1
EXHIBIT 10.15
MASTER EQUIPMENT LEASE AGREEMENT
Dated as of
DECEMBER 2,1996
between
FINOVA TECHNOLOGY FINANCE, INC.
(LESSOR)
AND
R F MICRO DEVICES, INC.
(LESSEE)
2
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. Agreement for Lease of Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Delivery and Acceptance of Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Disclaimer of Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Primary Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Lessee's Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Identification Marks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
8. Fees and Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
9. General Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Use of Equipment; Location; Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
11. Maintenance and Repairs; Additions to Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
12. Loss, Damage or Destruction of Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Reports; Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
15. Return of Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
16. Lessor's Ownership; Equipment To Be and Remain Personal Property. . . . . . . . . . . . . . . . . . 11
17. Other Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
19. Assignment and Transfer by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Recording and Filing; Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
21. Automatic Lease Term Renewal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
22. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
23. Failure or Indulgence not Waiver; Additional Rights of Lessor. . . . . . . . . . . . . . . . . . . . 16
24. Sublease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3
25. Purchase Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
27. Entire Agreement; Severability, Amendment or Cancellation of Lease. . . . . . . . . . . . . . . . . 18
28. Waiver of Jury. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
29. Restriction of Limitation Periods and Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
30. Governing Law, Consent to Jurisdiction and Service. . . . . . . . . . . . . . . . . . . . . . . . . 18
31. Lessor's Right to Perform for Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
32. Agreement for Lease Only. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
33. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
34. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
35. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4
MASTER EQUIPMENT LEASE AGREEMENT
MASTER EQUIPMENT LEASE AGREEMENT dated as of December 2,1996, between
R F MICRO DEVICES, INC. (hereinafter called "Lessee"), a North Carolina
corporation that has its executive office and principal place of business at
0000 Xxxxxxxxx Xxxx Xxxxxxxxxx, XX 00000 and FINOVA TECHNOLOGY FINANCE, INC.
(hereinafter called "Lessor"), a Delaware corporation with its principal place
of business at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000.
In consideration of the mutual covenants hereinafter contained, Lessee
and Lessor agree as follows:
1. Agreement for Lease of Equipment. Lessor shall lease to
Lessee and Lessee shall lease from Lessor, upon the terms and conditions
specified in this Master Lease and the applicable Rental Schedule, the
Equipment as described in the applicable Rental Schedule including Schedule A
of such Rental Schedule and this Master Lease. Each Rental Schedule shall
incorporate the terms of this Master Lease and shall constitute a separate
lease (the term "this Lease" shall refer collectively to the applicable Rental
Schedule and this Master Lease). Only the signed copy of each Rental Schedule
and not this Master Lease shall constitute chattel paper the possession of
which can perfect a security interest. In the event of a conflict between the
provisions of this Master Lease and the provisions of any Rental Schedule, the
provisions of the Rental Schedule shall prevail.
2. Delivery and Acceptance of Equipment. (a) Lessor and Lessee
agree that the vendor of the Equipment to Lessor or, as to any Equipment to be
sold by Lessee to Lessor and leased back, the vendor of the Equipment to Lessee
(in either case, the "Vendor") will be responsible to deliver the Equipment to
Lessee at the location specified in the applicable Rental Schedule. Such
delivery shall be delivery of the Equipment by Lessor to Lessee under this
Lease unless such Equipment is to be sold by Lessee to Lessor and leased back.
Provided that no Event of Default has occurred, no event which with the passage
of time or giving of notice would be an Event of Default has occurred, and is
continuing, and the conditions set forth in the next following paragraph have
been met and the Equipment is not to be sold by Lessee to Lessor and leased
back, Lessor hereby authorizes Lessee, acting as Lessors agent, to accept for
Lessor, and in Lessor's name, the Equipment from the Vendor upon delivery
pursuant to the purchase contract for the Equipment. Such acceptance shall be
acceptance of the Equipment by Lessee under this Lease. Nevertheless, if
within five business days after Lessee has received delivery of an item of the
Equipment, Lessee has not given Lessor written notice of a defect therein and
Lessor has not notified Lessee not to accept the Equipment, Lessee shall be
deemed to have (a) acknowledged receipt of such item of the Equipment in good
condition and repair and (b) accepted such item of the Equipment under this
Lease. Lessee agrees to confirm any acceptance of the Equipment by Lessee by
executing a Certificate of Inspection and Acceptance and providing the same to
Lessor in accordance with the notice provision hereof on or about the Lease
Commencement Date, but no later than the date for payment to the Vendor.
(b) Conditions precedent to every progress payment and Lease Term
Commencement shall include that (i) no payment shall be past due to Lessor or
any assign of Lessor from Lessee or any Guarantor (as hereinafter defined),
whether as a lessee, a guarantor or in some other capacity; (ii) Lessee shall
be in compliance with the provisions of this Lease; (iii) all documentation
then required by Lessor's counsel shall have been received by Lessor, (iv)
Lessee shall not be in default under any material contract to which Lessee is a
party or by which Lessee or the property of Lessee is bound; and (v) there
shall not have been any material adverse change or threatened material adverse
change in the financial or other condition, business, operations, properties,
or assets of Lessee or any Guarantor since September 3, 1996, or from the
written information that has been supplied to Lessor prior to September 3, 1996
by Lessee or any Guarantor. Conditions precedent to the Lease Term
Commencement under each Rental Schedule shall include that there shall not have
been any material adverse change or threatened material adverse change in the
financial or other condition, business, operations, properties or assets of any
Manufacturer (as hereinafter defined) of the Equipment to be leased under such
Rental Schedule since September 3, 1996, or from the written information that
has been supplied to Lessor prior to September 3, 1996 by such Manufacturer.
5
3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT IT HAS
SELECTED BOTH THE EQUIPMENT AND EVERY MANUFACTURER AND OTHER VENDOR OF THE
EQUIPMENT, THAT LESSEE HAS NOT RELIED UPON LESSOR FOR SUCH SELECTION AND THAT
LESSEE HAS A COPY OF THE PURCHASE CONTRACT(S) FOR LESSOR'S PURCHASE OF THE
EQUIPMENT. LESSOR HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY,
FITNESS FOR USE, FITNESS FOR A PARTICULAR PURPOSE OR TITLE OF THE EQUIPMENT (OR
ANY PART THEREOF) OR AS TO COMPLIANCE WITH SPECIFICATIONS, COMPLIANCE WITH
GOVERNMENTAL REGULATIONS, QUALITY SELECTION, INSTALLATION, SUITABILITY
PERFORMANCE, CONDITION, DESIGN, ABSENCE OF DEFECTS, OPERATION, OR
NON-INFRINGEMENT OF PATENT, COPYRIGHT TRADEMARK OR OTHER INTELLECTUAL PROPERTY
RIGHTS OF THE EQUIPMENT (OR ANY PART THEREOF). LESSEE SHALL LEASE THE
EQUIPMENT "AS IS, WHERE IS." LESSOR HEREBY DISCLAIMS ANY AND ALL SUCH
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED. LESSEE AND LESSOR AGREE
THAT ALL RISKS INCIDENT TO THE MATTERS REFERRED TO IN THIS SECTION ARE TO BE
BORNE BY LESSEE. Lessor has and shall have no responsibility for the
installation, adjustment or servicing of the Equipment. The provisions of this
Section have been negotiated and are intended to be a complete exclusion and
negation of any representations or warranties by Lessor, express or implied,
with respect to the Equipment that may arise pursuant to any law now or
hereafter in effect, or otherwise. In no event shall defect in, or unfitness
of, any or all of the Equipment, or any breach of warranty or representation by
any or every Manufacturer or other Vendor relieve Lessee of the obligation to
pay rent or to make any other payments required hereunder or to perform any
other obligation hereunder. Without limiting the generality of the foregoing,
Lessor shall not be responsible or liable for any (i) defect, either latent or
patent, in any of the Equipment or for any direct or consequential damages
therefrom, (ii) loss of use of any of the Equipment or for any loss of profits
or any interruption in Lessee's business occasioned by Lessee's inability to
use any or all of the Equipment for any reason whatsoever, or (iii) in the
event that any Vendor delays or fails to make delivery of any or all of the
Equipment or fails to fulfill or comply with any purchase contract or order.
For as long as no Event of Default shall have occurred and is continuing
hereunder, Lessor hereby transfers and assigns to Lessee during the Lease Term
(as hereinafter defined) all right and interest of Lessor in any Manufacturer's
and other Vendor's warranties with respect to any and all of the Equipment, and
agrees to execute all documents reasonably necessary to effect such transfer
and assignment, except that to the extent any rights of Lessor with respect to
the Equipment may not be assigned or otherwise be available to Lessee, Lessor
shall instead use reasonable efforts to enforce such rights against such
Manufacturers or other Vendors but only upon the request and at the expense of
Lessee.
4. Primary Term. The Primary Term for each item of the Equipment
shall commence on the Lease Commencement Date provided for by the Rental
Schedule for such Equipment, and unless sooner terminated pursuant to the
provisions of this Lease, shall be for the number of calendar months set forth
in such Rental Schedule, plus the number of days remaining in any partial
calendar month if the Lease Commencement Date occurs on other than the first
day of a month. Notwithstanding the foregoing, the provisions of this Master
Lease on indemnification of Lessor by Lessee shall apply between Lessor and
Lessee with respect to any Equipment from the time that any order for the
Equipment is placed by Lessor.
5. Rent. (a) Lessee shall pay to Lessor in cash or by check as
rent for the Equipment during the Lease Term, the amounts provided for in the
Rental Schedule ("Basic Rent") for such Equipment on the dates designated
therein ("Payment Dates"), at the location of Lessor set forth therein, or at
such other address or to such other person or entity as Lessor, from time to
time, may designate in writing.
(b) Lessee shall also pay to Lessor, within 10 business days
(unless specifically otherwise provided by this Lease) from notice by Lessor to
Lessee that payment is due, any sums other than for Basic Rent that Lessee at
any time shall be required to pay Lessor pursuant to the provisions of this
Lease, including but not limited to sums payable by reason of payments by
Lessor to any Vendors in advance of the delivery of such Equipment or the
commencement of the Lease Term for such Equipment, together with every
additional charge, interest and cost which by the terms of the applicable
Rental Schedule or this Master Lease may be added for non-payment or late
payment
2
6
of any such sums or of Basic Rent. All such sums shall be additional rent
("Additional Rent") and not less than 10 business days prior to the due date
thereof which due date if not otherwise specified in the notice by Lessor to
Lessee or by a specific provision of this Lease as to when payment is due shall
be the tenth day following the day such notice is given. Lessor shall provide
Lessee with written notification as to the amount of any Additional Rent. If
Lessee shall fail to pay any Additional Rent, Lessor shall have all rights,
powers and remedies with respect thereto as are provided herein or by law in
the case of non-payment of Basic Rent.
(c) With respect to any amount of Basic Rent or Additional Rent
not received by Lessor within three business days from when due hereunder,
Lessee shall pay to Lessor interest on such amount from the due date thereof
until payment is received by Lessor at two percent per month or the highest
rate of interest on amounts past due that is not unlawful, whichever is lower
(the "Default Interest Rate"). Additionally, with respect to each such
instance of late payment, Lessee shall pay to Lessor, within three business
days of written notification that such payment is due, a collection fee of
$500, which fee approximates Lessor's administrative costs, at minimum, to
collect such unpaid Basic Rent or Additional Rent.
(d) LESSEE AGREES THAT TIME IS OF THE ESSENCE TO LESSOR IN
LESSEE'S MAKING PAYMENTS OF BASIC RENT AND ADDITIONAL RENT WHEN SUCH PAYMENTS
BECOME DUE.
(e) This Lease is a net-net-net lease and, notwithstanding any
other provisions of this Lease, it is intended that Basic Rent and Additional
Rent shall be paid without notice, demand, counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction.
Lessee shall perform all its obligations under this Lease at its sole cost and
expense. Except to the extent otherwise expressly specified herein or for any
breach by Lessor of Section 22 of this Master Lease, the obligations and
liabilities of Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including, without limitation: (i) any
defect in the condition, quality or fitness for use of the Equipment or any
part thereof; (ii) any damage to, removal, abandonment, salvage, loss,
scrapping or destruction of or any requisition or taking of the Equipment or
any part thereof; (iii) any restriction, prevention or curtailment of or
interference with any use of the Equipment or any part thereof; (iv) any defect
in title or rights to the Equipment or any lien on such title or rights or on
the Equipment; (v) any change, waiver, extension, indulgence or other action or
omission in respect of any obligation or liability of Lessor, (vi) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessee or any action taken
with respect to this Lease by any trustee or receiver of Lessee or by any
court, in any such proceeding; (vii) any claim that Lessee has or might have
against any Person (as hereinafter defined), including without limitation
Lessor; (viii) any failure on the part of Lessor to perform or comply with any
of the terms hereof or of any other agreements; (ix) any invalidity,
unenforceability or disaffirmance of this Lease or any provision hereof against
or by Lessee; or (x) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not Lessee or Lessor shall have notice
or knowledge of any of the foregoing. To the extent permitted by law, Lessee
waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate, cancel rescind or surrender this Lease, or to any diminution or
reduction of Basic Rent or Additional Rent payable by Lessee hereunder.
Nothing is this paragraph shall prevent Lessee from suing and collecting
damages and refunds from Lessor.
6. Lessee's Representations and Warranties. Lessee represents
and warrants (and if requested by Lessor, promptly will provide supporting
documents to the effect and an opinion of counsel substantially in the form
requested by Lessor) that as of the date that Lessee signs this Master Lease,
as of any date that Lessor makes a payment to a Vendor prior to the date all
Equipment has been accepted for lease hereunder, as of each date that any
Equipment is accepted for lease hereunder and as of each Lease Commencement
Date pursuant to a Rental Schedule hereunder: (i) all items of the Equipment
are new and unused as of the Lease Commencement Date, unless otherwise
specified in the applicable Rental Schedule in which event the specified items
of the Equipment shall have been delivered new to Lessee by their suppliers not
more than 90 days prior to their Lease Term Commencement; (ii) Lessee is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and is qualified and in good standing to do
business wherein the failure to be so qualified could reasonably be expected to
have a material adverse effect on its operations or business including the
jurisdictions where the
3
7
Equipment is or will be located; (iii) Lessee has the corporate power to enter
into this Lease and the other instruments and documents executed by Lessee in
connection herewith (together with this Lease, the "Transactional Documents")
and to pay and perform its obligations under this Lease and the other
Transactional Documents; (iv) this Lease and the other Transactional Documents
have been duly authorized, executed and delivered by Lessee, and constitute the
valid, legal and binding obligations of Lessee enforceable in accordance with
their terms subject to such limitations on enforceability as may be imposed by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws relating to or affecting the rights of creditors generally
and to the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law); (v) no vote or consent of, or
notice to, the holders of any class of stock of Lessee is required, or if
required, such vote or consent has been obtained or given, to authorize the
execution, delivery and performance of this Lease and the other Transactional
Documents by Lessee; (vi) neither the execution and delivery by Lessee of this
Least or the other Transactional Documents, nor the consummation by Lessee of
the transactions contemplated hereby or thereby, nor compliance by Lessee with
the provisions hereof or thereof, conflicts with or results in a breach of any
of the provisions of any Certificate of Incorporation or Bylaws or partnership
or trust agreement or certificate of Lessee, or of any applicable law,
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, administrative agency or other governmental authority, or of any
indenture, mortgage, deed of trust, other agreement or instrument of any nature
to which Lessee is a party or by which it or its property is bound or affected
or pursuant to which it is constituted, or constitutes a default under any
thereof or will result in the creation of any lien, charge, security interest
or other encumbrance upon any of the Equipment, other than the interests
therein of Lessor or any Assignee (as hereinafter defined), or upon any other
right or property of Lessee or will in any manner adversely affect Lessor's or
any Assignee's right, title and interest in any of the Equipment; (vii) no
consent, approval, withholding of objection or other authorization of or by any
court, administrative agency, other governmental authority or any other Person
is required, except such consents, approvals or other authorizations which have
been duly obtained and are in full force and effect and copies of which have
been furnished Lessor, in connection with the execution, delivery or
performance by, or the consummation by Lessee, of the transactions contemplated
by this Lease and the other Transactional Documents; (viii) there are no
actions, suits or proceedings pending, or, to the knowledge of threatened, in
any court or before any administrative agency or other governmental authority
against or affecting Lessee, which, if adversely decided would be reasonably
likely or could reasonably be expected to materially and adversely affect the
financial or other condition, business, operations, properties, or assets of
Lessee or the ability of Lessee to perform any of its obligations under this
Lease or under the other Transactional Documents, except for any such actions,
suits or proceedings that Lessee has described in writing to Lessor, (ix) there
has been no material adverse change or threatened material adverse change in
Lessees, any Guarantor's or (with respect to the Equipment described in the
applicable Rental Schedule) any Manufacturer's financial or other condition,
business, operations, properties or assets since the date of Lessee's, such
Guarantor's or such Manufacturer's most recent financial statements reported on
by an independent public accounting firm prior to the date of this Master
Lease, since the dates of each such Person's interim and annual financial
statements, if any, subsequent to such prior statements, or from the written
information that has been supplied to Lessor by Lessee, any Guarantor or such
Manufacturer; (x) Lessee possesses any and all authorizations, certifications
and licenses which are or may be required to use and operate the Equipment;
(xi) the actual Acquisition Cost pursuant to the applicable Rental Schedule of
each item of the Equipment does not exceed the fair and usual price for like
quantity purchases of such item and reflects all discounts, rebates and
allowances for the Equipment given to Lessee, any Guarantor or any affiliate of
Lessee or any Guarantor by any Vendor or other Person including, without
limitation, discounts for advertising, prompt payment, testing or other
services; (xiii) all information supplied to Lessor by Lessee or any Guarantor
is correct in all material respects and does not omit any statement necessary
to make the information supplied not misleading; and (xiv) the financial
statements of and any Guarantor have been prepared in accordance with generally
accepted accounting principles consistently applied ("GAAP") and fairly present
in accordance with GAAP the financial condition and the results of operations
of Lessee and such Guarantors at the dates of and for the periods covered by
statements.
7. Identification Marks. To the extent requested by Lessor or if
required by applicable law, Lessee shall affix to the Equipment at Lessee's
expense signs, labels, or other forms of notice to disclose Lessor's ownership
of, and the interest of any Assignee in, the Equipment. Lessee shall keep and
maintain such signs, labels or other forms of notice affixed to the Equipment
throughout the Lease Term. Lessor may furnish such signs, labels or other
4
8
forms of notice to Lessee. Except as otherwise directed by Lessor, Lessee
shall not allow the name of any person other than Lessor to be placed on any
part of the Equipment as a designation that might reasonably be interpreted as
a claim of ownership.
8. Fees and Taxes. Lessee agrees to pay promptly when due, and
to indemnify and hold Lessor harmless from, all license, title, registration
and recording fees whatsoever, all taxes including, without limitation, sales,
use, franchise, personal property, excise, import, export and stamp taxes and
customs duties, and all charges together with any penalties, fines or interest
thereon which are assessed, levied or imposed by any governmental or taxing
authority against Lessor with respect to any or all of the Equipment or the
purchase, acquisition, ownership, construction, installation, shipment,
delivery, lease, possession, use, maintenance, condition, operation, control,
return or other disposition thereof or the rents, receipts or earnings arising
therefrom which accrue or are payable with respect to the Equipment or this
Lease or which are assessed, are based on a valuation date, or are due during
or with respect to the Lease Term or any subsequent period until the Equipment
has been returned to Lessor pursuant to the provisions of this Lease or until
the Equipment has been purchased by Lessee pursuant to any purchase option
provisions of this Lease, excluding, however, any taxes solely measured by
Lessor's net income from the general operation of Lessor's business including
applicable state franchise taxes payable by Lessor that are solely so measured.
In the event any fees, taxes or charges payable by Lessee pursuant to the next
preceding sentence are paid by Lessor, or if Lessor is required to collect or
pay any thereof, Lessee shall reimburse Lessor therefor (plus any penalties,
fines or interest thereon) promptly upon demand. Unless and until Lessor
notifies Lessee in writing to the contrary, Lessee shall file and pay any
personal property taxes levied or assessed on the Equipment directly to the
levying authority. Upon Lessor's written request, Lessee shall submit to
Lessor satisfactory evidence of payment by Lessee of any or all amounts for
which Lessee is required to make payment or to indemnify Lessor hereunder that
are paid by Lessee, and of the filing of any and all reports, returns and other
documentation required in connection with any such payment. However, Lessor
may, if it elects, estimate such personal property taxes and xxxx Lessee
therefor periodically in advance. In the event Lessor elects to pay the
personal property taxes directly to a levying authority, Lessor shall submit to
Lessee a copy of its personal property tax return and its receipt for the full
amount of such personal property taxes so paid by Lessor. All of the
obligations of Lessee under this Section shall continue in full force and
effect notwithstanding any expiration, termination, rescission or cancellation
of this Lease. Lessee acknowledges that Lessor may not be exempt from the
payment of any of the amounts referred to herein, even though Lessee might have
been exempt therefrom if it were the owner or purchaser of the Equipment, and
Lessee agrees that this Section shall apply, and the amounts due from it
hereunder shall be due, whether or not Lessee might itself have otherwise been
exempt from any such payments. Subject to the foregoing, Lessee shall have the
right to contest in good faith any such taxes levied or imposed by any
governmental or taxing authority, provided that Lessee shall have given Lessor
not less than ten business days prior notice of its intention to contest and
full particulars of the proposed contest, in the reasonable opinion of Lessor
the proposed contest will not adversely affect the interests of Lessor or any
Assignee, and Lessee either shall have paid the taxes or provided for a bond or
other security so that none of the Equipment will be subject to seizure,
confiscation or forfeiture. For purposes of this Section, the term "Lessor"
shall include each member of Lessor's affiliated group, if any.
9. General Indemnity. (a) Lessee shall indemnify Lessor and any
Assignee (as hereinafter defined), and their respective agents and servants,
against, and agrees to defend, protect, save and keep them harmless from, any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including attorneys' fees and
expenses and costs for customs, completion, performance and appeal bonds, of
whatsoever kind and nature (including, without limitation, for negligence, tort
liability, damages by reason of strict or absolute liability, punitive damages,
and indirect and consequential damages, but excluding any such amount imposed
or incurred as a result of Lessor's gross negligence or willful misconduct),
imposed on or incurred by or assessed against Lessor and/or any Assignee, in
any way relating to or arising out of (i) the failure of Lessee to provide or
obtain any certificates, documents, consents, authorizations, clearances,
licenses, permits or instruments required hereunder or under any of the other
Transactional Documents, or (ii) the ordering, construction, installation,
delivery, testing, ownership, lease, possession, use, maintenance, operation,
control, movement, import, export, shipment, condition, or return of the
Equipment (including but not limited to latent and other defects, whether or
5
9
not discoverable by Lessor or Lessee, and any claim for patent, trademark,
copyright, software or other intellectual property infringement) until such
time as the Equipment shall have been returned to Lessor pursuant to the
provisions of this Lease or until the Equipment shall have been purchased by
Lessee pursuant to any purchase option provisions of this Lease; provided that
Lessee shall have no obligation to indemnify any Person otherwise so entitled
to indemnity hereunder in respect of the foregoing to the extent the same shall
arise from the gross negligence or wilful misconduct of such person.
(b) The obligations of Lessee under this Section shall survive the
payment of all known obligations under and any expiration, termination,
rescission or cancellation of this Lease, and are expressly made for the
benefit of and shall be enforceable by Lessor, its successors and any Assignee.
10. Use of Equipment; Location; Liens. (a) During the Lease Term,
Lessee warrants and agrees that the Equipment shall be used and operated and
otherwise be in compliance with any established operating procedures therefor
of any Manufacturer and all statutes, regulations and orders of any
governmental body having power to regulate the Equipment or its use. Lessee
shall bear and pay all costs of such compliance. Lessee shall not permit the
Equipment to be used or maintained in any manner or condition that would
violate, or could result in the termination of, the insurance policies carried
by Lessee pursuant to the provisions of this Lease on insurance, or in any
manner or condition or for any purpose for which, in the opinion of any
Manufacturer, the Equipment is not designed or suited.
(b) Lessee agrees that without Lessor's prior written consent, it
will not remove any of the Equipment from the location specified in the Rental
Schedule for such Equipment or permit any of the Equipment to be used by anyone
other than Lessee, Lessee's employees or a responsible independent contractor
engaged by Lessee.
(c) During the Lease Term and until the Equipment has been
returned to Lessor pursuant to the provisions of this Lease or until the
Equipment is purchased by Lessee pursuant to any purchase option provisions of
this Lease, Lessee will not directly or indirectly create, incur, assume or
suffer to exist any mortgage, security interest, lien or encumbrance on the
Equipment or Lessor's or any Assignee's title thereto or interest therein,
except in the name of Lessor and its successor(s) and any Assignee. Lessee, at
its own expense, will promptly take such action as may be necessary to keep the
Equipment free and clear of, and to duly discharge, any such mortgage, security
interest, lien or encumbrance not excepted above.
(d) Lessee agrees to procure and maintain in effect all licenses,
certificates, permits and other approvals and consents required by federal,
state and local laws and regulations in connection with Lessee's possession,
use, operation and maintenance of the Equipment. During the Lease Term, Lessee
agrees that 100 percent of the use of the Equipment shall be "qualified
business use" as that term is and shall be from time to time defined by the
Internal Revenue Code of 1986, as amended.
(e) Lessee shall cooperate fully with Lessor or any Assignee to
perfect and record their respective interests in connection with the
Transactional Documents including, without limitation, the filing of financing
statements and will pay such Persons their reasonable costs related thereto.
Lessee authorizes Lessor to file financing statements that are signed only by
Lessor or that are signed for Lessee by Lessor in any jurisdiction when
permitted by law or local authority. Lessee hereby grants to Lessor
power-of-attorney to act as Lessee's attorney-in-fact to sign Lessee's name on
financing statements as "Debtor".
11. Maintenance and Repairs; Additions to Equipment. (a) Lessee
shall, for the entire Lease Term, at its sole expense, maintain all of the
Equipment in good, safe and efficient operating repair, appearance and
condition, will keep all components of the Equipment properly calibrated and
aligned, will make all required adjustments, replacements and repairs and, if
reasonably determined by Lessee to be necessary for the efficient use of the
Equipment in the conduct of Lessee's business, will obtain and install any
upgrades for the Equipment that are announced and available for sale by a
Manufacturer (collectively, "maintenance and repairs"). Such maintenance and
repairs shall include, but not be limited to, all recommended or advised by a
Manufacturer, all required or
6
10
advised by cognizant governmental agencies or regulatory bodies and all
commonly performed by prudent business and/or professional practice. All
maintenance and repairs to any item of the Equipment shall be made by the
Manufacturer or, upon prior written approval by Lessor, those of substantially
equal skill or knowledge in maintaining and repairing the Equipment.
(b) Lessee shall not modify the Equipment without the prior
written consent of Lessor. Any replacements, substitutions, additions,
attachments, accessions, parts, fittings, accessories, modifications,
enhancements, maintenance and repairs and other upgrades to the Equipment
whenever made shall be considered accessions to the Equipment and shall
automatically become the property of Lessor.
(c) All instruction manuals, published statements of capabilities
and technical specifications, service, maintenance and repair records,
installation, qualification, certification and calibration reports, usage logs,
and printed material relating to the Equipment shall be deemed part of the
Equipment. Computer programs, programming codes, operating systems, data
processing instructions, series of instructions or statements which are machine
readable, and any like symbols or signals usable by an electronic data
processing system (collectively "Software") that has been or shall be installed
or entered in the Equipment shall become a part of the Equipment except for any
Software that is proprietary Software of Lessee and is not a modification,
change, enhancement or improvement to any Software which is identified or
listed in the description of specific items of the Equipment in or attached to
a Rental Schedule. Whenever Lessee acquires Software licenses from other
parties, with respect to the Software such licenses shall, to the extent
assignable, automatically and without further action by Lessee be assigned to
Lessor and become through assignment a part of the Equipment transferable to
any future user of the Equipment for use with the Equipment.
12. Loss, Damage or Destruction of Equipment. (a) Lessee shall
bear all risks of damage to, taking of, or theft, loss or destruction of, any
or all of the Equipment commencing as of the date of this Master Lease and
continuing throughout the Lease Term and until such Equipment has been returned
to Lessor or purchased by Lessee pursuant to any purchase option provisions of
this Lease. Except as otherwise herein expressly provided, no damage to,
taking of or theft, loss or destruction of any Equipment shall impair any
obligation of Lessee to Lessor under this Lease, including, without limitation,
the obligation to pay Basic Rent.
(b) In the event that any item of Equipment shall become damaged
from any cause whatsoever, Lessee agrees to promptly notify Lessor in writing
of such fact, fully informing Lessor of the details thereof. If any item of
Equipment is damaged (unless the same, in the opinion of Lessor is irreparably
damaged, in which case the provisions of this Lease with respect to a Casualty
Occurrence shall apply), Lessee shall, at its sole cost and expense, place the
same in good repair, condition and working order or replace the same with "like
property" having the same value and operating capabilities and useful life at
least equal to the damaged Equipment prior to the date of such damage, which
property shall thereupon become subject to this Lease with title thereto in
Lessor. In the event that an item of Equipment has been damaged, but not
irreparably, if no Event of Default has occurred and is continuing hereunder,
upon receipt by Lessor of evidence, reasonably satisfactory to Lessor, that
such repair, restoration or replacement has been completed, and an invoice
therefor, Lessor shall release to Lessee or its supplier the proceeds of any
insurance received by Lessor as a result of such damage for the purpose of
reimbursing Lessee for the costs of repairing, restoring or replacing such
item.
(c) In the event that any item of Equipment shall become lost,
stolen, destroyed or irreparably damaged from any cause whatsoever, or if any
item of Equipment or Lessor's title thereto shall be requisitioned or seized by
any governmental authority (each such occurrence being herein called a
"Casualty Occurrence") during the Lease Term and until it has been returned to
Lessor pursuant to the provisions of this Lease or until the Equipment is
purchased by Lessee pursuant to any purchase option provisions of this Lease,
Lessee shall promptly notify Lessor in writing of such fact, fully informing
Lessor of all details of the Casualty Occurrence in question, and shall pay
Lessor in cash the greater of (i) the "Stipulated Loss Value" as set forth in
the Table of Stipulated Loss Values attached to the Rental Schedule pursuant to
which such item of Equipment is leased hereunder, calculated as of the date of
the Casualty Occurrence, or (ii) the Fair Market Value (as hereinafter defined)
of the item of Equipment in question as of the date of the Casualty Occurrence.
This payment shall be made within 30 days following the
7
11
Casualty Occurrence, together with the Basic Rent accrued and unpaid with
respect to such Equipment as of the date of the Casualty Occurrence, plus all
Additional Rent or amounts owing with respect to such Equipment on such date of
payment.
(d) Upon the payment of the greater of the Stipulated Loss Value
or Fair Market Value of the Equipment in question in accordance with the terms
of this Section, and the payment of all Basic Rent, Additional Rent and any
other sums then due hereunder, this Lease shall terminate with respect to the
Equipment or part thereof suffering the Casualty Occurrence and all Lessor's
rights and title to such Equipment shall pass to Lessee, "as is" and "where
is", without any representation or warranty by, or recourse to, Lessor, as
provided by the provisions of this Master Lease on disclaimer of warranties and
as evidenced by a duly executed xxxx of sale naming Lessor as the seller and
Lessee as the buyer.
(e) Provided that no Event of Default has occurred and is
continuing and no event that with the passage of time or giving of notice, or
both, would be an Event of Default has occurred and is continuing, any
insurance proceeds received as the result of a Casualty Occurrence with respect
to any or all items of the Equipment shall be applied first in reduction of any
other then unpaid obligation of Lessee to Lessor hereunder and second in
reduction of Lessee's obligation to pay the greater of the Fair Market Value or
the Stipulated Loss Value for such item if not already paid by Lessee to
Lessor, or, if already paid by Lessee, to the reimbursement of Lessee therefor,
and the balance of the insurance proceeds, if any, shall be paid to Lessee.
13. Reports; Inspections. Lessee will cause to be furnished to
Lessor, if requested in writing, from time-to-time a statement showing the
condition and such other information regarding the Equipment as Lessor may
reasonably request. Lessor and any Assignee shall have the right, upon
reasonable written notice to Lessee, to inspect during Lessee's normal business
hours the Equipment including Lessee's records with respect to the Equipment,
to copy such records, and to inspect and copy Lessee's records with respect to
the financial statements Lessee is required to furnish Lessor or has warranted
to Lessor pursuant to this Lease. Any inspection by Lessor or any Assignee
shall not be deemed to be approval or acknowledgment by Lessor or such Assignee
of the safety, freedom from defects, performance or compliance with
specifications or governmental requirements of the Equipment or of the
conformity of the Equipment or such financial statements to the requirements or
warranties of this Lease, and the disclaimers set forth in the provisions of
this Master Lease on disclaimer of warranties shall apply to any such
inspection. Lessee shall pay or reimburse Lessor for Lessor's reasonable costs
and travel expenses for one such inspection per year, and for Lessor's
reasonable costs, travel expenses and salaries and the charges and such
expenses of Lessor's advisers for the inspection following an inspection which
encountered a breach of the requirements of this Lease or the warranties of
Lessee pursuant to this Lease.
14. Insurance. During the Lease Term and until all Equipment has
been returned to Lessor pursuant to the provisions of this Lease or until the
Equipment is purchased by Lessee pursuant to any purchase option provisions of
this Lease, Lessee shall procure and maintain at its expense with reputable
insurers reasonably acceptable to Lessor (i) insurance on all of the Equipment
in an amount not less than the greater of the Equipment's Stipulated Loss Value
or Fair Market Value replacement cost insuring against all risks of loss or
damage to the Equipment and against such other risks as Lessee would, in the
prudent management of its properties, maintain with respect to similar
equipment owned by it, and (ii) comprehensive public liability and property
damage insurance, in such amounts as shall be satisfactory to Lessor but for
not less than the greater of $1,000,000 or the amounts customarily maintained
by parties similar to Lessee for similar leased equipment with similar
contemplated use, insuring Lessor and any Assignees, as their interests may
appear, against liability for death, bodily injury, professional malpractice,
and property damage arising out of or resulting from the design, construction,
manufacture, ownership, use, operation, lease or maintenance of, or otherwise
in connection with, the Equipment. On the policies referred to in clause (i),
such insurance shall name Lessor (and any Assignees) as the sole loss payee so
that (and Lessor and Lessee hereby agree that) the insurance proceeds payable
under such policies will be payable and paid solely to Lessor (and to any
Assignees). On the policies referred to in clause (ii), such insurance will
name Lessor (and any Assignees) as an additional insured as its interests may
appear. All such policies shall provide that they may not be invalidated
against Lessor (or any Assignees) because of any violation of a condition or a
breach of
8
12
warranty of the policies or application therefor by Lessee, that they may not
be altered or canceled except after 30 days' prior written notice to Lessor,
and that Lessor and any Assignee have the right but not the obligation to pay
the premiums with respect to coverage required by this Lease in order to
continue such insurance in effect or to obtain like coverage. Under the
policies of insurance required to be maintained by Lessee pursuant to this
Master Lease, Lessee agrees to waive any right of subrogation and to cause the
insurance carrier to waive any right of subrogation in each instance as such
right may exist against Lessor or any Assignee and for any and all loss or
damage to the Equipment. Lessee shall maintain and deliver evidence to Lessor
of such insurance written by insurers and in amounts satisfactory to Lessor.
Should Lessee fail to provide such insurance coverage, Lessor may obtain
coverage protecting interests of Lessor and Lessee, or the interest of Lessor
only, for part or all of the Lease Term or such period beyond the Lease Term as
is required by this Lease or by the insurance company issuing such coverage.
The proceeds of such insurance shall be applied, at the option of Lessee if no
Event of Default shall exist, and otherwise at Lessor's option, toward (i)
replacement, restoration or repair of the Equipment or (ii) payment of the
obligations of Lessee under this Lease. Lessee hereby appoints Lessor as
Lessee's attorney-in-fact to make claims for, receive payment of, and execute
and endorse all documents, checks or drafts for loss or damage under any such
policies.
15. Return of Equipment. (a) At the end of the Lease Term for any
Equipment, Lessee at its sole expense shall forthwith return possession of such
Equipment without omissions to Lessor by:
(i) properly preparing, crating and/or assembling such Equipment
(in accordance with the Manufacturer's instructions if such instructions exist)
for shipment by common carrier with all containers and pieces labeled with
model, part and unit numbers and descriptions; and
(ii) shipping such Equipment by common carrier, with insurance and
freight prepaid, to a place designated by Lessor within a 1,000 mile radius of
the specified location under this Lease for such Equipment. Lessor shall pay
additional shipping charges incurred because of distances in excess of such
1,000 miles.
The insurance required by clause (ii) above shall provide that in the
event of loss such insurance shall pay Lessor in cash directly the greater of
(A) the full replacement value of such Equipment and (B) the "Stipulated Loss
Value" as set forth in the Exhibit to the Rental Schedule calculated as of the
Payment Date next preceding the date of loss. Lessee acknowledges that "full
replacement value" may exceed Fair Market Value.
(b) When the Equipment is returned to Lessor it shall be complete.
The condition of the Equipment including Software upon receipt by Lessor shall
be not less than (i) meeting all specifications for such fully upgraded
equipment as published most currently by the respective Equipment vendor(s),
Manufacturer(s) or supplier(s) (collectively referred to, together with their
successors and assigns, if any, as "Vendors"), exclusive of upgrades not
purchased by Lessee in its reasonable discretion or with Lessor's consent (ii)
in fully operational condition, (iii) capable of being installed and operated
in the normal course by another user, (iv) for each item of the Equipment for
which the Vendor has a program of maintenance and service including
certification for reinstallation and for qualification under the maintenance
and service program certified in writing by the Vendor that the items of the
Equipment are in compliance with the conditions specified in this paragraph,
are accepted by the Vendor for reinstallation and are qualified for the usual
and customary service and maintenance program of the Vendor, (v) legally
qualified for future use or operation of the Equipment by another lessee or
purchaser of the Equipment, (vi) free of defects, visible or concealed,
including, but not limited to, damage or malfunction of any kind, dents,
fractures, defacements, discolorations, rust, corrosion, electrical shorts,
fluid restrictions or blockages, disconnections, breakage or the like,
reasonable well and tear excepted, (vii) safe for routine and usual operation,
(viii) in compliance with any and all pertinent governmental or regulatory
rules, laws or guidelines for its operation or use, (ix) free of Lessee's
markings or labelings, and (x) free of any advertising or insignia not
requested by Lessor that was placed on the Equipment by Lessee.
(c) Lessor reserves the right to inspect the Equipment within 30
days of its return to verify compliance with the provisions of this Master
Lease on Equipment maintenance and repairs and additions and on return of
9
13
Equipment. Should there be less than full compliance, Lessor at its option may
(i) perform or cause to be performed through service organizations of its own
choosing such maintenance and repairs, including upgrades, replacements, the
obtaining of paid-up Software licenses and other services, as it deems
necessary to effect such compliance, (ii) require Lessee to perform or cause to
be performed such maintenance and repairs, including upgrades, replacements,
the obtaining of paid-up Software licenses and other services, as Lessor deems
necessary to effect such compliance and/or (iii) reasonably estimate the costs
to effect such compliance. Lessee shall pay to Lessor the costs for
performance of (i) above, or the estimated costs under (iii) above, in any such
case including the costs of the inspection(s). If maintenance and repairs,
including upgrades, replacements, and the obtaining of paid-up Software
licenses and other services, are necessary to place any of the Equipment under
any Rental Schedule in the condition required by this Lease, Lessee shall
continue to pay to Lessor monthly Additional Rent at the last prevailing rate
during the Lease Term for Basic Rent on the Equipment under such Rental
Schedule for the period of delay until all such required maintenance and
repairs can be performed, or for the period of time reasonably necessary to
accomplish such maintenance and repairs. For any such period that applies,
Lessee shall continue to provide the insurance required during the Lease Term.
However, Lessor's acceptance of such rent and provision of insurance during
such period shall not constitute a renewal of the Lease Term, a waiver of
Lessor's right to prompt return of such Equipment in the condition required by
this Section, or a waiver of Lessor's right to possession of such Equipment.
(d) Should the inspection reveal any item(s) of the Equipment to
be missing, Lessee shall be responsible for paying to Lessor promptly the
greater of the Stipulated Loss Value or the Fair Market Value of such item(s)
of the Equipment computed as of the last Payment Date prior to the end of the
Lease Term, plus the amount of any impairment of the Fair Market Value of the
remaining item(s) of the Equipment due to the absence of such missing item(s)
of the Equipment.
(e) In the event that Lessee fails to return any of the Equipment
when required, at the election of Lessor effected by notice to Lessee, the
Lease Term for such Equipment shall be extended on a month-to-month basis on
the same terms as previously in effect, and Lessee shall pay to Lessor monthly
in advance Basic Rent for such Equipment at the last prevailing rate during the
unextended Lease Term, until such Equipment has been returned to Lessor
pursuant to the provisions of this Lease. Notwithstanding any month-to-month
continuance of this Lease, Lessor may resort to any remedies available to it
under this Lease, at law or in equity, to recover such Equipment at any time
following the end of such extended Lease Term.
(f) Lessor may give written notice to Lessee not more than 120
days and not less than 30 days prior to the end of the Lease Term that Lessee
shall delay returning the Equipment to Lessor and shall keep, at Lessor's
expense, the Equipment on the premises of Lessee in working condition after the
end of the Lease Term and until requested by Lessor to return the Equipment or
until six months after the end of the Lease Term, whichever first occurs, at
which time Lessee shall forthwith return possession of the Equipment without
omissions to Lessor as provided by the provisions of this Section other than
this paragraph. After the end of the Lease Term, Lessee shall not use the
Equipment except in the performance of demonstrations requested by Lessor,
which demonstrations shall be at Lessor's expense. During the period from
notice to delay returning the Equipment until requested to return the Equipment
or six months after the end of the Lease Term, Lessee shall maintain the
Equipment in the same condition as required to be maintained during the Lease
Term, shall cooperate with Lessor, shall grant access to Lessee's premises for
inspection of the Equipment by potential purchasers and future lessees of the
Equipment and representatives of Lessor, and shall facilitate demonstrations of
the Equipment by Lessor, all at Lessor's expense. During such period and
thereafter until the Equipment is delivered to a common carrier with the
insurance upon such delivery required by this section, Lessee shall continue to
maintain the insurance required by this Lease during the Lease Term, all at
Lessor's expense. Lessee shall continue to have the risk of loss of the
Equipment and the obligation to indemnify Lessor as provided by this Lease
until the return of the Equipment to Lessor following such period and delivery.
(g) Not less than 180 days prior to expiration of the Lease Term,
if Lessee has not given notice of the exercise of any purchase option and
Lessor has not given notice of the exercise of any option to require Lessee to
10
14
purchase such Equipment, Lessee shall give Lessor notice that Lessee shall be
returning the Equipment forthwith upon the expiration of the Lease Term unless
otherwise notified by Lessor and either (i) that the Equipment is in the
condition required by this Lease upon the return of the Equipment or (ii)
specifying the respects in which the condition of the Equipment is not in
compliance with such requirements and the measures that Lessee shall take to
bring the Equipment into compliance.
16. Lessor's Ownership; Equipment To Be and Remain Personal
Property. (a) Lessee acknowledges and agrees that it does not have, and by
execution of this Lease and/or payments and performance hereunder it shall not
have or obtain, any title to the Equipment, nor any property right or interest,
legal or equitable, therein, except its rights as Lessee hereunder and subject
to the terms hereof. Lessee shall not have or claim a security interest and
shall not seek or obtain replevin, detinue, specific performance,
sequestration, claim and delivery, or like remedies in or for this Lease, any
rents under this Lease, any or all of the Equipment, any items of personal
property identified to become items of the Equipment, or any proceeds of any or
all of the foregoing.
(b) All of the Equipment shall be and remain personal property
notwithstanding the manner in which the Equipment may be attached or affixed to
realty. Upon the expiration, cancellation or termination of the Lease Term of
any or all of the Equipment, Lessee shall have the obligation, and Lessor shall
have the right, to remove, or cause the removal of, such Equipment from the
premises where the same is then located, for return to Lessor pursuant to the
provisions of this Master Lease on return of Equipment and, if applicable, on
Events of Default, whether or not any of the Equipment is affixed or attached
to realty or to any building. In the exercise of its rights, Lessor shall not
be liable for any damage to the realty or any such building or other real or
personal property occasioned by any removal of the Equipment by Lessee or
Lessor or the agents of Lessee or Lessor. Lessee further covenants and agrees
that Lessee will at the request of Lessor, obtain and deliver to Lessor
concurrently with the execution and delivery of each Rental Schedule, a waiver,
in recordable form, from the owner and any landlord, tenant or holder of any
lien or encumbrance on the realty or building(s) on or in which any of the
Equipment described in such Rental Schedule shall be located, under which such
owner, landlord, tenant and holder (i) agree and consent that such Equipment is
and shall be personal property, owned by and removable by Lessor upon the
expiration, cancellation or termination of the Lease Term thereof, and (ii)
waive any rights of distraint or similar rights with respect to such Equipment.
(c) If Lessee is unable to return, or is prevented from returning,
any of the Equipment to Lessor for a period of 6 months following the
expiration, cancellation or termination of the Lease Term as required under the
provisions of this Master Lease on return of Equipment, for any reason
whatsoever, including, but not limited to, the assertion by any third party of
any claim against such Equipment, or of any right with respect thereto, whether
or not resulting from the manner in which such Equipment is affixed or attached
to, or installed in, the realty or any building(s) thereon or any other
personal or real property, or from the failure of any owner, landlord or tenant
of said realty (or the building(s) thereon) or the holder of any lien or
encumbrance to execute the waiver in writing of such fact, for all purposes of
this Lease such Equipment shall be deemed to have been the subject of a
Casualty Occurrence. Thereupon, Lessee shall pay to Lessor the amounts
provided for by the provisions of this Master Lease on loss, damage or
destruction of Equipment, with respect to such Equipment, at the time, in the
manner, and with the consequences provided by such provisions. During any
period of non-return of the Equipment, Lessor in addition to its rights under
this paragraph (c) also may exercise its rights under Section 15 of this Master
Lease.
(d) Notwithstanding the foregoing provisions of this Section,
without Lessor's prior written consent, Lessee shall not permit any of the
Equipment to be attached or affixed to, imbedded in or incorporated into any
building, structure, real estate or other personal or real property.
17. Other Covenants. (a) Lessee agrees to furnish, upon Lessor's
request, such financial, business and operational information concerning Lessee
and any or all Guarantors, including copies of its and their tax returns, as
Lessor or its assigns may reasonably request during the Lease Term.
Additionally, Lessee shall furnish to Lessor and its assigns without notice or
demand therefor two complete copies of its and of every Guarantor's (i)
quarterly interim financial statements within 45 days of the close of each of
the first three fiscal quarters of every year,
11
15
certified by the chief financial officer of, respectively, Lessee or such
Guarantor and (ii) annual financial statements within 120 days of the close of
each fiscal year reported on by independent accountants without material
adverse qualification or comment. All such financial statements shall be
prepared in accordance with generally accepted accounting principles
consistently applied, and shall fairly present in accordance with GAAP Lessee's
and every Guarantor's financial condition and results of operations at the
dates of and for the periods covered by such statements.
(b) Lessee shall promptly furnish to Lessor copies of (i) filings
that Lessee or any Guarantor makes with the SEC or other government agencies
under the securities laws including but not limited to definitive proxy
statements, registration statements, prospectuses and tender offer filings, and
reports on holdings or acquisitions of securities, relating to proxy
solicitations, and on Form 10-K, 10-Q, 8-K or similar forms, and any amendments
to such filings, (ii) press releases of Lessee or any Guarantor, and (iii) new
product (or service) announcements of Lessee or any Guarantor.
(c) Lessee shall give Lessor notice of all meetings of its
stockholders and copies of all materials that are furnished to the stockholders
for the meetings at the same time that the notice or materials are sent to the
stockholders. Lessor shall have the right to have its representative attend
any and all such meetings.
(d) There shall be no actual or threatened material conflict with,
or material violation of, any statute, regulation, standard or rule relating to
Lessee, its present or future operations, or the Equipment.
(e) All information supplied to Lessor or its assigns by Lessee or
any Guarantor shall be correct in all material respects and shall not omit any
statement necessary to make the information supplied not be misleading. There
shall be no material breach of the representations and warranties made by
Lessee in connection with this Lease or by any Guarantor in connection with a
Guaranty (as hereinafter defined).
(f) Lessee shall give Lessor notice of any change in the address
of the executive office or principal place of business of Lessee not less than
15 days prior to the change.
(g) No change shall occur in the control, and no material change
shall occur in the ownership, of Lessee or any Guarantor, and no Guarantor
shall assert in writing that the obligations of the Guarantor as a Guarantor or
in its Guaranty are not in full force and effect; provided, however, that no
material change in control or ownership of Lessee shall be deemed to have
occurred as a consequence of the initial public issuance of its stock.
(h) Lessee shall not make any payment or distribution of money,
checks, securities or property to any Person in contravention of the provisions
of any Guaranty or subordination that such Person has made in favor of Lessor
or its assigns of which Lessee shall have notice or knowledge.
18. Events of Default. If one or more of the following events
(hereinafter called "Events of Default" or an "Event of Default") shall occur:
(i) default shall be made in the payment of any Basic Rent or
Additional Rent due under this Master Lease or under any Rental Schedule
hereto, and any such default shall continue for more than 10 days after the due
date thereof;
(ii) any representation or warranty by Lessee or any Guarantor made
in this Master Lease or in any Guaranty or other Transactional Document or
certificate furnished to Lessor in connection with this Lease or pursuant
hereto shall at any time prove to be incorrect in any material respect when
made;
(iii) Lessee shall make or permit any unauthorized assignment or
transfer of this Master Lease or any Rental Schedule to this Master Lease or of
any of Lessee's rights and obligations hereunder or thereunder, or Lessee shall
make or permit any unauthorized sublease or transfer of any Equipment or the
possession of any Equipment;
12
16
(iv) Lessee shall default in the observance and/or performance of
any other covenant, condition or agreement on the part of Lessee to be observed
and/or performed under this Master Lease, under any Rental Schedule hereto, or
under any other Transactional Document, which default is not governed by
paragraphs (i), (ii) or (iii) above, and such default shall continue for 30
days after written notice from Lessor to Lessee specifying the default and
demanding the same to be remedied;
(v) Lessee or any Guarantor shall make an assignment for the
benefit of creditors, or generally fail to pay its debts as they become due,
or become insolvent or commence a voluntary case under the federal Bankruptcy
Code as now or hereafter constituted or any other applicable federal or state
bankruptcy, insolvency or similar law, or admit in writing its inability to pay
its debts as they mature, or consent to the appointment of a trustee or
receiver, or a trustee or a receiver shall be appointed for Lessee or any
Guarantor or for a substantial part of Lessee's or any Guarantor's property
without such party's consent and such appointment shall be not dismissed for a
period of 60 days; there shall have been entered a decree or order for relief
by a court having jurisdiction in respect of Lessee or any Guarantor, or
approving as properly filed a petition seeking a reorganization, arrangement,
adjustment or composition of or in respect of Lessee or any Guarantor in an
involuntary proceeding or case under any applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee or similar official of Lessee or any
Guarantor or of any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days, or there shall
have been filed a petition by or against Lessee or any Guarantor under any
bankruptcy law or other insolvency law and, if petition is filed against Lessee
or such Guarantor, the petition is not withdrawn or dismissed within 60 days
after the date of filing; or Lessee or any Guarantor shall cease doing business
as a going concern or shall liquidate or be dissolved;
(vi) Lessee or any Guarantor shall, without the prior written
consent of Lessor, enter into a merger, consolidation or division, effect a
share exchange of its outstanding stock for the stock of another corporation,
make a tender offer for equity securities of a publicly held entity, or sell or
otherwise dispose of all or a major part of its assets or of assets that
produce all or a major part of its revenues or profits; provided, however, that
Lessee or any Guarantor, without violating the provisions of this clause, may
consolidate with or merge with a corporation or other entity organized under
the laws of one of the states of the United States (the surviving entity, a
"successor"), effect a share exchange of its outstanding stock for the stock of
another corporation, make a tender offer for equity securities of a public
entity, or sell (except by means of a sale and leaseback arrangement) all or
substantially all of its business and assets to such a successor, on the
condition that any successor expressly assume in writing all of the obligations
of Lessee pursuant to this Lease or of such Guarantor pursuant to its Guaranty,
and that the net tangible assets and the net worth (determined in accordance
with generally accepted accounting principles) of the successor after the
consolidation, merger or sale shall be at least equal to the net tangible
assets and the net worth of Lessee or such Guarantor, as the case may be,
immediately prior to the consolidation, merger or sale;
(vii) there shall occur under any other lease, contract or agreement
between Lessee and Lessor, an Event of Default, as defined in such lease,
contract or agreement;
(viii) any of the Equipment shall be attached, levied upon,
encumbered, pledged, seized or taken under any judicial process (except for any
attachment, levy, encumbrance or pledge caused to be placed on the Equipment by
Lessor) and such proceedings shall not be vacated, or fully stayed, within 30
days thereof;
(ix) at any time there shall occur under (A) any lease between
Lessee and a party other than Lessor as lessor or (B) under any lease wholly or
partially guaranteed by Lessee, the exercise by the lessor of its possessory
remedies or commencement of legal proceedings by the lessor for default under
the lease; provided that the aggregate future payments remaining to be made or
guaranteed by Lessee exceed $250,000, and that under a lease described in (B)
above within ten days of notice to Lessee of such exercise of remedies and
demand for payment by Lessee any such amount guaranteed by Lessee remains
unpaid; or
13
17
(x) any obligation exceeding $250,000 of Lessee or any Guarantor
for the payment of borrowed money or the acquisition of assets by purchase,
conditional sale or other arrangement is not paid or refinanced at maturity,
whether by acceleration or otherwise, or is declared due and payable prior to
the stated maturity thereof by reason of default or other violation of the
terms of any promissory note or agreement evidencing or governing such
obligation, and Lessor has given Lessee an opportunity to either cure the
purported Event of Default or supply information satisfactory to Lessor that it
does not, in fact, exist;
this Lease shall be declared in default, immediately and without notice upon
the occurrence of an Event of Default specified in clause (v) above, and in the
case of any other Event of Default, upon Lessor at any time at its option
subsequent to such Event of Default giving written notice to Lessee that this
Lease is declared in default provided, however, that such notice only shall be
effective if the Event of Default has not been waived or cured as provided in
this Master Lease or if the Event of Default has continued for more than 30
days after Lessee has notice of the existence of the Event of Default. At any
time after this Lease has been declared in default, Lessor may exercise one or
more of the following remedies, to the extent not then prohibited by law, as
Lessor in its sole discretion may elect:
(I) to proceed by appropriate court action or actions at law or in
equity or in bankruptcy to enforce performance by Lessee of the covenants and
terms of this Lease and/or to recover damages for the breach thereof;
(II) to terminate or cancel this Lease upon written notice to
Lessee whereupon all rights of Lessee to use the Equipment shall immediately
terminate, but Lessee shall not be relieved of any obligations under this
Lease;
(III) whether or not this Lease be so terminated or canceled, and
without notice to Lessee, to repossess and/or to render inoperable the
Equipment wherever found, with or without legal process, and for this purpose
Lessor and/or its agents may enter upon any premises of or under the control or
jurisdiction of Lessee or any agent of Lessee without liability for suit,
action or other proceeding by Lessee and remove the Equipment therefrom; Lessee
hereby expressly waives any claims for damages occasioned by such repossession;
LESSEE HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS INCLUDING RIGHTS TO NOTICE OR
A JUDICIAL HEARING, WITH RESPECT TO REPOSSESSION OF THE EQUIPMENT AFTER AN
EVENT OF DEFAULT;
(IV) to hold or to use any Equipment returned to Lessor or
repossessed by Lessor for any purpose whatsoever, to sell any Equipment at a
private or public, cash or credit sale, to re-lease any Equipment, in all the
foregoing events free and clear of any rights of Lessee and without any duty to
account to Lessee with respect to such action or inaction;
(V) whether or not Lessor shall have exercised, or shall hereafter
at any time exercise, any of its other rights with respect to an item of the
Equipment, upon written notice to Lessee, to demand that Lessee pay to Lessor,
and Lessee shall pay to Lessor on the date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Basic Rent for such Equipment that prior to the Event of Default was to have
been paid on Payment Dates subsequent to the date specified in such notice),
the sum equal to the excess, if any, of 125% of the Stipulated Loss Value for
such item of Equipment computed as of the latest Payment Date when all Basic
Rent and Additional Rent then due and payable has been fully paid over
whichever of the following three amounts Lessor, in its sole discretion, shall
designate in such notice:
(A) the present value of the fair market rental value (determined
as hereafter provided in this Section) of such item of the
Equipment for the remainder of the Lease Term as of the date
specified in such notice, the present value to be computed on
the basis of a seven percent per annum rate of discount from
the respective dates upon which such rent would be paid,
(B) the fair market sales value (determined as hereafter provided
in this Section) of such item of Equipment as of the date
specified in such notice, or
14
18
(C) if Lessor shall have sold or re-leased any item of Equipment
pursuant to clause (IV) above, the net proceeds of such sale
or re-lease,
plus interest at the Default Interest Rate (a) on such sum from the such
Payment Date until paid and (b) on whichever of such three amounts is so
designated by Lessor from such Payment Date until whichever one of the
following shall be applicable to the designated amount: the time when the fair
market rental or sales value shall have been so determined or the time when the
Equipment shall have been sold or re-leased; and
(VI) to forthwith recover from Lessee, and Lessee shall be fully
liable for, all Basic Rent that shall accrue until the date that the Equipment
is returned to or repossessed by Lessor and any Additional Rent including
collection fees, whenever accrued, and interest at the Default Interest Rate.
In addition to the foregoing, Lessor may also recover from Lessee all
reasonable costs and expenses arising out of Lessee's default, including,
without limitation, expenses of repossession of the Equipment and the storage,
inspection, repair, reconditioning, sale and re-leasing thereof, and reasonable
attorneys fees incurred by Lessor in exercising any of its rights or remedies
hereunder. For the purposes of this Section only, "fair market rental value"
and "fair market sales value" shall be determined by an appraisal of an
independent appraiser chosen by Lessor, and the cost of any such appraisal
shall be borne by Lessee. No remedy referred to in this Section is intended to
be exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lessor at law or in equity or in
bankruptcy. Lesser shall have no duty to pay Lessee any surplus from sale or
lease of the Equipment, or in the fair market rental or sales value of the
Equipment, above all amounts payable by Lessee to Lessor. The exercise by
Lessor of any one or more remedies shall not be deemed to preclude the
simultaneous or later exercise by Lessor of any or all such previously
exercised remedies and any and all other remedies.
19. Assignment and Transfer by Lessor. (a) Lessor may at any time
and from time to time assign to one or more security assignees (all herein
called the "Secured Party" and also called an "Assignee") for the purpose of
securing a loan to Lessor or for any other purpose, and at its sole discretion,
may also sell or transfer to one or more Persons (herein called the
"Transferee" and also called an "Assignee"), in any case subject to the rights
of Lessee under this Lease but without notice to or consent of Lessee, this
Lease, any other Transactional Documents, any or all of the Equipment, and all
sums at any time due and to become due or at any time owing or payable by
Lessee to Lessor under this Lease or pursuant to any or all of the
Transactional Documents. The Secured Party shall not be obligated to perform
any duty, covenant or condition required to be performed by Lessor under this
Lease or any other Transactional Documents.
(b) Lessee agrees that notwithstanding any assignment to a Secured
Party, each and every covenant, agreement, representation and warranty of
Lessor under this Lease shall be and remain the sole liability of Lessor and of
every successor in interest of Lessor (excluding any Secured Party) or, in the
case of assignment to a Transferee, shall become and remain the sole liability
of the Transferee if so agreed to by the Transferee and if not so agreed to
shall be and remain the sole liability of Lessor. Lessee further agrees and
acknowledges that any assignment, sale or transfer by Lessor could not and
shall not materially change any duty or obligation of Lessee or materially
increase any burden or risk of Lessee.
(c) Lessee further acknowledges and agrees that from and after the
receipt by of written notice of an assignment from Lessor, Lessee shall comply
with the directions or demands given in writing by the Secured Party or (to the
extent not inconsistent with the directions or demands of the Secured Party) by
the Transferee, and the Secured Party or Transferee shall have the right to
exercise (either in its own name or in the name of Lessor) all rights,
privileges, and remedies of Lessor provided for herein. Lessee agrees that any
obligation to a Secured Party as a result of the assignment of this Lease to a
Secured Party as aforesaid shall not be reduced or minimized by reason of any
claim, defense, counterclaim (except for the assertion in litigation of a
mandatory counterclaim), set-off, abatement, reduction or recoupment or other
right that Lessee might otherwise have been able to assert against Lessor, any
prior Assignee or any Transferee. After any assignment to a Secured Party and
unless and until Lessee
15
19
is otherwise notified by the Secured Party, this Lease may not be amended or
modified, and no consent or waiver hereunder shall be effective, without the
prior written consent of the Secured Party. Lessee agrees, at Lessor's
expense, to execute and Lessor or any Transferee or Secured Party may record
any instruments and documents relating to such assignment, mortgage or security
interest reasonably desired by Lessor or any Transferee or Secured Party.
Lessee shall promptly provide any such instruments and documents that are
reasonably requested by Lessor or any Assignee including certificates
indicating any claim, defense, counterclaim, set-off, abatement, reduction,
recoupment or other right that Lessee may have against Lessor or any Assignee,
the date to which Basic Rent has been paid under each Rental Schedule hereunder
and that this Lease is in effect without default or amendment or the extent of
such default or amendment, as the case may be.
20. Recording and Filing; Expenses. Lessee will, upon demand of
Lessor, at Lessee's cost and expense, do and perform any other act and will
execute, acknowledge, deliver, file, register, record and deposit (and will
re-file, re-register, re-record or re-deposit whenever required) any and all
instruments required by law or requested by Lessor (or any Assignee) including,
without limitation, financing statements under the Uniform Commercial Code
(which, notwithstanding the intent of Lessor and Lessee that this is a true
lease, Lessor shall have the right to file wherever and whenever Lessor
requires), for the purpose of providing proper protection to the reasonable
satisfaction of Lessor (and/or any Assignee) of Lessor's title to any Equipment
(and/or of any Assignee's security interest in the Equipment) or for the
purpose of carrying out the intention of this Lease, provided, however, that
Lessee shall not bear such cost and expense in the case of any transfer or
assignment by Lessor other than for Lessee's signature, acknowledgment and
delivery to Lessor or any Assignee of instruments. Lessee will also pay, or
will upon demand reimburse Lessor for, all reasonable costs and expenses
incurred by Lessor in connection with this Lease, any other Transactional
Documents, and any related transactions, closings, enforcement of Lessor's
rights under this Lease and the other Transactional Documents, proceedings
involving Lessee or any Guarantor as a debtor under any chapter of the
Bankruptcy Code, filings, the documentation of this and any related
transactions, and fees and costs of attorneys for Lessor in connection
therewith; provided, however, that Lessee shall not so pay Lessor or reimburse
Lessor for assignments or sales by Lessor or transfers to any Secured Party or
Transferee.
21. Automatic Lease Term Renewal. In the event that at the
expiration of the Primary Term Lessee does not exercise the purchase option set
forth in this Master Lease with respect to the Equipment subject to a Rental
Schedule, the Lease Term shall automatically be renewed for all of the
Equipment subject to such Rental Schedule for an additional term of twelve
months (the "Renewal Term") at a monthly Basic Rent equal to one and one half
percent (1.5%) of the Acquisition Cost of such Equipment, plus any applicable
sales and other taxes, that shall be paid monthly in advance.
22. Quiet Enjoyment. So long as no Event of Default has occurred
and is continuing hereunder, Lessee shall have peaceful and quiet use and
enjoyment of the Equipment during the Lease Term as against acts of Lessor or
anyone claiming by, through or under Lessor including any Secured Party or
Transferee.
23. Failure or Indulgence not Waiver; Additional Rights of Lessor.
(a) No failure to exercise, and no delay in exercising, any right power or
remedy hereunder on the part of Lessor shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. Any waiver, to be effective, must be in writing. A waiver of any
covenant, term or condition contained herein shall not be construed as a waiver
of any subsequent breach of the same covenant, term or condition. Receipt by
Lessor of any Basic Rent or Additional Rent with knowledge of the breach of any
provision hereof shall not constitute a waiver of such breach.
(b) Lessor shall be entitled to injunctive relief in case of the
violation or attempted or threatened violation of any of the provisions hereof,
to a decree compelling performance of any of the provisions hereof, and to any
other remedy allowed in law or in equity.
24. Sublease. Lessee shall not sublease the Equipment, relinquish
possession of the Equipment, or assign, pledge or hypothecate this Lease or
any of Lessee's rights or obligations hereunder, in whole or in part,
16
20
without the prior written consent of Lessor. Nevertheless, any such sublease
and the rents, profits and proceeds therefrom shall be the property of Lessor
and, unless Lessor has consented to such sublease, Lessor within 30 days after
receiving notice thereof in accordance with the provisions of this Master Lease
on notices shall have the right to declare the sublease void from its purported
commencement, to terminate the sublease or to accept the sublease. Any such
attempted relinquishment of possession, assignment pledge or hypothecation by
Lessee without such consent shall be null and void.
25. Purchase Option. (a) If (i) no Event of Default, and no event
which with the giving of notice or lapse of time, or both, would constitute an
Event of Default, has occurred and then remains unremedied to Lessor's
satisfaction, and (ii) this Lease shall not have been earlier terminated,
Lessee shall be entitled, at its option, upon written notice to Lessor, as
hereinafter provided, to purchase all, but not less than all, items of the
Equipment then subject to a Rental Schedule, at the expiration of the Primary
Term for such items of the Equipment or, as the case may be, at the expiration
of any Renewal Term for such items of the Equipment, for an amount, with
respect to each such item of the Equipment, payable in immediately available
funds, equal to the Fair Market Value thereof as of the expiration of the
Primary Term or Renewal Term, as the case may be, as such value is determined
by an Appraisal, plus any applicable sales, excise or other taxes imposed as a
result of such sale (other than net income taxes attributable to such sale).
Lessor's sale of any item of the Equipment shall be on an "as-is", "where-is"
basis, without any representation or warranty by or recourse to Lessor, as
provided by the provisions of this Master Lease on disclaimer of warranties,
and shall be subject to such additional terms and conditions as may be
specified in the Rental Schedule. If Lessee intends to exercise said purchase
option, Lessee shall give written notice to Lessor to such effect at least 180
days prior to the earliest expiration of the Primary Term of the item(s) of the
Equipment subject to the particular Rental Schedule with respect to which
Lessee intends to exercise its purchase option, or, if a Renewal Term is then
in effect, at least 180 days prior to the earliest expiration of the then
current Renewal Term of the item(s) of the Equipment subject to the particular
Rental Schedule with respect to which Lessee intends to exercise its purchase
option. If Lessee fails to give such written notice to Lessor as aforesaid, it
shall be conclusively presumed that Lessee has elected not to exercise such
purchase option. If Lessee gives such written notice, Lessee shall be
obligated to buy, and Lessor shall be obligated to sell, such Equipment on the
terms herein provided.
(b) If Lessee has elected to exercise its purchase option, as
provided in this Section, as soon as practicable following Lessor's receipt of
the written notice from Lessee of Lessee's intent to exercise such option,
Lessor and Lessee shall consult for the purpose of determining the Fair Market
Value of each such item of the Equipment as of the end of the Primary Term
thereof, or, if this Lease has been renewed pursuant to any provisions of this
Lease on option to renew, as of the end of the then current Renewal Term
thereof, and any values agreed upon in writing shall constitute the Fair Market
Value of each such item of the Equipment for the purposes of this Section. In
so consulting, Lessor and Lessee may refer to books containing indexes of
standard values for used equipment of relevant type and age and to the records
of Lessee and similar users which tabulate the history of revenues and various
other economic benefits derived from the use of the Equipment. If Lessor and
Lessee have failed to agree upon such value prior to the 150th day before the
expiration of the Primary Term, or, if this Lease has been renewed, prior to
the 150th day before the expiration of the then current Renewal Term, on and
after such 150th day either party may request that such value be determined by
Appraisal.
(c) Notwithstanding any election by Lessee to purchase, the
provisions of this Lease shall continue in full force and effect until the
transfer of ownership of such Equipment upon the date of purchase by the
delivery of a Xxxx of Sale by Lessor.
26. Notices. Any notice or other communication required or
permitted to be given by either party hereto to the other party shall be deemed
to have been given upon its receipt, in writing, by the receiving party at its
address set forth below, or at such other address as the receiving party shall
have furnished to the other party by notice pursuant to this Section.
17
21
If to Lessee: R F Micro Devices, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
If to Lessor: FINOVA Technology Finance, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
27. Entire Agreement; Severability, Amendment or Cancellation of
Lease. This Lease constitutes the complete and exclusive statement of the
terms of the agreement between the parties with respect to the leasing of the
Equipment and any sale of the Equipment by Lessor to Lessee. Any provision of
this Lease which is prohibited or unenforceable in any jurisdiction shall be,
as to such jurisdiction, ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. LESSEE
ACKNOWLEDGES RECEIPT OF A COPY OF THIS MASTER LEASE. Lessor and Lessee agree
that neither this Lease nor Lessee's acceptance or deemed acceptance of any or
all of the Equipment may be canceled, waived, altered, amended, repudiated,
terminated, rescinded, revoked or modified, except by a writing signed by
Lessee and a duly authorized representative of Lessor.
---------------------------------------
Signature of Lessee
28. Waiver of Jury. Lessor and Lessee waive any right and all
right to trial by jury in any action or proceeding relating in any way to this
Lease.
29. Restriction of Limitation Periods and Damages. Any action for
breach of warranty or in respect of or relating to the Equipment or this Lease
that may be brought by Lessee against Lessor or any Assignee must be commenced
within one year after the cause of action accrues. Lessee shall not make any
claim in respect of or relating to the Equipment or this Lease against Lessor
or any Assignee for special consequential or punitive damages.
30. Governing Law, Consent to Jurisdiction and Service. This
Lease shall be governed by and construed in accordance with the laws of the
State of Connecticut (other than the conflicts of laws provisions). Lessee
agrees that any legal action or proceeding against Lessee in respect of or
relating to this Lease or the Equipment may be brought in any state or federal
court sitting in the city of Hartford in the State of Connecticut. Lessee
hereby irrevocably consents and submits to the nonexclusive personal
jurisdiction of said courts and irrevocably agrees that all claims in any such
action or proceeding may be heard and determined in and enforced by any such
court. Lessee irrevocably consents to the service of summons, notice, or other
process relating to any such action or proceeding by delivery thereof to it by
hand or by mail in the manner set forth in the provisions of this Master Lease
on notices.
31. Lessor's Right to Perform for Lessee. If Lessee fails to duly
and promptly perform any of its obligations under this Lease or fails to comply
with any of the covenants or agreements contained herein, Lessor may itself
perform such obligations or comply with such covenants or agreements, for the
account of Lessee, without thereby waiving any default, and any amount paid or
expense (including, without limitation, attorney's fees) reasonably incurred by
Lessor in connection with such performance or compliance shall, together with
interest thereon at the Default Interest Rate, be payable by Lessee to Lessor
on demand.
32. Agreement for Lease Only. Lessor and Lessee agree that this
Lease is and is intended to be a true lease (and not a lease in the nature of a
security interest) and further agree to treat this Lease as a true lease for
all purposes, including, without limitation, tax purposes.
18
22
33. Binding Effect. This Lease shall inure to the benefit of and
be binding upon the parties hereto and their respective permitted successors
and assigns.
34. General. The captions in this Master Lease and each Rental
Schedule are for convenience of reference only. There shall be only one
original executed copy of this Master Lease and of each Rental Schedule. This
Master Lease is and each Rental Schedule shall be executed in the State of
Connecticut by Lessor's having countersigned the same in the State of
Connecticut, and are to be and shall be performed in the State of Connecticut
by reason of the requirements therein for payment by Lessee to Lessor to be
made in the State of Connecticut.
35. Definitions. The following terms, not elsewhere defined,
shall have the following meanings for all purposes hereof:
"Acquisition Cost" of any item of the Equipment shall mean an amount
equal to the sum of (i) the purchase price of such item of the Equipment paid
by Lessor pursuant to the purchase order for such item of the Equipment
assigned to or given by Lessor, plus (ii) any excise, sales or use tax,
freight, installation, set-up and other costs that are paid by Lessor on or
with respect to such item of the Equipment on or about the time of Lessor's
purchase of the Equipment or the Lease Commencement Date and that Lessor does
not request Lessee to directly reimburse to Lessor.
"Appraisal" shall mean the following procedure whereby recognized
independent qualified equipment appraisers shall mutually agree upon the amount
in question. The party seeking Appraisal shall deliver a written notice to that
effect to the other party appointing its appraiser, and within 15 days after
receipt of such notice, the other party shall, by written notice, appoint its
appraiser. If within 15 days after appointment of the two appraisers as
described above, the two appraisers are unable to agree upon the amount in
question, a third appraiser shall be chosen within five days thereafter by
mutual agreement of the first two appraisers, or if the first two appraisers
fail to agree upon the appointment of a third appraiser, such appointment shall
be made by an authorized representative of the American Arbitration
Association. The appraisal of the third appraiser shall be given within a
period of ten days after the selection of the third appraiser. The average of
the three appraisals arrived at by the time appraisers shall be binding and
conclusive on Lessor and Lessee. Lessor and Lessee each shall pay the fees of
the appraiser appointed by it and shall share equally the fees and expenses of
the third appraiser, if any, and those of the American Arbitration Association,
if applicable.
"Certificate of Inspection and Acceptance" shall mean a certificate in
the form designated by Lessor whereby Lessee evidences its acceptance of one or
more items of the Equipment for lease hereunder.
"Equipment" shall mean the property that this Master Lease and any
Rental Schedule shall provide shall be leased to Lessee pursuant to the
provisions of this Lease.
"Fair Market Value" shall mean, with respect to the Equipment in
question, the amount which would be paid for that Equipment in an arm's-length
sale transaction between an informed and willing buyer (not a used equipment or
scrap dealer) who wants the Equipment to be as described in the next following
sentence and is under no compulsion to buy, and an informed and willing seller
under no compulsion to sell. In determining the Fair Market Value, it shall be
assumed (whether or not the same be true) that the Equipment is fully
operational, installed and in economically productive service and that all
maintenance and repairs including any upgrades, replacements and other services
required by this Lease have been performed and that the Equipment is in such
condition to comply fully with the requirements of this Lease, including
provisions of this Master Lease governing the return of Equipment. The costs
of removal from the location of current use and installation at another
location for use shall not be a deduction in determining the Fair Market Value.
However, upon any exercise by Lessee of the purchase option provided for by
this Master Lease at the expiration of the Primary Term for the Equipment
subject to a Rental Schedule. Lessor and Lessee agree that the Fair Market
Value shall not be less than fifteen percent (15%) of the Acquisition Cost of
such Equipment.
19
23
"Guarantor" shall mean a guarantor of any or all of the obligations of
Lessee pursuant to this Lease.
"Guaranty" shall mean a writing containing a guaranty of any or all of
the obligations of Lessee pursuant to this Lease.
"Lease Commencement Date" with respect to an item of Equipment shall
mean the date of commencement of the Lease Term of the item as provided by the
applicable Rental Schedule.
"Lease Term" with respect to an item of the Equipment shall mean the
Primary Term plus any and all Renewal Terms plus any period during which Lessee
retains the Equipment on a month-to-month basis pursuant to provisions of this
Master Lease governing the return of the Equipment. The Lease Term shall
include the Lease Commencement Date and the date on which the Lease Term ends.
"Manufacturer" shall mean the Person that manufactures the item of the
Equipment in question.
"Master Lease" shall mean this Master Equipment Lease Agreement.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a limited liability company, a trust, an
estate, any incorporated organization or similar association, a government or
political subdivision, or any other entity.
"Rental Schedule" shall mean each schedule, executed by Lessor and
Lessee pursuant to this Master Lease, providing for a description of some or
all of the Equipment to be leased hereunder, the place or places where such
Equipment shall be located, its Acquisition Cost, the Basic Rent payable by
Lessee with respect thereto, the Primary Term thereof, the Lease Commencement
Date with respect thereto, and such other matters as Lessor and Lessee may
agree upon.
"Stipulated Loss Value" shall mean the amounts specified in the Table
of Stipulated Loss Values applicable to the items of the Equipment subject to a
Rental Schedule, as provided by the Schedule B attached to the Rental Schedule.
Except as otherwise provided in a writing signed by Lessor and Lessee, the
Stipulated Loss Value immediately prior to the end of the Primary Term for any
items of the Equipment shall be the Stipulated Loss Value throughout any
Renewal Term(s) for such items, and thereafter until such items are returned to
Lessor pursuant to the provisions of this Lease or purchased by Lessee pursuant
to any then applicable purchase option provisions of this Lease.
IN WITNESS WHEREOF, the duly authorized representatives of Lessor and
Lessee have executed this Master Lease as of the date first above written.
LESSOR: LESSEE:
FINOVA TECHNOLOGY FINANCE, INC. R F MICRO DEVICES, INC.
By: By:
--------------------------------------- --------------------------------------------------------
Title: Title:
------------------------------------- -------------------------------------------------------
ATTEST:
By:
---------------------------------------------------------
Title:
------------------------------------------------------
20
