MASTER LEASE AGREEMENT
LESSOR: Meridian Leasing Corporation
an Illinois corporation
ADDRESS: 000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
LESSEE: Custom Papers Group, Inc.
ADDRESS: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
AGREEMENT DATE: January 1, 1994
This contract is a Master Lease Agreement. The terms of each Supplement
hereto are subject to any and all conditions and provisions set forth herein
at the time of execution of such Supplement as the same may have been amended
prior to the execution of such Supplement. Each Supplement shall provide a
description of Equipment, Lease Term, Rental Payment(s), Location of
Equipment, Supplement Commencement Date and such other information as may be
required. Each Supplement is enforceable according to the terms and
conditions contained therein and in the event of a conflict between the
language of the Master Lease Agreement and any Supplement hereto, the
language of the Supplement shall prevail in respect to that Supplement. Each
Supplement together with the terms and conditions of this Master Lease
Agreement incorporated therein is referred to herein as the "Lease" or
"Lease Agreement". Lessor, by its acceptance hereof, hereby leases to
Lessee, and the Lessee hereby leases from Lessor, in accordance with the
terms and conditions set forth herein and in the applicable Supplement, the
Equipment described on the Supplement and in any attachments thereto (the
"Equipment").
1. LEASE TERM
This Master Lease Agreement shall be effective from the date hereof. As to
any particular item of Equipment, the term shall continue as stated in the
applicable Supplement, from the respective Supplement Commencement Date, as,
from time to time, Equipment described in any Supplement is accepted by
Lessee. Said term shall be automatically extended at the monthly lease rate
in effect at the end of said term unless and until terminated by either party
hereto giving the other not less than ninety (90) days prior written notice.
Acceptance ("Acceptance") shall occur on the earlier of (i) the day the
Equipment has been installed and, if applicable, approved for coverage under
a prime shift maintenance contract by the manufacturer thereof or other
applicable maintenance organization; or (ii) the seventh (7th) day after
delivery of the Equipment to Lessee if the Equipment is used equipment
provided by Lessor and a delay of installation is caused by Lessee. Lessee
agrees both to advise Lessor on the Acceptance date and thereupon to execute
and deliver to Lessor a Certificate of Acceptance.
2. PAYMENTS OF RENT
Unless otherwise set forth in the respective Supplement, the following shall
apply: The first rental payment shall be due upon the Acceptance of the
Equipment by Lessee, and such payment shall cover the lease month or other
period commencing on the Supplement Commencement Date. Each subsequent rental
payment shall be due and payable in advance, for the lease period covered by
such payment, on the first day thereof. In the event Acceptance occurs prior
to the Supplement Commencement Date, interim rental shall be paid by Lessee
in the amount equal to a proration on a per diem basis of the Monthly Rent,
as hereinafter defined, for the period commencing as of the date of
Acceptance to the Supplement Commencement Date. Notwithstanding the provision
of any notice contemplated by Section 1 above, in the event that any Item of
Equipment is not returned at the expiration of any Supplement, Lessor shall be
entitled without notice or demand to receive Supplemental Rent for each day
that such return is delayed at the rate of 200% of the daily proration of
Monthly Rent. All rental and other payments by Lessee under this Lease shall
be made to Lessor at its address stated above or at such other address as
Lessor may designate in writing and if payment shall be made by check, such
check shall arrive at such address in sufficient time so that the same shall
arrive on or before the date the rental payment shall be due. Monthly rent
payable with respect to each item of Equipment ("Monthly Rent") shall be as
set forth for such Item in the applicable Supplement. Any and all amounts
payable to Lessor hereunder other than Monthly Rent shall be considered and
referred to herein as "Supplemental Rent". Monthly Rent, together with
Supplemental Rent, shall be referred to herein as "Rent". This Lease provides
for a net lease, and the Rent due hereunder from Lessee to Lessor shall be
absolute and unconditional and shall not be subject to any abatement,
recoupment, defense, claim, counter-claim, reduction, set-off, or any other
adjustment of any kind for any reason whatsoever.
3. ADDITIONAL SUMS PAYABLE BY LESSEE
(a) All transportation, transit insurance and other charges payable for
delivery of the Equipment to Lessee, and for installation of the Equipment,
shall be paid by Lessee.
(b) Lessee shall promptly pay all costs, expenses and obligations of every
kind and nature incurred in connection with the use, maintenance, servicing,
repair or operation of the Equipment which may arise or be payable during the
lease term of such Equipment hereunder, except as specifically provided
herein, and shall keep the Equipment in as good repair, condition and working
order as when delivered to Lessee hereunder, reasonable wear and tear from
the proper use thereof alone excepted, and shall furnish any and all parts,
mechanisms and devices required to keep the Equipment in such good repair,
condition and working order, at the expense of Lessee, and in addition will
permit the manufacturer to make all free-of-charge engineering changes, all so
that the Equipment will remain acceptable to the manufacturer for
maintenance. Without limiting the foregoing, Lessee shall, during the
continuance of this Lease, at its own expense, make appropriate arrangements
for maintenance of each item of Equipment, including without limitation with
respect to each item of Equipment entering into and maintaining in
force a contract with the manufacturer of the Equipment or other person or
entity approved in writing by Lessor covering at least prime shift
maintenance.
(c) Lessee shall indemnify and hold harmless Lessor against and shall pay all
federal, state, county or local taxes, fees or other charges, however
designated (together with any related interest or penalties not arising from
negligence on the part of Lessor), imposed or assessed against or with
respect to this Lease. Rent hereunder, the Equipment, Lessor or Lessee or
payable by Lessor or Lessee with respect to the use, lease, sale, purchase,
delivery, possession, sublease or ownership of the Equipment, excepting only
(i) taxes on or to the extent measured by the net income of Lessor; and (ii)
sales, use or similar taxes paid by Lessor if, and only if, any such taxes
are included as part of the acquisition cost of any Equipment. Lessor shall
give Lessee and Lessee shall give Lessor written notice of any event or
condition which requires indemnification by Lessee hereunder or any
allegation of such event or condition, promptly upon obtaining knowledge
thereof. Lessee shall not be obligated to pay any amount under this Section 3
so long as Lessee shall in good faith and by appropriate proceedings contest
and diligently prosecute the validity or the amount thereof unless such
contest would adversely affect the title of the Lessor to the Equipment or
would subject it to forfeiture or sale, provided that Lessee should make any
required deposits during such contest. Upon resolution of such contest,
Lessee shall promptly pay all amounts then owing. In case any report or
return is required to be made with respect to any obligation of Lessee
arising out of this Section 3, Lessee will either make such report or return
in such manner as shall be satisfactory to Lessor or, if required by Lessor,
furnish information to Lessor necessary to complete such report or return by
Lessor.
4. WARRANTIES
(a) Lessor hereby warrants and covenants to Lessee that so long as no Event of
Default has occurred and is continuing under the applicable Supplement
hereto, Lessee shall and may quietly have, hold and enjoy the Equipment and
every part thereof leased hereunder for the term of this Lease, as such term
may be extended hereunder, free from disturbance by Lessor or its agents,
employees, successors or assigns, or by anyone (whether the holder of a lien
or otherwise) claiming solely by, through or
under Lessor. LESSOR HAS NOT MADE AND MAKES NO, AND HEREBY EXPRESSLY
DISCLAIMS ANY OTHER, EXPRESS OR IMPLIED WARRANTY WHATSOEVER HEREUNDER,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PURPOSE, OR
OTHERWISE, REGARDING THE EQUIPMENT OR ANY PART OR THE DESIGN OR CONDITION
THEREOF. Subject to the provisions of Section 10 hereof, Lessor hereby
transfers and assigns to Lessee during the term of this Lease all of its
right, title and interest in any express or implied warranties and covenants
of any Equipment manufacturer or vendor which are assignable by Lessor.
Lessor and Lessee agree to execute any manufacturer's transfer of "Patent and
Copyright Indemnity" and "Warranties" documents with respect to the Equipment
leased hereunder.
(b) Lessee, at the time of execution of this Agreement and any Supplement
hereto, hereby warrants and represents to Lessor, Secured Party, as
hereinafter defined, and their respective successors and assigns: (i) that
execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on its part and are not in
conflict with its charter or bylaws or with or constitute a breach of or
default under any indenture, contract or agreement by which it is bound, or
with any statute, judgment, decree, rule or regulation binding upon it; (ii)
that no consent or approval of any trustee or holder of any indebtedness or
obligation, and no consent or approval of, or taking of any other action with
respect to, any governmental authority, is necessary for execution, delivery
or performance of this Agreement (iii) that this Agreement is legal, valid,
binding, and enforceable against the Lessee in accordance with its terms,
subject to enforcement limitations imposed by rules of equity or by
bankruptcy or similar laws; (iv) Lessee is a corporation validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
the jurisdiction(s) where the Equipment will be located and has adequate
corporate power to enter into and perform this Lease; and (v) there are no
actions, suits or proceedings pending or, to the knowledge of Lessee
threatened against or affecting Lessee in any court or before any
governmental commission, board or authority which, if adversely determined,
will have a materially adverse effect on the ability of Lessee to perform its
obligations under this Lease.
5. POSSESSION, USE AND MAINTENANCE OF THE EQUIPMENT
(a) The Equipment shall be kept by Lessee (i) subject to inspection by Lessor
at reasonable times and manner, (2) at Lessee's address, as stated on each
Supplement hereto, which Equipment shall not be relocated without prior
written consent of Lessor, which consent shall not be unreasonably withheld,
(3) free of all security interests of any kind whatever, liens, encumbrances
and other claims, except (i) those of persons claiming solely against Lessor
but not Lessee on account of obligations which Lessee is not required by this
Lease to discharge, (ii) liens of current taxes not delinquent (except liens
for taxes which are being contested by Lessee as provided in Section 3
hereof), (4) marked with the manufacturer's identification marks or numbers
and, if requested by Lessor or Secured Party, conspicuously labeled with
labels supplied by Lessor or Secured Party to disclose Lessor's and any
Secured Party's interest in the Equipment, and (5) in good and efficient
working order, condition and repair, reasonable wear and tear excepted, and
acceptable for maintenance under the manufacturer's maintenance agreement at
the expiration of the Lease Term. Lessee will, within ten (10) working days
of receiving notice thereof, promptly notify Lessor in writing of any
mortgage, pledge, lien, attachment, charge, encumbrance or right of others
which has arisen with respect to the Equipment.
(b) Lessee shall use the Equipment with due care to prevent injury thereto,
and to any person or property, and in conformity with all applicable laws,
ordinances, rules, regulations and other requirements of any insurer or
governmental body and with all requirements of the manufacturer with respect
to the use, maintenance and operation of the Equipment. Lessee shall not
modify any Equipment without the prior written consent of Lessor, which may
be granted or withheld in its sole discretion. It is the intention and
understanding of both Lessor and Lessee that the Equipment shall be and at
all times remain separately identifiable personal property. Lessee shall not
permit any Equipment to be installed in, or used, stored or maintained with,
any personal property (except other Equipment leased hereunder) in such
manner or under such circumstances that such Equipment might be or become an
accession to or confused with such other personal property. Lessee shall not
permit any Equipment to be installed in or used, stored or maintained with,
any real property in such a manner or under such circumstances that any
person might acquire any rights in such Equipment paramount to the rights of
Lessor or Secured Party by reason of such Equipment being deemed to be real
property or a fixture thereon.
6. RISK OF LOSS
(a) Lessee assumes and shall bear the entire risk of partial or complete
loss, theft, damage, destruction, condemnation, requisition, taking by
eminent domain or other interruption or termination of use of the Equipment
from any cause whatsoever, whether or not insured against, from the date of
delivery of the Equipment until the Equipment is returned to and received by
Lessor. Except as otherwise expressly provided herein, no such loss, theft,
damage, destruction, condemnation, requisition, taking by eminent domain or
other interruption or termination of use of the Equipment, and no delay,
deficiency or absence of insurance proceeds, and no unavailability, delay or
failure of supplies, parts, mechanisms, devices or service for the Equipment
or any failure of the Equipment to function for any cause, shall relieve
Lessee of the obligation to pay Rent hereunder. Lessee's obligation to pay
all Rent, and the rights of Lessor and the Secured Party in and to such
payments, shall be absolute and unconditional and except as otherwise
expressly provided herein, this Lease shall not terminate, nor shall the
respective obligations of the Lessor or the Lessee be affected, by reason of
any defect in or Total Casualty (as defined in this Section 6) to or
obsolescence of the Equipment or any item thereof from whatever cause, or the
interference with the use thereof by any private person, corporation or
governmental authority, or any other disability of the Lessee to use the
Equipment, or war, act of God, or governmental regulations, any present or
future law or regulation to the contrary notwithstanding. Lessee shall
promptly notify Lessor in writing of the occurrence of any of the above
events and all pertinent details connected therewith. Except during any
period when an Event of Default shall have occurred and shall be continuing.
Lessee shall be entitled to the proceeds of any claim or right of Lessor or
Lessee against any third party on account of any of the foregoing events and
Lessee shall be subrogated to the Lessor's right of recovery therefor against
any third party. Lessor shall execute and deliver from time to time such
instruments and take such other action as may be necessary or appropriate
more fully to vest in Lessee such proceeds or affect such subrogation,
provided, however, that all costs and expenses, including court costs and
attorneys' fees, incurred in connection with enforcing or realizing upon any
such claim or right to proceeds or obtaining enforcement of or realizing upon
such right of subrogation, shall be paid by, Lessee.
(b) In the event any item of Equipment is physically damaged to a material
extent by any occurrence whatsoever, Lessee shall immediately notify Lessor
of such damage and, unless Lessor shall determine that Section 6(c) hereof is
applicable to such damage, Lessee, at Lessee's expense, shall promptly cause
such item of Equipment to be returned to the condition described in Sections
3 and 5 hereof.
(c) In the event any item of Equipment shall be lost, stolen, destroyed,
damaged beyond repair or permanently rendered unfit for use for any reason
whatsoever, or shall be subjected to a requisition, taking by eminent domain
or other interruption or termination of use for a stated period which exceeds
the term of this Lease (any such occurrence being referred to as "Total
Casualty"), Lessee shall promptly notify Lessor and either, (i) obtain
replacement equipment of like model and features, having utility and remaining
useful life at least equal to that of each such replaced item of Equipment
and, in which case, Lessee shall immediately convey to Lessor good title for
all such replacement equipment free of all liens, claims or encumbrances and
such replacement equipment shall be substituted for each such item of
Equipment replaced hereunder; or (ii) pay to Lessor, on the next Monthly
Rent payment date for such item of Equipment following such Total Casualty,
an amount equal to the Casualty Value (specified in the applicable
Supplement) of such item of Equipment on such Monthly Rent payment date. If
Lessee elects to pay the Casualty Value rather than replace the Equipment,
after the payment of such Casualty Value and all Monthly Rent due and owing
for the period prior to the date of the Total Casualty with respect to such
item of Equipment, Lessee's obligation to pay further Monthly Rent for such
item of Equipment shall cease, but Lessee's obligation to pay Rent for all
other items of Equipment, shall remain unchanged. So long as no Event of
Default shall have occurred and be continuing under this Lease, and provided
Lessee shall have made the Casualty Value payment identified above. Lessor
shall pay Lessee any insurance proceeds received by Lessor by reason of such
Total Casualty up to the amount of the Casualty Value paid by the Lessee.
7. INSURANCE
Lessee shall at all times during the term of this Lease and until the
Equipment has been returned to Lessor as provided below, at its own expense,
maintain physical damage insurance in an amount not less than the replacement
value of the Equipment but in no event less than the Casualty Value thereof,
and liability and property damage insurance covering the Equipment (including
Lessee's contractual liability under Section 9 hereof), in such amount, and
with such companies and such endorsements and covering such hazards, as are
in general usage by companies owning or operating similar property and
engaged in a business similar to Lessee's, in order to adequately protect the
parties hereto. All insurance so maintained shall provide for a thirty-day
prior written notice to Lessor and its assigns of any cancellation or
reduction of coverages and an option in Lessor or its assignees to prevent
cancellation by payment premiums, shall cover both the interest of the Lessor
and any assigns of which the Lessee has notice and of the Lessee
in the Equipment, and shall provide that all insurance proceeds shall be
payable to the Lessee, Lessor and any such assignee as their respective
interests may appear at the time of any such payment. Lessor and any such
assignee shall be named as additional insureds on any public liability
insurance policies so maintained. Lessee shall furnish to Lessor satisfactory
evidence of any insurance so maintained no later than the date of delivery of
each item of Equipment and once annually, upon Lessor's request, during the
term hereof. Lessee's above obligation shall commence on the initial date of
delivery of the Equipment and shall continue until the Lease term hereof
expires and the Equipment is returned to Lessor. Lessee shall cooperate and,
to the extent possible, cause others to cooperate with Lessor and all
companies providing any insurance to Lessee or Lessor or both with respect to
the Equipment in collection on or enforcement of any such insurance. By this
Section 7, Lessor does not modify or limit any provision of this Lease
relating to disclaimer of warranties and liability, or indemnity.
8. RETURN OF EQUIPMENT
Upon the expiration or earlier termination of the Lease term, Lessee shall
return the Equipment to Lessor in the same condition and configuration
including original serial number, as received, reasonable wear and tear
excepted and in the condition required by Sections 3 and 5 hereof, and shall
permit the Equipment to be (a) inspected by agent(s) of the respective
manufacturer(s), if Lessor so requests, (b) repaired, if necessary, so as to
place the Equipment in the foregoing condition, (c) crated, and (d) shipped
by truck or other normal ground transportation to such address as Lessor may
designate. Lessor shall pay all expenses arising from the above clause (a) of
this Section 8, and Lessee shall pay all expenses arising from the above
clauses (b), (c), and (d) of this Section 8, provided-that shipping charges
payable by Lessee under such clause (d) shall be limited to an amount equal
to the cost of shipping the Equipment to any location within the Continental
United States.
9. DISCLAIMER OF LIABILITY AND INDEMNITY
Lessor shall not be liable for, and Lessee agrees to indemnify and hold
Lessor, Secured Party, and their respective successors and assigns harmless
against any loss, claim, action, suit, demand, proceeding, liability, penalty
cost, damage, obligation, lien or expense of any kind on account of personal
injury, property damage or otherwise, including but not limited to any matter
arising under strict liability in tort, imposed on or incurred by or asserted
against Lessor or Secured Party or its or their successors or assigns,
including without limitation attorneys' fees incurred on account of any of
the foregoing, in any way relating to this Lease or any document contemplated
hereby, or in any way relating to the selection, manufacture, purchase,
acceptance, ownership, delivery, installation, lease, sublease, possession,
use, operation, maintenance, condition, return or storage of any item of
Equipment, or any accident in connection therewith, or arising by operation
of law as a consequence of any of the foregoing. The provisions of this
Section 9 shall survive any termination of this Lease, provided, however,
that the Lessee shall not be required to indemnify the Lessor for (a) any
claim in respect of any item of Equipment arising from acts or events which
occur after possession of such item has been redelivered to the Lessor, (b)
any claim resulting from the willful misconduct or negligence of the Lessor.
Lessee shall give Lessor prompt written notice of any matter hereby
indemnified against and agrees that unless directed to the contrary by
written notice by the indemnified Party. Lessee shall assume full
responsibility for the defense thereof on behalf of such party.
10. EVENTS OF DEFAULT
(a) Each of the following shall constitute an Event of Default hereunder: (i)
default in the payment of any Rent hereunder and continuance thereof for ten
days after notice by Lessor to Lessee of said default; (ii) failure by Lessee
to make any other payment required by this Lease, or to perform any other of
Lessee's agreements set forth in this Lease, within 30 days after notice
thereof is given by Lessor to Lessee; (iii) Lessee becomes insolvent or
admits in writing its inability to pay its debts as they mature, or applies
for, consents to, or acquiesces in the appointment of a trustee or a receiver
or similar officer for it or any of its property, or, in the absence of such
application, consent or acquiescence, a trustee or receiver or similar
officer is appointed for Lessee or for a substantial part of its property and
is not discharged within 60 days, or any bankruptcy, reorganization, debt,
dissolution or other proceeding under any bankruptcy or insolvency law, or
any dissolution or liquidation proceeding, is instituted by or against
Lessee, and if instituted against Lessee is consented to or acquiesced in by
Lessee or remains for 60 days undismissed; (iv) Lessee shall make an
assignment for the benefit of creditors; (v) any warranty, representation,
statement or report made in writing by Lessee in this Lease or in any
document or certificate furnished in connection with this Lease or any
financing obtained in connection therewith proves to have been untrue or
incorrect in any material respect; or (vi) Lessee shall be a party to a
transaction governed by Section 11(a) below without complying with such
Section.
(b) Upon the occurrence of an Event of Default and so long as the same is
continuing, Lessor may, at its option, declare the applicable Supplement(s)
to be in default by notice to Lessee, and thereafter exercise one or more of
the following remedies, as Lessor in its sole discretion lawfully elects:
(1) Proceed by court action, either at law or in equity, to enforce
performance by Lessee of this Lease or to recover damages for the breach
thereof.
(2) By notice terminate the applicable Supplement, whereupon all rights
of Lessee in the Equipment subject to said Supplement will absolutely cease
but Lessee will remain liable as hereinafter provided; and thereupon
Lessee, if so requested, will at its expense promptly return the Equipment
to Lessor at the place designated by Lessor within the Continental United
States and in the condition required pursuant to the terms hereof, or
Lessor, at its option, may enter the premises where the Equipment is
located and take immediate possession of and remove the same in a lawful
manner. Lessee will, without further demand, forthwith pay Lessor an amount
equal to any past due Rent which was due and payable for all periods up to
and including the Monthly Rent payment date following the date on which
Lessor has declared the Supplement to be in default, plus, as liquidated
damages for loss of a bargain and not as a penalty, an amount equal to the
Casualty Value of the Equipment then subject to the applicable Supplement,
computed as of such monthly Rent payment date. Following the return of the
Equipment to Lessor pursuant to this clause (2), Lessor will proceed to
sell or re-lease the Equipment in a commercially reasonable manner. The
proceeds of such sale or re-lease will be applied by Lessor (A) first, to
pay all costs and expenses, including reasonable legal fees and
disbursements, incurred by Lessor as a result of the default and the
exercise of its remedies with respect thereto, (B) second, to pay Lessor an
amount equal to any unpaid past due Rent due and payable plus the Casualty
Value, to the extent not previously paid by Lessee, and (C) third, to
reimburse Lessee for the Casualty Value to the extent previously paid as
liquidated damages. Any surplus remaining thereafter will be retained by
Lessor. To the extent Lessee has not paid Lessor the amounts specified in
this clause (2), Lessee will forthwith pay such amounts to Lessor plus
interest provided in Section 12 on such amounts, computed from the date the
Casualty Value is payable hereunder until such amounts are paid.
(c) In addition, Lessee shall be liable for any damages and expenses which
Lessor shall have sustained by reason of the breach of any covenant,
representation or warranty of this Lease other than for the payment of the
Monthly Rent, and shall be liable for any and all unpaid amounts due
hereunder before, during or after the exercise of any of the foregoing
remedies and for all reasonable attorneys' fees and other costs and expenses
incurred by reason of the occurrence of any Event of Default or the exercise
of Lessor's remedies with respect thereto, including all costs and expenses
incurred in connection with the return of any item of Equipment. Upon the
occurrence and during the continuance of an Event of Default hereunder,
Lessor shall be exclusively entitled to enforce the warranties assigned to
Lessee under Section 4 hereof, notwithstanding such assignment.
(d) A cancellation or termination hereunder shall occur only upon written
notice by Lessor to Lessee, or repossession as provided above, and only with
respect to such items of Equipment as Lessor specifically elects to cancel or
terminate by such notice or repossession. Except as to any such item of
Equipment with respect to which there is a cancellation or termination, this
Lease shall remain in full force and effect and Lessee shall be and remain
liable for the full performance of all its obligations.
11. SUBLEASE AND ASSIGNMENT
(a) LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR AND SECURED
PARTY WHICH MAY BE GRANTED OR WITHHELD IN THEIR SOLE DISCRETION, (i)
SUBLEASE, ASSIGN, PLEDGE, HYPOTHECATE OR IN ANY OTHER WAY TRANSFER THIS
LEASE, THE EQUIPMENT OR ANY PART THEREOF, OR ANY INTEREST THEREIN, OR (ii)
PERMIT THE EQUIPMENT OR ANY PART THEREOF TO BE USED BY ANYONE OTHER THAN
LESSEE OR LESSEE'S EMPLOYEES. Any assignment, sublease, pledge hypothecation
or transfer for which consent is required hereby and which is made without
such consent shall be void. The consent of Lessor or Secured Party to any of
the foregoing applies only to the specific instance in which given, and shall
not be deemed a consent to any subsequent like act by Lessee or any other
person. Subject to the foregoing, this Lease inures to the benefit of, and is
binding upon, the successors and assigns of the parties hereto, Lessee's
interest herein shall not be assigned by operation of law. Notwithstanding
the foregoing, Lessee shall be entitled to assign or transfer this Lease, the
Equipment and its interests in this Lease and the Equipment in connection
with a sale of all or substantially all of its assets to, or a consolidation
of Lessee with, or a merger of Lessee into, any corporation so long as Lessee
provides Lessor with 45 days prior written notice and such corporation
assumes the obligations of Lessee under
this Lease and Lessee provides written evidence satisfactory to Lessor that
immediately following such sale, consolidation or merger such corporation is
in the opinion of Lessor now less credit-worthy than Lessee immediately prior
to such sale, consolidation or merger. Lessor and any direct or remote
assignee of any right, title and interest of Lessor hereunder shall have the
right at any time or from time to time to assign to any third party all or
any part of its right, title and interest in and to this Lease or the
Equipment.
(b) Lessor may obtain financing through financial institutions and secure
such financial institutions ("Secured Party") by granting a security interest
in or lien on all or any part of Lessor's interest in the Equipment, the
applicable Supplement, any collateral therefor, and amounts payable by Lessee
under the applicable Supplement. Such financing may include the purchase of
the Equipment by the Secured Party. In the event of such financing (1) the
lien instrument or security agreement will specifically provide that it is
subject to to Lessee's rights as herein provided; (2) such assignment of the
applicable Supplement or any interest herein will not relieve Lessor from its
obligations hereunder or be construed to be an assumption by Secured Party of
such obligations (but Secured Party may perform, at its option, some or all
of Lessor's obligations); (3) upon appropriate notice and upon request by
Secured Party, Lessee will execute such acknowledgements and other
documentation as may be requested by Lessor or Secured Party and Lessee will
thereafter pay directly to Secured Party all Rent and other amounts payable
hereunder; and (4) Lessee's obligations hereunder, including, without
limitation, its obligation to pay Rent and other amounts hereunder, shall be
absolute and unconditional and shall not be subject to any reduction,
abatement, defense, set-off, counterclaim or recoupment for any reason
whatsoever. Lessee acknowledges that any assignment or transfer by Lessor
permitted under this Lease shall not materially change Lessee's duties or
obligations under this Lease or materially increase the burdens or risks
imposed upon Lessee.
12. GENERAL
(a) Any provision herein that Lessee shall take any action shall require
Lessee to do so at its sole cost and expense. Lessee shall pay Lessor
interest at the maximum rate permitted by applicable law, but in no event in
excess of a rate of 1-1/2% per month, on any amount past due from the date it
is required to make any payment of Rent or other amount hereunder. Such
interest shall be payable with respect to the period commencing on the date
such payment is due through the date such payment is actually made.
(b) Any notice hereunder shall be in writing and shall be deemed to be given
when delivered, including but not limited to overnight courier or electronic
transmission or, if mailed, on the third day after mailing by registered or
certified mail, postage prepaid and addressed to Lessee or Lessor at its
respective address shown on the first page hereof, or to either party at such
other address it has designated as its address for purposes of notice
hereunder.
(c) Promptly upon Lessor's written request, Lessee agrees to execute,
acknowledge and deliver such instruments, and to take such other action, as
may reasonably be necessary in the opinion of Lessor, or Lessor's counsel, to
protect Lessor's or any Secured Party's interests in the Equipment, this
Lease and any Rent, including, but without limitation, the obtaining and
execution of landlord and mortgage waivers and Uniform Commercial Code
financing statements in recordable form, incumbency certificates and, at
Lessee's expense, opinion of Lessee's legal counsel regarding the matters
contained in Section 4(b) hereof. Upon Lessor's written request, Lessee also
agrees to provide quarterly financial statements and annual audited financial
statements in the form previously furnished to Lessor within 120 days of the
end of each quarter and Lessee's fiscal year end. Lessor may file or record a
copy of this Lease as a financing statement or for any other purpose.
(d) This Agreement is, and is intended to be, a lease, and Lessee does not
acquire hereby any right, title or interest in or to the Equipment except
the right to use the same as Lessee under the terms hereof. Both Lessor and
Lessee agree to characterize this Agreement as a lease for Federal income
tax purposes, such that Lessor shall receive the benefits of any depreciation
and investment tax credit, allowance or similar benefit associated with any
item of Equipment.
(e) This Master Lease Agreement and all Supplements duly executed and
attached hereto from time to time constitute the entire agreement between the
parties hereto with respect to the Equipment, and any change or modification
hereto and any related agreement must be in writing and signed by the parties
hereto. There shall be a single executed original of this Master Lease
Agreement which shall be marked and for the purposes hereof shall be referred
to as the "Original"; all other counterparts shall be marked "Duplicate".
With respect to any Supplement to this Master Lease Agreement executed by the
parties hereto, the following shall apply: (i) each such Supplement shall
constitute a new lease between the parties; (ii) there shall be a single
executed original of each such Supplement marked "Original"; (iii) all other
counterparts of such Supplement shall be marked "Duplicate"; and (iv) to the
extent, if any, that any such Supplement constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as is in effect in any
applicable jurisdiction) no security interest therein may be created through
the transfer or possession of the Original of this Master Lease Agreement or
any Duplicate of such a Supplement, but such security interest may be created
by the transfer or possession of the Original of such Supplement together
with a certified copy of this Master Lease Agreement.
(f) Lessor is not, and shall not be deemed to be, an agent, employee or
representative of Lessee or any manufacturer of any Equipment, for any
purpose whatsoever.
(g) If this Lease or any provision hereof shall be deemed invalid, illegal or
unenforceable in any respect or in any jurisdiction, the validity, legality
and enforceability of this Lease in other respects and in other jurisdictions
shall not be in any way impaired or affected thereby. No covenant or
condition of this Lease can be waived except by the written consent of the
party to be bound by such waiver. No waiver by Lessor of any Event of Default
hereunder shall in any way be, or be constituted to be, a waiver of any
future or subsequent Event of Default. Forbearance or indulgence by Lessor or
Lessee in any regard whatsoever shall not constitute a waiver of the covenant
or condition to be performed by the other party to which such forbearance or
indulgence may apply, and, until complete performance by such party of such
covenant or condition. Lessor or Lessee, as the case may be, shall be
entitled to invoke any remedy available to such party under this Lease or by
law or in equity or otherwise despite said forbearance or indulgence. This
Lease shall be governed by the laws of the State of Illinois. Lessee hereby
submits to the jurisdiction of the state and federal courts located in
Illinois.
(h) Should Lessee fail to make any payment or to do any act as herein
provided, after notice to Lessee which is reasonable under the circumstances,
Lessor shall have the right, but not the obligation and without releasing
Lessee from any obligation hereunder or waiving Lessor's right to declare a
default hereunder, to make or do the same, and to pay, purchase, contest or
compromise any encumbrance, charge or lien which in the reasonable judgment
of Lessor appears to materially and adversely affect Lessor's interest in the
Equipment, and in exercising any such rights, Lessor may incur any liability
and expend whatever amount in its reasonable discretion it may deem necessary
therefor. All sums so incurred or expended by Lessor shall be without demand
immediately due and payable by Lessee.
(i) Whenever the context of this Lease requires, the singular number includes
the plural. Section headings contained herein are solely for the convenience
of the parties, and are not an aid in the interpretation of the instrument.
Although this Lease is dated as of the date first above written for
convenience, the Supplement Agreement Date and the Supplement Commencement
Date shall be as specified in the applicable Supplement.
(j) This Master Lease Agreement may be canceled by Lessee in writing,
provided all outstanding Supplements hereunder have either expired or have
been terminated with respect to their individual termination provisions, and
that no Events of Default are continuing under any Supplements, and Lessee
has fulfilled all obligations under all such Supplements.
LESSOR: LESSEE:
MERIDIAN LEASING CORPORATION CUSTOM PAPERS GROUP, INC.
By: By: /s/ ILLEGIBLE
-------------------------------- --------------------------------
Title: Title: VICE-PRESIDENT
----------------------------- -----------------------------
[LOGO]
02/24/94 ms
SUPPLEMENT NUMBER 1
LESSEE: CUSTOM PAPERS GROUP, INC.
MASTER LEASE AGREEMENT DATE: January 1, 1994
This Supplement is issued pursuant to the Master Lease Agreement identified
above. All of the terms and conditions of the Master Lease Agreement are
hereby incorporated herein and made a part hereof as if such terms and
conditions were set forth in this Supplement. This Supplement, together with
the terms and conditions as incorporated herein, constitutes a separately
enforceable lease agreement with respect to the Equipment.
Lessee acknowledges that any assignment or transfer by Lessor permitted under
this Lease shall not materially change Lessee's duties or obligations under
this Lease or materially increase the burdens or risks imposed upon Lessee.
SUPPLEMENT AGREEMENT DATE: January 1, 1994
SUPPLEMENT COMMENCEMENT DATE: January 1, 1994
The Lease Term shall begin on the Supplement Commencement Date. To the extent
that the Equipment is accepted prior to that date, the Lessee shall pay to
the Lessor an interim rental representing a proration on a per diem basis of
the initial monthly rental.
EQUIPMENT: Manufactured by ACCURAY
See Equipment/Location Schedule A to Supplement Number 1.
LEASE TERM AND RENTAL PAYMENTS: Term 72 months, payable semi-annually on the
last day of each six months. The amount of payment for payments 1 through 12
is $196,290.00 per six months.
LOCATION OF EQUIPMENT:
See Equipment/Location Schedule A
to Supplement Number 1
ADDITIONAL PROVISIONS TO SUPPLEMENT:
Casualty Values. . . . . . . . . . . . . . . . . . . .Schedule B
Renewal Option . . . . . . . . . . . . . . . . . . . .Schedule C
Purchase Option. . . . . . . . . . . . . . . . . . . .Schedule C
Additional Consideration . . . . . . . . . . . . . . .Schedule C
MERIDIAN LEASING CORPORATION CUSTOM PAPERS GROUP, INC.
(Lessor) (Lessee)
By By /s/ [ILLEGIBLE]
------------------------- -------------------------------
Title: Title: VICE-PRESIDENT
EQUIPMENT/LOCATION SCHEDULE A
TO SUPPLEMENT NUMBER 1
LESSEE: CUSTOM PAPERS GROUP, INC.
SUPPLEMENT AGREEMENT DATE: January 1, 1994
EQUIPMENT: Manufactured by ACCURAY
LOCATION: CUSTOM PAPERS GROUP, INC.
FITCHBURG MILL
XXX XXX XXXXXXXXX XXXX
XXXXXXXXX, XX 00000
SEMI-ANNUAL
QTY TYPE/MODEL DESCRIPTION RENT
--- ---------- ----------- -----------
1 #1PM PROCESS CONTROL SYSTEM $36,304.00
LOCATION: CUSTOM PAPERS GROUP, INC.
XXXXXX XXXX XXXX
XXXXXX XXXX, XX 00000
SEMI-ANNUAL
QTY TYPE/MODEL DESCRIPTION RENT
--- ---------- ----------- -----------
1 #7PM PROCESS CONTROL SYSTEM $ 37,660.00
1 #8PM PROCESS CONTROL SYSTEM $ 72,930.00
LOCATION: CUSTOM PAPERS GROUP, INC.
XXXXXXXXXXX XXXX
XXXXXXXXXXX, XX 00000
QTY TYPE/MODEL DESCRIPTION
--- ---------- -----------
1 #9PM PROCESS CONTROL SYSTEM $ 49,396.00
--------------
Total $196,290.00
This Schedule is hereby attached to and made a part of the Supplement to the
Master Lease Agreement bearing date as set forth above, between MERIDIAN
LEASING CORPORATION and Lessee named above.
Lessee Address: CUSTOM PAPERS GROUP, INC.
000 XXXXXXXX XX.
XXXXXXXX, XX 00000
SCHEDULE B TO SUPPLEMENT NUMBER 1
To
Master Lease Agreement Dated January 1, 1994
Between
MERIDIAN LEASING CORPORATION (Lessor)
And
CUSTOM PAPERS GROUP, INC. (Lessee)
CASUALTY VALUES
The Casualty Value of the Equipment covered by the Supplement identified
above, as of any date, shall be the amount indicated below opposite the
period of time in which such date occurs. Values for those periods between
the ones indicated below can be calculated through interpolation of nearest
values.
Months Expired After Casualty
Supplement Commencement Date Value
0 $1,906,548
12 $1,558,794
24 $1,265,185
36 $1,016,953
48 $807,423
60 $630,495
72 $481,022
After the term of lease for such Equipment, and until such item of Equipment
has been surrendered to Lessor, as provided in the Master Lease Agreement,
the Casualty Value of such Equipment shall be $481,022.
Following payment of the Casualty Value, the Lessor and the Lessee shall each
make reasonable efforts to obtain bids for the purchase of any existing
Equipment suffering such Total Casualty. Such Equipment shall be sold for the
highest cash offer then available, or if higher, other offer acceptable to
Lessor and Lessee. Upon such sale, the Lessee shall be refunded the amount of
the proceeds of the sale less the actual expenses incurred by Lessor in
making the sale, including, without limitation, storage, insurance,
advertising and sales taxes, but such refund shall not be in excess of the
Casualty Value previously paid.
Following payment of the Casualty Value, the Lessee shall be entitled to the
proceeds of any insurance covering the Equipment suffering such a Total
Casualty up to an amount not in excess of the Casualty Value previously paid,
but in no event shall the aggregate of amounts refunded to or received by
Lessee pursuant to this Schedule B exceed the Casualty Value.
This Schedule is hereby attached to and made a part of the Supplement of the
Master Lease Agreement bearing date as set forth above, between MERIDIAN
LEASING CORPORATION and Lessee named above.
SCHEDULE C TO SUPPLEMENT NUMBER 1
To
Master Lease Agreement dated January 1, 1994
Between
MERIDIAN LEASING CORPORATION (Lessor)
And
CUSTOM PAPERS GROUP, INC. (Lessee)
RENEWAL OPTION:
Lessee has the option, with three months prior written notice, provided it
has not previously received written notice of default under the terms of the
Lease, or if it received such notice of default, has cured such default, to
renew the Lease for the Equipment at the end of the Lease Term for Fair
Market Value for a designated renewal term, such Fair Market Value to be
determined objectively by Lessor. In the event Lessee does not exercise said
renewal option, the Lease Term shall be automatically extended at the monthly
lease rate in effect at the end of said term unless and until terminated by
either party giving the other not less than three months prior written notice.
PURCHASE OPTION:
Lessee has the option, with three months prior written notice, provided
Lessee has not previously received written notice of default under the terms
of the Lease, or if it received such notice of default, has cured such default,
to purchase the Equipment at the termination of the Lease for $99,999.00.
ADDITIONAL CONSIDERATION:
The Casualty Values on Schedule B are prorated on a per location basis as
follows:
Type/Model Location Percentage
---------- -------- ----------
#1PM FITCHBURG MILL 18.495%
XXX XXX XXXXXXXXX XXXX
XXXXXXXXX, XX 00000
#7PM XXXXXX XXXX MILL 19.186%
XXXXXX XXXX, XX 00000
#8PM XXXXXX XXXX MILL 37.154%
XXXXXX XXXX, XX 00000
#9PM HUGHESVILLE MILL 25.165%
XXXXXXXXXXX, XX 00000
This Schedule is hereby attached to and made a part of the Supplement to the
Master Lease Agreement bearing date as set forth above, between MERIDIAN
LEASING CORPORATION and Lessee named above.
[Logo]
CERTIFICATE OF ACCEPTANCE
The undersigned being the Lessee under Supplement Number 1, to Master Lease
Agreement dated January 1, 1994, ("Lease") by and between MERIDIAN LEASING
CORPORATION, as Lessor, and the undersigned, as Lessee, hereby certifies as
follows:
(a) The equipment listed below is accepted by Lessee as being installed and
being acceptable under the terms of the Lease.
EQUIPMENT: Manufactured by ACCURAY
See Equipment/Location Schedule A to Supplement Number 1.
(b) The Lessor is not known to be in default under the terms of said Lease
and Lessee has no known claim against Lessor under the Lease as of the date
hereof.
(c) Lessee hereby waives any right it may have under Section 2A-517 of the
Uniform Commercial Code or otherwise to revoke this acceptance for any reason
whatsoever including but not limited to (i) any assumption by Lessee that a
nonconformity would be cured, (ii) any inducement of acceptance by the
Lessor's assurances or any difficulty to discover a nonconformity before
acceptance, or (iii) any Lessor default under the Lease. Lessee further
hereby waives its rights under Section 2A-401 and 2A-402 of the Uniform
Commercial Code to suspend performance of any of its obligations under the
Lease with respect to the Equipment hereby accepted.
CUSTOM PAPERS GROUP, INC.
(Lessee)
Acceptance
Date: January 1, 1994 By /s/ (ILLEGIBLE)
----------------------------- -----------------------------
Title: VICE-PRESIDENT
EQUIPMENT/LOCATION SCHEDULE A
TO SUPPLEMENT NUMBER 1
LESSEE: CUSTOM PAPERS GROUP, INC.
SUPPLEMENT AGREEMENT DATE: January 1, 1994
EQUIPMENT: Manufactured by ACCURAY
LOCATION: CUSTOM PAPERS GROUP, INC.
FITCHBURG MILL
XXX XXX XXXXXXXXX XXXX
XXXXXXXXX, XX 00000
Semi-Annual
Qty Type/Model Description Rent
--- ---------- ----------- -----------
1 #1PM PROCESS CONTROL SYSTEM $ 36,304.00
LOCATION: CUSTOM PAPERS GROUP, INC.
XXXXXX XXXX XXXX
XXXXXX XXXX, XX 00000
Semi-Annual
Qty Type/Model Description Rent
--- ---------- ----------- -----------
1 #7PM PROCESS CONTROL SYSTEM $ 37,660.00
1 #8PM PROCESS CONTROL SYSTEM $ 72,930.00
LOCATION: CUSTOM PAPERS GROUP, INC.
XXXXXXXXXXX XXXX
XXXXXXXXXXX, XX 00000
Qty Type/Model Description
--- ---------- -----------
1 #9PM PROCESS CONTROL SYSTEM $ 49,396.00
-----------
Total $196,290.00
This Schedule is hereby attached to and made a part of the Supplement to the
Master Lease Agreement bearing date as set forth above, between MERIDIAN
LEASING CORPORATION and Lessee named above.
Lessee Address: CUSTOM PAPERS GROUP, INC.
000 XXXXXXXX XX.
XXXXXXXX, XX 00000
[LETTERHEAD]
INSURANCE AUTHORIZATION LETTER
------------------------------
TO : Alexander and Alexander (Name of Insurance Agency/Broker)
-----------------------
[ILLEGIBLE] (Address)
-----------------------
[ILLEGIBLE] (Address)
-----------------------
Xxxxxxxx XX 00000 (City, State, Zip)
-----------------------
ATTN: [ILLEGIBLE]
----------------------- (Agent's Name)
TEL: 000 000-0000 (Telephone Number)
-----------------------
RE: 1 (Supplement)
------------------------
Please issue a Certificate of Insurance in the name of MERIDIAN LEASING
CORPORATION AND ITS ASSIGNS covering Supplement Number 1 and mail within five
(5) working days to:
Meridian Leasing Corporation
ATTN: Insurance Department
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
The insurance requirements below are in connection with Supplement Number 1
and cover equipment described as:
Computer Equipment
-------------------------------------------------------------------------------
Located at: VARIOUS LOCATIONS
---------------------
I. LIABILITY REQUIREMENTS: (Bodily Injury and Property Damage)
--------- ------------
A. $1,000,000 Single Limit Bodily Injury and Property Damage coverage.
B. ENDORSEMENT: It is understood and agreed that Meridian Leasing
Corporation ("Meridian") and its assigns are included as Additional
Insureds, as their interests may appear, with respect to the ownership,
security interest, maintenance or existence of certain personal
property leased to the named insured below by Meridian. It is further
understood that said equipment is leased on a "net lease" basis, and
that Meridian has no maintenance obligations with respect thereto.
C. ENDORSEMENT: It is understood and agreed that this insurance is primary
insurance insofar as it relates to any and all equipment leased from
Meridian under the above-referenced supplement.
D. ENDORSEMENT: It is understood and agreed that this policy shall not be
cancelled, nor any reduction or restriction of coverage be effected
until at least thirty (30) days prior written notice has been given to
Meridian at the above address by Certified Mail, Return Receipt
Requested.
(continued on next page)
[LETTERHEAD]
(continued from first page)
II. PHYSICAL DAMAGE REQUIREMENTS:
-------- ------ ------------
A. All Risk coverage for not less than $1,906,548.00.
-------------
B. ENDORSEMENT: It is understood and agreed that Meridian and its assigns
are included as Loss Payees with respect to the ownership, maintenance,
or existence of certain personal property leased to the named insured
below by Meridian. It is further understood that said equipment is
leased on a "net lease" basis, and that Meridian has no maintenance
obligations with respect thereto.
C. ENDORSEMENT: It is understood and agreed that this insurance is primary
insurance insofar as it relates to any and all equipment leased from
Meridian under the above-referenced supplement.
D. ENDORSEMENT: It is understood and agreed that this policy shall not be
cancelled, nor any reduction or restriction of coverage be effected until
at least thirty (30) days prior written notice has been given to
Meridian at the above address by Certified Mail, Return Receipt
Requested.
E. ENDORSEMENT: It is understood and agreed that any loss shall be
adjusted with the named insured below and proceeds made payable to
Meridian and its assigns, as their interests may appear.
The undersigned hereby authorizes you to provide a Certificate of Insurance
on the terms and in the manner as specified above.
Named Insured: CUSTOM PAPERS GROUP, INC.
----------------------------
(Lessee)
By: [ILLEGIBLE]
----------------------------------------
Title: Vice-President
-------------------------------------
Date: 3/7/94
-------------------------------------
(ms)
