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Exhibit 10.39
VENDOR LEASE PLAN AGREEMENT
THIS VENDOR LEASE PLAN AGREEMENT (the "Agreement") is effective as of
the date of execution, by and between FIRST SIERRA FINANCIAL, INC. ("First
Sierra") and XXXXXX INDUSTRIES INC. ("Xxxxxx") and cancels and supersedes the
Vendor Lease Plan Agreement between Oakmont Financial Services, now a
subsidiary of First Sierra, and Xxxxxx dated the 28th day of May, 1996 (Exhibit
1).
1. LEASE PROGRAM. First Sierra offers leasing and financing programs to
assist manufacturers, distributors and dealers in facilitating the
acquisition of equipment by their customers. Xxxxxx wishes to have
First Sierra provide a leasing and financing program for Xxxxxx'x
customers. First Sierra and Xxxxxx have agreed that First Sierra will
offer this program under the terms described in this Agreement.
2. ACCEPTANCE BY FIRST SIERRA. First Sierra shall purchase transactions
upon execution of an assignment by Xxxxxx on the First Sierra
assignment form (Exhibit 2) and pursuant to the First Sierra credit
guidelines and pricing schedule (Exhibit 3). First Sierra is not
obligated to accept any transaction submitted to First Sierra by
Xxxxxx unless the transaction in First Sierra's reasonable judgement
complies with First Sierra's then applicable credit criteria. Xxxxxx
may request a credit or documentation exception by following the
procedure described herein. Xxxxxx may, at its option, submit any
transaction declined by First Sierra or any transaction not meeting
the First Sierra credit guidelines to any third party leasing company
of its choice. If First Sierra declines over fifteen (15%) percent of
the leases submitted over any thirty (30) day period that are in
accordance with the First Sierra credit guidelines herein, which
leases are financed by a third party leasing company on substantially
the same terms and conditions declined by First Sierra, Xxxxxx may,
at its sole option, upon thirty (30) days written notice to First
Sierra, terminate this Agreement without penalty. In such event,
transactions approved but not yet funded by First Sierra shall be
funded pursuant to this Agreement.
3. XXXXXX WARRANTIES. In addition to any warranties Xxxxxx may make
pursuant to First Sierra's purchase of equipment, Xxxxxx makes the
following further representations and warranties related to each
lease, each such warranty and representation to speak as of the
funding by First Sierra respecting the transaction:
(a) To the best of Xxxxxx'x knowledge, the lessee will use the
equipment for commercial purposes;
(b) The lease and each other instrument, including but not limited
to guaranties, executed in connection therewith and all
signatures thereon are genuine; the lease has been duly
authorized and executed by the named lessee and/or an authorized
representative thereof; the lease correctly sets forth the
initial payment due upon delivery and acceptance of the
equipment and the rentals or installment payments to which the
lessee is obligated for the term of the lease; the equipment is
fully and correctly described in the lease and has been
delivered to the lessee at the location(s) indicated on the
lease; and the equipment has been accepted by the lessee for all
purposes of the lease.
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(c) There are no representations and warranties not set forth in the
lease that have been made by Xxxxxx to the lessee with respect
to the lease of the equipment other than those of which First
Sierra is aware, and, without limiting the foregoing, Xxxxxx has
not made any representation not set forth in the lease that the
lease is terminable by the lessee if the lessee is unsatisfied
with the equipment for any reason or that the lessee may
trade-in the equipment;
(d) All dealings by Xxxxxx with the lessee, including in connection
with any advertisements or purchase orders relative to the
lease, and the execution of the lease if procured by Xxxxxx have
been in accordance with all applicable laws and regulations;
(e) The conduct of Xxxxxx in developing the lease transaction shall
not subject First Sierra to liability under any suit or
administrative proceeding under any state or federal law, rule
or regulation, it being understood, without limiting the
generality of the foregoing, that the lease transaction shall be
assumed to constitute "credit" as that term is defined and used
in the Equal Credit Opportunity Art (or applicable State Law),
implementing regulations and official interpretations of the
Federal Reserve Board Staff.
(f) The lessee has and shall have no defense, offset or counterclaim
as to the enforcement of the lease arising out of the conduct of
Xxxxxx, and without limiting the generality of the foregoing,
Xxxxxx is not in default in any of Xxxxxx'x obligations to the
lessee;
(g) Xxxxxx does not know of any fact that indicates the
uncollectibility of the lease;
(h) The lessee's application correctly sets forth all information
given Xxxxxx by the lessee. Xxxxxx has provided First Sierra any
other credit information Xxxxxx has with respect to the leases
and all such information is true and correct to the best of
Xxxxxx'x knowledge;
(i) Except monies which First Sierra has agreed are to be retained
by Xxxxxx, Xxxxxx has not received any monies from the lessee
related to the equipment which Xxxxxx has not transferred to
First Sierra, properly endorsed to First Sierra where
appropriate, or which were loaned by Xxxxxx to the lessee;
(j) If the transaction is an equipment lease, title to the equipment
has vested in First Sierra free and clear of any liens of
persons claiming by, through or under Xxxxxx, and if the
transaction is a financing, such title has vested in the lessee.
4. XXXXXX'X CONTINUING OBLIGATIONS. Xxxxxx shall:
(a) at the request of First Sierra or the lessee, provide at
commercially reasonable prices full, complete and adequate
service, including warranty service, for the relevant equipment
in conformity with standard trade practices;
(b) takes such action as is reasonably necessary or as First Sierra
may reasonably request to evidence and perfect this Agreement
and First Sierra's rights contemplated hereby;
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(c) turn over promptly to First Sierra in the form received,
properly endorsed to First Sierra where appropriate, any monies
received by Xxxxxx relative to a lease following its funding by
First Sierra, unless the lease has been purchased by Xxxxxx
under paragraph 10;
(d) not represent that it is the agent of First Sierra nor make any
reference to First Sierra in any advertising materials of Xxxxxx
without First Sierra's prior written consent;
(e) not repossess any equipment or accept redelivery of any
equipment from a lessee without the prior consent of First
Sierra; and
(f) if any equipment is repossessed by (or surrendered to) First
Sierra or pursuant to First Sierra's request prior to all lease
obligations being fulfilled, upon request of First Sierra,
utilizing a reasonable and non-discriminatory "first in/first
out" approach, Xxxxxx shall assist First Sierra in remarketing
any such equipment from a lessee. If Xxxxxx is successful in
remarketing such equipment, First Sierra shall pay Xxxxxx a fee
equal to $150.00 per unit of equipment for services rendered by
Xxxxxx in remarketing such repossessed or surrendered equipment.
5. SALE OF EQUIPMENT AT FMV TO XXXXXX UPON EXPIRATION OF LEASE TERM.
Provided that the lease does not contain a purchase option to the
lessee and provided all rental and other monies due First Sierra have
been fully paid, upon the expiration of the customer's original lease
term First Sierra agrees to provide Xxxxxx with an option to
repurchase from First Sierra, for a cash purchase price equal to the
fair market value of the Equipment plus applicable sales tax, all
Equipment which is the subject of the lease. The fair market value
shall be an amount mutually agreed upon by First Sierra and Xxxxxx;
provided that if the parties are unable to agree upon the fair market
value, such fair market value shall be determined by an appraiser
selected by mutual agreement. Upon payment by Xxxxxx, First Sierra
shall assign and release to Xxxxxx any and all interest First Sierra
may have in the equipment. Delivery of any equipment repurchased by
Xxxxxx shall be the sole responsibility of Xxxxxx.
6. DOCUMENTATION DISCLAIMER. Xxxxxx and First Sierra acknowledge that
the documents required and provided by First Sierra in connection
with the documentation of a transaction hereunder have been prepared
by First Sierra for the purpose of First Sierra's leasing or
financing activities. Xxxxxx further acknowledges that First Sierra
makes no warranty of any nature whatsoever, express or implied, with
respect to the form, substance or enforceability of any such
documentation. Use by Xxxxxx of any such documentation for its own
purpose is at Xxxxxx'x own risk. If Xxxxxx uses any such
documentation for such purposes, Xxxxxx shall make certain that no
reference whatsoever to First Sierra appears thereon.
7. NOTICES. Notices hereunder must be in writing addressed to the
respective party at the appropriate address set forth at the foot
hereof or such other address of which the party may give the other
notice and shall be mailed, certified U.S. mail with postage prepaid.
Notices shall be effective two (2) days after such mailing. Each
party shall provide the other notice of a change in such party's
address.
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8. TERMINATION. This Agreement shall be for an initial term of one (1)
year and shall automatically be renewed for successive one (1) year
terms; Each party may terminate this Agreement, with or without
cause, upon sixty (60) days notice to the other party unless
terminated under paragraph 2 hereof. Termination of this Agreement
will not affect the rights and obligations of either party as to
previously consummated or approved leases, including as respects
paragraph 10; provided that if termination follows a breach by Xxxxxx
of any of Xxxxxx'x warranties or agreements under this Agreement,
First Sierra may terminate its obligations as to any previously
approved but unfunded transactions.
9. REMEDIES. The purchase of interests in equipment covered by this
Agreement is non-recourse except as provided herein. If Xxxxxx
breaches any warranty under this Agreement and First Sierra incurs a
loss with respect to a specific lease as a result of such breach, and
such breach is not cured within thirty (30) days of First Sierra's
notice to Xxxxxx thereof, Xxxxxx shall be granted ninety (90) days
thereafter to repossess and remarket the equipment under such lease
on behalf of First Sierra and pay to First Sierra an amount equal to
ninety (90) days of interest at the then current prime rate on the
present value of the remaining payments or, in the event Xxxxxx fails
to successfully remarket such equipment, Xxxxxx shall be obligated to
repurchase the lease and First Sierra's rights under all related
agreements and First Sierra's interest in the equipment for an amount
equal to the present value of the remaining payments at the prime
rate in effect at the first day of the month immediately preceding
the assignment of the lease from Xxxxxx to First Sierra less one
hundred dollars ($100.00), assuming no recovery by First Sierra from
disposition of the equipment, less any applicable deposit which First
Sierra will retain plus applicable taxes. Upon receipt of the
applicable payment, the lease and First Sierra's rights under the
related documents will be sold to Xxxxxx as is where is, without any
warranty, except in each case a warranty that title to such equipment
is being transferred by First Sierra to Xxxxxx. Until First Sierra
has received the purchase price, Xxxxxx will have no interest in the
interests to be purchased. If, however, after demand by First Sierra
but prior to payment Xxxxxx is deemed to have acquired any such
interest, First Sierra will have a security interest therein under
the Uniform Commercial Code as a security for the performance by
Xxxxxx of Xxxxxx'x obligations hereunder.
10. AMENDMENTS. This Agreement may be amended only by a writing signed by
both parties. Acceptance of an amendment by the parties shall be
manifested by and be effective upon the date of the first transmittal
to First Sierra of an application to consummate a lease or submission
of a documentation package.
11. LEASE CONSUMMATION. Xxxxxx and First Sierra agree that First Sierra
shall use the credit criteria found on Exhibit 3 to determine the
creditworthiness of an applicant. With respect to any lease or
financing (any such lease or financing a "lease") Xxxxxx wishes to
arrange, Xxxxxx will, before delivery of the related equipment,
furnish First Sierra with an equipment description, the transaction
proposed terms, credit information Xxxxxx has received regarding each
lessee or purchaser in connection with the transaction (individually
or collectively as the context indicates the "lessee") and such other
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information as First Sierra may reasonably request. Upon receipt of
all requested materials, First Sierra will review the package and
advise Xxxxxx of its decision within 2 business days of receipt of
the completed package for all transactions under $150,000 and within
4 business days of receipt of the completed package for all
transactions over $150,000. Documentation as to approved leases will
be prepared by First Sierra and procured by First Sierra and/or
Xxxxxx as First Sierra reasonably directs utilizing the then current
rates for this program. Xxxxxx will not, unless otherwise consented
to by First Sierra, deliver any equipment before receipt of First
Sierra's approval or rejection advice. When the documents required by
First Sierra as to a transaction are received by First Sierra, with
each properly completed within the specified commitment period, First
Sierra will complete the transaction and fund the advance for the
transaction within ten (10) business days after the delivery and
acceptance of the equipment, which will be calculated in the manner
agreed to by the parties from time to time. In the event a particular
applicant does not meet the minimum credit criteria, Xxxxxx may
request First Sierra to make an exception. In such event, an
exception request form shall be submitted by Xxxxxx to First Sierra
(see Exhibit B) and shall be considered by First Sierra.
12. FIRST SIERRA SUPPORT. In consideration of Xxxxxx'x Volume Commitment
and in order to facilitate and maximize production under this
Agreement, First Sierra will place one or more employees, as
required, at Xxxxxx'x corporate headquarters in Miami, Florida to act
as the "program manager" responsible for coordinating applications,
resolving credit and documentation issues and to maintain the level
of the program as established herein. The authority of the program
manager shall be determined by First Sierra in its sole discretion,
and any deviation from credit or documentation requirements shall be
approved by an officer of First Sierra. The program manager shall
have no authority to modify this Agreement. Xxxxxx, at its expense,
will provide the program manager with physical facilities and support
sufficient to perform duties effectively. First Sierra shall provide
additional necessary administrative support, from time to time, as
required to properly and effectively manage Xxxxxx'x growing volume
of transactions. First Sierra shall ensure that all credit approvals
and documents are completed within two (2) business days from the day
the transactions are submitted in accordance with the First Sierra
credit guidelines, provided all fully and properly completed
applications (the form of which shall be mutually agreed upon by
First Sierra and Xxxxxx), guarantees and other instruments required
in connection with the lease transaction are properly and completely
submitted to First Sierra by Xxxxxx. In addition to the program
manager and any required administrative support, First Sierra shall
agree to provide the professional services of Xxxxxxx X. Xxxx to
assist in the negotiation and management of accounts and for
marketing support as Xxxxxx may reasonably request. Xxxxxx agrees to
reimburse First Sierra for all travel related expenses reasonably
incurred by Xxxxxxx X. Xxxx, other than expenses incurred as a result
of normal and routine lease negotiation and transaction, including by
way of example but not limited to, participation at trade shows,
developmental meetings and other special requirements of Xxxxxx as it
relates to Xx. Xxxx'x services.
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13. VOLUME COMMITMENT. Xxxxxx estimates that for the period of January 1,
1999 through December 31, 1999 it will submit no less than
$15,000,000 (based on equipment cost) of proper and complete
transactions to First Sierra in accordance with First Sierra's credit
guidelines. If Xxxxxx does not submit this amount, it shall, no later
than January 31, 2000, pay First Sierra a fee of three (3%) percent
of the difference between $15,000,000 and the amount below
$15,000,000 which is actually submitted, but in no event more than
$150,000. In the event that this Agreement is terminated by Xxxxxx
prior to December 31, 1999 pursuant to the termination provisions
contained herein, the minimum volume commitment in the amount of
$15,000,000 and the maximum fee set forth above in the amount of
$150,000 shall be prorated on the basis of the number of days the
Agreement has been in effect during 1999 divided by 365, but subject
to a minimum fee of $75,000. In the event that this Agreement is
terminated by Xxxxxx pursuant to the termination provisions of
paragraph 2 herein or if termination follows a breach by First Sierra
of any of First Sierra's warranties or agreements under this
Agreement, Xxxxxx shall not be subject to any volume commitment or
payment of any fee. Each year thereafter, on or before the one year
anniversary date of this Agreement, Xxxxxx and First Sierra will
establish the volume commitment for the following year.
14. GENERAL PROVISIONS. This Agreement constitutes the entire agreement
of the parties as to the leasing and financing program First Sierra
will make available to Xxxxxx. In the event either party institutes
legal proceedings to enforce any of the terms of this Agreement, the
prevailing party in such proceedings will be entitled to recover its
attorneys' fees and costs incurred therein. It is the intent of the
parties that this Agreement be enforced to the fullest extent, and
any provision of this Agreement deemed by a court to be unenforceable
will be deemed deleted to the extent only of such unenforceability.
The singular number includes the plural, and the neuter gender the
masculine or feminine where the context requires. This Agreement
inures to the benefit of, and is binding upon, the heirs, legatees,
personal representatives, successors and assigns of the parties, it
being understood however, that neither Xxxxxx nor First Sierra may
assign its rights or duties hereunder without the prior written
consent of the other party. Time is of the Essence of this Agreement.
The headings to the paragraphs of this Agreement are for convenience
only and are not to be used in the interpretation of this Agreement.
FIRST SIERRA FINANCIAL, INC. XXXXXX INDUSTRIES INC.
000 Xxxxxx Xxxxxx, Xxxxx 000 0000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxx, XX 00000
By:/s/ Xxxx XxXxxxxx By:/s/ Xxxx X. Manur
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Its: Executive V.P. Its: C.E.O.
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Date: November 15, 1998 Date: November 9, 1998
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