Exhibit 10.3
[ KeyCorp Leasing Ltd. Letterhead ]
MASTER EQUIPMENT LEASE AGREEMENT
THIS MASTER EQUIPMENT LEASE AGREEMENT dated as of May 24, 1996 is made
by and between KEYCORP LEASING LTD., a Delaware corporation with its principal
place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (Lessor"), and
SECOM GENERAL CORPORATION, a Delaware corporation with its principal place of
business at 00000 Xxxxx Xxxxx Xxxxxx, Xxxx, XX 00000, UNIFLOW CORPORATION, a
Michigan corporation with its principal place of business at 00000 Xxxx Xxxxx,
Xxxx, XX 00000, FORM FLOW, INC., a Michigan corporation with its principal
place of business at 0000 Xxxxxxxx, Xxxxxxx, XX 00000, L & H DIE, INC., a
Michigan corporation with its principal place of business at 00000 Xxxxxx
Xxxx, Xxxxxxx, XX 00000 and MICANOL, INC., a Michigan corporation with its
principal place of business at 00000 Xxxxx Xxxxx Xxxxxx, Xxxx XX 00000
(collectively, the "Lessee").
TERMS AND CONDITIONS OF LEASE
1. Lease. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Equipment, subject to and upon the terms and conditions set
forth herein. Each Equipment Schedule shall constitute a separate and
enforceable lease incorporating all the terms and conditions of this Master
Equipment Lease Agreement as if such terms and conditions were set forth in
full in such Equipment Schedule. In the event that any term or condition of
any Equipment Schedule conflicts with or is inconsistent with any term or
condition of this Master Equipment Lease Agreement, the terms and conditions
of the Equipment Schedule shall govern.
2. Disclaimer of Warranties. LESSOR MAKES NO (AND SHALL NOT BE DEEMED
TO HAVE MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE
QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE
THERETO OR ANY COMPONENT THERETO, THE ABSENCE OF LATENT OR OTHER DEFECTS
(WHETHER OR NOT DISCOVERABLE}, AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING
UNDERSTOOD THAT THE EQUIPMENT IS LEASED TO LESSEE "AS IS" AND ALL SUCH RISKS,
IF ANY, ARE TO BE BORNE BY LESSEE. NO DEFECT IN, OR UNFITNESS OF, THE
EQUIPMENT, OR ANY OF THE OTHER FOREGOING MATTERS, SHALL RELIEVE LESSEE OF THE
OBLIGATION TO PAY RENT OR OF ANY OTHER OBLIGATION HEREUNDER. LESSEE HAS MADE
THE SELECTION OF THE EQUIPMENT FROM THE SUPPLIER BASED ON ITS OWN JUDGMENT AND
EXPRESSLY DISCLAIMS ANY RELIANCE UPON ANY STATEMENTS OR REPRESENTATIONS MADE
BY LESSOR. LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS, SERVICE, MAINTENANCE OR
DEFECT IN THE EQUIPMENT OR THE OPERATION THEREOF. IN NO EVENT SHALL LESSOR BE
LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER UNDER THE
UCC OR OTHERWISE), INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST OR DAMAGE TO
LESSEE OR OTHERS ARISING FROM ANY OF THE FOREGOING MATTERS, INCLUDING, WITHOUT
LIMITATION, DEFECTS, NEGLIGENCE, DELAYS, FAILURE OF DELIVERY OR
NON-PERFORMANCE OF THE EQUIPMENT. ANY WARRANTY BY THE SUPPLIER IS HEREBY
ASSIGNED TO LESSEE BY LESSOR WITHOUT RECOURSE. SUCH WARRANTY SHALL NOT RELEASE
LESSEE FROM ITS OBLIGATION TO LESSOR TO PAY RENT, TO PERFORM ALL OTHER
OBLIGATIONS HEREUNDER AND TO KEEP, MAINTAIN AND SURRENDER THE EQUIPMENT IN THE
CONDITION REQUIRED BY SECTIONS 12 AND 13 HEREOF. Lessee's execution and
delivery of a Certificate of Acceptance shall be conclusive evidence as
between Lessor and Lessee that the Items of Equipment described therein are in
all of the foregoing respects satisfactory to Lessee, and Lessee shall not
assert any claim of any nature whatsoever against Lessor based on any of the
foregoing matters; provided, however, that nothing contained herein shall in
any way bar, reduce or defeat any claim that Lessee may have against the
Supplier or any other person (other than Lessor).
3. Non-Cancelable Lease. THIS LEASE IS A NET LEASE AND LESSEE'S
OBLIGATION TO PAY RENT AND PERFORM ITS OBLIGATIONS HEREUNDER ARE ABSOLUTE,
IRREVOCABLE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER AND
SHALL NOT BE SUBJECT TO ANY RIGHT OF SET OFF, COUNTERCLAIM, DEDUCTION, DEFENSE
OR OTHER RIGHT WHICH LESSEE MAY HAVE AGAINST THE SUPPLIER, LESSOR OR ANY OTHER
PARTY. LESSEE SHALL HAVE NO RIGHT TO TERMINATE (EXCEPT AS EXPRESSLY PROVIDED
HEREIN) OR CANCEL THIS LEASE OR TO BE RELEASED OR DISCHARGED FROM ITS
OBLIGATION HEREUNDER FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
DEFECTS IN, DESTRUCTION OF, DAMAGE TO OR INTERFERENCE WITH ANY USE OF THE
EQUIPMENT (FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT LIMITATION, WAR, ACT
OF GOD, STRIKE OR GOVERNMENTAL REGULATION), THE INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY (OR ANY ALLEGATION THEREOF) OF THIS LEASE OR ANY PROVISION
HEREOF, OR ANY OTHER
OCCURRENCE WHATSOEVER, WHETHER SIMILAR OR DISSIMILAR TO THE FOREGOING,
WHETHER FORESEEN OR UNFORESEEN.
4. Definitions. Unless the context otherwise requires, as used in this
Lease, the following terms shall have the respective meanings indicated below
and shall be equally applicable to both the singular and the plural forms
thereof:
(a) "Applicable Law" shall mean all applicable Federal, state,
local and foreign laws (including, without limitation, any Environmental Law,
industrial hygiene and occupational safety or similar laws), ordinances,
judgments, decrees, injunctions, writs and orders of any Governmental
Authority and rules, regulations, orders, licenses and permits of any
Governmental Authority.
(b) "Appraisal Procedure" shall mean the following procedure
for obtaining an appraisal of the Fair Market Sales Value or the Fair Market
Rental Value. Lessor shall provide Lessee with the names of three independent
Appraisers, two of which shall be Xxxx Xxxx & Associates of Southfield,
Michigan, and Xxxxxxxx & Lipton Associates, of Birmingham, Michigan. Within
ten (10) business days thereafter, Lessee shall select one of such Appraisers
to perform the appraisal. The selected Appraiser shall be instructed to
perform its appraisal based upon the assumptions specified in the definition
of Fair Market Sales Value or Fair Market Rental Value, as applicable, and
shall complete its appraisal within twenty (20) business days after such
selection. Any such appraisal shall be final, binding and conclusive on Lessee
and Lessor and shall have the legal effect of an arbitration award. Lessee
shall pay the fees and expenses of the selected Appraiser.
(c) "Appraiser" shall mean a person engaged in the business of
appraising property who has at least ten years' experience in appraising
property similar to the Equipment.
(d) "Authorized Signer" shall mean those officers of Lessee,
set forth on an incumbency certificate (in form and substance satisfactory to
Lessor) delivered by Lessee to Lessor, who are authorized and empowered to
execute this Lease, the Equipment Schedules and all other documents the
execution of which is contemplated hereby.
(e) "Certificate of Acceptance" shall mean a certificate of
acceptance, in form and substance satisfactory to Lessor, executed and
delivered by Lessee in accordance with Section 7 hereof indicating, among
other things, that the Equipment described therein has been accepted by Lessee
for all purposes of this Lease.
(f) "Default" shall mean any event or condition which, with the
passage of time or the giving of notice, or both, would constitute an Event of
Default.
(g) "Environmental Law" shall mean any federal, state, or local
statute, law, ordinance, code, rule, regulation, or order or decree
regulating, relating to or imposing liability upon a person in connection with
the use, release or disposal of any hazardous, toxic or dangerous substance,
waste, or material as same may relate to the Equipment or its operation.
(h) "Equipment" shall mean an item or items of personal
property designated from time to time by Lessee which are described on an
Equipment Schedule and which are being or will be leased by Lessee pursuant to
this Lease, together with all replacement parts, additions and accessories
incorporated therein or affixed thereto.
(i) "Equipment Group" shall consist of all Items of Equipment
listed on a particular Equipment Schedule.
(j) "Equipment Location" shall mean the location of the
Equipment, as set forth on an Equipment Schedule, or such other location
(approved by Lessor) as Lessee shall from time to time specify in writing.
Lessor approved Equipment Locations shall include Lessee's current operating
facilities listed on Exhibit A attached hereto.
(k) "Equipment Schedule" shall mean each equipment lease
schedule from time to time executed by Lessor and Lessee with respect to an
Equipment Group, pursuant to and incorporating by reference all of the terms
and conditions of this Master Equipment Lease Agreement.
(l) "Event of Default" shall have the meaning specified in
Section 22 hereof.
(m) "Fair Market Rental Value" or "Fair Market Sale Value"
shall mean the value of each Item of Equipment for lease or sale, unless
otherwise specified herein as determined between Lessor and Lessee, or, if
Lessor and Lessee are unable to agree, pursuant to the Appraisal Procedure,
which would be obtained in an arms-length transaction between an informed and
willing lessor or seller (under no compulsion to lease or sell) and an
informed and willing lessee or buyer (under no compulsion to lease or
purchase). In determining the Fair Market Rental Value or Fair Market Sale
Value of the Equipment, (a) such Fair Market Rental Value or Fair Market Sale
Value shall be calculated on the assumption that the Equipment is in the
condition and repair required by Sections 12 and 13 hereof, and (b) there
shall be excluded from the calculation thereof the value of any upgrades and
attachments made pursuant to Section 14 hereof in which the Lessor does not
own an interest; provided, however, that, unless otherwise provided in such
Section 22, for purposes of Section 22 of the Lease, Fair Market Sale Value of
the Equipment shall be determined based upon the actual facts and
circumstances then prevailing without regard to the assumptions in clause (a)
above.
(n) "Governmental Action" shall mean all authorizations,
consents, approvals, waivers, filings and declarations of any Governmental
Authority, including, without limitation, those environmental and operating
permits required for the ownership, lease, use and operation of the Equipment.
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(o) "Governmental Authority" shall mean any foreign, Federal,
state, county, municipal or other governmental authority, agency, board or
court.
(p) "Guarantor" shall mean any guarantor of Lessee's
obligations hereunder.
(q) "Item of Equipment" shall mean each item of the Equipment.
(r) "Late Payment Rate" shall mean an annual interest rate
equal to the lesser of 18% or the maximum interest rate permitted by
Applicable Law.
(s) "Lease", "hereof', "herein" and "hereunder" shall mean,
with respect to an Equipment Group, this Master Equipment Lease Agreement and
the Equipment Schedule on which such Equipment Group is described. including
all addenda attached thereto and made a part thereof.
(t) "Lien" shall mean all mortgages, pledges, security
interests, liens, encumbrances, claims or other charges of any kind
whatsoever.
(u) "Purchase Agreement" shall mean any purchase agreement or
other contract entered into between the Supplier and Lessee for the
acquisition of the Equipment to be leased hereunder.
(v) "Related Equipment Schedule" shall have the meaning set
forth in Section 27 hereof.
(w) "Renewal Notice" shall have the meaning set forth in
Section 32 hereof.
(x) "Return Notice" shall have the meaning set forth in Section
13 hereof.
(y) "Rent" shall mean the periodic rental payments due
hereunder for the leasing of the Equipment, as set forth on the Equipment
Schedules, and, where the context hereof requires, all such additional amounts
as may from time to time be payable under any provision of this Lease.
(z) "Rent Commencement Date" shall mean, with respect to an
Equipment Group, the date on which Lessor disburses funds for the purchase of
such Equipment Group, as determined by Lessor in its sole discretion.
(aa) "Rent Payment Date" with respect to an Equipment Group,
shall have the meaning set forth in the Equipment Schedule associated
therewith.
(ab) "Stipulated Loss Value" shall mean, as of any Rent Payment
Date and with respect to an Item of Equipment, the amount determined by
multiplying the Total Cost for such Item of Equipment by the percentage
specified in the applicable Stipulated Loss Value Supplement opposite such
Rent Payment Date.
(ac) "Stipulated Loss Value Supplement" with respect to an
Equipment Group, shall have the meaning set forth in the Equipment Schedule
associated therewith.
(ad) "Supplier" shall mean the manufacturer or the vendor of
the Equipment, as set forth on each Equipment Schedule.
(ae) "Term" shall mean the Initial Term, as defined in Section
8 hereof, and any Renewal Term, as defined in Section 8 hereof.
(af) "Total Cost" shall mean, with respect to an Item of
Equipment, (1) the acquisition cost of such Item of Equipment (including
Lessor's capitalized costs), as set forth on the Equipment Schedule on which
such Item of Equipment is described, or (2) if no such acquisition cost is
specified, the Supplier's invoice price for such Item of Equipment plus
Lessor's capitalized costs, or (3) if no such acquisition cost is specified
and no such invoice price is obtainable, an allocated price for such Item of
Equipment based on the Total Cost of all Items of Equipment set forth on the
Equipment Schedule on which such Item of Equipment is described, as determined
by Lessor in its sole discretion.
5. Supplier Not an Agent. LESSEE UNDERSTANDS AND AGREES THAT (i)
NEITHER THE SUPPLIER, NOR ANY SALES REPRESENTATIVE OR OTHER AGENT OF THE
SUPPLIER, IS (1) AN AGENT OF LESSOR OR (2) AUTHORIZED TO MAKE OR ALTER ANY
TERM OR CONDITION OF THIS LEASE, AND (ii) NO SUCH WAIVER OR ALTERATION SHALL
VARY THE TERMS OF THIS LEASE UNLESS EXPRESSLY SET FORTH HEREIN.
6. Ordering Equipment. Lessee has selected and ordered the Equipment
from the Supplier and, if appropriate, has entered into a Purchase Agreement
with respect thereto. Lessor shall accept an assignment from Lessee of
Lessee's rights, but none of Lessee's obligations, under any such Purchase
Agreement. Lessee shall arrange for delivery of the Equipment so that it can
be accepted in accordance with Section 7 hereof. If an Item of Equipment is
subject to an existing Purchase Agreement between Lessee and the Supplier,
Lessee warrants that such Item of Equipment has not been delivered to Lessee
as of the date of the Equipment Schedule applicable thereto. If Lessee causes
the Equipment to be modified or altered, or requests any additions thereto
prior to the Rent Commencement Date, Lessee (i) acknowledges that any such
modification, alteration or addition to an Item of Equipment may affect the
Total Cost, taxes, purchase and renewal options, if any, Stipulated Loss Value
and Rent with respect to such Item of Equipment, and (ii) hereby authorizes
Lessor to adjust such Total Cost, taxes, purchase and renewal options, if any,
Stipulated Loss Value and Rent as appropriate. Lessee hereby authorizes Lessor
to complete each Equipment Schedule with the serial numbers and other
identification data of the Equipment Group associated therewith, as such data
is received by Lessor.
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7. Delivery and Acceptance. Upon acceptance For lease by Lessee of any
Equipment delivered to Lessee and described in any Equipment Schedule, Lessee
shall execute and deliver to Lessor a Certificate of Acceptance. LESSOR SHALL
HAVE NO OBLIGATION TO ADVANCE FUNDS FOR THE PURCHASE OF THE EQUIPMENT UNLESS
AND UNTIL LESSOR SHALL HAVE RECEIVED A CERTIFICATE OF ACCEPTANCE RELATING
THERETO EXECUTED BY LESSEE. Such Certificate of Acceptance shall constitute
Lessee's acknowledgment that such Equipment (a) was received by Lessee, (b) is
satisfactory to Lessee in all respects and is acceptable to Lessee for lease
hereunder, (c) is suitable for Lessee's purposes, (d) is in good order, repair
and condition, (e) has been installed and operates properly, and (f) is
subject to all of the terms and conditions of this Lease (including, without
limitation, Section 2 hereof.
8. Term; Survival. With respect to any Item of Equipment, unless
otherwise specified thereon, the initial term of this Lease (the "Initial
Term") shall commence on the date on which such Item of Equipment is delivered
to Lessee, and, unless earlier terminated as provided herein, shall expire on
the final Rent Payment Date for such Item of Equipment. With respect to an
Item of Equipment, any renewal term of this Lease (individually, a "Renewal
Term"), as contemplated hereby, shall commence immediately upon the expiration
of the Initial Term or any prior Renewal Term, as the case may be, and, unless
earlier terminated as provided herein, shall expire on the date on which the
final payment of Rent is due and paid hereunder. All obligations of Lessee
hereunder shall survive the expiration, cancellation or other termination of
the Term hereof.
9. Rent. With respect to Each Item of Equipment, Lessee shall pay the
Rent set forth on the Equipment Schedule applicable to such Item of Equipment,
commencing on the Rent Commencement Date, and, unless otherwise set forth on
such Equipment Schedule, on the same day of each payment period thereafter for
the balance of the Term. Rent shall be due whether or not Lessee has received
any notice that such payments are due. All Rent shall be paid to Lessor at its
address set forth on the Equipment Schedule, or as otherwise directed by
Lessor in writing.
10. Location; Inspection; Labels. The Equipment shall be delivered to
the Equipment Location and shall not be removed therefrom without Lessor's
prior written consent. Lessor shall have the right to enter upon the Equipment
Location and inspect the Equipment at any reasonable time. Lessor may, with
notice to Lessee, remove the Equipment if the Equipment is, in the reasonable
opinion of Lessor, being used beyond its capacity or is in any manner
improperly cared for, abused or misused. At Lessor's request, Lessee shall
affix labels stating that the Equipment is owned (or liened upon as
appropriate) by Lessor permanently in a prominent place on the Equipment and
shall keep such labels in good repair and condition.
11. Use; Alterations. Lessee shall use the Equipment lawfully and only
in the manner for which it was designed and intended and so as to subject it
only to ordinary wear and tear. Lessee shall comply with all Applicable Law.
Lessee shall immediately notify Lessor in writing of any existing, pending or
threatened investigation, inquiry, claim or action by any Governmental
Authority in connection with any Applicable Law or Governmental Action which
could adversely affect the Equipment or this Lease. Lessee, at its own
expense, shall make such alterations, additions or modifications or
improvements to the Equipment as may be required from time to time to meet the
requirements of Applicable Law or Governmental Action. Except as otherwise
permitted herein, Lessee shall not make any material alterations, additions,
modifications or improvements to the Equipment without Lessor's prior written
consent.
12. Repairs and Maintenance. Lessee, at Lessee's own cost and expense,
shall (a) keep the Equipment in good repair, good operating condition and
working order and in compliance with the manufacturer's specifications, and
(b) enter into and keep in full force and effect during the Term hereof a
maintenance agreement with the manufacturer of the Equipment, or a
manufacturer-approved maintenance organization, to maintain, service and
repair the Equipment so as to keep the Equipment in as good operating
condition and working order as it was when it first became subject to this
Lease and in compliance with the manufacturer's specifications. Upon Lessor's
request, Lessee shall furnish Lessor with an executed copy of any such
maintenance agreement. An alternate source of maintenance may be used by
Lessee with Lessor's prior written consent. Lessee, at its own cost and
expense and within a reasonable period of time, shall replace any part of any
Item of Equipment that becomes worn out, lost, stolen, destroyed, or otherwise
rendered permanently unfit or unavailable for use (whether or not such
replacement is covered by the aforesaid maintenance agreement), with a
replacement part of the same manufacture, value, remaining useful life and
utility as the replaced part immediately preceding the replacement (assuming
that such replaced part is in the condition required by this Lease). Such
replacement part shall be free and clear of all Liens. Notwithstanding the
foregoing, this paragraph shall not apply to any Loss or Damage (as defined in
Section 16 hereof) of any Item of Equipment.
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13. Return of Equipment. Upon the expiration (subject to Section 32
hereof and except as otherwise provided in an Equipment Schedule) or earlier
termination of this Lease, Lessee, at its sole expense, shall return the
Equipment to Lessor by delivering such Equipment F.A.S. or F.O.B. to such
location or such carrier (packed for shipping) as Lessor shall specify. Lessee
agrees that the Equipment, when returned, shall be in the condition required
by Section 12 hereof. All components of the Equipment shall have been properly
serviced, following the manufacturer's written operating and servicing
procedures, such that the Equipment is eligible, if available, for a
manufacturer's standard, full service maintenance contract without Lessor's
incurring any expense to repair or rehabilitate the Equipment. If, in the
reasonable opinion of Lessor, any Item of Equipment fails to meet the
standards set forth above, Lessee agrees to pay on demand all costs and
expenses incurred in connection with repairing such Item of Equipment and
restoring it so as to meet such standards, assembling and delivering such Item
of Equipment. Lessee shall give Lessor ninety (90) days written notice (the
"Return Notice") that Lessee is returning the Equipment as provided for above.
If Lessee fails to return any Item of Equipment as required hereunder, then,
all of Lessee's obligations under this Lease (including, without limitation,
Lessee's obligation to pay Rent for such Item of Equipment at the rental then
applicable under this Lease) shall continue in full force and effect until
such Item of Equipment shall have been returned in the condition required
hereunder.
14. Equipment Upgrades/Attachments. In addition to the requirements of
Section 11 hereof, Lessee, at its own expense, may from time to time add or
install upgrades or attachments to the Equipment during the Term; provided,
that such upgrades or attachments (a) are readily removable without causing
material damage to the Equipment, (b) do not materially adversely affect the
Fair Market Sale Value, the Fair Market Rental Value, residual value,
productive capacity, utility or remaining useful life of the Equipment, and
(c) do not cause such Equipment to become "limited use property" within the
meaning of Revenue Procedure 76-30, 1976-2 C.B. 647 (or such other successor
tax provision), as of the applicable delivery date or the time of such upgrade
or attachment. Any such upgrades or attachments which are not required by
Section 11 hereof and which can be removed without causing damage to or
adversely affecting the condition of the Equipment, or reducing the Fair
Market Sale Value, the Fair Market Rental Value, residual value, productive
capacity, utility or remaining useful life of the Equipment shall remain the
property of Lessee; and upon the expiration or earlier termination of this
Lease and provided that no Event of Default exists, Lessee may, at its option,
remove any such upgrades or attachments and, upon such removal, shall restore
the Equipment to the condition required hereunder.
15. Sublease and Assignment. (a) WITHOUT LESSOR'S PRIOR WRITTEN
CONSENT, LESSEE SHALL NOT (i) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR
OTHERWISE DISPOSE OF THIS LEASE, THE EQUIPMENT OR ANY INTEREST THEREIN, OR
(ii) SUBLET OR LEND THE EQUIPMENT TO, OR PERMIT THE EQUIPMENT TO BE USED BY,
ANYONE OTHER THAN LESSEE OR LESSEE'S QUALIFIED EMPLOYEES.
(b) Lessor, at any time with or without notice to Lessee, may
sell, transfer, assign and/or grant a security interest in this Lease, any
Equipment Schedule or any Item of Equipment. In any such event, any such
purchaser, transferee, assignee or secured party shall have and may exercise
all of Lessor's rights hereunder with respect to the items to which any such
sale, transfer, assignment and/or security interest relates, and LESSEE SHALL
NOT ASSERT AGAINST ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR SECURED PARTY
ANY DEFENSE, COUNTERCLAIM OR OFFSET THAT LESSEE MAY HAVE AGAINST LESSOR.
Lessee acknowledges that no such sale, transfer, assignment and/or security
interest will materially change Lessee's duties hereunder or materially
increase its burdens or risks hereunder. Lessee agrees that upon written
notice to Lessee of any such sale, transfer, assignment and/or security
interest, Lessee shall acknowledge receipt thereof in writing and shall comply
with the directions of Lessor's successor or assign.
16. Loss of or Damage to Equipment. (a) Lessee shall bear the entire
risk of loss, theft, destruction, disappearance of or damage to any and all
Items of Equipment ("Loss or Damage") from any cause whatsoever during the
Term hereof until the Equipment is returned to Lessor in accordance with
Section 13 hereof. No Loss or Damage shall relieve Lessee of the obligation to
pay Rent or of any other obligation under this Lease.
(b) In the event of Loss or Damage to any Item of Equipment,
Lessee, at the option of Lessor, shall within thirty (30) days following such
Loss or Damage: (1) place such Item of Equipment in good condition and repair,
in accordance with the terms hereof; (2) replace such Item of Equipment with
replacement equipment (acceptable to Lessor) in as good condition and repair,
and with the same value, remaining useful economic life and utility, as such
replaced Item of Equipment immediately preceding the Loss or Damage (assuming
that such replaced Item of Equipment is the condition required by this Lease),
which replacement equipment shall be free and clear of all Liens; or (3) pay
to Lessor the sum of (i) all Rent due and owing hereunder with respect to such
Item of Equipment (at the time of such payment) plus (ii) the Stipulated Loss
Value as of the Rent Payment Date next following the date of such Loss or
Damage with respect to such Item of Equipment, as set forth on the Schedule
applicable thereto. Upon Lessor's receipt of the payment required under
subsection (3) above, Lessee shall be entitled to Lessor's interest in such
Item of Equipment, in its then condition and location, "as is" and "where is",
without any warranties, express or implied. If Lessee replaces the Item of
Equipment pursuant to subsection (b) above, title to such replacement
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equipment shall immediately (and without further act) vest in Lessor and
thereupon shall be deemed to constitute Items of Equipment and be fully
subject to this Lease as if originally leased hereunder. If Lessee fails to
either restore of replace the Item of Equipment pursuant to subsection (1) or
(2) above, respectively, Lessee shall make the payment under subsection (3)
above.
17. Insurance. (a) Lessee, at all times during the Term hereof (until
the Equipment shall have been returned to Lessor) and at Lessee's own cost and
expense, shall maintain (1) insurance against all risks of physical loss or
damage to the Equipment (including theft and collision for Equipment
consisting of motor vehicles) in an amount not less than the full replacement
value thereof or the Stipulated Loss Value thereof, whichever is greater, and
(2) commercial general liability insurance (including blanket contractual
liability coverage and products liability coverage) for personal and bodily
injury and property damage in an amount satisfactory to Lessor.
(b) All insurance policies required hereunder shall (1) require 30
days' prior written notice of cancellation or material change in coverage to
Lessor (any such cancellation or change, as applicable, not being effective
until the thirtieth (30th) day after the giving of such notice); (2) name
"KeyCorp and its subsidiaries and affiliated companies, including KeyCorp
Leasing Ltd." as an additional insured under the public liability policies and
name Lessor as sole loss payee under the property insurance policies; (3) not
require contributions from other policies held by Lessor; (4) waive any right
of subrogation against Lessor; (5) in respect of any liability of any of
Lessor, except for the insurers' salvage rights in the event of a Loss or
Damage, waive the right of such insurers to set-off, to counterclaim or to any
other deduction, whether by attachment or otherwise, to the extent of any
monies due Lessor under such policies; (6) not require that Lessor pay or be
liable for any premiums with respect to such insurance covered thereby; (7) be
in full force and effect throughout any geographical areas at any time
traversed by any Item of Equipment; and (8) contain breach of warranty
provisions providing that, in respect of the interests of Lessor in such
policies, the insurance shall not be invalidated by any action or inaction of
Lessee or any other person (other than Lessor) and shall insure Lessor
regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Lessee or by any other person (other
than Lessor). Prior to the first date of delivery of any Item of Equipment
hereunder, and thereafter not less than 15 days prior to the expiration dates
of the expiring policies theretofore delivered pursuant to this Section,
Lessee shall deliver to Lessor a duplicate original of all policies (or in the
case of blanket policies, certificates thereof issued by the insurers
thereunder) for the insurance maintained pursuant to this Section.
18. General Tax Indemnification. Lessee shall pay when due and shall
indemnify and hold Lessor harmless from and against (on an after-tax basis)
any and all taxes, fees, withholdings, levies, imposts, duties, assessments
and charges of any kind and nature (together with interest and penalties
thereon) (including, without limitation, sales, use, gross receipts, personal
property, ad valorem, business and occupational, franchise, value added,
leasing, leasing use, documentary, stamp or other taxes) imposed upon or
against Lessor, Lessor's assigns, Lessee or any Item of Equipment by any
Governmental Authority with respect to any Item of Equipment or the
manufacturing, ordering, sale, purchase, shipment, delivery, acceptance or
rejection, ownership, titling, registration, leasing, subleasing, possession,
use, operation, removal, return or other dispossession thereof or upon the
rents, receipts or earnings arising therefrom or upon or with respect to this
Lease, excepting only all Federal, state and local taxes on or measured by
Lessor's net income (other than income tax resulting from making any
alterations, improvements, modifications, additions, upgrades, attachments,
replacements or substitutions by Lessee). Whenever this Lease terminates as to
any Item of Equipment, Lessee shall, upon written request by Lessor, advance
to Lessor the amount determined by Lessor to be the personal property or other
taxes on said item which are not yet payable, but for which Lessee is
responsible, provided Lessor provides Lessee with copies of tax bills
supporting Lessor's request.
19. Lessor's Right to Perform for Lessee. If Lessee fails to perform
or comply with any of its obligations contained herein, Lessor may (but shall
not be obligated to do so) itself perform or comply with such obligations, and
the amount of the reasonable costs and expenses of Lessor incurred in
connection with such performance or compliance, together with interest on such
amount at the Late Payment Rate, shall be payable by Lessee to Lessor upon
demand. No such performance or compliance by Lessor shall be deemed a waiver
of the rights and remedies of Lessor or any assignee of Lessor against Lessee
hereunder or be deemed to cure the default of Lessee hereunder.
20. Delinquent Payments: Interest. If Lessee fails to pay any Rent or
other sums under this Lease within ten (10) days after the same becomes due,
Lessee shall pay to Lessor a late charge equal to five percent (5%) of such
delinquent amount. Such late charge shall be payable by Lessee upon demand by
Lessor and shall be deemed Rent hereunder. In no event shall such late charge
exceed the maximum amounts permitted under Applicable Law.
6
21. Personal Property; Liens. Lessor and Lessor hereby agree that the
Equipment is, and shall at all times remain, personal property notwithstanding
the fact that any Item of Equipment may now be, or hereafter become, in any
manner affixed or attached to real property or any improvements thereon.
Lessee shall at all times keep the Equipment free and clear from all Liens.
Lessee shall (i) give Lessor immediate written notice of any such Lien, (ii)
promptly, at Lessee's sole cost and expense, take such action as may be
necessary to discharge any such Lien and (iii) indemnify and hold Lessor, on
an after-tax basis, harmless from and against any loss or damage caused by any
such Lien.
22. Events of Default; Remedies. (a) As used herein, the term "Event of
Default" shall mean any of the following events: (1) Lessee fails to pay any
Rent within ten (10) days after the same shall have become due; (2) Lessee or
any Guarantor becomes insolvent or makes an assignment for the benefit of its
creditors; (3) a receiver, trustee, conservator or liquidator of Lessee or any
Guarantor or of all or a substantial part of Lessee's or such Guarantor's
assets is appointed with or without the application or consent of Lessee or
such Guarantor, respectively; (4) a petition is filed by or against Lessee or
any Guarantor under any bankruptcy, insolvency or similar legislation; (5)
Lessee or any Guarantor violates or fails to perform any provision of either
this Lease or any other loan, lease or credit agreement or any acquisition or
purchase agreement with Lessor or any other party; (6) Lessee violates or
fails to perform any covenant or representation made by Lessee herein: (7) any
representation or warranty made herein or in any Lease, certificate, financial
statement or other statement furnished to Lessor shall prove to be false or
misleading in any material respect as of the date on which the same was made;
(8) Lessee makes a bulk transfer of furniture, furnishings, fixtures or other
equipment or inventory (other than in the ordinary course of business); or (9)
there is a material adverse change in Lessee's or any Guarantor's financial
condition since the first Rent Commencement Date of any Equipment Schedule
executed in connection herewith. An Event of Default with respect to any
Equipment Schedule hereunder shall, at Lessor's option, constitute an Event of
Default for all Equipment Schedules hereunder and any other agreements between
Lessor and Lessee. Lessee shall have forty-five (45) days in which to cure an
Event of Default declared hereunder with the exception of the failure of
Lessee to pay any Rent within ten (ten) days after the same shall have become
due.
(b) Upon the occurrence of an Event of Default, Lessor may do one
or more of the following as Lessor in its sole discretion shall elect: (1)
proceed by appropriate court action or actions, either at law or in equity, to
enforce performance by Lessee of the applicable covenants of this Lease or to
recover damages for the breach thereof; (2) sell any Item of Equipment at
public or private sale; (3) hold, keep idle or lease to others any Item of
Equipment as Lessor in its sole discretion may determine; (4) by notice in
writing to Lessee, terminate this Lease, without prejudice to any other
remedies hereunder; (5) demand that Lessee, and Lessee shall, upon written
demand of Lessor and at Lessee's expense forthwith return all Items of
Equipment to Lessor or its order in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease, except those
provisions relating to periods of notice; (6) enter upon the premises of
Lessee or other premises where any Item of Equipment may be located and,
without notice to Lessee and with or without legal process, take possession of
and remove all or any such Items of Equipment without liability to Lessor by
reason of such entry or taking possession, and without such action
constituting a termination of this Lease unless Lessor notifies Lessee in
writing to such effect. Such action shall be exercised by Lessor in a
reasonable and prudent manner; (7) by written notice to Lessee specifying a
payment date, demand that Lessee pay to Lessor, and Lessee shall pay to
Lessor, on the payment date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty, any unpaid Rent due prior to the
payment date specified in such notice plus whichever of the following amounts
Lessor, in its sole discretion, shall specify in such notice (together with
interest on such amount at the Late Payment Rate from the payment date
specified in such notice to the date of actual payment): (i) an amount, with
respect to an Item of Equipment, equal to the Rent payable for such Item of
Equipment for the remainder of the then current Term thereof, after
discounting such Rent to present worth as of the payment date specified in
such notice on the basis of a per annum rate of discount equal to five percent
(5%) from the respective dates upon which such Rent would have been paid had
this Lease not been terminated; or (ii) the Stipulated Loss Value, computed as
of the payment date specified in such notice or, if such payment date is not a
Rent Payment Date, the Rent Payment Date next following the payment date
specified in such notice (provided, however, that, with respect to any Item of
Equipment returned to or repossessed by Lessor, the amount recoverable under
this clause (ii) shall be reduced (but not below zero) by an amount equal to
the Fair Market Sales Value (taking into account its actual condition) of such
Item of Equipment; (8) cause Lessee, at its expense, to promptly assemble any
and all Items of Equipment and return the same to Lessor at such place as
Lessor may designate in writing; and (9) exercise any other right or remedy
available to Lessor under applicable law or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the breach hereof
or to rescind this Lease. In addition, Lessee shall be liable, except as
otherwise provided above, for any and all unpaid Rent due hereunder before or
during the exercise of any of the foregoing remedies, and for reasonable legal
fees and other costs and expenses incurred by reason of the occurrence of any
Event of Default or the exercise of Lessors remedies with respect thereto,
including without limitation the repayment in full of any costs and expenses
necessary to be expended in repairing any Item of Equipment in order to cause
it to be in compliance with all maintenance and regulatory standards imposed
by this Lease. If an Event of Default occurs, to the fullest extent permitted
by law, Lessee hereby waives any right to any
7
defenses, rights, offsets or claims against Lessor because of the manner or
method of sale or disposition of any Items of Equipment. None of Lessor's
rights or remedies hereunder are intended to be exclusive of, but each shall
be cumulative and in addition to any other right or remedy referred to
hereunder or otherwise available to Lessor or its assigns at law or in equity.
No express or implied waiver by Lessor of any Event of Default shall
constitute a waiver of any other Event of Default or a waiver of any of
Lessor's rights. Lessor agrees to give Lessee reasonable notice of any sale or
other disposition of the Equipment after the occurrence of an Event of
Default. Lessee agrees that the requirement of reasonable notice shall be met
if such notice is personally served on or mailed, postage prepaid, to Lessee
in accordance with the notice provisions hereof at least 10 days before the
time of sale or other disposition. Lessor shall not be obligated to make any
sale or other disposition of the Equipment regardless of notice having been
given.
23. Notices. All notices and other communications hereunder shall be in
writing and shall be transmitted by hand, overnight courier or certified mail
(return receipt requested), postage prepaid. Such notices and other
communications shall be addressed to the respective party at the address set
forth above or at such other address as any party may from time to time
designate by notice duly given in accordance with this Section. Such notices
and other communications shall be effective upon receipt.
24. General Indemnification. Lessee shall pay, and shall indemnify and
hold Lessor harmless on an after-tax basis from and against, any and all
liabilities, causes of action, claims, suits, penalties, damages, losses,
costs or expenses (including attorneys' fees), obligations, liabilities,
demands and judgments, and Liens, of any nature whatsoever (collectively, a
"Liability") arising out of or in any way related to: (a) this Lease or any
other written agreement entered into in connection with the transactions
contemplated hereby and thereby (including, without limitation, a Purchase
Agreement, if any) or any amendment, waiver or modification of any of the
foregoing or the enforcement of any of the terms hereof or any of the
foregoing, (b) the manufacture, purchase, ownership, selection, acceptance,
rejection, possession, lease, sublease, operation, use, maintenance,
documenting, inspection, control, loss, damage, destruction, removal, storage,
surrender, sale, use, condition, delivery, nondelivery, return or other
disposition of or any other matter relating to any Item of Equipment or any
part or portion thereof (including, in each case and without limitation,
latent or other defects, whether or not discoverable, any claim for patent,
trademark or copyright infringement and any and all Liabilities in any way
relating to or arising out of injury to persons, properties or the environment
or any and all Liabilities based on strict liability in tort, negligence,
breach of warranties or violations of any regulatory law or requirement, (c) a
failure to comply fully with any Environmental Law with respect to the
Equipment or its operation or use, and (d) Lessee's failure to perform any
covenant, or breach of any representation or warranty, hereunder; provided,
that the foregoing indemnity shall not extend to the Liabilities to the extent
resulting solely from the gross negligence or willful misconduct of Lessor.
Lessee shall deliver promptly to Lessor (i) copies of any documents received
from the United States Environmental Protection Agency or any state, county or
municipal environmental or health agency and (ii) copies of any documents
submitted by Lessee or any of its subsidiaries to the United States
Environmental Protection Agency or any state, county or municipal
environmental or health agency concerning the Equipment or its operation.
25. Severability; Captions. Any provision of this Lease or any
Equipment Schedule which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability shall not invalidate or
render unenforceable such provision in any other jurisdiction. Captions are
intended for convenience or reference only, and shall not be construed to
define, limit or describe the scope or intent of any provisions hereof.
26. Lessor's Expense. Lessee shall pay all costs and expenses of
Lessor, including reasonable attorneys' fees and the fees of any collection
agencies, incurred by Lessor in enforcing any of the terms, conditions or
provisions hereof or in protecting Lessor's rights hereunder.
27. Related Equipment Schedules. In the event that any Item of
Equipment covered under any Equipment Schedule hereunder may become attached
or affixed to, or used in connection with, Equipment covered under another
Equipment Schedule hereunder (a "Related Equipment Schedule"), Lessee agrees
that, if Lessee elects to exercise a purchase or renewal option under any such
Equipment Schedule, or if Lessee elects to return the Equipment under any such
Equipment Schedule pursuant to Section 13 hereof, then Lessor, in its sole
discretion, may require that all Equipment leased under all Related Equipment
Schedules be similarly disposed of.
28. Financial and Other Data. During the Term hereof, Lessee shall
furnish Lessor, as soon as available and in any event within 60 days after the
end of each quarterly period (except the last) of each fiscal year, and, as
soon as available and in any event within 120 days after the last day of each
fiscal year, financial statements of Lessee and each Guarantor, in each case
certified by an independent public accountant if customarily available or
8
requested. Lessee shall also furnish such other financial reports, information
or data as Lessor may reasonably request from time to time.
29. Reserved.
30. No Affiliation with the Supplier. Lessee hereby represents and
warrants to Lessor that, except as previously disclosed in writing to Lessor,
neither Lessee nor any of its officers or directors (if a corporation) or
partners (if a partnership) has, directly or indirectly, any financial
interest in the Supplier.
31. Representations and Warranties of Lessee. Lessee represents and
warrants that: (a) Lessee is a corporation duly organized and validly existing
in good standing under the laws of the state of its incorporation; (b) the
execution, delivery and performance of this Lease and all related instruments
and documents: (1) have been duly authorized by all necessary corporate action
on the part of Lessee, (2) do not require the approval of any stockholder,
partner, trustee, or holder of any obligations of Lessee except such as have
been duly obtained, and (3) do not and will not contravene any law,
governmental rule, regulation or order now binding on Lessee, or the charter
or by-laws of Lessee, or contravene the provisions of, or constitute a default
under, or result in the creation of any lien or encumbrance upon the property
of Lessee under, any indenture, mortgage, contract or other agreement to which
Lessee is a party or by which it or its property is bound; (c) this Lease and
all related instruments and documents when entered into, will constitute
legal, valid and binding obligations of Lessee enforceable against Lessee in
accordance with the terms thereof; (d) there are no pending actions or
proceedings to which Lessee is a party, and there are no other pending or
threatened actions or proceedings of which Lessee has knowledge, before any
court, arbitrator or administrative agency, which, either individually or in
the aggregate, would adversely affect the financial condition of Lessee, or
the ability of Lessee to perform its obligations hereunder; (e) Lessee is not
in default under any obligation for the payment of borrowed money, for the
deferred purchase price of property or for the payment of any rent under any
lease agreement which, either individually or in the aggregate, would have the
same such effect; (f) under the laws of the state(s) in which the Equipment is
to be located, the Equipment consists solely of personal property and not
fixtures; (g) the financial statements of Lessee (copies of which have been
furnished to Lessor) have been prepared in accordance with generally
acceptable accounting principles consistently applied ("GAAP"), and fairly
present Lessee's financial condition and the results of its operations as of
the date of and for the period covered by such statements, and since the date
of such statements there has been no material adverse change in such
conditions or operations; (h) the address stated above is the chief place of
business and chief executive office, or in the case of individuals, the
primary residence, of Lessee; (i) Lessee does not conduct business under a
trade, assumed or fictitious name other than those listed on Exhibit B
attached hereto; and (j) the Equipment is being leased hereunder solely for
business purposes and that no item of Equipment will be used for personal,
family or household purposes.
32. Renewal And Purchase Options. With respect to an Equipment
Schedule and the Equipment Group set forth thereon, so long as no Default or
Event of Default shall have occurred and is continuing, then, upon not less
than ninety (90) days prior written notice to Lessor, (the "Renewal Notice")
Lessee may (a) at the expiration of the Initial Term, or any Renewal Term,
purchase all, but not less than all, of the Equipment Group for the Fair
Market Sale Value of such Equipment Group, payable in cash to Lessor upon the
expiration of the Initial Term or any Renewal Term, as the case may be, (b) at
the expiration of the Initial Term, renew this Lease on a month to month basis
at the same Rent payable at the expiration of the Initial Term, or (c) at the
expiration of the Initial Term, renew this Lease for a minimum period of not
less than twelve (12) consecutive months at the then current Fair Market
Rental Value. If Lessee fails to give Lessor the Return Notice or the Renewal
Notice at least ninety (90) days before the expiration of the Initial Term,
Lessee shall be deemed to have chosen option (b) above. If Lessee exercises
option (a) above, Lessee shall purchase the Equipment "as is" and "where is"
and without any warranties, express or implied, by Lessor.
33. Lessee's Waivers. To the extent permitted by Applicable Law,
Lessee hereby waives (a) any and all rights and remedies which it may now have
or which at any time hereafter may be conferred upon it by statute (including,
without limitation, Article A of the Uniform Commercial Code, as applicable)
or otherwise, (1) which may limit or modify Lessor's rights or remedies
hereunder, (2) to terminate, cancel, quit, repudiate or surrender this Lease,
except as expressly provided herein; (3) to reject, revoke acceptance or
accept partial delivery of the Equipment; (4) to recover damages from Lessor
for any breach of warranty or for any other reason provided, however, that no
such waiver shall preclude Lessee from asserting any such claim against Lessor
in a separate cause of action; or (5) to setoff or deduct all or any part of
any claimed damages resulting from Lessor's default, if any, under this Lease.
34. UCC Filings. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS ITS
TRUE AND LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO
EXECUTE AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN
LESSOR'S SOLE DISCRETION ARE
9
NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN THE EQUIPMENT IN ALL
APPLICABLE JURISDICTIONS; PROVIDED, HOWEVER, LESSOR SHALL NOT EXERCISE SUCH
POWER-OF-ATTORNEY UNLESS EITHER (A) LESSEE HAS FAILED OR REFUSED TO SO
EXECUTE, ENDORSE OR DELIVER, AS THE CASE MAY BE, ANY DOCUMENT, INSTRUMENT OR
AGREEMENT SO REQUESTED BY LESSOR WITHIN FIVE (5) BUSINESS DAYS AFTER LESSOR'S
WRITTEN REQUEST FOR THE SAME OR (B) AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING.
35. Miscellaneous. Time is of the essence with respect to this Lease.
Any failure of Lessor to require strict performance by Lessee or any waiver by
Lessor of any provision herein shall not be construed as a consent or waiver
of any provision of this Lease. Neither this Lease nor any Equipment Schedule
may be amended except by a writing signed by Lessor and Lessee. This Lease and
each Equipment Schedule shall be binding upon, and inure to the benefit of,
the parties hereto, their permitted successors and assigns. This Lease will be
binding upon Lessor only if executed by a duly authorized officer or
representative of Lessor at Lessor's principal place of business as set forth
above. This Lease, and all other documents (the execution and delivery of
which by Lessee is contemplated hereunder), shall be executed on Lessee's
behalf by Authorized Signers of Lessee. THIS LEASE IS BEING DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH.
THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
36. Jury Trial Waiver. LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH LESSOR OR LESSEE MAY BE PARTIES ARISING OUT
OF OR IN ANY WAY PERTAINING TO THIS LEASE. THIS WAIVER IS MADE KNOWINGLY,
WILLINGLY AND VOLUNTARILY BY THE LESSOR AND THE LESSEE WHO EACH ACKNOWLEDGE
THAT NO REPRESENTATIONS HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER
OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
37. More than One Lessee. If more than one person or entity executes
this Lease, each Equipment Schedule, and all addenda or other documents
executed in connection herewith or therewith, as "Lessee," the obligations of
"Lessee" contained herein and therein shall be deemed joint and several and
all references to "Lessee" shall apply both individually and jointly.
38. Quiet Enjoyment. So long as no Event of Default has occurred and is
continuing, Lessee shall peaceably hold and quietly enjoy the Equipment
without interruption by Lessor or any person or entity claiming through
Lessor.
39. Entire Agreement. This Lease, together with all Equipment
Schedules, riders and addenda executed by Lessor and Lessee collectively
constitute the entire understanding or agreement between Lessor and Lessee
with respect to the leasing of the Equipment, and there is no understanding or
agreement, oral or written, which is not set forth herein or therein. By
initialing below, Lessee hereby further acknowledges the conditions of this
Section 39.
Lessee's Initials:___ Lessee's Initials: ___ Lessee's Initials: ___
Lessee's Initials:___ Lessee's Initials: ___
40. Execution in Counterparts. This Master Equipment Lease Agreement
may be executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
10
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of
this day and year first above written.
Lessee: Lessee:
SECOM GENERAL CORPORATION MICANOL, INC.
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board Title: Chairman of the Board
Lessee: Lessee:
UNIFLOW CORPORATION L & H DIE, INC.
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board Title: Chairman of the Board
Lessee:
FORM FLOW INC.
BY: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board
Lessor:
KEYCORP LEASING LTD.
By: /s/ Xxxxxx X. XxXxxxx
----------------------
Name: Xxxxxx X. XxXxxxx
Title: Vice President
11
[ KeyCorp Leasing Ltd. letterhead ]
EQUIPMENT SCHEDULE XX. 00
XXXXXXXXX XXXXXXXX XX. 00 dated as of May 24, 1996 (this "Schedule")
between KEYCORP LEASING LTD. ("Lessor"), a Delaware corporation, and SECOM
GENERAL CORPORATION, a Delaware corporation with its principal place of
business at 00000 Xxxxx Xxxxx Xxxxxx, Xxxx, XX 00000, UNIFLOW CORPORATION, a
Michigan corporation with its principal place of business at 00000 Xxxx Xxxxx,
Xxxx, XX 00000, FORM FLOW, INC., a Michigan corporation with its principal
place of business at 0000 Xxxxxxxx, Xxxxxxx, XX 00000, L & H DIE, INC., a
Michigan corporation with its principal place of business at 00000 Xxxxxx
Xxxx, Xxxxxxx, XX 00000 and MICANOL, INC., a Michigan corporation with its
principal place of business at 00000 Xxxxx Xxxxx Xxxxxx, Xxxx XX 00000
(collectively, the "Lessee").
I N T R O D U C T I O N :
Lessor and Lessee have heretofore entered into that certain Master
Equipment Lease Agreement dated as of May 24, 1996 (the "Master Lease"; the
Master Lease and this Schedule hereinafter collectively referred to as, this
"Lease"). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings specified in the Master Lease. The Master Lease provides for
the execution and delivery of a Schedule substantially in the form hereof for
the purpose of confirming the acceptance and lease of the Equipment under this
Lease as and when delivered by Lessor to Lessee in accordance with the terms
thereof and hereof.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
1. EQUIPMENT. Pursuant to the terms and conditions of this Lease,
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
equipment listed on Exhibit A attached hereto (the "Equipment"). The aggregate
Total Cost of such Equipment is $5,000,000.00.
2. TERM. The Initial Term of this Lease with respect to the Equipment
described on this Schedule shall commence on the date on which such Equipment
is delivered to Lessee, and, unless earlier terminated as provided herein,
shall expire on the date which is seventy-two (72) months after the Rent
Commencement Date (the "Initial Term Expiration Date').
3. RENT PAYMENT DATES; RENT. (a) The Rent set forth in Section
3(b)(2) hereof shall be adjusted (pursuant to Section 3(c) hereof) with each
change in the Actual Index (as hereinafter defined).
(b) Lessee hereby agrees to pay Rent for the Equipment as follows:
(1) On the Rent Commencement Date, an amount equal to $2,079.45 as
interim rent for the period from the Rent Commencement Date to
but excluding the first day of the month following the Rent
Commencement Date, which interim rent was calculated by Lessor
using the Assumed Rate (as hereinafter defined) and is
expressly not subject to adjustment pursuant to Section 3(c)
hereof.
(2) Throughout the Initial Term in seventy-two (72) consecutive
monthly installments payable in arrears commencing on July 1,
1996 and on the same day each month thereafter (each, a "Rent
Payment Date"). Each such installment of Rent shall be in an
amount equal to $86,657.72.
(c) Lessee and Lessor agree that each Rent payment hereunder shall
be increased or decreased (but not below zero), as the case may be, by
the Rent Differential (as hereinafter defined) as follows: if, as of
any Rent Payment Date, (i) the Rent Differential is greater than zero,
the amount of Rent due on such Rent Payment, Date shall be increased by
such Rent Differential, and (ii) the Rent Differential is less than
zero, the amount of Rent due on such Rent Payment Date shall be
decreased by such Rent Differential.
(d) As used herein, the following terms shall have the respective
meanings indicated below:
(1) "Assumed Index" shall mean 5.4336%).
(2) "Actual Index" shall mean, as of any day in a calendar
month, the London interbank offered rate for deposits in United
States dollars having a maturity of one month which appears in the
"Money Rates" section of The Wall Street Journal, published on the
business day on, or immediately prior to, the 28th day of the month
immediately preceding such calendar month. If the Actual Index is
no longer available, Lessor will choose a new index which is based
upon comparable information and will give Lessee notice of such new
"Actual Index."
(3) "Current Fixed Index" shall mean the most recent Fixed
Index available as of the week preceding the week in which the
Conversion Date occurs. Lessor shall choose such Current Fixed
Index on the day before the Conversion Date (as hereinafter
defined).
(4) "Daily Equivalent" shall mean the product of the following
formula:
Daily Actual Assumed Net
Equivalent = Index - Index X Investment Balance
-----------------
365
(5) "Fixed Index" shall mean the sum of (i) the weekly average
yield on United States Treasury securities adjusted to a constant
maturity equal to the then remaining Initial Term of the Lease or,
if a constant maturity equal to the then remaining Initial Term of
the Lease is not available, the next highest constant maturity, as
made available by the Federal Reserve Board, and (ii) 240 basis
points. If the Fixed Index is no longer available, Lessor will
choose a new index which is based upon comparable information.
Lessor will give Lessee notice of such new "Fixed Index. "
(6) "Net Investment Balance" shall mean, as of any day, the
outstanding balance (initially calculated using the Assumed Index
plus 215 basis points) reflected on Lessor's lease accounting
system for the Rent Payment Date immediately preceding such day or,
if such day is a Rent Payment Date, for such Rent Payment Date.
(7) "Rent Differential" shall mean, with respect to any Rent
Payment Date, the sum of all Daily Equivalents for each day from
and including the immediately prior Rent Payment Date (or the Rent
Commencement Date for the first Rent Payment Date) to and excluding
such Rent Payment Date.
(e) If (1) on or prior to execution of this Schedule, Lessee shall
have paid to Lessor a conversion option fee equal to $17,500.00, (2)
Lessee shall have provided Lessor with such documentation as Lessor may
reasonably request to effect the conversion, and (3) no default under
the Lease has occurred and is continuing, then, at any time on or after
the twelve (12) month anniversary of the Rent Commencement Date, upon
not less than forty-five (45), and not more than sixty (60), days'
prior written notice, Lessee shall have the option (the "Conversion
Option") to convert the then current Actual Index to a fixed index,
determined pursuant to Section 3(f) hereof. The date of such conversion
(the "Conversion Date") shall be the Rent Payment Date on which the
next payment of Rent is due and payable under the Lease (after giving
effect to such notice requirement).
(f) If Lessee exercises the Conversion Option, (1) on and after
the Conversion Date, the Rent set forth in Section 3(b) hereof shall be
adjusted pursuant to Section 3(c) hereof, provided that, for the
purposes of such adjustment, the term "Actual Index" shall be replaced
by the term "Current Fixed Index," (2) effective as of the Conversion
Date, such adjusted Rent shall be the Rent for the remaining Initial
Term of the Lease, and Lessee shall pay the amount of such adjusted
Rent (based on such Current Fixed Index) for the remainder of such
Initial Term, and (3) notwithstanding anything to the contrary
contained herein, the adjustment set forth in Section 3(a) shall be of
no further force and effect.
2
4. EQUIPMENT LOCATION; BILLING ADDRESS. The Equipment described on
this Schedule shall be located at, and except as otherwise provided in this
Lease, shall not be removed from, the following address: See Exhibit "A" to
Master Equipment Lease Agreement dated May 24, 1996. The billing address of
Lessee is as follows: SECOM GENERAL CORPORATION, 00000 Xxxxx Xxxxx Xxxxxx,
Xxxx, XX 00000.
5. LESSEE'S PURCHASE AND RENEWAL OPTIONS. (a) With respect to the
Equipment described on this Schedule, Section 32 of the Master Lease ("Renewal
and Purchase Options") is hereby deleted in its entirety.
(b) On the Initial Term Expiration Date, Lessee shall pay to Lessor
an amount equal to $1.00. Upon payment in full by Lessee of all Rent (and all
other sums) payable to Lessor hereunder, Lessor shall release its interest in
the Equipment.
6. STIPULATED LOSS VALUE; FUTURE RENTS. There are no Stipulated Loss
Values or Stipulated Loss Value Supplements applicable to the Equipment
described on this Schedule. Notwithstanding anything to the contrary contained
herein, including Section 3 hereof, with respect to all provisions of this
Lease requiring calculation of Rent payable for an Item of Equipment for the
remainder of the Term, such Rent shall be calculated using the Assumed Rate
or, if Lessee has exercised its conversion option under Section 3(e) hereof,
the Current Fixed Index.
7. SECURITY AGREEMENT. To secure the prompt payment and performance
as and when due of all obligations and indebtedness of Lessee, now existing or
hereafter created, to Lessor pursuant to this Lease or otherwise, Lessee
hereby grants to Lessor a security interest in the Equipment and all
accessions, substitutions and replacements thereto and therefor, and proceeds
(cash and non-cash), including, without limitation, insurance proceeds thereof
(but without power of sale). In furtherance of the foregoing, Lessee shall
execute and deliver to Lessor, to be recorded at Lessee's expense, Uniform
Commercial Code financing statements, statements of amendment and statements
of continuation as reasonably may be required by Lessor to perfect and
maintain perfected the security interest granted by Lessee herein.
8. NOTIFICATION OF TAX CONSEQUENCES. Lessee recognizes that, pursuant
to Section 18 of the Master Lease, it is Lessee's responsibility to include,
if required by Applicable Law, all equipment financed under this Lease in
Lessee's personal property tax returns and, if necessary, to pay any resulting
property tax bills. Lessor and Lessee acknowledge that personal property tax
policies vary from state to state and that, where uncertainty exists as to a
particular state's policies, Lessee shall contact its attorneys or financial
advisors (who may be familiar with such state's personal property tax policy)
for advice. It is expressly acknowledged by Lessee that Lessor has made no
warranties, statements or representations as to such personal property tax
matters, and Lessee hereby disclaims any reliance on any such warranties,
statements or representations made by Lessor with respect thereto.
9. MODIFICATIONS TO MASTER LEASE. In addition to the modifications
set forth in Section 5 hereof, with respect to the Equipment described on this
Schedule, the Master Lease shall be modified as follows:
(a) The following shall be inserted as the penultimate sentence
of Section 11 of the Master Lease ("Use; Alterations"):
All such alterations, additions, modifications or improvements
immediately, and without further act, shall be deemed to
constitute Items of Equipment and be fully subject to this Lease
as if originally leased hereunder.
(b) Section 12 of the Master Lease ("Repairs and Maintenance")
is hereby deleted in its entirety and the following substituted in its place:
Lessee will keep and maintain, or cause to be kept and
maintained, the Equipment in as good operating condition as on
the date of execution hereof (or on the date on which acquired,
if such date is subsequent to the date of execution hereof),
ordinary wear and tear resulting from proper use thereof alone
excepted. In addition, if any parts or accessories forming part
of the Equipment
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shall from time to time become worn out, lost, destroyed,
damaged beyond repair or otherwise permanently rendered unfit
for use, Lessee, at its own expense, will within a reasonable
time replace such parts or accessories with replacement parts or
accessories which and have a value and utility at least equal to
the parts or accessories replaced. Such replacement part shall
be free and clear of all Liens. Notwithstanding the foregoing,
this paragraph shall not apply to any Loss or Damage (as defined
in Section 16 hereof) of any Item of Equipment. Upon
installation, attachment or incorporation in, on or into such
Item of Equipment, such replacement part immediately, and
without further act, shall be deemed to constitute an Item of
Equipment and be fully subject to this Lease as if originally
leased hereunder
(c) Section 16(b) of the Master Lease ("Loss of or Damage to
Equipment") is hereby amended to delete subsection "(3)" and substitute the
following in its place:
(3) pay to Lessor an amount, with respect to such Item of
Equipment, equal to the Rent payable for such Item of Equipment
for the remainder of the Term, after discounting such Rent to
present worth on the basis of a per annum rate of discount equal
to five percent (5%) from the respective dates upon which such
Rent would have been paid had the Loss or Damage not occurred.
In determining the Rent payable for an Item of Equipment for the
purposes of this clause (3), Lessor and Lessee agree that such
Rent shall be deemed equal to the product of (a) the total Rent
payable under this Lease for the remainder of the Term, and (b)
a fraction, the numerator of which is the value (as set forth in
the appraisal prepared at lease closing) of such Item of
Equipment and the denominator of which is the value (as set
forth in the appraisal prepared at lease closing) of all Items
of Equipment under this Lease.
(d) Section 16(b) of the Master Lease ("Loss of or Damage to
Equipment") is hereby amended to delete the second to last sentence and
substitute the following in its place:
If Lessee replaces the Item of Equipment pursuant to subsection
(b) above, such replacement equipment shall immediately (and
without further act) be deemed to constitute Items of Equipment
and be fully subject to this Lease as if originally leased
hereunder.
(e) Section 17(a) of the Master Lease ("Insurance") is hereby
amended to delete subsection "(1)" and substitute the following in its place:
(1) insurance against all risks of physical loss or damage to
the Equipment (including theft and collision for Equipment
consisting of motor vehicles) in an amount not less than the
full replacement value thereof.
(f) As used in Section 22(a) of the Master Lease ("Events of
Default"), the term "Event of Default" shall also mean the following event:
the dissolution of Lessee.
(g) Section 22(b) of the Master Lease ("Events of Default") is
hereby amended to delete subsection "(7)" and substitute the following in its
place:
(7) by written notice to Lessee specifying a payment date, may
demand that Lessee pay to Lessor, and Lessee shall pay to
Lessor, on the payment date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty,
any unpaid Rent due prior to the payment date specified in such
notice plus the following amount which Lessor shall specify in
such notice (together with interest on such amount at the Late
Payment Rate from the payment date specified in such notice to
the date of actual payment): an amount, with respect to an Item
of Equipment, equal to the Rent payable for such Item of
Equipment for the remainder of the then current Term thereof,
after discounting such Rent to present worth as of the payment
date specified in such notice on the basis of a per annum rate
of discount equal to five percent (5%) from the respective dates
upon which such Rent would have been paid had this Lease not
been canceled or terminated.
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(h) Section 22(b) of the Master Lease ("Events of Default") is
hereby amended as follows: (1) with respect to Section 22(b)(4), the word
"terminate" is hereby deleted and the words "cancel or terminate" are hereby
substituted in its place; and (2) with respect to Section 22(b)(6), the word
"termination" is hereby deleted and the words "cancellation or termination"
are hereby substituted in its place.
10. GOVERNING LAW. This Schedule is being delivered in the State of
New York and shall in all respects be governed by, and construed in accordance
with, the laws of the State of New York, including all matters of
construction, validity and performance.
11. COUNTERPARTS. This Schedule may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together one and the same instrument.
12. PERSONAL PROPERTY TAX. To insure Lessee's compliance with the
provisions of the Lease with respect to the payment of personal property taxes
on the Equipment described on this Schedule, Lessee hereby covenants and
agrees that, unless otherwise directed in writing by Lessor or otherwise
required by law, Lessee will list itself as owner of all Items of Equipment
for property tax purposes. Except in those jurisdictions in which Lessor is
required to list itself as owner of all such Items of Equipment, upon receipt
by Lessee of any property tax xxxx pertaining to such Items of Equipment from
the appropriate taxing authority, Lessee will promptly pay all such taxes when
due. In those jurisdictions in which Lessor is required to list itself as
owner of all such Items of Equipment, upon receipt by Lessee of any property
tax xxxx pertaining to such Items of Equipment, Lessee will promptly forward
to Lessor such property tax xxxx and related payment. Upon receipt by Lessor
of any such property tax xxxx and related payment, Lessor will pay such tax.
13. ADDITIONAL ADDENDA. In addition to the End of Lease Options
Addendum, please see the following addenda to this Schedule, attached hereto
and made a part hereof, for additional terms and conditions governing the
leasing of the Equipment described on this Schedule: End of Lease Options
Addendum.
14. MORE THAN ONE LESSEE. If more than one person or entity executes
this Schedule, and all addenda or other documents executed in connection
herewith, as "Lessee," the obligations of "Lessee" contained herein and
therein shall be deemed joint and several and all references to "Lessee" shall
apply both individually and jointly.
15. RELATIONSHIP TO MASTER LEASE; FURTHER ASSURANCES. This Schedule
shall be construed in connection with and as part of the Lease, and all terms
and conditions contained in the Master Lease are hereby incorporated herein by
reference with the same force and effect as if such terms and conditions were
fully stated herein. By execution of this Schedule, Lessee and Lessor reaffirm
all terms and conditions of the Master Lease except as they may be modified
hereby. To the extent that any of the terms and conditions of this Schedule
are contrary to or inconsistent with any terms and conditions of the Master
Lease, the terms and conditions of this Schedule shall govern. LESSEE HEREBY
CERTIFIES TO LESSOR THAT THE REPRESENTATIONS AND WARRANTIES MADE BY LESSEE IN
THE MASTER LEASE (INCLUDING, WITHOUT LIMITATION, SECTION 31 THEREOF) ARE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF THIS SCHEDULE WITH THE
SAME EFFECT AS THOUGH MADE ON AND AS OF SUCH DATE. Lessee shall take such
additional actions and execute and deliver such additional documents as Lessor
shall deem necessary from time to time to effectuate the terms of the Lease.
16. Prepayment. On any Rent Payment Date, Lessee may prepay, in whole
but not in part, this Lease by paying to Lessor (1) any unpaid Rent and all
other amounts due on or before such Rent Payment Date, plus (2) an amount
equal to the Rent payable for the remainder of the Initial Lease Term, after
discounting such future Rent to present worth as of such Rent Payment Date on
the basis of a per annum rate of discount equal to five (5%) percent, from the
respective dates upon which such Rent would have been paid had this Lease not
been prepaid.
17. Depreciation. Lessor shall not claim any depreciation benefits as
a result of this Lease.
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IN WITNESS WHEREOF, Lessor and Lessee have caused this Schedule to be
duly executed and delivered on the day and year first above written.
Lessee: Lessee:
SECOM GENERAL CORPORATION MICANOL, INC.
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board Title: Chairman of the Board
Lessee: Lessee:
UNIFLOW CORPORATION L & H DIE, INC.
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board Title: Chairman of the Board
Lessee:
FORM FLOW INC.
BY: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board
Lessor:
KEYCORP LEASING LTD.
By: /s/ Xxxxxx X. XxXxxxx
----------------------
Name: Xxxxxx X. XxXxxxx
Title: Vice President
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