MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT ("Master Agreement') made as of June 23, 2000,
between Varilease Corporation, a Michigan corporation having its chief
executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxx, XX 00000
("Lessor") and LA West, Inc., a Indiana corporation having its chief
executive offices at 0000 Xxxx XX 00, XxXxxxxx, XX 00000 ("Lessee").
1. LEASE
On the terms and conditions of this Master Agreement, Lessor shall
lease to Lessee, and Lessee shall hire from Lessor, the items of
personal property described in the Schedule(s) (collectively the
"Equipment" and individually an "Item") which shall incorporate this
Master Agreement. Each Schedule shall constitute a separate and
independent lease and contractual obligation of Lessee. The term
"Lease" shall refer to an individual Schedule which incorporates this
Master Agreement. In the event of a conflict between this Master
Agreement and any Schedule, the language of the Schedule shall
prevail. The Lease shall be effective upon execution by Lessor at its
offices.
2. TERM
(a) The term of the Lease shall be comprised of a Delivery Term,
Installation Term and Base Term. The Delivery Term for each Item
shall commence on the date the Item is delivered to Lessee and shall
end on the Installation Date. The Installation Term shall commence
on the Installation Date and terminate on the first day of the month
following the Installation Date for the last item to be installed
(the "Base Term Commencement Date"). The Base Term of the Lease
shall begin on the Base Term Commencement Date, and may, subject to
Subsection 2(b), terminate on the last day of the last month of the
Base Term. The date of installation (the "Installation Date") for
any Item shall be the earlier of either (i) the date on which the
entity responsible for installing such Item certifies that the Item
is installed and placed in good working order, or (ii) if Lessee has
caused a delay in the installation of on Item, seven days from the
date the Item is delivered to the equipment location specified in
the Schedule, or (iii) if Lessee is to install the Item, the third
day after delivery, In the event the Equipment is already installed
at the equipment location of Lessee and has been previously paid for
by Lessee, the Installation Date shall be the date on which the
Lessor pays Lessee for the Equipment.
(b) A Lease may be terminated as of the last day of the last month of
the Base Term by written notice given by either Lessor or Lessee not
less than six (6) months prior to the date of termination of the
Base Term. If the Lease is not so terminated at the end of the Base
Term, the Base Term shall be automatically extended for successive
six (6) month periods until such six (6) month notice is given. The
Base Monthly Rental, as hereinafter defined, shall continue to be
due and payable by Lessee until the Equipment is redelivered to
Lessor upon the termination of the Base Term or any extension term,
and throughout any such extension term(s). No notice of termination
may be revoked without the written consent of the other party.
3. RENTAL
(a) The rental amount payable to Lessor by Lessee for the
Equipment will be as set forth on the Schedule ("Base Monthly
Rental"). As rent for Equipment, Lessee shall pay Lessor in
immediately available funds and in advance on the Base Term
Commencement Date and on the first day of each month during the
Base Term of the Lease the Base Monthly Rental, per mouth, and
(ii) on the Installation Date an amount equal to 1/30th of the
Base Monthly Rental for each Item times the number of days which
will elapse from the Installation Date of such Item to the Base
Term Commencement Date of the Lease. Each remittance from Lessee
to Lessor shall contain information as to the Lease for which
payment is made.
(b) For any payment of rent or other amount due under a Lease
which is past due for more than five (5) days, interest shall
accrue at the rate of 2% per month, from the date such payment
was due until payment is received by Lessor, or if such rate
shall exceed the maximum rate of interest allowed by law, then at
such maximum rate.
4. TAXES
The term "Taxes" shall mean all taxes, fees and assessments due,
assessed or levied by any foreign, federal, state or local government
or taxing authority, and/or any penalties, fines or interest, which
are imposed against or on the Equipment, its use, operation, or
ownership, or the rentals or receipts due under the Lease, or
penalties arising from the failure to file a return with respect to
the Taxes, but shall not include any federal or state taxes based upon
or measured by the net income of Lessor. As of the commencement of the
term of the Lease, Lessee shall be responsible for payment of all
Taxes. Lessor shall report and file any and all Taxes and shall
invoice Lessee for same. Lessee shall promptly reimburse Lessor for
all Taxes and hold Lessor harmless with respect to any non-payment
thereof:
5. NET LEASE
The Lease is a net lease, it being the intention of the parties that
all costs, expenses and liabilities associated with the Equipment or
its lease shall be borne by Lessee. Lessee's agreement to pay all
obligations under the Lease, including but not limited to Base Monthly
Rental, is absolute and unconditional and such agreement is for the
benefit of Lessor and its Assignee(s). Lessee's obligations shall not
be subject to any abatement, deferment, reduction, setoff, defense,
counterclaim or recoupment for any reason whatsoever. Except as may be
otherwise expressly provided in the Lease, it shall not terminate, nor
shall the obligations of Lessee be affected by reason of any defect in
or damage to, or any loss or destruction of or obsolescence of, the
Equipment or any Item from any cause whatsoever, or the interference
with its use by any private person, corporation or governmental
authority, or as a result of any war, riot, insurrection or an Act of
God. It is the express intention of Lessor and Lessee that all rent
and other sums payable by Lessee under the Lease shall be, and
continue to be, payable in all events throughout the term of the
Lease. The Lease shall be binding upon the Lessee, its successors and
permitted assigns and shall inure to the benefit of Lessor and its
Assignee(s).
6. INSTALLATION, RETURN AND USE OF EQUIPMENT
(a) Upon delivery of the Equipment to Lessee, Lessee shall pay all
transportation, installation, rigging, packing and insurance charges
with respect to the Equipment. In the case of a sale and leaseback
transaction, Lessee shall, upon the request of Lessor; certify the
date the Equipment was first put into use. Lessee will provide the
required electric current and a suitable place of installation for
the Equipment with all appropriate facilities as specified by the
manufacturer, No cards, tapes, disks, data cells or other
input/output and storage media may be used by Lessee to operate any
Item unless it meets the specifications of the manufacturer. Lessee
agrees that it will not install, or permit the installation of the
Equipment without Lessor's consent.
(b) Lessee shall, at all times during the term of the Lease, be
entitled to unlimited use of the Equipment. Lessee will at all times
keep the Equipment in its sole possession and control. The Equipment
shall not be moved from the location stated in the Schedule without
the prior written consent of Lessor and in no event shall the
Equipment be moved outside the continental, contiguous United
Slates. Lessee will comply with all laws, regulations, and
ordinances, and all applicable requirements of the manufacturer of
the Equipment which apply to the physical possession, use,
operation, condition, and maintenance of the Equipment. Lessee
agrees to obtain all permits and licenses necessary for the
operation of the Equipment.
(c) Lessee shall not without the prior written consent of Lessor,
affix or install any accessory, feature, equipment or device to the
Equipment or make any improvement, upgrade, modification, alteration
or addition to the Equipment (any such accessory, feature,
equipment, device or improvement, upgrade, modification, alteration
or addition affixed or installed is an "Improvement"). Title to all
Improvements shall, without further act, upon the making, affixing
or installation of such Improvement, vest solely in Lessor, except
such improvements as may be readily removed without causing material
damage to the Equipment and without in any way affecting or
impairing the originally intended function, value or use of the
Equipment, Removal of the Improvement shall be performed by the
manufacture; at the sole expense of Lessee. Provided the Equipment
is returned to Lessor in the condition required by the Lease,
including, but not limited to coverage under the manufacturer's
standard maintenance contract, title to the Improvement shall vest
in the Lessee upon removal. Any improvement not removed from the
Equipment prior to return shall at Lessor's option remain the
property of Lessor and shall be certified for maintenance by the
manufacturer, at Lessee's expense.
Lessee shall notify Lessor in no less than 60 days prior to the
desired installation date of the type of Improvement Lessee desires to
obtain. Lessor may, at any time within 10 days after receipt of the
notice offer to provide the Improvement to Lessee upon terms and
conditions to be mutually agreed upon. Lessee shall notify Lessor of
any third party offers and shall lease the Improvement from Lessor if
Lessor meets the terms of the third party offer.
If Lessee leases an Improvement from Lessor, such lease shall be under
a separate Schedule, the Improvement shall not be placed in service by
Lessee prior to acquisition by Lessor, and Lessee shall execute and
deliver any document necessary to vest title to such Improvement in
Lessor.
During the term of the Lease term and any renewal term, Lessee shall
cause all Improvements to be maintained, at Lessee's expense, in
accordance with the requirements of Section 7. Unless otherwise agreed
to by Lessor, upon the expiration or earlier termination of the term
of the Lease, any improvement shall be de-installed and removed from
the Equipment by the manufacturer; at Lessee's expense. If the
Improvement is removed, the Equipment shall be restored to its
unmodified condition and shall be certified for maintenance by the
manufacturer, at Lessee's expense.
In the event an Improvement is provided to Lessee by a party other
than Lessor, Lessee shall cause such party to execute and deliver to
Lessor such documents as shall be required by Lessor to protect the
interests of Lessor and any Assignee in the Equipment, this Master
Agreement and any Schedule.
(d) Lessee shall, at the termination of the Lease, at its expense,
de-install, pack and return the Equipment to Lessor at such location
within the continental United States as shall be designated by
Lessor in the same operating order; repair, condition and appearance
as of the Installation Date, reasonable wear and tear excepted, with
all current engineering changes prescribed by the manufacturer of
the Equipment or a maintenance contractor approved by Lessor (the
"Maintenance Organization") incorporated in the Equipment. Until the
return of the Equipment to Lessor, Lessee shall be obligated to pay
the Base Monthly Rental and all other sums due under the Lease. Upon
redelivery to Lessor, Lessee shall arrange and pay for such repairs
(if any) as are necessary for the manufacturer of the Equipment to
accept the Equipment under a maintenance contract at its then
standard rates.
7. MAINTENANCE AND REPAIRS
Lessee shall, during the term of the Lease, maintain in full force and
effect a contract with the manufacturer of the Equipment or
Maintenance Organization covering at least prime shift maintenance of
the Equipment. Lessee upon request shall furnish Lessor with a copy of
such maintenance contract as amended or supplemented. During the term
of the Lease, Lessee shall, at its expense, keep the Equipment in good
working order, repair, appearance and condition and make all necessary
adjustments, repairs and replacements, all of which shall become the
property of Lessor. Lessee shall not use or permit the use of the
Equipment for any purpose for which, in the opinion of the
manufacturer of the Equipment or Maintenance Organization, the
Equipment is not designed or intended.
8. OWNERSHIP, LIENS AND INSPECTIONS
(a) Lessee shall keep the Equipment free from any marking or labeling
which might be interpreted as a claim of ownership by Lessee or any
party other than Lessor and its Assignee(s), and shall affix and
maintain tags, decals or plates furnished by Lessor on the
Equipment indicating ownership and title to the Equipment in Lessor
or its Assignee(s). Upon reasonable notice to Lessee, Lessor or its
agents shall have access to the Equipment and Lessee's books and
records with respect to the Lease and the Equipment at reasonable
times for the purpose of inspection and for any other purposes
contemplated by the Lease, subject to the reasonable security
requirements of Lessee.
(b) Lessee shall execute and deliver such instruments, including
Uniform Commercial Code financing statements, as are required to be
filed to evidence the interest of Lessor and its Assignee(s) in the
Equipment or the Lease. Lessee has no interest in the Equipment
except as expressly set forth in the Lease and that interest is a
lease-hold interest. Lessor and Lessee agree, and Lessee represents
for the benefit of Lessor and its Assignee(s) that the Lease is
intended to be a "finance lease" and not a "lease intended as
security " as those terms are used in the Uniform Commercial Code;
and that the Lease is intended to be a "true lease" as the term is
commonly used under the Internal Revenue Code of 1986, as amended.
(c) LESSEE SHALL KEEP THE LEASE, THE EQUIPMENT AND ANY IMPROVEMENTS
FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES OF WHATSOEVER KIND
(EXCEPT THOSE CREATED BY LESSOR) AND LESSEE SHALL NOT ASSIGN THE
LEASE OR ANY OF ITS RIGHTS UNDER THE LEASE OR SUBLEASE ANY OF THE
EQUIPMENT OR GRANT ANY RIGHTS TO THE EQUIPMENT WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR. No permitted assignment or sublease
shall relieve Lessee of any of its obligations under the Lease and
Lessee agrees to pay all costs and expenses Lessor may incur in
connection with such sublease or assignment. Lessee grants to
Lessor the right of first refusal on any sublease or other grant of
Lessee's rights to the Equipment
9. DISCLAIMER OF WARRANTIES
(a) LESSOR LEASES THE EQUIPMENT "AS IS," AND BEING NE1THER THE
MANUFACTURER OF THE EQUIPMENT NOR THE AGENT OF EITHER THE
MANUFACTURER OR SELLER, LESSOR DISCLAIMS ANY REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE
CONDITION OR PERFORMANCE OF THE EQUIPMENT, ITS MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR WITH RESPECT TO PATENT
INFRINGEMENTS OR THE LIKE. LESSOR SHALL HAVE NO LIABILITY TO LESSEE
FOR ANY CLAIM, LOSS OR DAMAGE OF ANY KIND OR NATURE WHATSOEVER, NOR
SHALL THERE BE ANY ABATEMENT OF RENTAL FOR ANY REASON INCLUDING
CLAIMS ARISING OUT OF OR IN CONNECTION WITH (i) THE DEFICIENCY OR
INADEQUACY OF THE EQUIPMENT FOR ANY PURPOSE, WHETHER OR NOT KNOWN
OR DISCLOSED TO LESSOR, (ii) ANY DEFICIENCY OR DEFECT IN THE
EQUIPMENT, (iii) THE USE OR PERFORMANCE OF THE EQUIPMENT, OR (iv)
ANY LOSS OF BUSINESS OR OTHER CONSEQUENTIAL LOSS OR DAMAGE, WHETHER
OR NOT RESULTING FROM ANY OF THE FOREGOING.
(b) For the term of the Lease, Lessor assigns to Lessee (to the extant
possible), and Lessee may have the benefit of, any and all
manufacturer's warranties, service agreements and patent
indemnities, if any, with respect to the Equipment; provided,
however, that Lessee's sole remedy for the breach of any such
warranty, indemnification or service agreement shall be against the
manufacturer of the Equipment and not against Lessor, nor shall any
such breach have any effect whatsoever on the rights and
obligations of Lessor or Lessee with respect to the Lease.
(c) NO REPRESENTATIONS OR WARRANTIES OF THE MANUFACTURER OR DISTRIBUTOR
OF THE EQUIPMENT, OR ANY OTHER THIRD PARTY, CAN BIND LESSOR, AND
LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR SHALL HAVE NO
OBLIGATIONS WITH RESPECT TO THE EQUIPMENT EXCEPT AS SPECIFICALLY
SET FORTH HEREIN OR OTHER DOCUMENT EXECUTED BY LESSOR.
10. ASSIGNMENT
(a) Lessee acknowledges and understands that Lessor may assign to a
successor, financing lender and/or purchaser (the "Assignee"),
all or any part of the Lessor's right, title and interest in and
to the Lease and the Equipment and Lessee hereby consents to such
assignment(s). In the event Lessor transfers or assigns, or
retransfers or reassigns, to an Assignee all or part of Lessor's
interest in the Lease, the Equipment or any sums payable under
the Lease, whether as collateral security for loans or advances
made or to be made to Lessor by such Assignee or otherwise,
Lessee covenants that, upon receipt of notice of any such
transfer or assignment and instructions from Lessor,
(i) Lessee shall, if so instructed, pay and perform its
obligations under the Lease to the Assignee (or to any other
party designated by Assignee), and shall not assign the Lease
or any of its rights under the Lease or permit the Lease to be
amended, modified, or terminated without the prior written
consent of Assignee; and
(ii) Lessee's obligations under the Lease with respect to
Assignee shall be absolute and unconditional and not be
subject to any abatement, reduction, recoupment, defense,
offset or counterclaim for any reason, alleged or proven,
including, but not limited to, defect in the Equipment, the
condition, design, operation or fitness for use of the
Equipment or any loss or destruction or obsolescence of the
Equipment or any part, the prohibition of or other
restrictions against Lessee's use of the Equipment, the
interference with such use by any person or entity, any
failure by Lessor to perform any of its obligations contained
in the Lease, any insolvency or bankruptcy of Lessor, or for
any other cause; and
(iii) Lessee shall, upon request of Lessor, submit documents and
certificates as may be reasonably required by Assignee to
secure and complete such transfer or assignment, including but
not limited to the documents set forth in Section 1 of this
Master Agreement.
(iv) Lessee shall deliver to Assignee copies of any notices
which are required under the Lease to be sent to Lessor; and
(v) Lessee shall, if requested, restate to Assignee the
representations, warranties and covenants contained in the
Lease (upon which Lessee acknowledges Assignee may rely) and
shall make such other representations, warranties and
covenants to Assignee as may be reasonably required to give
effect to the assignment.
(b) Lessor shall not make an assignment or transfer to any Assignee
who shall not agree that, so long as Lessee is not in default
under the Lease, such Assignee shall take no action to interfere
with Lessee's quiet enjoyment and use of the Equipment in
accordance with the terms of the Lease. No such assignment or
conveyance shall relieve Lessor of its obligations under the
Lease and Lessee agrees it shall not look to any Assignee to
perform any of Lessor's obligations under the Lease. No such
assignment shall increase Lessee's obligations nor decrease
Lessee's rights hereunder.
11. QUIET ENJOYMENT
Lessor covenants that so long as Lessee is not in default under a
Lease, Lessor shall take no action to interfere with Lessee's
possession and use of the Equipment subject to and in accordance with
the provisions of the Lease.
12. INDEMNIFICATION
Except for the sole and gross negligence or willful misconduct of
Lessor or Assignee, Lessee shall and does agree to indemnify, protect,
defend, save and keep harmless Lessor and its Assignee(s) from and
against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, or expenses of any kind and
nature whatsoever, including but not limited to attorneys fees,
including without limitation attorneys fees in connection with the
enforcement of this indemnification, which may be imposed upon,
incurred by or asserted against Lessor or its Assignee(s) in any way
relating to or arising out of the Lease, the manufacture, ownership,
lease, possession, use, condition, operation, or accident in
connection with the Equipment (including, without limitation, those
claims based on latent and other defects, whether or not discoverable,
or claims based on strict liability, or any claim for patent,
trademark or copyright infringement). Lessor's rights arising from
this Section shall survive the expiration or other termination of the
Lease. Nothing in this Section shall limit or waive any right of
Lessee to proceed against the manufacturer of the Equipment.
13. RISK OF LOSS
(a) Lessee assumes and shall bear the entire risk of loss and damage,
whether or not insured against, of the Equipment from any and
every cause whatsoever as of the date the Equipment is delivered
to Lessee.
(b) In the event of loss or damage of any kind to any Item, Lessee
shall use all reasonable efforts to place the Item in good
repair, condition and working order to the reasonable
satisfaction of Lessor within sixty (60) days of such loss or
damage, unless the manufacturer of the Equipment determines that
such Item has been irreparably damaged, in which case Lessee
shall, within ten (10) days of the manufacturer's determination
of irreparable loss, make its election to either pay Lessor the
Stipulated Loss Value (as set forth in Attachment A to this
Master Agreement) for the irreparably damaged Item or replace the
irreparably damaged Item, all as provided in this Section. To the
extent that the Item is damaged but not irreparably damaged and
if Lessee is entitled, pursuant to the insurance coverage, to
obtain proceeds from such insurance for the repair of the Item,
Lessee (provided no Event of Default has occurred under the
Lease) may arrange for the disbursement of such proceeds to the
manufacturer or other entity approved by Lessor to perform the
repairs to pay the cost of repair. However, Lessee's obligation
to timely repair the damaged Item is not contingent upon receipt
of such insurance proceeds.
(c) In the event that Lessee elects to pay Lessor the Stipulated Loss
Value for the irreparably damaged Item, Lessee shall (i) pay such
amount (computed as of the first day of the month following the
determination of the irreparable damage by the manufacturer) to
Lessor on the first day of the month following the election by
Lessee as provided in (b) above, (ii) pay all Base Monthly Rental
for the Item up to the date that the Stipulated Loss Value is
paid to Lessor, and (iii) arrange with the applicable insurance
company (with the consent of Lessor) for the disposition of the
irreparably damaged item. If not all the Equipment is irreparably
damaged, the Value for Calculation of Stipulated Loss Value
("Value") as set forth on the Schedule for the irreparably
damaged Item shall be multiplied by the applicable percentage set
forth in Attachment A to compute the Stipulated Loss Value for
such irreparably damaged Item, and the Base Monthly Rental for
the undamaged Equipment remaining due (altar payment of the
Stipulated Loss Value for the irreparably damaged Item) shall be
that amount resulting from multiplying the original Base Monthly
Rental by the ratio of the Value of the undamaged Equipment
divided by the Value for all the Equipment prior to the damage.
(d) If Lessee elects to replace the irreparably damaged Item, Lessee
shall continue all payments under the Lease without interruption,
as if no such damage, loss or destruction had occurred, and shall
replace such irreparably damaged Item, paying all such costs,
associated with the replacement, and Lessee shall be entitled to
insurance proceeds up to the amount expended by Lessee in
effecting the replacement. Lessee shall within twenty (20) days
following the date of determination of irreparable damage by the
manufacturer, effect the replacement by replacing the irreparably
damaged Item with a "Replacement Item" so that Lessor has good,
marketable and unencumbered title to such Replacement Item. The
Replacement Item shall have a fair market value equal to or
greater than the Item replaced, and anticipated to have a fair
market value at the expiration of the Base Term equal to the fair
market value that the replaced Item would have had at the end of
the Base Term, and be the same manufacture, model and type and of
at least equal capacity to the Item for which the replacement is
being made. Upon delivery, such Replacement Item shall become
subject to all of the terms and conditions of the Lease. Lessee
shall execute all instruments or documents necessary to effect
the foregoing.
(e) For purposes of this Lease, the term "fair market value" shall
mean the price of the Equipment delivered and installed at
Lessee's location that would be obtained in an arm's-length
transaction between an informed and willing buyer-lessee under no
compulsion to buy or lease and an informed and willing seller-
lessor under no compulsion to sell or lease. If Lessor and Lessee
are unable to agree upon fair market value, such value shall be
determined, at Lessee's expense, in accordance with the foregoing
definition, by three independent appraisers, one to be appointed
by Lessee, one to be appointed by Lessor and the third to be
appointed by the first two.
14. INSURANCE
During the term of the Lease, Lessee, at its own expense, shall
maintain in regard to the Equipment all risk insurance (in an amount
not less than the Stipulated Loss Value as identified on Attachment A)
and comprehensive public liability insurance in amounts and with
carriers reasonably satisfactory to Lessor. Any such insurance shall
name Lessor and the Assignee(s) as additional insured and, as for the
all risk insurance, loss payees as their interests may appear. All
such insurance shall provide that it may not be terminated, canceled
or altered without at least thirty (30) days' prior written notice to
Lessor and its Assignee(s). Coverage afforded to Lessor shall not be
rescinded, impaired, or invalidated by any act or neglect of Lessee.
Lessee agrees to supply to Lessor, upon request, evidence of such
insurance.
15. REPRESENTATIONS AND WARRANTIES OF LESSEE; FINANCIAL STATEMENTS
(a) Lessee represents and warrants to Lessor and its Assignee(s) (i)
that the execution, delivery and performance of this Master
Agreement and the Lease was duly authorized and that upon execution
of this Master Agreement and the Lease by Lessee and Lessor, the
Master Agreement and the Lease will be in full force and effect and
constitute a valid legal and binding obligation of Lessee, and
enforceable against Lessee in accordance with their respective
terms; (ii) the Equipment is accurately described in the Lease and
all documents of Lessee relating to the Lease; (iii) that Lessee is
in good standing in the jurisdiction of its incorporation and in any
jurisdiction in which any of the Equipment is located; (iv) that no
consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of, any state, federal or
other government authority or agency is required with respect to the
execution, delivery and performance by the Lessee of this Master
Agreement or the Lease or, if any such approval, notice,
registration or action is required, it has been obtained; (v) that
the entering into and performance of this Master Agreement and the
Lease will not violate any judgment, order, law or regulation
applicable to Lessee or any provision of Lessee's Articles of
incorporation or Bylaws or result in any breach of, or constitute a
default under, or result in the creation of any lien, charge,
security interest or other encumbrance upon any assets of Lessee or
upon the Equipment pursuant to any instrument to which Lessee is a
party or by which it or its property may be bound; (vi) there are no
actions, suits or proceedings pending, or to the knowledge of
Lessee, threatened, before any court or administrative agency,
arbitrator or governmental body which will, if determined adversely
to Lessee, materially adversely affect its ability to perform its
obligations under the Lease or any related agreement to which it is
a party; (vii) that aside from the Master Agreement and the Lease
there are no additional agreements between Lessee and Lessor
relating to the Equipment, and (viii) that any and all financial
statements and other information with respect to Lessee supplied to
Lessor at the time of execution of the Lease and any amendment, are
true and complete. The foregoing representations and warranties
shall survive the execution and delivery of the Lease and any
amendments hereto and shall upon the written request of Xxxxxx, be
made to Lessor's Assignee(s).
(b) Prior to and during the term of the Lease, Lessee will furnish
Lessor with Lessee's reviewed financial statements. If Lessee is a
subsidiary of another company, Lessee shall supply such company's
financial statements and guarantees as are reasonably acceptable to
Lessor. Lessor's obligations to perform under any Lease is subject
to the condition that the financial statements furnished to Lessor
by Lessee present the financial condition and results of operations
of Lessee and its affiliated corporations, if any, and any guarantor
of Lessee's obligations under any Lease, as of the date of such
financial statements, and that since the date of such statements
there have been no material adverse changes in the assets or
liabilities, the financial condition or other condition which in
Lessor's or Assignee(s) sole discretion are deemed to be materially
adverse. Lessee shall also provide Lessor with such other statements
concerning the Lease and the condition of the Equipment as Lessor
may from time to time request.
(c) Upon Lessor's request, Lessee shall, with respect to each Lease,
deliver to Lessor (i) a certificate of a secretarial officer of
Lessee certifying the bylaw, resolution (specific or general) or
corporate action authorizing the transactions contemplated in the
Lease; (ii) an incumbency certificate certifying that the person
signing this Master Agreement and the Lease holds the office the
person purports to hold and has authority to sign on behalf of
Lessee; (iii) an opinion of Lessee's counsel with respect to the
representations in Section 15(a); (iv) an agreement with Lessor's
Assignee with regard to any assignment as referred to in Section 10;
(v) the purchase documents if Lessee has sold or assigned its
interest in the Equipment to Lessor, (vi) an insurance certificate
evidencing the insurance provided by Lessee pursuant to Section 14;
and (vii) an Installation Certificate duly executed by Lessee.
Failure by Lessee to deliver any of these documents when due shall
operate, at Lessor's option, to continue the Installation Term for
the Lease thus delaying the Base Term Commencement Date, or to
increase the Base Monthly Rental to recover costs incurred by Lessor
consequent to the delay or the termination of the Lease as provided
in Section 16.
16. DEFAULT, REMEDIES
(a) The following shall be deemed "Events of Default" under the
Lease:
(1.) Lessee fails to pay any installment of rent or other charge
or amount due under the Lease within ten (10) days after
notice that such payment is overdue; or
(2.) Except as expressly permitted in the Lease, Lessee attempts
to remove, sell encumber assign or sublease or fails to
insure any of the Equipment or fails to deliver any
documents required of Lessee under the Lease; or
(3.) Any representation or warranty made by Lessee or Lessee's
guarantor in the Lease or any document supplied in
connection with the Lease or any financial statement is
misleading or materially inaccurate; or
(4.) Lessee fails to observe or perform any of the other
obligations required to be observed by Lessee under the
Lease within thirty (30) days of Lessee's first knowledge
of such failure; or
(5.) Lessee or Lessee's guarantor ceases doing business as a
going concern; makes an assignment for the benefit of
creditors; admits in writing its inability to pay its debts
as they become due; files a voluntariy petition in
bankruptcy; is adjudicated a bankrupt or an insolvent;
files a petition seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or
future statute, law or regulation or files an answer
admitting or fails to deny the material allegations of a
petition filed against it in any such proceeding; consents
to or acquiesces in the appointment of a trustee, receiver,
or liquidator for it or of all or any substantial part of
its assets or properties, or if it or its trustee,
receiver, liquidator or shareholders shall take any action
to affect its dissolution or liquidation; or
(6.) If within thirty (30) days after the commencement of any
proceedings against Lessee or Lessee's guarantor seeking
reorganization, arrangement; composition, readjustment,
liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such
proceedings shall not have been dismissed, or if within
thirty (30) days after the appointment (with or without
Lessee's or Lessee's guarantor's consent) of any trustee,
receiver or liquidator of it or all of or any substantial
part of its respective assets and properties, such
appointment shall not be vacated.
(b) Upon the happening of any Event of Default, Lessor may declare
the Lessee to be in default. Lessee authorizes Lessor at any time
thereafter, with or without terminating the Lease, to enter any
premises where the Equipment may be and take possession of the
Equipment. Lessee shall, upon such declaration of default, without
further demand, immediately pay Lessor an amount which is equal to
(i) any unpaid amount due on or before Lessor declared the Lease to
be in default, plus (ii) as liquidated damages for loss of a bargain
and not as a penalty, an amount equal to the Stipulated Loss Value
for the Equipment computed as of the date the last Base Monthly
Rental payment was due prior to the date Lessor declared the Lease
to be in default, together with interest, as provided herein, plus
(iii) all attorney and court costs incurred by Lessor relating to
the enforcement of its rights under the Lease. After an Event of
Default, at the request of Lessor and to the extent requested by
Lessor, Lessee shall immediately comply with the provisions of
Section 6(d) and Lessor may sell the Equipment at private or public
sale, in bulk or in parcels, with or without notice, without having
the Equipment present at the place of sale; or Lessor may lease,
otherwise dispose of or keep idle all or part of the Equipment;
subject, however, to its obligation to mitigate damages. The
proceeds of sale, lease or other disposition, if any, of the
Equipment shall be applied: (1) to all Lessor's costs, charges and
expenses incurred in taking, removing, holding, repairing and
selling, leasing or otherwise disposing of the Equipment including
attorney fees; then (2) to the extent not previously paid by Lessee,
to pay Lessor the Stipulated Loss Value for the Equipment and all
other sums owed by Lessee under the Lease, including any unpaid rent
which accrued to the date Lessor declared the Lease to be in default
and indemnities then remaining unpaid under the Lease; then (3) to
reimburse to Lessee Stipulated Loss Value previously paid by Lessee
as liquidated damages; and (4) any surplus shall be retained by
Lessor. Lessee shall pay any deficiency in (1) and (2) immediately.
The exercise of any of the foregoing remedies by Lessor shall not
constitute a termination of the Lease unless Lessor so notifies
Lessee in writing. Lessor may also proceed by appropriate court
action, either at law or in equity to enforce performance by Lessee
of the applicable covenants of the Lease or to recover damages for
the breach of the Lease.
(c) The waiver by Lessor of any breach of any obligation of Lessee
shall not be deemed a waiver of any future breach of the same or any
other obligation. The subsequent acceptance of rental payments under
the Lease by Lessor shall not be deemed a waiver of any such prior
existing breach at the time of acceptance of such rental payments.
The rights afforded Lessor under Section 16 shall he cumulative and
concurrent and shall be in addition to every other right or remedy
provided for the Lease or now or later existing in law (including as
appropriate all the rights of a secured party or lessor under the
Uniform Commercial Code) or in equity and Lessor's exercise or
attempted exercise of such rights or remedies shall not preclude the
simultaneous or later exercise of any or all other rights or
remedies.
(d) In the event Lessee shall fail to perform any of its obligations
under the Lease, then Lessor may perform the same, but shall not be
obligated to do so, at the cost and expense of Lessee In any such
event, Lessee shall promptly reimburse Lessor for any such costs and
expenses incurred by Lessor.
17. LESSOR'S TAX BENEFITS
Lessee acknowledges that Lessor shall be entitled to claim all tax
benefits, credits and deductions related to the Equipment for federal
income tax purposes including, without limitation; (i) deductions on
Lessor's cost of the Equipment for each of its tax years during the
term of the Lease under any method of depreciation or other cost
recovery formula permitted by the Internal Revenue Code of 1986, as
amended (hereinafter called the "Code"), and (ii) interest deductions
as permitted by the Code on the aggregate interest paid to any
Assignee (hereinafter collectively "Lessor's Tax Benefits"). Lessee
agrees to take no action inconsistent (including the voluntary
substitution of Equipment) with the foregoing or which would result in
the loss, disallowance, recapture or unavailability to Lessor of
Lessor's Tax Benefits. Lessee hereby indemnifies Lessor and its
Assignee(s) from and against (a) any loss, disallowance,
unavailability or recapture of Lessor's Tax Benefits resulting from
any action or failure to act of Lessee, including replacement of the
Equipment, plus (b) all interest, penalties, costs; (including
attorney fees), or additions to tax resulting from such loss,
disallowance, unavailability or recapture.
18. GENERAL
(a) The Lease shall be deemed to have been made and delivered in the
State of Michigan and shall be governed in all respects by the
laws of such State. THE PARTIES HERETO AGREE THAT IN THE EVENT OF
AN ALLEGED BREACH OF THIS AGREEMENT OR ANY DOCUMENTS RELATING
THERETO BY EITHER PARTY, OR ANY CONTROVERSIES ARISE BETWEEN THE
PARTIES RELATING TO THIS AGREEMENT OR ANY DOCUMENTS RELATING
THERETO, AND SUCH BREACHES OR CONTROVERSIES ARE BROUGHT BEFORE
ANY COURT, SUCH CONTROVERSIES SHALL BE TRIED BY A JUDGE ALONE.
THE PARTIES, HAVING HAD THE OPPORTUNITY TO CONSULT WITH
INDEPENDENT COUNSEL OF THEIR OWN CHOOSING, HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY MANNER
RELATING TO THIS AGREEMENT OR ANY DOCUMENTS RELATED THERETO.
(b) The Master Agreement and the Lease constitute the entire and only
agreement between Lessee and Lessor with respect to the lease of
the Equipment, and the parties have only those rights and have
incurred only those obligations as specifically set forth herein.
The covenants, conditions, terms and provisions may not be waived
or modified orally and shall supersede all previous proposals,
both oral and written, negotiations, representations, commitments
or agreements between the parties. The Lease may not be amended
or discharged except by a subsequent written agreement entered
into by duly authorized representatives of Lessor and Lessee.
(c) All notices, consents or requests desired or required to be given
under the Lease shall be in writing and shall be delivered in
person or sent by certified mail, return receipt requested, or by
courier service to the address of the other party set forth in
the introduction of the Master Agreement or to such other address
as such party shall have designated by proper notice.
(d) Each Schedule shall be executed in three counterparts,
consecutively numbered. To the extent, if any, that a Schedule
constitutes chattel paper (as such term is defined in the Uniform
Commercial Code) no security interest in the Schedule may be
created through the transfer or possession of any counterpart
other than Counterpart No. 1. The Master Agreement, in the form
of a photocopy, is Exhibit A to the Schedule and is not chattel
paper by itself.
(e) Section headings are for convenience only and shall not be
construed as part of the Lease.
(f) It is expressly understood that all of the Equipment shall be and
remain personal property, notwithstanding the manner in which the
same may be attached or affixed to realty, and, upon Lessor's
request, Lessee shall secure from its mortgagee, landlord or
owner of the premises a waiver in form and substance reasonably
satisfactory to Lessor.
(g) Lessor may upon written notice to Lessee advise Lessee that
certain Items supplied to Lessee are leased to Lessor and
supplied to Lessee under the Lease as a sublease. Lessee agrees
to execute and deliver such acknowledgements and assignments in
connection with such a Lease as are reasonably required. If, at
any time during the term of the Lease, Lessor's right to lease
the Equipment expires, Lessor may remove the Equipment from
Lessee's premises and shall promptly provide identical substitute
Equipment. All expenses of such substitution, including de-
installation, installation and transportation expenses, shall be
borne by Lessor.
(h) Prior to the delivery of any Item, the obligations of Lessor
hereunder shall be suspended to the extent that it is hindered or
prevented from complying therewith because of labor disturbances,
including strikes and lockouts; acts of God; fires; storms;
accidents; failure to deliver any Item; governmental regulations
or interferences or any cause whatsoever not within the sole
control of Lessor.
(i) Any provision of the Master Agreement or any Schedule prohibited
by or unlawful or unenforceable under any applicable law of any
jurisdiction shall be ineffective as to such jurisdiction without
invalidating the remaining provisions of the Master Agreement and
such Schedule.
(j) Although this Lease is the standard form used by Lessor to lease
hardware equipment to Lessee, both Lessor and Lessee acknowledge
that, with respect to any software which may be included as
Equipment ("Software"), this Lease is a financing agree whereby
that portion of Lessee's Base Monthly Rental payment obligation
applicable to any Software represents license fees which are
being paid by Lessee in consideration for payment by Lessor to
the software vendor ("Vendor") of the total license fee relating
to any such Software. Neither Lessor nor Lessee have or were
granted any ownership or other proprietary rights in the
Software, and neither party purports to transfer any such rights
to the other hereunder. Lessee has only those rights in the
Software which were granted to Lessee pursuant to the software
license agreement entered into directly between Vendor and Lessee
("License). The terms of this Lease are applicable only as
between Lessor (and any Assignee) and Lessee. The terms of the
License are applicable only as between Lessee and Vendor, and
Lessor does not assume and is not liable for any obligations
under any of the provisions of the License. Lessee's Base Monthly
Rental payment obligation is absolute and unconditional in all
respects regardless of any problem Lessee may have with the
Software, any dispute Lessee may have with the Vendor, any
inability of Lessee to use the Software, or the exercise by
Vendor of any remedies it may have pursuant to the License.
(k) The parties agree that this is a "Finance Lease" as defined by
section 2A-103(g) of the uniform Commercial Code ("UCC"). Lessee
acknowledges either (a) that Lessee has reviewed and approved any
written Supply Contract (as defined by UCC 2 covering the
Equipment purchased from the Supplier (as defined by UCC 2-A-
l03(y)) thereof for lease to Lessee or (b) that Lessor has
informed or advised Lessee, in writing, either previously or by
this Lease of the following: (i) the identity of the Supplier,
(ii) that the Lessee may have rights under the Supply Contract;
and (iii) that the Lessee may contact the Supplier for a
description of any such rights Lessee may have under the Supply
Contract.
(l) The parties acknowledge that serial numbers for one or more Items
may be unavailable prior to execution of the applicable Schedule.
In the event a Schedule fails to indicate a serial number for one
or more Items, Lessee expressly consents to Lessor's unilateral
amendment of the applicable Schedule to insert accurate serial
numbers therein.
The parties have executed this Master Lease Agreement as of the date
written above.
LESSOR: LESSEE:
Varilease Corporation LA West, Inc.
By: _____________________________ By:______________________________
Name: ___________________________ Name: ___________________________
By: _____________________________ Title: ____________________________
If there are no Additional Provisions to this Master Lease Agreement,
check here 0. If there are Additional Provisions describe here:
ATTACHMENT A
to MASTER LEASE AGREEMENT
dated June 23, 2000
between Varilease Corporation ("LESSOR")
and LA West, Inc. ("LESSEE")
To calculate Stipulated Loss Value, multiply the applicable
percentage, below, by the value of the applicable Item(s) set forth on
the Schedule.
RENT RENT RENT
PAYMENT STIP LOSS PAYMENT STIP LOSS PAYMENT STIP LOSS
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
1 11050% 2 85.3 41 60.13%
2 109.24% 22 84.05% 42 58.87%
3 107.98% 23 82.80% 43 57.61%
4 106.62% 24 81.54% 44 56.35%
5 105.46% 25 80.28% 45 55.09%
6 104.20% 26 79.02% 46 53.83%
7 l02.94% 27 77.76% 47 52.57%
8 101.68% 28 76.50% 48 51.31%
9 100.43% 29 75.24% 49 50.05%
10 99.17% 30 73.98% 50 48.79%
11 97.91% 31 72.72% 51 47.53%
12 96.65% 32 71 52 46.28%
13 95.39% 33 70.20% 53 45.02%
14 94.13% 34 68.94% 54 43.76%
15 92.87% 35 67.68% 55 42.50%
16 91.61% 36 66.42% 56 41.24%
17 9035% 37 6537% 57 39.98%
18 89.09% 38 63.91% 58 38.72%
19 87.83% 39 62.65% 59 37.46%
20 86.57% 40 61.39% 60 36.10%
AND THEREAFTER
Lessor: ______ Lessee: ______
