EQUIPMENT SUBLEASE AGREEMENT
Dated as of September 28th, 2001
LESSOR: BEI TECHNOLOGIES, INC. (herein called "LESSOR")
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ADDRESS: XXX XXXX XXXXXX, XXX. 0000, XXX XXXXXXXXX, XX 00000
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LESSEE: OPTICNET, INC. (herein called "LESSEE")
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ADDRESS: 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000
1. LEASE. LESSOR hereby leases and/or grants to LESSEE the right to use, and
LESSEE hereby leases from and/or agrees to accept the right to use, subject to
the terms and conditions herein set forth, the item(s) of personal property
including but not limited to hardware and/or software and herein referred to as
"Equipment' described in each Equipment Schedule entered into from time to time
pursuant to this Equipment Sublease Agreement ("Lease Agreement"). Each
Equipment Schedule entered into by the parties shall constitute a separate
non-cancellable lease agreement and shall incorporate therein all of the terms
and conditions of this Lease Agreement and contain such additional terms and
conditions as agreed upon. The term "LEASE" as used hereinafter shall refer to
an individual Equipment Schedule which incorporates this Lease Agreement. Until
an Equipment Schedule is signed by LESSOR, an Equipment Schedule signed by
LESSEE constitutes an irrevocable offer by LESSEE to lease from LESSOR.
2. TERM. This Lease Agreement shall be effective when signed by both parties and
shall continue in effect until all obligations of LESSEE under each Equipment
Schedule are fully satisfied.
The Lease Term for each Equipment Schedule shall become effective on the
Installation Date ("Commencement Date"). The Installation Date is the date on
which the Equipment is installed at the location set forth in the Equipment
Schedule ("Equipment Location") and is accepted by LESSEE as fully operational
and in use by the LESSEE or if LESSEE has fully paid for the Equipment and the
Equipment is already installed at the Equipment Location and being used by
LESSEE and LESSOR is purchasing the Equipment from LESSEE for lease hereunder,
the Installation Date shall be deemed to be the date LESSOR purchases the
Equipment from LESSEE, said date being defined herein as the date of the check
or wire transfer to LESSEE representing LESSOR'S payment of the Equipment's
Purchase Price. LESSEE shall promptly sign and deliver to LESSOR a Certificate
of Acceptance confirming the applicable Installation Date. UNLESS LESSEE, NOT
MORE THAN ONE HUNDRED FIFTY (150) DAYS OR LESS THAN SIXTY (60) DAYS PRIOR TO THE
INITIAL OR EXTENDED EXPIRATION OF THE LEASE, NOTIFIES LESSOR IN WRITING BY
CERTIFIED MAIL OF ITS INTENTION NOT TO EXTEND THE LEASE AND EXERCISE OPTION (A)
OR (B) BELOW, THE LEASE SHALL AUTOMATICALLY AND CONTINUOUSLY BE EXTENDED ON THE
SAME TERMS AND CONDITIONS FOR SUCCESSIVE THIRTY (30) DAY PERIODS. In the event
LESSEE notifies LESSOR of its intention not to extend the LEASE, then LESSEE
must do one of the following: ("(A) Purchase all the Equipment for fair market
value or twenty percent (20%) of the Equipment's original acquisition cost,
whichever is greater; or (B) Extend the LEASE for a period of twelve (12)
additional months at a fair market value monthly rent equal to 1.734% of the
Equipment's original acquisition cost per month. At the end of said extension
period provided by option (B) LESSEE may (i) return all but not less than all of
the Equipment to LESSOR in accordance with the terms of the LEASE or (ii)
Purchase all the Equipment for a fair market value to be determined by LESSOR at
its sole and absolute discretion. In the event LESSEE elects option (B) in
accordance with the terms hereof, said option shall be subject to an updated
credit review and approval of LESSOR in its reasonable discretion. In the event
LESSOR does not approve option (B), then option (A) shall prevail.
3. RENT. LESSEE shall pay to LESSOR at its address set forth above, or at such
other address LESSOR may hereinafter designate in writing, the rent specified
for the Equipment, payable in advance, effective on the Commencement Date.
Subsequent monthly or other calendar period rental payments shall be due on the
same day of subsequent months or other calendar periods as the Commencement Date
of the LEASE.
4. DISCLAIMER OF WARRANTIES.
(a) LESSEE ACKNOWLEDGES THAT LESSEE IS NOT RELYING ON LESSOR'S SKILL OR
JUDGMENT TO SELECT OR FURNISH GOODS SUITABLE FOR ANY PARTICULAR PURPOSE. LESSEE
ACKNOWLEDGES THAT LESSOR HAS NOT MADE AND DOES NOT MAKE ANY WARRANTIES, EXPRESS
OR IMPLIED, DIRECTLY OR INDIRECTLY, INCLUDING, WITHOUT LIMITATION, THE WARRANTY
OF MERCHANTABILITY AND OF FITNESS, CAPACITY OR DURABILITY FOR ANY PARTICULAR
PURPOSE, AND WARRANTIES AS TO THE DESIGN OR CONDITION OF THE EQUIPMENT AND THE
QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT. LESSOR SHALL HAVE NO
LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE OF ANY KIND OR NATURE
WHATSOEVER, INCLUDING ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, TO ANY
EXTENT WHATSOEVER, RELATING TO OR ARISING OUT OF THE SELECTION, QUALITY,
CONDITION, MERCHANTABILITY, SUITABILITY, FITNESS, OPERATION OR PERFORMANCE OF
THE EQUIPMENT. NO DEFECT IN OR UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE
OF ITS OBLIGATIONS UNDER THE LEASE. LESSEE agrees that LESSOR assumes no
liability for and makes no representation as to the treatment by LESSEE of the
LEASE, the Equipment or the rent payments or other sums due thereunder for
financial statement or tax purposes.
(b) For the term of the LEASE, or any extension thereof, LESSOR hereby
assigns to LESSEE and LESSEE may have the benefit of any and all Vendor's
warranties, service agreements and patent indemnities, if any, with respect to
the Equipment to the extent assignable by LESSOR, provided, however, that
LESSEE'S sole remedy for the breach of any such warranty or indemnification
shall be against the Vendor and not against LESSOR, nor shall any such breach
have any effect whatsoever on the rights and obligations of either party with
respect to the LEASE.
5. STATUTORY RIGHTS AGAINST VENDOR. LESSEE IS ADVISED THAT IT MAY HAVE RIGHTS
UNDER THE CONTRACT EVIDENCING THE ACQUISITION OF THE EQUIPMENT FROM THE VENDOR
AND THAT LESSEE SHOULD CONTACT THE VENDOR OF THE EQUIPMENT FOR A DESCRIPTION OF
ANY SUCH RIGHTS.
6. EQUIPMENT AND LIABILITY. LESSOR shall not be liable for specific performance
of the LEASE or for damages if, for any reason, any Vendor fails to accept order
or delays or fails to fill the order. LESSEE agrees to accept the Equipment
notwithstanding any such failure of any Vendor and authorizes LESSOR to add the
serial number of the Equipment to the LEASE.
7. VENDOR NOT AN AGENT. LESSEE understands and agrees that neither the Vendor,
nor any salesman or other agent of the Vendor, is an agent of LESSOR, no
salesman or agent of the Vendor is authorized to waive or alter any term or
condition of the LEASE, and no representation as to Equipment or any other
matter by the Vendor shall in any way affect LESSEE'S duty to pay the rent and
perform its other obligations as set forth in the LEASE.
8. PLACE OF USE. LESSEE shall keep the Equipment at its place of business as
specified in the LEASE, or at such other place as LESSOR may consent to in
writing. LESSEE covenants and agrees not to (a) allow the use of the Equipment
by any one other than the employees of the LESSEE or authorized personnel or
representatives of LESSOR pursuant to the terms of that certain InterCompany
Agreement between LESSEE and LESSOR or (b) rent or sublet the Equipment or any
part thereof. LESSEE WILL NOT WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, WHICH MAY
BE WITHHELD BY LESSOR AT LESSOR'S SOLE AND ABSOLUTE DISCRETION, ASSIGN THE LEASE
OR ITS INTEREST THEREUNDER.
9. USE AND RETURN OF EQUIPMENT. The LESSEE leases and shall use the Equipment
only for its intended purposes and shall exercise due and proper care in the
use, repair and servicing of the Equipment and at all times and at its expense
shall keep and maintain the Equipment in good working condition, order, and
repair. The LESSEE shall make no alteration to the Equipment without the prior
written consent of the LESSOR such consent being hereby granted to LESSEE for
those alterations specifically designed to enhance or repair the Equipment.
LESSEE represents and warrants that the Equipment will be covered and maintained
under the best standard full service maintenance agreement offered by the
Vendor, provided the Vendor is either the original equipment
manufacturer/licensor or an authorized original equipment manufacturer/Licensor
maintenance organization, or such other maintenance organization authorized by
the original equipment manufacturer/licensor (hereinafter called "Maintenance
Provider"), during the full term of the LEASE or any extension thereof. Upon the
expiration or termination of the LEASE, LESSEE at its sole expense shall
forthwith have the Equipment de-installed and properly prepared for shipment by
the Maintenance Provider, insure, warrant eligibility for continued maintenance
provider's best standard and most current version full service and maintenance
agreement (or, with LESSOR'S written consent, in lieu of such warranty pay to
LESSOR an inspection and refurbishment fee equal to ten percent (10%) of the
original Equipment cost) and return the Equipment unencumbered to LESSOR, except
for the liens created by or through LESSOR or BANKERS (as defined below), at
such place designated by LESSOR, in the same condition as when received by
LESSEE , ordinary wear and tear excepted. LESSOR reserves the right to approve
or designate the carrier and the means of shipment. However, if requested by
LESSOR, LESSEE will, prior to shipment, at
1.
its sole expense, store the Equipment after de-installation and packing on its
premises for ninety (90) days. All replacement parts, additions and accessories
incorporated in or affixed to the Equipment, including but not limited to
wiring, software and operating systems, at or after the commencement of the
LEASE shall become the property of LESSOR. All related documentation, manuals
and service logs are the property of LESSOR and are to be returned with the
Equipment.
10. INTENTIONALLY OMITTED.
11. INTENTIONALLY OMITTED.
12. TAXES. (a) General. LESSEE assumes liability for and shall indemnify and
defend LESSOR against all fees, taxes, and charges of any nature imposed by any
governmental authorities upon or relating to the Equipment. (b) Filing. If at
any time such taxes, fees, or charges are imposed, LESSOR (or its agents) shall
make and file any or all declarations and returns in connection with such taxes
in order to pay the same (unless LESSOR otherwise directs that LESSEE shall make
and file all declarations and returns in connection with such taxes and send
LESSOR evidence of timely payment). (c) Rental, Sales, and/or Use Taxes. LESSOR
shall directly remit all rental, sales and/or use taxes to the appropriate
taxing unit and LESSEE shall remit to LESSOR, upon demand, any and all such
taxes as LESSOR shall require. (d) Personal Property Taxes. For Equipment
subject to personal property taxes, to liquidate such taxes LESSEE agrees to pay
LESSOR an annual liquidated amount ("Assessed Amount") which shall be based upon
the Equipment price (as set forth in the original Vendor Invoice), reduced by
depreciation calculated in accordance with applicable depreciation schedules
used by the applicable taxing jurisdiction at the applicable tax rate. The
Assessed Amount shall be payable by LESSEE without regard to any discounts or
reduction LESSOR may obtain by reason of early payment or otherwise. In
addition, LESSEE shall pay LESSOR an annual Tax Administration fee equal to ten
percent (10%) of the Assessed Amount charged for each Equipment Schedule, if any
personal property taxes are imposed upon Equipment subject of that Equipment
Schedule. (e) Audits and Exemption Certificates. LESSEE will be responsible for
any audit adjustment if a tax exemption certificate furnished by LESSEE is not
accepted by the applicable taxing authority. LESSEE will otherwise indemnify
LESSOR for taxes, interest, penalties and other sums charged as a result of
audit adjustments occurring for any reason with respect to the LEASE or
Equipment (including if a certificate is denied).
LESSOR reserves the right to invoice and collect an estimated amount for
personal property taxes each year, such estimate to be based on the most recent
ascertainable assessment. Upon receipt of an invoice for the actual amount due,
LESSOR will invoice LESSEE and LESSEE will pay to LESSOR or LESSOR will rebate
to LESSEE any difference between the actual invoice and the estimated amount.
13. INTENTIONALLY OMMITTED.
14. TITLE. LESSEE agrees and acknowledges that this LEASE is a sublease and that
the Equipment has been originally leased by LESSOR from Bankers Direct Leasing,
a division of EAB Leasing Corp. ("BANKERS") pursuant to that certain BANKERS
Master Lease Agreement dated as of September 26th, 2001, between LESSOR and
BANKERS ("Master Lease"). LESSEE'S rights under the LEASE are subject to the
terms and conditions of the Master Lease and expressly subordinated to BANKERS'
rights under the Master Lease. All Equipment shall remain personal property and
the title thereto shall remain in the name of Bankers exclusively unless the
Equipment is, or includes, software in which event and only to the extent
required by the applicable license, title to said software shall remain in the
Licensor. To the extent that the License allows title to software to pass to the
Licensee, such title shall vest and remain in BANKERS. To the extent that such
vesting requires a specific written conveyance, LESSEE hereby conveys to BANKERS
any title it has or may hereafter acquire in the software and relinquishes any
subsequent claim or title in the software, including any rights to purchase the
software and/or retain rights to use the same beyond the Lease Term, except to
the extent LESSEE may purchase the same or renew the LEASE as provided for under
the LEASE. If any provision of this paragraph requires for its effectiveness
Licensor's prior written consent because the License limits transfers,
encumbrance, or assignment of the software, then LESSEE shall assist LESSOR, if
so requested, in obtaining such consent. LESSEE shall keep BANKERS' title rights
in the Equipment free from any and all liens, claims, and legal processes,
except for liens created by or through LESSOR OR BANKERS. LESSEE shall give
LESSOR immediate notice of any attachment or other judicial process, liens, or
claims affecting the Equipment and shall indemnify and save LESSOR harmless from
any loss or damage caused thereby. To further secure payment to LESSOR, LESSEE
agrees that each LEASE is cross-collateralized with all others and in the event
of default by LESSEE of any LEASE, LESSOR may exercise its rights and remedies
as if LESSEE defaulted on all LEASES.
In the event the Maintenance Provider deems it necessary to replace any
Equipment with like equipment, LESSEE shall immediately notify LESSOR of the
same. However, no exchange or replacement shall occur without LESSOR'S prior
written approval and consent. LESSEE further agrees (a) to take all necessary
and reasonable steps to insure title to the replacement Equipment is, subject to
LESSOR'S satisfaction, transferred to BANKERS, (b) to insure the replacement
Equipment as provided in Paragraph 11, and (c) to pay any and all costs in
connection with or related to such Equipment exchange.
15. FILING. LESSEE, on behalf of LESSEE and LESSOR, hereby authorizes LESSOR and
appoints LESSOR its attorney-in-fact to execute and file the LEASE, any
financing statements or security agreements with respect to the Equipment or any
collateral provided by LESSEE to LESSOR prior to or following LESSOR'S
acceptance of the LEASE, in any state of the United States. LESSEE shall execute
such supplemental instruments and financing statements if LESSOR deems such to
be necessary or advisable and shall otherwise cooperate to defend the title of
BANKERS by filing or otherwise.
16. RIGHT OF INSPECTION. The LESSOR or BANKERS, or their respective agents,
dealers, and representatives shall have the right at any time during usual
business hours to inspect the Equipment and to have access to the location of
the Equipment.
17. NON-WAIVER. LESSOR'S failure at any time to require strict performance by
LESSEE of any of the provisions of the LEASE shall not waive or diminish
LESSOR'S right thereafter to demand strict compliance therewith or with any
other provision. Waiver of any default shall not waive any other default.
LESSOR'S rights under the LEASE are cumulative and not alternative.
18. DEFAULT. Time is of the essence of the LEASE, and no waiver by LESSOR of any
breach or default shall constitute a waiver of any other breach or default by
LESSEE or waiver of any of LESSOR'S rights. If LESSEE fails to pay any rent or
other amounts required within five (5) days after the same is due and payable,
or if LESSEE fails to observe, keep or perform any other provision of the LEASE
required to be observed, kept or performed by LESSEE, or if LESSEE ceases doing
business as a going concern, or if a petition is filed by or against LESSEE
under the Bankruptcy Act or any amendment thereto (including a petition for
re-organization or an arrangement), or if a receiver is appointed for LESSEE or
its property, or if LESSEE commits an act of bankruptcy, becomes insolvent,
makes an assignment for the benefit of creditors, offers a composition or
extension of any of its indebtedness, or if LESSEE without LESSOR'S prior
written consent, attempts to remove or sell or transfer or encumber or sublet or
part with the possession of the Equipment, or if LESSOR deems itself insecure,
LESSOR or its agents shall have the right to exercise any one or more of the
following remedies: (a) to declare the entire amount of rent hereunder
immediately due and payable without notice or demand to LESSEE, (b) to xxx for
and recover from the LESSEE the amount equal to the unpaid balance of the rent
due and to become due during the term of the LEASE plus an amount equal to the
greater of (i) the fair market value of the Equipment prior to the event of
default, or (ii) twenty percent (20%) of the Equipment Cost, all discounted to
present value at an annual rate of 6%, (c) to take possession of any Equipment
without demand or notice wherever same may be located without any court order or
other process of law. Upon retaking possession of any Equipment, the LESSOR at
its option may (i) lease repossessed Equipment or any part thereof to any third
party on such terms and conditions as the LESSOR may determine or (ii) sell the
Equipment or any part thereof to the highest bidder at public auction or at
private sale, and will credit the net amount so realized less expenses incurred
in connection with such disposition to the amount due pursuant to (b) above.
LESSEE hereby waives any and all damages occasioned by such taking of
possession. Any said taking of possession shall not constitute termination of
the LEASE and shall not relieve LESSEE of its original obligations unless LESSOR
expressly so notifies LESSEE in writing.
To the extent permitted by applicable law, LESSEE waives any and all rights
and remedies conferred upon a LESSEE by UCC Sections 2A-508 through 2A-522,
including (without limitation) LESSEE'S rights to (a) cancel or repudiate the
LEASE, (b) reject or revoke acceptance of the leased Equipment, (c) recover
damages from LESSOR for breach of warranty or for any other reason, (d) claim a
security interest in any rejected Equipment in LESSEE'S possession or control,
(e) deduct from rental payments all or any part of any claimed damages resulting
from LESSOR'S default under the LEASE, (f) accept partial delivery of the leased
Equipment, (g) "cover" by making any purchase or lease of other equipment in
substitution for Equipment due from LESSOR, (h) recover from LESSOR any general,
special, incidental or consequential damages, for any reason whatsoever, and (i)
specific performance, replevin or the like for any of the leased Equipment.
To the extent permitted by applicable law, LESSEE waives any rights now or
hereafter conferred by statute or otherwise that may require LESSOR to sell,
re-lease or otherwise use or dispose of any of the leased Equipment in
mitigation of LESSOR'S damages as set forth in the LEASE or that may otherwise
limit or modify any of LESSOR'S rights or remedies under the LEASE. The remedies
provided for in the LEASE shall not be deemed exclusive but shall be cumulative,
and shall be in addition to all other remedies existing at law or in equity.
Should any legal proceedings be instituted by LESSOR to recover any monies
due or to become due under the LEASE and/or for the possession of the Equipment,
LESSEE shall pay LESSOR'S reasonable attorney's fees, court costs, and other
related expenses as well as fees and costs incurred In connection with a
bankruptcy proceeding including, but not limited to, any objections or disputes.
LESSEE and all endorsers and guarantors hereby consent to LESSOR granting, at
its own option, one or
2.
more extensions of the time of payment or performance of any of the obligations
of LESSEE or of any security agreement securing the LEASE, hereby waiving all
notice thereof.
19. ASSIGNMENT. NEITHER THE LEASE NOR THE RIGHTS THEREUNDER SHALL BE ASSIGNED,
NOR SHALL ANY OF THE EQUIPMENT BE SUBLEASED BY LESSEE WITHOUT PRIOR WRITTEN
CONSENT OF LESSOR. LESSOR OR BANKERS, WITHOUT NOTICE TO LESSEE, MAY AT ANY TIME
ASSIGN ALL OR PART OF ITS RESPECTIVE RIGHT, TITLE AND INTEREST IN AND TO THE
LEASE IN AND TO EACH ITEM OF EQUIPMENT AND MONIES TO BECOME DUE TO LESSOR OR
BANKERS THEREUNDER; and, each of LESSOR or BANKERS may grant a security interest
in the Equipment, subject to LESSEE'S rights therein as set forth in the LEASE.
Any assignee of LESSOR or BANKERS shall have all of the rights, but none of the
respective obligations, of LESSOR or BANKERS under the LEASE and LESSEE agrees
that it will not assert against any assignee of LESSOR or BANKERS, any defense,
counterclaim or offset that LESSEE may have against LESSOR or BANKERS, as
applicable. LESSEE acknowledges that any assignment or transfer by LESSOR or
BANKERS would neither materially change LESSEE'S duties or obligations under the
LEASE nor materially increase the burdens or risks imposed on LESSEE.
20. POSSESSION AND QUIET ENJOYMENT. Subject to BANKERS rights under the Master
Lease, LESSOR covenants to and with LESSEE that, provided LESSEE performs the
conditions of the LEASE and so long as LESSEE shall not be in default
thereunder, LESSEE shall peaceably and quietly hold and use the Equipment during
the LEASE term without hindrance or interruption by LESSOR.
21. LIABILITY AND INDEMNITY. Except for the gross negligence or willful
misconduct of LESSOR, LESSEE agrees to indemnify LESSOR against and hold LESSOR
harmless from any and all claims, (INCLUDING WITHOUT LIMITATION, CLAIMS
INVOLVING STRICT OR ABSOLUTE LIABILITY), actions, suits, proceedings, costs,
expenses, damages and liabilities at law or in equity, including costs and
reasonable attorney's fees, arising out of, connected with or resulting from the
LEASE or the Equipment, including, without limitation the manufacture,
selection, purchase, ownership, delivery; possession, use, operation, condition,
sales, return, storage or disposition thereof, any latent or other defects,
whether or not discoverable, and any claim for patent, trademark or trade name
infringement.
LESSOR shall not be liable to LESSEE for any loss, damage, injury, or
expense of any kind or nature, caused directly or indirectly by any Equipment or
the use or maintenance thereof; the repair, servicing or adjustment thereto, or
for any delay or failure to provide any thereof, any interruption of service or
loss of use of the Equipment, or for any loss of business or damage whatsoever
and howsoever caused.
For purposes of this Paragraph, the term "LESSOR" shall include LESSOR, its
successors and assigns, shareholders, directors, officers, representatives,
employees, and agents, and the provisions of this Paragraph shall survive
expiration of the LEASE with respect to events occurring prior thereto.
22. INTENTIONALLY OMMITTED.
23. REPRESENTATIONS AND WARRANTIES OF LESSEE. LESSEE hereby represents, warrants
and covenants that, with respect to the LEASE, any amendment, addendum, rider,
or other attachment executed thereunder:
(a) The execution, delivery and performance thereof by LESSEE have been
duly authorized by all necessary corporate or business action.
(b) The individual executing such is duly authorized to do so.
(c) They constitute legal, valid and binding agreements of LESSEE
enforceable in accordance with their respective terms, subject to any bankruptcy
laws, laws affecting the rights of creditors generally and general principles of
equity.
(d) Any and all financial statements or other information with respect
to LESSEE supplied to LESSOR at the time of execution hereof and any amendments,
addendums, or riders hereto are true and complete.
The foregoing representations and warranties shall survive the signing and
delivery of the LEASE and any amendments, addendums, riders or other attachments
thereto.
24. MISCELLANEOUS. (a) All notices relating hereto shall be in writing and
mailed to LESSOR or LESSEE by certified mail, return receipt requested at its
respective address above shown or at any later address last known to the sender.
The LEASE is irrevocable for the full term thereof and for the aggregate rental
therein reserved, and the rent shall not xxxxx by reason of termination of
LESSEE's right of possession and/or the taking of possession by LESSOR or for
any other reason. If more than one LESSEE is named in the LEASE, the liability
of each shall be joint and several.
(b) Delinquent installments of rent, or other amounts due under the
LEASE, of more than five (5) days shall be subject to a penalty equal to ten
(10) percent of such payment, plus interest at the rate of one and one-half (1
1/2) percent per month, but in no event greater than the highest lawful rate. If
LESSOR supplies LESSEE with labels stating that Equipment is owned by LESSOR,
LESSEE shall label the Equipment and shall keep the same affixed in a prominent
place.
(c) LESSEE agrees to furnish to LESSOR upon request:
(1) Such additional information as LESSOR may reasonably
request concerning LESSEE and LESSEE's use of the Equipment in order to enable
LESSOR to determine whether the covenants, terms, and provisions of the LEASE
have been complied with by LESSEE.
(2) Copies of annual or quarterly financial statements,
including a copy of the balance sheet and profit and loss statement of LESSEE.
(3) Financial statements of any corporation that owns a
controlling interest in LESSEE.
(4) Copies of all Maintenance Provider's reports covering the
Equipment.
(5) A duly executed written warranty or certificate, as
applicable, verifying the serial number(s) of the Equipment and any attachments
or appurtenances thereto, specifying the shipment date for the return of the
Equipment (if the Equipment is being returned to LESSOR), its general condition,
that the Equipment has been and continues to be in use for its intended purpose
and within the limitations set forth and at the location specified in the LEASE.
(d) LESSEE shall furnish to LESSOR such information and data as LESSOR
may from time to time reasonably request as to existence of and status of any
claims for damages (whether against the Equipment or against LESSOR or LESSEE)
arising out of the use, operation, or condition of the Equipment; the taxes of
the nature provided to be paid by LESSEE under the provisions of Paragraph 12
which have been assessed and the amount of such taxes paid, and such other data
pertinent to the Equipment and the condition, use, and operation thereof as
LESSOR may from time to time reasonably request.
(e) If LESSEE shall fail to comply with its covenants and obligations
under the LEASE, the payment of taxes, assessments, and other charges of keeping
the Equipment in repair and free of liens, charges, and encumbrances, LESSOR
may, after notice to LESSEE of LESSOR's intent, pay such charges, taxes,
assessments or cause compliance with such covenants, however, LESSOR shall not
be obligated to make advances to perform the same, and all sums so advanced
shall be payable by LESSEE to LESSOR upon demand as additional rent. No such
advance shall be deemed to relieve LESSEE from any default under the LEASE or be
considered a waiver by LESSOR of any of its rights or remedies.
(f) In the event a major change in the ownership or financial condition
of LESSEE occurs prior to delivery and acceptance of any Equipment, and LESSOR,
in its sole discretion deems itself insecure as a result of such change, LESSOR
reserves the right to cancel the LEASE and LESSEE hereby agrees to hold LESSOR
harmless and to indemnify LESSOR from any and all obligations, liabilities,
costs and expenses incurred as a result of such cancellation, including but not
limited to LESSOR's issuance of its purchase order to the Equipment Vendor.
(g) The LEASE, any amendments, addendums, riders, or other attachments
made thereto shall be deemed to have been made and executed in San Francisco,
California, regardless of the order in which the signatures of the parties shall
be affixed thereto, and shall be interpreted and the rights and liabilities of
the parties thereto determined in accordance with the laws of the State of
California. LESSEE AND LESSOR HEREBY WAIVE THE RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY CLAIMS OR ANY OTHER MATTERS ARISING OUT OF THE LEASE OR ANY OTHER
AGREEMENT EXECUTED IN CONNECTION THEREWITH.
(h) LESSEE agrees to pay LESSOR on demand LESSOR's cost of processing,
documentation, filing and search fees, credit reports and other related
administrative and processing expenses for each LEASE.
(i) Notwithstanding anything to the contrary contained in the LEASE,
including but not limited to Paragraph 18, in addition to all other remedies
provided therein, in the event LESSEE fails to ship the Equipment to the
destination designated by LESSOR on or before the warranted date as specified In
Paragraph 24 (c) (5), LESSEE agrees to
3.
pay to LESSOR upon demand an amount equal to the daily rate, based on a 30 day
month, of the monthly or other calendar period rental for each day after such
date until such time as the Equipment leaves the LESSEE's location for the
destination designated by LESSOR.
(j) LESSEE and any guarantor agree that any process served for any
action or proceeding shall be valid if mailed by certified mail, return receipt
requested, with delivery directed to the LESSEE, its registered agent, or any
agent appointed in writing to accept such process. LESSEE and any guarantor
accordingly hereby expressly appoint CT Corporation Systems," or its successor,
in California as THEIR AGENT TO ACCEPT SERVICE of such process in connection
with the LEASE.
25. SEVERABILITY. If any provisions of the LEASE or any remedy thereunder
provided for is deemed invalid under any applicable law, such provision shall be
inapplicable and deemed omitted, but the remaining provisions thereof including
remaining default remedies, shall be given effect in accordance with the
manifest intent thereof.
26. CONFLICTS. If any of the provisions of the LEASE conflict with any
provisions of any other documentation relating to the transaction, the terms of
the LEASE shall prevail and control, unless otherwise agreed to in writing by
LESSOR.
27. ENTIRE AGREEMENT, WAIVER. This instrument constitutes the entire agreement
between the parties. No waiver by LESSOR of any provision hereof shall
constitute a waiver of any other matter. This Lease Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
This Lease Agreement including any amendments, additions, riders or other
attachments is not valid and binding until execution thereof by an authorized
officer of LESSOR in San Francisco, California.
LESSEE's INITIALS [ ]
IN WITNESS WHEREOF, LESSOR and LESSEE have signed this Lease Agreement as of the
date set forth above.
LESSOR: BEI TECHNOLOGIES, INC. LESSEE: OPTICNET, INC.
By: By:
------------------------------------- ----------------------------------
XXXXXX X. XXXX (Print or Type Name)
Title: VICE PRESIDENT Title:
-------------------------------
EQUIPMENT SCHEDULE NO. 1
TO
EQUIPMENT SUBLEASE AGREEMENT DATED AS OF SEPTEMBER 28th, 2001
BETWEEN
BEI TECHNOLOGIES, INC., AS LESSOR
AND
OPTICNET, INC., AS LESSEE
This Equipment Schedule is entered into in accordance with the Equipment
Sublease Agreement ("Lease Agreement") identified above. All the terms and
conditions of the Lease Agreement are hereby incorporated herein and made a part
hereof as if such terms and conditions were set forth in this Equipment
Schedule. In the event of a conflict between the terms of the Lease Agreement
and this Equipment Schedule, the terms of this Equipment Schedule shall prevail.
VENDOR(S): TO BE IDENTIFIED AND DOCUMENTED AT A LATER DATE
EQUIPMENT DESCRIPTION:
This Equipment Schedule shall cover various new manufacturing and production
equipment and related soft costs to be more fully described at a later date (the
"Equipment"), with soft costs not to exceed 10% of total final cost. Said
Equipment has a total approximate cost of $708,000 (the "Approximate Cost") and
is delivered and installed at the Equipment Location provided below. The final
monthly equivalent rent and advance rental amounts hereunder shall be determined
by multiplying the monthly rental payment factor identified below (which may be
adjusted as provided for herein) by the total final cost of the Equipment to be
covered hereunder. In connection herewith, LESSEE hereby agrees to execute and
return to LESSOR any and all documents that LESSOR shall request within two (2)
days of LESSEE'S receipt thereof.
The Equipment shall also include any periodic updates, revisions, upgrades and
enhancements thereto.
EQUIPMENT LOCATION(S): LESSEE agrees that the Equipment will only be located and
used at the following address(es): 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 and
at no other location(s) unless authorized in writing by LESSOR for the full term
hereof and any extensions thereof.
INITIAL LEASE TERM: Thirty-six (36) months
MONTHLY EQUIVALENT
RENTAL PAYMENT FACTOR: 2.606%
RENTAL PAYMENT: Billed quarterly, plus applicable taxes,
payable in advance
ADVANCE RENTALS: LESSEE agrees to an initial payment equal to
a monthly equivalent rental payment which
shall be applied to the final amounts due
under the LEASE.
ADDITIONAL PROVISIONS: 1. Upon an event of default by LESSEE,
LESSOR or BANKERS has the right to cause the
Licensor of any software under the LEASE to
both terminate its License with LESSEE or
LESSOR and to cease providing maintenance
and support services to LESSEE or LESSOR.
LESSEE agrees to hold LESSOR harmless from
any claims LESSEE may have as a result of
said License termination and termination of
maintenance and support services.
2. In the event a maintenance agreement is
covered under the LEASE, LESSEE acknowledges
that LESSOR shall have no obligation for the
performance of such maintenance and LESSEE
furthermore shall hold LESSOR harmless from
any claims relating to such maintenance
agreement.
3. All Equipment description items shall be
deemed to be personal property for all
purposes under the LEASE.
4. LESSEE hereby further represents,
confirms, and warrants that in the event
Licensor/Vendor fails to provide support,
service or maintenance or LESSEE is
dissatisfied with the support, service or
maintenance performed by Licensor/Vendor,
LESSEE recognizes that such events shall not
affect LESSEE'S payment and other
obligations under the LEASE. LESSEE agrees
that it will not seek any relief from LESSOR
as a result of the failure of
Licensor/Vendor to perform such support,
service or maintenance.
5. LESSEE warrants that LESSOR will have
full, unrestricted right to sell all
Equipment returned under the LEASE.
6. INCOME TAX INDEMNIFICATION. LESSEE
acknowledges that BANKERS shall be entitled
to all tax benefits of ownership with
respect to the Equipment (the "Tax
Benefits"), including but not limited to (i)
the accelerated cost recovery deductions
determined in accordance with Section
168(b)(1) of the Internal Revenue Code of
1986 for the Equipment based on the cost
thereof, (ii) deductions for interest on any
indebtedness incurred by BANKERS to finance
the Equipment and (iii) sourcing of income
and losses attributable to the LEASE. LESSEE
agrees to take no action inconsistent with
the foregoing or which would result in the
loss, disallowance, unavailability to
BANKERS of all or any part of the Tax
Benefits. LESSEE hereby indemnifies and
holds harmless LESSOR and its assigns from
and against (i) any loss, disallowance,
unavailability or recapture of all or any
part of the Tax Benefits resulting directly
or indirectly from any action, failure to
act, statements, misrepresentation or breach
of any warranty or covenant contained in
this Lease Agreement, amendments, addendums,
riders, Equipment Schedules, or any other
attachments made hereto by LESSEE of any
nature whatsoever including, but not limited
to, the breach of any representation,
warranties or covenants contained in this
section plus (ii) all interest, penalties,
fines or additions to tax resulting from
such loss, disallowance, unavailability or
recapture plus (iii) all taxes required to
be paid by LESSOR upon receipt of the
indemnity set forth herein. Any payments
made by LESSEE to reimburse BANKERS for lost
Tax Benefits shall be calculated on the
assumption that BANKERS is subject to the
maximum Federal Corporate Income Tax with
respect to each year and all Tax Benefits
are currently utilized, and without regard
to whether BANKERS, or any members of a
consolidated group of which BANKERS or its
assigns is also a member, is then subject to
any increase in tax as a result of the loss
of the Tax Benefits. The term "BANKERS"
includes for all tax purposes BANKERS'S
assigns, heirs, executors, administrators,
or other legal representation.
COMMENCEMENT DATE:
The Commencement Date shall be the first day of the calendar quarter following
the Installation Date. A calendar quarter means a three-month period commencing
on January 1, April 1, July 1, and October I of any calendar year. Charges from
the Installation Date to the Commencement Date shall be computed by converting
the monthly or other calendar period rental to a daily rate based on a 30-day
month. LESSOR assumes no responsibility for costs associated with returning
non-acceptable Equipment, and LESSEE agrees to pay, on demand, any and all such
costs.
If on the Installation Date there is a difference between the yield of United
States Treasury Obligations for a comparable term of the Lease as published in
The Wall Street Journal and this Equipment Schedule's assigned base rate, LESSOR
may, at its sole discretion, adjust the monthly equivalent rent by applying an
adjusted monthly lease rate factor to the Equipment cost. Therefore, in the
event of such an adjustment, the Equipment Schedule's base monthly lease rate
factor of .02606 may be increased by .011 percent for each twenty-five (25)
basis point difference between the aforementioned Treasury Obligation rate and
the Equipment Schedule's assigned base rate. Pro-rata adjustments will be made
for fractional changes thereof. This Equipment Schedule's assigned base rate is
4.28 percent.
1.
IN WITNESS WHEREOF, the authorized representatives of LESSOR and LESSEE have
hereunto signed as of the date set forth below:
BEI TECHNOLOGIES, INC., as LESSOR OPTICNET, INC., as LESSEE
By: By:
----------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxx Name:
----------------------------------
Title: Vice President Title:
---------------------------------
Date: Date:
--------------------------------- ----------------------------------
2.
