EXHIBIT 10.7
MASTER NOTE AND SECURITY AGREEMENT
----------------------------------
Wilton, Connecticut
Date: May 15, 1998
1. Master Agreement.
----------------
(a) This Agreement sets forth the basic terms and conditions upon which
LEASING TECHNOLOGIES INTERNATIONAL, INC. (together with its successors and
assigns, collectively, the "Lender"), shall, lend to JEEPERS! INC. a
------
Corporation organized under the laws of the State of Delaware (the "Borrower"),
--------
and the Borrower shall borrow from the Lender, funds to purchase (or refinance
the purchase of) the items of "Equipment" specified (and as defined in) one or
---------
more loan schedules hereto to be entered into from time to time (each, a "Loan
----
Schedule"). Each Loan Schedule shall reference this Master Note and Security
--------
Agreement (this "Agreement") and shall be deemed to incorporate therein all of
---------
the terms and conditions hereof, unless and to the extent any provisions hereof
are expressly excluded or modified therein, and shall contain such additional
terms as the Lender and the Borrower shall, in their sole discretion, agree
upon. Each Loan Schedule, together with the terms and conditions of this
Agreement so incorporated therein, shall constitute a separate promissory note
that evidences a separate loan with respect to the Equipment specified in such
Loan Schedule. Each Loan Schedule may be assigned by the Lender and/or
reassigned by any assignee(s) thereof separate and apart from any other Loan
Schedule(s) hereunder. With respect to each Loan Schedule, the Lender or its
respective assignee(s) shall have all of the rights of the "Lender" thereunder
and with respect to the Equipment and other Collateral covered thereby, and such
rights shall be separately exercisable by the Lender or such assignee(s), as the
case may be, collectively with all of the other Loan Schedules then held by the
Lender or such assignee(s), but exclusively and independently of the rights of
the Lender or such assignee(s) with respect to any other Loan Schedule(s) not
then held by the Lender or such assignee(s).
(b) The term "Loan" as used in this Agreement shall mean any and all of the
----
liabilities and obligations of the Borrower under a loan evidenced by a
particular Loan Schedule, which is entered into by the Lender and the Borrower
under this Agreement with respect to the Equipment specified in such Loan
Schedule. Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings ascribed to them in the relevant Loan Schedule.
2. Terms of Payment.
-----------------
(a) FOR VALUE RECEIVED, the Borrower hereby promises to pay to the order of
the Lender, the "Principal Sum" set forth in each Loan Schedule, in the "Total
------------- -----
Number of Monthly Installments" set forth in such Loan Schedule, consisting of
------------------------------
the "Number of Consecutive Monthly Installments" of principal and interest set
------------------------------------------
forth in such Loan Schedule, each payable in advance, and the "Final Payment" of
-------------
principal and interest set forth in such Loan Schedule, together with all other
sums then owing thereunder, payable on the "Final Payment Date" set forth in
------------------
such Loan Schedule; the first such consecutive monthly installment shall be in
the "First Monthly Installment Amount" set forth in such Loan Schedule and shall
--------------------------------
be due and payable on the "First Monthly Installment Date" set forth in such
------------------------------
Loan Schedule; the remaining consecutive monthly installments shall each be in
the "Remaining Consecutive Monthly Installment Amount" set forth in such Loan
------------------------------------------------
Schedule and shall thereafter be due and payable on the same day of each month
in each year as such First Monthly Installment Date and ending on the "Last
----
Consecutive Monthly Installment Date" set forth in such Loan Schedule; and the
------------------------------------
Final Payment and shall be due and payable on the Final Payment Date, except as
otherwise expressly provided in Sections 17(b), 17(c), 17(d) or 18(b) hereof.
-------------------------------------
(b) The installments described in Sections 2(a) and 17(a) hereof include
-----------------------
interest on the unpaid principal amount of the relevant Loan from time to time
outstanding, computed on the basis of a 360-day year at the "Annual Interest
---------------
Rate" set forth in the relevant Loan Schedule.
----
(c) The proceeds of the Loan evidenced by each Loan Schedule shall be used
solely to purchase (or refinance the purchase of) the Equipment described in
such Loan Schedule.
(d) The Borrower shall not have the right to prepay any Loan, in whole or
in part, at any time; provided however, that, notwithstanding the foregoing, the
Borrower may prepay any Loan in whole, but not in part, at any time after 13
months following the First Monthly Installment Date of the relevant Loan
Schedule (the "Loan Date"), upon not less than sixty (60) days' prior written
notice to Lender, provided, further, however, that on the date of such
prepayment (the "Prepayment Date") (a) no Default or Event of Default shall then
be continuing, and (b) the Borrower shall pay to the Lender an amount equal to
the sum of (i) all unpaid interest accrued on such Loan through the Prepayment
Date, (ii) the present value of all unpaid Remaining Consecutive Monthly
Installment Amounts including the Final Payment, calculated by discounting at
the prime rate (as stated by Citibank, N.A. in effect at the time such
prepayment notice is received by Lender) plus one percent, compounded monthly,
(iii) all other amounts then owing to the Lender hereunder with respect to such
Loan, and (iv) a prepayment premium calculated as follows: (A) if the
Prepayment Date is at least 13 months but not more than 23 months after the
First Monthly Installment Date, an amount equal to 3% of the outstanding
principal balance of such Loan on the Prepayment Date (the "Outstanding
Balance"), (B) if the Prepayment Date is more than 23 months but not more than
36 months after the First Monthly Installment Date, an amount equal to 2% of the
then Outstanding Balance, and (C) if the Prepayment Date is more than 36 months
after the First Monthly Installment Date, an amount equal to 1% of the then
Outstanding Balance.
(e) Whenever any installment or other amount payable to the Lender by the
Borrower hereunder is not paid when due, the Borrower agrees to pay to the
Lender, on demand, as liquidated damages and not as a penalty: (i) with respect
to overdue amounts, a late charge calculated at the rate of one and a half (1
1/2) percent a month on such amounts overdue for more than ten (10) days, or the
maximum amount permitted under applicable law, whichever is less, from the date
such payment is due until the date such payment is made in full to the Lender;
and (ii) in addition, with respect to overdue installment payments only, an
administrative fee equal to five cents ($.05) for each one dollar ($1.00) of
such delayed installment payment overdue for more than twenty (20) days, or the
maximum amount permitted under applicable law, whichever is less. The Borrower
agrees to also reimburse the Lender on demand for any and all reasonable costs
and expenses (including the Lender's reasonable attorneys' fees and
disbursements) arising out of or caused by this Agreement or any breach by the
Borrower hereunder, including (without limitation) any enforcement by the Lender
of its rights and remedies hereunder.
(f) All payments by the Borrower on account of principal, interest or fees
hereunder shall be made in lawful money of the United States of America, in
immediately available funds.
3. Grant of Security Interest. The Borrower hereby pledges, assigns and
--------------------------
grants to the Lender a continuing first priority security interest in and lien
on the following properties, assets and rights (collectively, the "Collateral"):
----------
(a) the Equipment as set forth (and defined) in each Loan Schedule hereunder,
together with all warranties thereon and all additions, improvements,
accessions, replacements and substitutions thereto and therefor, whether now
owned or hereafter acquired, and all proceeds thereof; (b) the proceeds of any
insurance payable to the Borrower with respect to the Equipment; and (c) all of
the "Other Personal Property," if any, described in any Loan Schedule hereunder
-----------------------
and all proceeds thereof. In addition, all other property of the Borrower now
or hereafter pledged to or held by the Lender to secure any Obligations (as
hereinafter defined), whether under this Agreement, any Loan Schedule or
otherwise, and all property now or hereafter leased by the Lender to the
Borrower, shall also serve as collateral security for the full payment and
performance of the Obligations.
4. Obligations Secured. The Collateral hereunder constitutes and will
-------------------
constitute continuing security for the full payment, performance and observance
by the Borrower of the following obligations (collectively, the "Obligations"):
-----------
-2-
(a) "Liabilities," which shall mean all of the indebtedness evidenced
-----------
by this Agreement and each Loan Schedule hereunder together with any Lease
Agreement(s) between Lender and Borrower (and any Schedules thereunder), and all
liabilities and obligations of any kind of the Borrower to the Lender arising
out of or relating thereto, whether (i) for the Lender's own account, (ii)
acquired directly or indirectly by the Lender from the Borrower, (iii) absolute
or contingent, joint or several, secured or unsecured, liquidated or
unliquidated, due or not due, contractual or tortious, now existing or hereafter
arising, or (iv) incurred by the Borrower as principal, surety, endorser,
guarantor, borrower, lessee or otherwise, and including (without limitation) all
reasonable expenses and attorneys' fees incurred by the Lender in connection
with any such indebtedness, liabilities or obligations or any of the Collateral
(including any sale or other disposition of the Collateral);
(b) the prompt payment, when due, of all present and future
obligations and indebtedness of the Borrower to the Lender under this Agreement
and/or any Loan Schedule, as the same may hereafter be amended or modified, and
under any other agreement or instrument executed by the Borrower in favor of the
Lender, whether direct or indirect, absolute or contingent; and
(c) the strict performance and observance by the Borrower of all
warranties, covenants and agreements contained in this Agreement or any Loan
Schedule and any instrument or other agreement delivered by the Borrower to the
Lender.
5. Borrower Selected Equipment; Warranty Disclaimer. THE BORROWER
------------------------------------------------ ------------
REPRESENTS AND ACKNOWLEDGES THAT IT HAS SELECTED BOTH THE EQUIPMENT AND THE
---------------------------------------------------------------------------
VENDOR OF THE EQUIPMENT (THE "VENDOR") AND THAT THE EQUIPMENT SUITS THE
-----------------------------------------------------------------------
BORROWER'S PARTICULAR NEEDS. THE LENDER MAKES NO REPRESENTATIONS OR WARRANTIES
-------------------------------------------------------------------------------
OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO THE
---------------------------------------------------------------------------
EQUIPMENT OR ANY OTHER MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, TITLE TO
--------------------------------------------------------------------------------
THE EQUIPMENT OR THE EQUIPMENT'S CONDITION, THE SUITABILITY OF THE EQUIPMENT,
-----------------------------------------------------------------------------
ITS DURABILITY, CAPACITY, OPERATION, PERFORMANCE, DESIGN, MATERIALS, WORKMANSHIP
--------------------------------------------------------------------------------
AND/OR QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. THE
---------------------------------------------------------------------
BORROWER AGREES TO LOOK SOLELY TO THE MANUFACTURER, VENDOR OR CARRIER OF THE
EQUIPMENT FOR ANY CLAIM ARISING FROM ANY DEFECT, BREACH OF WARRANTY, FAILURE OR
DELAY IN DELIVERY, MISDELIVERY OR INABILITY TO USE THE EQUIPMENT FOR ANY REASON
WHATSOEVER, AND THE BORROWER'S OBLIGATIONS TO THE LENDER HEREUNDER SHALL NOT IN
ANY MANNER BE AFFECTED THEREBY. THE LENDER SHALL NOT BE LIABLE FOR ANY LOSS,
DAMAGE, INJURY OR EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY ANY ITEM OF
EQUIPMENT, THE USE, MAINTENANCE, REPAIR, DEFECT OR SERVICING THEREOF, BY ANY
DELAY OR FAILURE TO PROVIDE SAME, BY ANY INTERRUPTION OF SERVICE OR LOSS OF
SERVICE OR LOSS OF USE, OR FAILURE TO PROVIDE SAME, OR FOR ANY LOSS OF BUSINESS
HOWEVER CAUSED. NO REPRESENTATION OR WARRANTY AS TO THE EQUIPMENT OR ANY OTHER
MATTER BY THE VENDOR OF THE EQUIPMENT SHALL BE BINDING ON THE LENDER, NOR SHALL
THE BREACH OF SUCH RELIEVE THE BORROWER OF, OR IN ANY WAY AFFECT, ANY OF THE
BORROWER'S OBLIGATIONS TO THE LENDER AS SET FORTH HEREIN.
6. Representations and Warranties. The Borrower represents, warrants,
-------------------------------
covenants and agrees that:
(a) If the Borrower is a corporation or a partnership, it is duly
organized, existing and in good standing under the laws of its state of
incorporation, is duly qualified and in good standing under the laws of each
jurisdiction where the character of its properties or the transaction of its
business makes such qualification necessary and has full power to own its
properties and assets and to carry on its business as now being conducted.
-3-
(b) The Borrower has full power and authority to execute, deliver and
perform this Agreement and each Loan Schedule, which has been duly authorized by
all necessary and proper corporate or partnership action. No consent of
stockholders, if any, or of any public authority is required as a condition to
the validity of this Agreement and each Loan Schedule. The making and
performance by the Borrower of this Agreement and each Loan Schedule will not
violate any provision of law and will not conflict with or result in a breach of
any order, writ, injunction or decree of any court or government
instrumentality, or its charter or by-laws or partnership agreement, if any, or
create a default under any agreement, note or indenture to which it is a party
or by which it is bound or to which any of its property is subject, or result in
the imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of its properties or assets, except for the liens created under this
Agreement or any Loan Schedule.
(c) This Agreement and each Loan Schedule have been duly executed and
delivered, and constitutes the valid and legally binding obligation of the
Borrower, enforceable in accordance with its terms.
(d) The Borrower has good title to and is the lawful owner of the
Collateral free from all claims, liens, encumbrances, charges or security
interests whatsoever, except for the liens granted by this Note. For purposes
of this Agreement, Permitted Liens shall mean the liens granted by this
Agreement or any Loan Schedule.
(e) The Collateral shall not be moved from the location(s) set forth
in the relevant Loan Schedule hereto without the prior written consent of
Lender, which consent shall not be unreasonably withheld.
(f) The provisions of this Agreement and each Loan Schedule create a
valid and perfected first priority security interest in the Collateral,
enforceable in accordance with their respective terms, subject to no prior or
equal lien, charge, encumbrance or security interest, upon the filing of
appropriate Uniform Commercial Code financing statements or equivalent
instruments, and notation and issuance of appropriate certificates of title,
with respect to the Collateral. Uniform Commercial Code financing statements or
equivalent instruments and certificates of title with the Lender's security
interest duly noted thereon, with respect to the Collateral in a form provided
by Lender, have been executed by the Borrower and delivered to the Lender for
filing at the appropriate offices.
(g) There are no judgments outstanding against the Borrower and there
are no actions or proceedings before any court or administrative agency pending
or, to the knowledge of the Borrower, threatened against the Borrower which, if
determined adversely to the Borrower, would affect the Collateral.
(h) The Borrower's principal office and place of business where it
maintains its records concerning the Collateral is at its address stated on the
relevant Loan Schedule. The Borrower has no other office or place of business,
except as indicated on the relevant Loan Schedule.
7. Insurance. The Borrower shall keep and maintain the Equipment and
----------
other Collateral insured with all risk insurance, for not less than the
replacement cost thereof. The Borrower shall also provide, for the benefit of
the Lender, public liability insurance (both personal injury and property
damage) covering the Equipment and other Collateral. The amount of any such
insurance shall be sufficient so that neither the Borrower nor the Lender will
be considered a co-insurer. Such insurance shall be in form, issued by
insurance companies and in amounts reasonably satisfactory to the Lender. Each
insurer shall agree, by endorsement upon the policy or policies issued by it or
by independent instrument furnished to the Lender, that such insurer give at
least ten (10) days' prior written notice of the effective date of any
alteration or cancellation of such policy and that coverage under such policy
shall not be affected by any default, misrepresentation or other breach by the
Borrower or the Lender under this Agreement or any Loan Schedule or such policy.
The Lender shall have the option but not the obligation, to pay the premiums to
continue any such canceled insurance policy in effect or to obtain like
coverage. The Borrower agrees that any payment made by the Lender pursuant to
the foregoing authorization (and
-4-
interest thereon at the rate of one and a half (1 1/2) percent a month, or if
such rate shall exceed the maximum rate allowed by law, then, at such maximum
rate from the date of such payment) shall become part of the Obligations and be
secured by the Collateral. The proceeds of all insurance payable as a result of
loss or damage to any item of the Equipment, up to the amount of the Obligations
pertaining to such Equipment may be applied by Lender to satisfy such
Obligations. The Borrower hereby irrevocably appoints the Lender as the
Borrower's attorney-in-fact to make claim for, receive payments of and execute
and endorse all documents, checks or drafts received in payment for loss or
damage under any such insurance policy. In the event that the amount of such
payments exceeds the amount of the Obligations pertaining to such Equipment or
this Agreement, Lender shall remit such excess amount to Borrower within ten
(10) business days after receipt thereof. In all events, the Borrower shall be
liable for any loss, damage, expense or costs suffered or incurred by the Lender
relating to or in any manner pertaining to this Agreement or any Loan Schedule,
the Collateral or the use or operation of the Collateral, provided that Borrower
shall not be liable for any loss, damage, expense or cost solely caused by
Lender's gross negligence or willful misconduct.
8. Maintenance; Loss of Collateral. The Borrower acknowledges that, in
-------------------------------
making its decision to extend the credit evidenced by this Agreement and each
Loan Schedule to the Borrower, the Lender is depending heavily upon the
realizable value of the Collateral at all times during the term of this
Agreement and each Loan Schedule, and the Borrower hereby represents and
warrants to the Lender that the purchase price paid by the Borrower for the
Collateral represents the retail fair market value thereof. Accordingly, the
Borrower agrees at all times to maintain the Collateral in good operating
condition, repair and appearance, and protect the same from deterioration, other
than normal wear and tear, keep the Collateral in its exclusive possession and
control at the location specified in the relevant Loan Schedule and use the
Collateral only in the regular course of its business within its normal
capacity, without abuse and in a manner contemplated by the Vendor, shall comply
with all laws, ordinances, regulations, requirements and rules with respect to
the use, maintenance and operation of the Collateral, shall not make any
modification, alteration or addition to the Collateral (other than normal
operating accessories or controls which, when added to the Collateral, shall not
impair the operation or reduce the value of the Collateral) without the prior
written consent of the Lender, and all modifications, alterations, accessories,
parts, replacements and additions to the Collateral which affect the value or
operation of the Collateral shall become part of the Collateral and be included
within the term "Collateral" as used herein. For the purpose of assuring the
Lender that the Collateral will be properly serviced, the Borrower agrees, in
the event that the Lender so requests, to cause the Collateral to be maintained
by the Vendor (or another maintenance organization approved by the Lender in
writing) pursuant to Vendor's standard preventive maintenance contract or
comparable maintenance contract, in each case covering at least prime shift
maintenance of each item of Collateral. The Borrower hereby assumes the entire
risk of loss, damage or destruction of the Collateral from any and every cause
whatsoever. The Borrower agrees that any such loss, damage or destruction of
the Collateral shall not relieve the Borrower of its obligations hereunder,
which obligations shall remain absolute, unconditional and not subject to any
claim, defense, set-off, counterclaim, reduction or abatement of any kind
whatsoever; provided, however, that the foregoing shall not limit the right of
the Borrower to bring a separate claim against Lender for breach of this
Agreement or any other reason. In the event of any loss, damage or destruction
of any item of Collateral, the Borrower shall give the Lender immediate written
notice thereof and shall, at the Borrower's sole expense (except to the extent
of any proceeds of insurance maintained by the Borrower which shall have been
received by the Borrower as a result of such loss, damage or destruction) and at
the Lender's sole option, either (a) repair such item, returning it to its
previous condition, unless damaged beyond repair, or (b) replace such item with
a like item acceptable to the Lender, in good condition and of equivalent value,
which shall be included within the term "Collateral" as used herein.
9. Books and Records. The Borrower shall give the Lender full and free
-----------------
access to the Collateral at reasonable times and with reasonable notice and to
all books, correspondence and records of the Borrower with respect thereto,
permit the Lender and its representatives to examine the same and to make copies
and extracts therefrom, all at the Borrower's expense. Notice shall not be
required at such time Borrower is in default under this Agreement.
-5-
10. Taxes and Encumbrances. The Borrower shall promptly pay and
----------------------
discharge or cause to be paid and discharged all its obligations and
liabilities, including (without limitation) all taxes, assessments and
governmental charges upon it and its income or properties, when due unless and
to the extent only that the same shall be contested in good faith and by
appropriate proceedings and then only to the extent that a bond is filed in
cases where the filing of a bond is necessary to avoid the creation of a lien
against any of the Collateral or any of its other assets. Other than Permitted
Liens, the Borrower covenants and agrees to keep the Collateral free and clear
of all levies, liens, claims, security interests and encumbrances (including,
without limitation, any lease or sublease thereof) and to promptly pay all
charges, taxes and fees which may now or hereafter be imposed upon the
ownership, sale, purchase, possession or use of the Collateral. In addition,
the Borrower shall timely file all tax returns required in connection with the
use, operation or possession of the Collateral, and shall promptly furnish
copies thereof to the Lender.
11. Corporate Existence. If the Borrower is a corporation or partnership,
-------------------
the Borrower shall do, or cause to be done, all things necessary to preserve and
keep in full force and effect its corporate or partnership existence and all
franchises, rights and privileges necessary for the proper conduct of its
business, and continue to engage in the business of the same type as now
conducted by it.
12. Notice of Events of Default. The Borrower shall give notice in
---------------------------
writing promptly to the Lender of the occurrence of any event which constitutes,
or which with notice or lapse of time or both would constitute, an Event of
Default (as hereinafter defined).
13. Delivery of Financial Data.
--------------------------
(a) So long as any obligations remain unsatisfied under this Agreement,
Borrower agrees to deliver to Lender or any assignee and any successor assignee
a copy of Borrower's monthly unaudited financial statements, and the annual
financial budget for the upcoming year as soon as available and as it may be
adjusted during the year. Borrower shall also furnish, as soon as available and
in any event within ninety (90) days after the last day of Borrower's fiscal
year, a draft copy of Borrower's annual audited statements and consolidating and
consolidated balance sheet, as of the end of such fiscal year, and in any event
within one hundred twenty (120) days after the last day of Borrower's fiscal
year, a copy of Borrower's annual audited statements and consolidating and
consolidated balance sheet, if any, as of the end of such fiscal year,
accompanied by the opinion of an independent certified public accounting firm of
recognized standing. The Borrower shall furnish such other financial
information as may be reasonably requested by Lender, including but not limited
to any material changes in budgets or financial reports furnished to the
Borrower's Board of Directors or Shareholders.
(b) The Borrower acknowledges and agrees that all credit applications,
statements, financial reports and other information prepared by (including any
information prepared by the Borrower's CPA's, as hereafter defined) and
submitted by it to the Lender are material inducements to the execution by the
Lender of this Agreement and each Loan Schedule and the financing provided
hereunder. The Borrower warrants that all such credit applications, statements,
reports and other information are and all information hereafter prepared by
(including any information prepared by the Borrower's CPA's, as hereafter
defined) and furnished by the Borrower to the Lender will be, true and correct
in all material respects as of the date submitted, that no such credit
application, statement, report or other information contains any material
untrue or misleading information or omits any material fact necessary to make
such application, statement, report or other information not misleading and that
the Borrower is in no way affiliated with any Vendor of any of the Equipment.
The Borrower agrees, upon request by Lender, to obtain for the Lender such
estoppel certificates, landlord's waivers or other similar documents as the
Lender may reasonably request.
-6-
14. Principal Office. The Borrower shall not change its principal office
----------------
or the place where it maintains its records pertaining to the Collateral, as
specified in Sections 6(d) and 6(g) hereof, without giving the Lender at least
----------------------
thirty (30) days' prior written notice thereof.
15. Location of Collateral; Inspection; Labels. The Borrower shall not
------------------------------------------
remove or permit the removal of the Collateral from its present location as set
forth on the relevant Loan Schedule, without the prior written consent of the
Lender which consent shall not be unreasonably withheld or delayed. Upon
reasonable notice, the Lender and its representatives shall have the right to
enter the Borrower's premises from time to time during business hours to
inspect, observe or, after the occurrence and during the continuance of an Event
of Default, remove the Collateral, and to confirm its existence, condition and
proper maintenance or otherwise protect the Lender's interest therein. The
Borrower shall comply with all laws, ordinances, regulations or requirements of
any governmental authority, official, board or department relating to the
Collateral's installation, possession, use or maintenance. The Collateral shall
remain personal property regardless of its affixation to any realty. Upon the
Lender's request, the Borrower shall affix and keep in a prominent place on each
item of Collateral labels, plates or other markings indicating the Lender's
security interest in the Collateral.
16. Option to Perform Obligations of the Borrower in Respect of the
---------------------------------------------------------------
Collateral. If the Borrower fails or refuses, after any applicable grace period
----------
and notice to the Borrower, to make any payment, perform any covenant or
obligation, or take any other action which the Borrower is obligated hereunder
to perform, observe, take or do hereunder, then the Lender may, at its option,
without releasing the Borrower from any obligation or covenant hereof, perform,
observe, take or do the same in such manner and to such extent as the Lender may
deem necessary or appropriate to protect any of the Collateral and its rights
hereunder, including (without limitation) obtaining insurance and the payment of
any taxes and the payment of any sums necessary to discharge liens or security
interests at any time levied or placed on the Collateral. The Borrower agrees
that any payment or expense incurred by the Lender pursuant to the foregoing
authorization (and interest thereon at the rate of one and a half (1 1/2)
percent a month, or if such rate shall exceed the maximum rate allowed by law,
then, at such maximum rate from the date of incurring of any such expense is
incurred) shall become part of the Obligations and be secured by the Collateral
set forth in this Agreement and each Loan Schedule.
17. Final Payment Alternatives (a) Notwithstanding anything to the
--------------------------
contrary set forth in Section 2(a) of this Agreement, if at least 120 days prior
------------
to the Final Payment Date under a Loan Schedule, the Borrower gives the Lender
written notice requesting that the Lender extend and finance the repayment of
the relevant Final Payment over an additional 12-month term commencing on such
Final Payment Date (the "Refinancing Request"), and provided that no Event of
-------------------
Default (as hereinafter defined) and no event or circumstance that, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, including (without limitation) the nonpayment or nonperformance of any
outstanding liability or obligation under this Agreement (each, a "Default"),
-------
shall have occurred and be continuing as of (i) the date such Refinancing
Request is given, or (ii) the relevant Final Payment Date, then such Final
----
Payment shall not be due and payable on such Final Payment Date but instead
shall be payable in 12 equal monthly installments of principal and interest,
each in the "Refinanced Monthly Installment Amount" set forth in the relevant
-------------------------------------
Loan Schedule and due and payable on the same day of each month as such Final
Payment Date, commencing on such Final Payment Date.
(b) Notwithstanding anything to the contrary set forth in Section 2(a) of
------------
this Agreement, so long as no Default or Event of Default has occurred and is
continuing on the Final Payment Date under a Loan Schedule and if, at least 120
days prior to the relevant Final Payment Date, the Borrower notifies the Lender
in writing (the "Return Option Exercise Notice") of the Borrower's desire to
-----------------------------
transfer title to the related Equipment to the Lender in partial satisfaction of
the Borrower's obligation to pay the relevant Final Payment (the "Return
------
Option"), the Borrower shall receive a credit in an amount equal to the "Return
------
Option Credit" set forth in such Loan Schedule against such Final Payment by
-------------
unconditionally and irrevocably transferring and assigning to the Lender or its
designee on such Final Payment Date all of the Borrower's right, title and
interest in and to the related Equipment; provided, however, that the Borrower
-------- -------
pays the entire remaining "Return Option Balance Amount" set forth in such
----------------------------
-7-
Loan Schedule to the Lender on the relevant Final Payment Date. If a Return
Option Exercise Notice is duly given as provided above, the relevant Return
Option shall be exercised by the Borrower delivering each of the following to
the Lender, at the Borrower's sole cost and expense, on or before the relevant
Final Payment Date: (i) a duly executed xxxx of sale in favor of the Lender with
respect to all of the Equipment covered by the relevant Loan Schedule, in form
and substance satisfactory to the Lender and its counsel; (ii) payment in full
of the relevant Return Option Balance Amount; and (iii) the relevant Equipment,
at a location within the continental Untied States designated by the Lender, in
the same operating order, repair, condition and appearance as on the date
hereof, reasonable wear and tear only excepted, and with all engineering and
safety changes prescribed by the manufacturer or approved maintenance
organization to accept such Equipment under contract maintenance at its then
standard rates. The Borrower shall promptly pay any and all costs of repair,
replacement, deinstallation, packing, shipping and delivery of the relevant
Equipment to the Lender upon the Borrower's exercise of such Return Option. If
the Borrower duly satisfies all of the terms and conditions of this Section
-------
17(b), the Borrower shall have fully satisfied all of its obligations under the
-----
related Loan Schedule.
(c) Notwithstanding anything to the contrary set forth in Section 2(a) of
------------
this Agreement, if the Borrower believes that the "Fair Market Value" (as
hereinafter defined) of the Equipment covered by a Loan Schedule as of the
relevant Final Payment Date will be less than the amount of the Final Payment
under such Loan Schedule, the Borrower may notify the Lender in writing at least
120 days prior to such Final Payment Date of the Borrower's election to have the
amount of such Final Payment adjusted (the "Final Payment Adjustment Option
-------------------------------
Notice") to an amount equal to the greater of (i) Fair Market Value of the
------
relevant Equipment as of such Final Payment Date, or (ii) the "Adjusted Final
--------------
Payment" set forth in the such Loan Schedule. If such Final Payment Adjustment
-------
Option Notice is so given, and so long as no Default or Event of Default has
occurred and is continuing as of (A) the date such Final Payment Adjustment
Option Notice is given, or (B) the relevant Final Payment Date, then unless the
----
amount of such Adjusted Final Payment is greater than the amount of such Final
Payment, such Final Payment shall automatically be deemed changed to such
Adjusted Final Payment and the Borrower irrevocably and unconditionally agrees
to pay such Adjusted Final Payment on the relevant Final Payment Date in lieu of
such Final Payment. "Fair Market Value" of any Equipment shall mean the amount
-----------------
as of the relevant Final Payment Date that would obtain for such Equipment in a
retail arms'-length transaction between an informed and willing buyer in
possession under no compulsion to buy and an informed and willing seller under
no compulsion to sell. The Lender shall initially determine the Fair Market
Value of any Equipment by notifying the Borrower thereof in writing at least 75
days prior to the relevant Final Payment Date. If the Borrower does not accept
such determination of Fair Market Value by the Lender, the Borrower shall
notify the Lender of such non-acceptance in writing not less than 60 days prior
to such Final Payment Date. If the Borrower does not so notify the Lender of
its non-acceptance of the Lender's determination within such period, then the
Fair Market Value of such Equipment as initially determined by the Lender shall
be conclusive. If the Borrower does so notify the Lender of such non-
acceptance within such period, then the Fair Market Value of such Equipment
shall conclusively be established not less than 30 days prior to the relevant
Final Payment Date by an independent appraiser selected by the Lender and
reasonably acceptable to the Borrower. All costs for such appraiser shall be
paid by the Borrower within 10 days after its receipt of an invoice therefor.
18. Events of Default; Remedies. (a) If any one of the following events
---------------------------
(each, an "Event of Default") shall occur, then to the extent permitted by
----------------
applicable law, the Lender shall have the right to exercise any one or more of
the remedies set forth in Section 18(b) hereof: (i) the Borrower fails to make
-------------
any payment when due hereunder and such failure continues for a period of five
(5) days after written notice thereof to Borrower by Lender or the then assignee
hereof; or (ii) Borrower fails to observe or perform (A) any other agreement or
obligation to be observed or performed hereunder or under any Loan Schedule or
other agreement, document or instrument delivered to the Lender by or on behalf
of an Obligor or otherwise relating to any of the Obligations (collectively, the
"Other Documents")and unless expressly set forth in this Agreement or any Loan
---------------
Schedule, such failure continues uncured for a period of thirty (30) days
following notice by Lender, or (B) any other obligation of Borrower to the
Lender and the failure to observe or perform shall continue uncured for thirty
(30) days following notice by Lender; or (iii) any representation or warranty
made by or on behalf of Borrower in this Agreement or
-8-
any Loan Schedule or in any of the Other Documents shall at any time prove to
have been incorrect or untrue in any material respect when made; or (iv) the
Borrower's failure to obtain or maintain any insurance required by the Lender
hereunder and such failure continues uncured for a period of ten (10) days
following notice by Lender; or (v) a default occurs in the payment of any
indebtedness, other than a general payable incurred in the ordinary course of
business, in an amount in excess $50,000 owed by Borrower to any individual or
entity other than the Lender and such default continues beyond any applicable
cure period; or (vi) a default occurs in the performance or observance of the
terms of any agreement, document or instrument pursuant to which such
indebtedness was created, secured or guaranteed, the effect of which default is
to cause or permit the holder of any such indebtedness to cause the same to be
due prior to its stated maturity (unless however such default is permanently
waived by the holder or waived by the holder for a period of time, provided such
period of time is approved by Lender); or (vii) Borrower fails (after ten (10)
days prior notice thereof) to pay, withhold, collect or remit when asserted or
due any tax, assessment or other sum payable with respect to the Collateral or
any security for any of the Obligations (including, without limitation, any
premium on any insurance policy with respect to any of the Collateral or any
security for any of the Obligations, or any insurance policy assigned to the
Lender as security for any of the Obligations), or (viii) a judgment is entered
against the Borrower in an amount in excess of $50,000 and such judgment is not
satisfied, dismissed or stayed within 30 days, or any attachment, levy or
execution is made against any Collateral; or (ix) Borrower enters into any
transaction which adversely affects a significant portion of the business value
of Borrower and which affects the ability of the Borrower to repay the
Borrower's obligations under the Agreement; or (x) Borrower fails (or Borrower
admits in writing its inability) to generally pay its debts as they become due
or the insolvency or business failure of Borrower; or (xi) the filing of an
application for appointment of a trustee, custodian or receiver for Borrower or
of any part of Borrower's property (and in the case of an involuntary filing
against the Borrower, such filing is not dismissed within 60 days); or (xii) the
filing of a petition in bankruptcy by or against Borrower, or the commencement
by or against Borrower of any proceeding under any bankruptcy or insolvency law
or statute, or any law or statute relating to the relief of debtors or
arrangement of debt, readjustment of indebtedness, reorganization, receivership
or composition, or the extension of indebtedness (and in the case of an
involuntary filing against the Borrower, such filing is not dismissed within 60
days); or (xiii) a material adverse change in the condition or affairs
(financial or otherwise) of Borrower or any other event or circumstance occurs
that materially impairs the prospects of full and prompt payment or performance
by Borrower of any of its Obligations; or (xiv) Borrower attempts to remove,
sell, transfer, encumber, sublet or part with possession of the Equipment or any
item thereof, except as expressly permitted herein; no cure period shall apply
to this Section 18 (xiv); or (xv) any entity which is controlled by the
Borrower, or which controls the Borrower, or which is under common control with
the Borrower, fails to observe or perform any obligation under any other
agreement with the Lender, and such failure continues beyond the expiration date
of any applicable grace period.
(b) Upon the occurrence of an Event of Default, which default has not
been cured within the applicable cure period, at the Lender's sole option, all
or any part of the entire unpaid total amount of the Obligations then owed to
the Lender for the balance of the term thereof shall be at once due and payable
and; in the event that Borrower shall not immediately pay the entire unpaid
amount of the Obligations to Lender, the Lender may enter upon the premises
where any or all of the Collateral securing such Obligations is located, take
possession of and remove same, and exercise any one or more of the following
rights and remedies, without liability to the Borrower therefor and without
affecting the Borrower's obligations hereunder: (i) sell, lease or otherwise
dispose of any or all of such Collateral or any part thereof at one or more
public or private sales, leases or other dispositions, at wholesale or retail,
for such consideration, on such terms, for cash or on credit, as the Lender may
deem advisable, and the Lender may immediately, without demand of performance
and without intention of notice to sell or of the time or place of sale or of
redemption or of advertisement or other notice or demand whatsoever to the
Borrower, all of which are hereby expressly waived (if notice of any sale or
other disposition is required by law to be given, the Borrower hereby agrees
that a notice sent at least five (5) days before the time of any intended public
sale or of the time after which any private sale or other disposition of such
Collateral is to be made, shall be reasonable notice of such sale or other
disposition); or (ii) to the extent permitted by law, retain such Collateral or
any part thereof, crediting the Borrower with the reasonable fair market or
rental
-9-
value thereof for the balance of the term of the related Loan Schedule; and/or
(iii) require the Borrower to assemble such Collateral at the Borrower's sole
expense, for the Lender's benefit, at a place designated by the Lender; and/or
(iv) pursue any other remedy granted by any existing or future document executed
by the Borrower or by law, including, without limitation, the rights and
remedies of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which any of such Collateral may be located. At any public sale,
the Lender may be the purchaser of all or any part of such Collateral, free from
any right of redemption on the part of the Borrower, which right is hereby
waived and released. The Borrower agrees to pay all of the Lender's reasonable
expenses, including but not limited to the costs of repossessing, storing,
repairing and preparing such Collateral for sale or lease, any commissions
payable in connection with any such sale or lease, and reasonable attorney's
fees and disbursements, if an attorney shall be consulted. The net proceeds
realized from any such sale, lease or other disposition or the exercise of any
other remedy, after deducting therefrom all related expenses, shall be applied
toward payment of the unpaid Obligations due and to become due to the Lender
hereunder, the Borrower to remain personally liable for any deficiency. The
Lender's recovery shall in no event exceed the maximum amount permitted by law.
If any of such Collateral is leased by the Lender to a bona fide third party,
the present value of such lease receivable discounted at an interest rate of 12%
per annum shall be credited to the Borrower's liability to the Lender after
deducting all expenses associated with the lease of such Collateral and the
Borrower shall remain liable for any deficiency thereof. It is understood that
facility of repossession in an Event of Default is a basis for the financial
accommodation reflected by this Agreement and each Loan Schedule. Any late
charges payable to the Lender under Section 2(e) hereof shall be payable in
------------
addition to all amounts payable by the Lender as a result of exercise of any of
the remedies herein provided. The Borrower agrees to also reimburse the Lender
for any expenses (including the Lender's reasonable attorneys' fees and
expenses) arising out of or caused by Borrower's breach of this Agreement or any
Loan Schedule. Notwithstanding anything to the contrary contained herein, if
any one or more Loan Schedules are assigned by the Lender to one or more
assignees, the Collateral securing the Obligations under each Loan Schedule
shall be limited to the Collateral securing the Obligations under each Loan
Schedule then held by the Lender or such assignee, as the case may be.
19. Power of Attorney. The Borrower authorizes the Lender and does hereby
-----------------
make, constitute and appoint the Lender and any officer, employee or agent of
the Lender with full power of substitution, as the Borrower's true and lawful
attorney-in-fact with power, in its own name or in the name of the Borrower:
upon the occurrence and during the continuance of an Event of Default, (i) to
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Lender, (ii) to sign and
endorse any documents relating to the Collateral, (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on or threatened against the Collateral, and/or (iv) to grant, collect,
receipt for, compromise, settle and xxx for monies due in respect of the
Collateral; and (v) generally to do, at the Lender's option, all acts and things
that the Lender reasonably deems necessary or desirable to protect, preserve and
realize upon the Collateral and the Lender's security interests therein, or (vi)
in order to otherwise effectuate the intents of this Agreement and each Loan
Schedule, in each case as fully and effectually as the Borrower might or could
itself do; and the Borrower hereby ratifies all that such attorney-in-fact shall
lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY IS
COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE FOR AS LONG AS ANY OF THE
OBLIGATIONS SHALL BE OUTSTANDING. The Borrower agrees that any expense incurred
by the Lender pursuant to the foregoing authorization, and interest thereon at
the rate of one and a half (1 1/2) percent a month, or if such rate shall exceed
the maximum rate allowed by law, then, at such maximum rate from the date of
incurring any such expense, shall become part of the Obligations and be secured
by the Collateral.
20. Assignment, Etc. The Borrower shall not assign, pledge, mortgage,
---------------
lease, transfer, encumber or otherwise dispose of any of its rights in the
Collateral or any part thereof, nor permit its use by anyone other than its
regular employees without the Lender's prior written consent. Any such
purported transfer, assignment or other action without the Lender's prior
written consent shall be void. The Lender may, upon notice to (but without the
consent of) the Borrower, transfer or assign this Agreement and each Loan
Schedule or any interest herein and may mortgage, pledge, encumber or transfer
any of its rights or interest in and to the Collateral or any part thereof
-10-
and, without limitation, each assignee, transferee, pledgee and mortgagee (which
may include any affiliate of the Lender) shall have the right to further
transfer or assign its interest. The Lender shall not transfer or assign this
Agreement or any Loan Schedule hereto to a person or entity which at the time of
such transfer or assignment is engaged in a business activity which is
competitive with the business activities then engaged in by Borrower. Each such
assignee, transferee, pledgee and mortgagee shall have all of the rights (but
none of the obligations, which obligations shall remain with Lender) of the
Lender under this Agreement and each Loan Schedule. The Borrower hereby
acknowledges notice of the Lender's intended assignment of this Agreement and
each Loan Schedule and, upon such assignment, the Borrower agrees not to assert
against any such assignees, transferees, pledgees and mortgagees any defense,
claim, counterclaim, recoupment or set-off that the Borrower may have against
the Lender, whether arising under this Agreement or any Loan Schedule or
otherwise. Any assignee, transferee, pledgee or mortgagee of the Lender's rights
under this Agreement or any Loan Schedule shall be considered a third party
beneficiary of all of the Borrower's representations, warranties and obligations
hereunder to the Lender. The Borrower agrees (a) in connection with any such
transfer or assignment, to provide such instruments, documents, acknowledgments
and further assurances as the Lender or any assignee, transferee, mortgagee or
pledgee may deem necessary or advisable to effectuate the intents of this
Agreement or any Loan Schedule or any such transfer or assignment, with respect
to such matters as the Agreement, any Loan Schedule, the Collateral, the
Borrower's obligations to such assignee, transferee, mortgagee or pledgee and
such other matters as may be reasonably requested, and (b) that after receipt by
the Borrower of written notice of assignment from the Lender or from the
Lender's assignee, transferee, pledgee or mortgagee, all principal, interest and
other amounts which are then and thereafter become due under this Agreement or
any Loan Schedule shall be paid to such assignee, transferee, pledgee or
mortgagee, at the place of payment designated in such notice. This Agreement and
each Loan Schedule shall be binding upon the Borrower and its successors and
shall inure to the benefit of the Lender and its successors and assigns.
21. No Waiver. No failure on the part of the Lender to exercise, and no
---------
delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Lender of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. No course of dealing between the Borrower and the
Lender nor any delay or omission on the part of the Lender shall operate as a
waiver of any rights of the Lender. Each and every right, remedy or power
hereby granted to the Lender or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Lender
from time to time. Waiver of any particular Event of Default shall not be
deemed to be a waiver of any other or subsequent Event of Default.
22. Further Assurances; Filing. The Borrower from time to time, at its
--------------------------
sole expense, will promptly execute and deliver all further instruments,
documents and assurances, and take all further action, that may be necessary or
desirable, or that the Lender may reasonably request, and hereby authorizes the
Lender to take all action (including the filing of any financing statements,
continuation statements or amendments thereto without the signature of the
Borrower) as the Lender may deem reasonably necessary, proper or desirable in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. The Borrower hereby
authorizes the Lender to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral without
the signature of the Borrower where permitted by law. A carbon, photographic or
other reproduction of this Agreement or any Loan Schedule or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. The Borrower agrees to pay the
Lender the actual fees for such filing, recording or stamp fees or taxes arising
from the filing or recording of any such instrument or statement. Lender shall
provide Borrower with copies of each filing which has been made hereunder.
23. Indemnity and Expenses. The Borrower shall and does hereby indemnify
----------------------
and save the Lender, its directors, officers, employees, agents, attorneys,
servants, successors and assigns, harmless from any and all liabilities
(including, without limitation, negligence, tort and strict liability), damages,
expenses, claims, actions,
-11-
proceedings, judgments, settlements, losses, liens and obligations (each, an
"Indemnified Claim"), including (without limitation) attorneys' fees and
-----------------
expenses, arising out of the ordering, purchase, delivery, rejection, non-
delivery, ownership, selection, possession, leasing, renting, financing,
operation (regardless of where, how and by whom operated), control, use,
condition (including but not limited to latent and other defects, whether or not
discoverable by the Borrower), maintenance, delivery, transportation, storage,
repair, furnishing of specifications with respect to, and the return or other
disposition of, the Equipment or any other Collateral, or, in the event that the
Borrower shall be in default hereunder, arising out of the condition of any item
of Equipment or any other Collateral sold or disposed of after use by the
Borrower, including (without limitation) claims for injury to or death of
persons and for damage to property. The indemnities and obligations herein
provided shall continue in full force and effect notwithstanding the expiration,
termination or cancellation of this Agreement or any Loan Schedule for any
reason whatsoever and irrespective of whether the Borrower ever accepts the
Equipment or any other Collateral. The Lender shall give the Borrower prompt
written notice of any Indemnified Claim and, at the Lender's sole option,
Borrower shall defend the Lender against any Indemnified Claim at the Borrower's
sole expense with attorney(s) selected by the Borrower and reasonably acceptable
to Lender. The Borrower is an independent contractor and nothing contained
herein shall authorize the Borrower or any other person to operate any item of
Equipment or any other Collateral so as to incur any liability or obligation for
or on behalf of the Lender. The Borrower will upon demand pay to the Lender the
amount of any and all reasonable expenses, including the fees and disbursements
of its counsel and of any experts and agents, which the Lender may incur in
connection with (a) the exercise, enforcement or protection of any of the rights
of the Lender hereunder after the occurrence and during the continuance of an
Event of Default, or (b) the failure by the Borrower to perform or observe any
of the provisions hereof. The foregoing amounts shall become part of the
Obligations and secured by the Collateral as set forth in this Agreement or any
Loan Schedule and the Lender may at any time apply to the payment of all such
costs and expenses all proceeds arising from the possession or disposition of
all or any portion of the Collateral.
24. Modifications, Etc. Neither this Agreement nor any Loan Schedule, nor
-------------------
any provision hereof or thereof, may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by a duly
authorized representative of the party against whom enforcement of the change,
waiver, discharge or termination is sought.
25. Termination. Upon the non-defeasible payment in full of all
-----------
Obligations, the Lender shall execute and deliver to the Borrower all such
documents and instruments as shall be necessary to evidence termination of this
Agreement or any Loan Schedule and the security interests created hereunder.
26. Entire Agreement: Partial Invalidity. This Agreement and each Loan
------------------------------------
Schedule constitutes the entire agreement of the Lender and the Borrower with
respect to the transactions covered hereby, and supersedes any and all prior
agreements, understandings and negotiations with respect thereto. If any
provision of this Agreement or any Loan Schedule is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this
Agreement or any Loan Schedule as a whole, but this Agreement or such Loan
Schedule shall be construed as though it did not contain the particular
provision or provisions held to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and enforced to such extent as
shall be permitted by law.
27. Miscellaneous. (a) Any notice or other communication to a party
-------------
hereunder shall be sufficiently given if in writing and personally delivered or
mailed to said party by certified mail, return receipt requested, at its address
set forth herein or such other address as either may designate for itself in
such a notice to the other and such notice shall be deemed to have been given
when received if personally delivered or served by overnight delivery or by
mail. Whenever the sense of this Agreement or any Loan Schedule requires, words
in the singular shall be deemed to include the plural and words in the plural
shall be deemed to include the singular. If more than one Borrower is named
herein, the liability of each shall be joint and several. The headings set
forth in this Agreement or any Loan Schedule are for convenience of reference
only, and shall not be given substantive effect.
-12-
(b) To the extent that any Loan Schedule evidencing a Loan hereunder
would constitute "chattel paper," as such term is defined under the Connecticut
Uniform Commercial Code, a security interest therein may be created only through
the transfer or possession of the original of Counterpart No. 1 of such Loan
Schedule executed pursuant to this Agreement. Transfer or possession of an
original counterpart of this Agreement shall not be necessary to perfect such
security interest and no security interest in any such Loan Schedule may be
created by the transfer or possession of any other counterpart of such Loan
Schedule or by the transfer or possession of any counterpart of this Agreement.
28. Choice of Law and Venue; Waiver of Jury Trial. THIS AGREEMENT AND
---------------------------------------------
EACH LOAN SCHEDULE SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW.
The Borrower hereby agrees that all actions or proceedings arising directly or
------------------------------------------------------------------------------
indirectly from or in connection with this Agreement or any Loan Schedule or any
--------------------------------------------------------------------------------
of the Collateral shall, at the Lender's sole option, be litigated only in the
------------------------------------------------------------------------------
Connecticut state courts or the United States District Court for the District
-----------------------------------------------------------------------------
of Connecticut sitting in Fairfield County, Connecticut. The Borrower consents
----------------------------------------------------
to the jurisdiction and venue of the foregoing courts and consents that any
process or notice of motion or other application to either of such courts or a
judge thereof may be served inside or outside the State of Connecticut or the
District of Connecticut by registered mail, return receipt requested, directed
to the Borrower at its address set forth in this Agreement or any Loan Schedule
(and service so made shall be deemed complete upon receipt or by personal
service, or in such other manner as may be permissible under the rules of said
courts. THE LENDER AND THE BORROWER EACH WAIVE THE RIGHT TO TRIAL BY JURY IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR ANY LOAN SCHEDULE, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING, BETWEEN
THE BORROWER AND THE LENDER. The Borrower hereby waives the right to interpose
any set-off or counterclaim or cross-claim in any such litigation; provided,
--------
however, that nothing in this Section 28 shall prevent the Borrower from
------- ----------
asserting, in a separate and independent proceeding, any claim it may have
against the Lender.
IN WITNESS WHEREOF, the parties hereby have caused these presents to
be duly executed by their authorized representatives on the date first above
written.
JEEPERS! INC. LEASING TECHNOLOGIES
INTERNATIONAL, INC.
By: By:
----------------------------- ----------------------------------
(Title) (Title)
Attest:
-----------------------------
(Title)
-13-
Loan Schedule No.
-----
to
Master Note and Security Agreement
dated _________, 199_ (the "Agreement")
---------
between
Leasing Technologies International, Inc. (the "Lender")
------
and
_____________________________(the "Borrower")
--------
The Lender and the Borrower agree that: (a) all of the terms and conditions
of the Agreement are hereby incorporated in this Loan Schedule by reference,
unless and to the extent such provisions are expressly excluded or modified
herein; and (b) this Loan Schedule, together with the terms and conditions of
the Agreement so incorporated herein, shall (i) constitute a single promissory
note to evidence a separate Loan made by the Lender to the Borrower under this
Schedule, and (ii) control the rights and obligations of the parties with
respect to such Loan, which Loan was made with respect to the personal property
described below (such personal property, together with all additions,
substitutions and replacements thereto, collectively, the "Equipment").
---------
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Agreement.
Sections 1(a) and 3: The term "Equipment" as used in this Loan Schedule and in
------------------- ---------
the Agreement shall include the following described personal property, together
with all warranties thereon, all replacement parts, repairs, additions and
accessories now or hereafter incorporated therein or affixed thereto, and all
additions, improvements, accessions, replacements and substitutions thereto and
therefor, whether now owned or hereafter acquired, and all proceeds and products
thereof:
Type Description Serial Number
---- ----------- -------------
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
"Other Personal Property" constituting "Collateral" under Section 3(c):
-----------------------------------------------------------------------
Section 2(a): "Principal Sum": $
------------- ------------- -----------
"Total Number of Monthly Installments":
------------------------------------ ------
"Final Payment": $
------------- -------------
"Final Payment Date": ,
------------------ ------------- ----
"First Monthly Installment Amount": $
-------------------------------- --------
"First Monthly Installment Date": ,
------------------------------ ------------ ----
"Remaining Consecutive Monthly Installment Amount": $
------------------------------------------------ --------
"Last Consecutive Monthly Installment Date": ,
----------------------------------------- ----------- ----
-14-
Section 2(b): "Annual Interest Rate": % per annum.
------------- -------------------- ----
Sections 6(d), 8
----------------
and 15: Collateral Location(s):
------- ----------------------
Section 6(h): Borrower's Office(s) and/or Place(s) of Business:
------------- ------------------------------------------------
Section 17(a): "Refinanced Monthly Installment Amount": $
-------------- ------------------------------------- ------------
Section 17(b): "Return Option Credit": $
-------------- -------------------- ----------
"Return Option Balance Amount": $
---------------------------- ---------
Section 17(c): "Adjusted Final Payment": $
-------------- ---------------------- ----------
This is Counterpart No. ___ of 3 executed Counterparts of this Loan
Schedule. Counterpart No. 1 of this Loan Schedule shall constitute the only
original executed counterpart of this Loan Schedule. For purposes of
perfection of a security interest in chattel paper by possession under the
Connecticut Uniform Commercial Code, (a) such Counterpart shall be deemed
the only original counterpart of this Loan Schedule, and transfer or
possession of such Counterpart shall effect such perfection, (b) transfer
or possession of no other purported Counterpart of this Loan Schedule shall
effect such perfection, and (c) transfer or possession of an original
counterpart of the Agreement shall not be necessary to effect such
perfection.
IN WITNESS WHEREOF, the parties hereby have caused these presents to be
duly executed by their authorized representatives on the date first above
written.
---------------------------------- LEASING TECHNOLOGIES
[Name of Borrower] INTERNATIONAL, INC.
By: By
-------------------------- ------------------------------
(Title) (Title)
Attest:
----------------------
(Title)
-15-
