MASTER LEASE AGREEMENT #193
Exhibit
10(ii)23
THE XXXXXX GROUP,
LTD.
Master Lease
Agreement No. 197
This Master Lease Agreement is made the 7th
day of April, 1999 between The Xxxxxx Group, Inc., 0000 Xxxxxxx Xxxx Xxxxx,
Xxxxx X, Xxxxxxxx, XX 00000 (the “Lessor”), and The IT Group, Inc.
with its principal office at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, XX
00000-0000 (the “Lessee”).
The parties hereto, desiring legally to be
bound, hereby agree as follows:
1.
LEASE:
Lessor agrees to lease to Lessee, and Lessee
agrees to lease from Lessor, the Equipment described in one or more Lease
Schedules between the parties incorporating this Lease by reference. Any
reference to “Lease” shall mean this Master Lease Agreement, the
Lease Schedule(s) and all Rider(s), Addenda, Amendment(s), or Supplement(s)
hereto and thereto, if any. Each Lease Schedule shall constitute a separate
and distinct lease on the terms herein and therein set forth.
2.
DEFINITIONS:
(a) The “Equipment” means
all the equipment described in the applicable Lease Schedule, together with
all manuals, cables and associated equipment included and delivered
therewith and associated software systems and programming.
(b) The “Installation Date
” means, except as otherwise provided herein, the date determined in
accordance with the Lease Schedule.
(c) The “Base Term
Commencement Date” means, as to all Equipment designated on any Lease
Schedule, where the Installation Date for the item of Equipment last to be
installed falls on the first day of the month, that date, or, in any other
case, the first day of the month following the month in which the item of
Equipment last to be installed is installed.
(d) The “Daily Rental”
means 1/30th of the amount set forth as the monthly rental for each item of
Equipment in the applicable Lease Schedule.
(e) A “Holdover” means,
the event which shall have occurred should Lessee fail to deliver possession
of any item of Equipment in a timely manner after giving Lessor proper
notice that such Equipment shall be returned pursuant to the provisions of
the Lease.
3.
TERM OF LEASE:
The term of this Lease as to each item of
Equipment shall commence on the Installation Date for such item of
Equipment, and shall continue for a base period (the “Base Term”)
ending that number of months from the Base Term Commencement Date as is
specified on the applicable Lease Schedule. The term of this Lease for all
such Equipment shall be automatically extended for successive three (3)
month periods until terminated by either party giving to the other not less
than six (6) months, and no more than
twelve (12) months prior written notice of termination. Any such termination
shall be effective only on the last day of the Base Term or the last day of
any such extended period. Rental for any Holdover by Lessee beyond such
termination shall be at a daily rate equal to 125% of the Daily Rental, if
such Holdover continues for a period less than five days or at 150% of the
monthly rental if such Holdover continues for more than five (5) days. With
respect to each Lease Schedule executed pursuant to this Master Lease
Agreement, Lessee agrees to execute and deliver to Lessor, on or about the
Installation Date, a Certificate of Delivery and Acceptance, and upon
request by Lessor, an incumbency certificate and opinion of counsel, each in
such form as is acceptable to Lessor.
4.
PAYMENTS:
The monthly rental for each item of Equipment
payable hereunder is as set forth in the applicable Lease Schedule. Rental
on each item of Equipment shall begin to accrue on the Installation Date of
such item of Equipment and shall be due and payable in U.S. dollars in
immediately available funds by Lessee in advance on the first day of each
month. If the Installation Date does not fall on the first day of the month,
the rental for that period of time from the Installation Date until the Base
Term Commencement Date shall be an amount equal to the Daily Rental
multiplied by the number of days from (and including) the Installation Date
to (but not including) the Base Term Commencement Date and shall be due and
payable on the Installation Date. Progress and deposit payments to vendors
and reimbursement of payments already paid by Lessee shall be made by Lessor
upon receipt of Lessee’s instruction to do so in form and substance
acceptable to Lessor, together with purchase, payment and purchase
assignment documentation requested by Lessor. The date on which a progress
or deposit payment or reimbursement is made by Lessor shall be considered
the Installation Date with respect to the portion of the entire cost of the
Equipment for any Lease Schedule such payment represents; provided that the
Base Term Commencement Date shall always follow the funding by Lessor of the
entire such Lease Schedule. In addition to the monthly rental set forth in
the Lease Schedule, Lessee shall pay to Lessor, when due, amounts equal to,
and hold Lessor harmless from, all taxes, levies, imposts, duties, fees,
assessments, and other charges or withholdings of any nature whatsoever,
however designated (including, without limitation, franchise, sales, use,
stamp, privilege or excise taxes), together with any penalties, fines or
interest thereon, imposed against Lessor (or which Lessor is required to
collect) by any federal, state or local government or taxing authority and
which are levied or based on or relate to the rental, the Lease or the
Equipment or its use, possession, lease, ownership, financing, operation,
control or value; but excluding federal, state or local taxes or fees on, or
measured by, the net income of Lessor. Personal property taxes assessed on
the Equipment during the term of this Lease shall be paid by Lessee to
Lessor or (upon notice and at Lessor’s option) directly to the
appropriate taxing authority. Lessor may charge Lessee a reasonable
administrative fee in connection with Lessor’s completion of the
return, or payment of, and billing Lessee for, personal property taxes.
Interest on any past due payments under this Lease shall accrue at the rate
of 1 1/2% per month (but in no event less than $50.00 per occurrence), or if
such rate shall exceed the maximum rate allowed by law, then at such maximum
rate, and shall be payable on demand. Charges for taxes, levies, imposts,
duties, fees, assessments or other charges, penalties and interest payable
by Lessee hereunder shall be promptly paid by Lessee when due.
5.
INSTALLATION, USE, MAINTENANCE, RETURN AND QUIET
POSSESSION:
(a) Lessee, at its own expense,
will provide the required electric current to operate the Equipment and
appropriate facilities to house and care for the Equipment as specified by
the manufacturer.
(b) Any equipment, cards, disks,
tapes or other items not specified in the Lease Schedule which are used on
or in connection with the Equipment must meet the specifications of the
manufacturer and shall be acquired by Lessee at its own expense.
(c) Lessee will at all times keep
the Equipment in its sole possession and control. The Equipment shall not be
moved from the locations stated in the Lease Schedule without the prior
written consent of Lessor (said consent not to be unreasonably withheld
provided that: (i) such location is within the Continental United States in
a state which has adopted the Uniform Commercial Code; and (ii) Lessee shall
timely execute, and shall reimburse Lessor for its expense in preparing and
filing, any Uniform Commercial Code Financing Statements or other
instruments which Lessor requests to reflect such relocation).
(d) After prior notice to Lessor,
Lessee may, at its own expense, make alterations in or add attachments to
the Equipment, provided such alterations or attachments are readily
removable and do not reduce the value of the Equipment or interfere with the
normal and satisfactory operation or maintenance of the Equipment or with
Lessee’s ability to obtain and maintain the maintenance contract
required by Section 5(g) hereof. The manufacturer or other organization
selected by Lessee and approved in writing by Lessor to maintain the
Equipment (“Maintenance Organization”) may incorporate engineering
changes or make temporary alterations to the Equipment upon request of
Lessee. All such alterations and attachments shall be and become the
property of Lessor at the expiration or termination of the Lease, or, at the
option of Lessee, shall be removed (prior to the expiration or termination
of the Lease) and retained by Lessee provided the Equipment is restored, at
Lessee’s expense, to its original condition, reasonable wear and tear
only excepted.
(e) So long as Lessee is not in
default hereunder, neither Lessor nor any of its assignees hereof shall
interfere with Lessee’s use or possession of the Equipment during the
term of this Lease.
(f) Lessee, during the term of this
Lease and at its expense, shall keep the Equipment in good working order and
condition and make all necessary adjustments, repairs and replacements.
Lessee shall not use or permit the Equipment to be used in any manner or for
any purpose for which, in the opinion of the manufacturer, the Equipment is
not designed or reasonably suitable, and Lessee shall use and operate the
Equipment in conformity with the manufacturer’s specifications. Lessee
shall comply with all governmental laws, rules and regulations in the use,
maintenance, storage and operation of the Equipment. In case any additional
or other equipment, appliance or alteration is required to be made or
installed on any item of Equipment in order to comply with such laws,
regulations, requirements and rules, Lessee agrees to make or install such
equipment, appliance or alteration at its own cost and expense.
(g) Lessee shall, during the term
of this Lease and at its own expense, enter into and maintain in force a
contract with a Maintenance Organization covering at least prime shift
maintenance of each item of
Equipment. Such contract shall commence upon expiration of the manufacturer
’s warranty period, if any, relating to such item. Lessee shall furnish
Lessor, from time to time upon Lessor’s request, a copy of such
contract(s).
(h) At the termination of this
Lease, Lessee shall, at its expense, return the Equipment to Lessor (at the
location designated by Lessor within the Continental United States) in the
same operating order, repair, condition and appearance as on the
Installation Date, reasonable wear and tear only excepted, with all
engineering and safety changes prescribed by the manufacturer incorporated
herein; provided that, notwithstanding reasonable wear and tear, the
Equipment shall be operable in conformity with the manufacturer’s
original specifications and have a good general appearance free from any
obvious damage. At such termination, Lessee shall obtain a certification
from the manufacturer that the Equipment is eligible and acceptable for (and
Lessee shall arrange and pay for any repairs and changes as are necessary
for the manufacturer to accept the Equipment under) contract maintenance at
its then standard rates.
6.
OWNERSHIP AND INSPECTION:
(a) Lessee shall have no interest
in the Equipment other than the rights acquired as a lessee hereunder. The
Equipment is and shall always remain separate identifiable personalty.
Lessee shall not permit any item of Equipment to be installed in, or used,
stored or maintained with, any real property in such a manner or under such
circumstances that any person might acquire any rights in such item of
Equipment paramount to the rights of Lessor by reason of such item of
Equipment being deemed to be real property or a fixture thereon. Lessee
shall, promptly upon request of Lessor, obtain a written acknowledgment from
the owner and/or mortgagee(s) of the real property in which such item of
Equipment is located that such owner and/or mortgagee(s) will not at any
time assert any interest in such item of Equipment or that such item of
Equipment constitutes part of such real property. Lessee shall, at Lessor
’s request, affix to the Equipment in a prominent place or places,
tags, decals, or plates furnished by Lessor evidencing Lessor’s
ownership and Lessee shall not permit their removal or
concealment.
(b) Lessee shall keep the Equipment
free and clear of all liens and encumbrances except liens or encumbrances
arising through Lessor. LESSEE SHALL NOT ASSIGN OR OTHERWISE ENCUMBER
THIS LEASE OR ANY OF ITS RIGHTS HEREUNDER OR SUBLEASE THE EQUIPMENT WITHOUT
THE PRIOR WRITTEN CONSENT OF LESSOR. Lessee agrees that, except as
expressly authorized by Lessor, any assignment or sublease by Lessee shall
materially impair the prospects of Lessee’s performance hereunder, and
materially change the duty of, and materially increase the burden or risk
imposed on, Lessor, and shall constitute the delegation by Lessee of its
material obligations hereunder, notwithstanding any continued liability of
Lessee therefor. No assignment or sublease (whether or not permitted hereby)
shall relieve Lessee of any of its obligations hereunder and any permitted
sublease shall be expressly subordinate to the terms hereof. For purposes of
this Master Lease Agreement, the parties agree that the sale of all or
substantially all of the assets of Lessee or of more than 50% of the voting
stock of Lessee (whether in one transaction or several related transactions)
or, in the case of a partnership, any change in the constitution of the
partnership, shall be deemed an assignment for which Lessor’s prior
consent shall be required.
(c) Lessor or its agents shall have
free access to the Equipment at all reasonable times for the purpose of
inspection and for any other purpose contemplated in this Lease.
7.
WARRANTIES:
(a) Lessee represents, covenants
and agrees that, at the Installation Date, it shall have (i) thoroughly
inspected the Equipment, (ii) determined for itself that all items of
Equipment are in good condition, working order and repair and are of a size,
design, capacity and manufacture selected by it and (iii) satisfied itself
that the Equipment is suitable for Lessee’s purposes. LESSOR LEASES
THE EQUIPMENT AS IS AND MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS
OR IMPLIED, AS TO THE EQUIPMENT’S MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, DESIGN, CONDITION, QUALITY, CAPACITY, MATERIAL OR
WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed
that all such risks, as between Lessor and Lessee, are to be borne by
Lessee. Lessee agrees to look solely to the manufacturer or to suppliers of
the Equipment for any and all warranty claims and any and all assignable
warranties made by the manufacturer or the supplier to Lessor are hereby
assigned to Lessee for the term of the applicable Lease Schedule. Lessee
hereby assumes the sole responsibility for, and agrees that Lessor shall not
be responsible for, the delivery, installation, maintenance, operation or
service of this Equipment or for the delay or inadequacy of any or all of
the foregoing. Lessor shall not be responsible for any indirect, special or
consequential loss or damage resulting from any cause whatsoever, whether
arising as a result of tort, breach of contract or otherwise.
(b) Lessee further represents,
covenants and agrees that:
(i) Lessee is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to enter into and perform this Lease and the documents related
thereto. Lessee is duly qualified as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification,
including the jurisdiction where the Equipment will be located.
(ii) the Equipment constitutes
standard equipment manufactured by the manufacturers of such Equipment and
has not been altered, modified or customized specifically for Lessee’s
uses or purposes.
(iii) Lessee has the corporate
power and authority to execute and perform this Lease and, in the case of a
sale and leaseback, to sell the Equipment to Lessor and to lease the
Equipment back from Lessor hereunder, and has duly authorized such sale and
the execution, delivery and performance of this lease, the Certificate of
Delivery and Acceptance, the Lease Schedule, and other related instruments
and documents;
(iv) this Lease and the documents
related hereto have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements of Lessee, enforceable in
accordance with their terms, except to the extent the enforcement of
remedies may be limited under applicable bankruptcy and insolvency
laws.
(v) the entering into and
performance of this Lease and the documents related hereto will not violate
any judgement, order, law or regulation applicable to Lessee or any
provision of Lessee’s Articles of Incorporation or By-laws or result in
any breach of, or constitute a default under, or result in the creation of
any lien, charge, security interest or other encumbrance upon any assets of
Lessee or on the Equipment pursuant to, any instrument to which Lessee is a
party or by which it or its assets may be bound.
(vi) no consent or approval of,
giving of notice to, registration with, or taking of any other action in
respect of, any state, federal or other governmental authority or agency is
required with respect to the execution, delivery and performance by the
Lessee of this Lease or any of the documents related hereto or, if any such
approval, notice, registration or action is required, it has been
obtained.
(vii) there are no actions, suits
or proceedings pending or, to the knowledge of the Lessee, threatened
against or affecting the Lessee in any court or before any governmental
commission, board or authority which, if adversely determined, will have a
materially adverse effect on the financial condition or ability of the
Lessee to perform its obligations under this Lease or any of the documents
related hereto.
(viii) the financial statements of
Lessee delivered to Lessor have been prepared in accordance with generally
accepted accounting principles and are complete and correct in all material
respects and fairly present the financial condition of Lessee as of the date
thereof. Since the date of such financial statements, there has been no
material adverse change in the financial condition of Lessee, or any
consolidated group of companies of which the Lessee is a member.
(ix) all date-sensitive hardware,
software, processes, procedures, interfaces and similar operating systems
used within the Lessee’s operations contain acceptable design and
performance specifications so that such systems will not abruptly end or
provide invalid or incorrect results during the operation of Lessee’s
business on or after January 1, 2000. All such operating systems have been
designed to ensure year 2000 compatibility including, but not limited to:
date data century recognition, calculations that accommodate same century
and multi-century formulas and date values, date data interface values that
reflect the century, and which include year 2000 leap year
calculations.
(x) it has confirmed with all of
its material suppliers that all date-sensitive hardware, software,
processes, procedures, interfaces and similar operating systems used within
the such supplier’s operations contain acceptable design and
performance specifications so that such systems will not abruptly end or
provide invalid or incorrect results during the operation of Lessee’s
business on or after January 1, 2000 and that all such operating systems
have been designed to ensure year 2000 compatibility including, but not
limited to: date data century recognition, calculations that accommodate
same century and multi-century formulas and date values, date data interface
values that reflect the century, and which include year 2000 leap year
calculations.
8.
RISK OF LOSS:
(a) From the earlier of. (i) the
date of delivery of the Equipment to Lessee; or (ii) the Installation Date
of the Equipment, until the Equipment is returned to Lessor as provided in
this Lease, Lessee shall bear
all risks of physical damage to or loss or destruction of the Equipment,
howsoever caused. During the term of this Lease as to any Lease Schedule,
Lessee, at its own expense, shall keep in effect all risk and public
liability insurance policies covering the Equipment designated in each Lease
Schedule in such amounts as are reasonably acceptable to Lessor. The all
risk insurance policy shall insure against all risks of loss or damage from
every cause whatsoever and shall be for an amount equal to the greater of:
(i) the Casualty Value as set in the Casualty Value Schedule attached as an
Exhibit to the Schedule; or (ii) the full replacement cost of the Equipment
subject of the Lease. Lessor, its successors and assigns shall be named as
additional insureds and sole loss payee on such policies, which shall be
written by an insurance company of recognized responsibility which is
reasonably acceptable to Lessor. Evidence of such insurance coverage shall
be furnished to Lessor no later than the Installation Date and from time to
time thereafter as Lessor may demand. Such policies shall provide that no
less than thirty days written notice shall be given Lessor prior to any
expiration, modification, reduction termination or cancellation of such
policies for any reason. Lessee hereby irrevocably appoints Lessor as Lessee
’s attorney-in-fact coupled with an interest for the sole purposes of
making claim for, receiving payment of, and executing any and all documents
that may be required to be provided to the insurance carrier in
substantiation of any claim for loss or damage to the Equipment or related
to the Lease under said insurance policies, and endorsing Lessee’s name
to any and all drafts or checks in payment of such applicable loss
proceeds.
(b) If any item of Equipment is
rendered unusable as a result of any physical damage to, or loss or
destruction of, the Equipment, or title thereto shall be taken by any
governmental authority under the power of eminent domain or otherwise,
Lessee shall give to Lessor immediate notice thereof and this Lease shall
continue in full force and effect without any abatement of rental. Lessor
shall determine, within thirty (30) days after the date of occurrence of any
such damage or destruction, whether such item of Equipment can be repaired.
In the event Lessor determines that the item of Equipment cannot be repaired
or such Equipment was lost, destroyed or title thereto taken, Lessee, at its
expense, shall, subject to Lessor’s consent, either: (i) promptly
replace such item of Equipment with identical equipment of at least equal
value and convey title to such replacement equipment to Lessor free and
clear of all liens, claims, equities and encumbrances of every kind or
nature whatsoever, and this Lease shall continue in full force and effect
with respect to the replacement Equipment as though, subject to the
provision of Section 12 hereof, such damage, loss, destruction or taking of
title had not occurred; or (ii) pay to Lessor, in immediately available
funds, the applicable Casualty Value as provided in a Casualty Value
Schedule attached as an Exhibit to the applicable Lease Schedule. In the
event Lessor determines that such item of Equipment can be repaired, Lessee
shall cause such item of Equipment to be promptly repaired. All proceeds of
insurance received by Lessor or Lessee under the policy referred to in the
preceding paragraph of this Section shall be applied toward the cost of such
repair or replacement.
(c) Lessee shall immediately notify
Lessor of all details concerning any damage to, or loss of, the Equipment
arising out of any event or occurrence whatsoever.
9.
EVENTS OF DEFAULT AND REMEDIES:
The occurrence of any one of the following
shall constitute an Event of Default hereunder:
(a) Lessee fails to pay or Lessor
does not receive any installment of rent on or before the fifth day
following the date when the same becomes due and payable;
(b) Lessee attempts to remove,
sell, assign, transfer, encumber, sublet or part with possession of the
Equipment or any items thereof, except as expressly permitted
herein;
(c) Lessee shall fail to procure
and or maintain insurance in accordance with Section 8 hereof or such
insurance shall be reduced, modified, canceled, terminated or
lapsed;
(d) Any guarantor of any of Lessee
’s obligations under any Lease Schedule defaults in the performance of
any covenant or obligation in favor of Lessor;
(e) Lessee shall fail to observe or
perform any of the other obligations required to be observed or performed by
Lessee hereunder and such failure shall continue uncured for ten (10) days
after written notice thereof to Lessee by Lessor;
(f) Any representation or warranty
made by Lessee herein or in any document or certificate furnished in
connection herewith shall prove incorrect in any material
respect;
(g) Lessee ceases doing business as
a going concern, makes an assignment for the benefit of creditors, admits in
writing its inability to pay its debts as they become due, files a voluntary
petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a
petition seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any
present or future statute, law or regulation or files an answer admitting
the material allegations of a petition filed against it in any such
proceeding, consents to or acquiesces in the appointment of a trustee,
receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or if it or its shareholders take any action looking
to its dissolution or liquidation; or
(h) Within thirty (30) days after
the commencement of any proceeding against Lessee seeking reorganization,
arrangement, readjustments, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such proceedings shall not
have been dismissed, or if within thirty (30) days after the appointment,
without Lessee’s consent or acquiescence, of any trustee, receiver or
liquidator of it or of all or any substantial part of its assets and
properties, such appointment shall not be vacated.
(i) Lessee or any guarantor shall
default in the payment or performance of any other duties, obligations or
liabilities of any indebtedness for borrowed money, or under conditional
sales or installment contracts or similar agreements, leases or obligations
evidenced by bonds, debentures, notes or other similar agreements or
instruments to any creditor (including Lessor under any other agreement)
after any and all applicable cure periods therefor shall have
elapsed.
Upon the occurrence of an Event of Default,
Lessor may at its option do any or all of the following: (i) by notice to
Lessee terminate this Lease as to the subject Lease Schedule: (ii) whether
or not this Lease is terminated as to any Lease Schedule, take possession of
any or all of the Equipment listed on the subject
Lease Schedule, wherever situated, and for such purpose, enter upon any
premises without liability for so doing or Lessor may cause Lessee, and
Lessee hereby agrees, to return the Equipment to Lessor as provided in this
Lease; (iii) recover from Lessee, as liquidated damages for loss of a
bargain and not as a penalty, an amount equal to the stipulated loss value
as provided in the Stipulated Loss Value Schedule attached as an Exhibit to
the applicable Lease Schedule, which payment shall become immediately due
and payable; or (iv) sell, dispose of, hold, use or lease any Equipment as
Lessor in its sole discretion may determine without, except as provided
below, any duty to account to Lessee (and Lessor shall not be obligated to
give preference to the sale, lease or other disposition of the Equipment
over the sale, lease or other disposition of similar equipment owned or
leased by Lessor). In any event, Lessee shall, without further demand, pay
to Lessor an amount equal to all sums due and payable for all periods up to
and including the date on which Lessor has declared this Lease to be in
default. In the event that Lessee shall have paid to Lessor the liquidated
damages referred to in clause (iii) above, Lessor hereby agrees to pay to
Lessee, promptly after receipt thereof, all rentals or proceeds received
from any reletting of the Equipment to the extent such rentals or proceeds
are attributable to the balance of the Base Term (after deduction of all
expenses incurred by Lessor and a reasonable sales commission to Lessor),
said amount never to exceed the amount of the liquidated damages paid by
Lessee. Lessee agrees that Lessor shall have no obligation to sell or lease
the Equipment. In the event that Lessee has paid Lessor the amount set forth
in (iii) above, and provided all other amounts due under the Lease have been
paid, then Lessor shall deliver title to the Equipment to Lessee,
unencumbered as to Lessor, “as is” and “where is”
without recourse or representation.
Lessee shall in any event remain fully liable
for reasonable damages as provided by law and for all costs and expenses
incurred by Lessor on account of such default including, but not limited to,
all court costs and reasonable attorney’s fees. Lessee further agrees
that, in any event, it will be liable for any deficiency after any sale,
lease or other disposition by Lessor. The rights afforded Lessor hereunder
shall not be deemed to be exclusive, but shall be in addition to any rights
or remedies provided by law.
10.
NET LEASE:
Except as otherwise specifically provided in
this Lease, it is understood that this is a net lease, and that, as between
Lessor and Lessee, Lessee shall be responsible for all costs and expenses of
every nature whatsoever arising out of or in connection with or related to
this Lease or the Equipment (including, but not limited to, transportation
in and out, transportation insurance, rigging, drayage, packing,
installation and disconnect charges as well as reasonable UCC and other
record search fees and related expenses incurred by Lessor with respect to
Lessee in Lessor’s sole discretion). Lessee hereby agrees that in the
event that Lessee fails to perform any obligation under this Lease, Lessor
may at its option, pay or perform said obligation and any payment made or
expense incurred by Lessor in connection therewith shall become additional
rent which shall be due and payable by Lessee upon demand.
11.
ASSIGNMENT:
Lessee agrees that Lessor may transfer or
assign all or any part of Lessor’s right, title and interest in, under
or to the Equipment and this Lease and any or all sums due or to become due
pursuant to any of the above, to any third party (the “Assignee”)
for any reason. Lessee agrees that upon receipt of written notice
from Lessor of such assignment, Lessee shall perform all of its obligations
hereunder for the benefit of Assignee and, if so directed, shall pay all
sums due or to become due hereunder directly to the Assignee or to any other
party designated by the Assignee. Lessee hereby covenants, represents,
warrants and agrees that the Assignee shall be entitled to rely on and shall
be considered a third party beneficiary of the following covenants,
representations and warranties: (i) Lessee’s obligations to Assignee
hereunder are absolute and unconditional and are not subject to any
abatement, reduction, recoupment, defense, offset or counterclaim available
to Lessee for any reason whatsoever including, without limitation, operation
of law, defect in the Equipment, the condition, design, operation or fitness
for use thereof or any loss, taking, destruction or interference with the
use of the Equipment or any part thereof, Lessor’s default or failure
to perform any of its obligations hereunder or for any other cause or reason
whatsoever, whether similar or dissimilar to the foregoing (Lessee reserving
any of its rights to have separate recourse directly against Lessor on
account of any thereof): nor, except as otherwise expressly provided herein,
shall this Agreement terminate, or the respective obligations of Lessor or
Lessee be otherwise affected, by reason of any of the foregoing or for any
other cause whether similar or dissimilar to the foregoing, it being the
intention of the parties hereto that the monthly rental, additional rental,
and all other sums payable by Lessee hereunder shall continue to be payable
in all events and at the times herein provided; (ii) Lessee shall not look
to Assignee to perform any of Lessor’s obligations hereunder, unless
otherwise expressly agreed and assumed by Assignee; (iii) Lessee will not
amend or modify this Agreement without prior written consent of the
Assignee; and (iv) Lessee will send a copy to Assignee of each notice which
Lessee sends to Lessor. Upon receipt of notice of such assignment, Lessee
agrees to execute and deliver to Lessor such documentation as Assignee may
require, including, but not limited to, (i) an acknowledgment of, or consent
to, assignment which may require Lessee to make certain representations or
reaffirmations as to some of the basic terms and covenants contained in this
Lease or as to the current status of the Lease and the Equipment; (ii) a
certified copy of resolutions of Lessee authorizing Lessee to enter into the
Lease, (iii) an opinion of counsel for Lessee as to customary matters; and
(iv) a Certificate of Delivery and Acceptance. Nothing contained in such
documentation required by Assignee shall be in derogation of any rights
granted to Lessee hereunder. Notwithstanding such assignment, (i) Lessor
shall not be relieved of any of its obligations hereunder; and (ii) the
rights of Lessee hereunder, including its rights under Section 5(e) hereof,
shall not be impaired.
12.
TAX INDEMNITY:
This Lease has been
entered into, and the Equipment has been acquired by Lessor, on the basis
that Lessor and/or any persons, firms, corporations or other entities to
which Lessor transfers or has transferred title to all or any portion of the
Equipment (the “Owner”) shall be entitled to such deductions,
credits and other benefits as are provided to an owner of property (the
“Tax Benefits”), including, without limitation, the accelerated
cost recovery or depreciation deduction on the Equipment under various
Sections of the Internal Revenue Code of 1986 as amended from time to time
(the “Code”) based upon such depreciable lives, averaging
conventions, methods of depreciation and other accounting methods as the
Owner elects for tax purposes, and the deduction under Section 163 of the
Code in the full amount of any interest paid or accrued by Owner in
accordance with the Owner’s method of accounting for tax purposes with
respect to any indebtedness incurred by the Owner in financing its purchase
of the Equipment. (As used herein the term “Owner” includes Lessor
in the event Lessor has not transferred title of all the Equipment.) If as a
result of: (i) any act or failure to act of Lessee (including a sale or
disposition of any unit of Equipment after
an Event of Default or Bankruptcy of Lessee unless Lessor shall have been paid
in full the Stipulated Loss or Termination Value, as the case may be, in
accordance with the Lease); (ii) any physical damage to or loss or
destruction of the Equipment; or (iii) the existence or operation of any
early termination or early buy out provision contained in any Lease
Schedule, the Owner (a) shall lose, have recaptured or disallowed, or not be
entitled to the full use of the Tax Benefits, or (b) shall have its tax
increased or accelerated on account of recomputation or recapture of such
Tax Benefits in any year or years pursuant to the provisions of the Code,
(each of the events referred to in (a) and (b) above being referred to as a
“Loss”) then Lessee shall pay to the Owner, upon demand, a sum
which after deduction therefrom for all federal, state and local income
taxes payable by the Owner with respect to the receipt of such sum, shall be
sufficient to restore the Owner to substantially the same positions the
Owner would have been in had such Loss not been incurred after taking into
account all relevant factors, including, without limitation, (i) the amount
of the Tax Benefits so lost, recaptured, disallowed, recomputed or not so
utilized, (ii) the increase or acceleration on the Owner’s tax on
account thereof, (iii) penalties, interest or other charges imposed on the
Owner, (iv) differences in tax years involved and (v) the Tax Benefits, if
any, available to the Owner with respect to any replacement Equipment
transferred to Lessor pursuant to Section 8 (b) hereof. The provisions of
this Section 12 shall survive the expiration or earlier termination of this
Lease. For the purpose of this Section 12, a Loss shall occur upon the
earliest of (1) the happening of any event which may cause such Loss, (2)
the payment by the Owner to the Internal Revenue Service of the tax increase
resulting from such Loss or (3) the adjustment of the tax return of the
Owner to reflect such Loss. Lessee represents and warrants for the benefit
of Lessor, and will provide supporting documents reasonably satisfactory to
Lessor to the effect that: (i) at the time Lessor becomes the owner of the
Equipment, and at all times during the term of the Lease, the Lessor shall
be entitled to take the maximum deductions for depreciation allowable
pursuant to Section 167(a) of the Internal Revenue Code of 1986 (the
“Code”); (ii) the deductions for depreciation of the Equipment
shall be determined as provided in Section 168(a) of the Code; and (iii) the
applicable “recovery period” for the Equipment as provided in
Section 168(c) of the Code shall be as provided in the Lease
Schedule.
13.
INDEMNIFICATION AND WAIVER:
Lessee hereby agrees to assume liability for,
and does hereby agree to indemnify, protect, save and keep harmless Lessor
and its respective successors, assigns, legal representatives, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, claims, costs, or expenses (including legal fees and expenses) of
any kind and nature whatsoever which may be imposed on, incurred by or
asserted against Lessor or any of its respective successors, assigns, legal
representatives, agents or servants (whether or not such person is also
indemnified by any other person), or in any way relating to or arising out
of this Lease or any documents contemplated hereby, or the performance or
enforcement of any of the terms hereof, or in any way relating to or arising
out of the Equipment or the acceptance, rejection, return, lease,
possession, use, condition, operation, ownership or disposition of the
Equipment or any accident in connection therewith (including, without
limitation, latent and other defects, whether or not discoverable):
provided, however, that Lessee shall not be required to indemnify Lessor or
its respective successors, assigns, legal representatives, agents and
servants, for loss or liability in respect of any item of Equipment arising
from acts or events which occur after possession of such item of Equipment
has been returned to Lessor or loss or liability resulting from the active
willful misconduct of the party otherwise to be indemnified hereunder.
Lessee agrees that, in order to induce Lessor to enter into each lease of
Equipment
hereunder, and recognizing that Lessor is not the manufacturer of the
Equipment: Lessor shall not be liable to Lessee for any liability, claim,
loss, damage or expense of any kind or nature arising directly or indirectly
from (and Lessor shall not be in default hereunder as a result of) any
inadequacy or deficiency of the Equipment or any defect therein or any delay
or failure in providing or delivering the Equipment. Lessee agrees that this
Lease is a “finance lease” as that term is defined in Section 13
10.01 of the Ohio Revised Code. Lessee acknowledges that the supplier of the
equipment may have rights under the contract with Lessee and Lessor may
contact the supplier for a description of any rights or warranties under the
supply contract. Lessee waives any and all rights and remedies granted under
Section 1310.54 to 1310.68 of the Ohio Revised Code, including, but not
limited to, any of Lessee’s rights to (i) reject or revoke acceptance
of the Equipment; (ii) accept partial delivery of the Equipment; and (iii)
“cover” and substitute for the Equipment.
14.
TRUE LEASE—SECURITY INTEREST:
It is the intention of the parties hereto that
the lease of the Equipment pursuant to each Lease Schedule be a true lease.
However, in the event (and only in the event) that is finally determined by
a court of competent jurisdiction that this Lease does not create a true
lease with respect to any Equipment, then the parties agree that, with
respect to any such Equipment, Lessee hereby grants to Lessor (effective
upon the Installation Date) a purchase money security interest in such
Equipment to secure repayment of all amounts due, and the performance of all
of Lessee’s other obligations hereunder and under such Lease
Schedule.
15.
MISCELLANEOUS:
(a) Neither this Lease nor any
consent or approval provided for herein shall be binding upon Lessor unless
signed on its behalf by a duly authorized officer. This Agreement shall be
governed in all respects by the laws of Ohio, in the county of Xxxxxxxx,
without giving effect to principles of choice of law.
(b) This Lease constitutes the
entire agreement between Lessee and Lessor with respect to the Equipment,
and no covenant, condition or other term or provision may be waived or
modified orally. No waiver of any of the terms and conditions hereof shall
be effective unless in writing and signed by the party against whom such
waiver is sought to be enforced. Any waiver of the terms hereof shall be
effective only in the specific instance and for the specific purpose given.
The waiver by Lessor or Lessee of any breach of any obligation of Lessee or
Lessor shall not be deemed a waiver of such obligation or of any subsequent
breach of the same or any obligation. The subsequent acceptance of rental
payments hereunder by Lessor shall not be deemed a waiver of any prior
existing breach by Lessee regardless of Lessor’s knowledge of such
prior existing breach at the time of acceptance of such rental
payments.
(c) All notices hereunder shall be
in writing and shall be delivered in person or sent by registered or
certified mail, postage prepaid, to the address of the other party as set
forth herein or to such other address as such party shall have designated by
proper notice.
(d) This Lease shall be binding
upon and inure to the benefit of Lessor and Lessee and their respective
successors and assigns (including any subsequent assignee of
Assignee).
(e) If any term or provision of
this Lease or the application thereof to any person is, to any extent,
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to the persons other than those to which it is invalid or
unenforceable, shall not be affected thereby, and each provision of this
Lease shall be valid and be enforced to the fullest extent permitted by
law.
(f) Lessor is hereby authorized by
Lessee to cause this Lease or other instruments, including Uniform
Commercial Code Financing Statements, to be filed or recorded for the
purposes of showing Lessor’s interest in the Equipment and Lessee
agrees to execute and deliver all such instruments at the request of Lessor
and that Lessor may execute and deliver such instruments for and on behalf
of Lessee.
(g) In the event that the
Installation Date does not occur within forty-five (45) days of the
projected Installation Date (as set forth in the applicable Lease Schedule),
then Lessor, at its option, may terminate the applicable Lease Schedule and
this Lease (to the extent that it applies to said Lease Schedule) without
further obligation to Lessee.
(h) In the event of any conflict
between the terms and conditions of this Master Lease Agreement and the
terms and conditions of any Lease Schedule, the terms and conditions of such
Lease Schedule shall prevail.
(i) Each year during the term of
this Lease, Lessee hereby agrees to deliver to Lessor a copy of: (i) Lessee
’s quarterly unaudited financial statements within sixty (60) days of
Lessee’s quarter-ends; (ii) annual audited financial statements within
one hundred twenty (120) days of Lessee’s fiscal year-end; and (iii)
within a reasonable period of time, any other financial information Lessor
requests from time to time
(j) The obligations which Lessee is
required to perform during the term of this Lease shall survive the
expiration or other termination of this Lease, to the extent that such
obligations remain unperformed as of the expiration or termination of this
Lease.
(k) Lessee hereby acknowledges and
agrees that (i) certain of its wholly-owned subsidiaries will guaranty the
obligations of Lessee hereunder on terms and conditions satisfactory to
Lessor; and (ii) at any time after the date hereof, upon the request of
Lessor and on terms and conditions satisfactory to Lessor, Lessee shall
cause such other of its wholly-owned subsidiaries as Lessee shall direct to
guaranty its obligations under this Lease.
IN WITNESS HEREOF, the parties hereto have
executed this Agreement on the day and year first above written.
| LESSOR: THE XXXXXX
GROUP, INC.
| LESSEE: THE IT
GROUP, INC.
|
| By:
/s/ Xxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxxxx
| By:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X.
Xxxxx
|
| Title:
President and
CEO
| Title:
Vice
President, Treasurer
FORM OF
GUARANTY
[Subsidiary Name] (
“Guarantor”)
The Xxxxxx Group,
Inc. (“Lessor”)
The IT Group, Inc. (
“Lessee”)
1. In consideration of the
execution and delivery of Master Lease Agreement No. 193 dated as of April
7, 1999 between Lessee and The Xxxxxx Group, Inc. (hereinafter called
“Lessor”), an Ohio corporation, with its principal place of
business at 0000 Xxxxxxx Xxxx Xxxxx, Xxxxx X, Xxxxxxxx, Xxxx 00000 (said
Master Lease Agreement, as modified, amended or supplemented from time to
time in accordance with the provisions thereof, and together with all Lease
Schedules and Delivery and Acceptance Certificates executed pursuant
thereto, being hereafter collectively called the “Lease”), and for
other valuable consideration, the receipt of which is hereby acknowledged,
Guarantor does hereby unconditionally guarantee to Lessor and its successors
and assigns, without offset or deduction: (a) the prompt payment when due,
whether by acceleration or otherwise, of all rent, and all other amounts
whatsoever payable by Lessee under or pursuant to the Lease, the guaranty
under this clause (a) constituting hereby a continuing guaranty of payment
and not of collection; and (b) that Lessee will perform punctually and
faithfully each and every duty, agreement, covenant and obligation of Lessee
under or pursuant to the Lease (the “Obligations”). Guarantor does
hereby agree that upon the occurrence of an Event of Default under the
Lease, Guarantor will promptly pay the rent and all other amounts whatsoever
due under or pursuant to the Lease, or will otherwise provide for and bring
about promptly when due such payment, and will perform, or will otherwise
provide for and bring about promptly the performance of such duties,
agreements, covenants and obligations of Lessee under or pursuant to the
Lease which are in default thereunder.
2. This guaranty is a continuing
one and shall terminate only upon full payment of all rents and all other
sums due under the Lease and the performance of all of the terms, covenants
and conditions therein required to be kept, observed, or performed by the
Lessee, including such payment and performance under schedules made a part
of said Lease after the satisfaction of all obligations under the Lease and
all earlier schedules thereto.
3. Guarantor further agrees that
this Guaranty shall remain and continue in full force and effect as to any
amendments, modifications, renewals or extensions by the Lessee, and that no
assignment or transfer of the Lease or any interest therein shall operate to
extinguish or diminish the liability of the Guarantor. No notification by
Lessor to Guarantor of such amendment, modification, renewal or extension
shall be required. The undersigned waives presentment, protest, demand for
payment, any right of set-off, notice of dishonor or default, notice of
acceptance of this Guaranty and notice of any other kind in connection with
the Lease or this Guaranty. The undersigned also waives any right to require
a commercially reasonable disposition of any collateral securing the
Obligations.
4. Guarantor waives any right to
require Lessor to: (a) proceed against Lessee; (b) proceed against or
exhaust any security held from Lessee; (c) pursue any other remedy in Lessor
’s power whatsoever; or (d) notify Guarantor of any default by Lessee
in the payment of any rent or other sums reserved in the Lease or in the
performance of any term, covenant or condition therein required to be kept,
observed or performed by Lessee. Guarantor waives any defense arising by
reason of any disability or other defense of Lessee or by reason of the
cessation from any cause whatsoever of the liability of Lessee. Until the
payment of all rents and all other sums due under the Lease and the
performance of all of the terms, covenants and conditions therein required
to be kept, observed or performed by Lessee, Guarantor shall have no right
of subrogation, and waives any right to enforce any remedy which Lessor now
has or may hereafter have against Lessee, and waives any benefit of and any
right to participate in any security now or hereafter held by Lessor.
Guarantor waives all presentments, demands for performance, notices of
nonperformance, protests, notices or protest, notices of dishonor, notices
of acceptance of this guaranty and of the existence, creation or
continuations of new or additional leases.
5. This absolute, continuing,
unconditional, and unrestricted guaranty is a guaranty of payment and not a
guaranty of collection. Upon Lessee’s failure to pay the Obligations
promptly when due, Lessor, at its sole option, may proceed against the
undersigned (or any one or more of them if more than one) to collect the
Obligations, with or without proceeding against the Lessee, or co-surety or
co-guarantor, or any collateral held as security for the Obligations. Any
and all payments under the Lease made by the lessee, the undersigned, or any
other person, and the proceeds of any and all collateral securing the
payment of the Obligations and this guaranty, may be applied by Lessor in
whatever manner it may determine in its sole discretion. The undersigned
agrees to reimburse Lessor for all costs and expenses of any nature
whatsoever, including, without limitation attorneys’ fees, incurred or
paid by Lessor in exercising any right, power, or remedy conferred by this
Guaranty.
6. The obligations of Guarantor are
independent of the obligations of Lessee. A separate action or actions may
be brought and prosecuted against Guarantor, whether an action is brought
against Lessee or whether Lessee be joined in any such action or actions;
and Guarantor waives the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof.
7. The undersigned agrees that this
guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of rent or any other amount
with respect to the Obligations is rescinded or must otherwise be restored
by Lessor upon the bankruptcy or reorganization of lessee, any other person
or otherwise. The undersigned agrees that this guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of rent or any other amount with respect to the lease is
rescinded or must otherwise be restored by Lessor upon the bankruptcy or
reorganization of Lessee, any other person or otherwise.
8. As a specifically bargained
inducement for Lessor to extend credit to lessee: (a) THE UNDERSIGNED HEREBY
EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING
RELATED TO THIS GUARANTY OR ARISING IN ANY WAY FROM THE LEASE OR
TRANSACTIONS INVOLVING LESSOR AND THE LESSEE AND (b) THE UNDERSIGNED HEREBY
DESIGNATE(S) ALL COURTS OF RECORD SITTING IN CINCINNATI, OHIO, AND HAVING
JURISDICTION OVER THE SUBJECT MATTER, STATE AND FEDERAL, AS FORUMS WHERE ANY
ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING FROM OR OUT OF THIS
GUARANTY, ITS MAKING, VALIDITY OR PERFORMANCE, MAY BE PROSECUTED AS TO ALL
PARTIES, THEIR SUCCESSORS AND ASSIGNS, AND BY THE FOREGOING DESIGNATION THE
UNDERSIGNED CONSENT(S) TO THE JURISDICTION AND VENUE OF SUCH
COURTS.
9. This Guaranty shall inure to the
benefit of Lessor, its successors and assigns, and shall be binding upon the
heirs, personal representatives, successors and assigns of
Guarantor.
10. This Guaranty: (a) may not be
assigned by Guarantor; and (b) may be assigned by Lessor and by its
successors or assigns, in whole or in part, without the consent of
Guarantor, and in the event of any such assignment each of Lessor’s
successors or assigns shall have and may enforce against Guarantor all of
the rights of Lessor hereunder with respect to the guaranty of the payment
and performance of such of the obligations as are covered by such
assignment.
11. Notwithstanding the foregoing,
neither this Guaranty nor the obligations of Guarantor hereunder shall be
construed in any manner which would render the Guarantor
insolvent.
IN WITNESS HEREOF, each of the undersigned has
duly executed this guaranty this
day of
, in the presence
of:
|
| [Subsidary
Name]
|
|
/s/ Xxxxx X. Xxxxxxx
Attest
| By:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X.
Xxxxx
|
|
| Title:
Vice President, Treasurer
| |
