SCHEDULE NO. 02
dated April 15, 1997
incorporating by reference
Master Agreement dated March 7, 1997
between VARILEASE CORPORATION, as Lessor,
and STARPAK, INC., as Lessee.
LESSEE AGREES TO LEASE THE DESCRIBED EQUIPMENT FROM LESSOR, AND LESSOR BY
ACCEPTANCE OF THIS LEASE, AGREES TO LEASE THE EQUIPMENT TO LESSEE ON THE
TERMS AND CONDITIONS SET FORTH IN THIS SCHEDULE AND THE MASTER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE.
1. Equipment Description:
Value for
Calculation
Model/ of Stip.
Qty Mfgr Feature Description Loss Value
2 Aspect 3273 Voice Storage Expansion Module $ 7,694.50
250 Aspect 3190 Teleset, Standard 109,312.50
66 Aspect 3197 Standard Handset and Cradle 871.20
12 Aspect 4061 Teleset Int. Card 79,173.60
Parts Installation 5,850.00
SUB TOTAL $202,901.80
Contract Deletions/Customer Credit:
1 Aspect 3060 Telecaster {$ 2,747.25}
1 Aspect 4310 Agent Monitoring Card { 5,720.00}
Installation Credit { 550.00}
TOTAL $193,884.05
2. Base Monthly Rental: $5,190.56
3. Equipment Location: 000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
4. Equipment Return Location: To Be Advised
5. Expected Delivery Date: June 1997
6. Base Term: 36 months
7. Riders: If there are no Riders, please check here:___.
If there are Riders, attach and describe here:
FMV Renewal Option
FMV Purchase Option
8. Special Terms:
A) The thirty-sixth (36th) Base Monthly Rental is due and payable on
the Rent Commencement Date.
9. Lessee Address for Notices (if different than Master Agreement):
Notwithstanding anything herein or in the Master Agreement to the contrary,
Lessee acknowledges and agrees, that Lessor shall be entitled to claim for
federal income tax purposes, without limitation, all benefits, credits and
deductions related to the Equipment.
The undersigned Lessee acknowledges that this Schedule authorizes the Lessor
or its agents or assignee(s) to sign and execute on its behalf any and all
necessary documents to make public this lease transaction. The parties
intend this transaction to be a true lease, but if any court or tribunal,
having power to bind the parties, should conclude that all or part of this
Schedule is not a true lease but is in the nature of a sale, consignment, or
other transaction, the parties intend and the Lessee hereby grants a
continuing security interest in the Equipment from the date of this Schedule
to secure the payment of all Lessee's indebtedness to Lessor.
THIS SCHEDULE TOGETHER WITH EXHIBIT A AND ANY ADDITIONAL PROVISION(S)
REFERRED TO IN ITEM 7 CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE LESSOR AND
LESSEE AS TO THE LEASE AND THE EQUIPMENT. LESSEE ACKNOWLEDGES THAT ON OR
BEFORE LESSEE'S SIGNING OF THIS SCHEDULE IT RECEIVED A COPY OF THE CONTRACT
EVIDENCING LESSOR'S ACQUISITION OF THE EQUIPMENT.
LESSOR: LESSEE:
VARILEASE CORPORATION STARPAK, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President Title: Vice President
Rider Xx. 00
XXXXXXX XXXXXX
Xx Xxxxxxxx Xx. 00 dated April 15, 1997
Master Agreement dated Xxxxx 0, 0000
Xxxxxx: Varilease Corporation
Lessee: Starpak, Inc.
Provided no Event of Default or event which with the giving of notice or
lapse of time, or both, would constitute an Event of Default has occurred and
is continuing, Lessee shall have the option to extent the term of the Lease
as to all, but not less than all, of the Equipment at the end of the Base
Term or any prior renewal term subject to the following terms and conditions:
1. Lessee must notify Lessor of its exercise of the option at least 180
days prior to the expiration of the Base Term or renewal term, if
applicable.
2. All of the terms and conditions of the Lease, other than the Base
Monthly Rental, which shall be the then Fair Rental Value of the
Equipment at the commencement of such renewal term, shall remain the
same. For purposes of this Renewal Option, the "Fair Rental Value"
is defined as the value upon which a willing lessor and a willing
lessee would agree, for the term involved, each respectively under
no compulsion to lease. Fair Rental Value shall be determined by
agreement of Lessor and Lessee, or, if they are unable to agree, Fair
Rental Value shall be determined by an independent appraiser selected
by Lessor and satisfactory to Lessee. The cost of such appraisal
shall be borne equally by Lessor and Lessee.
Rider Xx. 00
XXXXXXXX XXXXXX
Xx Xxxxxxxx Xx. 00 dated April 15, 1997
Master Agreement dated Xxxxx 0, 0000
Xxxxxx: Varilease Corporation
Lessee: Starpak, Inc.
Provided no Event of Default or event which with the giving of notice or
lapse of time, or both, would constitute an Event of Default has occurred and
is continuing, and provided Lessee has given Lessor at least 180 days written
notice prior to the expiration of the Base Term of any extension, Lessee
shall have the option at the end of such Base Term or any extension to
purchase all, but not less than all, of the Equipment for an amount equal to
the then Fair Market Value of the Equipment.
For purposes of this Purchase Option, "Fair Market Value" shall be defined as
the purchase price of the Equipment (delivered and installed at Lessee's
location) that would be obtained in an arm's length transaction between a
willing seller and a willing purchaser, neither under a compulsion to buy or
sell. In the event Lessor and Lessee cannot agree upon the Fair Market
Value, then such amount shall be determined by an independent appraiser
selected by Lessor but satisfactory to Lessee. The cost of such appraisal
shall be borne equally by Lessor and Lessee.
Upon receipt of the Fair Market Value, plus any taxes, Lessor shall execute
and deliver to Lessee a xxxx of sale without representation or warranty
except that the Equipment is free and clear of any liens, claims or
encumbrances created by Lessor.
EXHIBIT A
MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT ("Master Agreement") made as of March 7, 1997, between
VARILEASE CORPORATION, a Michigan corporation, having its chief executive
offices at 00000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx Xxxxx, XX 00000 ("Lessor") and
STARPAK, INC., a Colorado corporation having its chief executive offices at
000 00xx Xxxxxx, Xxxxxxx, XX 00000 ("Lessee").
1. LEASE
On the terms and conditions of this Master Agreement, Lessor shall lease to
Lessee, and Lessee shall hire from Lessor, the items of personal property
described in the Schedule(s) (collectively the "Equipment," and individually
an "Item") which shall incorporate this Master Agreement. Each Schedule
shall constitute a separate and independent lease and contractual obligation
of Lessee. The term "Lease" shall refer to an individual Schedule which
incorporates this Master Agreement. In the event of a conflict between this
Master Agreement and any Schedule, the language of the Schedule shall prevail.
The Lease shall be effective upon execution by Lessor at its offices.
2. TERM
(a) The term of the Lease shall be comprised of a Delivery Term,
Installation Term and Base Term. The Delivery Term for each Item shall
commence on the date the Item is delivered to Lessee and shall end on the
Installation Date. The Installation Term shall commence on the Installation
Date and terminate on the first day of the month following the Installation
Date for the last Item to be installed (the "Base Term Commencement Date").
The Base Term of the Lease shall begin on the Base Term Commencement Date,
and may, subject to Subsection 2(b), terminate on the last day of the last
month of the Base Term. The date of installation (the "Installation Date")
for any Item shall be the earlier of either (i) the date on which the entity
responsible for installing such Item certifies that the Item is installed and
placed in good working order, or (ii) if Lessee has caused a delay in the
installation of an Item, seven days from the date the Item is delivered to
the equipment location specified in the Schedule, or (iii) if Lessee is to
install the Item, the third day after delivery. In the event the Equipment
is already installed at the equipment location of Lessee and has been
previously paid for by Lessee, the Installation Date shall be the date on
which the Lessor pays Lessee for the Equipment.
(b) A Lease may be terminated as of the last day of the last month of the
Base Term by written notice given by either Lessor or Lessee not less than
six (6) months prior to the date of termination of the Base Term. If the
Lease is not so terminated at the end of the Base Term, the Base Term shall
be automatically extended for
successive six (6) month periods until such six (6) month notice is given.
The Base Monthly Rental, as hereinafter defined, shall continue to be due and
payable by Lessee until the Equipment redelivered to Lessor upon the
termination of the Base Term or any extension term, and throughout any such
extension term(s). No notice of termination may be revoked without the
written consent of the other party. Lessor will notify Lessee in writing
seven (7) months prior to lease termination of the date of the completion of
lease term.
3. RENTAL
(a) The rental amount payable to Lessor by Lessee for the Equipment will be
as set forth on the Schedule ("Base Monthly Rental"). As rent for Equipment,
Lessee shall pay Lessor in immediately available funds and in advance on the
Base Term Commencement Date and on the first day of each month during the
Base Term of the Lease the Base Monthly Rental, per month, and (ii) on the
Installation Date an amount equal to 1/30th of the Base Monthly Rental for
each Item times the number of days which will elapse from the Installation
Date of such Item to the Base Term Commencement Date of the Lease. Each
remittance from Lessee to Lessor shall contain information as to the Lease
for which payment is made.
(b) For any payment of rent or other amount due under a Lease which is past
due for more than five (5) days, interest shall accrue at the rate of 2% per
month, from the date such payment was due until payment is received by
Lessor, or if such rate shall exceed the maximum rate of interest allowed by
law, then at such maximum rate.
4. TAXES
The term "Taxes" shall mean all taxes, fees and assessments due, assessed or
levied by any foreign, federal, state or local government or taxing
authority, and/or any penalties, fines or interest, which are imposed against
or on the Equipment, its use, operation, or ownership, or the rentals or
receipts due under the Lease, or penalties arising from the failure to file a
return with respect to the Taxes, but shall not include any federal or state
taxes based upon or measured by the net income of Lessor. As of the
commencement of the term of the Lease, Lessee shall promptly report, file,
pay and indemnify, and hold Lessor harmless with respect to any and all
Taxes. Lessee will, upon request by Lessor, submit to Lessor written
evidence of Lessee's payment of all Taxes.
5. NET LEASE
The Lease is a net lease, it being the intention of the parties that all
costs, expenses and liabilities associated with the Equipment or its lease
shall be borne by Lessee. Lessee's agreement to pay all obligations under
the Lease, including but not limited to Base Monthly Rental, is absolute and
unconditional and
such agreement is for the benefit of Lessor and its Assignee(s). Lessee's
obligations shall not be subject to any abatement, deferment, reduction,
setoff, defense, counterclaim or recoupment for any reason whatsoever.
Except as may be otherwise expressly provided in the Lease, it shall not
terminate, nor shall the obligations of Lessee be affected by reason of any
defect in or damage to, or any loss or destruction of, no obsolescence of,
the Equipment or any Item from any cause whatsoever, or the interference with
its use by any private person, corporation or governmental authority, or as a
result of any war, riot, insurrection or an Act of God. It is the express
intention of Lessor and Lessee that all rent and other sums payable by Lessee
under the Lease shall be, and continue to be, payable in all events
throughout the term of the Lease. The Lease shall be binding upon the
Lessee, its successors and permitted assigns and shall inure to the benefit
of Lessor and its Assignee(s).
6. INSTALLATION, RETURN AND USE OF EQUIPMENT
(a) Upon delivery of the Equipment to Lessee, Lessee shall pay all
transportation, installation, rigging, packing and insurance charges with
respect to the Equipment. In the case of a sale and leaseback transaction,
Lessee shall, upon the request of Lessor, certify the date the Equipment was
first put into use. Lessee will provide the required electric current and a
suitable place of installation for the Equipment with all appropriate
facilities as specified by the manufacturer. No cards, tapes, disks, data
cells or other input/output and storage media may be used by Lessee to
operate any Item unless it meets the specifications of the manufacturer.
Lessee agrees that it will not install, or permit the installation of, the
Equipment without Lessor's consent.
(b) Lessee shall, at all times during the term of the Lease, be entitled to
unlimited use of the Equipment. Lessee will at all times keep the Equipment
in its sole possession and control. The Equipment shall not be moved from
the location stated in the Schedule without the prior written consent of
Lessor and in no event shall the Equipment be moved outside the continental,
contiguous United States. Lessee will comply with all laws, regulations, and
ordinances, and all applicable requirements of the manufacturer of the
Equipment which apply to the physical possession, use, operation, condition,
and maintenance of the Equipment. Lessee agrees to obtain all permits and
licenses necessary for the operation of the Equipment.
(c) Lessee shall not without the prior written consent of Lessor, affix or
install any accessory, feature, equipment or device to the Equipment or make
any improvement, upgrade, modification, alteration or addition to the
Equipment (any such accessory, feature, equipment, device or improvement,
upgrade, modification, alteration or addition affixed or installed is an
"Improvement"). Title to all Improvements shall, without further act, upon
the making, affixing or installation of such Improvement, vest solely in
Lessor, except such Improvements as may be readily removed
without causing material damage to the Equipment and without in any way
affecting or impairing the originally intended function, value or use of the
Equipment. Removal of the Improvement shall be performed by the manufacturer,
at the sole expense of Lessee. Provided the Equipment is returned to Lessor
in the condition required by the Lease, including, but not limited to
coverage under the manufacturer's standard maintenance contract, title to the
Improvement shall vest in the Lessee upon removal. Any Improvement not
removed from the Equipment prior to return shall at Lessor's option remain
the property of Lessor and shall be certified for maintenance by the
manufacturer, at Lessee's expense.
Lessee shall notify Lessor in writing no less than 60 days prior to the
desired installation date of the type of Improvement Lessee desires to
obtain. Lessor may, at any time within 10 days after receipt of the notice
offer to provide the Improvement to Lessee upon terms and conditions to be
mutually agreed upon. Lessee shall notify Lessor of any third party offers
and shall lease the Improvement from Lessor if Lessor meets the terms of the
third party offer.
If Lessee leases an Improvement from Lessor, such lease shall be under a
separate Schedule, the Improvement shall not be placed in service by Lessee
prior to acquisition by Lessor, and Lessee shall execute and deliver any
document necessary to vest title to such Improvement in Lessor.
During the term of the Lease term and any renewal term, Lessee shall
cause all Improvements to be maintained, at Lessee's expense, in accordance
with the requirements of Section 7. Unless otherwise agreed to by Lessor,
upon the expiration or earlier termination of the term of the Lease, any
Improvement shall be de-installed and removed from the Equipment by the
manufacturer, at Lessee's expense. If the Improvement is removed, the
Equipment shall be restored to its unmodified condition and shall be
certified for maintenance by the manufacturer, at Lessee's expense.
In the event an Improvement is provided to Lessee by a party other than
Lessor, Lessee shall cause such party to execute and deliver to Lessor such
documents as shall be required by Lessor to protect the interests of Lessor
and any Assignee in the Equipment, this Master Agreement and any Schedule.
(d) Lessee shall, at the termination of the Lease, at its expense,
de-install, pack and return the Equipment to Lessor at such location within
the continental United States as shall be designated by Lessor in the same
operating order, repair, condition and appearance as of the Installation
Date, reasonable wear and tear excepted, with all current engineering changes
prescribed by the manufacturer of the Equipment or a maintenance contractor
approved by Lessor (the "Maintenance Organization") incorporated in the
Equipment. Until the return of the Equipment to Lessor, Lessee shall be
obligated to pay the Base Monthly Rental and all other sums due under the
Lease. Upon redelivery to Lessor, Lessee shall
arrange and pay for such repairs (if any) as are necessary for the
manufacturer of the Equipment to accept the Equipment under a maintenance
contract at its then standard rates.
7. MAINTENANCE AND REPAIRS
Lessee shall, during the term of the Lease, maintain in full force and effect
a contract with the manufacturer of the Equipment or Maintenance Organization
covering at least prime shift maintenance of the Equipment. Lessee upon
request shall furnish Lessor with a copy of such maintenance contract as
amended or supplemented. During the term of the Lease, Lessee shall, at its
expense, keep the Equipment in good working order, repair, appearance and
condition and make all necessary adjustments, repairs and replacements, all
of which shall become the property of Lessor. Lessee shall not use or permit
the use of the Equipment for any purpose for which, in the opinion of the
manufacturer of the Equipment or Maintenance Organization, the Equipment is
not designed or intended.
8. OWNERSHIP, LIENS AND INSPECTIONS
(a) Lessee shall keep the Equipment free from any marking or labeling which
might be interpreted as a claim of ownership by Lessee or any party other
than Lessor and its Assignee(s), and shall affix and maintain tags, decals or
plates furnished by Lessor on the Equipment indicating ownership and title to
the Equipment in Lessor or its Assignee(s). Upon reasonable notice to
Lessee, Lessor or its agents shall have access to the Equipment and Lessee's
books and records with respect to the Lease and the Equipment at reasonable
times for the purpose of inspection and for any other purposes contemplated
by the Lease, subject to the reasonable security requirements of Lessee.
(b) Lessee shall execute and deliver such instruments, including Uniform
Commercial Code financing statements, as are required to be filed to evidence
the interest of Lessor and its Assignee(s) in the Equipment or the Lease.
Lessee has no interest in the Equipment except as expressly set forth in the
Lease, and that interest is a lease-hold interest. Lessor and Lessee agree,
and Lessee represents for the benefit of Lessor and its Assignee(s) that the
Lease is intended to be a "finance lease" and not a "lease intended as
security" as those terms are used in the Uniform Commercial Code, and that
the Lease is intended to be a "true lease" as the term is commonly used under
the Internal Revenue Code of 1986, as amended.
(c) LESSEE SHALL KEEP THE LEASE, THE EQUIPMENT AND ANY IMPROVEMENTS FREE AND
CLEAR OF ALL LIENS AND ENCUMBRANCES OF WHATSOEVER KIND (EXCEPT THOSE CREATED
BY LESSOR) AND LESSEE SHALL NOT ASSIGN THE LEASE OR ANY OF ITS RIGHTS UNDER
THE LEASE OR SUBLEASE ANY OF THE EQUIPMENT OR GRANT ANY RIGHTS TO THE
EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. No permitted
assignment or sublease shall relieve Lessee of any of its
obligations under the Lease and Lessee agrees to pay all costs and expenses
Lessor may incur in connection with such sublease or assignment. Lessee
grants to Lessor the right of first refusal on any sublease or other grant of
Lessee's rights to the Equipment.
9. DISCLAIMER OF WARRANTIES
(a) LESSOR LEASES THE EQUIPMENT "AS IS," AND BEING NEITHER THE MANUFACTURER
OF THE EQUIPMENT NOR THE AGENT OF EITHER THE MANUFACTURER OR SELLER, LESSOR
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,
WITH RESPECT TO THE CONDITION OR PERFORMANCE OF THE EQUIPMENT, ITS
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR WITH RESPECT TO PATENT
INFRINGEMENTS OR THE LIKE, LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY
CLAIM, LOSS OR DAMAGE OF ANY KIND OR NATURE WHATSOEVER, NOR SHALL THERE BE
ANY ABATEMENT OF RENTAL FOR ANY REASON INCLUDING CLAIMS ARISING OUT OF OR IN
CONNECTION WITH (i) THE DEFICIENCY OR INADEQUACY OF THE EQUIPMENT FOR ANY
PURPOSE, WHETHER OR NOT KNOWN OR DISCLOSED TO LESSOR, (ii) ANY DEFICIENCY OR
DEFECT IN THE EQUIPMENT, (iii) THE USE OR PERFORMANCE OF THE EQUIPMENT, OR
(iv) ANY LOSS OF BUSINESS OR OTHER CONSEQUENTIAL LOSS OR DAMAGE, WHETHER OR
NOT RESULTING FROM ANY OF THE FOREGOING.
(b) For the term of the Lease, Lessor assigns to Lessee (to the extent
possible), and Lessee may have the benefit of, any and all manufacturer's
warranties, service agreements and patent indemnities, if any, with respect
to the Equipment; provided, however, that Lessee's sole remedy for the breach
of any such warranty, indemnification or service agreement shall be against
the manufacturer of the Equipment and not against Lessor, nor shall any such
breach have any effect whatsoever on the rights and obligations of Lessor or
Lessee with respect to the Lease.
(c) NO REPRESENTATIONS OR WARRANTIES OF THE MANUFACTURER OR DISTRIBUTOR OF
THE EQUIPMENT, OR ANY OTHER THIRD PARTY, CAN BIND LESSOR, AND LESSEE
ACKNOWLEDGES AND AGREES THAT LESSOR SHALL HAVE NO OBLIGATIONS WITH RESPECT TO
THE EQUIPMENT EXCEPT AS SPECIFICALLY SET FORTH HEREIN OR OTHER DOCUMENT
EXECUTED BY LESSOR.
10. ASSIGNMENT
(a) Lessee acknowledges and understands that Lessor may assign to a
successor, financing lender and/or purchaser (the "Assignee"), all or any
part of the Lessor's right, title and interest in and to the Lease and the
Equipment and Lessee hereby consents to such assignment(s). In the event
Lessor transfers or assigns, or retransfers or reassigns, to an Assignee all
or part of Lessor's interest in the Lease, the Equipment or any sums payable
under the Lease, whether as collateral security for loans or advances made or
to be made to Lessor by such Assignee or otherwise, Lessee covenants that,
upon receipt of notice of any such transfer or assignment and instructions
from Lessor,
(i) Lessee shall, if so instructed, pay and perform its obligations under
the Lease to the Assignee (or to any other party designated by Assignee), and
shall not assign the Lease or any of its rights under the Lease or permit the
Lease to be amended, modified, or terminated without the prior written consent
of Assignee; and
(ii) Lessee's obligations under the Lease with respect to Assignee shall be
absolute and unconditional and not be subject to any abatement, reduction,
recoupment, defense, offset or counterclaim for any reason, alleged or proven,
including, but not limited to, defect in the Equipment, the condition, design,
operation or fitness for use of the Equipment or any loss or destruction or
obsolescence of the Equipment or any part, the prohibition of or other
restrictions against Lessee's use of the Equipment, the interference with such
use by any person or entity, any failure by Lessor to perform any of its
obligations contained in the Lease, any insolvency or bankruptcy of Lessor, or
for any other cause; and
(iii) Lessee shall, upon request of Lessor, submit documents and
certificates as may be reasonably required by Assignee to secure and complete
such transfer or assignment, including but not limited to the documents set
forth in Section 15(c) of this Master Agreement.
(iv) Lessee shall deliver to Assignee copies of any notices which are
required under the Lease to be sent to Lessor; and
(v) Lessee shall, if requested, restate to Assignee the representations,
warranties and covenants contained in the Lease (upon which Lessee
acknowledges Assignee may rely) and shall make such other representations,
warranties and covenants to Assignee as may be reasonably required to give
effect to the assignment.
(b) Lessor shall not make an assignment or transfer to any Assignee who
shall not agree that, so long as Lessee is not in default under the Lease,
such Assignee shall take no action to interfere with Lessee's quiet enjoyment
and use of the Equipment in accordance with the terms of the Lease. No such
assignment or conveyance shall relieve Lessor of its obligations under the
Lease and Lessee agrees it shall not look to any Assignee to perform any of
Lessor's obligations under the Lease. No such assignment shall increase
Lessee's obligations nor decrease Lessee's rights hereunder.
11. QUIET ENJOYMENT
Lessor covenants that so long as Lessee is not in default under a Lease,
Lessor shall take no action to interfere with Lessee's possession and use of
the Equipment subject to and in accordance with the provisions of the Lease.
12. INDEMNIFICATION
Except for the sole and gross negligence or willful misconduct of Lessor or
Assignee, Lessee shall and does agree to indemnify, protect, defend, save and
keep harmless Lessor and its Assignee(s) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, or expenses of any kind and nature whatsoever, including but not
limited to attorneys fees, including without limitation attorneys fees in
connection with the enforcement of this indemnification, which may be imposed
upon, incurred by or asserted against Lessor or its Assignee(s) in any way
relating to or arising out of the Lease, the manufacture, ownership, lease,
possession, use condition, operation, or accident in connection with the
Equipment (including, without limitation, those claims based on latent and
other defects, whether or not discoverable, or claims based on strict
liability, or any claim for patent, trademark or copyright infringement).
Lessor's rights arising from this Section shall survive the expiration or
other termination of the Lease. Nothing in this Section shall limit or waive
any right of Lessee to proceed against the manufacturer of the Equipment.
13. RISK OF LOSS
(a) Lessee assumes and shall bear the entire risk of loss and damage,
whether or not insured against, of the Equipment from any and every cause
whatsoever as of the date the Equipment is delivered to Lessee.
(b) In the event of loss or damage of any kind to any Item, Lessee shall use
all reasonable efforts to place the Item in good repair, condition and
working order to the reasonable satisfaction of Lessor within sixty (60) days
of such loss or damage, unless the manufacturer of the Equipment determines
that such Item has been irreparably damaged, in which case Lessee shall,
within ten (10) days of the manufacturer's determination of irreparable loss,
make its election to either pay Lessor the Stipulated Loss Value (as set
forth in Attachment A to this Master Agreement) for the irreparably damaged
Item or replace the irreparably damaged Item, all as provided in this
Section. To the extent that the Item is damaged but not irreparably damaged
and if Lessee is entitled, pursuant to the insurance coverage, to obtain
proceeds from such insurance for the repair of the Item, Lessee (provided no
Event of Default has occurred under the Lease) may arrange for the
disbursement of such proceeds to the manufacturer or other entity approved by
Lessor to perform the repairs to pay the cost of repair. However, Lessee's
obligation to timely repair the damaged Item is not contingent upon receipt
of such insurance proceeds.
(c) In the event that Lessee elects to pay Lessor the Stipulated Loss Value
for the irreparably damaged Item, Lessee shall (i) pay such amount (computed
as of the first day of the month following the determination of the
irreparable damage by the manufacturer) to Lessor on the first day of the
month following the election by Lessee as provided in (b) above, (ii) pay all
Base Monthly Rental for the Item up to the date that the Stipulated Loss
Value is paid
to Lessor; and (iii) arrange with the applicable insurance company (with the
consent of Lessor) for the disposition of the irreparably damaged Item. If
not all the Equipment is irreparably damaged, the Value for Calculation of
Stipulated Loss Value ("Value") as set forth on the Schedule for the
irreparably damaged Item shall be multiplied by the applicable percentage set
forth in Attachment A to compute the Stipulated Loss Value for such
irreparably damaged Item, and the Base Monthly Rental for the undamaged
Equipment remaining due (after payment of the Stipulated Loss Value for the
irreparably damaged Item) shall be that amount resulting from multiplying the
original Base Monthly Rental by the ratio of the Value of the undamaged
Equipment divided by the Value for all the Equipment prior to the damage.
(d) If Lessee elects to replace the irreparably damaged Item, Lessee shall
continue all payments under the Lease without interruption, as if no such
damage, loss or destruction had occurred, and shall replace such irreparably
damaged Item, paying all such costs, associated with the replacement, and
Lessee shall be entitled to insurance proceeds up to the amount expended by
Lessee in effecting the replacement. Lessee shall within twenty (20) days
following the date of determination of irreparable damage by the
manufacturer, effect the replacement by replacing the irreparably damaged
Item with a "Replacement Item" so that Lessor has good, marketable and
unencumbered title to such Replacement Item. The Replacement Item shall have
a fair market value equal to or greater than the Item replaced, and
anticipated to have a fair market value at the expiration of the Base Term
equal to the fair market value that the replaced Item would have had at the
end of the Base Term, and be the same manufacture, model and type and of at
least equal capacity to the Item for which the replacement is being made.
Upon delivery, such Replacement Item shall become subject to all of the terms
and conditions of the Lease. Lessee shall execute all instruments or
documents necessary to effect the foregoing.
(e) For purposes of this Lease, the term "fair market value" shall mean the
price of the Equipment delivered and installed at Lessee's location that
would be obtained in an arm's-length transaction between an informed and
willing buyer-lessee under no compulsion to buy or lease and an informed and
willing seller-lessor under no compulsion to sell or lease. If Lessor and
Lessee are unable to agree upon fair market value, such value shall be
determined, at Lessee's expense, in accordance with the foregoing definition,
by three independent appraisers, one to be appointed by Lessee, one to be
appointed by Lessor and the third to be appointed by the first two.
14. INSURANCE
During the term of the Lease, Lessee, at its own expense, shall maintain in
regard to the Equipment all risk insurance (in an amount not less than the
Stipulated Loss Value as identified on Attachment A) and comprehensive public
liability insurance in
amounts and with carriers reasonably satisfactory to Lessor. Any such
insurance shall name Lessor and the Assignee(s) as additional insured and, as
for the all risk insurance, loss payees as their interests may appear. All
such insurance shall provide that it may not be terminated, canceled or
altered without at least thirty (30) days' prior written notice to Lessor and
its Assignee(s). Coverage afforded to Lessor shall not be rescinded,
impaired, or invalidated by any act or neglect of Lessee. Lessee agrees to
supply to Lessor, upon request, evidence of such insurance.
15. REPRESENTATIONS AND WARRANTIES OF LESSEE; FINANCIAL STATEMENTS
(a) Lessee represents and warrants to Lessor and its Assignee(s) (i) that
the execution, delivery and performance of this Master Agreement and the
Lease was duly authorized and that upon execution of this Master Agreement
and the Lease by Lessee and Lessor, the Master Agreement and the Lease will
be in full force and effect and constitute a valid legal and binding
obligation of Lessee, and enforceable against Lessee in accordance with their
respective terms; (ii) the Equipment is accurately described in the Lease and
all documents of Lessee relating to the Lease; (iii) that Lessee is in good
standing in the jurisdiction of its incorporation and in any jurisdiction in
which any of the Equipment is located; (iv) that no consent or approval of,
giving of notice to, registration with, or taking of any other action in
respect of, any state, federal or other government authority or agency is
required with respect to the execution, delivery and performance by the
Lessee of this Master Agreement or the Lease or, if any such approval,
notice, registration or action is required, it has been obtained; (v) that
the entering into and performance of this Master Agreement and the Lease will
not violate any judgment, order, law or regulation applicable to Lessee or
any provision of Lessee's Articles of Incorporation or Bylaws or result in
any breach of, or constitute a default under, or result in the creation of
any lien, charge, security interest or other encumbrance upon any assets of
Lessee or upon the Equipment pursuant to any instrument to which Lessee is a
party or by which it or its property may be bound; (vi) there are no actions,
suits or proceedings pending, or to the knowledge of Lessee, threatened,
before any court or administrative agency, arbitrator or governmental body
which will, if determined adversely to Lessee, materially adversely affect
its ability to perform its obligations under the Lease or any related
agreement to which it is a party; (vii) that aside from the Master Agreement
and the Lease there are no additional agreements between Lessee and Lessor
relating to the Equipment, and (viii) that any and all financial statements
and other information with respect to Lessee supplied to Lessor at the time
of execution of the Lease and any amendment, are true and complete. The
foregoing representations and warranties shall survive the execution delivery
of the Lease and any amendments hereto and shall upon the written request of
Lessor, be made to Lessor's Assignee(s).
(b) Prior to and during the term of the Lease, Lessee will furnish Lessor
with Lessee's audited or unaudited financial statements. If
Lessee is a subsidiary of another company, Lessee shall supply such company's
financial statements and guarantees as are reasonably acceptable to Lessor.
Lessor's obligations to perform under any Lease is subject to the condition
that the financial statements furnished to Lessor by Lessee present the
financial condition and results of operations of Lessee and its affiliated
corporations, if any, and any guarantor of Lessee's obligations under any
Lease, as of the date of such financial statements, and that since the date
of such statements there have been no material adverse changes in the assets
or liabilities, the financial condition or other condition which in Lessor's
or Assignee(s) sole discretion are deemed to be materially adverse. Lessee
shall also provide Lessor with such other statements concerning the Lease and
the condition of the Equipment as Lessor may from time to time request.
(c) Upon Lessor's request, Lessee shall, with respect to each Lease, deliver
to Lessor (i) a certificate of a secretarial officer of Lessee certifying the
bylaw, resolution (specific or general) or corporate action authorizing the
transactions contemplated in the Lease; (ii) an incumbency certificate
certifying that the person signing this Mater Agreement and the Lease holds
the office the person purports to hold and has authority to sign on behalf of
Lessee; (iii) an opinion of Lessee's counsel with respect to the
representations in Section 15(a); (iv) an agreement with Lessor's Assignee
with regard to any assignment as referred to in Section 10; (v) the purchase
documents if Lessee has sold or assigned its interest in the Equipment to
Lessor; (vi) an insurance certificate evidencing the insurance provided by
Lessee pursuant to Section 14; and (vii) an Installation Certificate duly
executed by Lessee. Failure by Lessee to deliver any of these documents when
due shall operate, at Lessor's option, to continue the Installation Term for
the Lease thus delaying the Base Term Commencement Date, or to increase the
Base Monthly Rental to recover costs incurred by Lessor consequent to the
delay or the termination of the Lease as provided in Section 16.
16. DEFAULT, REMEDIES
(a) The following shall be deemed "Events of Default" under the Lease:
(1) Lessee fails to pay any installment of rent or other charge or
amount due under the Lease within ten (10) days after notice that such
payment is overdue; or
(2) Except as expressly permitted in the Lease, Lessee attempts to
remove, sell, encumber, assign or sublease or fails to insure any of the
Equipment, or fails to deliver any documents required of Lessee under the
Lease; or
(3) Any representation or warranty made by Lessee or Lessee's guarantor
in the Lease or any document supplied in connection with the Lease or any
financial statement is misleading or materially inaccurate; or
(4) Lessee fails to observe or perform any of the other obligations
required to be observed by Lessee under the Lease within thirty (30) days of
Lessee's first knowledge of such failure; or
(5) Lessee or Lessee's guarantor ceases doing business as a going
concern; makes an assignment for the benefit of creditors; admits in writing
its inability to pay its debts as they become due; files a 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 or
fails to deny the material allegations of a petition filed against it in any
such proceeding; consents to or acquiesces in the appointment of a trustee,
receiver, or liquidator for it or of all or any substantial part of its
assets or properties, or if it or its trustee, receiver, liquidator or
shareholders shall take any action to effect its dissolution or liquidation;
or
(6) If within thirty (30) days after the commencement of any proceedings
against Lessee or Lessee's guarantor seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such proceedings shall not
have been dismissed, or if within thirty (30) days after the appointment
(with or without Lessee's or Lessee's guarantor's consent) of any trustee,
receiver or liquidator of it or all of or any substantial part of its
respective assets and properties, such appointment shall not be vacated.
(b) Upon the happening of any Event of Default, Lessor may declare the
Lessee to be in default. Lessee authorizes Lessor at any time thereafter,
with or without terminating the Lease, to enter any premises where the
Equipment may be and take possession of the Equipment. Lessee shall, upon
such declaration of default, without further demand, immediately pay Lessor
an amount which is equal to (i) any unpaid amount due on or before Lessor
declared the Lease to be in default, plus (ii) as liquidated damages for loss
of a bargain and not as a penalty, an amount equal to the Stipulated Loss
Value for the Equipment computed as of the date the last Base Monthly Rental
payment was due prior to the date Lessor declared the Lease to be in default,
together with interest, as provided herein, plus (iii) all attorney and court
costs incurred by Lessor relating to the enforcement of its rights under the
Lease. After an Event of Default, at the request of Lessor and to the extent
requested by Lessor, Lessee shall immediately comply with the provisions of
Section 6(d) and Lessor may sell the Equipment at private or public sale, in
bulk or in parcels, with or without notice, without having the Equipment
present at the place of sale; or Lessor may lease, otherwise dispose of or
keep idle all or part of the Equipment, subject, however, to its obligation
to mitigate damages. The proceeds of sale, lease or other disposition, if
any, of the Equipment shall be applied: (1) to all Lessor's costs,
charges and expenses incurred in taking, removing, holding, repairing and
selling, leasing or otherwise disposing of the Equipment including attorney
fees; then (2) to the extent not previously paid by Lessee, to pay Lessor the
Stipulated Loss Value for the Equipment and all other sums owed by Lessee
under the Lease, including any unpaid rent which accrued to the date Lessor
declared the Lease to be in default and indemnities then remaining unpaid
under the Lease; then (3) reimburse to Lessee Stipulated Loss Value previously
paid by Lessee as liquidated damages; and (4) any surplus shall be retained by
Lessor. Lessee shall pay any deficiency in (1) and (2) immediately. The
exercise of any of the foregoing remedies by Lessor shall not constitute a
termination of the Lease unless Lessor so notifies Lessee in writing. Lessor
may also proceed by appropriate court action, either at law or in equity to
enforce performance by Lessee of the applicable covenants of the Lease or to
recover damages for the breach of the Lease.
(c) The waiver by Lessor of any breach of any obligation of Lessee shall not
be deemed a waiver of any future breach of the same or any other obligation.
The subsequent acceptance of rental payments under the Lease by Lessor shall
not be deemed a waiver of any such prior existing breach at the time of
acceptance of such rental payments. The rights afforded Lessor under Section
16 shall be cumulative and concurrent and shall be in addition to every other
right or remedy provided for the Lease or now or later existing in law
(including as appropriate all the rights of a secured party or lessor under
the Uniform Commercial Code) or in equity and Lessor's exercise or attempted
exercise of such rights or remedies shall not preclude the simultaneous or
later exercise of any or all other rights or remedies.
(d) In the event Lessee shall fail to perform any of its obligations under
the Lease, then Lessor may perform the same, but shall not be obligated to do
so, at the cost and expense of Lessee. In any such event, Lessee shall
promptly reimburse Lessor for any such costs and expenses incurred by Lessor.
17. LESSOR'S TAX BENEFITS
Lessee acknowledges that Lessor shall be entitled to claim all tax benefits,
credits and deductions related to the Equipment for federal income tax
purposes including, without limitation: (i) deductions on Lessor's cost of
the Equipment for each of its tax years during the term of the Lease under
any method of depreciation or other cost recovery formula permitted by the
Internal Revenue Code of 1986, as amended (hereinafter called the "Code"),
and (ii) interest deductions as permitted by the Code on the aggregate
interest paid to any Assignee (hereinafter collectively "Lessor's Tax
Benefits"). Lessee agrees to take no action inconsistent (including the
voluntary substitution of Equipment) with the foregoing or which would result
in the loss, disallowance, recapture or unavailability to Lessor of Lessor's
Tax Benefits. Lessee hereby indemnifies Lessor and its Assignee(s) from and
against (a) any loss, disallowance, unavailability or
recapture of Lessor's Tax Benefits resulting from any action or failure to
act of Lessee, including replacement of the Equipment, plus (b) all interest,
penalties, costs (including attorney fees), or additions to tax resulting
from such loss, disallowance, unavailability or recapture.
18. GENERAL
(a) The Lease shall be deemed to have been made and delivered in the State
of Michigan and shall be governed in all respects by the laws of such state.
THE PARTIES HERETO AGREE THAT IN THE EVENT OF AN ALLEGED BREACH OF THIS
AGREEMENT OR ANY DOCUMENTS RELATING THERETO BY EITHER PARTY, OR ANY
CONTROVERSIES ARISE BETWEEN THE PARTIES RELATING TO THIS AGREEMENT OR ANY
DOCUMENTS RELATING THERETO, AND SUCH BREACHES OR CONTROVERSIES ARE BROUGHT
BEFORE ANY COURT, SUCH CONTROVERSIES SHALL BE TRIED BY A JUDGE ALONE. THE
PARTIES, HAVING HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF
THEIR OWN CHOOSING, HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO A
TRIAL BY JURY IN ANY MATTER RELATING TO THIS AGREEMENT OR ANY DOCUMENTS
RELATED THERETO.
(b) The Master Agreement and the Lease constitute the entire and only
agreement between Lessee and Lessor with respect to the lease of the
Equipment, and the parties have only those rights and have incurred only
those obligations as specifically set forth herein. The covenants,
conditions, terms and provisions may not be waived or modified orally and
shall supersede all previous proposals, both oral and written, negotiations,
representations, commitments or agreements between the parties. The Lease
may not be amended or discharged except by subsequent written agreement
entered into by duly authorized representatives of Lessor and Lessee.
(c) All notices, consents or requests desired or required to be given under
the Lease shall be in writing and shall be delivered in person or sent by
certified mail, return, receipt requested, or by courier service to the
address of the other party set forth in the introduction of the Master
Agreement or to such other address as such party shall have designated by
proper notice.
(d) Each Schedule shall be executed in three counterparts, consecutively
numbered. To the extent, if any, that a Schedule constitutes chattel paper
(as such term is defined in the Uniform Commercial Code) no security interest
in the Schedule may be created through the transfer or possession of any
counterpart other than Counterpart No. 1. The Master Agreement, in the form
of a photocopy, is Exhibit A to the Schedule and is not chattel paper by
itself.
(e) Section headings are for convenience only and shall not be construed as
part of the Lease.
(f) It is expressly understood that all of the Equipment shall be and remain
personal property, notwithstanding the manner in which
the same may be attached or affixed to realty, and, upon Lessor's request,
Lessee shall secure from its mortgagee, landlord or owner of the premises a
waiver in form and substance reasonably satisfactory to Lessor.
(g) Lessor may upon written notice to Lessee advise Lessee that certain
Items supplied to Lessee are leased to Lessor and supplied to Lessee under
the Lease as a sublease. Lessee agrees to execute and deliver such
acknowledgements and assignments in connection with such a Lease as are
reasonably required. If, at any time during the term of the Lease, Lessor's
right to lease the Equipment expires, Lessor may remove the Equipment from
Lessee's premises and shall promptly provide identical substitute Equipment.
All expenses of such substitution, including de-installation, installation
and transportation expenses, shall be borne by Lessor.
(h) Prior to the delivery of an Item, the obligations of Lessor hereunder
shall be suspended to the extent that it is hindered or prevented from
complying therewith because of labor disturbances, including strikes and
lockouts, acts of God, fires, storms, accidents, failure to deliver any Item,
governmental regulations or interferences or any cause whatsoever not within
the sole control of Lessor.
(i) Any provision of the Master Agreement or any Schedule prohibited by or
unlawful or unenforceable under any applicable law or any jurisdiction shall
be ineffective as to such jurisdiction without invalidating the remaining
provisions of the Master Agreement and such Schedule.
(j) Although this Lease is the standard form used by Lessor to lease
hardware equipment to Lessee, both Lessor and Lessee acknowledge that, with
respect to any software which may be included as Equipment ("Software"), this
Lease is a financing agreement whereby that portion of Lessee's Base Month
Rental payment obligation applicable to any Software represents license fees
which are being paid by Lessee in consideration for payment by Lessor to the
software vendor ("Vendor") of the total license fee relating to any such
Software. Neither Lessor nor Lessee have or were granted any ownership or
other proprietary rights in the Software, and neither party purports to
transfer any such rights to the other hereunder. Lessee has only those
rights in the Software which were granted to Lessee pursuant to the software
license agreement entered into directly between Vendor and Lessee ("License").
(k) The parties agree that this is a "Finance Lease" as defined by section
2A-103(g) of the Uniform Commercial Code ("UCC"). Lessee acknowledges either
(a) that Lessee has reviewed and approved any written Supply Contract (as
defined by UCC 2-A-103(y)) covering the Equipment purchased from the Supplier
(as defined by UCC 2A-103(x) thereof for lease to Lessee or (b) that Lessor
has informed or advised Lessee, in writing, either previously or by this
Lease of the following: (i) identity of the Supplier, (ii) that the Lessee
may have rights under the Supply Contract; and (iii) that the Lessee may
contact the Supplier for a description of any such rights Lessee may have
under the Supply Contract.
The terms of this Lease are applicable only as between Lessor (and any
Assignee) and Lessee. The terms of the License are applicable only as
between Lessee and Vendor, and Lessor does not assume and is not liable for
any obligations under any of the provisions of the License.
Lessee's Base Monthly Rental payment obligation is absolute and
unconditional in all respects regardless of any problem Lessee may have with
the Software, any dispute Lessee may have with the Vendor, any inability of
Lessee to use the Software or exercise by Vendor of any remedies it may have
pursuant to the License.
The parties have executed this Master Lease Agreement as of the date written
above.
LESSOR: LESSEE:
VARILEASE CORPORATION STARPAK, INC.
By: /s/ XXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXX
------------------------------- ------------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
By: Senior Vice President Title: Vice President
If there are no Additional Provisions to this Master Lease Agreement, check
here X . If there are Additional Provisions describe here:
ATTACHMENT A
to MASTER LEASE AGREEMENT
dated March 6 [sic], 1997
between VARILEASE CORPORATION ("LESSOR")
and STARPAK, INC. ("LESSEE")
To calculate Stipulated Loss Value, multiply the applicable percentage,
below, by the value of the applicable Item(s) set forth on the Schedule.
RENT RENT RENT
PAYMENT STIP LOSS PAYMENT STIP LOSS PAYMENT S T I P
LOSS
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
1 110.50% 21 85.31% 41 60.13%
2 109.24% 22 84.05% 42 58.87%
3 107.98% 23 82.80% 43 57.61%
4 106.62% 24 81.54% 44 56.35%
5 105.46% 25 80.28% 45 55.09%
6 104.20% 26 79.02% 46 53.83%
7 102.94% 27 77.76% 47 52.57%
8 101.68% 28 76.50% 48 51.31%
9 100.43% 29 75.24% 49 50.05%
10 99.17% 30 73.98% 50 48.79%
11 97.91% 31 72.72% 51 47.53%
12 96.65% 32 71.46% 52 46.28%
13 95.39% 33 70.20% 53 45.02%
14 94.13% 34 68.94% 54 43.76%
15 92.87% 35 67.68% 55 42.50%
16 91.61% 36 66.42% 56 41.24%
17 90.35% 37 65.17% 57 39.98%
18 89.09% 38 63.91% 58 38.72%
19 87.83% 39 62.65% 59 37.46%
20 86.57% 40 61.39% 60 36.10%
AND THEREAFTER
