational inspection by persons designated by the Lessor
who shall be duly qualified to inspect the Equipment in its operational
environment.
(c) All Equipment shall be cleaned and treated with respect to rust, corrosion
and appearance in accordance with manufacturers recommendations and consistent
with the best practices of dealers in used equipment similar to the
Equipment; shall have no Lessee installed markings or labels which are not
necessary for the operation, maintenance or repair of the Equipment; and shall
be in compliance with all applicable governmental laws, rules and regulations.
(d) Provide for the deinstallation, packing, transporting, and certifying of
the Equipment to include, but not limited to, the following:
(i) the manufacturer's representative shall de-install all Equipment
(including all wire, cable and mounting hardware) in accordance with the
specifications of the manufacturer, (ii) each item of Equipment will be
returned with a certificate supplied by the manufacturer's representative
qualifying the Equipment to be in good condition and (where applicable) to
be eligible for the manufacturer's maintenance plan; the certificate of
eligibility shall be transferable to another operator of the Equipment;
(iii) the Equipment shall be packed properly and in accordance to the
manufacturer's recommendations; (iv) Lessee shall provide for the
transportation of the Equipment in a manner consistent with the
manufacturers recommendations and practices to any locations within the
continental United States as Lessor shall direct, and shall have the
Equipment unloaded at such locations, (v) Lessee shall obtain and pay for
a policy of transit insurance for the redelivery period in an amount equal
to the replacement value of the Equipment and Lessor shall be named as the
loss payee on all such policies of insurance; and (vi) Lessee shall
provide insurance and safe, secure storage for the Equipment for thirty
(30) days after expiration or earlier termination of the Lease at an
accessible location satisfactory to Lessor.
6. LEASE TERM OPTIONS
END OF BASIC TERM OPTIONS
At the expiration of the Basic Term (the "Basic Term Expiration Date"), so
long as no default has occurred and is continuing hereunder and this Agreement
has not been earlier terminated, Lessee shall exercise one of the following
options:
(1) EXTENSION OPTION. Lessee may extend the Lease beyond the Basic Term
Expiration Date with respect to all (but not less than all) of the
Equipment covered by this Schedule through the Secondary Term set forth in this
Schedule and Lessee shall pay Secondary Term Rent as set forth in this Schedule.
(2) PURCHASE OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the Basic
Term Expiration Date, Lessee may purchase all (but not less than all) of the
Equipment covered by this Schedule on an AS IS BASIS for cash equal to the
greater of (A) twenty percent (20%) of the Capitalized Lessor's Cost (plus all
applicable sales taxes) or (B) the then Fair Market Value of the Equipment (plus
all applicable sales taxes). On the Basic Term Expiration Date, Lessor shall
receive in cash the full purchase price (plus all applicable sales taxes)
together with any rent or other sums then due under the Lease on such date.
Lessee shall be deemed to have waived its purchase option if it fails to (a)
timely provide Lessor with the required written notice of its election to
exercise the same or (b) provide Lessor with written notice of its irrevocable
election to exercise the same within fifteen (15) days after Fair Market Value
is determined (by agreement or appraisal).
INITIALS:BAM
---
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the Basic
Term Expiration Date (the "Notice Date"), Lessee my cancel the Agreement (the
"Cancellation Option") with respect to all (but not less than all) of the
Equipment on this Schedule. If all of the terms and conditions of this Section
are not fulfilled, this Lease shall continue in full force and effect and
Lessee shall continue to be liable for all obligations thereunder, including,
without limitation, the obligation to continue paying rent. Lessee shall be
deemed to have waived this option if it fails to timely provide Lessor with the
required written notice of its election to exercise the same.
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent, ________________ percent (________
%) of the Capitalized Lessor's Cost of the Equipment, plus all rent and all
other sums due and unpaid as of the Basic Term Expiration Date (including, but
not limited to, any rent payment due and payable on the Basic Term Expiration
Date and any sales taxes and property taxes); and
(ii) return the Equipment in full compliance with Section XI of the
Agreement, such compliance being independently verified by an independent
appraiser selected by Lessor (reasonably acceptable to Lessee) to determine that
the Equipment is in such compliance, which determination shall be final, binding
and conclusive. Lessee shall bear all costs associated with such appraiser's
determination and such costs, if any, to cause the Equipment to be in full
compliance with Section XI of the Agreement on or prior to such Basic Term
Expiration Date.
(b) From the applicable Notice Date through the Basic Tenn Expiration Date,
Lessee shall:
(i) continue to comply with all of the terms and conditions of the Lease,
including, but not limited to, Lessee's obligation, to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to allow
Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor, provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiation Date through the earlier of
the date the Equipment is sold by Lessor to a third party or thirty (30) days
following the Basic Term Expiration Date, comply with the following terms and
conditions:
(i) continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in Section X of the Agreement, and
(ii) make the Equipment available to Lessor and/or allow Lessor to store
the Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor and
Lessee shall have no interest in nor any claim upon any of such proceeds.
END OF SECONDARY TERM OPTIONS
Section XIX(a) of the Lease is hereby deleted in its entirety and the
following is substituted therefor:
(a) So long as no default exists hereunder and the Lease has not been
earlier terminated, Lessee may at the expiration of the Secondary Term upon at
least one hundred eighty (180) days but not more than two hundred seventy (270)
days written notice to Lessor prior to the end of the Secondary Term, purchase
all (but not less than all) of the Equipment in this Schedule on an AS IS, WHERE
IS BASIS, without recourse to or warranty from Lessor, express or implied ("AS
IS BASIS") for cash equal to its then Fair Market Value (plus all applicable
sales taxes).
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
------------------------------------------------------------------------------------
INTERSERVICE $ 126,161.25
XXXXXXXX INTERIORS $ 183,395.98
DEPARTMENT OF TAXATION - ILLINOIS $ 8,855.42
NEW CENTURY MORTGAGE CORPORATION $1,142,394.62
TOTAL: $1,460,797.27
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding or
effective with respect to the Agreement or Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- ----------------------------------
Name: XXXXXXXX X. XXXXXXXXX Name: Xxxx X. Xxxxxxx
------------------------------- --------------------------------
Title: REGION CREDIT MANAGER Title: CEO
------------------------------ -------------------------------
Attest
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------
AGENCY AGREEMENT
THIS AGENCY AGREEMENT, dated Oct. 24, 1997 ("Agreement"), between General
Electric Capital Corporation, a New York corporation ("Lessor"), and New Century
Mortgage Corporation, a California corporation (the "Company"). Capitalized
terms not defined herein shall have the meanings assigned to them in the Lease
(as that term is defined below).
RECITALS:
WHEREAS, Lessor and the Company have entered into a Master Lease Agreement
dated Oct. 24, 1997 wherein Lessor, as the lessor, has agreed to lease certain
items of Furniture and other equipment to the Company (the Master Lease
Agreement and all Schedules entered into from time to time thereunder are
hereinafter collectively referred to as the "Lease"; all Furniture and other
equipment leased thereunder are hereinafter collectively referred to as the
"Equipment"); capitalized terms used herein but not otherwise defined shall have
the meanings as provided in the Lease; and
WHEREAS, Lessor desires to appoint the Company its agent to order, receive
and pay for, in the name and on behalf of Lessor, the Equipment;
NOW, THEREFORE, in consideration of the above premises and the mutual
promises contained herein, as well as other good and valuable considerations,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
GENERAL UNDERTAKING
SECTION 1.01 APPOINTMENT. Lessor hereby appoints the Company, and the Company
hereby agrees to accept such appointment, as the agent of Lessor, without any
fee for acting as such agent, pursuant to the terms and conditions of this
Agreement, for the purpose of: (i) ordering and, subject to the conditions set
forth in Section 2.01 hereof, accepting Equipment on Lessor's behalf for leasing
to the Company under the Lease; and (ii) paying, on behalf of Lessor, any and
all amounts required to purchase such Equipment from the respective suppliers
thereof (each a "Supplier" and collectively, the "Suppliers") ("Purchase
Price"). It is specifically agreed that all of the power and authority vested to
the Company herein shall be subject to any modifications as may from time to
time be made by Lessor.
SECTION 1.02 POWERS. Except as may be otherwise expressly provided in this
Agreement, the Company is hereby granted the authority to act, and hereby agrees
to act, on behalf of Lessor and in the name of Lessor, to the extent necessary
to carry out its duties under this Agreement.
SECTION 1.03 MASTER LEASE. This Agreement is entered into in connection with
and subject to the terms of the Lease and in the event of a conflict between the
terms of this Agreement and the Lease, the Lease shall control. The Company and
Lessor may from time to time hereafter enter into Equipment Schedules to the
Lease, and it is the intent of the parties that this Agreement facilitate the
leasing of Equipment under the Lease. NOTHING IN THIS AGREEMENT SHALL BE OR
SHALL BE DEEMED TO BE, A COMMITMENT ON THE PART OF EITHER THE COMPANY OR LESSOR
TO EXECUTE OR OTHERWISE ENTER INTO ANY EQUIPMENT SCHEDULES AFTER THE DATE OF
THIS AGREEMENT.
ARTICLE H
DUTIES OF AGENT
SECTION 2.01 EQUIPMENT ORDERS. Upon the execution by the Company and Lessor of
each Schedule to the Lease, the Company, pursuant to the agency granted to it by
Lessor in Article I hereof, may order, receive, accept and pay for the
Equipment, to be leased pursuant to each such Schedule. Upon and as of the date
of acceptance of the Equipment by the Company and satisfaction of the conditions
precedent provided for in the Lease: (a) Lessor shall be unconditionally
obligated to purchase such Equipment pursuant to the terms of the applicable
purchase order or purchase agreement ("Purchase Order") and to lease such
Equipment to the Company pursuant to the terms and conditions of the Lease and
the applicable Schedule; and (b) the Company shall be unconditionally obligated
to lease such Equipment from Lessor pursuant to the terms and conditions of the
Lease and the applicable Schedule. Notwithstanding any provision to the contrary
herein, the Company's ability to act as Lessor's agent hereunder, and to
unconditionally obligate Lessor to purchase Equipment pursuant to such agency,
shall be limited by the following: (i) the Company must disclose to all
Suppliers that it is ordering the Equipment as agent for Lessor; (ii) all of the
Equipment ordered and/or accepted hereunder must meet at least one of the
general description categories contained on the applicable Schedule; (iii) the
aggregate Purchase Price for all Equipment purchased in connection with any
Schedule must be less than, or equal to, the Capitalized Lessor's Cost specified
on that Schedule; (iv) the Equipment must be delivered to, and accepted by, the
Company on or before the Last Delivery Date specified in the applicable
Schedule; (v) the Purchase Price of each unit of Equipment must not be more than
the then current Fair Market Value of such Equipment; (vi) each unit of
Equipment must qualify for all the Tax Benefits described in the applicable
Schedule in the hands of Lessor upon the Company's acceptance thereof from the
Supplier and (vii) with respect to any documentation, technical or confidential
business information and/or software relating to the Equipment (collectively,
"Software"), the Purchase Order will xxxxx Xxxxxx a license to use the Software
and will allow Lessor to grant a sublicense to the Company to use such Software
pursuant to the Lease and will allow Lessor to grant a sublicense to a third
party after a termination or the expiration of the Lease in the event the
Company does not elect to exercise any purchase option that may be provided for
in the Lease. The Company additionally agrees that all Purchase Orders executed
by the Company as Lessor's agent hereunder shall: (A) condition Lessor's
obligation to pay for and purchase the Equipment on the Company's acceptance of
such Equipment: (B) not permit passage of title or risk of loss for the
Equipment earlier than such acceptance by the Company; (C) not permit the
Supplier or any other person or entity to retain any security in, or lien on,
any of the Equipment; and (D) otherwise be on terms and conditions acceptable to
Lessor in its sole discretion.
SECTION 2.02 RECEIPT OF AND PAYMENT FOR EQUIPMENT. With respect to any Equipment
ordered by the Company as agent for
Lessor, the Company agrees to pay and perform all obligations of the purchaser
in the time and manner required by the applicable Purchase Order. Without
limiting the foregoing, upon receipt and acceptance by the Company of any
Equipment, the Company shall, on behalf of Lessor, pay the Purchase Price
thereof to the Supplier in the time and manner required by the Purchase Order.
Receipt and acceptance of any Equipment by the Company from the Supplier shall
be deemed to be an unconditional and irrevocable acceptance or such Equipment by
the Company for all purposes of the Lease and the applicable Schedule.
SECTION 2.03 REIMBURSEMENT OF PURCHASE PRICE. On or before the Lease
Commencement Date for any Schedule, the Company shall present to Lessor
documentation ("Purchase Documentation"), in form and substance satisfactory to
Lessor in its sole discretion, which (i) describes all units of Equipment
ordered, received and accepted by the Company as agent for Lessor in connection
with such Schedule, and (ii) includes evidence of the Purchase Price paid to
Supplier for each such unit of Equipment and of passage of title thereto to
Lessor. Upon the latter or (A) Lessor's receipt of the Purchase Documentation or
(B) the applicable Lease Commencement Date, Lessor shall reimburse the Company
for the aggregate Purchase Price for all Equipment purchased hereunder in
connection with such Schedule.
SECTION 2.04 BOOKS AND RECORDS. The Company shall maintain full and accurate
books and records of all Equipment orders, receipts and payments. All such books
and records shall be maintained in a form acceptable to Lessor in its sole
discretion. Such books and records shall be open for inspection and examination
by Lessor and its respective representatives and/or accountants during the
Company's normal business hours.
ARTICLE III
TERMINATION
SECTION 3.01 TERMINATION.
(a) So long as no default exists and is continuing hereunder or under the
Lease, either party may terminate this Agreement at any time upon Forty-
Five (45) days written notice to the other party.
(b) In the event the Company is in default hereunder or under the Lease, Lessor
may elect to terminate this Agreement immediately, which shall be effective
upon the receipt of written notice thereof by the Company.
(c) Any termination under this Section 3.01 shall automatically result in the
immediate revocation of all authority vested in the Company under this
Agreement to order, accept or pay for any Equipment on behalf of Lessor.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute and deliver this Agreement on the date first written.
General Electric Capital Corporation New Century Mortgage Corporation
By: /s/ XXXXXXXX X. XXXXXXXXX By: /s/ XXXX X. XXXXXXX
--------------------------- -----------------------------
Title: REGION CREDIT MANAGER Title: CEO
------------------------ --------------------------
CORPORATE LESSEE'S
BOARD OF DIRECTORS RESOLUTION
The undersigned hereby certifies: (i) that she/he is the Secretary of NEW
CENTURY MORTGAGE CORPORATION; (ii) that the following is a true and
correct copy of resolutions duly adopted at a meeting of the Board of Directors
of said Corporation duly held on the September 26, day of , 1997;
------------ ------------ --
and (iii) that said resolutions have not been amended, rescinded, modified or
revoked, and are in full force and effect:
"RESOLVED, that each of the officers of this Corporation, whose name appears
below:
/s/ XXXX X. XXXXXXX /s/ X.X. XXXXXXXXX
----------------------------- ----------------------------------
President Treasurer
/s/ XXXXX X. XXXXX /s/ XXXX X. XXXXXXX
----------------------------- ----------------------------------
Vice President Secretary
or the duly elected or appointed successor in office of any or all of them, be,
and hereby is, authorized and empowered in the name and on behalf of this
Corporation to enter into, execute and deliver a master lease agreement with
General Electric Capital Corporation ("Lessor'") as Lessor, providing for the
leasing to (or sale and leaseback by) this Corporation, from time to time, of
certain equipment, and further providing for this Corporation to indemnify said
Lessor against certain occurrences and against the loss of contemplated tax
treatment; and
FURTHER RESOLVED, that each officer of this Corporation be, and hereby is,
authorized and empowered in the name and on behalf of this Corporation to enter
into, execute and deliver any documents and to do and perform all other acts and
deeds which may be necessary or appropriate to effectuate the lease (or sale and
leaseback) of equipment from Lessor; and
FURTHER RESOLVED, that the Lessor may rely upon the aforesaid resolutions
until receipt by it of written notice of any change.
IN WITNESS WHEREOF, I have set my hand and affixed me seal of said Corporation
this 24th day of October, 1997.
---- ------- --
(CORPORATE SEAL)
/s/ XXXX X. XXXXXXX
-----------------------------------
Secretary
