LASALLE NATIONAL LEASING CORPORATION
Exhibit 10.51
LASALLE NATIONAL LEASING CORPORATION
THIS
MASTER LEASE AGREEMENT (this “Lease”) is made as of
February 10, 2006, between
LASALLE NATIONAL LEASING CORPORATION (“Lessor”) and ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES,
INC. (“Lessee”).
Lessee desires to lease from Lessor the equipment and other property (the “Equipment”)
described in each Equipment Schedule executed pursuant to this Lease (each, a “Schedule”)
incorporating by reference the terms and conditions of this Lease (the term “Lease” shall also
include any Riders to this Lease entered into with respect to such Schedule). Certain definitions
and construction of certain of the terms used in this Lease are provided in Section 19 hereof.
For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Lease agree as follows:
1. AGREEMENT TO LEASE; TERM. This Lease is effective as of the date specified above. By entering
into a Schedule, Lessor leases the Equipment described therein to Lessee, and Lessee leases such
Equipment from Lessor, in each case, subject to the terms and conditions in this Lease and such
Schedule and all of the other documents and agreements executed in connection herewith
(collectively, the “Lease Documents”). Each Schedule, incorporating the terms and conditions of
this Lease, will constitute a separate instrument of lease. The term of lease with respect to each
item of Equipment leased under a Schedule shall commence on the date of execution of such Schedule
and continue for the term provided in that Schedule.
2. RENT. Lessee shall pay Lessor (a) the rental installments (“Basic Rent”) as and when specified
in each Schedule, without demand, and (b) all of the other amounts payable in accordance with this
Lease, such Schedule and/or any of the other Lease Documents (“Other Payments”, and together with
the Basic Rent, collectively, the “Rent”). Upon Lessee’s execution thereof, the related Schedule
shall constitute a non-cancelable net lease, and Lessee’s obligation to pay Rent, and otherwise to
perform its obligations under or with respect to such Schedule and all of the other Lease
Documents, are and shall be absolute and unconditional and shall not be affected by any
circumstances whatsoever, including any right of setoff, counterclaim, recoupment, deduction,
defense or other right which Lessee may have against Lessor, the manufacturer or vendor of the
Equipment (the “Suppliers”), or anyone else, for any reason whatsoever (each, an “Abatement”).
Lessee agrees that all Rent shall be paid in accordance with Lessor’s or Assignee’s written
direction. Time is of the essence. If any Rent is not paid within five (5) days of the due date,
Lessor may collect, and Lessee agrees to pay, interest (accruing at the “Late Charge Rate”
specified in the related Schedule) with respect to the amount in arrears for the period such amount
remains unpaid (the “Late Charge”).
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE. Lessee represents, warrants and agrees
that, as of the effective date of this Lease and of each Schedule: (a) Lessee has the form of
business organization indicated, and is and will remain duly organized and existing in good
standing under the laws of the state specified, under Lessee’s signature and is duly qualified to
do business wherever necessary to perform its obligations under the Lease Documents, including each
jurisdiction in which the Equipment is or will be located. Lessee’s legal name is as shown in the
preamble of this Lease; and Lessee’s Federal Employer Identification Number and organizational
number are as set forth under Lessee’s signature. Within the previous six (6) years, Lessee has
not changed its name, done business under any other name, or merged or been the surviving entity of
any merger, except as disclosed to Lessor in writing. (b) The Lease Documents (1) have been duly
authorized by all necessary action consistent with Lessee’s form of organization, (2) do not
require the approval of, or giving notice to, any governmental authority, (3) do not contravene or
constitute a default under any applicable law, Lessee’s organizational documents, or any agreement,
indenture, or other instrument to which Lessee is a party or by which it may be bound, and (4)
constitute legal, valid and binding obligations of Lessee enforceable against Lessee, in accordance
with the terms thereof. (c) There are no pending actions or proceedings to which Lessee is a
party, and there are no other pending or threatened actions or proceedings of which Lessee has
knowledge, before any court, arbitrator or administrative agency, which, either individually or in
the aggregate, would have a Material Adverse Effect. As used herein, “Material Adverse Effect”
shall mean (i) a materially adverse effect on the business, condition
(financial or otherwise), operations, performance or properties of Lessee, or (ii) a material
impairment of the ability of Lessee to perform its obligations under or remain in compliance with
such Schedule or any of the other Lease Documents. Further, Lessee is not in default under any
financial or other material agreement that, either individually, or in the aggregate, would have
the same such effect. (d) All of the Equipment covered by such Schedule is located solely in the
jurisdiction(s) specified in such Schedule. (e) Under the applicable laws of each such
jurisdiction, such Equipment consists (and shall continue to consist) solely of personal property
and not fixtures. Such Equipment is removable from and is not essential to the premises at which
it is located. (f) The financial statements of Lessee (copies of which have been furnished to
Lessor) have been prepared in accordance with generally accepted accounting principles consistently
applied (“GAAP”), and fairly present Lessee’s financial condition and the results of its operations
as of the date of and for the period covered by such statements, and since the date of such
statements there has been no material adverse change in such conditions or operations. (g) With
respect to any Collateral, Lessee has good title to, rights in, and/or power to transfer all of the
same. (h) The Supplier is not an affiliate of Lessee. (i) The Supply Contract (as such term is
hereinafter defined) represents an arms’ length transaction and the purchase price for the
Equipment specified therein is the amount obtainable in an arms’ length transaction between a
willing and informed buyer and a willing and informed seller under no compulsion to sell.
4. FURTHER ASSURANCES AND OTHER COVENANTS. Lessee agrees as follows: (a) Lessee will furnish
Lessor with (1) Lessee’s balance sheet, statement of income and statement of retained earnings,
prepared in accordance with GAAP, certified by a recognized firm of certified public accountants,
within one hundred twenty (120) days of the close of each fiscal year of Lessee, (2) Lessee’s
quarterly financial report certified by the chief financial officer of Lessee, within sixty (60)
days of the close of each fiscal quarter of Lessee, and (3) all of Lessee’s Forms 10-K and 10-Q, if
any, filed with the Securities and Exchange Commission (“SEC”) as and when filed (by furnishing
these SEC forms, or making them publicly available in electronic form, Lessee shall be deemed to
have satisfied the requirements of clauses (1), (2) and (3)). (b) Lessee shall obtain and deliver
to Lessor and/or promptly execute or otherwise authenticate any documents, filings, waivers
(including any landlord and mortgagee waivers), releases and other records, and will take such
further action as Lessor may reasonably request in furtherance of Lessor’s rights under any of the
Lease Documents. Lessee irrevocably authorizes Lessor to file UCC
financing statements (“UCCs”),
and other filings with respect to the Equipment or any Collateral. Without Lessor’s prior written
consent, Lessee agrees not to file any corrective or termination statements or partial releases
with respect to any UCCs filed by Lessor pursuant to this Lease. (c) Lessee shall provide written
notice to Lessor: (1) thirty (30) days prior to any change in Lessee’s name or jurisdiction or form
of organization; (2) promptly upon the occurrence of any Event of Default (as defined in Section
15) or event which, with the lapse of time or the giving of notice, or both, would become an Event
of Default (a “Default”); and (3) promptly upon Lessee becoming aware of any alleged violation of
applicable law relating to the Equipment or this Lease. (d) Lessee is and will remain in full
compliance with all applicable laws including, without limitation, (i) ensuring that no person who
owns a controlling interest in or otherwise controls Lessee is or shall be (A) listed on the
Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets
Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC
pursuant to any authorizing statute, Executive Order or regulation, or (B) a person designated
under Sections 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders, and (ii) compliance with all applicable
Bank Secrecy Act (“BSA”) laws, regulations and government guidance on BSA compliance and on the
prevention and detection of money laundering violations, and the Client Acceptance and Anti-Money
Laundering Policy of Lessor and/or its affiliates.
5. CONDITIONS PRECEDENT. Lessor’s agreement to purchase and lease any Equipment under a Schedule,
is conditioned upon Lessor’s determination that all of the following have been satisfied: (a)
Lessor having received the following, in form and substance reasonably satisfactory to Lessor: (1)
evidence as to due compliance with the insurance provisions of Section 11; (2) if requested, lien
searches in the jurisdiction of Lessee’s organization, and wherever else Lessor deems appropriate;
(3) UCCs, real property waivers and all other filings required by Lessor; (4) a certificate of an
appropriate officer of Lessee certifying: (A) resolutions duly authorizing the transactions
contemplated in the applicable Lease Documents, and (B) the incumbency and signature of the
officers of Lessee authorized to execute such documents; (5) if requested by Lessor, an opinion of
counsel for Lessee as to each of the matters set forth in sub-parts (a) through (c) of Section 3;
(6) the only manually executed original of the Schedule, and counterpart originals of all other
Lease Documents; (7) all purchase documents pertaining to the Equipment (collectively, the “Supply
Contract”); (8) if requested by Lessor, good standing certificates from the jurisdiction of
Lessee’s organization and the location of the Equipment, and evidence of Lessee’s organizational
number; and (9) such other documents, agreements, instruments, certificates, opinions, and
assurances, as Lessor reasonably may require. (b) All representations and warranties provided by
Lessee in favor of Lessor in any of the Lease Documents shall be true and correct on the effective
date of the related Schedule (Lessee’s execution and delivery of the Schedule shall constitute
Lessee’s acknowledgment of the same). (c) There shall be no Default or Event of Default under the
Schedule or any other Lease Documents. The Equipment shall have been delivered to and accepted by
Lessee, as evidenced by the Schedule, and shall be in the condition and repair
required hereby; and on the effective date of such Schedule Lessor shall have received good title
to the Equipment described therein, free and clear of any claims, liens, attachments, rights of
others and legal processes (“Liens”).
6. ACCEPTANCE UNDER LEASE. Upon delivery, Lessee shall inspect and, if conforming to the condition
required by the applicable Supply Contract, accept the Equipment and execute and deliver to Lessor
a Schedule describing such Equipment. The Schedule will evidence Lessee’s unconditional and
irrevocable acceptance under the Schedule of the Equipment described therein. However, if Lessee
fails to accept delivery of any item of the Equipment, or accepts such Equipment but fails to
satisfy any or all of the other conditions set forth in Section 5, Lessor shall have no obligation
to purchase or lease such Equipment. In such event, Lessor’s rights shall include, among other
things, the right to demand that Lessee (a) fully assume all obligations as purchaser of the
Equipment, with the effect of causing Lessor to be released from any liability relating thereto,
(b) immediately remit to Lessor an amount sufficient to reimburse it for all advance payments,
costs, taxes or other charges paid or incurred with respect to the Equipment (including any of such
amounts paid by Lessor to Supplier under the Supply Contract or as a reimbursement to Lessee),
together with interest at the Late Charge Rate accruing from the date or dates such amounts were
paid by Lessor until indefeasibly repaid by Lessee in full, and (c) take all other actions
necessary to accomplish such assumption.
7. USE AND MAINTENANCE. (a) Lessee shall (1) use the Equipment solely in the continental United
States and in the conduct of its business, for the purpose for which the Equipment was designed, in
a careful and proper manner, and shall not permanently discontinue use of the Equipment; (2)
operate, maintain, service and repair the Equipment, and maintain all records and other materials
relating thereto, (A) in accordance and consistent with (i) the Supplier’s recommendations and all
maintenance and operating manuals or service agreements, whenever furnished or entered into,
including any subsequent amendments or replacements thereof, issued by the Supplier or service
provider, (ii) the requirements of all applicable insurance policies, (iii) the Supply Contract, so
as to preserve all of Lessee’s and Lessor’s rights thereunder, including all rights to any
warranties, indemnities or other rights or remedies, (iv) all applicable laws, and (v) the prudent
practice of other similar companies in the same business as Lessee, but in any event, to no lesser
standard than that employed by Lessee for comparable equipment owned or leased by it; and (B)
without limiting the foregoing, so as to cause the Equipment to be in good repair and operating
condition and in at least the same condition as when delivered to Lessee hereunder, except for
ordinary wear and tear resulting despite Lessee’s full compliance with the terms hereof; (3)
provide written notice to Lessor not less than thirty (30) days after any change of the location of
any Equipment (or the location of the principal garage of any Equipment, to the extent that such
Equipment is mobile equipment) as specified in the Schedule; and (4) not attach or incorporate the
Equipment to or in any other property in such a manner that the Equipment may be deemed to have
become an accession to or a part of such other property. (b) Within a reasonable time, Lessee will
replace any parts of the Equipment which become worn out, lost, destroyed, damaged beyond repair or
otherwise unfit for use, by new or reconditioned replacement parts which are free and clear of all
Liens and have a value, utility and remaining useful life at least equal to the parts replaced
(assuming that they were in the condition required by this Lease). Any modification or addition to
the Equipment that is required by this Lease shall be made by Lessee. Title to all such parts,
modifications and additions to the Equipment immediately shall vest in Lessor, without any further
action by Lessor or any other person, and they shall be deemed incorporated in the Equipment for
all purposes of the related Schedule. Unless replaced in accordance with this Section, Lessee
shall not remove any parts originally or from time to time attached to the Equipment, if such parts
are essential to the operation of the Equipment, are required by any other provision of this Lease
or cannot be detached from the Equipment without materially interfering with the operation of the
Equipment or adversely affecting the value, utility and remaining useful life which the Equipment
would have had without the addition of such parts. Except as permitted in this Section, Lessee
shall not make any material alterations to the Equipment. (c) Upon forty-eight (48) hours’ notice,
Lessee shall afford Lessor and/or its designated representatives access to the premises where the
Equipment is located for the purpose of inspecting such Equipment and all applicable maintenance or
other records relating thereto at any reasonable time during normal business hours; provided,
however, if a Default or Event of Default shall have occurred and then be continuing, no notice of
any inspection by Lessor shall be required. If any discrepancies are found as they pertain to the
general condition of the Equipment, Lessor will communicate these discrepancies to Lessee in
writing. Lessee shall then have thirty (30) days to rectify these discrepancies at its sole
expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed representative, if
corrective measures were required.
8. DISCLAIMER; QUIET ENJOYMENT. (a) THE EQUIPMENT IS LEASED HEREUNDER “AS IS, WHERE IS”. LESSOR
SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING ANY PART, OR ANY MATTER WHATSOEVER, INCLUDING,
AS TO EACH ITEM OF EQUIPMENT, ITS DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR LATENT DEFECT
(WHETHER OR NOT DISCOVERABLE BY LESSEE), COMPLIANCE OF SUCH ITEM WITH ANY APPLICABLE LAW,
CONFORMITY OF SUCH ITEM TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT OR TO THE
DESCRIPTION SET FORTH IN THE RELATED SCHEDULE OR ANY OF
THE OTHER LEASE DOCUMENTS, OR ANY INTERFERENCE OR INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 8(b)), OR ARISING FROM ANY COURSE OF DEALING OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE,
FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY
IN TORT; AND LESSEE HEREBY WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE FOREGOING. Without limiting
the foregoing, Lessor will not be responsible to Lessee or any other person with respect to, and
Lessee agrees to bear sole responsibility for, any risk or other matter that is the subject of
Lessor’s disclaimer; and Lessor’s agreement to enter into this Lease and any Schedule is in
reliance upon the freedom from and complete negation of liability or responsibility for the matters
so waived or disclaimed herein or covered by the indemnity in this Lease. So long as no Event of
Default has occurred, Lessee may exercise Lessor’s rights, if any, under any warranty with respect
to the Equipment. Lessee’s exercise of such rights shall be at its sole risk, shall not result in
any prejudice to Lessor, and may be exercised only during the term of the related Schedule. Lessee
shall not attempt to enforce any such warranty by legal proceeding without Lessor’s prior written
approval. (b) Lessor warrants that during the term of each Schedule, so long as no Event of
Default has occurred, Lessee’s possession and use of the Equipment leased thereunder shall not be
interfered with by Lessor or anyone rightfully claiming an interest through Lessor. The preceding
warranty is in lieu of all other warranties by Lessor, whether written, oral or implied, with
respect to this Lease or the Equipment. Any actual or purported breach of this warranty shall not
give rise to any Abatement, but Lessee may bring a direct cause of action against Lessor for any
actual damages directly resulting from any such breach.
9. FEES AND TAXES. Lessee agrees to: (a) (1) if permitted by law, file in Lessee’s own name or on
Lessor’s behalf, directly with all appropriate taxing authorities all declarations, returns,
inventories and other documentation with respect to any personal property taxes (or any other taxes
in the nature of or imposed in lieu of property taxes) due or to become due with respect to the
Equipment, and if not so permitted by law, to promptly notify Lessor and provide it with all
information required in order for Lessor to timely file all such declarations, returns,
inventories, or other documentation, and (2) pay on or before the date when due all such taxes
assessed, billed or otherwise payable with respect to the Equipment directly to the appropriate
taxing authorities; (b) (1) pay when due as requested by Lessor, and (2) defend and indemnify
Lessor on a net after-tax basis against liability for all license and/or registration fees,
assessments, and sales, use, property, excise, privilege, value added and other taxes or other
charges or fees now or hereafter imposed by any governmental body or agency upon the Equipment or
with respect to the manufacture, shipment, purchase, ownership, delivery, installation, leasing,
operation, possession, use, return, or other disposition thereof or the Rent hereunder (other than
taxes on or measured solely by the net income of Lessor); and (c) indemnify Lessor against any
penalties, charges, interest or costs imposed with respect to any items referred to in clauses (a)
and (b) above (the items referred to in clauses (a), (b), and (c) above being referred to herein as
“Impositions”). Any Impositions which are not paid when due and which are paid by Lessor shall, at
Lessor’s option, become immediately due from Lessee to Lessor.
10. TITLE; GRANTING CLAUSE. (a) Lessee and Lessor intend that: (1) each Schedule, incorporating by
reference the terms of this Lease, constitutes a true “lease” and a “finance lease” as such terms
are defined in Article 2A and not a sale or retention of a security interest; and (2) Lessor is and
shall remain the owner of each item of Equipment (unless sold by Lessor pursuant to any Lease
Document), and Lessee shall not acquire any right, title or interest in or to such Equipment except
the right to use it in accordance with the terms of the related Schedule. (b) In order to secure
the prompt payment of the Rent and all of the other amounts from time to time outstanding with
respect hereto and to each Schedule, and the performance and observance by Lessee of all of the
provisions hereof and thereof and of all of the other Lease Documents, Lessee hereby collaterally
assigns, grants, and conveys to Lessor, a security interest in and lien on all of Lessee’s right,
title and interest in and to all of the following (whether now existing or hereafter created, and
including any other collateral described on any rider hereto; the “Collateral”): (1) (if contrary
to the parties’ intentions a court determines that such Schedule is not a true “lease” under the
UCC) the Equipment described in such Schedule or otherwise covered thereby (including all
inventory, fixtures or other property comprising the Equipment), together with all related software
(embedded therein or otherwise) and general intangibles, all additions, attachments, accessories
and accessions thereto whether or not furnished by the Supplier; (2) all subleases, chattel paper,
accounts, security deposits, and general intangibles relating thereto, and any and all
substitutions, replacements or exchanges for any such item of Equipment or other collateral, in
each such case in which Lessee shall from time to time acquire an interest; and (3) any and all
insurance and/or other proceeds of the property and other collateral in and against which a
security interest is granted hereunder. The collateral assignment, security interest and lien
granted herein shall survive the termination, cancellation or expiration of each Schedule until
such time as Lessee’s obligations thereunder and under the other Lease Documents are fully and
indefeasibly discharged. (c) If contrary to the parties’ intentions a court determines that any
Schedule is not a true “lease”, the parties agree that in such event Lessee agrees that: (1) with
respect to the Equipment, in addition to all of the other rights and remedies available to Lessor
hereunder upon the occurrence of a Default, Lessor shall have all of the rights and remedies of a
first priority secured party under the UCC; and (2) any obligation to pay Basic Rent or any Other
Payment, to the extent constituting the payment of interest, shall be at an interest rate that is
equal to the lesser of the maximum lawful rate permitted by applicable law or the effective
interest rate used by Lessor in calculating such amounts.
11. INSURANCE. Upon acceptance under a Schedule, until the Equipment is returned to Lessor in
accordance with this Lease, Lessee shall maintain all-risk insurance coverage with respect to the
Equipment insuring against, among other things: (a) any casualty to the Equipment (or any portion
thereof), including loss or damage due to fire and the risks normally included in extended
coverage, malicious mischief and vandalism, for not less than the full replacement value of the
Equipment; and (b) any commercial liability arising in connection with the Equipment, including
both bodily injury and property damage with a combined single limit per occurrence of not less than
the amount specified in the Schedule; having a deductible reasonably satisfactory to Lessor. The
required insurance policies (including endorsements) shall (i) be in form and amount reasonably
satisfactory to Lessor, and written by insurers of recognized reputation and responsibility
satisfactory to Lessor (but such insurer shall carry a current rating by A.M. Best Company of at
least “A” for a general policyholder and a financial rating of at least “VIII”), (ii) be endorsed
to name Lessor as an additional insured (but without responsibility for premiums), (iii) provide
that any amount payable under the required casualty coverage shall be paid directly to Lessor as
sole loss payee, and (iv) provide for thirty (30) days’ written notice by such insurer of
cancellation, material change, or non-renewal. Lessee agrees that it shall obtain and maintain
such other coverages (including pollution coverage), or cause adjustments to be made to the scope,
amount or other aspects of the existing coverages, promptly upon Lessor’s request, as and when
Lessor deems such additional coverages or modifications to be appropriate in light of any changes
in applicable law, prudent industry practices, Lessee’s anticipated use of the Equipment or other
pertinent circumstances.
12. LOSS AND DAMAGE. (a) At all times until the Equipment is returned to Lessor in accordance
with this Lease, Lessee shall bear the risk of loss, theft, confiscation, taking, unavailability,
damage or partial destruction of the Equipment and shall not be released from its obligations under
any Schedule or other Lease Document in any such event. (b) Lessee shall provide prompt written
notice to Lessor of any Total Loss or any material damage to the Equipment. Any such notice must
be provided together with any damage reports provided to any governmental authority, the insurer or
Supplier, and any documents pertaining to the repair of such damage, including copies of work
orders, and all invoices for related charges. (c) Without limiting any other provision hereof,
Lessee shall repair all damage to any item of Equipment from any and all causes, other than a Total
Loss, so as to cause it to be in the condition and repair required by this Lease. (d) A “Total
Loss” shall be deemed to have occurred to an item of Equipment upon: (1) the actual or constructive
total loss of any item of the Equipment, (2) the loss, disappearance, theft or destruction of any
item of the Equipment, or damage to any item of the Equipment that is uneconomical to repair or
renders it unfit for normal use, or (3) the condemnation, confiscation, requisition, seizure,
forfeiture or other taking of title to or use of any item of the Equipment or the imposition of any
Lien thereon by any governmental authority. On the next rent payment date following a Total Loss
(a “Loss Payment Date”), Lessee shall pay to Lessor the Basic Rent due on that date plus the
Stipulated Loss Value of the item or items of the Equipment with respect to which the Total Loss
has occurred (the “Lost Equipment”), together with any Other Payments due hereunder with respect to
the Lost Equipment. Upon making such payment, (i) Lessee’s obligation to pay future Basic Rent
shall terminate solely with respect to the items of Lost Equipment so paid for, but Lessee shall
remain liable for, and pay as and when due, all Other Payments, and (ii) Lessor shall convey to
Lessee all of Lessor’s right, title and interest in the Lost Equipment, “AS IS WHERE IS”, but
subject to the requirements of any third party insurance carrier in order to settle an insurance
claim. As used in this Lease, “Stipulated Loss Value” shall mean the product of the Total Invoice
Cost of the Lost Equipment, times the percentage factor applicable to the Loss Payment Date, as set
forth in the Schedule of Stipulated Loss Values incorporated in such Schedule. After the final
rent payment date of the original term or any renewal term of a Schedule, the Stipulated Loss Value
shall be determined as of the last rent payment date during the applicable term of such Schedule,
and the applicable percentage factor shall be the last percentage factor set forth in the Schedule
of Stipulated Loss Values incorporated in such Schedule. (e) Lessor shall be under no duty to
Lessee to pursue any claim against any person in connection with a Total Loss or other loss or
damage. (f) If Lessor receives a payment under an insurance policy required under this Lease in
connection with any Total Loss or other loss of or damage to an item of Equipment, and such payment
is both unconditional and indefeasible, then provided Lessee shall have complied with the
applicable provisions of this Section, Lessor shall either (1) if received pursuant to a Total
Loss, remit such proceeds to Lessee up to an amount equal to the amount paid by Lessee to Lessor as
the Stipulated Loss Value, or credit such proceeds against any amounts owed by Lessee pursuant to
Section 12(d), or (2) if received with respect to repairs made pursuant to Section 12(c), remit
such proceeds to Lessee up to an amount equal to the amount of the costs of repair actually
incurred by Lessee, as established to Lessor’s satisfaction.
13. REDELIVERY. (a) Lessee shall provide written notice to Lessor not less than one hundred
eighty (180) days and not more than two hundred forty (240) days prior to the expiration of the
term of any Schedule (or of any renewal thereof, if applicable) of Lessee’s intent to return the
Equipment described on such Schedule to Lessor upon the expiration of the term of such Schedule.
IF LESSEE FAILS TO PROVIDE THE FOREGOING NOTICE IN A TIMELY MANNER, THE TERM OF THE APPLICABLE
SCHEDULE AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL
ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE ON WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING
WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO PAY TO LESSOR PER DIEM RENT AT THE LAST PREVAILING
LEASE RATE UNDER THE APPLICABLE
SCHEDULE; provided, however that Lessor may elect to terminate such extension at any time upon ten
(10) days written notice to Lessee. During such extension period, the terms and conditions of this
Lease (including, without limitation, the provisions of this Section 13) shall continue to be
applicable. Solely for purposes of the definition of Stipulated Loss Value in Section 12(d)
hereof, any such extension shall be deemed a renewal of the term of such Schedule. (b) Upon the
expiration or earlier cancellation or termination of any Schedule, Lessee shall return the
Equipment described on such Schedule to Lessor free and clear of all Liens whatsoever, to such
place(s) within the continental United States as Lessor shall specify. Lessee shall provide, at
its expense, transit insurance for the redelivery period in an amount equal to the replacement
value of such Equipment and Lessor shall be named as the loss payee on all such policies of
insurance. Lessee shall cause: (1) the Supplier’s representative or other qualified person
acceptable to Lessor (the “Designated Person”) to de-install such Equipment in accordance with the
Supplier’s specifications (as applicable) and pack such Equipment properly and in accordance with
the Supplier’s recommendations (as applicable); and (2) such Equipment to be transported in a
manner consistent with the Supplier’s recommendations and practices (as applicable). Upon return,
such Equipment shall be: (i) in the same condition as when delivered to Lessee under the related
Schedule, ordinary wear and tear excepted; (ii) mechanically and structurally sound, capable of
performing the functions for which such Equipment was originally designed, in accordance with the
Supplier’s published and recommended specifications (as applicable); (iii) redelivered with all
component parts in good operating condition (and all components must meet or exceed the Supplier’s
minimum recommended specifications, unless otherwise agreed by Lessor in writing); (iv)
redelivered with all software and documentation necessary for the operation of such Equipment for
the performance of the functions for which such Equipment was originally designed (whether or not
such software is embedded in or otherwise is a part of such Equipment); and (v) cleaned and
cosmetically acceptable, with all Lessee-installed markings removed and all rust, corrosion or
other contamination having been removed or properly treated, and in such condition so that it may
be immediately installed and placed in service by a third party. Upon delivery, such Equipment
shall be in compliance with all applicable Federal, state and local laws, and health and safety
guidelines. Lessee shall be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs, demonstration costs and other related costs
necessary to cause such Equipment to be in full compliance with the terms of this Lease. (c) If
requested by Lessor, Lessee shall also deliver all related records and other data to Lessor,
including all records of maintenance, modifications, additions and major repairs, computerized
maintenance history, and any maintenance and repair manuals (collectively, the “Records”). All
manuals or other documents delivered to Lessor that are subject to periodic revision will be fully
up-to-date and current to the latest revision standard of any particular manual or document. In
the event any such Records are missing or incomplete, Lessor shall have the right to cause the
same to be reconstructed at Lessee’s expense. (d) In addition to Lessor’s other rights and
remedies hereunder, if such Equipment and the related Records are not returned in a timely
fashion, or if repairs are necessary to place any item of Equipment in the condition required in
this Section, Lessee shall (i) continue to pay to Lessor per diem rent at the last prevailing
lease rate under the applicable Schedule with respect to such item of Equipment, for the period of
delay in redelivery, and/or for the period of time reasonably necessary to accomplish such
repairs, and (ii) pay to Lessor an amount equal to the aggregate cost of any such repairs.
Lessor’s acceptance of such rent on account of such delay and/or repair does not constitute an
extension or renewal of the term of the related Schedule or a waiver of Lessor’s right to prompt
return of such Equipment in proper condition. Such amount shall be payable upon the earlier of
Lessor’s demand or the return of such Equipment in accordance with this Lease. (e) Without
limiting any other terms or conditions of this Lease, the provisions of this Section are of the
essence of each Schedule, and upon application to any court of equity having jurisdiction, Lessor
shall be entitled to a decree against Lessee requiring Lessee’s specific performance of its
agreements in this Section.
14. INDEMNITY. (a) General. Lessee shall indemnify, defend and keep harmless Lessor and
any Assignee (as defined in Section 17), and their respective agents and employees (each, an
“Indemnitee”), from and against any and all Claims (other than such as may directly and proximately
result from the actual, but not imputed, gross negligence or willful misconduct of such
Indemnitee), by paying, on a net after-tax basis, or otherwise discharging same, when and as such
Claims shall become due. Lessee agrees that the indemnity provided for in this Section includes
the agreement by Lessee to indemnify each Indemnitee from the consequences of its own simple
negligence, whether that negligence is the sole or concurring cause of the Claims, and to further
indemnify each such Indemnitee with respect to Claims for which such Indemnitee is strictly liable.
Lessor shall give Lessee prompt notice of any Claim hereby indemnified against and Lessee shall be
entitled to control the defense of and/or to settle any Claim, in each case, so long as (1) no
Default or Event of Default has occurred and is then continuing, (2) Lessee confirms, in writing,
its unconditional and irrevocable commitment to indemnify each Indemnitee with respect to such
Claim, (3) Lessee is financially capable of satisfying its obligations under this Section, and (4)
Lessor approves the defense counsel selected by Lessee. The term “Claims” shall mean all claims,
allegations, xxxxx, judgments, settlements, suits, actions, debts, obligations, damages (whether
incidental, consequential or direct), demands (for compensation, indemnification, reimbursement or
otherwise), losses, penalties, fines, liabilities (including strict liability), charges that Lessor
has incurred or for which it is responsible, in the nature of interest, Liens, and costs (including
attorneys’ fees and disbursements and any other legal or non-legal expenses of investigation or
defense of any Claim, whether or not such Claim is ultimately defeated or enforcing the rights,
remedies or indemnities provided for hereunder, or otherwise available at law or equity to Lessor),
of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, by or
against any person, arising on account of (A) any Lease Document, including the performance, breach
(including any Default or Event of Default) or enforcement of any of the terms thereof, or (B) the
Equipment, or any part or other contents thereof, any substance at any time contained therein or
emitted therefrom, including any hazardous substances, or the premises at which the Equipment may
be located from time to time, or (C) the ordering, acquisition, delivery, installation or rejection
of the Equipment, the possession of any property to which it may be attached from time to time,
maintenance, use, condition, ownership or operation of any item of Equipment, and by whomsoever
owned, used, possessed or operated, during the term of any Schedule with respect to that item of
Equipment, the existence of latent and other defects (whether or not discoverable by Lessor or
Lessee) any claim in tort for negligence or strict liability, and any claim for patent, trademark
or copyright infringement, or the loss, damage, destruction, theft, removal, return, surrender,
sale or other disposition of the Equipment, or any item thereof, including, Claims involving or
alleging environmental damage, or any criminal or terrorist act, or for whatever other reason
whatsoever. If any Claim is made against Lessee or an Indemnitee, the party receiving notice of
such Claim shall promptly notify the other, but the failure of the party receiving notice to so
notify the other shall not relieve Lessee of any obligation hereunder.
(b) Tax Indemnity. (1) Lessee represents and warrants that: (A) it believes that it
is reasonable to estimate that the useful life of the Equipment exceeds the lease term (including
any interim and fixed rental renewal periods) by the greater of one (1) year or twenty (20) percent
of such estimated useful life, and that said Equipment will have a value at the end of the lease
term, including any fixed rate renewal period, of at least twenty (20) percent of the Total Invoice
Cost of the Equipment, without including in such value any increase or decrease for inflation or
deflation during the original lease term; and (B) the Equipment is, and will be used by Lessee so
as to remain, property eligible for the MACRS Deductions (as defined below).
(2) If (A) Lessor in computing its taxable income or liability for tax, shall lose, or shall
not have, or shall lose the right to claim or there shall be disallowed or recaptured for Federal
and/or state income tax purposes, in whole or in part, the benefit of MACRS Deductions; or (B)
Lessor shall become liable for additional tax as a result of Lessee having added an attachment or
made an alteration to the Equipment, including (without limitation) any such attachment or
alteration which would increase the productivity or capability of the Equipment so as to violate
the provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156 (as it may hereafter be modified or
superseded); or (C) the statutory full-year marginal Federal tax rate (including any surcharge) for
corporations is other than thirty-five (35) percent; hereinafter referred to as a “Loss”; then
Lessee shall pay Lessor the Tax Indemnification Payment as additional rent and Lessor shall revise
the Schedule(s) of Stipulated Loss Values to reflect the Loss. As used herein, “MACRS Deductions”
shall mean the deductions under Section 167 of the Internal Revenue Code of 1986, as now or
hereafter amended (the “Code”), determined in accordance with the modified Accelerated Cost
Recovery System with respect to the Total Invoice Cost of any item of the Equipment using the
accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on the date
of this Lease for property assigned to the class of property specified in the Schedule pertaining
thereto; “Lessor” shall be deemed to include the consolidated Federal taxpayer group of which
Lessor is a member; and “Tax Indemnification Payment” shall mean such amount as, after
consideration of (i) all taxes required to be paid by Lessor in respect of the receipt thereof
under the laws of any governmental or taxing authority in the United States, and (ii) the amount of
any interest or penalty which may be payable by Lessor in connection with the Loss, shall be
required to cause Lessor’s after-tax net return (the “Net Return”) to be equal to, but no greater
than, the Net Return computed consistently with current tax laws (and with the assumption that
Lessor is taxed at the highest marginal Federal and state tax rates) as of the date of this Lease
that would have been available to Lessor had the Loss not occurred.
(3) Lessor shall be responsible for, and shall not be entitled to a Tax Indemnification
Payment by Lessee on account of, any Loss arising solely as a direct result of the occurrence of
any one or more of the following events: (A) the failure of Lessor to timely and properly claim
MACRS Deductions in the tax return of Lessor other than as a result of changes in the Code or
applicable regulations unless in the reasonable opinion of Lessor’s tax counsel there is no basis
for such claim; or (B) the failure of Lessor to have sufficient taxable income before application
of the MACRS Deductions to offset the full amount of such MACRS Deductions other than as a result
of changes in the Code or applicable regulations; or (C) any event which by the terms of the Lease
requires payment by Lessee of the Stipulated Loss Value if such payment is thereafter actually made
to Lessor, to the extent that such payment reimburses Lessor for amounts otherwise payable by
Lessee pursuant hereto; or (D) a disqualifying disposition due to sale of any item of the Equipment
or the Lease by Lessor prior to a Default.
(4) Lessor promptly shall notify Lessee in writing of such Loss and Lessee shall pay to Lessor
the Tax Indemnification Payment within thirty (30) days of such notice. For these purposes, a Loss
shall occur upon the earliest of: (A) the happening of any event (such as disposition or change in
use of any item of the Equipment) which will cause such Loss, (B) the payment by Lessor to the
Internal Revenue Service or state taxing authority of the tax increase (including an increase in
estimated taxes) resulting from such Loss; (C) the date on which the Loss is realized by Lessor; or
(D) the adjustment of the tax return of Lessor to reflect such Loss.
15. DEFAULT. A default shall be deemed to have occurred hereunder and under a Schedule upon the
occurrence of any of the following (each, an “Event of Default”): (a) non-payment of Basic Rent on
the applicable rent payment date; (b) non-payment of any Other Payment within five (5) days after
it is due; (c) failure to maintain, use or operate the Equipment in compliance with applicable law;
(d) breach by Lessee of its covenants pursuant to Section 4(d) hereof; (e) failure to obtain,
maintain and comply with all of the insurance coverages required under this Lease; (f) any transfer
or encumbrance, or the existence of any Lien, that is prohibited by this Lease; (g) a payment or
other default by Lessee under any loan, lease, guaranty or other financial obligation to Lessor or
its affiliates which default entitles the other party to such obligation to exercise remedies; (h)
a payment or other default by Lessee under any material loan, lease, guaranty or other material
financial obligation to any third party which default has been declared; (i) an inaccuracy in any
representation or breach of warranty by Lessee (including any false or misleading representation or
warranty) in any financial statement or Lease Document, including any omission of any substantial
contingent or unliquidated liability or Claim against Lessee; (j) the commencement of any
bankruptcy, insolvency, receivership or similar proceeding by or against Lessee or any of its
properties or business (unless, if involuntary, the proceeding is dismissed within sixty (60) days
of the filing thereof) or the rejection of this Lease or any other Lease Document in any such
proceeding; (k) the failure by Lessee generally to pay its debts as they become due or its
admission in writing of its inability to pay the same; (l) Lessee shall (1) enter into any
transaction of merger or consolidation, unless Lessee shall be the surviving entity (such actions
being referred to as an “Event”), unless the surviving entity is organized and existing under the
laws of the United States or any state, and prior to such Event: (A) such person executes and
delivers to Lessor (x) an agreement satisfactory to Lessor, in its sole discretion, containing such
person’s effective assumption, and its agreement to pay, perform, comply with and otherwise be
liable for, in a due and punctual manner, all of Lessee’s obligations having previously arisen, or
then or thereafter arising, under any and all of the Lease Documents, and (y) any and all other
documents, agreements, instruments, certificates, opinions and filings requested by Lessor; and (B)
Lessor is satisfied as to the creditworthiness of such person, and as to such person’s conformance
to the other standard criteria then used by Lessor when approving transactions similar to the
transactions contemplated in this Lease; (2) cease to do business as a going concern, liquidate, or
dissolve; or (3) sell, transfer, or otherwise dispose of all or substantially all of its assets or
property; (m) if Lessee is privately held and effective control of Lessee’s voting capital
stock/membership interests/partnership interests, issued and outstanding from time to time, is not
retained by the present holders (unless Lessee shall have provided thirty (30) days’ prior written
notice to Lessor of the proposed disposition and Lessor shall have consented thereto in writing);
(n) if Lessee is a publicly held corporation and there is a material change in the ownership of
Lessee’s capital stock, unless Lessor is satisfied as to the creditworthiness of Lessee and as to
Lessee’s conformance to the other standard criteria then used by Lessor for such purpose
immediately thereafter; (o) there occurs a default or anticipatory repudiation under any guaranty
executed in connection with this Lease; (p) failure to satisfy the requirements of any financial
covenants set forth herein, or in any rider to this Lease or any Schedule; or (q) breach by Lessee
of any other covenant, condition or agreement (other than those in items (a)-(p)) under this Lease
or any of the other Lease Documents that continues for thirty (30) days after Lessor’s written
notice to Lessee (but such notice and cure period will not be applicable unless such breach is
curable by practical means within such notice period).
16. REMEDIES. (a) If an Event of Default occurs with respect to any Schedule, the Lessor
thereunder may (in its sole discretion) exercise any one or more of the following remedies with
respect to such Schedule and any or all other Schedules to which such Lessor is then a party: (1)
proceed at law or in equity, to enforce specifically Lessee’s performance or to recover damages;
(2) declare each such Schedule in default, and cancel each such Schedule or otherwise terminate
Lessee’s right to use the Equipment and Lessee’s other rights, but not its obligations, thereunder
and Lessee shall immediately assemble, make available and, if Lessor requests, return the Equipment
to Lessor in accordance with the terms of this Lease; (3) enter any premises where any item of
Equipment is located and take immediate possession of and remove (or disable in place) such item
(and/or any unattached parts) by self-help, summary proceedings or otherwise without liability; (4)
use Lessee’s premises for storage without liability; (5) sell, re-lease or otherwise dispose of any
or all of the Equipment, whether or not in Lessor’s possession, at public or private sale, with or
without notice to Lessee, and apply or retain the net proceeds of such disposition, with Lessee
remaining liable for any deficiency and with any excess being retained by Lessor; (6) enforce any
or all of the preceding remedies with respect to any related Collateral, and apply any deposit or
other cash collateral, or any proceeds of any such Collateral, at any time to reduce any amounts
due to Lessor; (7) demand and recover from Lessee all Liquidated Damages and all Other Payments
whenever the same shall be due; and (8) exercise any and all other remedies allowed by applicable
law, including the UCC. As used herein, “Liquidated Damages” shall mean the liquidated damages
(all of which, Lessee hereby acknowledges, are damages to be paid in lieu of future Basic Rent and
are reasonable in light of the anticipated harm arising by reason of an Event of Default, and are
not a penalty) described in the first sentence of parts (1) or (2) of Section 16(b), depending upon
the recovery and disposition of the Equipment leased under the applicable Schedule.
(b) If an Event of Default occurs with respect to any Schedule, (1) if Lessor recovers the
Equipment and disposes of it by a lease or elects not to dispose of the Equipment after recovery,
upon demand, Lessee shall pay to Lessor an
amount equal to the sum of (A) any accrued and unpaid Rent as of the date Lessor recovers
possession of the Equipment, plus (B) the present value as of such date of the total Basic
Rent for the then remaining term of such Schedule, minus (C) either, as applicable, (i) the
present value, as of the commencement date of any substantially similar re-lease of the Equipment,
of the re-lease rent payable for that period, commencing on such date, which is comparable to the
then remaining term of such Schedule or (ii) the present value, as of that certain date which may
be determined by taking into account Lessor’s having a reasonable opportunity to remarket the
Equipment, of the “market rent” for such Equipment (as computed pursuant to Article 2A) in the
continental United States on that date, computed for that period, commencing on such date, which is
comparable to the then remaining term of such Schedule; provided, however, Lessee acknowledges that
if Lessor is unable after reasonable effort to dispose of the Equipment at a reasonable price and
pursuant to other reasonable terms, or the circumstances reasonably indicate that such an effort
will be unavailing, the “market rent” in such event will be deemed to be $0.00, but in the event
that Lessor does eventually re-lease or otherwise dispose of the Equipment, it will apply the net
proceeds of such disposition, to the extent received in good and indefeasible funds, as a credit or
reimbursement, as applicable, in a manner consistent with the applicable provisions of Article 2A.
Any amounts discounted to present value, shall be discounted at the rate of three percent (3%) per
annum, compounded annually.
(2) If Lessee fails to return the Equipment in the manner and condition required by this
Lease, or Lessor recovers and sells the Equipment, upon demand, Lessee shall pay to Lessor an
amount calculated as the Stipulated Loss Value of the Equipment (determined as of the next rent
payment date after the date of the occurrence of the subject Event of Default), together with all
other Rent due with respect to the related Schedule as of such determination date, and all
Enforcement Costs (defined in Section 16(c)), less a credit for any disposition proceeds, if
applicable pursuant to the application provisions in the next sentence. If Lessor demands the
Liquidated Damages under this part (2), and recovers and sells the Equipment, any proceeds received
in good and indefeasible funds shall be applied by Lessor, with respect to the related Schedule:
first, to pay all Enforcement Costs, to the extent not previously paid; second, to
pay to Lessor an amount equal to any unpaid Rent due and payable, together with the liquidated
damage amounts specified in this part (2), to the extent not previously paid; third, to pay
to Lessor any interest accruing on the amounts covered by the preceding clauses, at the Late Charge
Rate, from and after the date the same becomes due, through the date of payment; and
fourth, (A) if the Lessor under such Schedule is also the Lessor under any other Schedules
(whether by retaining the same, or as Assignee), to satisfy any remaining obligations under any or
all such other Schedules, or (B) if such Lessor is not the Lessor under any other Schedule, or if
Lessee’s obligations to such Lessor under such other Schedules have been fully and indefeasibly
satisfied, to reimburse Lessee for such amounts to the extent paid by Lessee as liquidated damages
pursuant to this part (2).
(c) A cancellation of any Schedule shall occur only upon written notice by Lessor to Lessee.
Unless already specifically provided for in Section 16(b), if an Event of Default occurs with
respect to any Schedule, Lessee shall also be liable for all of the following (“Enforcement
Costs”): (1) all unpaid Rent due before, during or after exercise of any of the foregoing remedies,
and (2) all reasonable legal fees (including consultation, drafting notices or other documents,
expert witness fees, sending notices or instituting, prosecuting or defending litigation or
arbitration) and other enforcement costs and expenses incurred by reason of any Default or Event of
Default or the exercise of Lessor’s rights or remedies, including all expenses incurred in
connection with the return or other recovery of any Equipment in accordance with the terms of this
Lease or in placing such Equipment in the condition required hereby, or the sale, re-lease or other
disposition (including but not limited to costs of transportation, possession, storage, insurance,
taxes, lien removal, repair, refurbishing, advertising and brokers’ fees), and all other
pre-judgment and post-judgment enforcement related actions taken by Lessor or any actions taken by
Lessor in any bankruptcy case involving Lessee, the Equipment, or any other person. Late Charges
shall accrue with respect to any amounts payable under this Section for as long as such amounts
remain outstanding, and shall be paid by Lessee upon demand. No right or remedy is exclusive and
each may be used successively and cumulatively. Any failure to exercise the rights granted
hereunder upon any Default or Event of Default shall not constitute a waiver of any such right.
The execution of a Schedule shall not constitute a waiver by Lessor of any pre-existing Default or
Event of Default. With respect to any disposition of any Equipment or Collateral pursuant to this
Section, (i) Lessor shall have no obligation, subject to the requirements of commercial
reasonableness, to clean-up or otherwise prepare the same for disposition, (ii) Lessor may comply
with any applicable law in connection with any such disposition, and any actions taken in
connection therewith shall not be deemed to have adversely affected the commercial reasonableness
of any disposition thereof, (iii) Lessor may disclaim any title or other warranties in connection
with any such disposition, and (iv) Lessee shall remain responsible for any deficiency remaining
after Lessor’s exercise of its remedies and application of any funds or credits against Lessee’s
obligations under any Schedule, and Lessor shall retain any excess after such application.
17. ASSIGNMENT. (a) LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST OR ANY COLLATERAL, SUBLET
THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR
USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. Without limiting the
foregoing, (1) Lessee may not attempt to dispose of any of the Equipment, and (2) Lessee shall (A)
maintain the Equipment free from all Liens, other than Permitted Liens, (B) notify Lessor
immediately upon receipt of notice of any Lien affecting the Equipment, and (C) defend Lessor’s
title to the Equipment. A “Permitted Lien” shall mean any Lien for Impositions, Liens of
mechanics, materialmen, or suppliers and similar Liens arising by operation of law, provided that
any such Lien is incurred by Lessee in the ordinary course of business, for sums that are not yet
delinquent or are being contested in good faith and with due diligence, by negotiations or by
appropriate proceedings which suspend the collection thereof and, in Lessor’s sole discretion, (i)
do not involve any substantial danger of the sale, forfeiture or loss of the Equipment or any
interest therein, and (ii) for the payment of which adequate assurances or security have been
provided to Lessor. No disposition referred to in this Section shall relieve Lessee of its
obligations, and Lessee shall remain primarily liable under each Schedule and all of the other
Lease Documents. (b) Lessor may at any time with or without notice to Lessee grant a security
interest in, sell, assign, delegate or otherwise transfer (an “Assignment”) all or any part of its
interest in the Equipment, this Lease or any Schedule and any related Lease Documents or any Rent
thereunder, or the right to enter into any Schedule, and Lessee shall perform all of its
obligations thereunder, to the extent so transferred, for the benefit of the beneficiary of such
Assignment (such beneficiary, including any successors and assigns, an “Assignee”). Lessee agrees
not to assert against any Assignee any Abatement (without limiting the provisions of Section 2) or
Claim that Lessee may have against Lessor, and Assignee shall not be bound by, or otherwise
required to perform any of Lessor’s obligations, unless expressly assumed by such Assignee. Lessor
shall be relieved of any such assumed obligations. If so directed in writing, Lessee shall pay all
Rent and all other sums that become due under the assigned Schedule and other Lease Documents
directly to the Assignee or any other party designated in writing by Lessor or such Assignee.
Lessee acknowledges that Lessor’s right to enter into an Assignment is essential to Lessor and,
accordingly, waives any restrictions under applicable law with respect to an Assignment and any
related remedies. Upon the request of Lessor or any Assignee, Lessee also agrees (i) to promptly
execute and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in form and
substance satisfactory to the requesting party, an insurance certificate and such other documents
and assurances reasonably requested by Lessor or Assignee, and (ii) to comply with all other
reasonable requirements of any such Assignee in connection with any such Assignment. Upon such
Assignment and except as may otherwise be provided herein, all references in this Lease to “Lessor”
shall include such Assignee. (c) Subject always to the foregoing, this Lease and each Schedule
shall inure to the benefit of, and are binding upon, Lessee’s and Lessor’s respective successors
and assigns.
18. MISCELLANEOUS. (a) This Lease, each Schedule, any Riders hereto or thereto and any commitment
letter between the parties, constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and shall not be amended or modified in any manner except by a
document in writing executed by both parties. (b) Any provision of this Lease that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. (c) The representations, warranties and
agreements of Lessee herein shall be deemed to be continuing and to survive the execution and
delivery of this Lease, each Schedule and any other Lease Documents. With respect to each
Schedule, the obligations of Lessee under Sections 8, 9, 10, 12, 13 and 14 hereof, together with
any of Lessee’s obligations under the other provisions of this Lease (as incorporated therein)
which have accrued but not been fully satisfied, performed or complied with prior to the expiration
or earlier cancellation or termination of such Schedule, shall survive the expiration or earlier
cancellation or termination thereof. (d) All of Lessee’s obligations hereunder and under any
Schedule shall be performed at Lessee’s sole expense. Lessee shall reimburse Lessor promptly upon
demand for all expenses incurred by Lessor in connection with (1) any action taken by Lessor at
Lessee’s request, or in connection with any option, (2) the filing or recording of real property
waivers and UCCs, (3) any Enforcement Costs not recovered pursuant to Section 16, (4) all
inspections, and (5) all lien search reports (and copies of filings) requested by Lessor. If
Lessee fails to perform any of its obligations with respect to a Schedule, Lessor shall have the
right, but shall not be obligated, to effect such performance, and Lessee shall reimburse Lessor,
upon demand, for all expenses incurred by Lessor in connection with such performance. Lessor’s
effecting such compliance shall not be a waiver of Lessee’s default. All amounts payable under
this Section, if not paid when due, shall be paid to Lessor together with interest thereon at the
Late Charge Rate. (e) Lessee irrevocably appoints Lessor as Lessee’s attorney-in-fact (which power
shall be deemed coupled with an interest) to execute, endorse and deliver any documents and checks
or drafts relating to or received in payment for any loss or damage under the policies of insurance
required by this Lease, but only to the extent that the same relates to the Equipment. (f) LESSOR
AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY
BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE. (g) All notices (excluding
xxxxxxxx and communications in the ordinary course of business) hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile transmission (with
confirmation of receipt), or sent by certified mail, return receipt requested, addressed to the
other party at its respective address stated below the signature of such party or at such other
address as such party shall from time to time designate in writing to the other party; and shall be
effective from the date of receipt. (h) This Lease shall not be effective
unless and until accepted by execution by an officer of Lessor at the address, in the State of
Maryland (the “State”), as set forth below the signature of Lessor. THIS LEASE AND ALL OF THE
OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER,
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF THE STATE), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties
agree that any action or proceeding arising out of or relating to this Lease may be commenced in
any state or Federal court in the State, and agree that a summons and complaint commencing an
action or proceeding in any such court shall be properly served and shall confer personal
jurisdiction if served personally or by certified mail to it at the mailing address below Lessee’s
signature, or as it may provide in writing from time to time, or as otherwise provided under the
laws of the State. (i) This Lease and all of the other Lease Documents may be executed in
counterparts. Photocopies or facsimile transmissions of signatures shall be deemed original
signatures and shall be fully binding on the parties to the same extent as original signatures.
The transfer or possession of the “Original” of this Lease shall be irrelevant to the full or
collateral assignment of, or grant of security interest in, any Schedule; provided, however, no
security interest in any Schedule may be created through the transfer, possession or control, as
applicable, of any counterpart of such Schedule other than the original thereof, which shall be
identified as the document or record (as applicable) marked “Original” and all other counterparts
shall be marked “Duplicate”. (j) If Lessor is required by the terms hereof to pay to or for the
benefit of Lessee any amount received as a refund of an Imposition or as insurance proceeds, Lessor
shall not be required to pay such amount, if any Default has occurred and not been cured or any
Event of Default shall have occurred and not been waived by Lessor. In addition, if Lessor is
required by the terms hereof to cooperate with Lessee in connection with certain matters, such
cooperation shall not be required if a Default or Event of Default has then occurred and is
continuing. (k) To the extent Lessor is required to give its consent or approval with respect to
any matter, the reasonableness of Lessor’s withholding of such consent shall be determined based on
the then existing circumstances; provided, that Lessor’s withholding of its consent shall be deemed
reasonable for all purposes if (i) the taking of the action that is the subject of such request,
might result (in Lessor’s discretion), in (A) an impairment of Lessor’s rights, title or interests
hereunder or under any Schedule or other Lease Document, or to the Equipment, or (B) expose Lessor
to any Claims or Impositions, or (ii) Lessee fails to provide promptly to Lessor any filings,
certificates, opinions or indemnities required by Lessor as a condition to such consent. (l) There
is no restriction (either express or implied) on any disclosure or dissemination of the tax
treatment or tax structure of the transactions contemplated by this Lease or any documents executed
in connection herewith. Further, each party hereto acknowledges that it has no proprietary rights
to any tax matter or tax idea or to any element of the transaction structure contemplated by this
Lease; and each party hereto (and any employee, representative or agent of any party hereto) may
disclose to any and all persons (without limitation of any kind), the Federal tax treatment and
Federal tax structure of the transaction contemplated by this Lease. This Section 18(l) is
intended to cause the transaction contemplated by this Lease to be treated as not having been
offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any
successor provision) of the Treasury
Regulations promulgated under Section 6011 of the Code and
Section 6111 of the Code and the Treasury Regulations promulgated thereunder; and shall be
construed in a manner consistent with such purpose.
19. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in this Lease or in
any of the Schedules have the following meanings: (1) “affiliate”: with respect to any given
person, shall mean (i) each person that directly or indirectly owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five (5) percent or more of the voting
stock, membership interest or similar equity interest having ordinary voting power in the election
of directors or managers of such person, (ii) each person that controls, is controlled by, or is
under common control with, such person, or (iii) each of such person’s officers, directors,
members, joint venturers and partners. For the purposes of this definition, “control” of a person
means the possession, directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by contract or
otherwise; (2) “applicable law” or “law”: any law, rule, regulation, ordinance, order, code, common
law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award,
permit or similar norm or decision of any governmental authority; (3) “AS IS, WHERE IS”: AS IS,
WHERE IS, without warranty, express or implied, with respect to any matter whatsoever; (4)
"business day”: any day, other than a Saturday, Sunday, or legal holiday for commercial banks under
the laws of the state of the Lessor’s notice address; (5) “governmental authority”: any federal,
state, county, municipal, regional or other governmental authority, agency, board, body,
instrumentality or court, in each case, whether domestic or foreign; (6) “person”: any individual,
corporation, limited liability entity, partnership, joint venture, or other legal entity or a
governmental authority, whether employed, hired, affiliated, owned, contracted with, or otherwise
related or unrelated to Lessee or Lessor; and (7) “UCC” or “Uniform Commercial Code”: the Uniform
Commercial Code as in effect in the State or in any other applicable jurisdiction; and any
reference to an article (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such applicable version of the Uniform Commercial Code.
(b) The following terms when used herein or in any of the Schedules shall be construed as follows:
(1) “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Lease or such other Lease
Document in which such term appears (and not
merely in, of, under, etc. the section or provision where the reference occurs); (2) “including”:
means including without limitation unless such term is followed by the words “and limited to,” or
similar words; and (3) “or”: at least one, but not necessarily only one, of the alternatives
enumerated. Any defined term used in the singular preceded by “any” indicates any number of the
members of the relevant class. Any Lease Document or other agreement or instrument referred to
herein means such agreement or instrument as supplemented and amended from time to time. Any
reference to Lessor or Lessee shall include their permitted successors and assigns. Any reference
to an applicable law shall also mean such law as amended, superseded or replaced from time to time.
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IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement to be duly
executed, under seal, as of the day and year first above set forth.
| LASALLE NATIONAL LEASING CORPORATION | ADVANCED ENVIRONMENTAL RECYCLING | |||||||||||
| Lessor | TECHNOLOGIES, INC. | |||||||||||
| Lessee | ||||||||||||
By:
|
[SEAL] | By: | [SEAL] | |||||||||
Name:
|
Name: | |||||||||||
Title:
|
Title: | |||||||||||
| Xxx Xxxx Xxxxxxxxxxxx Xxxxxx | Xxxxxxx: | |||||||||||
| Xxxxx 0000 | ||||||||||||
| Xxxxxx, Xxxxxxxx 00000 | ||||||||||||
| Facsimile: 000-000-0000 | Facsimile: | |||||||||||
| Form of Organization:
|
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| Jurisdiction of
Organization:
|
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| Organizational No.
|
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| Federal Employer
Identification No.
|
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