COMERICA LEASING, A DIVISION OF COMERICA BANK
LEASE FINANCING AGREEMENT
LEASE FINANCING AGREEMENT dated as of April 8,1998, by and between
COMERICA LEASING, A DIVISION OF COMERICA BANK, a Michigan Banking
corporation, with its principal office located at 00000 Xxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, and with local offices located at
00 Xxxxxxx Xxxxxxxxx, xxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 (herein
"CLCB") and NETTER DIGITAL ENTERTAINMENT, INC. , a Delaware
corporation of 0000 Xxxxxxxxxx Xxxx., Xxxxx Xxxxxxxxx, XX 00000
(herein called "Lessee").
Upon the terms and conditions contained herein, CLCB agrees to lease
to Lessee, and Lessee agrees to lease from CLCB, and grant to CLCB a
security interest in, the Equipment described in the Lease
Schedule(s) executed from time to time by the parties and thereby
made a part hereof. "Schedule" as used herein includes each of such
Lease Schedules, together with any amendments, attachments and
exhibits thereto, each of which shall be deemed to be a part of this
Capital Lease Financing Agreement and collectively referred to as
the "Agreement" and/or "Lease Agreement". "Equipment" as used
herein shall mean all the Equipment which shall be subject to the
term of this Agreement as identified on the Schedules and/or
Exhibits attached hereto or referenced herein or otherwise
incorporated by reference. Individual pieces of such Equipment
shall be referred to as "Item(s)" or "Item(s) of Equipment".
1. LEASE STATUS AND EFFECTIVE DATE. The terms and provisions of
this Agreement shall be effective as of the date Lessee certifies in
writing that the Equipment has been delivered to and accepted by
Lessee or as of the date CLCB confirms to the seller or supplier of
the Equipment the purchase of or the purchase order for the
Equipment, whichever occurs first, and shall continue for the period
specified in the Schedule pertaining to the Equipment unless sooner
terminated as provided hereunder (herein called the "Term"). The
rental payments shall be payable as set forth in each Schedule. The
parties agree that this Agreement represents a financing arrangement
referred to as a "Lease Financing Agreement" to which the relevant
provisions of Article 9 (Secured Transactions) of the Michigan
Uniform Commercial Code (MCLA Section 440.9101 ET SEO) are
applicable.
2. RENT, TAXES, ETC. The amount and terms of payment of the rental
for the Equipment shall be as provided for in the Schedule
pertaining thereto. Lessee shall also pay and discharge when due,
whether payable by or billed or assessed to CLCB or Lessee, all
license fees, assessments, and sales, use, property, excise and
other taxes now or hereafter imposed by any federal, state or local
government upon or with respect to this Agreement, any of the
Equipment or payments hereunder (excluding only taxes based solely
on CLCB's net income), together with any interest or penalties in
connection therewith. The parties agree that the Lessee shall
include the Items of Equipment in the ad valorem tax returns to be
filed by the Lessee in the applicable states or localities and that
CLCB shall not include the Items of Equipment in any ad valorem tax
returns filed by them in such states or localities. Lessee agrees
to comply with all state and local laws requiring the filing of any
tax returns or any reports relating to the Equipment and promptly
furnish to CLCB evidence of such filings and payment of the taxes.
3. WARRANTY. CLCB warrants that it has received whatever title was
conveyed to CLCB by CLCB's predecessor in title to such Equipment.
CLCB further warrants that during the term of the Lease, if no
default has occurred, Lessee's use of the Equipment shall not be
interrupted by CLCB or anyone claiming solely through or under CLCB
regarding matters not related to this Agreement or the transactions
contemplated thereby.
Lessee acknowledges and agrees that (i) the Equipment is of a size,
design, capacity and manufacture selected by Lessee, (ii) CLCB is
not a manufacturer thereof, nor a manufacturer's agent, nor a dealer
in property of such kind as the Equipment, and (iii) as between CLCB
and Lessee, LESSEE LEASES THE EQUIPMENT AS IS AND THAT CLCB HAS NOT
MADE, NOR DOES IT MAKE, ANY REPRESENTATION OR WARRANTY OR AGREEMENT
WITH RESPECT TO THE FITNESS, MERCHANTABILITY, CONDITION, QUALITY,
DURABILITY OR SUITABILITY OF THE EQUIPMENT IN ANY RESPECT INCLUDING
ITS FITNESS FOR THE PURPOSES AND USES OF LESSEE, OR AS TO CLCB'S
TITLE THERETO OR LESSEE'S RIGHT TO QUIET ENJOYMENT OF THE SAME
(EXCEPT AS SPECIFICALLY SET FORTH HEREIN), OR ANY OTHER
REPRESENTATION OR WARRANTY OR AGREEMENT OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT THERETO, ALL OF
WHICH ARE HEREBY SPECIFICALLY DISCLAIMED. Lessee acknowledges that
Lessee has reviewed and approved the Purchase Order, Supply Contract
or Purchase Agreement covering the Equipment purchased from the
seller or supplier thereof for lease to Lessee.
Lessee's Initials
CLCB agrees to assign, without warranty or representation as to
legality or validity, to Lessee, at Lessee's request and so long as
there has been no default hereunder, all rights which CLCB may have
against the seller of the Equipment by reason of and arising out of
the purchase of such Equipment, including any implied or express
warranties respecting the Equipment.
4. ACCEPTANCE; NET LEASE. Acceptance by Lessee of the Equipment
shall be conclusively presumed upon delivery of the Equipment to
Lessee. If CLCB so requests, Lessee will furnish CLCB with a
Certificate of Equipment Acceptance in CLCB's form. This Agreement
is a "net lease" and Lessee's obligation to pay rental and other
amounts payable hereunder shall be absolute and unconditional and
shall not be subject to any abatement, reduction, setoff, defense,
or counterclaim whatsoever (and lessee hereby waives all of the
foregoing to any extent permitted by law), including, but not
limited to, abatements or reductions due to any present or future
claims of Lessee against CLCB hereunder or otherwise. Nor, except
as otherwise expressly provided herein, shall this Agreement
terminate or the obligations of Lessee hereunder be affected, by
reason of any defect in, damage to, or loss or destruction of any of
the Equipment from any cause whatsoever, including any defect in the
condition, design, operation or fitness for use of the Equipment,
any liens, encumbrances, security interests or rights of others with
respect to any of the Equipment, the taking or requisitioning of the
Equipment by condemnation or otherwise, the
prohibition by government action of Lessee's use of the Equipment,
the interference with such use by any private person or corporation,
the invalidity or unenforceability or lack of due authorization or
other infirmity of this Agreement.
5. DELIVERY AND INSTALLATION. Unless otherwise agreed in writing,
all insurance, transportation, rigging, drayage, installation and
other charges in connection with the delivery and installation of
the Equipment, or with the removal to another location, are to be
paid by Lessee.
6. CARE AND USE OF EQUIPNWNT. Lessee (i) shall, at its expense,
maintain the Equipment in good operating condition, repair, and
appearance, and protect the same from deterioration, ordinary wear
and tear excepted; (ii) shall use the Equipment in the regular
course of its business only within its normal capacity, without
abuse, and in a manner contemplated by the manufacturer and required
by any insurers thereof, and (iii) shall cause the Equipment at all
times to be in compliance with all applicable governmental rules and
regulations and laws. Lessee shall not make modifications,
alterations, or additions to the Equipment without the prior written
consent of CLCB and no such modifications, alterations or additions
shall be made which adversely affect the value or utility of the
Equipment.
7. DAMAGE TO EQUIPMENT. Lessee hereby assumes all risks of loss,
theft, damage, or destruction, partial or complete, of the Equipment
from any and every cause whatsoever commencing with delivery of the
Equipment to Lessee, an agent of Lessee or to a carrier consigned
for shipment to Lessee or an agent of Lessee, whichever is earlier.
Lessee agrees to give prompt written notice to CLCB in the event of
any loss of, or damage to, any Equipment. The total or partial
destruction of any Equipment or the total or partial loss of use or
possession thereof to Lessee shall not release or relieve Lessee
from any obligation of Lessee hereunder which shall remain in full
force and effect. In the event of damages of any kind whatever to
any Equipment, Lessee at its expense (except to the extent of any
proceeds of insurance provided by Lessee which shall have been
received by CLCB as a result of such loss, theft, damage, or
destruction), and at the option of CLCB, shall either (a) place the
same in good repair, condition and working order, or (b) replace the
same with a like item of equipment acceptable to CLCB and in good
repair, condition and working order and of equivalent value which
shall become Equipment hereunder free and clear of all liens, and
Lessee shall execute a new Schedule and other documents deemed
appropriate by CLCB to evidence such replacement, or (c) pay CLCB
the amount shown as the "Principal Balance" in the Amortization
Schedule for the Equipment, attached to the Schedule pertaining to
such Equipment or thereafter furnished to the Lessee by Lessor which
schedule shall be based on the same assumptions used by Lessor in
initially pricing the transaction. Upon replacement or payment as
provided for in clauses (b) and (c) hereof this Agreement shall
terminate with respect to such Items of Equipment so paid for or
replaced and CLCB shall release its security interest therein.
8. INDENMITY. Lessee shall promptly defend, indemnify, and hold
CLCB harmless from and against (a) any and all loss of or damage to
the,Equipment, usual wear and tear excepted; (b) any claim, cause of
action, liability (including, but not limited to, negligence, tort
and strict liability), damages, cost or expenses (including
reasonable attorneys' fees) which may arise or be incurred in any
manner in favor of any person relating to the Equipment or any part
thereof, including, by way of example but not of limitation, claims
arising out of or incident to the construction, design, purchase,
delivery, installation, ownership, sale, leasing or return of the
Equipment or as a result of its use, maintenance, repair, operation
or condition thereof, whether or not any claimed defects in such
Equipment are latent or are discoverable; (c) any claim, cause of
action, cost or expense which may arise or be incurred by reason of
or as a result of any act or omission of Lessee for itself or as
agent for CLCB hereunder, and (d) any claim, cause of action, cost
or expense arising from alleged patent infringement. The
obligations of Lessee herein contained shall survive the expiration
of this Agreement as to any loss, damages, claims, causes of action,
liabilities, costs or expenses based on or arising out of events or
conditions occurring or existing during the Term
.
9. ISURANCE. Lessee will carry insurance with such insurers and in
such amounts as shall be satisfactory to CLCB, which shall include
but not be limited to all insurance required by law, on the
Equipment covering all risks of loss in an amount not less than the
full replacement cost thereof and comprehensive public liability and
property damage insurance in respect of the operation and use of the
Equipment IN AN AMOUNT ADEQUATE TO PROTECT CLCB. Each such
insurance policy shall provide as follows: (a) with respect to the
risk of loss, insurance on the Equipment, that (i) coverage is in
effect at the premises where the Equipment is located and while in
transit to and from such location, (ii) CLCB, as a secured party,
shall be insured as its interest may appear, (iii) all losses will
be adjusted directly with CLCB, (iv) all amounts payable thereunder
will be payable to CLCB, (v) the interest of CLCB will at all times
be insured regardless of any breach of violation by Lessee of any
warranties, declarations or conditions contained in such policy,
(vi) the policy may be canceled only after 30 days written notice to
CLCB; (b) as to the insurance for public liability and property
damage incurred by others, that (i) CLCB, as a secured party, is an
additional insured thereunder, (ii) all provisions of such policy,
except the limits of liability, will operate in the same manner as
if there were a separate policy covering each insured, and (iii) the
policy may be canceled only after 30 days written notice to CLCB.
The proceeds of the physical damage insurance on the Equipment shall
be applied pursuant to Section 7 hereof. Lessee shall pay the
premiums for all insurance and deliver evidence of such payment,
together with the policies, or duplicates thereof, to CLCB. In case
of failure of Lessee to procure or maintain insurance as herein
specified, CLCB may, at its option, obtain such insurance, in which
event the cost thereof shall be payable to CLCB forthwith as
additional rent hereunder.
10. GRANT OF SECURITY INTEREST. Lessee hereby assigns, pledges and
grants to CLCB a continuing security interest in the Equipment, the
Agreement and all interests and matters of any nature whatsoever
arising therefrom to secure all payment due under this Agreement and
any indebtedness of Lessee to CLCB from time to time outstanding as
evidenced by the Agreement and under such other leases or notes or
other evidence of indebtedness made by Lessee and delivered to CLCB
from time to time, and any and all other advances, commitments to
loan or lease, accruals, extensions and renewals of credit owing by
Lessee to CLCB whether present or future as the case may be and to
secure Lessee's prompt, full and faithful performance and observance
of all the provisions to be kept, observed or performed by Lessee
under the Agreement and under any other leases, notes, agreements
executed by Lessee and delivered to CLCB. The security interest
granted hereby shall also cover the cash and non-cash proceeds of
the Equipment, including the proceeds of any hazard or casualty
insurance relating thereto. The creation of an interest in proceeds
is not construed to give Lessee any right to dispose of any of the
Equipment.
11. PERFECTION OF SECURITY INTEREST. In order to perfect and
maintain CLCB's security interest in the Equipment, the Agreement
and all interests of any nature whatsoever arising therefrom and as
further assurance to CLCB, Lessee shall execute and deliver to CLCB,
concurrently with Lessee's execution of the Agreement, and promptly
at any time or times thereafter at the request of CLCB, all
financing statements, continuation financing statements, assignments
of lease, certificates of title, applications of vehicle or other
titles, affidavits, reports, financial statements and all other
documents and information which CLCB may request, in a form
satisfactory to CLCB; and Lessee shall promptly pay all costs
associated therewith, including, but not limited to, filing and
recording fees.
12. TITLE. The Lessee, as between CLCB and the Lessee, shall and
hereby does retain full legal title to the Equipment. Lessee
acknowledges that the Equipment is and will be at all times remain
personal property regardless of how installed or attached to the
premises.
13. COVENANTS AND REPRESENTATIONS. Lessee shall keep the Equipment
free and clear of all levies, liens, charges and encumbrances except
for the security interest of CLCB as provided for herein. During
the Term, Lessee shall not, without CLCB's prior written consent,
remove the Equipment from the location set forth in the Schedule
pertaining thereto, part with possession or control of the
Equipment, or sublease, sell, assign, pledge, mortgage or otherwise
encumber the Equipment or any part thereof. CLCB shall be entitled
to inspect the Equipment and all records of Lessee pertaining
thereto upon request and during normal business hours. Lessee shall
not consolidate with or merge into any other business entity or
convey, transfer or lease substantially all of its assets as an
entirety to any third party without the prior written consent of
CLCB being first obtained. Lessee shall not without the prior
written consent of Lessor: (i) consolidate with or merge into any
other business entity; (ii) convey, transfer or lease substantially
all of its assets as an entirety to any third party; or (iii) become
a party to a leveraged buy-out. In the event that Lessee is a party
to a leveraged buy-out, merger, consolidation, sale or lease of
substantially all of its assets, or any other significant corporate
changes, unless Lessor's prior written consent is given, such event
shall constitute a Casualty Loss; and in such event, Lessee shall
pay Lessor the amount shown in the "Principal Balance" in the
Amortization Schedule plus any other amounts owing by Lessee in
accordance with the terms of the Lease for the Equipment if attached
to the Schedule pertaining to such Equipment or thereafter furnished
by Lessor to Lessee based on the same assumptions used in initially
pricing the transaction. Upon the receipt of such amount by Lessor,
this Agreement shall terminate and Lessee shall take title to the
Equipment AS IS,
WHERE IS, WITHOUT WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
MATTER WHATSOEVER. Any consent ofLessor shall be in its sole
discretion.
Lessee warrants and represents that (i) there currently are no
pending or threatened actions or proceedings before any court,
administrative agency or other tribunal or body or judgments which
may materially adversely affect Lessee's financial condition or
business operations ("Adverse Actions") and that during the Term,
Lessee shall promptly advise CLCB, in writing, of the commencement
or threatened commencement of any such Adverse Actions; (ii) Lessee
has the full power and authority to enter into this Agreement, and
has taken all requisite actions to authorize this transaction, the
acceptance of delivery of the Equipment and the performance of the
obligations of Lessee hereunder; and (iii) the signatories hereto
are duly authorized to sign on behalf of Lessee, and upon execution,
the Agreement shall be the valid, legal and binding obligation of
Lessee enforceable pursuant to its terms and will not constitute a
breach of any other agreement to which Lessee is a party.
14. LABELS. Lessee shall affix any labels furnished by CLCB
denoting CLCB's interest and keep the same upon a prominent place
and clearly readable on each item of Equipment. Lessee may place a
number on any Equipment for its identification purposes, but shall
not otherwise xxxx the Equipment.
15. ACTS OF GOD, ETC. CLCB shall not be liable or in default for
any delay or failure of performance hereunder resulting, directly or
indirectly, from acts of God, civil or military authority, acts of
public enemy, war, accidents, fires, explosions, earthquakes,
floods, the elements, strikes, labor disputes, shortages of parts,
materials, labor on transportation or any cause beyond CLCB's
control.
16. SECURITY DEPOSIT. CLCB may at its option require a deposit of
advance rentals ("Security Deposit") and Lessee hereby agrees to pay
any Security Deposit provided for in any Schedule upon request of
CLCB. Any Security Deposit may be applied at the option of CLCB,
toward the payment of any obligation of Lessee to CLCB under this
Agreement or toward the payment of any other debt, obligation or
liability of Lessee to CLCB and any unapplied balance thereof may be
applied by CLCB to the rental installments hereunder or inverse
order of maturity. The Security Deposit may be commingled with
CLCB's general funds and Lessee shall not be entitled to any
interest thereon.
17. DEFAULT. Each of the following events shall constitute an
"Event of Default" hereunder: (a) Lessee fails to make payment of
any rent or other sum due to CLCB as and when required hereunder and
such failure shall continue for a period of ten (10) days; (b)
Lessee fails to procure or maintain insurance on the Equipment as
required herein; (c) Lessee fails in the performance or observance
of any of the other covenants, conditions or agreements to be
performed or observed by it under this Agreement and such failure
shall continue uncured for seven (7) days after written notice
thereof to Lessee by CLCB; (d) Lessee defaults in any obligation to
Comerica Bank or any of its subsidiaries; (e) Lessee defaults in the
payment of any obligation of Lessee for money borrowed from a third
party; (f) Lessee ceases doing business, becomes insolvent, conimits
an act of bankruptcy or becomes the subject of any proceeding under
the Federal Bankruptcy Code; (g) any representation or warranty made
by Lessee under this Agreement or any supplement, amendment, or
addition thereto, or in any document or certificate furnished CLCB
in connection herewith or pursuant hereto shall prove to be
incorrect at any time in any material respect; (h) judgments
aggregating more than One Thousand and 00/100 ($1,000.00) Dollars
shall be entered against Lessee; (i) CLCB in good faith considers
that the prospect of payment or performance of the Lessee's
obligations under this Agreement has been impaired; and (j) Lessee
creates, incurs, assumes, or suffers to exist any mortgage, lien,
pledge, or other encumbrance or attachment of any kind whatsoever
upon, affecting or with respect to the Equipment or this Agreement
or any of CLCB's interests thereunder.
18. REMEDIES. Upon the happening of an Event of Default, CLCB may
at its option undertake one or more of the following actions: (1)
proceed by appropriate court action or actions to enforce
performance by Lessee of the applicable covenants and provisions of
this Agreement or to recover damages for the breach thereof; (2)
terminate this Agreement as to any or all Items of Equipment,
without prejudice to CLCB's rights in respect to obligations then
accrued and remaining unsatisfied as well as the remedies and claims
referred to herein; (3) declare all unpaid rent immediately due and
payable; (4) directly, or by its agents, enter upon the premises of
Lessee or other premises where the Equipment may be located and
without liability for suit, action or other proceeding by Lessee,
take possession of all such Equipment and thereupon Lessee's right
to possession thereof shall absolutely cease and terminate and this
Agreement shall terminate as to all such Equipment. LESSEE HEREBY
EXPRESSLY WAIVES TO THE EXTENT PERMITTED BY LAW (a) NOTICE AND THE
RIGHT TO AHEARING PRIOR TO SUCH RETAKING OF POSSESSION, AND (b) ANY
DIRECT OR CONSEQUENTIAL DAMAGESOCCASIONED BY SUCH TAKING OF
POSSESSION; (5) elect to sell or release any or all Items of
Equipment and recover from the Lessee as liquidated damages for the
Lessee's default hereunder the "Principal Balance" in the
Amortization Schedule, on the date the sale or re-lease is
consummated. The amount received by CLCB upon sale of such Items of
Equipment shall be deducted from said liquidated damage amount, and
upon re-lease of such Items of Equipment, the aggregate rentals to
be received by CLCB over the term(s) of such re-lease, discounted by
5% per annum, shall be deducted from said liquidated damage amount;
(6) upon demand made to the Lessee, receive prompt payment from
Lessee of an amount equal to the "Principal Balance" in the
Amortization Schedule for the Equipment rental payment date next
preceding the date such demand is made, plus all rent and any other
amounts owing by Lessee hereunder to and including the date such
notice is given; provided upon receipt of payment in full of such
amount, CLCB shall tender to the Lessee a xxxx of sale for the Items
of Equipment then subject to this Agreement without any warranties
or representations regarding or relating to the Items for which the
xxxx of sale is tendered; (7) avail itself of any other remedy or
remedies provided for by any statute or otherwise available at law,
in equity or in bankruptcy or insolvency proceedings. In addition
to any and all remedies and damages set forth herein, Lessee shall
also pay to CLCB all costs and expenses incurred by CLCB as a result
of Lessee's default, including without limitation, all reasonable
attorneys' fees and all costs and expenses incurred in searching
for, taking, removing, keeping, storing, repairing, restoring,
selling or re-leasing any Items of Equipment, and impositions
relating thereto, as well as any reasonable attorneys' fees and
costs incurred subsequent to an Event of Default relating to this
Agreement, including, but not limited to, all collection efforts,
negotiations, documentation preparation and examination of CLCB's
rights and remedies. CA-03/95
In the event of any termination of this Agreement under this Section
18, it is understood that CLCB shall be entitled to retain all sums
duly received by it and shall be entitled to recover all rentals
accrued and unpaid for the period up to and including the date of
such termination, as well as all other additional sums which
pursuant to the Agreement are payable by Lessee or for which Lessee
is liable or in respect of which Lessee agreed to indemnify CLCB,
which may then be owing and unpaid.
19. LESSEE'S WAIVERS. To the extent permitted by applicable law,
Lessee hereby waives any and all rights including but not limited to
Lessee's rights to: (i) cancel this Agreement; (ii) repudiate this
Agreement; (iii) reject the Equipment; (iv) revoke acceptance of the
Equipment; (v) recover damages from CLCB for any breaches of
warranty or for any other reason; (vi) a security interest in the
Equipment in Lessee's possession or control for any reason; (vii)
deduct all or any part of any claimed damages resulting from CLCB's
default, if any, under this Agreement; (viii) accept partial
delivery of the Equipment; (ix) "cover" by making any purchase or
lease or of contract to purchase or lease Equipment in substitution
for those due from CLCB; (x) recover any general, special,
incidental or consequential damages, for any reason whatsoever; (xi)
specific performance, replevin, detinue, sequestration, claim and
delivery or the like for any Equipment identified to this Agreement.
To the extent permitted by applicable law, Lessee also hereby waives
any rights now or hereafter conferred by statute or otherwise which
may require CLCB to sell, lease or otherwise use any Equipment in
mitigation of CLCB's damages as set forth in Paragraph 18 of this
Agreement or which may otherwise limit or modify any of CLCB's
rights or remedies under Paragraph 18.
20. WAIVER OF JURY TRIAL. Lessee hereby knowingly, voluntarily and
intelligently waives its constitutional right to a trial by jury
with respect to any claim, dispute, conflict, or contention, if any,
as may arise under this Lease Agreement or under any documents
executed in connection herewith and agrees that any litigation
between the parties concerning this Lease Agreement and the related
documents shall be heard by a court of competent jurisdiction
sitting without a jury. Lessee hereby confirms to Lessor that it
has reviewed the effect of this waiver of jury trial with competent
legal counsel of its choice, or has been afforded the opportunity to
do so, prior to signing this Lease Agreement and the related
documents and acknowledges and agrees that Lessor is relying upon
its waiver in entering into this Lease Agreement.
21. ASSIGNMENT. LESSEE SHALL HAVE NO RIGHT TO ASSIGN THIS AGREEMENT
OR ANY INTEREST HEREIN WITHOUT THE PRIOR WRITTEN CONSENT OF CLCB
HAVING FIRST BEEN OBTAINED. CLCB may at any time assign for
security or otherwise to any person or entity all or part of its
right, title and interest in, under and to this Agreement, all or
part of the rents and other sums at any time due or to become due or
at any time owing or payable by Lessee hereunder, and in and to the
Equipment covered hereby and the Security Deposit or any part
thereof. After written notice of such assignment given by CLCB or
such assignee to Lessee, all sums payable by Lessee shall be paid by
Lessee to such assignee. No such assignee shall be obligated to
perform any duty, covenant or condition required to be observed or
performed by CLCB. Lessee agrees to acknowledge such assignment in
writing within fifteen (15) days after receiving written notice
thereof from the assignee or CLCB. In the event of any such
assignment, Lessee agrees that Lessee will not assert against any
such assignee any claims by way of abatement, defense, setoff,
counterclaim, recoupment or otherwise which Lessee may have by
reason of any default of CLCB hereunder or under any other
agreement, and no covenant, warranty or representation of CLCB as to
the Equipment or any other matter shall in any way affect Lessee's
duty to pay the rent and perform its other obligations exactly as
set forth in this lease.
22. FURTHER ASSURANCES. Lessee hereby makes, constitutes and
appoints CLCB its true and lawful attorney-in-fact with full power
of substitution to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing statements,
endorsing of instruments, and the execution and delivery of all
documents and agreements necessary to obtain or accomplish any
protection for or collection or disposition of any part of the
Equipment. Such appointment shall be deemed irrevocable and coupled
with an interest. Lessee also agrees to furnish CLCB: (1) an audit
report containing a balance sheet, income statement, and statement
of sources and uses of funds prepared by independent certified
public accountants, or other accountants acceptable by CLCB within
one hundred twenty (120) days after the close of each fiscal year of
Lessee occurring after the date of Lease; (2) balance sheets as of
the end of each quarterly period of Lessee's fiscal years, income
statement and statement of sources and uses of funds certified as
accurate by an officer of Lessee within forty-five (45) days after
the close of each quarterly period, unless more frequent reports are
requested by CLCB in its sole discretion; and (3) prompt written
notice of any material adverse change in Lessee's financial
condition or business operations, whether pending or threatened.
The Lessee agree(s) that COMERICA LEASING, A DIVISION OF COMERICA
BANK may provide information relating to Lessee regarding the
Agreement to COMERICA LEASING, A DIVISION OF COMERICA BANK's parent,
affiliates, subsidiaries and service providers and to Federal or
State regulators as may be required by law.
23. LATE RENTAL PAYMENTS. In the event that Lessee should fail to
pay any part of the lease payments or any other sum required to be
paid hereunder within ten (10) days after the due date thereof,
Lessee shall pay to CLCB, in addition to the amount due, a sum equal
to 5 % of the total monthly payment for each month or part thereof
for which said lease payments or other sums shall be delinquent, but
in no event shall such charge exceed the highest lawful amount
chargeable.
24. MISCELLANEOUS. All obligations of Lessee hereunder shall
continue until full performance thereof has been rendered. Any
cancellation or termination by CLCB pursuant to the provisions
hereof shall not release Lessee from any obligations to CLCB. If
there is more than one Lessee named herein, the liability of each
shall be joint and several. THIS AGREEMENT AND ALL SCHEDULES
CONSTITUTE THIS ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH
RESPECT TO THE EQUIPMENT. THIS LEASE MAY NOT BE AMENDED EXCEPT BY A
WRITING SIGNED BY CLCB AND LESSEE AND SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE PARTIES HERETO, THEIR PERMITTED
SUCCESSORS AND ASSIGNS.
Lessee's Initials
A failure by CLCB to require strict performance by Lessee of any
terms, covenants or agreements herein shall not be construed as a
consent or waiver of any other breach of the same or of any other
term, covenant or agreement herein. All notices and other
communications made or required to be given pursuant to this
Agreement shall be in writing and shall be mailed, certified, return
receipt requested, postage prepaid, to the party's address as set
forth herein or such other address as such party shall have
designated in writing. If any provision of this Agreement is
prohibited by, or is unlawful or unenforceable under any applicable
law of any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
without invalidating the remaining provisions hereof, provided,
however, that any such prohibition in any jurisdiction shall not
invalidate such provision in any other jurisdiction; and provided,
further, that where the provisions of any such applicable law may be
waived, they are waived by Lessee to the full extent permitted by
law so that the remaining provisions of this Agreement shall be
deemed to be a valid and binding agreement in accordance with its
terms.
LESSEE ACKNOWLEDGES THAT LESSOR IS COMERICA BANK DOING BUSINESS
UNDER THE ASSUMED NAME COMERICA LEASING, AND THAT COMERICA LEASING
OPERATES AS A DIVISION OF COMERICA BANK AND DOES NOT HAVE AN
INDEPENDENT CORPORATE STANDING.
25. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF MICHIGAN. LESSEE AGREES TO
SUBMIT TO THE JURISDICTION OF THE STATE AND/OR FEDERAL COURTS IN THE
STATE OF MICHIGAN. THE VENUE FOR ANY PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE DEEMED PROPER IF SUCH PROCEEDING
IS BROUGHT IN A FEDERAL OR STATE COURT IN MICHIGAN SELECTED SOLELY
BY CLCB. SERVICE OF PROCESS MAY BE MADE BY MAILING A SUMMONS AND
COMPLAINT BY FIRST CLASS MAIL, POSTAGE PREPAID TO THE LAST KNOWN
ADDRESS OF THE LESSEE, TOGETHER WITH THEIR PROMPT SERVICE BY MAIL
UPON THE SECRETARY OF STATE FOR THE STATE OF MICHIGAN.
Lessee's Initials
26. OTHER CONDITIONS.
COMERICA LEASING, A DIVISION OF COMERICABANK
(Lessor)
By:
Xxxx X. Xxxxxx
Its: Vice President
Dated: April 8, 1998
WITNESSES: NETTER DIGITAL ENTERTAINMENT, INC.
(Lessee)
By:
Xxxx Xxxxxxx
Its: Chief Financial Officer
Dated: April 8, 1998
CA-01/97
Dated April 8, 1998 Lease Agreement No.9818
Schedule No. 001
COMERICA LEASING, A DIVISION OF COMERICA BANK
LEASE SCBEDULE
1. DESCRIPTION OF LEASE: Lease Agreement dated April 8. 1998, by and
between COMERICA LEASING, A DIVISION OF COMERICA BANK (herein "CLCB")
as Lessor, and NETTER DIGITAL ENTERTAINMENT, INC. as Lessee (herein
called "Lease Agreement").
2. DESCRIPTION OF EQUIPMENT:
"As further described on attached Exhibit A".
3. LOCATION: The equipment described above shall be located at 0000
Xxxxxxxxxx Xxxx., Xxxxx Xxxxxxxxx, XX 00000
4. TERM; RENTAL: The Term of the Lease Agreement for the Equipment
described in this Schedule shall be in accordance with the provisions
of the Lease Agreement and shall continue until all rental payments
are fully paid. Lessee agrees to pay CLCB as rental payments
aggregating $233,585.28 plus any applicable sales and/or use taxes
thereon payable in 36 monthly payments of $6,488.48 each, plus any
applicable sales and/or use taxes commencing May 15, 1998, and on the
same calendar day of each succeeding like period until fully paid.
THE RENTAL PAYMENTS SHALL BE REMITTED TO CLCB AT X.X. XXXXXX 00-000,
XXXXXXX, XXXXXXXX 00000, unless CLCB specifies otherwise in writing.
5. INSURANCE: Lessee agrees to maintain adequate property damage
insurance in accordance with the terms of the Lease Agreement, but in
any event not less than the sum of the payments due, protecting CLCB
as a loss payee. The minimum amount indicated above shall not be
construed to imply such amount will be or is adequate, but rather as
a minimum amount.
6. UCC 2A: In accordance with Section 2A of the Michigan Uniform
Commercial Code (MCLA Section 440.3101 et seq.) ("UCC") Lessee
acknowledges either (a) that Lessee has reviewed and approved any
written Supply Contract (as defined by UCC Section 2A-103(i)(y))
covering the Equipment purchased from the "Supplier" (as defmed by
UCC Section 2A103(i)(x)) thereof for lease to Lessee or (b) that
Lessor has informed or advised Lessee, in writing, either previously
or by this Lease Schedule 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.
Lessee acknowledges that Lessee has reviewed and approved the
Purchase Order, Supply Contract or Purchase Agreement covering the
Equipment purchased from the seller or supplier thereof for lease to
Lessee.
Lessee's Initials:
7. ADDITIONAL CONDITIONS: At the end of the Lease term, Lessee may
purchase the equipment for $1.00 provided no event of default shall
have occurred and been left unremedied.
LESSEE ACKNOWLEDGES THAT LESSOR IS A DIVISION OF COMERICA BANK AND
NOT A SEPARATE BODY CORPORATE.
The foregoing is hereby approved and agreed to by the undersigned as
a Schedule to and a part of the Lease Agreement, the provisions of
which are hereby incorporated herein by reference and which shall
govern, notwithstanding anything contrary or inconsistent herein.
COMERICA LEASING, NETTER DIGITAL ENTERTAINMENT, INC.
A DIVISION OF COMERICA BANK
(Lessor) (Lessee)
Address: 0000 Xxxxxxxxxx, Xxxx
Xxxxx Xxxxxxxxx, XX 00000
By: By:
Xxxx X.Xxxxxx Xxxx Xxxxxxx
Its: /Vice President Its: Chief Financial
Officer
06AP-1-97
