Exhibit
10(ii)22
MASTER LEASE
AGREEMENT
dated as of 6-18-99
(“Agreement”)
THIS AGREEMENT, is between General
Electric Capital Corporation (together with its successors and assigns,
if any, “Lessor”) and The IT Group, Inc. (
“Lessee”). Lessor has an office at 0000 Xxxxxx Xxxxxxx/Xxxx
00 Xxxxxx Xxxx/Xxxx, Xxxxx 000, Xxxx Xxxx, XX 00000. Lessee is a
corporation organized and existing under the laws of the State of Delaware.
Lessee’s mailing address and chief place of business is 0000 Xxxxxxx
Xxxx., Xxxxxxxxxxx, XX 00000. This Agreement contains the general terms
that apply to the leasing of Equipment from Lessor to Lessee. Additional
terms that apply to the Equipment (term, rent, options, etc.) shall be
contained on a schedule (“Schedule”).
1.
LEASING:
(a) Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment (
“Equipment”) described in any Schedule signed by both
parties.
(b) Lessor shall
purchase Equipment from the manufacturer or supplier (“Supplier
”) and lease it to Lessee if on or before the Last Delivery Date
Lessor receives (i) a Schedule for the Equipment, (ii) evidence of insurance
which complies with the requirements of Section 9, and (iii) such other
documents as Lessor may reasonably request. Each of the documents required
above must be in form and substance satisfactory to Lessor. Lessor hereby
appoints Lessee its agent for inspection and acceptance of the Equipment
from the Supplier. Once the Schedule is signed, the Lessee may not cancel
the Schedule.
2.
TERM, RENT AND PAYMENT:
(a) The rent payable
for the Equipment and Lessee’s right to use the Equipment shall begin
on the earlier of (i) the date when the Lessee signs the Schedule and
accepts the Equipment or (ii) when Lessee has accepted the Equipment under a
Certificate of Acceptance (“Lease Commencement Date”). The
term of this Agreement shall be the period specified in the applicable
Schedule. The word “term” shall include all basic and any renewal
terms.
(b) Lessee shall pay
rent to Lessor at its address stated above, except as otherwise directed by
Lessor. Rent payments shall be in the amount set forth in, and due as stated
in the applicable Schedule. If any Advance Rent (as stated in the Schedule)
is payable, it shall be due when the Lessee signs the Schedule. Advance Rent
shall be applied to the first rent payment and the balance, if any, to the
final rent payment(s) under such Schedule. In no event shall any Advance
Rent or any other rent payments be refunded to Lessee. If rent is not paid
within ten (10) days of its due date, Lessee agrees to pay a late charge of
five cents ($.05) per dollar on, and in addition to, the amount of such rent
but not exceeding the lawful maximum, if any.
3.
RENT ADJUSTMENT:
(a) If, solely as a
result of Congressional enactment of any law (including, without limitation,
any modification of, or amendment or addition to, the Internal Revenue Code
of 1986, as amended, (“Code”)), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers (“Effective Rate”) is higher than
thirty-five percent (35%) for any year during the lease term, then Lessor
shall have the right to increase such rent payments by requiring payment of
a single additional sum. The additional sum shall be equal to the product of
(i) the Effective Rate (expressed as a decimal) for such year less .35 (or,
in the event that any adjustment has been made hereunder for any previous
year, the Effective Rate (expressed as a decimal) used in calculating the
next previous adjustment) times (ii) the adjusted Termination Value (defined
below), divided by (iii) the difference between the new Effective Rate
(expressed as a decimal) and one (1). The adjusted Termination Value shall
be the Termination Value (calculated as of the first rent due in the year
for which the adjustment is being made) minus the Tax Benefits that would be
allowable under Section 168 of the Code (as of the first day of the year for
which such adjustment is being made and all future years of the lease term).
The Termination Values and Tax Benefits are defined on the Schedule. Lessee
shall pay to Lessor the full amount of the additional rent payment on the
later of (i) receipt of notice or (ii) the first day of the year for which
such adjustment is being made.
(b) Lessee’s
obligations under this Section 3 shall survive any expiration or termination
of this Agreement.
4.
TAXES: If permitted by law, Lessee
shall report and pay promptly all taxes, fees and assessments due, imposed,
assessed or levied against any Equipment (or purchase, ownership, delivery,
leasing, possession, use or operation thereof,) this Agreement (or any rents
or receipts hereunder), any Schedule, Lessor or Lessee by any governmental
entity or taxing authority during or related to the term of this Agreement,
including, without limitation, all license and registration fees, and all
sales, use, personal property, excise, gross receipts, franchise, stamp or
other taxes, imposts, duties and charges, together with any penalties, fines
or interest thereon (collectively “Taxes”). Lessee shall
have no liability for Taxes imposed by the United States of America or any
state or political subdivision thereof which are on or measured by the net
income of Lessor except as provided in Sections 3 and 14(c). Lessee shall
promptly reimburse Lessor (on an after tax basis) for any Taxes charged to
or assessed against Lessor. Lessee shall show Lessor as the owner of the
Equipment on all tax reports or returns, and send Lessor a copy of each
report or return and evidence of Lessee’s payment of Taxes upon
request.
5.
REPORTS:
(a) If any tax or other
lien shall attach to any Equipment, Lessee will notify Lessor in writing,
within ten (10) days after Lessee becomes aware of the tax or lien. The
notice shall include the full particulars of the tax or lien and the
location of such Equipment on the date of the notice.
(b) Lessee will deliver
to Lessor, Lessee’s complete financial statements, certified by a
recognized firm of certified public accountants within ninety (90) days of
the close of each fiscal year of Lessee. Lessee will deliver to Lessor
copies of Lessee’s quarterly financial report certified by the chief
financial officer of Lessee, within ninety (90) days of the close of each
fiscal quarter of Lessee. Lessee will deliver to Lessor all Forms 10-K and
10-Q, if any, filed with the Securities and Exchange Commission within
thirty (30) days after the date on which they are filed.
(c) Lessor may inspect
any Equipment during normal business hours after giving Lessee reasonable
prior notice.
(d) Lessee will keep
the Equipment at the Equipment Location (specified in the applicable
Schedule) and will give Lessor prior written notice of any relocation of
Equipment. If Lessor asks, Lessee will promptly notify Lessor in writing of
the location of any Equipment.
(e) If any Equipment is
lost or damaged (where the estimated repair costs would exceed the greater
of ten percent (10%) of the original Equipment cost or ten thousand and
00/100 dollars ($10,000)), or is otherwise involved in an accident causing
personal injury or property damage, Lessee will promptly and fully report
the event to Lessor in writing.
(f) Lessee will furnish
a certificate of an authorized officer of Lessee stating that he has
reviewed the activities of Lessee and that, to the best of his knowledge,
there exists no default or event which with notice or lapse of time (or
both) would become such a default within thirty (30) days after any request
by Lessor.
6.
DELIVERY, USE AND OPERATION:
(a) All Equipment shall
be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that
the Equipment will be used by Lessee solely in the conduct of its business
and in a manner complying with all applicable laws, regulations and
insurance policies and Lessee shall not discontinue use of the
Equipment.
(c) Lessee will not
move any equipment from the location specified on the Schedule, without the
prior written consent of Lessor.
(d) Lessee will keep
the Equipment free and clear of all liens and encumbrances other than those
which result from acts of Lessor.
(e) Lessor shall not
disturb Lessee’s quiet enjoyment of the Equipment during the term of
the Agreement unless a default has occurred and is continuing under this
Agreement.
7.
MAINTENANCE:
(a) Lessee will, at its
sole expense, maintain each unit of Equipment in good operating order and
repair, normal wear and tear excepted. The Lessee shall also maintain the
Equipment in accordance with manufacturer’s recommendations. Lessee
shall make all alterations or modifications required to comply with any
applicable law, rule or regulation during the term of this Agreement. If
Lessor requests, Lessee shall affix plates, tags or other identifying labels
showing ownership thereof by Lessor. The tags or labels shall be placed in a
prominent position on each unit of Equipment.
(b) Lessee will not
attach or install anything on any Equipment that will impair the originally
intended function or use of such Equipment without the prior written consent
of Lessor. All additions, parts, supplies, accessories, and equipment (
“Additions”) furnished or attached to any Equipment that are
not readily removable shall become the property of Lessor. All Additions
shall be made only in compliance with applicable law. Lessee will not attach
or install any Equipment to or in any other personal or real property
without the prior written consent of Lessor.
8.
STIPULATED LOSS VALUE: If for any
reason any unit of Equipment becomes worn out, lost, stolen, destroyed,
irreparably damaged or unusable (“Casualty Occurrences”)
Lessee shall promptly and fully notify Lessor in writing. Lessee shall pay
Lessor the sum of (i) the Stipulated Loss Value (see Schedule) of the
affected unit determined as of the rent payment date prior to the Casualty
Occurrence; and (ii) all rent and other amounts which are then due under
this Agreement on the Payment Date (defined below) for the affected unit.
The Payment Date shall be the next rent payment date after the Casualty
Occurrence. Upon Payment of all sums due hereunder, the term of this lease
as to such unit shall terminate.
9.
INSURANCE:
(a) Lessee shall bear
the entire risk of any loss, theft, damage to, or destruction of, any unit
of Equipment from any cause whatsoever from the time the Equipment is
shipped to Lessee.
(b) Lessee agrees, at
its own expense, to keep all Equipment insured for such amounts and against
such hazards as Lessor may reasonably require. All such policies shall be
with companies, and on terms, reasonably satisfactory to Lessor. The
insurance shall include coverage for damage to or loss of the Equipment,
liability for personal injuries, death or property damage. Lessor shall be
named as additional insured with a loss payable clause in favor of Lessor,
as its interest may appear, irrespective of any breach of warranty or other
act or omission of Lessee. The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION U.S. DOLLARS
($1,000,000.00) total liability per occurrence, unless otherwise stated in
any Schedule. The casualty/property damage coverage shall be in an amount
equal to the higher of the Stipulated Loss Value or the full replacement
cost of the Equipment. No insurance shall be subject to any co-insurance
clause. The insurance policies shall provide that the insurance may not be
altered or canceled by the insurer until after thirty (30) days written
notice to Lessor. Lessee agrees to deliver to Lessor evidence of insurance
reasonably satisfactory to Lessor.
(c) Lessee hereby
appoints Lessor as Lessee’s attorney-in-fact to make proof of loss and
claim for insurance, and to make adjustments with insurers and to receive
payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessee’s
attorney-in-fact unless Lessee is in default. Lessee shall pay any
reasonable expenses of Lessor in adjusting or collecting insurance. Lessee
will not make adjustments with insurers except with respect to claims for
damage to any unit of Equipment where the repair costs are less than the
lesser of ten percent (10%) of the original Equipment cost or ten thousand
and 00/100 dollars ($10,000). Lessor may, at its option, apply proceeds of
insurance, in whole or in part, to (i) repair or replace Equipment or any
portion thereof, or (ii) satisfy any obligation of Lessee to Lessor under
this Agreement.
10.
RETURN OF EQUIPMENT:
(a) At the expiration
or termination of this Agreement or any Schedule, Lessee shall perform any
testing and repairs required to place the units of
Equipment in the same condition and appearance as when received by Lessee
(reasonable wear and tear excepted) and in good working order for the
original intended purpose of the Equipment. If required the units of
Equipment shall be deinstalled, disassembled and crated by an authorized
manufacturer’s representative or such other service person as is
reasonably satisfactory to Lessor. Lessee shall remove installed markings
that are not necessary for the operation, maintenance or repair of the
Equipment. All Equipment will be cleaned, cosmetically acceptable, and in
such condition as to be immediately installed into use in a similar
environment for which the Equipment was originally intended to be used. All
waste material and fluid must be removed from the Equipment and disposed of
in accordance with then current waste disposal laws. Lessee shall return the
units of Equipment to a location within the continental United States as
Lessor shall direct. Lessee shall obtain and pay for a policy of transit
insurance for the redelivery period in an amount equal to the replacement
value of the Equipment. The transit insurance must name Lessor as the loss
payee. The Lessee shall pay for all costs to comply with this section
(a).
(b) Until Lessee has
fully complied with the requirements of Section 10(a) above, Lessee’s
rent payment obligation and all other obligations under this Agreement shall
continue from month to month notwithstanding any expiration or termination
of the lease term. Lessor may terminate the Lessee’s right to use the
Equipment upon ten (10) days notice to Lessee.
(c) Lessee shall
provide to Lessor a detailed inventory of all components of the Equipment
including model and serial numbers. Lessee shall also provide an up-to-date
copy of all other documentation pertaining to the Equipment. All service
manuals, blue prints, process flow diagrams, operating manuals, inventory
and maintenance records shall be given to Lessor at least ninety (90) days
and not more than one hundred twenty (120) days prior to lease
termination.
(d) Lessee shall make
the Equipment available for on-site operational inspections by potential
purchasers at least one hundred twenty (120) days prior to and continuing up
to lease termination. Lessor shall provide Lessee with reasonable notice
prior to any inspection. Lessee shall provide personnel, power and other
requirements necessary to demonstrate electrical, hydraulic and mechanical
systems for each item of Equipment.
11.
DEFAULT AND REMEDIES:
(a) Lessor may in
writing declare this Agreement in default if: (i) Lessee breaches its
obligation to pay rent or any other sum when due and fails to cure the
breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section 9; (iii) Lessee breaches any of its other
obligations and fails to cure that breach within thirty (30) days after
written notice from Lessor; (iv) any representation or warranty made by
Lessee in connection with this Agreement shall be false or misleading in any
material respect; (v) Lessee or any guarantor or other obligor for the Lessee
’s obligations hereunder( “Guarantor”) becomes
insolvent or ceases to do business as a going concern; (vi) any Equipment is
illegally used; (vii) if Lessee or any Guarantor is a natural person, any
death or incompetency of Lessee or such Guarantor; or (viii) a petition is
filed by or against Lessee or any Guarantor under any bankruptcy or
insolvency laws and in the event of an involuntary petition, the petition is
not dismissed within forty-five (45) days of the filing date. The default
declaration shall apply to all Schedules unless specifically excepted by
Lessor.
(b) After a default, at
the request of Lessor, Lessee shall comply with the provisions of Section I
0(a). Lessee hereby authorizes Lessor to peacefully enter any premises where
any Equipment may be and take possession of the Equipment. Lessee shall
immediately pay to Lessor without further demand as liquidated damages for
loss of a bargain and not as a penalty, the Stipulated Loss Value of the
Equipment (calculated as of the rent payment date prior to the declaration
of default), and all rents and other sums then due under this Agreement and
all Schedules. Lessor may terminate this Agreement as to any or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may, but shall not be required to, sell Equipment at private or
public sale, in bulk or in parcels, with or without notice, and without
having the Equipment present at the place of sale. Lessor may also, but
shall not be required to, lease, otherwise dispose of or keep idle all or
part of the Equipment. Lessor may use Lessee’s premises for a
reasonable period of time for any or all of the purposes stated above
without liability for rent costs, damages or otherwise. The proceeds of
sale, lease or other disposition, if any, shall be applied in the following
order of priorities: (i) to pay all of Lessor’s costs, charges and
expenses incurred in taking, removing, holding, repairing and selling,
leasing or otherwise disposing of Equipment; then, (ii) to the extent not
previously paid by Lessee, to pay Lessor all sums due from Lessee under this
Agreement; then (iii) to reimburse to Lessee any sums previously paid by
Lessee as liquidated damages; and (iv) any surplus shall be retained by
Lessor. Lessee shall immediately pay any deficiency in (i) and (ii)
above.
(c) The foregoing
remedies are cumulative, and any or all thereof may be exercised instead of
or in addition to each other or any remedies at law, in equity, or under
statute. Lessee waives notice of sale or other disposition (and the time and
place thereof), and the manner and place of any advertising. Lessee shall
pay Lessor’s actual attorney’s fees incurred in connection with
the enforcement, assertion, defense or preservation of Lessor’s rights
and remedies under this Agreement, or if prohibited by law, such lesser sum
as may be permitted. Waiver of any default shall not be a waiver of any
other or subsequent default.
(d) Any default under
the terms of this or any other agreement between Lessor and Lessee may be
declared by Lessor a default under this and any such other
agreement.
12.
ASSIGNMENT: LESSEE SHALL NOT SELL,
TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY EQUIPMENT OR THE INTEREST OF LESSEE
IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. Lessor may,
without the consent of Lessee, assign this Agreement, any Schedule or the
right to enter into a Schedule. Lessee agrees that if Lessee receives
written notice of an assignment from Lessor, Lessee will pay all rent and
all other amounts payable under any assigned Schedule to such assignee or as
instructed by Lessor. Lessee also agrees to confirm in writing receipt of
the notice of assignment as may be reasonably requested by assignee. Lessee
hereby waives and agrees not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which Lessee has or may
at any time have against Lessor for any reason whatsoever.
13.
NET LEASE: Lessee is unconditionally
obligated to pay all rent and other amounts due for the entire lease term no
matter what happens, even if the Equipment is damaged or destroyed, if it is
defective or if Lessee no longer can use it. Lessee is not entitled to
reduce or set-off against rent or other amounts due to Lessor or to anyone
to whom Lessor assigns this Agreement or any Schedule whether Lessee’s
claim arises out of this Agreement, any Schedule, any statement by Lessor,
Lessor’s liability or any manufacturer’s liability, strict
liability, negligence or otherwise.
14.
INDEMNIFICATION:
(a) Lessee hereby
agrees to indemnify Lessor, its agents, employees, successors and assigns
(on an after tax basis) from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Agreement, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Lessor
’s gross negligence or willful misconduct (“Claims”).
This indemnity shall include, but is not limited to, Lessor’s strict
liability in tort and Claims, arising out of (i) the selection, manufacture,
purchase, acceptance or rejection of Equipment, the ownership of Equipment
during the term of this Agreement, and the delivery, lease, possession,
maintenance, uses, condition, return or operation of Equipment (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for patent, trademark or copyright
infringement or environmental damage) or (ii) the condition of Equipment
sold or disposed of after use by Lessee, any sublessee or employees of
Lessee. Lessee shall, upon request, defend any actions based on, or arising
out of, any of the foregoing.
(b) Lessee hereby
represents, warrants and covenants that (i) on the Lease Commencement Date
for any unit of Equipment, such unit will qualify for all of the items of
deduction and credit specified in Section C of the applicable Schedule (
“Tax Benefits”) in the hands of Lessor, and (ii) at no time
during the term of this Agreement will Lessee take or omit to take, nor will
it permit any sublessee or assignee to take or omit to take, any action
(whether or not such act or omission is otherwise permitted by Lessor or by
this Agreement), which will result in the disqualification of any Equipment
for, or recapture of, all or any portion of such Tax Benefits.
(c) If as a result of a
breach of any representation, warranty or covenant of the Lessee contained
in this Agreement or any Schedule (i) tax counsel of Lessor shall determine
that Lessor is not entitled to claim on its Federal income tax return all or
any portion of the Tax Benefits with respect to any Equipment, or (ii) any
Tax Benefit claimed on the Federal income tax return of Lessor is disallowed
or adjusted by the Internal Revenue Service, or (iii) any Tax Benefit is
recalculated or recaptured (any determination, disallowance, adjustment,
recalculation or recapture being a “Loss”), then Lessee
shall pay to Lessor, as an indemnity and as additional rent, an amount that
shall, in the reasonable opinion of Lessor, cause Lessor’s after-tax
economic yields and cash flows to equal the Net Economic Return that would
have been realized by Lessor if such Loss had not occurred. Such amount
shall be payable upon demand accompanied by a statement describing in
reasonable detail such Loss and the computation of such amount. The economic
yields and cash flows shall be computed on the same assumptions, including
tax rates as were used by Lessor in originally evaluating the transaction
(“Net Economic Return”). If an adjustment has been made
under Section 3 then the Effective Rate used in the next preceding
adjustment shall be substituted.
(d) All references to
Lessor in this Section 14 include Lessor and the consolidated taxpayer group
of which Lessor is a member. All of Lessor’s rights, privileges and
indemnities contained in this Section 14 shall survive the expiration or
other termination of this Agreement. The rights, privileges and indemnities
contained herein are expressly made for the benefit of, and shall be
enforceable by Lessor, its successors and assigns.
15.
DISCLAIMER: LESSEE ACKNOWLEDGES THAT
IT HAS SELECTED THE EQUIPMENT WITHOUT ANY ASSISTANCE FROM LESSOR, ITS AGENTS
OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT MADE, NOR SHALL BE DEEMED TO
MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED UNDER THIS
AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS
OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION,
SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All such
risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following; (i) any
liability, loss or damage caused or alleged to be caused directly or
indirectly by any Equipment, any inadequacy thereof, any deficiency or
defect (latent or otherwise) of the Equipment, or any other circumstance in
connection with the Equipment; (ii) the use, operation or performance of any
Equipment or any risks relating to it; (iii) any interruption of service,
loss of business or anticipated profits or consequential damages; or (iv)
the delivery, operation, servicing, maintenance, repair, improvement or
replacement of any Equipment. If, and so long as, no default exists under
this Agreement, Lessee shall be, and hereby is, authorized during the term
of this Agreement to assert and enforce whatever claims and rights Lessor
may have against any Supplier of the Equipment at Lessee’s sole cost
and expense, in the name of and for the account of Lessor and/or Lessee, as
their interests may appear.
16.
REPRESENTATIONS AND WARRANTIES OF LESSEE:
Lessee makes each of the following representations and warranties to
Lessor on the date hereof and on the date of execution of each
Schedule.
(a) Lessee has adequate
power and capacity to enter into, and perform under, this Agreement and all
related documents (together, the “Documents”). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment
is or is to be located.
(b) The Documents have
been duly authorized, executed and delivered by Lessee and constitute valid,
legal and binding agreements, enforceable in accordance with their terms,
except to the extent that the enforcement of remedies may be limited under
applicable bankruptcy and insolvency laws.
(c) No approval,
consent or withholding of objections is required from any governmental
authority or entity with respect to the entry into or performance by Lessee
of the Documents except such as have already been obtained.
(d) The entry into and
performance by Lessee of the Documents will not: (i) violate any judgment,
order, law or regulation applicable to Lessee or any provision of Lessee
’s Certificate of Incorporation or bylaws; or (ii) result in any breach
of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant
to any indenture, mortgage, deed of trust, bank loan or credit agreement or
other instrument (other than this Agreement) to which Lessee is a
party.
(e) There are no suits
or proceedings pending or threatened in court or before any commission,
board or other administrative agency against or affecting Lessee, which if
decided against Lessee will have a material adverse effect on the ability of
Lessee to fulfill its obligations under this Agreement.
(f) The Equipment
accepted under any Certificate of Acceptance is and will remain tangible
personal property.
(g) Each financial
statement delivered to Lessor has been prepared in accordance with generally
accepted accounting principles consistently applied. Since the date of the
most recent financial statement, there has been no material adverse
change.
(h) Lessee is and will
be at all times validly existing and in good standing under the laws of the
State of its incorporation (specified in the first sentence of this
Agreement).
(i) The Equipment will
at all times be used for commercial or business purposes.
17.
EARLY TERMINATION:
(a) On or after the
First Termination Date (specified in the applicable Schedule), Lessee may,
so long as no default exists hereunder, terminate this Agreement as to all
(but not less than all) of the Equipment on such Schedule as of a rent
payment date (“Termination Date”). Lessee must give Lessor
at least ninety (90) days prior written notice of the
termination.
(b) Lessee shall, and
Lessor may, solicit cash bids for the Equipment on an AS IS, WHERE IS BASIS
without recourse to or warranty from Lessor, express or implied (“AS
IS BASIS”). Prior to the Termination Date, Lessee shall (i) certify
to Lessor any bids received by Lessee and (ii) pay to Lessor (A) the
Termination Value (calculated as of the rent due on the Termination Date)
for the Equipment, and (B) all rent and other sums due and unpaid as of the
Termination Date.
(c) If all amounts due
hereunder have been paid on the Termination Date, Lessor shall (i) sell the
Equipment on an AS IS BASIS for cash to the highest bidder and (ii) refund
the proceeds of such sale (net of any related expenses) to Lessee up to the
amount of the Termination Value. If such sale is not consummated, no
termination shall occur and Lessor shall refund the Termination Value (less
any expenses incurred by Lessor) to Lessee.
(d) Notwithstanding the
foregoing, Lessor may elect by written notice, at any time prior to the
Termination Date, not to sell the Equipment. In that event, on the
Termination Date Lessee shall (i) return the Equipment (in accordance with
Section 10) and (ii) pay to Lessor all amounts required under Section 17(b)
less the amount of the highest bid certified by Lessee to
Lessor.
18.
PURCHASE OPTION:
(a) Lessee may at lease
expiration purchase all (but not less than all) of the Equipment in any
Schedule on an AS IS BASIS for cash equal to its then Fair Market Value
(plus all applicable sales taxes). Lessee must notify Lessor of its intent
to purchase the Equipment in writing at least one hundred eighty (180) days
in advance. If Lessee is in default or if the Lease has already been
terminated Lessee may not purchase the Equipment.
(b) “Fair Market
Value” shall mean the price that a willing buyer (who is neither a
lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm’s-length transaction to a willing seller under no
compulsion to sell. In determining the Fair Market Value the Equipment shall
be assumed to be in the condition in which it is required to be maintained
and returned under this Agreement. If the Equipment is installed it shall be
valued on an installed basis. The costs of removal from current location
shall not be a deduction from the value of the Equipment. If Lessor and
Lessee are unable to agree on the Fair Market Value at least one hundred
thirty-five (135) days before lease expiration, Lessor shall appoint an
independent appraiser (reasonably acceptable to Lessee) to determine Fair
Market Value. The independent appraiser’s determination shall be final,
binding and conclusive. Lessee shall bear all costs associated with any such
appraisal.
(c) Lessee shall be
deemed to have waived this option unless it provides Lessor with written
notice of its irrevocable election to exercise the same within fifteen (15)
days after Fair Market Value is told to Lessee.
19.
MISCELLANEOUS:
(a) LESSEE AND LESSOR
UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, THE WAIVER ALSO SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) The Equipment shall
remain Lessor’s property unless Lessee purchases the Equipment from
Lessor and until such time Lessee shall only have the right to use the
Equipment as a lessee. Any cancellation or termination by Lessor of this
Agreement, any Schedule, supplement or amendment hereto, or the lease of any
Equipment hereunder shall not release Lessee from any then outstanding
obligations to Lessor hereunder. All Equipment shall at all times remain
personal property of Lessor even though it may be attached to real property.
The Equipment shall not become part of any other property by reason of any
installation in, or attachment to, other real or personal
property.
(c) Time is of the
essence of this Agreement. Lessor’s failure at any time to require
strict performance by Lessee of any of the provisions hereof shall not waive
or diminish Lessor’s right at any other time to demand strict
compliance with this Agreement. Lessee agrees, upon Lessor’s request to
execute any instrument necessary or expedient for filing, recording or
perfecting the interest of Lessor. All notices required to be given
hereunder shall be deemed adequately given if sent by registered or
certified mail to the addressee at its address stated herein, or at such
other place as such addressee may have specified in writing. This Agreement
and any Schedule and Annexes thereto constitute the entire agreement of the
parties with respect to the subject matter hereof. NO VARIATION OR
MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS PROVISIONS OR
CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE PARTIES HERETO.
(d) If Lessee does not
comply with any provision of this Agreement, Lessor shall have the right,
but shall not be obligated, to effect such compliance, in whole or in part.
All reasonable amounts spent and obligations incurred or assumed by Lessor
in effecting such compliance shall constitute additional rent due to Lessor.
Lessee shall pay the additional rent within five days after the date Lessor
sends notice to Lessee requesting payment. Lessor’s effecting such
compliance shall not be a waiver of Lessee’s default.
(e) Any rent or other
amount not paid to Lessor when due shall bear interest, from the due date
until paid, at the lesser of eighteen percent (18%) per annum or the maximum
rate allowed by law. Any provisions in this Agreement and any Schedule that
are in conflict with any statute, law or applicable rule shall be deemed
omitted, modified or altered to conform thereto.
(f) Lessee hereby
irrevocably authorizes Lessor to adjust the Capitalized Lessor’s Cost
up or down by no more than ten percent (10%) within each Schedule to account
for equipment change orders, equipment returns, invoicing errors, and
similar matters. Lessee acknowledges and agrees that the rent shall be
adjusted as a result of the change in the Capitalized Lessor’s Cost.
Lessor shall send Lessee a written notice stating the final Capitalized
Lessor’s Cost, if it has changed.
(g) THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH
STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
(h) Any cancellation or
termination by Lessor, pursuant to the provisions of this Agreement, any
Schedule, supplement or amendment hereto, of the lease of any Equipment
hereunder, shall not release Lessee from any then outstanding obligations to
Lessor hereunder.
(i) To the extent that
any Schedule would constitute chattel paper, as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction, no
security interest therein may be created through the transfer or possession
of this Agreement in and of itself without the transfer or possession of the
original of a Schedule executed pursuant to this Agreement and incorporating
this Agreement by reference; and no security interest in this Agreement and
a Schedule may be created by the transfer or possession of any counterpart
of the Schedule other than the original thereof, which shall be identified
as the document marked “Original” and all other counterparts shall
be marked “Duplicate”.
IN WITNESS WHEREOF, Lessee and Lessor
have caused this Agreement to be executed by their duly authorized
representatives as of the date first above written.
| LESSOR: | | LESSEE: |
| |
| General Electric
Capital Corporation | | The IT Group,
Inc. |
| |
| By:
/s/ Xxxxx Xxxxxx
| | By:
/s/ Xxxxxxx
X. Xxxxx
|
| |
| Name:
Xxxxx Xxxxxx
| | Name:
Xxxxxxx
X. Xxxxx
|
| |
| Title:
Risk Analyst
| | Title:
Vice
President, Treasurer |
