EQUIPMENT LEASE AGREEMENT
EQUIPMENT LEASE AGREEMENT dated March 22, 1999, by and between
BESICORP GROUP, INC., a New York corporation, having its principal office and
place of business at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx ("Lessor"), and
BESICORP SERVICES, INC., a New York corporation, having its principal office and
place of business at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx ("Lessee").
W I T N E S S E T H :
IN CONSIDERATION of the mutual agreements set forth hereinafter and the
payment of rent as provided for herein, the parties agree as follows:
1. Property Leased. Subject to the terms and conditions of this
Agreement, Lessor hereby agrees to lease to Lessee and Lessee hereby agrees to
lease from Lessor the items of personal property (individually a "Unit" and
collectively the "Equipment") described in the Schedule annexed hereto (the
"Schedule"). Lessee shall have no right, title or interest in the Equipment,
except as expressly set forth in this Lease.
2. Term, Rent and Termination. The term of this Lease shall be for a
period of two (2) years, commencing on the date hereof and continuing through
March 21, 2001.
3. Rent. The total rent hereunder (the "Basic Rent") shall be in the
amount of $507,503 and shall be payable in equal installments of $63,473.88
payable on July 1, 1999, October 1, 1999, January 1, 2000, April 1, 2000, July
1, 2000, October 1, 2000, January 1, 2001 and March 1, 2001.
4. Acceptance, Warranties, Limitation of Liability. Lessee represents
and agrees that, as of the date hereof, each Leased Unit is of a size, design,
capacity and manufacturer selected by Lessee and that Lessee has as between
Lessee and Lessor unconditionally accepted such Item.
LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR
ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY BY
THE EQUIPMENT, BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY
INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING IN STRICT LIABILITY,
NEGLIGENCE OR OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING OUT OF THIS
AGREEMENT. LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING
THOSE OF MERCHANTABILITY, DURABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE EQUIPMENT AND EXPRESSLY DISCLAIMS
THE SAME. Notwithstanding the foregoing, Lessee will be entitled to the benefit
of any applicable manufacturer's warranties, and, to the extent assignable, such
warranties are hereby assigned by Lessor for the benefit of Lessee, and Lessee
shall take all reasonable action to enforce such warranties where available to
Lessee.
5. Obligation to Pay Rent Unconditional. This Lease is a net lease and
Lessee agrees that its obligation to pay all Basic Rent and other sums payable
hereunder (collectively, "Rent"), and the rights of Lessor in and to such Rent,
are absolute and unconditional and are not subject to any abatement, reduction,
setoff, defense, counterclaim or recoupment due or alleged to be due to, or by
reason of, any past, present or future claims which Lessee may have against
Lessor, the manufacturer or seller of the Equipment, or against any person for
any reason whatsoever.
6. Installation, De-installation, Maintenance and Repair. Lessee shall,
at its expense, be responsible for the delivery, installation, de-installation,
redelivery, maintenance and repair of the Equipment by a party reasonably
acceptable to Lessor. Lessee agrees, at all times during the term, at its sole
expense, to keep the Equipment in good repair, condition and working order, and
to furnish all parts, mechanisms or devices which may be required in the course
of so doing. Lessee will at all times during the term maintain in force a
maintenance agreement covering the Equipment with the manufacturer thereof or
such other party as may be reasonably acceptable to Lessor. Lessor shall have
the right, but not the obligation, to inspect the Equipment during reasonable
business hours. Lessee shall permit manufacturer access to the Equipment to
install "no charge" engineering changes in order to keep the Equipment at
current engineering levels.
7. Representations and Warranties. Lessee represents and warrants for
the benefit of Lessor that:
(a) Lessee is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and
authorized to do business in any jurisdiction where the Equipment will
be located and has adequate power to enter into and perform this Lease.
(b) The Lease has been duly authorized, executed and delivered
by Lessee and constitutes the valid, legal and binding agreement of
Lessee, enforceable in accordance with its terms.
(c) The entering into and performance of this Lease will not
violate any judgment, order, law or regulation applicable to Lessee or
any provision of Lessee's Articles of Incorporation or By-laws or
result in the creation of any lien, charge, security interest or other
encumbrance upon any assets of Lessee or on the Equipment pursuant to
any instrument to which Lessee is a party or by which it or its assets
may be bound.
(d) There are no actions, suits or proceedings pending, or to
the knowledge of Lessee threatened, before any court, administrative
agency, arbitrator or governmental
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body which will, if determined adversely to Lessee, materially
adversely affect its ability to perform its obligations under this
Lease or any related agreement to which it is a party.
8. Risk of Loss.
(a) Lessee agrees to bear the risk of loss with respect to any
damage, destruction, loss, theft, or governmental taking of any Unit, whether
partial or complete and whether or not through any fault or neglect of Lessee.
Except as provided in this Section 8, no such event shall relieve Lessee of its
obligation to pay Rent hereunder.
(b) If any Unit is damaged, Lessee shall, at its expense,
cause such repairs to be made as are necessary to return such Unit to its
previous condition, or if insurance is available, shall utilize such insurance
proceeds received to repair such damage.
(c) In the event of a governmental taking of a Unit for an
indefinite period or for a stated period which does not extend beyond the term,
all obligations of the Lessee with respect to such Item (including payment of
Rent) will continue. So long as Lessee is not in default hereunder, Lessor will
pay to Lessee all sums received by Lessor by reason of such governmental taking
up to the amount paid by Lessee during such period.
9. Insurance. Lessee, at its expense, shall insure the Equipment
against all risks and in such amounts as Lessor reasonably requires with
carriers acceptable to Lessor. All such insurance policies must name Lessor and
Lessee as insureds, and must provide that they may not be canceled or altered
without at least 30 days prior written notice to Lessor. Upon Lessor's written
consent, Lessee may act as a self-insurer in amounts acceptable to Lessor.
10. Indemnity. Except for the gross negligence or willful misconduct of
Lessor, Lessee agrees to indemnify Lessor against, and hold Lessor harmless from
any and all claims, actions, suits, proceedings, costs, expenses, damages and
liabilities at law or in equity, including attorneys' fees, arising out of,
connected with or resulting from this Lease or the Equipment, including, without
limitation, the manufacturer, selection, purchase, delivery, possession,
condition, use, operation or return thereof. Lessee's obligations hereunder will
survive the expiration of this Lease with respect to acts or events occurring or
alleged to have occurred prior to the return of the Equipment to Lessor at the
end of the Lease term. Lessee shall, at its own expense, carry bodily injury and
property damage liability insurance during the term of the Lease in amounts and
against risks customarily insured against by the Lessee on equipment owned by
it. Any amounts received by Lessor with respect to such insurance shall be
credited against the Lessee's obligations under this Section 10.
11. Liens and Taxes. Lessee will, at its expense, keep the Equipment
free and clear of all levies, liens and encumbrances. Lessee shall not assign or
otherwise encumber this Lease or any of its rights hereunder without the prior
written consent of Lessor. Lessee will declare and pay when due all license
fees, registration fees, assessments, charges and taxes, whether municipal,
state or federal, including, but not limited to, sales, use, excise and property
taxes, and penalties and interest
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with respect thereto, excluding, however, any taxes based on or measured solely
by Lessor's net income. Lessee shall provide evidence of any payment hereunder
upon request of Lessor.
12. Lessee's Failure to Perform. Should Lessee fall to make any payment
or do any act required herein, Lessor has the right, but not the obligation and
without releasing Lessee from any obligation hereunder, to make or do the same,
and to pay, purchase, contest or compromise any encumbrance, charge or lien
which in the judgment of Lessor appears to affect the Equipment, and in
exercising any such rights, incur any liability and expend whatever amounts in
its absolute discretion it may deem necessary therefor. All sums so incurred or
expended by Lessor shall be due and payable by Lessee within 30 days after
demand, shall be considered Rent hereunder and will bear interest at the rate of
8% per anum.
13. Equipment is Personal Property; Location of Equipment. Lessee
covenants and agrees that the Equipment is, and will at all times be and remain,
personal property. Lessee may move a Unit from the address set forth above to
another of Lessee's locations upon 20 day's notice to Lessor; provided, however,
that in no event will any Unit be moved to a location outside the United States
of America or to any jurisdiction within the United States of America which has
not adopted the Uniform Commercial Code.
14. Designation of Ownership. If at any time during the term hereof
Lessee is supplied with labels, plates or other markings stating that the
Equipment is owned by Lessor, Lessee agrees to affix and keep the same
prominently displayed on the Equipment. Lessee agrees to execute Uniform
Commercial Code financing statements and any and all other instruments necessary
to perfect Lessor's interest in this Lease, the payments due hereunder or the
Equipment.
15. Use. Lessee shall use the Equipment in a careful and proper manner
in conformance with manufacturer's specifications and shall comply with and
conform to all federal, state, municipal and other laws, ordinances and
regulations in any way relating to the possession, use or maintenance of the
Equipment.
16. Surrender of Equipment. Upon the expiration or earlier termination
of this Lease with respect to any Unit, Lessee shall return the same to Lessor
in good repair, condition and working order, ordinary wear and tear resulting
from proper use thereof alone excepted. All cost of de- installation, packaging,
insurance and transportation of the equipment will be borne by Lessee.
17. Default. The occurrence of any of the following events shall
constitute an Event of Default and shall, at the option of Lessor, terminate
this Lease and Lessee's right to possession of the Equipment:
(a) The non-payment by Lessee of any item of Rent within 10
days after written notice that such Rent is overdue.
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(b) The failure by Lessee to perform or observe any other
term, covenant or condition of this Lease which is not cured within 30
days after written notice thereof from Lessor.
(c) Any affirmative act of insolvency by Lessee, or the filing
by Lessee of any petition or action under any bankruptcy,
reorganization, insolvency, arrangement, liquidation, dissolution or
moratorium law, or any other law or laws for the relief of, or relating
to debtors.
(d) The filing of any involuntary petition against Lessee
under any bankruptcy, reorganization, insolvency, arrangement,
liquidation, dissolution or moratorium law or any other law for the
relief of or relating to debtors which is not dismissed within 60 days
thereafter, or the appointment of any receiver, liquidator or trustee
to take possession of any substantial portion of the properties of
Lessee, unless the appointment is set aside or ceases to be in effect
within 60 days from the date of said filing or appointment.
(e) The subsection of a substantial part of Lessee's property
or any Unit to any levy, seizure, assignment or sale for or by any
creditor or governmental agency.
(f) Any representation or warranty made by Lessee in this
Lease or in any document furnished by Lessee to Lessor in connection
with this Lease or with respect to the acquisition or use of the
Equipment shall be untrue in any material respect.
18. Remedies. Upon the happening of any of the above events:
(a) Lessor may proceed, by appropriate court action or actions
either at law or in equity, to enforce performance by Lessee of the
applicable covenants of this Agreement or to recover damages for the
breach thereof.
(c) Lessor may, upon notice and demand upon Lessee:
(i) Take possession of the Equipment and lease the
same or any portion thereof, for such period, amount, and to
such entity as Lessor shall reasonably elect. The proceeds
of such lease will be applied by Lessor (A) first, to pay
all actual and reasonable costs and expenses, including
reasonable legal fees and disbursements, incurred by Lessor
as a result of the default and the exercise of its remedies
with respect thereto, and (B) second, to pay Lessor an
amount equal to any delinquent Rent due. Any surplus
remaining thereafter will be retained by Lessor. To the
extent Lessor has not received the amounts specified in
Section 17(a), and the proceeds of such Lease are
insufficient to pay such amounts, Lessee will forthwith pay
such amounts to Lessor plus interest at the rate of 8% per
annum.
(ii) Take possession of the Equipment and upon
reasonable terms sell the same or any portion thereof at
public or private sale and without demand or notice
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of intention to sell. The proceeds of such sale will be
applied by Lessor (A) first, to pay all actual and
reasonable costs and expenses, including reasonable legal
fees and disbursements, incurred by Lessor as a result of
the default and the exercise of its remedies with respect
thereto, and (B) second, pay to Lessor an amount equal to
any delinquent Rent due and payable. To the extent Lessor
has not received the amounts specified in Section 17(a), and
the proceeds of such sale are insufficient to pay such
amounts, Lessee will forthwith pay such amounts to Lessor
plus interest at the rate of 8% per annum.
The exercise of any of the foregoing remedies by Lessor will not
constitute a termination of this Lease unless Lessor so notifies
Lessee, but in no event shall Lessee be required to make any
further rent payments. No remedy referred to in this Section 18 is
intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity.
19. Special Terms. Any special terms set forth in one or more
Exhibits, Schedules or Riders to this Lease as they apply to the applicable
Equipment Schedule(s) will be applicable as though fully set forth herein.
20. Lessee's Right to Purchase. Lessee shall have the right to
purchase all of the Equipment effective as of March 31, 2000 (the "Purchase
Date") for a purchase price of $288,479 together with the lease payment that
would have been due on April 1, 2000. Lessee may exercise its right to purchase
by notice to Lessor given not less than 15 days prior to the Purchase Date. In
the event Lessee shall exercise its right to purchase, Lessor shall deliver to
Lessee on or prior to the Purchase Date a quit-claim xxxx of sale with respect
to all of the Equipment against delivery by Lessee to Lessor of a certified or
official bank check representing the aggregate purchase price. Following such
purchase, this Lease shall be deemed to be terminated and of no further force or
effect.
21. Lessor's Right to Sell. If Lessee shall not have exercised its
right to purchase the Equipment as set forth in Paragraph 20, Lessor shall have
the right to sell the Equipment to Lessee as of March 21, 2001 (the "Sale Date")
for a purchase price of $55,000. Lessor may exercise its right to sell by notice
to Lessee given not less than 15 days prior to the Sale Date. In the event
Lessor shall exercise its right to sell, Lessor shall deliver to Lessee a
quit-claim xxxx of sale with respect to all of the Equipment against delivery by
Lessee to Lessor of a certified or official bank check representing the
aggregate purchase price.
22. Miscellaneous.
(a) Effect of Waiver. No delay or omission to exercise any
right or remedy accruing to Lessor upon any breach or default of Lessee will
impair any such right or remedy or be construed to be a waiver of any such
breach or default, nor will a waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval on the part of Lessor of any breach or
default under this Lease
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or of any provision or condition hereof must be in writing and will be effective
only to the extent in such writing specifically set forth.
(b) Notices. Any notice required or permitted to be given by
the provisions hereof must be in writing and will be conclusively deemed to have
been received by a party hereto on the day it is delivered to such party at the
address indicated below (or at such other address as such party specifies to the
other party in writing) or, if sent by registered mail, on the fifth business
day after the day on which mailed, addressed to such party at such address:
IF TO LESSOR: As set forth above
IF TO LESSEE: As set forth above
(c) Attorney's Fees and Costs. In the event of any action at
law or suit in equity in relation to this Lease, the prevailing party will be
entitled to a reasonable sum for its attorney's fees and costs.
(d) Applicable Law. This Lease and Equipment Schedule(s)
will be governed by, and construed in accordance with, the laws of the State of
New York.
(e) Entire Agreement. Lessor and Lessee acknowledge that
there are no agreements or understandings, written or oral, between Lessor and
Lessee with respect to the Equipment, other than as set forth herein and that
this Lease contains the entire agreement between Lessor and Lessee with respect
thereto. This Lease may not be altered, modified, terminated or discharged
except by a writing signed by the party against whom such alteration,
modification or discharge is sought.
(f) Severability. Any provision of this Lease prohibited by
or unlawful or unenforceable under any applicable law or any jurisdiction shall,
at the sole option of the Lessor, be ineffective as to such jurisdiction without
invalidating the remaining provisions of this Lease.
(g) Quiet Enjoyment. Provided that no Event of Default has
occurred or is continuing hereunder, Lessor shall not interfere with Lessee's
right of quiet enjoyment and use of the Equipment.
(h) Substitution. Prior to delivery, Lessor and Lessee may,
by mutual agreement, provide Equipment with different serial numbers and
locations than those shown on the Schedule.
(i) Alterations. Lessee shall be permitted, with Lessor's
consent and at its own expense, to make alterations or improvements to the
Equipment which are readily removable without causing material damage to the
Equipment and do not adversely affect any manufacturer's warranties with respect
to such equipment.
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(j) Headings. Section headings are for convenience only and
shall not be construed as part of this Lease.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be
duly executed all as of the date first above written.
LESSOR: LESSEE:
BESICORP GROUP, INC. BESICORP SERVICES, INC.
By: _________________________ By: ________________________
Name: _______________________ Name:_______________________
Title: ______________________ Title: _____________________
Date: ______________________ Date: _____________________
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