MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT dated as of October 10, 1995 between Southbridge
Financial Corp., a Delaware corporation ("Lessor"), and American Hotel Exchange,
Inc., a Florida corporation ("Lessee"). In Consideration of the mutual
agreements hereinafter set forth and the payment of rent as herein provided, the
parties hereto agree as follows:
1. Property Leased. Lessor hereby rents, demises and lets to Lessee all of the
tangible personal property (the "Equipment") listed on each equipment schedule
("Equipment Schedule") executed, from time to time, pursuant to this Master
Lease. Each Equipment Schedule shall be substantially in the form of Exhibit A,
shall incorporate therein all of the terms and conditions of the Master Lease,
shall contain such additional terms and conditions as Lessor and Lessee shall
agree and shall constitute a separate, distinct and independent lease and
contractual obligation of Lessee.
2. Definitions. 2.1 "Installation Date" means, as to each Item of Equipment
designated on any Equipment Schedule, the date determined in accordance with
such Equipment Schedule.
2.2. "Commencement Date" means, as to each Equipment Schedule, the Date
determined in accordance with such Equipment Schedule.
2.3. "Event of Default" has the meaning specified in Section 14 hereof.
2.4. "Item" means any individual item or items of Equipment identified
in an Equipment Schedule.
2.5. "Lease" means an Equipment Schedule as it incorporates the terms
of the Master Lease, together with any riders, supplements and amendments to
such Equipment Schedule and Master Lease.
2.6. "Manufacturer" means the manufacturer of the Equipment.
2.7. "Potential Event of Default" means any event which with the lapse
of time or the giving of notice, or both, would constitute an Event of Default.
2.8 "Guarantor" means AMNEX, Inc., the parent company of Lessee.
2.9 "Guaranty" means the guaranty of Guarantor delivered pursuant to
Section 15.11.
3. Term and Lease Termination Option. 3.1 Term. The term of the Master Lease
shall commence on the date set forth above and shall continue in effect so long
as any Equipment Schedule remains in effect. The lease term for each Item shall
commence on the Installation Date for such Item and shall continue for an
initial period ending that number of months from the Commencement Date as is
specified in the applicable Equipment Schedule (the "Initial Term"). On the
Installation Date for each Item of Equipment, Lessee shall execute and deliver
to Lessor a Certificate of Acceptance substantially in the form of Exhibit B.
3.2 Lease Termination Option. So long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, Lessee shall
have the right to purchase the Equipment on an "as is, where is" basis for the
sum of $1.00. At such time, Lessor shall deliver to Lessee a Xxxx of Sale to
evidence such sale.
4. Rent and Payment. Rent shall begin to accrue on the Installation Date and
Lessee shall pay to Lessor, as rental for the Equipment during the Initial Term,
the rent set forth in the applicable Equipment Schedule ("Rent"), which shall be
due and payable on the dates ("Rent Payment Dates") specified therein. Rent
shall be paid to Lessor at the address set forth for Lessor in the Equipment
Schedule or at such other place as Lessor shall designate in writing, or if to
an assignee of Lessor, at such place as such assignee shall designate in
writing, and shall be paid free and clear of all claims, demands or setoffs
against Lessor or such assignee or any other party. Whenever any payment (of
Rent or otherwise) is not made when due hereunder, Lessee shall pay interest on
such amount until and including the date of payment, at the lesser of (a) the
Overdue Rate specified in the applicable Equipment Schedule, and (b) the maximum
allowable rate of interest permitted by law.
5. Selection; Warranty and Disclaimer of Warranties. Lessee represents and
warrants that it selects the Equipment based on its own judgment and expressly
disclaims any reliance upon statements made by Lessor. Lessee authorizes Lessor
to insert in each Equipment Schedule the serial numbers and other identifying
data of the Equipment. Lessor warrants to Lessee that, so long as Lessee shall
not be in default of any of the provisions of the applicable Equipment Schedule,
neither Lessor nor any Assignee or Secured Party (as such terms are defined in
Section 6.3) of Lessor will disturb Lessee's quiet and peaceful possession of
the Equipment and Lessee's unrestricted use thereof for its intended purpose.
LESSOR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS OR CAPACITY OR DURABILITY FOR ANY PARTICULAR
PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT OR
CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE
ORDER OR ORDERS RELATING THERETO AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT
"AS IS". Lessor shall not be liable, to any extent whatever, for the selection,
quality, condition, merchantability, suitability, fitness, operation or
performance of the Equipment. Without limiting the generality of the foregoing,
Lessor shall not be liable to Lessee for any liability, claim, loss, damage or
expense of any kind or nature (including strict liability in tort) caused,
directly or indirectly, by the Equipment or any inadequacy thereof for any
purpose, or any deficiency or defect therein, or the use or maintenance thereof,
or any repairs, servicing or adjustments thereto; or any delay in providing, or
failure to provide, any part thereof, or any loss of business, or any damage
whatsoever and howsoever caused except for any such loss caused directly by the
gross negligence or willful misconduct of Lessor, or its agents and
representatives. Lessor hereby appoints Lessee as Lessor's agent to assert,
during the term of the applicable Equipment Schedule, any right Lessor may have
to enforce the Manufacturer's warranties, if any; provided, however, that Lessee
shall indemnify and hold Lessor and any Assignee or Secured Party harmless from
and against any and all claims, costs, expenses, damages, losses and liabilities
incurred or suffered by it as a result of or incident to any action by Lessee in
connection therewith.
6. Title and Assignment. 6.1 Title. Nothing contained herein or in any Equipment
Schedule shall give or convey to Lessee any right, title or interest in or to
the Equipment, except as a lessee as set forth therein and Lessee represents and
agrees that Lessee shall hold the Equipment subject and subordinate to the
rights of Lessor, any Assignee and any Secured Party, and Lessee shall furnish
2
Lessor with such documentation as Lessor shall reasonably request with respect
thereto. Lessor is hereby authorized by Lessee, at Lessor's expense, to cause
this Master Lease, any Equipment Schedule or any statement or other instrument
in respect of any Equipment Schedule as it may deem necessary or appropriate
showing the interest of Lessor, any Assignee and any Secured Party in the
Equipment to be filed in all jurisdictions deemed by Lessor to be necessary or
appropriate and Lessee agrees to execute and deliver Uniform Commercial Code
financing statements reasonably requested by Lessor for such purpose. Lessee, at
its expense, shall protect and defend Lessor's title as well as the interest of
any Assignee and any Secured Party against all persons claiming against or
through Lessee and shall at all times keep the Equipment free and clear from any
legal process, liens or encumbrance whatsoever (except any placed thereon by or
through Lessor) and shall give Lessor immediate written notice thereof and shall
indemnify and hold Lessor, any Assignee and any Secured Party harmless from and
against any loss caused thereby.
6.2 Sublease or Relocation by Lessee. Provided that no Event of Default
or Potential Event of Default shall have occurred and be continuing, Lessee may,
upon not less than thirty (30) days' prior written notice to Lessor, relocate
the equipment to any location within any state of the continental United States
where the Uniform Commercial Code is in effect. In the event of a relocation,
Lessee shall cooperate with Lessor in taking all reasonable measures to protect
the title of Lessor or any Assignee and the interest of any Secured Party to and
in the Equipment and the Lease. No relocation permitted hereunder shall relieve
Lessee from any of its obligations under the Lease and Lessee hereby waives any
rights it may now have or hereafter acquire to avoid any such obligation by
reason of such relocation or any circumstance arising therefrom. Lessee shall
not sublease the Equipment or assign this Lease without the prior written
consent of Lessor, which consent shall not be unreasonably withheld.
6.3 Assignment by Lessor. (a) Lessee acknowledges Lessor's intent to
have the ability to sell and assign its interest, or grant a security interest
for the purpose of securing an obligation, in and to each Equipment Schedule and
the Equipment listed therein in whole or in part to a security assignee
("Secured Party") for the purpose of securing a loan to Lessor. Lessor may also
sell and assign its rights as owner and lessor of the Equipment under any
Equipment Schedule to an assignee ("Assignee") which, at the option of Lessor or
the Assignee, may be represented by a bank or trust company acting as a trustee,
in which case such trustee shall be the Assignee. After any such assignments,
the term Lessor shall mean, as the case may be, such Assignee or trustee and any
Secured Party. Lessee hereby consents to any such assignment and shall
acknowledge such assignment or assignments as shall be designated by written
notice, substantially in the form of Exhibit C hereto, given by Lessor to Lessee
and further covenants and agrees that: (i) any Secured Party or Assignee shall
have and be entitled to exercise any and all discretions, rights and powers of
Lessor hereunder or under any Equipment Schedule, but such secured party or
Assignee shall not be obligated to perform any of the obligations of Lessor
hereunder or under any Equipment Schedule; (ii) Lessee shall pay to such Secured
Party as Assignee as shall be designated in such notice, all Rent and any and
all other amounts designated in such notice which are payable by Lessee under
any Equipment Schedule, notwithstanding any defense, counterclaim, recoupment or
setoff of whatever nature, whether by reason of breach of such Equipment
Schedule or otherwise, which it may or might now or hereafter have against
Lessor or Secured Party or any other party; (iii) Lessee will execute and
deliver such further documentation as such Secured Party or Assignee may
3
reasonably require to perfect or further the assignments contemplated by this
Section 6.3; and (iv) subject to and without impairment of Lessee's leasehold
rights in and to the Equipment, Lessee holds the Equipment for such Secured
Party or Assignee to the extent of such Secured Party's or Assignee's rights
therein.
(b) Notwithstanding any assignment of Lessor's rights hereunder to an Assignee,
Secured Party or any other person or entity, Lessor agrees that it shall remain
principally responsible and obligated to perform all of Lessor's obligations and
agreements hereunder. Lessee shall maintain its right to have recourse directly
against Lessor on account of any breach by Lessor of its obligations hereunder.
Each Secured Party and Assignee shall covenant that it will not disturb Lessee's
quiet and peaceful possession of such Equipment or its unrestricted use thereof
for its intended purpose during the term hereof so long as no Event of Default
has occurred and is continuing.
7. Net Lease; Taxes and Fees. 7.1 Net Lease. Each Equipment Schedule constitutes
a net lease. Lessee's obligation to pay all Rent and any and all other amounts
payable by Lessee under any Equipment Schedule shall be absolute and
unconditional and shall not be subject to any abatement, reduction, setoff,
defense, counterclaim, interruption, deferment or recoupment for any reason
whatsoever, and such payments shall be and continue to be payable in all events.
7.2 Taxes and Fees. Lessee covenants and agrees to pay when due or
reimburse and indemnify and hold Lessor harmless from and against all taxes,
fees or other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed during the term of
each Equipment Schedule against Lessor, Lessee or the Equipment by any federal,
state, county or local governmental authority upon or with respect to the
Equipment or upon the ordering, purchase, ownership, delivery, leasing,
possession, use, operation, return or other disposition thereof or upon the
rents, receipts or earnings arising therefrom or upon or with respect to any
Equipment Schedule (excepting only federal, state and local taxes based on or
measured by the net income of Lessor). To the extent permitted by applicable
law, Lessee shall prepare (in such manner as will show Lessor's ownership of the
Equipment) and timely file all tax returns required in connection with taxes
payable by Lessee hereunder.
8. Care, Use and Maintenance, etc. 8.1 Care, Use and Maintenance. (a) Lessee
shall, at its sole expense, at all times during the term of each Equipment
Schedule, maintain the Equipment in good operating order, repair, condition and
appearance and protect the Equipment from deterioration, other than normal wear
and tear.
(b) Lessee shall not use the Equipment for any purpose other than that for which
it was designated Lessee covenants that the Equipment will at all times be used
and operated in accordance with the Manufacturer's instructions and in
compliance with any restriction contained in the Manufacturer's warranties
regarding the Equipment and with any and all statutes, laws, ordinances and
regulations of any government agency applicable to the Equipment Lessee will
ensure, by contract or otherwise, that any Equipment affixed to real property
does not become the property of the real property owner or any party holding a
security interest therein, without the prior written consent of Lessor, and any
such Equipment that is so affixed will be affixed subject to such reasonable
conditions as Lessor may impose for its protection, and Lessee will provide
Lessor with such landlord's and mortgagee's waivers as Lessor may request in
connection therewith
4
8.2 Alterations and Attachments. Lessee will not, without prior written
consent of Lessor, affix or install any accessory, equipment or device on the
Equipment leased hereunder which will either impair the originally intended
function or use of such Equipment or cannot be readily removed without causing
material damage to such Equipment. All such accessories, equipment and devices
furnished, attached or affixed to the Equipment shall thereupon become the
property of Lessor (except such as may be readily removed without causing
material damage to the Equipment)
8.3 Inspection by Lessor. Upon the request of Lessor, Lessee shall, at
reasonable times during business hours and subject to Lessee's and the
applicable property owner's or manager's normal security, safety and
confidentiality regulations, make the Equipment available to Lessor for
inspection at the place where it is normally located and shall make Lessee's log
and maintenance records pertaining to the Equipment available to Lessor for
inspection.
9. Representations and Warranties. 9.1 Representations and Warranties of Lessee.
Lessee represents, warrants and covenants that, with respect to this Master
Lease and each Equipment Schedule executed hereunder, (a) the execution,
delivery and performance thereof by Lessee have been duly authorized by all
necessary corporate action and do not conflict with Lessee's charter or by-laws
or with any indenture, contract or agreement by which it is bound, or with any
statute, judgment, decree, rule or regulation binding upon it; (b) any
individual executing this Master Lease or any documents delivered in connection
herewith on behalf of Lessee is duly authorized to do so; (c) the Master Lease
and each Equipment Schedule constitute legal, valid and binding agreements of
Lessee enforceable in accordance with their respective terms; and (d) the
Equipment is personal property and when subject to use by Lessee will not, in
accordance with Lessee's service contract with the relevant property owner or
manager, be deemed to become fixtures under applicable law.
9.2 Representations and Warranties of Lessor. Lessor represents, warrants
and covenants that, with respect to the Master Lease and each Equipment Schedule
executed hereunder, (a) the execution, delivery and performance thereof by
Lessor have been duly authorized by all necessary corporate action; (b) any
individual executing this Master Lease or any documents delivered in connection
herewith on behalf of Lessor is duly authorized to do so; and (c) the Master
Lease and each Equipment Schedule constitute legal, valid and binding agreements
of Lessor enforceable in accordance with their respective terms.
10. Delivery of Equipment. Lessee hereby assumes the full expense of
transportation to the premises designated by Lessee (including in-transit
insurance) and installation thereat of the Equipment.
11. Labeling. Lessee covenants and agrees that, upon request of Lessor, it shall
cause the Equipment to be plainly, permanently and conspicuously marked, by
stenciling or by metal tag or plate affixed thereto as supplied by Lessor,
indicating Lessor's interest in the Equipment. Lessee shall replace any such
stenciling, tag or plate which may be removed or destroyed or become illegible.
Lessee shall keep all Equipment free from any marking or labeling which might be
interpreted as a claim of ownership thereof by Lessee or any party other than
Lessor or anyone so claiming through Lessor.
5
12. Loss Indemnification. Lessee shall and does hereby indemnify and hold
Lessor, any Assignee and any Secured Party harmless from and against any and all
claims, costs, expenses, damages and liabilities, including reasonable
attorneys' fees (a "Claim"), arising out of the ownership, selection,
possession, leasing, renting, operation, control, use, maintenance or delivery
of the Equipment. Notwithstanding the foregoing, Lessee shall not be responsible
under the terms of this Section 12 to a party indemnified hereunder for any
Claim occasioned by the gross negligence or willful misconduct of such
indemnified party. Lessee shall notify Lessor immediately upon its having
knowledge thereof of any Claim arising out of the alleged or improper
manufacturing, functioning or operation of any Item of Equipment, and as
promptly as practicable furnish Lessor with details thereof and copies of
documents pertaining thereto.
13. Risk of Loss and Insurance. 13.1 Risk of Loss. Lessee hereby assumes the
entire risk of loss, damage, theft or destruction of the Equipment, including
during shipment of the Equipment to Lessee, and ending upon Lessee's purchase of
the Equipment pursuant to Section 3.2, and no such loss, damage or destruction
shall relieve Lessee of any of its obligations under any Equipment Schedule
executed hereunder. In the event the Equipment is lost, damaged, destroyed or
stolen, or title thereto shall be taken by any governmental authority under
power of eminent domain or otherwise (an "Event of Loss"), Lessee shall give
Lessor immediate notice thereof if the aggregate cost of the damaged Equipment
at one location exceeds $3,000, and in any event, shall (a) have the damage
repaired at its expense, without interruption of payment of Rent, or (b) if the
Equipment so damaged cannot be repaired, or if the Equipment was lost, destroyed
or title thereto taken then, at Lessor's option, either (x) continue the Lease,
without interruption, as if not such damage had occurred, and promptly replace
the Equipment with like-kind equipment reasonably satisfactory to Lessor
("Replacement Equipment"); provided, however, that (A) Lessee transfers or
causes to be transferred to Lessor or its order (by xxxx of sale or other
documents necessary to effect such transfer) such Replacement Equipment, free
and clear of all security interests, liens, leases, claims, charges and
encumbrances, and (B) such Replacement Equipment has a fair market value at the
time of such replacement not less than the fair market value of the Equipment
being replaced immediately prior to the damage or destruction requiring its
replacement, or (y) on the next Rent Payment Date pay to Lessor the greater of
(i) the fair market value of any irreparably damaged Equipment, or (ii) the
Stipulated Loss Value (as set forth in the relevant Equipment Schedule)
applicable to such Lease and all Rent charges and other charges accrued and
unpaid to and including the date of such payment.
Lessee shall give Lessor notice, immediately upon its having knowledge
thereof, of any damage to, or loss or destruction of, any Equipment having an
aggregate cost at one location in excess of $3,000. All proceeds of insurance
received by Lessor or Lessee under the policy referred to in Section 13.2 shall
be applied toward the cost of repair or replacement of the Equipment or, if
applicable, to reimburse Lessee for the amount of any Stipulated Loss Value
actually paid by Lessee to Lessor. Upon replacement or payment of the fair
market value or Stipulated Loss Value as provided herein above, title to the
irreparably damaged Item or Items of Equipment shall transfer to Lessee (or
Lessee's designee as may be required under the provisions of an insurance policy
or maintenance agreement provided by Lessee with respect to the Equipment or
otherwise) on an "as is" basis, without recourse or warranty.
13.2 Insurance. (a) Lessee will, at all times prior to its purchase of
the Equipment from
6
Lessor pursuant to Section 3.2, at its own expense, carry and maintain or cause
to be carried and maintained (i) property insurance with respect to the
Equipment, and (ii) public liability insurance with respect to third party
personal and property damage, in each case with no greater deductibles and at
least comparable in amounts and against risks customarily insured against by
Lessee with respect to equipment it owns or leases similar in nature to the
Equipment. Property insurance with respect to the Equipment in any event shall
be in an amount at least equal to the greater of (i) the fair market replacement
value of the Equipment, or (ii) the Stipulated Loss Value, if any, applicable to
the relevant Lease. Public liability insurance with respect to third party
personal and property damage in any event shall be for an amount not less than
$5,000,000 per occurrence. Any policies of insurance carried in accordance with
this Section 13.2 shall (i) require 30 days prior notice to Lessor, any Assignee
and any Secured Party of cancellation, invalidation or material change in
coverage, (ii) name Lessor, any Assignee and any Secured Party as additional
insured, and provide that the policy shall be treated with respect to each of
them as if it were a separate policy, (iii) provide that such insurance is
primary and without right of contribution from any other insurance which might
otherwise be available to the additional insureds, (iv) provide that in the
event of any loss payment under a property policy the proceeds thereof shall be
payable to Lessee, Lessor, any Assignee and any Secured Party as their interest
may appear, (v) expressly provide that any obligations imposed upon the insureds
(including, without limitation, the obligation to pay premiums) shall be the
obligation solely of Lessee and not the obligation of the additional insureds
and that any rights of the insurer for setoff, counterclaim or other deductions,
and any rights of subrogation against Lessor, any Assignee and any Secured
Party, are waived by such insurer, and (vi) be written by a company of
recognized responsibility which is reasonably acceptable to Lessor.
(b) On or prior to the Installation Date and thereafter not less than
five days prior to any expiration date of a policy required pursuant to this
Section 13.2, Lessee shall deliver to Lessor and any additional insureds
certificates of insurance issued by the insurers thereunder or by an insurance
broker authorized to bind such insurers evidencing the insurance maintained
pursuant to this Section 13.2; provided, however, that if the delivery of any
certificate is delayed, Lessee shall deliver an executed binder with respect
thereto and shall deliver the formal certificate upon receipt thereof.
(c) Lessee irrevocably appoints Lessor as Lessee's attorney-in-fact to
make claim for, receive payment of, and execute any and all documents that may
be required to be provided to the insurance carrier in substantiation of any
claim for loss under any insurance policy and to endorse Lessee's name to any
and all drafts or checks in payment of the loss proceeds.
(d) Notwithstanding the foregoing provisions of this Section 13.2,
Lessee may self-insure with respect to damage to the Equipment, or third party
personal and property damage, or both, provided that (i) such self-insurance is
consistent with the self-insurance practices of Lessee with respect to equipment
it owns similar in nature to the Equipment, (ii) a description of such
self-insurance practices including any limits or restrictions on coverage is
provided in writing to Lessor and any Assignee or Secured Party upon request,
and (iii) Lessor shall in its sole discretion agree to accept self-insurance in
lieu of the foregoing insurance requirements set forth in this Section 13.2.
14. Default. 14.1 Definition. The occurrence of any one or more of the following
events shall
7
constitute an Event of Default under ln Equipment Schedule: (a) Lessee fails to
pay any installment of Rent or other charge payable by Lessee under such
Equipment Schedule when the same becomes due and payable and such default
continues for a period of five business days after written notice thereof to
Lessee; or (b) Lessee or Guarantor fails to perform any other term, covenant or
condition of such Equipment Schedule or any Guaranty delivered in connection
therewith, and such failure continues uncured for a period of 15 days after
written notice; or (c) with respect to either Lessee or Guarantor, the making of
an assignment by such party for the benefit of its creditors or the admission by
such party in writing of its inability to pay its debts as they become due, or
the insolvency of such party, or the filing by such party of a voluntary
petition in bankruptcy, or the adjudication of such party as a bankrupt, or the
filing by such party of any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, or the
filing of any answer by such party admitting, or the failure by such party to
deny, the material allegations of a petition filed against it for any such
relief, or the seeking or consenting by such party to, or acquiescence by such
party in, the appointment of any trustee, receiver or liquidator of such party
or of all or any substantial part of the properties of such party, to vacate
such appointment; or (d) with respect to either Lessee or Guarantor, the failure
by such party, within 45 days after the commencement of any proceeding against
such party seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, to obtain the dismissal such proceeding or, within 45 days
after the appointment, without the consent or acquiescence of such party, of any
trustee, receiver or liquidator of such party or of all or any substantial part
of the properties of such party, to vacate such appointment; or (e) any
representation or warranty made by Lessee or Guarantor herein or in any document
or certificate delivered by Lessee or Guarantor in connection herewith shall
prove to have been incorrect in any material respect when such representation or
warranty was made or given; (f) an event of default shall occur and be
continuing with respect to any other indebtedness or lease obligation of Lessee
or Guarantor having a principal or rental amount outstanding in excess of
$500,000; or (g) Lessee shall, or shall attempt to or permit any person to,
remove, sell, transfer, encumber, part with possession of, assign, relocate or
sublet any Item or Equipment (except as expressly permitted by the provisions of
this Master Lease).
14.2 Remedies. (a) upon the occurrence of any Event of Default, Lessor
may, at its option: (i) proceed by appropriate court action, either at law or in
equity, to enforce performance by Lessee of the applicable terms and covenants
of the applicable Equipment Schedule or to recover damages for the breach
thereof; (ii) by notice to Lessee terminate such Equipment Schedule; (iii)
declare immediately due and payable by Lessee, as liquidated damages for loss of
a bargain and not as a penalty, an amount equal to the greater of (A) the
present value of all sums to be paid by Lessee during the remaining Initial Term
or any Renewal Term then in effect, discounted at the Acceleration Rate set
forth in the applicable Equipment Schedule, and (B) the Stipulated Loss Value of
the Equipment as of the Rent Payment Date immediately preceding the date on
which such Event of Default occurs: (iv) take possession of the Equipment
subject to such Equipment Schedule during Lessee's normal working hours, without
demand or notice, wherever such Equipment may be located. Lessee hereby waives
any right it may have for damages occasioned by any repossession. Any taking of
possession pursuant to this subsection shall not in itself constitute
termination of any Equipment Schedule and shall not, in any event, relieve
Lessee of its obligations thereunder; and (v) enforce any of its rights against
Guarantor under the Guaranty.
8
(b) Upon taking of possession of any Equipment pursuant to Section 14.2(a)(iv),
Lessor may, at its option and without notice to Lessee, lease the repossessed
Equipment to any third party on such terms and conditions as Lessor may
determine or sell such Equipment at public auction or at private sale. In the
event that Lessor leases or sells such repossessed Equipment, the Net Proceeds
(as defined below) shall first be credited to amounts due and owing by Lessee,
and shall then be used to reimburse Lessee for any liquidated damage payment
made by Lessee pursuant to Section 14.2(a)(iii). Any surplus shall be retained
by Lessor. Lessee shall remain liable for any deficiency resulting from an
excess of amounts due and owing by Lessee over Net Proceeds. As used herein,
"Net Proceeds" shall mean the sale price of the Equipment, or the aggregate rent
payable pursuant to a re-lease of the Equipment discounted at the Overdue Rate,
less all costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lessor as a result of Lessee's default and Lessor's
exercise of its remedies with respect thereto. In calculating Net Proceeds with
respect to a re-lease of the Equipment for a term that extends beyond the
Initial Term, only that portion of the re-lease term which does not extend
beyond the Initial Term shall be used in such calculation.
(c) Notwithstanding Lessor's choice of one or more of the remedies provided
herein, Lessee shall be liable for (i) all sums due and payable for all periods
up to and including the date on which Lessor declared an Event of Default to
exist, and (ii) all costs, charges and expenses, including reasonable attorneys'
fees and disbursements, incurred by Lessor by reason of occurrence of any Event
of Default or Lessor's exercise of its remedies hereunder. Any overdue Rent, and
any unpaid amounts payable as liquidated damages pursuant to Section
14.2(a)(iii) shall bear interest at the Overdue Rate until paid in full.
(d) No remedy, referred to herein is intended to be exclusive, but each shall be
cumulative and in addition to any other right or remedy otherwise available to
Lessor at law or in equity.
15. Miscellaneous. 15.1 Entire Agreement. Lessor and Lessee acknowledge that
there are no agreements or understanding, written or oral, between Lessor and
Lessee with respect to the Equipment, other than as set forth herein and in each
Equipment Schedule and that this Master Lease and each Equipment Schedule
contain the entire agreement between Lessor and Lessee with respect thereto.
Neither this Master Lease nor any Equipment Schedule may be altered, modified,
terminated or discharged except by a writing signed by the party against whom
such alteration, modification, termination or discharge is sought.
15.2 No Waiver; Cure. No omission or delay by Lessor at any time to
exercise or enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Lessee at any
time designated, shall be a waiver of any such right or remedy to which Lessor
is entitled, not shall it in any way affect the right of Lessor to enforce such
provisions thereafter. If Lessee fails to perform any of its obligations under
this Master Lease, Lessor or its assigns in addition to their other rights and
remedies may, at the cost and expense of Lessee, perform such obligations but
shall not be obligated to do so. All sums so paid by Lessor or its assigns shall
be immediately due and payable by Lessee upon demand and shall bear interest at
the Overdue Rate.
9
15.3 Binding Nature. Each Equipment Schedule shall be binding upon, and
shall inure to the benefit of, Lessor, Lessee and their respective successors,
legal representatives and assigns, except, in the case of any Assignor or
Secured Party, to the extent set forth in Section 6.3 hereof.
15.4 Survival of Obligations. All agreements, representations and
warranties contained in the Master Lease, any Equipment Schedule or in any
document delivered pursuant hereto or in connection herewith shall be for the
benefit of Lessor and its successors and assigns and shall survive the execution
and delivery of this Master Lease and the expiration or other termination of the
Master Lease.
15.5 Notices. Any notice, request or other communication to either
party by the other as provided for herein shall be given in writing and shall be
deemed received only upon the earlier of receipt or three days after mailing if
mailed postage prepaid by registered mail to Lessor or Lessee, as the case may
be, at the address for such party set forth in the appropriate Equipment
Schedule or at such changed address as may be subsequently submitted by written
notice of either party.
15.6 Applicable Law. This Master Lease and each Equipment Schedule
shall be deemed to have been made, executed and delivered in the State of New
York and shall be governed by and construed in accordance with the internal laws
of the State of New York applicable to contracts made and to be performed
entirely within such State.
15.7 Severability. If any one or more of the provisions of the Master
Lease or any Equipment Schedule shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Master Lease and any such
Equipment Schedule shall not be affected thereby and shall be enforced to the
fullest extent permitted by law.
15.8 Counterparts. This Master Lease and any Equipment Schedule may be
executed in any number of counterparts, each of which shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. If Lessor grants a security interest in all or any part of an
Equipment Schedule, the Equipment covered thereby and/or sums payable
thereunder, only that counterpart Equipment Schedule marked "Counterpart Number
One of ___ Counterparts" shall be effective to transfer Lessor's rights therein.
All counterparts shall bear the legend "No security interest in this Lease may
be perfected by the possession of any counterpart other than Counterpart Number
One. Only Counterpart Number One shall be deemed to be the original; all other
counterparts shall be deemed to be duplicates.
15.9 Delay in Installation. Lessee hereby assumes and shall bear the
entire risk of loss arising out of or in connection with delays, partial
performance or non-performance by the supplier of the Equipment and Lessor shall
not be liable for specific performance of this Lease or for damages if, for any
reason, any supplier delays or fails to fill or improperly fills an order.
15.10 Further Assurances. Lessee shall furnish in connection with the
execution and delivery of the Master Lease and, upon request by Lessor, in
connection with each Equipment Schedule hereunder, an opinion of counsel, a
certificate of incumbency and such other documents as Lessor may reasonably
request in form reasonably acceptable to Lessor. Lessee hereby authorizes
10
Lessor to insert the serial numbers provided by the Manufacturer of any
Equipment in the Equipment Schedule, Certificate of Acceptance and UCC-l
financing statements, covering such Equipment.
15.11 Guaranty of Parent. As incentive to Lessor and any Assignee or
Secured Party to enter into each Equipment Schedule with Lessee, Lessee shall
cause its parent company, Guarantor to deliver a Guaranty substantially in the
form of Exhibit E hereto.
15.12 Additional Matters. (a) Pursuant to Section l, Lessee and Lessor
may, from time to time, mutually agree on additional terms and conditions with
respect to an Equipment Schedule which may be set forth therein or attached
thereto as "Riders" which shall be applicable to and constitute a part thereof.
(b) In the event of any conflict between the terms and conditions of this Master
Lease and the terms and conditions of any Equipment Schedule or Rider, the terms
and conditions of the Equipment Schedule or Rider shall prevail.
(c) Section headings are for convenience only and shall not be construed as part
of the Master Lease.
(d) Unless otherwise specified, references to Exhibits or Sections herein shall
be references to Exhibits or Sections of this Master Lease.
In Witness Whereof, the parties hereto have executed the Master Lease as of the
day and year first above written.
AMERICAN HOTEL EXCHANGE, INC., SOUTHBRIDGE FINANCIAL CORP.,
LESSEE LESSOR
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx
Title: Chairman President
11
