Exhibit 10.2
ALLY CAPITAL CORPORATION
EQUIPMENT LEASE AGREEMENT
THIS EQUIPMENT LEASE AGREEMENT is made as of the 1/st/ day of April,
1996, by and between ALLY CAPITAL CORPORATION ("Lessor") and CONFERENCE SOURCE
INTERNATIONAL, INC. ("Lessee"). All of the defined terms and rules of
construction pertaining to this Lease are set forth in Section 17 hereof.
1. TERM AND RENT.
(a) Lessor agrees to lease to Lessee, and Lessee agrees to lease from
Lessor, the Equipment described in each Equipment Schedule to be executed
pursuant hereto. This Lease shall be effective from and after the date of
execution hereof, whether or not any Equipment Schedule has been entered into,
and as an inducement to Lessor to enter into this Lease, Lessee agrees that it
shall, pursuant to the terms hereof, be liable for, subject to, undertake or
comply with, as the case may be, all of the representations, warranties,
agreements, disclaimers, waivers and indemnifications made herein that pertain
to Lessee and Lessor generally, or to events that arise or occur in connection
with transactions that the parties intend to document under an Equipment
Schedule, whether or not such Equipment Schedule is ever effectively entered
into, and any other provisions of any of the Lease Documents that may be
necessary or appropriate for the interpretation or enforcement of the foregoing.
The Term of this Lease with respect to any item of the Equipment shall consist
of the Term set forth in the Equipment Schedule relating thereto; and, except as
otherwise expressly provided herein, Lessor's and Lessee's respective rights and
obligations thereunder (including Lessee's obligation to pay Basic Rent for the
items of Equipment described therein) shall commence and continue at all times
from and after the effective date thereof, and terminate upon the expiration of
the Term thereof and Lessee's complete performance of all of its obligations
thereunder.
(b) Lessee shall pay Lessor Basic Rent for the Equipment, without any
deduction or setoff and without prior notice or demand, in the aggregate amounts
specified in each Equipment Schedule, and Supplemental Rent, promptly as such
Rent shall become due and owing. In addition to each such payment of Rent, on
the due date therefor, Lessee shall be liable for and shall pay to Lessor an
Administrative Fee; provided, however, to the extent such payment of Rent shall
be received by Lessor in good collected indefeasible funds on the due date
therefor, Lessee shall be relieved of its obligation to pay the Administrative
Fee attributable to such Rent payment. Lessee agrees that it shall have no right
to, and it shall not, pay any Rent prior to the due date thereof. Each
Equipment Schedule shall be and remain a non-cancelable net lease, and Lessee
shall not be entitled to any abatement or reduction of Rent due thereunder for
any reason.
-------------------
THE ONE AND ONLY ORIGINAL OF THIS EQUIPMENT SCHEDULE IS MARKED "ORIGINAL" AT THE
TOP OF THIS PAGE AND SHALL CONSTITUTE THE ONLY CHATTEL PAPER ORIGINAL FOR THE
PURPOSES OF ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE. EACH OTHER SIGNED VERSION
IS MARKED "DUPLICATE".
Without limiting the foregoing, Lessee's obligation to pay Rent, and to
otherwise perform its obligations under the Lease Documents, are and shall be
absolute and unconditional until, with respect to each Equipment Schedule, such
Equipment Schedule terminates in accordance with its terms and shall not be
affected by any circumstances, happenings or events whatsoever and whenever and
howsoever occurring, including, any right of setoff, counterclaim, recoupment,
deduction, defense or other right which Lessee may have against Lessor, the
manufacturer or vendor of the Equipment, or anyone else for any reason
whatsoever. If for any reason whatsoever, any Equipment Schedule shall be
terminated in whole or in part by operation of law or otherwise (other than
pursuant to the expiration of the Term of the applicable Equipment Schedule),
Lessee nonetheless agrees to pay to Lessor an amount equal to each payment of
Rent at the time such payment would have become due and payable in accordance
with the terms hereof had such Equipment Schedule not been terminated in whole
or in part. Rent is payable as and when specified in the Equipment Schedule, or
as otherwise provided herein, by mailing the same to Lessor at its address
specified pursuant to this Lease; and shall be effective upon receipt.
Timeliness of Lessee's payment and other performance of its obligations under
the Lease Documents is of the essence.
Notwithstanding anything in this Section 1(b) to the contrary, Lessee
shall be entitled to a credit in an amount equal to the Abatement Amount against
its obligation to pay Basic Rent for any item(s) of Equipment suffering an
Impairment of Use conditioned upon the following: (A) Lessee provides Lessor
with written notice of such Impairment of Use within two business days after
having written notice or actual knowledge thereof (whichever occurs first), with
a full and complete description of such Impairment of Use, including the nature
and extent thereof, and (B) Lessee provides to Lessor all necessary and
appropriate cooperation with respect to Lessor's or its designee's
investigation, replacement, curing action or other action with respect to such
Impairment of Use. In furtherance of the foregoing, Lessee (i) agrees that in
the event Lessor replaces any item of Equipment with Replacement Equipment,
Lessor shall be deemed to have cured any Impairment of Use with respect to such
replaced items of Equipment, on and as of the date of Lessee's acceptance of
such Replacement Equipment; (ii) shall execute a supplement to the appropriate
Equipment Schedule thereby substituting the Replacement Equipment for such
replaced item of Equipment; (iii) shall without further action be deemed to have
conveyed to Lessor good title, free and clear of all Liens, to any item of
Equipment replaced pursuant hereto or for which the Abatement Period pertaining
thereto extends to the expiration of the Term of the Equipment Schedule, by
making it available to Lessor, and (iv) shall execute and deliver to Lessor a
xxxx of sale pertaining thereto that is acceptable to Lessor.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lessee represents,
warrants and covenants that: (a) It is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, is duly
qualified to do business in all jurisdictions where failure to be so qualified
would have a material adverse effect on the financial condition, business or
operations of Lessee, or impair the enforcement of its obligations under the
Lease Documents. (b) The execution, delivery and performance of the Lease
Documents and compliance with the terms thereof: (i) have been duly authorized
by all necessary corporate action on the part of Lessee; (ii) do not require the
approval of any stockholder, trustee or holder of any obligations of Lessee
except such as have been duly obtained; and (iii) do not and will not
2
contravene any Law, now binding on Lessee, or the charter or by-laws of Lessee,
or contravene the provisions of, or constitute a default under, or result in the
creation of any Lien upon the property of Lessee under, any indenture, mortgage,
contract or other agreement to which Lessee is a party or by which it or its
property is bound. (c) The Lease Documents, when entered into, will constitute
legal, valid and binding obligations of Lessee, enforceable against Lessee in
accordance with the terms thereof. (d) There are no pending actions or
proceedings to which Lessee is a party, and there are no other pending or
threatened actions or proceedings of which Lessee has knowledge, before any
Government Authority, which, either individually or in the aggregate, would
adversely affect the financial condition of Lessee, or the ability of Lessee to
perform its obligations under, or comply with the terms of, the Lease Documents.
(e) Lessee is not in default under any obligation for the payment of borrowed
money, for the deferred purchase price of property or for the payment of any
rent under any lease agreement which, either individually or in the aggregate,
would have the same such effect. (f) With respect to the Equipment covered by
each Equipment Schedule, under the Applicable Laws of the state(s) in which such
Equipment is to be located, such Equipment consists solely of personal property
and not fixtures. (g) The financial statements of Lessee (copies of which have
been furnished to Lessor) have been prepared in accordance with GAAP, and fairly
present Lessee's financial condition and the results of its operations as of the
date of and for the period covered by such statements, and since the date of
such statements there has been no material adverse change in such conditions or
operations. (h) The address stated below the signature of Lessee is the chief
place of business and chief executive office (which terms shall have the
meanings provided in Article 9 of the Code) of Lessee; and Lessee does not
conduct business under a trade, assumed or fictitious name. (i) With respect to
the Equipment covered by each Equipment Schedule, Lessor will have a valid,
perfected, first priority security interest in such Equipment pursuant to the
Code and other Applicable Law upon its purchase of such Equipment and its filing
all of the UCCs executed by Lessee in connection therewith. (j) With respect
hereto and to each Equipment Schedule, Lessee has not permitted, and will not
permit, any person to engage in any activity that could result in the imposition
of liability under Applicable Law on Lessee, Lessor or any owner or operator of
the Equipment, or would otherwise impair Lessor's rights or title pertaining
thereto.
3. FINANCIALS, FURTHER ASSURANCES AND NOTICES. Lessee covenants and agrees
as follows: (a) Lessee will, if requested by Lessor, furnish Lessor (i) within
one hundred twenty (120) days after the end of each fiscal year of Lessee, a
balance sheet of Lessee as at the end of such year, and the related statement of
income and statement of changes in financial position of Lessee for such fiscal
year, prepared in accordance with GAAP, all in reasonable detail and certified
by independent certified public accountants of recognized standing selected by
Lessee; (ii) within sixty (60) days after the end of each quarter of Lessee's
fiscal year, a balance sheet of Lessee as at the end of such quarter, and the
related statement of income and statement of changes in financial position of
Lessee for such quarter, prepared in accordance with GAAP; and (iii) within
thirty (30) days after the date on which they are filed, all regular periodic
reports, forms and other filings required to be made by Lessee to the Securities
and Exchange Commission, if any. (b) Lessee will promptly execute and deliver to
Lessor such further documents, instruments and assurances and take such further
action as Lessor from time to time may reasonably request in order to carry out
the intent and purpose of this Lease and to establish
3
and protect the rights and remedies created or intended to be created in favor
of Lessor under the Lease Documents. (c) Lessee shall provide written notice to
Lessor: (i) thirty (30) days prior to any contemplated change in the name or
address of Lessee; (ii) promptly upon the occurrence of any default or Default;
and (iii) promptly upon the commencement of proceedings under Federal bankruptcy
laws or any other insolvency laws (as now or hereafter in effect) involving
Lessee or any person (other than Lessor) holding an interest in the Equipment or
related property as the debtor.
4. CONDITIONS PRECEDENT. Lessor's obligations under each Equipment Schedule,
including Lessor's obligation to purchase and participate in the financing of
any Equipment to be leased thereunder, are conditioned upon:
(a) Lessor having received, at least two (2) business days prior to the
date upon which Lessor purchases the Equipment or has committed to purchase same
(if sooner), all of the following in form and substance satisfactory to Lessor:
(i) evidence as to due compliance with the insurance provisions hereof; (ii)
UCCs and all other filings and recordings with respect to the transactions
contemplated thereunder which are necessary or appropriate to establish,
protect, perfect or give first priority to Lessor's title in the Equipment
leased thereunder; (iii) if requested by Lessor, a certificate of Lessee's
Secretary certifying: (1) resolutions of Lessee's Board of Directors duly
authorizing the leasing of the Equipment under such Equipment Schedule and the
execution, delivery and performance thereof and of all related Lease Documents,
and (2) the incumbency and specimen signatures of the officers of Lessee
authorized to execute such documents; (iv) if requested by Lessor, an opinion of
counsel for Lessee as to each of the matters set forth in subsections (a)
through (i) (other than subsection (g)) of Section 2 hereof; (v) the only
manually executed original of such Equipment Schedule and all other Lease
Documents, (vi) to the extent requested by Lessor, copies or reports of searches
conducted at the appropriate recordation offices against Lessee, the Equipment
and premises at which the Equipment is or is to be located; (vii) a copy of an
executed xxxx of sale to Lessor for the Equipment together with an invoice of
the seller thereof specifying the purchase price for such Equipment; (viii) all
Purchase Documents pertaining to the Equipment and, to the extent requested by
Lessor, an acknowledgment and assignment of Lessee's rights, if any, under such
Purchase Documents, including all warranties, indemnities, licenses, remedies
and other rights thereunder, which Lessor shall be entitled to exercise in
connection with its exercise of its remedies under Section 15 of this Lease;
(ix) if Lessor is purchasing the Equipment from Lessee, all of the operating
records pertaining to the maintenance and use of the Equipment; and (x) such
other documents, agreements, instruments, certificates, opinions, assurances, as
Lessor may reasonably require.
(b) (i) The representations and warranties of Lessee herein or in any
of the other Lease Documents, and of each other person (other than Lessor) in
any of the other documents or agreements delivered to Lessor pursuant hereto or
thereto shall be true and correct on and as of the effective date of such
Equipment Schedule with the same effect as though made on and as of such date
(Lessee's execution and delivery of the Equipment Schedule shall constitute an
acknowledgment of the same); and (ii) there shall be no default or Default under
the Equipment Schedule or any other Lease Documents, nor shall there have
occurred any casualty or Total
4
Loss, or event or condition which with notice or passage time, or both, would
constitute a casualty or Total Loss with respect to the equipment to be leased
under the Equipment Schedule.
(c) (i) Lessor shall be permitted under all Applicable Laws to purchase
and provide financing to Lessee for the Equipment and to enter into the
transactions contemplated herein and in the Equipment Schedule; and (ii) there
shall have been no change in Law or proposed change in Law or in Lessee's
financial condition which could make it inadvisable for Lessor to do so, in
Lessor's sole discretion.
(d) (i) if Lessor is purchasing the Equipment from Lessee, Lessee shall
have paid all amounts due to the Supplier (including any vendor or manufacturer)
and to any other persons from whom Lessee acquired any right, title or interest
in the Equipment, or with respect to any improvements thereon, additions
thereto, or transportation or storage thereof, on or prior to the effective date
of the Equipment Schedule; (ii) the Equipment shall have been delivered to and
accepted by Lessee, and be in the condition and repair required hereby; and
(iii) Lessor shall have received a xxxx of sale from the Supplier, on or prior
to the effective date of the Equipment Schedule, that is valid and legally
binding, and effective to convey to Lessor good title to the Equipment to be
leased thereunder, free and clear of any Lien.
5. DELIVERY, INSPECTION AND ACCEPTANCE BY LESSEE. Lessee shall provide an
acceptable installation environment as specified in any applicable
manufacturer's manual or by Applicable Law, and, except as otherwise specified
by manufacturer, shall furnish all labor required to install the Equipment.
Upon delivery, Lessee shall inspect the Equipment and, if the same is found to
be in good order and in compliance with the provisions of any applicable Supply
Contract, accept delivery of the same and execute and deliver to Lessor an
Equipment Schedule containing a complete description of the accepted Equipment.
The Lessee acknowledges that its execution and delivery of any Equipment
Schedule shall constitute conclusive evidence that as between Lessor and Lessee,
the Equipment shall be deemed to have been finally and irrevocably accepted by
Lessee pursuant to this Lease and such Equipment Schedule. Lessor shall not be
liable for loss or damage occasioned by any cause, circumstance or event of
whatsoever nature relating to delivery, inspection, installation or acceptance,
including the failure of or delay in delivery, delivery to the wrong place,
delivery of improper equipment or property other than the Equipment, damage to
the Equipment, governmental regulations, strike, embargo or other cause,
circumstance or event, whether of like or unlike nature. All expenses incurred
in connection with Lessor's purchase of the Equipment (including taxes,
shipment, delivery and installation) shall be the responsibility of Lessee and
shall be either, at Lessor's sole option, capitalized or expensed or paid by
Lessee upon demand. If as a result of any damage to the Equipment, strike,
embargo or other similar cause certified to Lessor in writing by Lessee's
responsible officer and verified to Lessor's satisfaction by such other evidence
relating thereto as Lessor may reasonably request, Lessee shall refuse to accept
delivery of the Equipment, Lessee will be assigned all rights and shall assume,
indemnify and hold Lessor harmless from all obligations as purchaser of the
Equipment and all other Claims relating thereto pursuant to Section 13 hereof.
5
6. USE AND MAINTENANCE.
(a) Lessee shall (i) use the Equipment solely in the conduct of its
business, for the purpose for which the Equipment was designed, in a careful and
proper manner and not discontinue use of the Equipment; (ii) operate, maintain,
inspect, service, repair, overhaul and test the Equipment, and maintain all
records, logs and other materials relating thereto, in accordance with (1) all
maintenance and operating manuals or service agreements, whenever furnished or
entered into, including any subsequent amendments, supplements, renewals or
replacements thereof, issued by the manufacturer or service provider, (2) the
requirements of all applicable insurance policies, (3) the Purchase Documents,
so as to preserve all of Lessee's and Lessor's rights thereunder, including all
rights to any warranties, indemnities or other rights or remedies, (4)
Applicable Laws, and (5) consistent with the prudent practice of other similar
companies in the same business as Lessee, but in any event, to no lesser
standard than that employed by Lessee for comparable equipment owned or leased
by it; (iii) not change the location of any Equipment as specified in the
Equipment Schedule without the prior written consent of Lessor; (iv) not attach
or incorporate the Equipment to or in any other item of equipment in such a
manner that the Equipment may be deemed to have become an accession to or a part
of such other item of equipment; (v) cause each principal item of the Equipment
to be continually marked, in a plain and distinct manner, with the name of
Lessor or its designee followed by the words "Owner and Lessor," or other
appropriate words designated by Lessor on labels furnished by Lessor, and (vi)
cause the Equipment to be kept and maintained in good operating condition and in
the same condition as when delivered to Lessee hereunder, except for ordinary
wear and tear resulting despite Lessee's full compliance with the terms hereof.
With respect to Lessee's agreement in subclause (ii) above to maintain, inspect,
service, repair, overhaul and test each item of Equipment in accordance with
sub-subclauses (1), (3) and (5), Lessee shall undertake and be responsible for
the foregoing in exchange for a credit to Lessee's rental obligations the amount
of which has been calculated and agreed to by both Lessee and Lessor as fair and
complete consideration for such undertaking and responsibility as it may now and
hereafter exist (including the payment of all charges, fees, costs and expenses
relating thereto), and accounted for in the amount of Basic Rent Lessee has
agreed to pay for such item of Equipment by its execution and delivery of the
Equipment Schedule relating thereto. In furtherance of the foregoing, Lessee
acknowledges and agrees that (A) the credit provided for in the preceding
sentence shall fully discharge Lessor for all purposes from performing or
complying with any of the obligations specified in such sentence (to the extent
Lessor would be deemed to have had any responsibility therefor), and (B) it
shall also undertake, be responsible for and otherwise fully perform and comply
with all of the obligations provided for herein that are not specified in the
preceding sentence, and that it shall not be entitled to any credit or other
compensation with respect thereto, nor shall Lessor have any responsibility to
Lessee or any other person with respect to the performance or non-performance
of, or compliance or non-compliance with, any of such obligations, or any other
obligations not expressly assumed by it hereunder.
(b) If any parts of the Equipment become worn out, lost, destroyed,
damaged beyond repair or otherwise permanently rendered unfit for use, Lessee,
at its own expense, will within a reasonable time replace such parts with
replacement parts that are free and clear of all
6
Liens and have a value and utility at least equal to the value, condition and
utility that such replaced parts would have had if maintained in the condition
and repair required by the terms hereof. In the event that any Applicable Law
requires alteration or modification to the Equipment, Lessee will conform
thereto or obtain conformance therewith, and shall otherwise cause the altered
or modified Equipment to comply with the provisions hereof. With respect to
parts, additions or improvements which are added to the Equipment that are
essential to the operation of the Equipment, are necessary to cause it to be in
compliance with the provisions of this Lease or which cannot be detached from
the Equipment without materially interfering with the operation of the Equipment
or adversely affecting the value, condition and utility which the Equipment
would have had without the addition thereof, title thereto shall immediately
vest in Lessor to the same extent and with the same priority as Lessor holds in
the Equipment, without cost or expense to Lessor, or any further action by any
other person, and such parts, improvement and additions shall be deemed
incorporated in the Equipment and subject to the terms of this Lease as if
originally leased hereunder. Lessor agrees that upon Lessee's replacing a part
in full compliance with the provisions of this subsection (b), all of Lessor's
right, title and interest in and to any part so replaced shall without further
action vest in Lessee "AS IS, WHERE IS," and otherwise subject to the provisions
of Section 7 hereof. Lessee shall not make any material alterations to the
Equipment without the prior written consent of Lessor, which consent shall not
be unreasonably withheld.
(c) Upon the twenty-four (24) hours' written or telephonic request of
Lessor, Lessee shall provide to Lessor any information reasonably requested by
Lessor pertaining to the Equipment or Lessee, including, the location and
condition of the Equipment. Upon reasonable advance notice (which the parties
agree shall be no less than forty-eight (48) hours' written or telephonic
request) Lessee shall afford Lessor access to Lessee's premises where the
Equipment is located for the purpose of inspecting such Equipment, all
applicable maintenance and other records, Permits, licenses and any notices or
directives from any manufacturer, vendor, service provider or Governmental
Authority, at any reasonable time during normal business hours; provided,
however, if a Default or default shall have occurred and be continuing, no
notice of any inspection by Lessor shall be required. In the event Lessee fails
or is unable to perform any of its obligations hereunder, Lessor shall have the
right, but not the obligation, to perform the same, and Lessee shall forthwith
reimburse Lessor on an after-tax basis, as Supplemental Rent, for all costs and
expenses incurred by Lessor in performing the same. Lessor shall not have any
duty to make or cause to be made any inspection, repair, restoration,
replacement, renewal, addition or improvement of any nature or description with
respect to the Equipment, or the related property or to incur any cost or
expense in connection with any Lease Document and Lessor shall not incur any
liability or obligation to any person by reason of Lessor's doing, causing to be
done or failing to do any of the foregoing, in its discretion.
7. DISCLAIMER OF WARRANTIES. LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT:
EXCEPT FOR THE WARRANTY IN SECTION 16(d) HEREOF, THE EQUIPMENT AND THE RIGHTS,
TITLE AND INTEREST BEING CONVEYED HEREIN WITH RESPECT THERETO, ARE BEING
CONVEYED AND DELIVERED TO LESSEE "AS IS" AND "WHERE IS" WITHOUT ANY RECOURSE TO
LESSOR, AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS, LIABILITY FOR, AND LESSEE
HEREBY
7
WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES,
GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT THERETO,
EITHER EXPRESS OR IMPLIED, ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING (A)
ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF
OR ARISING FROM OR IN (1) MERCHANTABILITY OR FITNESS FOR PARTICULAR USE OR
PURPOSE, (2) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (3)
TORT (WHETHER OR NOT ARISING FROM THE ACTUAL IMPLIED OR IMPUTED NEGLIGENCE OF
LESSOR OR STRICT LIABILITY) OR UNDER THE CODE OR OTHER APPLICABLE LAW WITH
RESPECT TO THE EQUIPMENT, INCLUDING ITS TITLE OR FREEDOM FROM LIENS, FREEDOM
FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT
DISCOVERABLE), CONDITION, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH
APPLICABLE LAW AND (B) ALL OBLIGATIONS AND LIABILITIES OF LESSOR, AND RIGHTS AND
REMEDIES OF LESSEE, HOWSOEVER ARISING UNDER ANY APPLICABLE LAW WITH RESPECT TO
THE MATTERS WAIVED AND DISCLAIMED, INCLUDING, FOR LOSS OF USE, REVENUE OR PROFIT
WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY OF LESSEE OR LESSOR TO ANY THIRD
PARTY, OR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (AS SUCH TERMS
ARE USED IN SECTION 2719(3) OF THE CODE, OR OTHER APPLICABLE LAW) EXCEPT TO THE
EXTENT THE WAIVER OF SAME IS PROHIBITED BY APPLICABLE LAW; all such risks, as
between Lessor and Lessee, are to be born by Lessee; and Lessor's agreement to
enter into this Lease and any Equipment Schedule is in reliance upon the freedom
from and the complete negation of liability or responsibility for the matters
waived and disclaimed herein. Lessee agrees that the only representations,
warranties, guaranties or indemnities made with respect to the Equipment are
those made by the Supplier thereof; and, provided that no Default or default has
then occurred and is continuing under the pertinent Equipment Schedule, Lessor
(a) shall cooperate fully with Lessee with respect to the resolution of such
claims, in good faith and by appropriate proceedings at Lessee's expense, (b)
hereby assigns to Lessee, for and during the term of this Lease, any applicable
warranties, indemnities or other similar rights under any Supply Contracts
(excluding any refunds or other similar payments reflecting a decrease in the
value of any such Equipment, which amount shall during the existence of any
default or Default be received by and paid to Lessor, for application to
Lessee's obligations under the Equipment Schedule relating thereto) applicable
to any Equipment, and (c) hereby authorizes Lessee to obtain all services,
warranties or (except as provided in (b) above) amounts from the Supplier of
such Equipment to be used to repair such Equipment (and such amounts shall be
used by Lessee to repair such Equipment). Any such claim shall not affect in any
manner the unconditional obligation of Lessee to make rent payments hereunder.
8. FEES AND TAXES.
(a) To the extent permitted by Law, Lessee shall file any necessary
report and return for, shall pay promptly when due, shall otherwise be liable to
reimburse Lessor (on an after-tax basis) for, and agrees to indemnify and hold
Lessor harmless from all Impositions.
8
(b) If any report, return or property listing, or any Imposition is, by
Law, required to be filed by, assessed or billed to, or paid by, Lessor, Lessee
will do all things required to be done by Lessor (to the extent permitted by
Law) in connection therewith and is hereby authorized by Lessor to act on behalf
of Lessor in all respects, including, the contest or protest, in good faith and
by appropriate proceedings, of the validity of any Imposition, or the amount
thereof. Lessor agrees fully to cooperate with Lessee in any such contest, and
Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred
by Lessor in the course of such cooperation. An Imposition or Claim therefor
shall be paid, subject to refund proceedings, if failure to pay would adversely
affect the title or rights of Lessor in the Equipment or otherwise hereunder.
Provided that no Default or default has occurred and is then continuing, if
Lessor obtains a refund of any Imposition which has been paid (by Lessee, or by
Lessor and for which Lessor has been fully reimbursed by Lessee), Lessor shall
promptly pay to Lessee the net amount of such refund actually received. Lessee
will cause all xxxxxxxx of such charges to Lessor to be made to Lessor in care
of Lessee and will, in preparing any report or return required by Law, show the
ownership of the Equipment in Lessee, and shall send a copy of any such report
or return to Lessor. If Lessee fails to pay any such charges when due, except
any Imposition being contested in good faith and by appropriate proceedings as
above provided for a reasonable period of time, Lessor at its option may do so,
in which event the amount so paid (including any penalty incurred as a result of
Lessee's failure), plus an Administrative Fee shall be paid by Lessee to Lessor
with the next installment of Basic Rent.
(c) The provisions of this Section 8 shall not apply to any Imposition
(i) imposed as a result of any voluntary transfer or disposition by Lessor of
all or any portion of its interest in the Equipment pursuant to Section 15
hereof; (ii) that Lessee is contesting in good faith, by appropriate proceedings
and is otherwise permitted pursuant to the provisions of this Lease until the
conclusion of such contest; except, that Lessee's right to contest any
Imposition and thereby avoid its obligation to pay any such Imposition is
conditioned upon the existence of such Imposition during any such contest not
causing any material danger of the sale, forfeiture or loss of the Equipment; or
(iii) imposed on Lessor that is based on, or measured by gross or net income
taxes (including, capital gains taxes, minimum taxes, income taxes collected by
withholding and taxes on tax preference items), except for Lessee's obligation
to pay indemnities and reimbursements on an "after-tax basis", and as otherwise
expressly provided herein.
9. INTENT, TITLE AND LIENS.
(a) The parties intend and agree that the Equipment shall remain
personal property, and that Lessor's title thereto or the priority of such title
not be impaired, notwithstanding the manner in which it may be affixed to any
real or personal property. Lessee shall obtain and deliver to Lessor (to be
recorded at Lessee's expense), from any person having an interest in any real or
personal property to or upon which the Equipment is to be attached or located,
as the case may be, waivers of any Lien or which such person might have or
hereafter obtain or claim with respect to the Equipment.
(b) During the Term of each Equipment Schedule, and until Lessee either
purchases such Equipment upon the expiration of the Initial Term, or upon the
expiration of any
9
Renewal Term with respect thereto, and upon Lessee's full performance of all its
obligations under or relating to such Equipment Schedule, Lessor shall retain
title to such Equipment; provided, that, Lessee and Lessor acknowledge that
transactions documented hereunder and under each Equipment Schedule shall
constitute a "Lease intended as security," or "security interest," as the case
may be, under Applicable Law (including under Section 1201(37) of the Code). In
furtherance thereof, (i) in order to secure the prompt payment and performance
as and when due of all of Lessee's obligations (both now existing and hereafter
arising) under each such Equipment Schedule and all of the other Lease
Documents, Lessee shall be deemed to have granted, and it hereby grants to
Lessor a first priority security interest in and assigns and conveys the
following (whether now existing or hereafter created): (A) the Equipment leased
pursuant to such Equipment Schedule, (B) all subleases thereof (including all of
Lessee's rights, but none of its obligations thereunder, including all amounts
payable thereunder) all accounts, contract rights and general intangibles
(including all licenses, patents, copyrights, maskworks and trade secrets)
relating to the Equipment, and (C) all replacements and Proceeds (cash and non-
cash), including the proceeds of all insurance policies, of the property and
rights described in (A) and (B), and (ii) Lessee agrees that with respect to the
Equipment, in addition to all of the other rights and remedies available to
Lessor hereunder upon the occurrence of a Default, Lessor shall have all of the
rights and remedies of a first priority perfected secured party under the Code.
Lessee may not dispose of any of the Equipment except to the extent expressly
provided herein, notwithstanding the fact that proceeds constitute a part of the
Equipment.
(c) Lessee will not directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to any of the Equipment, title
thereto or any interest therein, except Permitted Liens. Lessee shall notify
Lessor immediately upon receipt of notice of any Lien affecting the Equipment in
whole or in part, and defend Lessor's title therein and the first priority
thereof against all persons holding or claiming to hold a Lien; and any Claims
suffered by Lessor as a result thereof shall be covered by the indemnity in
Section 13 hereof.
(d) Owner for Federal Tax Purposes. It is hereby agreed between Lessee
and Lessor that, for Federal income tax purposes (i) the Lease is, and will be
consistently treated as, a finance lease rather than a true lease; (ii) Lessee
will be the owner of the Equipment to be delivered under this Lease; (iii)
Lessee will not claim any rental deduction for amounts paid to Lessor under the
Lease; (iv) Lessor will not claim any cost recovery or depreciation deductions
with respect to the Equipment delivered under this Lease; (v) neither Lessor nor
Lessee will at any time take any action, directly or in directly, or file any
returns or other documents inconsistent with the foregoing; and (vi) Lessor and
Lessee will file such returns, take such actions and execute such documents as
may be reasonable and necessary to facilitate accomplishment of the intent
expressed in subparagraphs (i) through (iv) of this Section 9(d).
10. INSURANCE.
(a) Lessee shall obtain and maintain all-risk insurance coverages with
respect to the Equipment insuring against, among other things: casualty
coverage, including, loss or damage to the Equipment due to fire and the risks
normally included in extended coverage, malicious mischief and vandalism, for
not less than the greater of the Equipment's full
10
replacement value or the Stipulated Loss Value; and public liability coverage
including, both personal injury and property damage, with a combined single
limit per occurrence of not less than the amount specified in each Equipment
Schedule, with no deductible. All such insurance shall be in form and amount and
with companies reasonably satisfactory to Lessor. All insurance for loss or
damage shall provide that losses, if any, shall be payable to Lessor as sole
loss payee and Lessee shall utilize its best efforts to have all checks relating
to any such losses delivered promptly to Lessor. Lessor shall be named as an
additional insured with respect to all such liability insurance. Lessee shall
pay the premiums therefor and deliver to Lessor evidence satisfactory to Lessor
of such insurance coverage. Lessee shall cause to be provided to Lessor, not
less than fifteen (15) days prior to the scheduled expiration or lapse of such
insurance coverage, evidence satisfactory to Lessor of renewal or replacement
coverage. Each insurer shall agree, by endorsement upon the policy or policies
issued by it or by independent instrument furnished to Lessor, that (i) no
cancellation, lapse, expiration or adverse change reducing the coverage thereof
shall be effective unless Lessor has been given thirty (30) days' prior written
notice thereof, (ii) insurance as to the interest of any named additional
insured or loss payee other than Lessee shall not be invalidated by any actions,
inactions, breach of warranty, declaration or condition or negligence of Lessee
or any person other than such additional insured with respect to such policy or
policies; (iii) such insurance is primary with respect to any other insurance
carried by or available to Lessor, (iv) the insurer waivers any right of
subrogation and any setoff, counterclaim, or other deduction, whether by
attachment or otherwise, against Lessor, and (v) with respect to the liability
coverage, all of the provisions of such coverage, except the limits of
liability, shall operate in the same manner as if there were a separate policy
with and covering Lessee and Lessor. The proceeds of such insurance payable as a
result of loss of or damage to the Equipment shall be applied as required by the
provisions of Section 11 hereof.
(b) With respect to Lessee's agreement to obtain and maintain the
casualty and liability insurance coverage for each item of Equipment required in
clause (a) above, Lessee shall undertake and be responsible for the foregoing in
exchange for a credit to Lessee's rental obligations the amount of which has
been calculated and agreed to by both Lessee and Lessor as fair and complete
consideration for such undertaking and responsibility as it may now and
hereafter exist (including the payment by Lessor of all premiums, costs and
expenses relating thereto), and accounted for in the amount of Basic Rent for
such item of Equipment by its execution and delivery of the Equipment Schedule
relating thereto. In furtherance of the foregoing, Lessee acknowledges and
agrees that (A) the credit provided for in the preceding sentence shall fully
discharge Lessor for all purposes from so obtaining or maintaining any such
insurance coverage (to the extent Lessor would be deemed to have had any
responsibility therefor), and (B) it shall also undertake, be responsible for
and otherwise fully perform and comply with all of the obligations provided for
herein that are not related to the obtaining and maintaining of such insurance
coverage, and that it shall not be entitled to any credit or other compensation,
nor shall Lessor have any responsibility to Lessee or any other person, with
respect to such obligations or any other obligations not expressly assumed by it
hereunder.
11
11. LOSS AND DAMAGE.
(a) Lessee assumes the risk of direct and consequential loss and damage
to the Equipment from all causes. Except as provided in this Section 11 for
discharge upon payment of Stipulated Loss Value, no loss or damage to the
Equipment or any part thereof shall release or impair any obligations of Lessee
under this Lease. Without limiting Sections 5, 7, 8, 13 or any other provision
hereof, Lessee agrees that Lessor shall not incur any liability to Lessee for
any loss of business, loss of profits, expenses, or any other Claims resulting
to Lessee by reason of any failure of or delay in delivery or any delay caused
by any non-performance, defective performance, or breakdown of the Equipment,
nor shall Lessor at any time be responsible for personal injury or the loss or
destruction of any other property resulting from the Equipment. In the event of
loss or damage to any item of Equipment which does not constitute a Total Loss,
Lessee shall, at its sole cost and expense, promptly repair and restore such
item of Equipment to the condition required by this Lease. Provided that no
Default or default has occurred and is then continuing, upon receipt of evidence
reasonably satisfactory to Lessor of completion of such repairs, Lessor will
apply any net insurance proceeds received by Lessor on account of such loss to
the cost of repairs. Upon the occurrence of a Total Loss during the Term of this
Lease, Lessee shall give prompt notice thereof to Lessor. On the next date for
the payment of Basic Rent, Lessee shall pay to Lessor the Rent due on that date
plus the Stipulated Loss Value of the item or items of the Equipment with
respect to which the Total Loss has occurred and any other sums due hereunder
with respect to that Equipment (less any net insurance proceeds or net
condemnation award actually paid to Lessor to compensate it for such Total
Loss). Upon Lessor's receipt of such payment in good collected indefeasible
funds with respect to an Equipment Schedule, such Equipment Schedule and the
obligation to make future payments of Basic Rent thereunder shall terminate
solely with respect to the Equipment or items thereof so paid for and (unless
any insurer shall otherwise demand) Lessor shall be deemed to have conveyed all
of its right, title and interest therein to Lessee "AS IS, WHERE IS" and
otherwise subject to Section 7 hereof. Stipulated Loss Value shall be determined
as of the next date on which a payment of Basic Rent is or would be due after a
Total Loss or other termination of the subject Equipment Schedule, after payment
of any Basic Rent due on such date, and the applicable percentage factor shall
be that which is set forth on the SLV Schedule with respect to such Basic Rent
payment.
(b) Notwithstanding the foregoing or any other provision hereof to the
contrary, in the event any item(s) of Equipment suffers a Total Loss and the
insurance carrier providing coverage obtained by Lessee against such Total Loss,
has as a result of such Total Loss, agreed in writing to pay to Lessor as the
sole loss payee proceeds of such coverage in an amount equal to the Stipulated
Loss Value (determined as of the Basic Rent payment date next preceding such
Total Loss, but otherwise in accordance with the preceding clause(b)), Lessee's
obligation to pay future installments of Basic Rent for such item(s) of
Equipment suffering a Total Loss shall cease as of the Basic Rent payment date
preceding the Total Loss thereof, and Lessee shall thereupon be relieved of its
obligation to pay the Stipulated Loss Value thereof; provided, that (i) Lessee
has given prompt written notice of such Total Loss to Lessor and the appropriate
insurer(s) (which notice shall include Lessee's written election that it intends
that this clause(b) shall apply to such Total Loss); (ii) no default or Default
occurs prior to Lessor's receipt of all
12
amounts due from Lessee and such insurer pursuant hereto in good collected
indefeasible funds; (iii) such insurer neither (A) repudiates its obligation to
the amount required above or fails to pay such amount to Lessor in good
collected indefeasible funds within 90 days after the date of the Total Loss,
nor (B) suffers an event of the type described in Section 14(a)(iv); and (iv)
Lessee takes all actions as shall be requested by Lessor with respect to the
insurance coverage, or otherwise necessary to facilitate the payment of the
insurance proceeds required above. Upon the failure of any of the conditions set
forth in the proviso in the preceding sentence, Lessee shall immediately be
liable to and pay to Lessor the full amounts that would otherwise have been due
pursuant to paragraph (a) of this Section 11. To the extent Lessee's obligation
to pay the Stipulated Loss Value of any item of Equipment is satisfied by
Lessor's receipt of insurance proceeds as provided above, and not by funds in
such amount paid by Lessee in the manner required herein, Lessor shall have no
obligation to convey such item of Equipment to Lessee.
12. REDELIVERY.
(a) In the event Lessor exercises its remedies under Section 14(c)(2)
hereof, Lessee shall, at its own expense, return the Equipment to Lessor within
the period designated by Lessor, in a condition that satisfies all of the
requirements of this Lease (including Section 6 hereof), and free and clear of
all Liens except Liens resulting from claims against Lessor not relating to the
ownership or operation of such Equipment, by delivery to such place within the
Continental United States as Lessor shall specify. In addition to Lessor's
other rights and remedies hereunder, if repairs are necessary to place the
Equipment in the condition required in this Section, Lessee shall be liable for
and pay to Lessor the full amount of the costs and expenses incurred and/or paid
by Lessor to accomplish such repairs.
13. INDEMNITY. Lessee assumes and agrees to indemnify, defend and keep
harmless, even if such Claims are groundless, false or fraudulent, Lessor (which
for the purposes of this Section 13 shall also include Ally Capital Corporation
and its affiliates ("Ally"), and any assignee of Lessor's rights, obligations,
title or interest under any Equipment Schedule notwithstanding any assignment
made by Ally of its interests herein), its agents and employees, from and
against any and all Claims (other than, with respect to any such indemnitee,
such as may directly and proximately result from the gross negligence or willful
misconduct of such indemnitee; but Lessee does agree to so indemnify each such
indemnitee against its own negligence), by paying (on an after-tax-basis, if to
Lessor) or otherwise discharging same, when and as such Claims shall become due,
including any Claims arising on account of (a) this Lease, any Equipment
Schedule, or any other Lease Documents, or (b) the Equipment, or any part
thereof, including the ordering, acquisition, delivery, installation or
rejection of the Equipment, the possession, maintenance, use, condition, or
ownership or operation of any item of Equipment, and by whomsoever owned, used
or operated, during the term of this Lease or any Equipment Schedule with
respect to that item of Equipment, the existence of latent and other defects
(whether or not discoverable by Lessor or Lessee) any claim in tort for
negligence or strict liability, and any claim for patent, trademark or copyright
infringement, or the loss, damage, destruction, removal, return, surrender, sale
or other disposition of the Equipment, or any item thereof, or for whatever
other reason whatsoever. Lessor shall give Lessee prompt notice of any claim or
liability hereby indemnified against and Lessee shall be entitled to control
13
the defense thereof, so long as Lessee is not in Default; provided, however,
that Lessor shall have the right to approve defense counsel selected by Lessee.
14. DEFAULT; REMEDIES.
(a) A default shall be deemed to have occurred hereunder (solely
with respect to the obligations and other matters addressed in the second
sentence of Section 1 hereof) and under an Equipment Schedule ("Default") if (i)
Lessee shall fail to make any payment of Rent or any other payment hereunder,
thereunder, or under any other Lease Document relating thereto, within ten (10)
days after the same shall have become due; or (ii) Lessee shall fail to obtain
and maintain the insurance required pursuant thereto; (iii) (1) Lessee shall
fail to perform or observe any other covenant, condition or agreement to be
performed or observed by it thereunder or under any other Lease Document
relating thereto and such failure shall continue unremedied for a period of
thirty (30) days after the earlier of (A) actual knowledge thereof by any
officer of Lessee, or (B) written notice thereof to Lessee by Lessor; or (2)
Lessee repudiates this Lease or such Equipment Schedule, or any part hereof or
thereof, or attempts to reject or revoke acceptance of any Equipment to be
leased or leased thereunder (except for any rejection permitted by the last
sentence of Section 5 of this Lease), or (iv) Lessee shall (1) be generally not
paying its debts as they become due; or (2) take action for the purpose of
invoking the protection of any bankruptcy or insolvency law, or any such law is
invoked against or with respect to Lessee or its property, and any such petition
filed against Lessee is not dismissed within sixty (60) days; or (v) Lessee
shall make or permit any unauthorized Lien against or assignment or transfer
thereof or of the Equipment or of any interest therein; (vi) any certificate,
statement, representation, warranty or audit contained herein, therein or in any
other Lease Document heretofore or hereafter furnished with respect thereto by
or on behalf of Lessee proving to have been false in any material respect at the
time as of which the facts therein set forth were stated or certified, or having
omitted any substantial contingent or unliquidated liability or claim against
Lessee; or (vii) Lessee shall be in default under any material obligation for
the payment of borrowed money, for the deferred purchase price of property or
for the payment of any rent under any lease agreement, and the applicable grace
period with respect thereto shall have expired; or (viii) Lessee shall have
terminated its corporate existence, consolidated with, merged into, or conveyed
or leased substantially all of its assets as an entirety to any person (such
actions being referred to as an "Event"), unless such person is organized and
existing under the laws of the United States or any state, and not less than
sixty (60) days prior to such Event: (1) such person executes and delivers to
Lessor an agreement satisfactory in form and substance to Lessor, in its sole
discretion, containing an effective assumption by such person of the sole
responsibility for, and agreement to pay, perform, comply with and otherwise be
liable for, in a due and punctual manner, all of Lessee's obligations having
previously arisen, or then or thereafter arising, under any and all of the Lease
Documents; and (2) Lessor is satisfied as to the creditworthiness of such
person, and of its conformance to the other standard criteria used by Lessor (or
Lessor's affiliate or agent to the extent such affiliate or agent and not
Lessor, regularly makes decisions on Lessor's behalf to participate or not
participate in the extension of lease financing to an equipment user); or (ix)
there occurs a default under any guaranty executed in connection with such
Equipment Schedule; or if there is an anticipatory repudiation of Lessee's
obligations hereunder, under such Equipment Schedule or any other Lease
Documents; or (x) if Lessee is a
14
privately held corporation and effective control of Lessee's voting capital
stock, issued and outstanding from time to time, is not retained by the present
stockholders (unless Lessee shall have provided sixty (60) days' prior written
notice to Lessor of the proposed disposition of stock and Lessor shall have
consented thereto in writing); or (xi) if Lessee is a publicly held corporation
and, as a result of or in connection with a material change in the ownership of
Lessee's capital stock, Lessee's debt to worth ratio then equals or exceeds
twice Lessee's debt to worth ratio as of the date of this Lease, without the
prior written consent of Lessor. As used herein, "debt to worth ratio" shall
mean the ratio of (1) Lessee's total liabilities which, in accordance with GAAP,
would be included in the liability side of a balance sheet, to (2) Lessee's
tangible net worth including the sum of the par or stated value of all
outstanding capital stock, surplus and undivided profits, less any amounts
attributable to goodwill, patents, copyrights, mailing lists, catalogs,
trademarks, bond discount and underwriting expenses, organization expense and
other intangibles, all as determined in accordance with GAAP.
(b) Although each Equipment Schedule executed pursuant to this Lease
shall constitute a separate instrument of lease, the occurrence of a Default
hereunder or with respect to any Equipment Schedule shall, at the sole
discretion of Lessor constitute a Default with respect to any one or more of the
remaining Equipment Schedules. Notwithstanding anything set forth herein, Lessor
may, but shall not have any obligations to (Lessee hereby waiving any rights it
may have to require Lessor to xxxxxxxx assets), (i) exercise all rights and
remedies hereunder independently with respect to each Equipment Schedule; or
(ii) apply any collateral and the proceeds thereof in which Lessor holds a
security interest with respect to a particular Equipment Schedule to Lessee's
obligations under such Equipment Schedule or any one or all of the remaining
Equipment Schedules.
(c) Upon a Default hereunder or under an Equipment Schedule, as the
case may be, Lessor may, at its option, declare this Lease or such Equipment
Schedule to be in default either with or without written notice to Lessee
(without election of remedies), and at any time thereafter, may exercise any and
all rights and remedies of a secured party under the Code and in addition
thereto, at its sole discretion, do any one or more of the following, all of
which are authorized by Lessee with respect to such Equipment Schedule as Lessor
in its sole discretion shall elect (to the extent permitted by, and subject to
compliance with, any mandatory requirements of Applicable Law then in effect):
(i) (1) declare the following amounts to be immediately due
and payable, as liquidated damages and not as a penalty (and in lieu of future
rentals and other obligations then due thereunder), and demand or xxx for,
collect and apply, (A) all Basic Rent due and unpaid as of the payment date
immediately preceding the Default, plus a pro-rated daily rent in the amount set
----
forth in Section 3(b)(i) of such Equipment Schedule for the period from such
preceding payment date to the date of Lessor's declaration (to the extent such
daily rent is not accounted for in clause (B)), (B) by acceleration, the unpaid
principal portion of the aggregate Basic Rent payments due on or after such date
for the remaining period of the Initial Term and the Renewal Term (whether or
not Lessee has exercised its renewal option thereunder) of such Equipment
Schedule, which principal amount shall be equal to the Stipulated Loss Value of
the Equipment leased thereunder (determined as of the Basic Rent date next
preceding the Default),
15
(C) all Supplemental Rent and all other sums due thereunder as of the date of
such Default; and (D) all such other charges permitted by Applicable Law that,
when received by Lessor together with all other payments due to Lessor under
this Section 15(c), shall make Lessor whole with respect to all xxxxx, damages,
losses and expenses suffered by Lessor as a result of the Default and Lessee's
failure to pay any Rent due as a result thereof on the date required hereunder;
provided, that if a Default described in subsection (a)(iv) above, or if a
Default shall have occurred and be continuing at any time after the occurrence
of an event that is similar in nature to any of the events described in
subsection (a)(iv), then, without further action or notice of any kind, the
amounts described above shall immediately become due and payable; and/or
(ii) (1) require Lessee to assemble any or all of the
Equipment at the location to which the Equipment was delivered or the location
to which such Equipment may have been moved by Lessee or to return promptly, any
or all of the Equipment to Lessor at the location, and otherwise in accordance
with all of the terms of Section 12 hereof, and/or (2) take possession of and
render unusable by Lessee any or all of the Equipment, wherever it may be
located, without any court order or other process of law (and if Lessor does
seek the entry of such an order, Lessee agrees to waive any notice or
opportunity to be heard with respect thereto) and without liability for any
damages occasioned by such taking of possession (any such taking of possession
shall constitute an automatic termination of this Lease as it applies to those
items taken without further notice, and such taking of possession shall not
prohibit Lessor from exercising its other remedies hereunder); and/or (3) at
Lessor's request, Lessee shall promptly execute and deliver to Lessor such
instruments of title and other documents as Lessor may deem necessary or
advisable to enable Lessor or an agent or representative designated by Lessor,
at such time or times and place or places as Lessor may specify, to obtain
possession of all or any part of any rights in respect of the Equipment the
possession of which Lessor shall at the time be entitled hereunder; and if
Lessee shall for any reason fail to execute and deliver such instruments and
documents after such demand by Lessor, Lessor may (A) obtain a judgment
conferring on Lessor the right to immediate possession and requiring Lessee to
deliver such instruments and documents to Lessor, to the entry of which judgment
Lessee hereby specifically consents, and (B) pursue all or part of such
Equipment wherever it may be found and may enter any of the premises wherever
such Equipment may be, or is supposed to be, and search for such Equipment and
take possession of and remove same; and/or (4) have the right, but without any
obligation, to (A) use, operate, store, control, insure or manage the Equipment
and to carry on the business and to exercise all rights and powers of Lessee
relating to the Equipment as Lessor shall deem best, including the right to
remove Liens, cure violations of Applicable Law, and enter into any and all such
agreements with respect thereto and with respect to the maintenance, condition,
operation, leasing, storage or disposition of the Equipment or any part thereof
as Lessor may determine, (B) collect and receive all Proceeds, without
prejudice, however, to the right of Lessor under any provision of this Lease to
collect and receive all cash held by, or required to be deposited with, Lessor
hereunder, and (C) apply such Proceeds, less costs of collection, in the manner
provided in clause (iii)(A) below; and/or
(iii) subject to any right of Lessee to redeem such
Equipment, sell or otherwise dispose of any or all of such Equipment, whether or
not in Lessor's possession, and without instituting any legal proceedings
whatsoever, in a commercially reasonable manner at
16
public or private sale with notice to Lessee (the parties agreeing that ten (10)
days' prior written notice shall constitute adequate notice of any such sale);
and such sale or disposition may be (1) by public auction to the highest bidder,
in one lot as an entirety or in separate lots, either for cash or on credit and
on such terms as Lessor may determine, and at any place (whether or not it be
the location of the Equipment or any part thereof) designated in such notice,
and (2) be adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned sale or sales,
without further published notice, and Lessor may bid for and purchase, at its
sole discretion, the Equipment or any part thereof at such sale, it being
understood, however, that without the consent of Lessor, neither Lessee nor any
affiliate of Lessee or any other person acting directly or indirectly for or on
behalf of Lessee or any affiliate of Lessee may be the purchaser at any such
private sale (except for the full amount due to Lessor under such Equipment
Schedule, and under any other Lease Documents collateralized thereby); and apply
the proceeds of such disposition and all Proceeds: (A) First, to the payment of
-----
all costs of enforcement, including expenses of any sale, lease or other
disposition, expenses of any taking, attorneys' fees, court costs and other
expenses incurred or advances made by Lessor in protection of its rights or
otherwise pursuant to its exercise of remedies and to provide adequate indemnity
to Lessor against all Impositions and Liens which by Law have, or may have,
priority over the rights of Lessor to the money so received by Lessor; (B)
Second, to the payment of Lessee's obligations under the Equipment Schedule, and
------
under any other Lease Documents collateralized thereby; and (C) Third, to the
-----
payment of any surplus thereafter remaining to Lessee or to whosoever may be
entitled thereto; and in the event that the proceeds and Remaining Proceeds are
insufficient to pay the amounts specified in clauses (A) and (B) above, Lessor
may collect such deficiency from Lessee; and/or terminate this Lease or such
Equipment Schedule; and/or
(iv) terminate this lease or such Equipment Schedule; and/or
(v) proceed by appropriate court action, either at law or
in equity or in bankruptcy, whether for the specific performance of any covenant
or agreement herein contained or in execution or aid of any power herein
granted; or for foreclosure hereunder, or for the appointment of a receiver or
receivers for the Equipment or any part thereof, for the recovery of a judgment
for the obligations thereby secured or for the enforcement of any other proper,
legal or equitable remedy available under Applicable Law, including Section 9501
et seq. of the Code.
-- ----
(d) Unless otherwise provided above, a termination pursuant hereto
shall occur only upon written notice by Lessor to Lessee and, unless Lessor is
terminating this Lease, only with respect to the Equipment Schedule as Lessor
specifically elects to terminate in such notice. Except as to the Equipment
Schedule with respect to which there is a termination, the remaining Equipment
Schedules shall continue in full force and effect and Lessee shall be and remain
liable for the full performance of all its obligations thereunder and under the
remaining Lease Documents. In addition, Lessee shall be liable for all
reasonable legal fees, all court costs and other expenses incurred by reason of
any Default or the exercise of Lessor's remedies, including all expenses
incurred in connection with the return of any Equipment in accordance with the
terms of Section 12 hereof or in placing such Equipment in the condition
required by Section 12. No right or remedy referred to in this Section 14 is
intended to be exclusive, but each shall be cumulative and shall be in addition
to any other remedy referred to above or otherwise available
17
at law or in equity, and may be exercised concurrently or separately from time
to time. The failure of Lessor to exercise the rights granted hereunder upon any
default or Default by Lessee shall not constitute a waiver of any such right
upon the continuation or reoccurrence of any such default or Default. In no
event shall the execution of an Equipment Schedule constitute a waiver by Lessor
of any pre-existing default or Default in the performance of the terms and
conditions hereof.
15. ASSIGNMENT BY LESSOR AND LESSEE. WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR (WHICH SHALL NOT UNREASONABLY BE WITHHELD), LESSEE WILL NOT ASSIGN ANY OF
ITS RIGHTS NOR DELEGATE ANY OF ITS OBLIGATIONS HEREUNDER, SUBLET THE EQUIPMENT
OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. ANY UNPERMITTED SUBLEASE OR
ASSIGNMENT BY LESSEE SHALL BE VOID AB INITIO. No assignment or sublease,
-- ------
whether authorized in this Section or in violation of the terms hereof, shall
relieve Lessee of its obligations under any Lease Document and Lessee shall
remain primarily liable under all of the Lease Documents. Lessor may at any
time assign any or all of its rights, obligations, title and interest under any
or all of the Lease Documents, to any other person, so long as notice is sent to
Lessee. Such notice shall provide the name and address of Lessor's assignee and
the percentage interest such assignee has acquired in the Lease. Lessee shall
acknowledge receipt of such notice in writing. Upon receipt of such notice from
Lessor, Lessee shall enter in its books and records the name and address of the
assignee (and its percentage interest in the Lease) as the new Lessor under the
Lease. In the event Lessor expressly retains the obligations of the lessor
under any Lease Document in any such assignment, Lessor's assignee shall not be
obligated to perform any duty, covenant or condition required to be performed by
the lessor under the terms of such Lease Document (other than the covenant of
quiet enjoyment specified in Section 16(d) hereof); and no breach or default by
Lessor hereunder or pursuant to any other agreement between Lessor and Lessee,
should there be one, shall excuse performance by Lessee of any provision hereof,
it being understood that in the event of a default or breach by Lessor that
Lessee shall pursue any rights on account thereof solely against Lessor. Lessee
agrees that any such assignment shall not materially change Lessee's duties or
obligations under the Lease or any Equipment Schedule nor materially increase
Lessee's risks or burdens. Upon such assignment and except as may otherwise be
provided therein all references in this Lease, or such other assigned Lease
Document, to Lessor shall include such assignee. Subject always to the
foregoing, this Lease inures to the benefit of, and is binding upon, the
successors and assigns of the parties hereto.
16. MISCELLANEOUS.
(a) This Lease, each Equipment Schedule, any other Lease Documents
and any commitment letter executed by the parties pertaining to such Equipment
Schedules, constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and shall not be amended or altered in any
manner except by a document in writing executed by both parties. This Lease and
all of the other Lease Documents may be executed in any number of counterparts
and by different parties hereto or thereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all such
counterparts shall together
18
consist of but one and the same instrument; provided, however, that to the
extent that this Lease or any Equipment Schedule constitutes chattel paper (as
such term is defined in the Code) no security interest in this Lease or such
Equipment Schedule may be created thereby by the transfer or possession of any
counterpart hereof or thereof, as the case may be, other than the originally
executed counterpart bearing the xxxx "Original" on the first page hereof or
thereof, which counterpart shall constitute the "Original" hereof or thereof, as
the case may be, for purposes of the Code.
(b) Any provision of this Lease or any other Lease Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without limiting the
generality of the foregoing, in the event any court shall determine that any
provision hereof was unconscionable when made, such court is hereby authorized
by Lessor and Lessee to limit the application of such unconscionable provision
to the extent necessary to avoid any unconscionable result.
(c) Each execution by Lessee of an Equipment Schedule shall be
deemed a reaffirmation and warranty that there shall have been no material
adverse change in the business or financial condition of Lessee from the date of
execution hereof. Except as otherwise expressly provided herein, it is hereby
agreed that (i) all agreements, indemnities, representations and warranties
contained herein or in any other Lease Document shall survive, and shall
continue in effect following the execution and delivery of this Lease and all
such other Lease Documents; and (ii) with respect to each Equipment Schedule,
the provisions of Sections 7, 8, 12 and 14, together with any of Lessee's
obligations under the other provisions of this Lease, as incorporated therein,
which have accrued but not been fully satisfied, performed or complied with
prior to the termination of such Equipment Schedule, shall survive the
termination thereof to the extent necessary for their full and complete
performance.
(d) Subject to the terms and conditions hereof, neither Lessor nor
any person authorized by Lessor shall interfere with Lessee's right to peaceably
and quietly hold, possess and use the Equipment during the term of the Equipment
Schedule relating thereto. Any action by Lessee against Lessor for any default
by Lessor under this Lease or any Equipment Schedule, shall be commenced within
one (1) year after any such cause of action accrues.
(e) Lessee irrevocably appoints Lessor as Lessee's attorney-in-fact
(which power shall be deemed coupled with an interest) to execute on Lessee's
behalf and file all UCCs and amendments Lessor deems advisable to establish,
protect, perfect or obtain priority for the security interest granted herein, to
execute, endorse and deliver any documents and checks or drafts relating to or
received in payment for any loss or damage under the policies of insurance
required by the provisions of Section 10 hereof, but only to the extent that the
same relates to the Equipment.
(f) LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES
19
ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE OR ANY OF THE LEASE
DOCUMENTS. IT IS HEREBY AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS LEASE
OR SUCH OTHER LEASE DOCUMENTS. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY THE PARTIES AND THE PARTIES HEREBY ACKNOWLEDGE THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. EACH
OF LESSOR AND LESSEE FURTHER ACKNOWLEDGE THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS LEASE AND THE OTHER LEASE DOCUMENTS AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT
THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
(g) All notices (excluding xxxxxxxx and communications in the
ordinary course of business) hereunder shall be in writing, delivered personally
or by overnight courier service, sent by facsimile transmission (with
confirmation of receipt), or sent by certified mail, return receipt requested,
addressed to the other party at its respective address stated below the
signature of such party or at such other address as such party shall from time
to time designate in writing to the other party, and shall be effective from the
date of mailing.
(h) This Lease and all of the other Lease Documents shall not be
effective unless and until accepted by execution by an officer of Lessor at the
address, in the State of California, as set forth below the signature of Lessor.
THIS LEASE AND ALL OF THE OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF
THE EQUIPMENT. The parties agree that any action or proceeding arising out of or
relating to this Lease may be commenced in any state or Federal court in the
State of California, and agree that a summons and complaint commencing an action
or proceeding in any such court shall be properly served and shall confer
personal jurisdiction if served personally or by certified mail to it at its
address hereinbelow set forth, or as it may provide in writing from time to
time, or as otherwise provided under the laws of the State of California.
17. DEFINITIONS AND RULES OF CONSTRUCTION.
(a) The following terms, when capitalized (if applicable) or
otherwise used as below, have the following meanings:
20
"Abatement Amount": with respect to any Abatement Period, an amount
equal to (i) any installment(s) of Basic Rent, and any fraction thereof,
accruing pursuant to the Equipment Schedule covering the item of Equipment
having suffered an Impairment of Use, multiplied by (ii) a fraction having (x) a
----------
numerator equal to the amount of Total Invoice Cost allocable to such item of
Equipment, and (y) a denominator equal to the Total Invoice Cost of all of the
items of Equipment then being leased to Lessee under such Equipment Schedule.
"Abatement Period": with respect to any item of Equipment, that
period commencing upon the Impairment Date relating thereto, and continuing
until the earlier of (i) Lessor having either (x) cured the Impairment of Use
relating thereto, or (y) provided Lessee with Replacement Equipment in
substitution therefor, or (ii) the expiration of the Term of such Equipment
Schedule.
"Administrative Fee": with respect to each payment of Rent that shall
become due and payable hereunder or under or with respect to any Equipment
Schedule, an amount equal to five (5) percent of such Rent payment; provided,
that if such charge exceeds the highest charges of such type permitted by
Applicable Law, then the Administrative Fee shall be the highest such charges
permitted by Applicable Law.
"Applicable Law": any applicable Law, including any Law that may
apply to Lessee, its properties and operations, the Equipment or related
property or the operation, modification, condition, maintenance, ownership,
leasing or use thereof (including any product thereof), or any transaction
contemplated hereunder or under any other Lease Document, including any
environmental law, federal or state securities law, commercial law (pertaining
to the rights and obligations of sellers, purchasers, debtors, secured parties,
or to any other pertinent matter), zoning, sanitation, siting or building law,
energy, occupational safety and health practices, or any other Law.
"Base Lease Commencement Date": for each Equipment Schedule, as
defined in Section 2 thereof.
"Basic Rent": the rental installments payable pursuant to each
Equipment Schedule for the Interim Term, the Basic Term and the Renewal Term, in
the amounts and on the dates set forth therein.
"business day": any day, other than a Saturday, Sunday, or legal
holiday for commercial banks under the laws of the State of the governing Law of
this Lease.
"Claims": all claims, xxxxx, judgments, good faith settlements
entered into, suits, actions, debts, obligations, damages (whether incidental,
consequential or direct), demands (for compensation, indemnification,
reimbursement or otherwise) losses, penalties, fines, liabilities (including
strict liability), charges that Lessor has incurred or is responsible for in the
nature of interest, Liens, and costs (including attorneys' fees and
disbursements and any other legal or non-legal expenses of investigation or
defense of any Claim, whether or not such Claim is ultimately defeated, or
enforcing the rights, remedies or indemnities provided for hereunder, or
otherwise
21
available at law or equity to Lessor), of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable, by or against any
person.
"Code" or "Uniform Commercial Code": the Uniform Commercial Code as
in effect in California or in any other applicable jurisdiction; and any
reference to an article or section thereof shall mean the corresponding article
or section (however termed) of any such other applicable version of the Uniform
Commercial Code.
"default": except when inconsistent with the context of any provision
hereof, an event which, but for the lapse of time or the giving of notice or
both, would be a Default.
"Equipment": with respect to each Equipment Schedule, the property
described therein, together with all appliances, parts, instruments,
accessories, furnishings, which are from time to time incorporated in the
Equipment, or having been so incorporated, are later removed therefrom, unless
title thereto is expressly released by Lessor, and all replacements of, and all
additions, improvements and accessions to any and all thereof, and all books and
records and general intangibles (including all licenses, patents, copyrights and
trade secrets) relating thereto; and when used in the context of Lessor's title
to the Equipment (whether relating to the creation, grant, perfection, release,
priority, enforcement or application of proceeds thereof) shall also include all
other property in which Lessor is granted a security interest hereunder or from
time to time under any Equipment Schedule.
"Equipment Schedule": any Equipment Schedule to be executed
pursuant hereto.
"GAAP": generally accepted accounting principle, applied
consistently.
"Governmental Authority": any federal, state, county, municipal,
regional or other governmental authority, agency, board, body, instrumentality
or court, in each case, whether domestic or foreign.
"Impairment Date": the date of the occurrence of any Impairment of
Use.
"Impairment Event": with respect to any item of Equipment, Lessor's
breach of its agreements in Section 16(d).
"Supplemental Rent": all amounts, liabilities and obligations (other
than Basic Rent) which Lessee assumes or agrees to pay to Lessor or others
hereunder, or under any other Lease Document, with respect to an Equipment
Schedule, including the Stipulated Loss Value, the Purchase Price, all
Administrative Fees and payments constituting indemnities, reimbursements,
expenses and other charges payable pursuant to the terms thereof.
"Supplier": the person from whom Lessor is purchasing the
Equipment.
"Supply Contract": any written contract from the Supplier of the
Equipment, pursuant to which Lessor has purchased the Equipment for lease to
Lessee under an Equipment Schedule.
22
"Term": the period for which Equipment is leased under any Equipment
Schedule, including the Interim Term, the Initial Term and, to the extent Lessee
does not purchase the Equipment on the last day of the Initial Term, the Renewal
Term.
"title": When used in the context of Lessor's title to any Equipment,
such title retained by Lessor, which, after giving effect to the provisions of
this Lease, constitutes a first priority security interest in such Equipment
under Applicable Law.
"Total Invoice Cost": with respect to each Equipment Schedule, the
amount specified as such thereon.
"Impairment of Use": Lessee is denied use or possession of any item
of Equipment to a material extent, as a direct and primary result of an
Impairment Event, provided, that such event is certified to Lessor in writing by
Lessee's responsible officer, and verified to Lessor's satisfaction by Lessor's
independent investigation or such other evidence relating thereto as Lessor may
reasonably request.
"Imposition": with respect to each Equipment Schedule, any title,
recordation, documentary stamp and other fees, taxes, assessments and all other
charges or withholdings of any nature (together with any penalties or fines
thereon) arising at any time upon or relating thereto or to the Equipment leased
thereunder, or the delivery, acquisition, ownership, use, operation, leasing or
other disposition of such Equipment or upon the Rent payable thereunder, whether
the same be assessed to Lessor or Lessee.
"Initial Term": for each Equipment Schedule, the monthly period
specified in Section 2 thereof commencing on the Base Lease Commencement Date.
"Interim Term": for each Equipment Schedule, the period from the
effective date thereof to the Base Lease Commencement Date.
"Law": any law, rule, regulation, ordinance, order, code, common law,
interpretation, judgment, directive, decree, treaty, injunction, writ,
determination, award, Permit or similar norm or decision of any Governmental
Authority.
"Lease": this Equipment Lease Agreement.
"Lease Documents": collectively, the Lease, the Equipment Schedules,
and all instruments, documents, certificates and agreements delivered pursuant
hereto.
"Lien": any mortgage, pledge, lease, sublease, security interest,
attachment, charge, encumbrance or right or claim of others whatsoever
(including any conditional sale or other retention agreement).
"Permit": any action, approval, certificate of occupancy, consent,
waiver, exemption, variance, franchise, order, permit, authorization, right or
license, or other form of legally required permission, of or from a Governmental
Authority.
23
"Permitted Lien": (a) Lessor's and Lessee's respective rights, titles
and interest in the Equipment, (b) mechanics, materialmen, laborers, employees
or suppliers Liens and similar Liens arising by operation of Law and incurred by
Lessee in the ordinary course of business for sums that are not yet delinquent
or are being contested in good faith by negotiations or by appropriate
proceedings which suspend the collection and enforcement thereof (provided, that
the existence of such Lien while such negotiations or proceedings are pending
does not involve any substantial risk (in Lessor's discretion) of the sale,
forfeiture or loss of the Equipment or any therein, and for which adequate
reserves have been provided in accordance with GAAP), and (c) Liens arising out
of any judgments or awards against Lessee which have been adequately bonded to
protect Lessor's interests or with respect to which a stay of execution has been
obtained pending an appeal or a proceeding for review.
"person": any individual, corporation, partnership, joint venture, or
other legal entity or a Governmental Authority, whether related or unrelated to
Lessee or Lessor.
"Proceeds": all tolls, rents, revenues, issues, income, products,
profits and other proceeds of the Equipment or any part thereof.
"Purchase Documents": all documents, instruments, licenses and
agreements pertaining to the acquisition of any of the rights, title and
interests in the Equipment.
"Purchase Price": for each Equipment Schedule, the amount specified
as such therein.
"Renewal Term": for each Equipment Schedule, unless Lessee elects to
purchase the Equipment on the last day of the Initial Term, the consecutive
monthly period set forth therein.
"Rent": collectively, the Basic Rent and the Supplemental Rent.
"Replacement Equipment": any item(s) of Equipment substituted by
Lessor for any item of Equipment suffering an Impairment of Use, having the same
value, utility and condition that the replaced item of Equipment had on the date
next preceding the Impairment Date.
"Stipulated Loss Value": with respect to each Equipment Schedule, the
product of the Total Invoice Cost of the Equipment leased thereunder, and the
applicability percentage factors set forth on the Schedule of Stipulated Loss
Values attached hereto.
"Total Loss": any of (a) the actual or constructive total loss of any
item of the Equipment; or (b) the loss, disappearance, theft or destruction of
any item of the Equipment; or (c) damage (including any contamination by
hazardous substances) to any item of the Equipment to such extent as shall make
repair thereof uneconomical, or shall render any item of the Equipment
permanently unfit for normal use, for any reason whatsoever; or (d) the
condemnation, confiscation, requisition, seizure, forfeiture or other taking of
title to or use of any item of the Equipment, or any imposition of a Lien
thereon by any Governmental Authority in
24
excess of $20,000 or (e) as a result of any Law or other action taken by any
Governmental Authority, the use of the Equipment in the normal course of
Lessee's business shall have been prohibited (i) indefinitely or (ii) for a
period in excess of (1) 60 days, or (2) for a period that extends beyond the
then existing Term; all of the foregoing, to the extent established to the
reasonable satisfaction of Lessor.
"UCC": a Uniform Commercial Code financing statement.
(b) Any defined term used in the singular preceded by "any" indicates
any number of the members of the relevant class. (i) "including" shall mean
containing, embracing or involving all of the enumerated items, but not limited
to such items unless such term is followed by the words "and limited to," or
similar words; and (ii) use of the word "or" shall mean at least one, but not
necessarily only one, of the alternatives enumerated. Any Lease Document or
other agreement or instrument referred to herein means such agreement or
instrument as supplemented and amended from time to time. Any reference to
Lessor or Lessee shall include their permitted successors and assigns. Any
reference to a Law shall also mean such Law as amended, superseded or replaced
from time to time. Unless otherwise expressly provided herein to the contrary,
all actions that Lessee takes or is required to take under this Lease or any
other Lease Document, shall be taken at Lessee's sole cost and expense, and all
such costs and expenses shall constitute Claims and be covered by Section 14
hereof. To the extent Lessor is required to give its consent to Lessee with
respect to any matter, the reasonableness of Lessor's withholding of such
consent shall be determined based on the then existing circumstances; provided,
that Lessor's withholding of its consent shall be deemed reasonable for all
purposes if (i) the taking of the action that is the subject of such request,
might result (in Lessor's discretion), in (1) an impairment of Lessor's rights,
title or interests hereunder or under any Equipment Schedule or other Lease
Document, or to the Equipment, or (2) expose Lessor to any Claims, or (ii) to
the extent Lessee fails to provide promptly to Lessor any filings, certificates,
opinions or indemnities specified by Lessor to Lessee in writing.
(c) Lessor and Lessee agree that the definitions and rules of
construction herein shall constitute an integral part of this Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed as of the day and year first above set forth.
By:/s/ /s/
---------------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxxx
Title: Vice President-Production Title: President
0000 Xxxxxxxxx Xxx, Xxxxx 000 000 Xxxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxxxxx, XX 00000
25
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS, that Conference Source International, Inc. a
Georgia corporation ("Seller") for good and valuable consideration, paid by Ally
Capital Corporation (herein "Buyer"), at or before the execution and delivery of
these presents, the receipt of which is hereby acknowledged, does hereby grant,
bargain, sell, assign, transfer and set over unto Buyer, its successors and
assigns, all right, title and interest in and to the following personal
property:
See Exhibit "A" attached hereto and made a part hereof
together with all parts and accessories attached thereto (all such personal
property, parts and accessories being herein collectively called the
"Equipment").
TO HAVE AND TO HOLD, all and singular the Equipment to Buyer, its successors and
assigns, for its and their own use and benefit forever.
And Seller hereby warrants to Buyer, its successors and assigns, that
immediately prior to the delivery of this Xxxx of Sale, Seller had legal title
to the Equipment and good and lawful right to sell the same, and that title to
the Equipment is hereby duly vested in Buyer free and clear of all claims,
liens, encumbrances and rights of others of any nature; and Seller covenants and
agrees with Buyer, its successors and assigns, that it will warrant and defend
such title forever against all claims and demands whatsoever.
IN WITNESS WHEREOF Seller has caused this Xxxx of Sale to be executed and
delivered in its name as of this 2 day of April, 1996
CONFERENCE SOURCE INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
26
Exhibit A
This Exhibit A is attached to Xxxx of Sale that is a part of an Equipment Lease
Agreement dated April 1, 1996 (the "Lease") between ALLY CAPITAL CORPORATION
("Lessor") and CONFERENCE SOURCE INTERNATIONAL, INC. ("Lessee").
Equipment Location:
-------------------
000 Xxxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Vendor
MultiLink, Inc.
0 Xxxxxxxxx Xxxxx Xxxxx 0
Xxxxxxx, XX 00000
2 One Hundred forty-four (144) port MultiLink System 70 equipped with eight
operator workstations each
Basic System 70 configured with 144 ports and eight operator workstations:
--------------------------------------------------------------------------
486DX2 CPU card with 16MB RAM
340 MB Hard Disk Drive
5.25" and 3.5" Combination Floppy Disk Drive
(1) Internal Modem
(6) Digital Signal Processor (DSP) Conferencing Cards, each with (4) DSP's
3) Dual TI Interface Cards
24 Channel Analog Interface Card
8-Port Serial I/O Card
8 Channel Annunciator Feature
Current Release of System Software
Each Operator Workstation includes:
14" Wyse 60 Operator Display Screen
ASCII Keyboard
Audio Console
Binaural Headset
1 Complete Set of Manuals (each)
27
Vendor
E. S. Services
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
1 Pentium 133 Novell Server
1 Mid Tower Case with 250 Power Supply
1 32 MB Memory
2 1.2 and 1.44 Floppy Xxxx Xxxxxx
0 Xxxxxxx XX00000 2.3 GB Drives
2 Adaptee 2940 SCSI Adapters
1 MB PCI Video Adapter
1 3COM PCI Ethernet Adapter
1 CTX GM 1765 17" SVGA Monitor
1 2 Serial and 1 Parallel Ports
1 101 key keyboard
1 Genius Mouse
1 Microsoft DOS 6.22
1 Microsoft Windows 3.11
1 Install Novell 3.11 on Server
1 Pentium 133 Novell Server
1 Mid Tower Case with 250 Wall Power Supply
1 32 MB Memory
2 1.2 and 1.44 Floppy Xxxx Xxxxxx
0 Xxxxxxx XX00000 2.3 GB Drives
2 Adaptec 2940 SCSI Controllers
1 MB PCI Video Adapter
1 3COM PCI Ethernet Adapter
1 2 Serial 1 Parallel Ports
1 SOCOS 14" SVGA Monitor
1 101 key keyboard
1 Genius Mouse
Multimedia Kit Including
1 Quad Speed CD-Rom
1 Soundblaster adapter
1 PC Multimedia Speakers
1 Microsoft Windows 95 Software
3 4 mb SIMM Memory
2 8 MB SIMM Memory
1 1.6 GB Western Digital Fixed Disk
28
Schedule of Stipulated Loss Values
This Schedule of Stipulated Loss Values is attached to Equipment Schedule dated
April 1, 1996 that is part of an Equipment Lease Agreement dated April 1, 1996
(the "Lease") between ALLY CAPITAL CORPORATION ("Lessor") and Conference Source
International ("Lessee"). For each payment of Basic Rent, the applicable
percentage shall be applied to the Total Invoice Cost of the Equipment in order
to determine the Stipulated Loss Value at that time.
Stipulated Loss Value
Payment Number as a % of Total Cost
-------------- --------------------
1 - 12 110% - 92%
13 - 24 91% - 73%
25 - 36 72% - 54%
37 - 48 53% - 35%
For payments 49 and thereafter, the applicable percentage shall decline from 30%
by 1/4% per month, beginning with payment number 43, but in no event shall the
applicable percentage be less than 20%.
GUARANTY
To: ALLY CAPITAL CORPORATION
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Subject: CONFERENCE SOURCE INTERNATIONAL, INC.
-------------------------------------
Gentlemen:
To induce you to enter into one or more security agreements, including but not
limited to conditional sale agreements, leases, chattel and/or real estate
mortgages, notes or other deferred or time payment paper and any and all
agreements relating to the purchase of such paper or documents (all of the
foregoing hereinafter called "Security Obligations") with the above-captioned
(hereinafter called the "Subject"), and/or to induce you to purchase and/or
accept an assignment of Security Obligations from Subject and/or to induce you
to purchase and/or accept one or more assignments from any party or parties of
one or more Security Obligations having Subject as obligor thereon, and/or in
consideration of your having heretofore done any or all of the foregoing, we the
undersigned (and each of us if more than one) agree to be, without deduction by
reason of set-off, defense or counterclaim of Subject, jointly, severally and
directly liable to you for the due performance of all such Security Obligations
both present and future, and any and all subsequent renewals, continuations,
modifications, supplements and amendments thereof, and for the payment of any
and all debts of Subject of whatever nature, whether matured or unmatured,
whether absolute or contingent and whether now or hereafter existing or arising
or contracted or incurred or owing to or acquired by you by assignment, transfer
or otherwise. Any and all present and future debts and obligations of Subject to
us are hereby waived and postponed in favor of and subordinated to the full
payment and performance of all present and future debts and obligations of
Subject to you. We hereby waive notice of acceptance hereof and of all notices
of any kind to which we may be entitled, including without limitation any and
all demands of payment, notices of non-payment, protest and dishonor to use or
Subject or makers, or endorsers of any notes or other instruments for which we
are or may be liable hereunder. You shall be entitled to hold any and all sums
to our credit and any of our property at any time in your possession as security
for any and all of our obligations to you, no matter how or when arising and
whether under this instrument or otherwise. We further waive notice of, and
hereby consent to, any agreement or arrangements whatever with Subject or anyone
else, including without limitation, agreements and arrangements for payment
extension, subordination, composition, arrangement, discharge or release of the
whole or any part of the Security Obligations, or for release of collateral
and/or other guarantors, or for the change or surrender of any and all security,
or for compromise, whether by way of acceptance of partial payment or of returns
of merchandise or of dividends or in any other way whatsoever, and the same
shall in no way impair our liability hereunder. The liability hereunder of each
of the undersigned is direct and unconditional and may be enforced without
requiring you first to resort to any other right, remedy or security and shall
survive any repossession of property whether or not such constitutes an election
of remedies against Subject; nothing shall discharge or satisfy our liability
hereunder
except the full performance and payment of all Security Obligations with
interest. We shall have no right of subrogation, reimbursement or indemnity
whatsoever and no right of recourse to our with respect to any assets or
property of Subject or to any collateral for Security Obligations, unless and
until all Security Obligations shall have been paid and performed in full. As
part of the consideration for your entering into and/or purchasing and/or
accepting an assignment of one or more Security Obligations with Subject as
obligor thereon, we hereby designate and appoint your legal counsel as our true
and lawful attorney-in-fact and agent for each of us and in our name, place and
stead to accept service of any process. You agree to notify us by depositing in
the United States mail, certified mail, postage prepaid, written notice of such
service, addressed to us at our address shown herein below, within (3) days of
such service having been effected. We hereby irrevocably authorize any attorney
of any court of record to appear for and confess judgment against any one or
more of us (except in any jurisdiction where such action is not permitted by
law) for all unpaid balances and other monies due to you from Subject, plus
expenses and 15% added for attorney's fees, without stay of execution, and we
hereby waive and release relief from any and all appraisement, stay or exemption
laws then in force. We agree that if we or Subject shall at any time become
insolvent, or make a general assignment, or if a petition in bankruptcy or any
insolvency or reorganization proceeding shall be commenced by, against or in
respect to us or Subject, any and all of our obligations shall, at your sole
option, forthwith become due and payable without notice. This instrument is a
continuing guaranty and shall continue in full force and effect, notwithstanding
the death of any of us until the full performance, payment and discharge of all
Security Obligation, and thereafter until actual receipt by you from us of our
obligations shall, at your sole option, forthwith become due and payable without
notice. This instrument is a continuing guaranty and shall continue in full
force and effect, notwithstanding the death of any of us until the full
performance, payment and discharge of all Security Obligation, and thereafter
until actual receipt by you from us of written notice of termination; such
termination shall be applicable only to transactions having their inception
thereafter. Termination by one or more of us shall not affect the liability of
such of us as do not give such notice of termination.
Any indebtedness of Subject now or hereafter held by undersigned is hereby
subordinated to the indebtedness of Subject to you. Such indebtedness of Subject
to undersigned is assigned to you as security for this Guaranty and the
indebtedness and if you request, shall be collected and received by undersigned
as trustee for you and paid over to you on account of the indebtedness of
Subject to you but without reducing or affecting in any manner our liability
under the provisions of this Guaranty. Any notes now or hereafter evidencing
such indebtedness of Subject to undersigned shall be marked with a legend that
the same are subject to this Guaranty and, if you so request, shall be delivered
to you. Undersigned will, and you are hereby authorized, in the name of the
undersigned from time to time to execute and file financing statements and
continuation statements and execute such other documents and take such other
actions as you deem necessary or appropriate to perfect, preserve and enforce
your rights hereunder.
The words "you" and "your" as used herein shall mean and include and this
instrument shall apply in favor of and be severally enforceable by any addressee
hereinabove named and/or any concern which is or may at anytime be the parent,
subsidiary or assignee thereof. We hereby waive any and all right to a trial by
jury in any action or proceeding based hereon. This
instrument cannot be changed orally, shall be interpreted according to the laws
of the State of California, shall be binding upon the heirs, executors,
administrators, successors and assigns of each of the undersigned and shall
endure to the benefit of your successors and assigns.
Dated: 4/1/96.
------
Witness:
/s/ /s/
-------------------------------------- -------------------------------------
XXXXX X. XXXXXX Name: Xxxx X. Xxxxxxxx
Address: 0000 Xxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
GUARANTY
To: ALLY CAPITAL CORPORATION
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Subject: CONFERENCE SOURCE INTERNATIONAL, INC.
-------------------------------------
Gentlemen:
To induce you to enter into one or more security agreements, including but not
limited to conditional sale agreements, leases, chattel and/or real estate
mortgages, notes or other deferred or time payment paper and any and all
agreements relating to the purchase of such paper or documents (all of the
foregoing hereinafter called "Security Obligations") with the above-captioned
(hereinafter called the "Subject"), and/or to induce you to purchase and/or
accept an assignment of Security Obligations from Subject and/or to induce you
to purchase and/or accept one or more assignments from any party or parties of
one or more Security Obligations having Subject as obligor thereon, and/or in
consideration of your having heretofore done any or all of the foregoing, we the
undersigned (and each of us if more than one) agree to be, without deduction by
reason of set-off, defense or counterclaim of Subject, jointly, severally and
directly liable to you for the due performance of all such Security Obligations
both present and future, and any and all subsequent renewals, continuations,
modifications, supplements and amendments thereof, and for the payment of any
and all debts of Subject of whatever nature, whether matured or unmatured,
whether absolute or contingent and whether now or hereafter existing or arising
or contracted or incurred or owing to or acquired by you by assignment, transfer
or otherwise. Any and all present and future debts and obligations of Subject to
us are hereby waived and postponed in favor of and subordinated to the full
payment and performance of all present and future debts and obligations of
Subject to you. We hereby waive notice of acceptance hereof and of all notices
of any kind to which we may be entitled, including without limitation any and
all demands of payment, notices of non-payment, protest and dishonor to use or
Subject or makers, or endorsers of any notes or other instruments for which we
are or may be liable hereunder. You shall be entitled to hold any and all sums
to our credit and any of our property at any time in your possession as security
for any and all of our obligations to you, no matter how or when arising and
whether under this instrument or otherwise. We further waive notice of, and
hereby consent to, any agreement or arrangements whatever with Subject or anyone
else, including without limitation, agreements and arrangements for payment
extension, subordination, composition, arrangement, discharge or release of the
whole or any part of the Security Obligations, or for release of collateral
and/or other guarantors, or for the change or surrender of any and all security,
or for compromise, whether by way of acceptance of partial payment or of returns
of merchandise or of dividends or in any other way whatsoever, and the same
shall in no way impair our liability hereunder. The liability hereunder of each
of the undersigned is direct and unconditional and may be enforced without
requiring you first to resort to any other right, remedy or security and shall
survive any repossession of property whether or not such constitutes an election
of remedies against Subject; nothing shall discharge or satisfy our liability
hereunder
except the full performance and payment of all Security Obligations with
interest. We shall have no right of subrogation, reimbursement or indemnity
whatsoever and no right of recourse to our with respect to any assets or
property of Subject or to any collateral for Security Obligations, unless and
until all Security Obligations shall have been paid and performed in full. As
part of the consideration for your entering into and/or purchasing and/or
accepting an assignment of one or more Security Obligations with Subject as
obligor thereon, we hereby designate and appoint your legal counsel as our true
and lawful attorney-in-fact and agent for each of us and in our name, place and
stead to accept service of any process. You agree to notify us by depositing in
the United States mail, certified mail, postage prepaid, written notice of such
service, addressed to us at our address shown herein below, within (3) days of
such service having been effected. We hereby irrevocably authorize any attorney
of any court of record to appear for and confess judgment against any one or
more of us (except in any jurisdiction where such action is not permitted by
law) for all unpaid balances and other monies due to you from Subject, plus
expenses and 15% added for attorney's fees, without stay of execution, and we
hereby waive and release relief from any and all appraisement, stay or exemption
laws then in force. We agree that if we or Subject shall at any time become
insolvent, or make a general assignment, or if a petition in bankruptcy or any
insolvency or reorganization proceeding shall be commenced by, against or in
respect to us or Subject, any and all of our obligations shall, at your sole
option, forthwith become due and payable without notice. This instrument is a
continuing guaranty and shall continue in full force and effect, notwithstanding
the death of any of us until the full performance, payment and discharge of all
Security Obligation, and thereafter until actual receipt by you from us of our
obligations shall, at your sole option, forthwith become due and payable without
notice. This instrument is a continuing guaranty and shall continue in full
force and effect, notwithstanding the death of any of us until the full
performance, payment and discharge of all Security Obligation, and thereafter
until actual receipt by you from us of written notice of termination; such
termination shall be applicable only to transactions having their inception
thereafter. Termination by one or more of us shall not affect the liability of
such of us as do not give such notice of termination.
Any indebtedness of Subject now or hereafter held by undersigned is hereby
subordinated to the indebtedness of Subject to you. Such indebtedness of Subject
to undersigned is assigned to you as security for this Guaranty and the
indebtedness and if you request, shall be collected and received by undersigned
as trustee for you and paid over to you on account of the indebtedness of
Subject to you but without reducing or affecting in any manner our liability
under the provisions of this Guaranty. Any notes now or hereafter evidencing
such indebtedness of Subject to undersigned shall be marked with a legend that
the same are subject to this Guaranty and, if you so request, shall be delivered
to you. Undersigned will, and you are hereby authorized, in the name of the
undersigned from time to time to execute and file financing statements and
continuation statements and execute such other documents and take such other
actions as you deem necessary or appropriate to perfect, preserve and enforce
your rights hereunder.
The words "you" and "your" as used herein shall mean and include and this
instrument shall apply in favor of and be severally enforceable by any addressee
hereinabove named and/or any concern which is or may at anytime be the parent,
subsidiary or assignee thereof. We hereby waive any and all right to a trial by
jury in any action or proceeding based hereon. This
instrument cannot be changed orally, shall be interpreted according to the laws
of the State of California, shall be binding upon the heirs, executors,
administrators, successors and assigns of each of the undersigned and shall
endure to the benefit of your successors and assigns.
Dated: 4/1/96.
------
Witness:
/s/ /s/
-------------------------------------- -------------------------------------
XXXXX X. XXXXXX Name: Xxxx X. Xxxxxxxx
Address: 0000 Xxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
ENVIRONMENTAL RIDER
RIDER NO. 01.
--
This Rider is a part of that certain Equipment Lease Agreement dated as
of April 1, 1996 (the Lease) between ALLY CAPITAL CORPORATION ("Lessor") and
CONFERENCE SOURCE INTERNATIONAL, INC. ("Lessee").
In addition to and without limiting any of the other provisions of this
Lease, Lessee and Lessor hereby agree as follows:
A. DEFINITIONS AND RULES OF CONSTRUCTION. Section 17 of this Lease is
hereby supplemented by adding the following terms, which when capitalized (or
otherwise used) as below, shall have the following meanings:
"Applicable Law": shall also include any Applicable Permit.
"Applicable Permit": any Permit, including any zoning, environmental
protection, pollution, sanitation, safety, energy, siting or building Permit
that Lessee shall be required to obtain to comply with Applicable Law, including
any Permit that is necessary to operate, modify, construct, convey, maintain,
acquire, own, lease, sublease or use the Equipment (including any product
thereof), or related property, to own, lease or operate Lessee's properties,
conduct its business or necessary to enter into any of these Lease Documents or
to consummate any of the transactions contemplated thereby.
"Claims": shall also include all Environmental Claims.
"Environmental Claims": any Claims by a Governmental Authority or other
person that are incurred, arise or effectuated at any time as a result of the
existence of any Environmental Contamination or violation of any Environmental
Law pertaining to any Equipment or related property, or allegation thereof,
regardless of whether the existence (alleged or otherwise) of such Environmental
Contamination or the violation of Environmental Law originated or resulted from
the Equipment or related property, or arose prior to the present ownership or
operation of the Equipment or related property, including: (a) Claims for
personal injury or injury to or destruction, loss or diminution in value of
property or natural resources occurring to, upon, near or off any Equipment or
related property, foreseeable or unforeseeable; (b) Claims relating to any
Remedial Action, including any demolition and rebuilding of any improvements on
real property; (c) Claims for indemnity or reimbursement or for the disgorgement
of amounts paid to Lessor or on its behalf, or resulting from any failure to
report discharges promptly; and (d) Claims incurred for the services of
attorneys, engineers, consultants, contractors, experts, laboratories and all
other costs reasonably incurred in connection with the investigation or Remedial
Actions taken with respect to Hazardous Substances or violation of Environmental
Law, including the preparation of any feasibility studies or reports of the
performance of any Remedial Action.
"Environmental Contamination": any existence, uncontained presence, leak,
discharge, emission, aggregation, release, or abandonment, or threat or
suspicion of any of the foregoing, or abandonment of Hazardous Substances in,
upon, about, beneath, or off the Equipment or related property or arising from
the Equipment or related property, that may require Remedial Action or may
result in a violation of any Environmental Law pertaining to the Equipment or
related property, or may result in Claims.
"Environmental Law" or "environmental law": any Applicable Law relating
to safety, land use, pollution or protection of human health or species of
wildlife or plants or the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata), including, Laws relating to
(a) maintenance of a public or private nuisance, (b) carrying on of an
abnormally dangerous activity, (c) industrial hygiene, (d) Environmental
Contamination, including to air, water, land, groundwater or personal property,
(e) withdrawal or use of groundwater, (f) Hazardous Substances, including the
treatment, manufacture, processing, distribution, use, analysis, generation,
storage, disposal, handling or transportation thereof and (g) any regulation,
order, notice or demand issued pursuant to such Laws, in each case, applicable
to Lessee or Lessor, the Equipment or any related property, or the ownership or
operation thereof, including the following: (i) the Clean Air Act, (ii) the
Federal Water Pollution Control Act, the Clean Water Act and the Safe Drinking
Water Act, (iii) the Toxic Substances Control Act, (iv) the Comprehensive
Environmental Response Compensation Liability Act of 1980, as amended
("CERCLA"), (v) the Resource Conservation and Recovery Act ("RCRA"), (vi) the
Solid and Hazardous Waste Amendments of 1984, (vii) the Occupational Safety and
Health Act, (viii) the Emergency Planning and Community Right-to-Know Act of
1978, (ix) the Solid Waste Disposal Act, (x) the Superfund Amendment and
Reauthorization Act ("XXXX"), (xi) the Hazardous Material Transportation act,
(xii) the Endangered Species Act, (xiii) the Federal Insecticide, Fungicide and
Rodenticide Act, (xiv) the Environmental Laws listed on Annex No. 2 to each
Equipment Schedule and (xv) any other Applicable Laws addressing matters similar
to the foregoing Laws.
"Hazardous Substances" or "hazardous substances": any and all hazardous
or toxic substances, materials, and wastes, including any material, waste or
substance which is (a) oil or petroleum, or their products or by-products
(including sludge or residue), chemical liquids or solid, liquid or gaseous
products or by-products, (b) asbestos, (c) polychlorinated biphenils, or
(d) designated as hazardous or toxic or regulated as such under any Applicable
Law, including RCRA, CERCLA, XXXX, the Clean Water Act, the United States
Department of Transportation Hazardous Materials Table or by the Environmental
Protection Agency, or defined as a "hazardous material," "hazardous substance"
or "hazardous waste" under any other Applicable Laws.
"herein," "hereof," "hereunder," etc.: in, of, under, etc. this Lease
(and not merely in, of, under, etc. the section or provision where the reference
occurs).
"related property": with respect to any Equipment, the land and
buildings at which such Equipment is or shall become located or any personalty
or real property (including any body of
water) to or upon which the Equipment may now or hereafter be attached, situated
on or near, or adjacent to.
"Remedial Action": any clean-up, remedial action, removal, response,
abatement, containment, closure, excavation, restoration or monitoring where
undertaken to comply with Environmental Law, whether or not required by any
Government Authority, or reasonably necessary to make full economic use of the
Equipment or related property.
B. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
representations, warranties and covenants provided in Section 2 of this Lease,
Lessee hereby represents, warrants to and covenants with Lessor that:
With respect to the Equipment covered by each Equipment Schedule:
(i) There are no applicably permitted Hazardous Substances contained therein or
at, upon, under or within any related property that does or shall cause Lessee
to be in violation of this Lease or Applicable Law; (ii) Lessee has not caused
or permitted to occur, or suffered the occurrence of and shall not permit to
exist, any condition which may cause any Environmental Contamination of such
Equipment or at, upon, under or within any related property that does or shall
cause Lessee to be in violation of this Lease or result in a violation of
Applicable Law; (iii) neither Lessee, nor any other party has been is or will be
involved in activities relating to the Equipment or any related property that
could lead to (1) the imposition of liability on Lessor, Lessee, or on any
subsequent or former owner or operator of the Equipment or (2) the creation of a
Lien on the Equipment under Applicable Law (including any Environmental Laws);
(iv) Lessee has not permitted, and will not permit, any person to engage in any
activity that could result in the imposition of liability under any
Environmental Laws on Lessee, Lessor or any owner or operator of the Equipment,
or would otherwise impair Lessor's rights or title pertaining thereto; (v) all
of the Environmental Laws applicable to the Equipment, or to the operation or
ownership thereof, are listed on Annex No. 1 to such Equipment Schedule, and
Lessee is in full compliance therewith; and (vi) all Applicable Permits,
registrations, filings or notices necessary for Lessee to comply with any
Applicable Laws, are listed on Annex No. 2 to such Equipment Schedule, Lessee
has obtained, completed or given, as the case may be, and is maintaining in good
standing, all such Permits, registrations, filings or notices and is in full
compliance with all of the terms thereof; all actions necessary for the renewal
thereof have timely been taken (including the filing of any applications); and
all of the foregoing are in full force and effect and there are no proceedings
or investigations pending or, to the best knowledge of Lessee, threatened that
seek the revocation, cancellation, suspension or adverse modification thereof.
C. NOTICES. In addition to the notices required by Section 3 of this
Lease, Lessee shall provide written notice to Lessor (i) promptly upon Lessee
becoming aware of (A) any alleged violation of Applicable Law, or (B) any
threatened or actual suspension, revocation or recision of any Permit necessary
for Lessee to be in compliance with the terms hereof; and (ii) promptly after
any of the Equipment becomes lost, stolen, missing, destroyed, materially
damaged, worn out, or subject to or causing, or threatening to cause, any
Environmental Contamination.
D. CONDITIONS PRECEDENT. In addition to the conditions precedent set
forth in Section 4 of this Lease, Lessor's obligations under each Equipment
Schedule (including Lessor's obligation to purchase and participate in the
financing of the Equipment to be leased thereunder) are conditioned upon
Lessor's having received all of the following, in form and substance
satisfactory to Lessor, at least two (2) business days prior to the date upon
which Lessor purchases the Equipment or has committed to purchase same (if
sooner): (i) to the extent requested by Lessor, a report, audit or opinion, as
the case may be, from an appraiser, environmental engineer, or other expert,
regarding any matters specified by Lessor (1) including the value of the
Equipment, as of the effective date of the Equipment Schedule, and at the
expiration of the Initial Term and any Renewal Term, or (2) the then existing
condition of the Equipment or any of the related property, including, the
absence of any past or existing violations of Applicable Law (including any
Environmental Laws); and (ii) if Lessor is purchasing the Equipment from Lessee,
(1) all of the operating records pertaining to the storage or transportation of
the Equipment and any Environmental Contamination relating to the Equipment or
the related property and (2) copies of all enforcement actions for alleged
violations of Applicable Laws (including Environmental Laws), and any and all
information concerning any pending investigations pertaining to alleged
violations of Applicable Laws (including any Environmental Laws).
E. USE AND MAINTENANCE. In addition to the requirements of Section 6 of
this Lease, and without limiting the generality of subsection (a) of Section 4
of this Lease, Lessee agrees to comply strictly and in all respects with all
Applicable Laws (including all Environmental Laws) pertaining to the Equipment
or related property (without regard to which person such Applicable Laws shall,
by their terms, be nominally imposed), unless Lessee shall be contesting the
validity thereof in good faith and by appropriate proceedings, but only so long
as Lessee's failure to so comply during the existence of such proceedings shall
not (i) involve any material risk of the sale, forfeiture or loss of such
Equipment, or any part thereof or interest therein, (ii) result in, or involve
any substantial probability of resulting in, the creation of any Lien (other
than a Permitted Lien) on or with respect to such Equipment, or any part thereof
or interest therein, and (iii) involve the risk of the imposition of civil or
criminal fines or penalties on Lessor, Lessee, or generally to the operators or
holders of title to or other interests in the Equipment. Lessee will maintain
all records, logs and other materials required by any Governmental Authority
having jurisdiction to be maintained in respect of any Equipment, without regard
to which person any such requirements shall, by their terms, be nominally
imposed. Lessee will procure and pay for all Permits, franchises, inspections
and licenses necessary or appropriate in connection with any Equipment and any
repair, restoration, replacement, renewal, addition or improvement thereof and
thereto that may be required pursuant to the first sentence of this paragraph.
Lessee shall promptly forward to Lessor copies of all orders, notices, Permits,
applications or other communications and reports in connection with any
discharge or the presence of any Hazardous Substances or any other matters
relating to the Environmental Laws or similar Applicable Laws, as they may
affect Lessee, the Equipment or Lessor's or Lessee's right, title, or interest
therein. Promptly upon the written request of Lessor, from time to time, Lessee
shall provide Lessor with environmental site assessments or environmental audit
reports prepared by an environmental engineering firm acceptable to Lessor, to
assess with a reasonable degree of certainty the presence or absence of any
Hazardous
Substances and the potential cost in connection with any Remedial Action
pertaining to the Equipment or related property.
F. DISCLAIMER OF WARRANTIES. In addition to the waivers, disclaimers
and acknowledgments made in the Lease and each Equipment Schedule, Lessee
further acknowledges that: Lessor has made the Equipment available to Lessee for
examination, demanded that Lessee inspect the Equipment using a professional in
the field of inspections pertaining to such Equipment (including compliance with
the Environmental Laws), and Lessee has, pursuant to such demand examined the
Equipment (using such an experienced inspector); the Equipment is not to be
used, and is not being acquired hereby, for use in any respect for Lessee's or
any other person's personal or family purposes, and as such, the Equipment does
not constitute "consumer goods" as such term is defined under Applicable Law;
the Equipment was selected by Lessee on the basis of its own respective
judgment, Lessee has not asked for, been given or relied upon any statements,
representations, guaranties or warranties of Lessor; Lessor is not in the
business of manufacturing or assembling Equipment or otherwise in the business
of being a vendor or supplier, but is instead in the business of providing
financial accommodations including lease financing; AND THE PROVISIONS OF THIS
PARAGRAPH F AND SECTION 7 OF THIS LEASE HAVE BEEN NEGOTIATED BY LESSOR AND
LESSEE AND, EXCEPT FOR THE WARRANTY MADE BY LESSOR IN SECTION 16(d) HEREOF, ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS,
GUARANTIES, OBLIGATIONS OR WARRANTIES OF LESSOR EXPRESS OR IMPLIED WITH RESPECT
TO THE EQUIPMENT THAT MAY ARISE PURSUANT TO ANY APPLICABLE LAW (INCLUDING ANY
ENVIRONMENTAL LAW) NOW OR HEREAFTER IN EFFECT.
G. INSURANCE. In addition to the requirements of Section 10 of this
Lease, to the extent available, both the casualty and liability insurance
coverage shall insure against loss of or damage to the Equipment, or liability
to Lessor or Lessee, resulting from Environmental Claims; provided, that Lessee
shall only be obligated to obtain coverage against such Environmental Claims to
the extent such insurance shall be available at an aggregate cost, with respect
to the Equipment, of no greater than 2.5% of the Total Invoice Cost thereof;
provided, further, that notwithstanding the then current cost of said coverage,
Lessee shall obtain such coverage to the extent it is typically obtained and
maintained by companies and businesses similar to Lessee, in connection with
their ownership or operation of, or other activities in connection with,
equipment that is the same as or similar to the Equipment, or to the extent
Lessee currently maintains such coverage with respect to its other similar
equipment. All said insurance shall be in form and amount and with companies
reasonably satisfactory to Lessor.
H. REDELIVERY. In addition to the requirements of Section 12 of this
Lease, Lessee agrees that with respect to any Equipment or item thereof that
Lessee shall be required to return or turn over to Lessor, to the extent the
continued possession and operation of the Equipment or item of Equipment is
necessary for Lessee to remain in compliance with Applicable Law, Lessee shall
immediately replace such Equipment or item of Equipment, and in any event,
Lessee shall not upon such removal take any action or fail to take any action
the effect of which will result in a violation of Applicable Law (including any
Environmental Law); and
without limiting the generality of any other provision hereof, Lessee agrees to
return such Equipment or item of Equipment to Lessor, free from any Hazardous
Substances, and dispose of such Hazardous Substances in compliance with all
Applicable Law.
I. REMEDIES. Section 14 of the Lease shall be supplemented as follows:
(a) Lessee agrees that Lessor's remedies provided in Section 14 and certain
other Sections of this Lease shall also expressly include the right to take
Remedial Action and be reimbursed, made whole, indemnified, held harmless and
otherwise protected by Lessee against any resulting or related Claims incurred
or suffered in connection therewith; except that Lessee agrees that Lessor shall
not have any obligation whatsoever to undertake or consummate the same or to
take or refrain from taking any other action with respect thereto or otherwise
relating to or arising in connection with any Environmental Claim, Environmental
Contamination, Environmental Law or Hazardous Substance pursuant to the
pertinent terms of this Lease including Sections 12, 13 and 14;
(b) Lessee agrees that to the extent Lessor's ability to dispose
of the Equipment in a commercially reasonable manner may be impeded by any
violations of Applicable Law that have occurred with respect thereto, or
Lessor's actions with respect to same might result in an Environmental Claim,
Lessee hereby waives, without limiting the generality of any other waivers,
disclaimers or indemnities herein, any claim, right, action or defense otherwise
available to it against Lessor in connection with such disposition or Lessor's
deficiency claim. Lessee hereby acknowledges that: (i) Lessor's election to
dispose of the Equipment at any point after a Default has occurred with respect
to an Equipment Schedule may be affected by the Equipment's non-compliance with
the provisions hereof; (ii) Lessee, pursuant to its representations, agreements
and indemnities hereunder, is ultimately responsible to Lessor for any xxxxx
(including any Environmental Claims) suffered by Lessor in connection with any
such non-compliance; and (iii) to avoid or mitigate the imposition of Claims
(including Environmental Claims) resulting from such non-compliance it will
benefit Lessee even if such efforts (which may include abandoning the Equipment
or selling it expeditiously or after an extended period) result in there being a
deficiency, or greater amount thereof, under the Equipment Schedules; and
(iv) in furtherance thereof, Lessee hereby waives, without limiting the
generality of any other waivers, disclaimers or indemnities herein, any claim,
right, action or defense otherwise available to it against Lessor in connection
with such disposition or deficiency claim.
J. EFFECT OF RIDER. Except as supplemented hereby, this Lease remains
unmodified by the provisions of this Rider, which provisions are, for all
purposes, hereby incorporated into and made a part of this Lease and each
Equipment Schedule.
ALLY CAPITAL CORPORATION CONFERENCE SOURCE INTERNATIONAL,
INC.
Lessee
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Vice President-Production Title: President
ALLY
NOTICE OF ASSIGNMENT
Xx. Xxxx Xxxxxxxx
President
Conference Source International, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
RE: Equipment Lease Agreement dated April 1, 1996
Please be advised that ALLY CAPITAL CORPORATION, Lessor in the above referenced
Lease, has assigned all of its right, title and interest in Equipment Schedule
dated April 1, 1996 to the referenced Lease to Environmental Allies N.V., 0
Xxxx X. Xxxxxxxxxx, Xxxxxxx, Xxxxxxxxxx Antilles.
Please acknowledge receipt of this Notice and Lessor's compliance with Section
15 of the Lease by signing below and returning the original of this Notice to
the above address.
Sincerely,
/s/
Xxxxxx Xxxxxxxxx
Portfolio Manager
Acknowledged and Accepted:
CONFERENCE SOURCE INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
