MASTER LEASE AGREEMENT
Lease No.: 002
THIS MASTER LEASE AGREEMENT (this "Lease") is between NATIONSCREDIT
COMMERCIAL CORPORATION ("Lessor"), a Delaware corporation with an office address
at Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 and TEXFI INDUSTRIES, INC.
("Lessee"), a Delaware corporation with its address and principal place of
business at 0000 Xxxxxxxx Xxxxxx #000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, which
parties hereby agree as follows:
1. LEASING: Subject to the terms and conditions set forth herein,
Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor the
equipment (the "Equipment"; a unit or part thereof being sometimes referred to
as an "Item") described in any Equipment Schedule hereto (each, a "Schedule")
now or hereafter executed by the parties. Except as otherwise provided in
Section 19(d), nothing contained herein shall obligate either party to execute
any Schedule subsequent to the date hereof and in no event shall Lessor have any
obligation to execute any Schedule subsequent to Lessor's determination that a
material adverse change in the financial condition of Lessee has occurred. Any
modifications to this Lease contained in any Schedule shall be controlling, but
only with respect to the Equipment described in such Schedule. This Lease and
all Schedules and Addenda shall constitute one lease, and references to this
Lease shall include all Schedules and Addenda.
2. TERM, RENT AND PAYMENT: (a) The term (the "Term") of this Lease for
each Item shall commence on the date (the "Commencement Date") the Lessee
executes a Delivery and Acceptance Certificate (an "Acceptance Certificate")
therefor and, unless sooner terminated pursuant to Sections 8 or 15 hereof or
pursuant to Section 1 of the Termination, Purchase and Renewal Addendum, shall
continue for the period specified as the "Basic Term" in the applicable
Schedule. If any Term be extended, or the Lease renewed pursuant to a renewal
option, "Term" shall include all such extensions and renewals, and all
provisions of this Lease shall apply therein, except as may be otherwise
specifically provided.
(b) Lessee agrees to pay to Lessor basic rent ("Basic Rent")
for each Item in the amount set forth in the applicable Schedule. The first
Basic Rent payment for each Item shall be due on the date specified in such
Schedule. Subsequent Basic Rent payments shall be made monthly in advance on the
same day of each month thereafter. On the Commencement Date, Lessee will pay to
Lessor as interim rent ("Interim Rent") for each Item the amount specified
therefor in the Schedule, such Interim Rent to cover the period from the
Commencement Date to the first Basic Rent payment date. Any payment due on a day
which is not a business day shall be made on the next business day.
(c) Basic Rent, Interim Rent and all other amounts payable to
Lessor under this Lease (collectively, "Rent") shall, be paid by either company
check to Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 Attention: Manager,
Contract Administration (or to such other address as Lessor may direct) or by
wire transfer to The First National Bank of Chicago, Chicago Illinois, ABA
#000000000, Credit: NationsCredit Commercial Corporation, Account Number:
52-56933, Ref: Texfi Industries, Inc. and shall be deemed received when good
funds
are received by Lessor. Lessee agrees to pay Lessor on demand
(i) a late charge on all Rent not paid within 10 days of the date due hereunder
equal to the lesser of: (x) 5% of the amount not timely paid and (y) the maximum
amount permitted by applicable law, and (ii) interest on all Rent not paid
within 10 days of the due date hereunder from such 10th day until the date paid
at a rate per annum equal to the lesser of (x) the prime rate (the "Prime Rate")
as announced from time to time by The Chase Manhattan Bank, N.A. (whether or not
such rate is charged) or, if no such rate is published, the generally accepted
prime rate in effect on the Commencement Date plus 5% and (y) the maximum rate
permitted by applicable law.
3. QUIET ENJOYMENT: So long as no Event of Default (as defined below)
exists Lessor will not interfere with Lessee's quiet enjoyment and use of the
Equipment and Lessee's use and possession of the Equipment will not be
interrupted or otherwise disturbed by any entity asserting a claim under or
through Lessor.
4. NET LEASE; NO SET-OFF: This Lease is a net lease and
Lessee shall not be entitled to any abatement or reduction of, or set-off
against, any Rent by reason of: (a) any past, present or future claim against
Lessor or any successor or assignee of Lessor or any supplier of any Item or
any other person or entity; (b) any defect in or damage to, or loss,
prohibition, restriction on use or destruction of, any Item (except as
expressly provided in Section 8) from whatever cause; or (c) any other cause
whatsoever, whether similar or dissimilar to the foregoing, it being
the intention of the parties that all Rent shall continue to be payable in all
events in the specified manner and at the specified times and that Lessee's
obligation to pay Rent shall be absolute and unconditional unless the obligation
to pay the same shall be terminated pursuant to the express provisions of this
Lease.
5. USE, LOCATION AND POSSESSION; LIENS: (a) Lessee shall use each Item
in a careful and proper manner and for the use contemplated by the manufacturer
thereof and in compliance with all applicable laws, rules, and regulations and
the provisions of the insurance required to be maintained hereunder and the
terms of any manufacturer's warranty. Each Item will at all times be kept at the
location specified in the applicable Schedule unless the Lessor has given prior
written consent to a change in location. Lessee shall at all times keep each
Item in its possession and control.
(b) Lessee shall keep each Item free and clear of all, and
shall not create, incur, assume or suffer to exist any, claims, liens, pledges,
rights of others or other encumbrances (collectively "Liens"), other than those
("Lessor Liens") arising by, through or under Lessor prior to the occurrence of
an Event of Default and not related to the transactions contemplated hereby.
6. MAINTENANCE AND SERVICE; IMPROVEMENTS: (a) Lessee will, at its
expense, at all times maintain, service and repair each Item as would a prudent
owner of such Item, and in any event so as to keep each Item in good operating
condition, ordinary wear and tear excepted, in compliance with all applicable
laws, rules, regulations, and manufacturer's recommended maintenance programs,
and, to the extent that Lessee's maintenance, repair or servicing standards
exceed the foregoing, then so as to keep each Item in at least as good
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condition as other comparable equipment owned or used by Lessee. Lessee shall,
if at any time requested to do so by Lessor, affix in a prominent position on
each Item plates, tags or other identifying labels showing ownership thereof by
Lessor.
(b) Any alterations or modifications with respect to any Item
that may at any time during the Term be required to comply with any applicable
law or any governmental or other rule or regulation shall be made by Lessee at
its sole cost and expense, and shall thereupon become the property of Lessor.
(c) Unless required pursuant to Subsection (b), Lessee will
not, without Lessor's prior consent, affix, or install any accessory, equipment,
or device on, or modify, any Item if such addition or modification will impair
the original function or use thereof or cannot be readily removed without
causing damage to such Item. Further, Lessee will not, without Lessor's prior
written consent, affix or install any Item to or in any other real or personal
property so that such Item shall constitute a fixture. The Equipment is, and
shall at all times be and remain, personal property notwithstanding that the
Equipment or any part thereof may now be, or hereafter become, in any manner
affixed or attached to real property or any improvements thereon. Lessee shall
obtain and deliver to Lessor disclaimers or waivers from all owners and/or
mortgagees of real estate in which an Item is located in form and content
acceptable to Lessor.
7. DISCLAIMER: Lessee acknowledges that it alone has selected the
Equipment and the supplier(s) thereof; that it has reviewed and approved any
written supply contract or purchase order covering the Equipment purchased from
the supplier, or has been advised by the Lessor in writing of the identity of
the supplier; that it may have rights under such supply contract or purchase
order; and that it may contact the supplier for a description of any such
rights. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE WAIVES ANY AND ALL
RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE, INCLUDING SECTIONS 2A-508 THROUGH 522 THEREOF. LESSOR IS
NEITHER THE MANUFACTURER NOR SELLER OF THE EQUIPMENT, AND MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE
EQUIPMENT, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED. LESSEE UNDERSTANDS AND
AGREES THAT THE EQUIPMENT IS BEING LEASED TO IT "AS-IS," "WHERE-IS" AND "WITH
ALL FAULTS" AND THAT NO WARRANTY FROM LESSOR IS TO BE IMPLIED WITH RESPECT TO
THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, THE FITNESS OF THE
EQUIPMENT FOR A PARTICULAR PURPOSE, THE ACCURACY OF THE DESCRIPTION OF THE
EQUIPMENT, OR WITH RESPECT TO INFRINGEMENT, INTERFERENCE OR THE LIKE. LESSOR
SHALL NOT BE LIABLE IF, FOR WHATEVER REASON, THE EQUIPMENT IS NOT DELIVERED TO
LESSEE. LESSOR SHALL HAVE NO OBLIGATION TO INSTALL, MAINTAIN, ERECT, TEST,
ADJUST OR SERVICE THE EQUIPMENT. REGARDLESS OF CAUSE, LESSEE AGREES NOT TO
ASSERT ANY CLAIM WHATSOEVER AGAINST LESSOR FOR LOSS OF ANTICIPATORY PROFITS OR
ANY OTHER INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, NOR SHALL LESSOR BE
RESPONSIBLE FOR ANY
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DAMAGES OR COSTS WHICH MAY BE ASSESSED AGAINST LESSEE IN ANY ACTION FOR
INFRINGEMENT OF ANY UNITED STATES LETTERS PATENT. Nothing herein contained
shall be construed to deprive the Lessee of whatever rights Lessee may have
against parties other than the Lessor, such as the supplier and the manufacturer
of any Item, and Lessee agrees to look solely to such third parties with respect
to any and all claims concerning the Equipment. So long as Lessee is not in
default under this Lease, Lessee may pursue such claims for the mutual benefit
of Lessor and Lessee in accordance with their interests in the Equipment. Lessee
understands and agrees that neither the manufacturer, the supplier, any dealer
nor any agent of the foregoing is an agent of Lessor or is authorized to waive
or alter any term or condition of this Lease. Lessor hereby assigns to Lessee
(to the extent assignable) any and all rights Lessor may have to enforce any
warranty from the manufacturer with respect to the Equipment and Lessor agrees
to enforce for the benefit of Lessee (at Lessee's sole cost and expense) every
such warranty not assigned hereby; provided, however, that all of the foregoing
rights shall automatically revert to Lessor upon the occurrence and during the
continuance of any Event of Default hereunder or upon the return of the
Equipment to Lessor. Lessee agrees to settle all claims with respect to the
Equipment directly with the manufacturers thereof, and to give Lessor prompt
notice of any such settlement and the details of such settlement.
8. RISK OF DAMAGE AND LOSS: Lessee assumes and shall be solely
responsible for the entire risk of any Item being lost, destroyed, damaged,
stolen, confiscated or condemned, from whatever source, from the Commencement
Date until the Return Date (as defined in Section 10). In the event of damage to
any Item, Lessee, at its sole cost and expense, shall promptly repair the same,
restoring it to the condition required to be maintained hereunder and continuing
to pay Rent while doing so.
If any Item is lost, destroyed, stolen, damaged in such a way that it
is not commercially reasonable to repair it (or such repairs are not completed
within 60 days of the damage or by the end of the Term with respect thereto,
whichever is shorter), confiscated or condemned (each, an "Event of Loss")
Lessee shall, on the first to occur of (x) the end of the Term with respect
thereto and (y) the second Basic Rent payment date following such Event of Loss,
pay to Lessor the Stipulated Loss Value (as shown on the Stipulated Loss Value
Table to the applicable Schedule) of such Item as of the Basic Rent payment date
immediately preceding the Event of Loss plus interest thereon at a rate per
annum equal to the Prime Rate then in effect plus 2% from the Event of Loss date
through the date of payment and all other Rent owing with respect to such Item.
Until such time as the Stipulated Loss Value payment is made to Lessor, Lessee
shall continue to make Basic Rent payments with respect to such Item (provided
that all Basic Rent payments made for Basic Rent payment dates subsequent to the
Event of Loss date shall be credited against the Stipulated Loss Value amount as
of the date of its payment.
Upon due payment by the Lessee of all such amounts, this Lease
shall terminate with respect to such Item and Lessor shall transfer title
thereto to Lessee, without representation or warranty other than as to Lessor
Liens and that Lessor has not conveyed any interest in the Equipment to any
third party. So long as no Event of Default exists, any
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proceeds of insurance received by Lessor with respect to any damage or Event of
Loss respecting any Item shall be paid to Lessee to the extent necessary to
reimburse Lessee for costs incurred and paid by Lessee in repairing the same or
shall be credited against amounts payable to Lessor by Lessee with respect to
the Item involved.
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 said insurance policies, should the
Lessee fail to promptly do so.
9. INSURANCE: Lessee at its sole cost and expense shall
at all times through the Return Date:
(a) Keep the Equipment insured against all risks of loss or
damage from every cause whatsoever in an amount not less than the greater of
replacement value or the Stipulated Loss Value thereof, and
(b) Obtain comprehensive liability insurance, including
automobile if the Equipment includes motor vehicles, respecting the Equipment
covering liability for bodily injury, including death, and property damage, in
an amount of at least $5 million per occurrence, or such greater amount as
Lessee may generally maintain, or in such other amounts as Lessor may from time
to time require. Lessor shall be the sole named loss payee with respect to
damage or loss to the Equipment with no provision for co-insurance and shall be
named as an additional insured on the liability insurance. All insurance shall
be with insurers and in form reasonably satisfactory to Lessor; have a
deductible not to exceed $50,000 per occurrence, or such other amount as Lessor
may from time to time reasonably require; shall provide for at least 30 days'
prior written notice to Lessor before any cancellation or material modification
thereof shall be effective as against Lessor; shall waive any claim for premium
against Lessor; and shall provide that Lessor will be insured regardless of any
breach by Lessee of any representation, warranty or covenant in any such policy
or any application therefor. Lessee shall deliver to Lessor certificates of
insurance and other evidence satisfactory to Lessor evidencing the insurance
required hereby, and at Lessor's request Lessee will furnish copies of such
policies to Lessor. In the case of renewals, evidence of renewal shall be
delivered to Lessor at least 20 days prior to the expiration of the current
policy.
10. ACCEPTANCE AND RETURN OF EQUIPMENT: (a) By its
execution of any Acceptance Certificate, Lessee warrants and agrees that the
Equipment covered thereby conforms to the specifications and requirements of
Lessee and that, as between Lessee and Lessor, it was delivered in good repair
and that Lessee has unconditionally accepted it hereunder as of the Commencement
Date.
(b) Upon the expiration or earlier termination of this Lease
with respect to any Item, Lessee will, at its sole cost and expense, promptly
dismantle, crate and return such Item to Lessor at the address specified in the
first paragraph of the Lease, or to such other location in the continental
United States as Lessor may specify in a written notice to Lessee to be provided
to Lessee prior to such expiration or earlier termination or as soon
thereafter as
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practicable, in the condition required to be maintained hereunder.
If Lessee shall fail to return any Item of Equipment as provided herein, Lessee
shall be responsible for all cost and expense incurred by Lessor in returning
the Equipment to such required condition or any reduction in value as a result
thereof. Lessee shall also, at the request of Lessor, store the Equipment for up
to 90 days prior to such redelivery and shall bear the risk of loss and shall be
responsible for insuring the Equipment during such storage period as if this
Lease were still in effect with respect thereto. In the event Lessee does not
redeliver any Item to Lessor as herein required, Lessee shall pay to Lessor
Basic Rent for such Item (at the highest rate payable during the Term) until the
date (the "Return Date") the same is duly returned and in the proper condition
unless Lessee fails to redeliver any such Item solely as a result of Lessor's
failure to designate a location to which any such Item shall be returned.
11. GENERAL TAX INDEMNITY: Lessee agrees to pay and does hereby
indemnify, on an after-tax basis, Lessor against all income, sales, use, excise,
personal property, ad valorem, value added, leasing, stamp, documentary or other
taxes, levies, imposts, fees, assessments, duties, charges or withholdings of
any nature, including all license and registration fees, together with any
penalties, fines or interest thereon (collectively, "Impositions") arising out
of the transactions contemplated by this Lease (including the acquisition of any
Item prior to the Commencement Date) and imposed against Lessor, Lessee, this
Lease (including any Rent) or the Equipment or any Item by the United States or
any state or political subdivision thereof or any foreign government or taxing
authority, excluding, however, any Impositions based on or measured by the net
income of Lessor imposed by the United States or any state or political
subdivision thereof. Lessee will notify Lessor of the need to file any reports
and returns relating to any Imposition within five (5) days of Lessee's notice
thereof and will remit to Lessor upon demand any amounts payable in connection
therewith. In the event that Lessor pays any such Impositions, Lessee will on
demand reimburse Lessor for the full amount paid by Lessor therefor. Lessor
shall prepare and file all returns, and remit all Impositions, unless and to the
extent that Lessor directs Lessee to do so, in which case Lessee shall do so.
Lessee acknowledges that in some jurisdictions Impositions may not be billed,
audited, assessed or due until after this Lease has terminated and agrees that
in such event Lessee will remain liable for such Impositions notwithstanding
such termination.
12. INCOME TAX INDEMNIFICATION: (a) Lessee acknowledges
that Lessor intends to claim and take the depreciation deductions
("Depreciation Deductions") with respect to the Equipment in accordance with
Section 168 of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Lessee represents, warrants and covenants as follows:
(i) Lessor will not be required to include any
amount in its income in connection with any Item for any taxable year or part
thereof during the Term respecting such Item other than (1) Basic Rent and
Interim Rent, as such Rent accrues in accordance with the terms hereof, (2) any
amount constituting gain recognized with respect to or by reason of the sale or
other disposition of such Item upon the termination of this Lease with respect
thereto, (3) any amount payable to Lessor to the extent such amount is required
to be determined by
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reference to the income tax effect to Lessor of the receipt thereof, (4) any
amount specifically identified as interest, and (5) any other amount with
respect to which Lessor shall be entitled to a contemporaneous and equal
offsetting deduction (any amount so includable in Lessor's income other than as
contemplated in clauses (1) through (5) above being referred to herein
as an "Inclusion"); and
(ii) Each Item will constitute 5-year MACRS
property within the meaning of Section 168(e) of the Code and Lessor will be
entitled to Depreciation Deductions with respect to its basis in the Equipment
(which basis shall equal 100% of the total cost (including any taxes,
transportation or installation charges) originally paid by Lessor for the
Equipment (the "Equipment Cost") for each Item) in accordance with the Code.
(c) If, by reason of any act or omission of Lessee or the
inaccuracy of any representation or warranty of Lessee herein or any breach by
Lessee of its obligations hereunder:
(i) Lessor shall lose or lose the right to
claim, or be advised or determines that it would be imprudent, improper or
inadvisable to claim, or there shall be disallowed or recaptured, all or any
portion of the anticipated Depreciation Deductions,
(ii) Lessor shall suffer an Inclusion, or
(iii) Any foreign tax credit of Lessor shall be
reduced, disallowed or recaptured (any such loss, disallowance, reduction,
recapture or Inclusion being hereinafter called a "Tax Loss"),
then, in any such event, within 30 days after written notice to Lessee by Lessor
that any Tax Loss has occurred, which notice shall include an explanation and
calculation of such Tax Losses, Lessee shall pay Lessor, as an indemnity
payment, a lump sum amount which, after deduction of all federal, state and
local taxes required to be paid by Lessor in respect of the receipt of such
payment, shall provide Lessor with not less than the same net after-tax return
that Lessor would have realized if such Tax Loss had not occurred, including any
interest and penalties payable by Lessor attributable to such Tax Loss. In
computing Lessee's liability under this Section, the federal, state and local
taxes payable by Lessor shall be based upon the highest marginal corporate tax
rate in effect for the taxable year in which the Tax Loss occurred.
(d) Lessee shall not be liable for indemnification respecting
a Tax Loss occurring solely as a result of: (i) Lessor being subject to the
application of the mid-quarter convention of Section 168(d)(3) of the Code, (ii)
Lessor making any election to claim the Depreciation Deductions in a manner less
rapid than contemplated by the definition thereof, (iii) Lessor failing to have
sufficient taxable income to utilize the Depreciation Deductions, (iv) Lessor
being subject to the "alternative minimum tax" of Section 55 of the Code, or (v)
A voluntary transfer or other voluntary disposition by the Lessor of any
interest in any Equipment or this Lease when no Event of Default exists.
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(e) For the purposes of this Section the term "Lessor" shall
include any affiliated group within the meaning of Section 1504 of the Code of
which Lessor is a member, if consolidated returns are filed for such affiliated
group for Federal tax purposes, and a Tax Loss shall be deemed to have occurred
upon the earliest of:
(i) The happening of any event which may cause
such Tax Loss,
(ii) The payment by Lessor to the taxing
authority of the tax increase resulting from such Tax Loss, or
(iii) The adjustment of the tax return of
Lessor to reflect such Tax Loss.
13. GENERAL INDEMNIFICATION: Lessee hereby agrees to indemnify, save
and keep harmless Lessor, and its agents, officers, directors, employees,
successors and assigns, from and against any and all losses, damages, (including
indirect, special or consequential damages) harm, expenses, including reasonable
legal fees, penalties, injuries, claims, actions and suits, of whatsoever kind
and nature, in contract, tort or otherwise, whether caused by the negligence of
Lessor or otherwise and including Lessor's strict liability in tort, in any way
arising out of or in connection with the selection, modification, manufacture,
purchase, acceptance, rejection, ownership, delivery, lease, possession,
maintenance, use, condition (including latent or other defects, whether or not
discoverable by Lessor or Lessee, and any claim for patent, trademark or
copyright infringement), return of, or operation of any Item prior to its Return
Date or relating to any default by Lessee or any Event of Default.
14. DEFAULT: Each of the following shall constitute an
event of default (an "Event of Default") hereunder:
(a) Lessee fails to pay any Rent or Stipulated Loss Value,
late fee, indemnity obligation, reimbursement, or any other amount payable to
Lessor under this Lease or any other Document (as defined in Section 18(a)(i))
when due;
(b) Lessee fails to pay when due any indebtedness for borrowed
money (which term shall include any rental due under any lease the aggregate
rental throughout the term which exceeds $1,000,000.00 as to which Lessee is a
lessee), whether or not to Lessor, arising independently of this Lease;
(c) Lessee defaults in the performance of any other covenant
contained herein, in any Document or in any other agreement relating to borrowed
money, whether or not such other agreement is with Lessor, and such default
continues beyond the applicable grace period, if any, without being cured or
waived and, in the case of a default under any other agreement relating to
borrowed money, such default permits the acceleration of the maturity of the
indebtedness under such agreement;
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(d) Lessee becomes insolvent or make an assignment
for the benefit of creditors;
(e) Lessee applies for or consent to the appointment of a
receiver, trustee or liquidator for a substantial part of its property or such
receiver, trustee or liquidator is appointed without the application or consent
of Lessee;
(f) A petition is filed by or against Lessee under the federal
bankruptcy laws (including a petition for reorganization, arrangement or
extension) or under any other insolvency law or law providing for the relief of
debtors and, in the case of a filing against Lessee, shall not be dismissed
within 60 days of the date of filing;
(g) Lessee defaults or an event of default occurs under any
Document, that certain Master Lease Agreement between Lessor and Lessee dated as
of August 10, 1995 and all schedules and addenda thereto, or any other agreement
with Lessor or any affiliate of Lessor and such default or event of default
continues beyond the applicable grace period, if any, without being cured or
waived;
(h) Any representation or warranty made by Lessee herein
(other than in Section 12), in any agreement or certificate delivered in
connection herewith or any Document proves to have been false or misleading in
any material respect when made; or
(i) Lessee defaults or an event of default occurs under any
agreement with the landlord or mortgagee of any property on which any Item of
Equipment is located or with any other person or entity which may affect the
ability of Lessee to keep any Item of Equipment at its location specified in the
applicable Schedule and such default or event of default continues beyond the
applicable grace period, if any, without being cured or waived.
15. REMEDIES: (a) So long as any Event of Default
exists, then, to the extent permitted by applicable law, Lessor shall have the
right to exercise any one or more of the following remedies:
(i) To proceed by appropriate court action to
enforce performance by Lessee of its obligations hereunder or to recover
damages for breach thereof;
(ii) To require Lessee, at Lessee's sole cost
and expense, to assemble all the Equipment at a place reasonably designated by
Lessor or to return the Equipment in the method, manner and condition described
in Section 10 or to take possession of any and all Items, wherever located, and
thereafter hold, sell, operate or lease such Items, all with or without
judicial process to the fullest extent permitted by law, free of claims of
Lessee, except as set forth below;
(iii) By notice to Lessee, to terminate this
Lease;
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(iv) To demand immediate payment of the
Stipulated Loss Value of the Equipment as liquidated damages for the remaining
Term (whereupon Lessee shall promptly pay the same); and
(v) To pursue any other remedy available to
Lessor at law or in equity.
(b) Lessor and Lessee agree that an amount equal to the
Stipulated Loss Value of the Equipment represents a reasonable return for the
use of the Equipment and for the depreciation thereof, and shall be the basis
for liquidated damages for the remaining Term for which Lessee shall be liable
to Lessor upon an Event of Default. Any amounts realized by Lessor on account of
the Equipment subsequent to Lessor's taking possession thereof pursuant to
Section 15(a)(ii) shall, after reimbursement to Lessor of all its expenses
incurred in connection therewith, including legal fees, (and a reasonable
allocation of the compensation, costs and expenses of internal counsel, based
upon time spent), be credited to amounts of Stipulated Loss Value and all other
Rent owing by Lessee hereunder or, if such Stipulated Loss Value and all other
Rent has been paid, paid to Lessee, up to the amount of Stipulated Loss Value
actually paid by Lessee.
(c) If Lessor elects not to sell, re-lease, or otherwise
dispose of all or any part of the Equipment, and holds such Equipment for the
Lessee for the remaining Term, Lessor may recover, in addition to all Rent
accrued and unpaid as of the date of Lessor's recovery of possession of the
Equipment, the present value as of such date, of the Rent for the remainder of
the Term respecting such Equipment (which Term shall include, for this purpose,
to the extent applicable, any agreed upon renewals which would, in the absence
of an Event of Default, automatically extend the Term upon the Lessee's failure
to exercise any option to purchase the Equipment contained in any Addenda
hereto). Present value shall be computed using a discount rate equal to the
Prime Rate in effect on the Commencement Date.
(d) If Lessor sells, leases, or otherwise disposes of all or
any part of the Equipment, Lessor may recover from Lessee, in addition to any
Rent accrued and unpaid as of the date of Lessor's recovery of possession of the
Equipment, the present value computed by using a discount rate equal to the
Prime Rate in effect on the Commencement Date, of the difference between (i) the
Rent for the remainder of the Term respecting such Equipment (which Term shall
include, for this purpose, to the extent applicable, any agreed upon renewals
which would, in the absence of an Event of Default, automatically extend the
Term upon the Lessee's failure to exercise any option to purchase the Equipment
contained in any Addenda hereto) and (ii) the market rent determined by Lessor
in its reasonable discretion, or, in the case of a lease of Equipment which is
substantially similar to this Lease, the total rent for the lease term of such
substantially similar lease.
(e) Time of performance of Lessee's obligations
hereunder is of the essence. All remedies of Lessor hereunder are cumulative,
and may, to the extent permitted by law, be exercised concurrently or
separately, and the exercise of any one remedy shall not be deemed
to be an election of such remedy to the exclusion of any other remedy or to
preclude the exercise of any other remedy at any other time. Failure on the part
of Lessor to exercise, or
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delay in exercising, any right or remedy hereunder or Lessor's failure at any
time to require performance by Lessee of any of the provisions hereof shall not
operate as a waiver thereof; nor shall any single or partial exercise by Lessor
of any right or remedy hereunder preclude any other further exercise thereof or
the exercise of any other right or remedy. With respect to Lessor, Lessee
hereby waives any and all damages occasioned by any retaking of the Equipment.
Lessee shall be liable for all costs and expenses incurred by Lessor in
exercising the remedies provided hereunder, including but not limited to, court
costs and reasonable attorneys' fees.
16. ASSIGNMENT: Lessee acknowledges and understands that Lessor without
notice to Lessee, may assign this Lease or any Schedule or any Addenda or part
thereof and/or may sell or grant a security interest in the Equipment to any
person, organization or agency (which shall thereafter be entitled to Lessor's
rights hereunder to the extent assigned) and Lessor shall give Lessee prompt
written notice thereafter of any such assignment, sale or grant, including the
date thereof and the parties thereto. Lessor hereby covenants that as a
condition to any assignment of the Lease hereunder or the sale or grant of a
security interest with respect thereto, each person or entity to whom such
assignment, sale or security interest is made shall expressly covenant to Lessee
that, so long as no Event of Default shall have occurred and be continuing, such
person or entity nor anyone claiming by, through or under such person or entity
shall disturb Lessee's quiet and peaceful possession and use of the Equipment
for its intended purpose during the term of the Lease. Any assignee of Lessor
shall have all of the rights, but (unless specifically assumed) none of the
obligations, of Lessor under this Lease and Lessee agrees that it will not
assert against any assignee of Lessor any defense, counterclaim or offset that
Lessee may have against Lessor, provided that Lessor shall remain liable for
such performance. Lessee acknowledges that any assignment or transfer by Lessor
shall not materially change Lessee's duties or obligations under this Lease nor
materially increase the burdens or risks imposed on Lessee. Upon being notified
by the Lessor of an assignment Lessee shall: (a) recognize and consent to any
such assignment and reaffirm in writing the provisions of this Section with
respect thereto; (b) accept the lawful demands of such assignee; and (c) not
require any assignee of the Lease to perform any duty, covenant or condition
required to be performed by Lessor under the terms of this Lease (unless
specifically assumed); provided that Lessor shall remain liable for such
performance. Such assignment shall not affect any claims that Lessee may have
against Lessor or the right of Lessee to enforce such claim in any manner other
than Lessee's refusal to perform its obligations under this Lease.
LESSEE SHALL NOT ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR IN ANY WAY
DISPOSE OF ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS LEASE OR
ENTER INTO ANY SUBLEASE OF ALL OR ANY PART OF THE EQUIPMENT WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR.
This Lease inures to the benefit of and is binding upon the heirs,
legatees, personal representatives, and permitted successors and assigns of the
parties hereto.
17. REPORTS: (a) Lessee will immediately notify Lessor of:
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(i) Each Event of Loss or accident involving or
allegedly involving any Item;
(ii) Any Lien (other than a Lessor Lien) which
shall have attached to any Item;
(iii) Any notice from the landlord or mortgagee
of any property on which any Item of Equipment is located or from any other
person or entity which may affect the ability of Lessee to keep any Item of
Equipment at its location specified in the applicable Schedule; and
(iv) The occurrence of any Event of Default or
event which, with the lapse of time or giving of notice or both could become an
Event of Default.
(b) Lessee will within 120 days of the close of each of its
fiscal years deliver to Lessor Lessee's balance sheet, profit and loss
statement, and cash flow statement certified to by a recognized firm of
certified public accountants. Lessee will also deliver to Lessor within 60 days
of the close of each of its fiscal quarters Lessee's quarterly financial report
(which shall be in reasonable detail) certified to by the chief financial
officer of Lessee.
(c) Lessee will permit Lessor to inspect and examine the
Equipment and any Item and Lessee's records relating thereto upon reasonable
notice.
18. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF
LESSEE: (a) Lessee hereby represents and warrants to Lessor,
and agrees that the following representations and warranties shall be deemed
remade by Lessee on the date of execution of each Schedule:
(i) Lessee has full power, authority and legal
right to enter into and to perform its obligations under this Lease and all
related documents (collectively the "Documents"), is in good standing under the
laws of its jurisdiction of incorporation and is duly qualified to do business
and in good standing wherever necessary to carry on its present business and
operations, including the jurisdiction(s) where the Equipment is or is to be
located.
(ii) The Documents have been duly authorized,
executed and delivered by Lessee and constitute valid, legal and binding
agreements of Lessee, enforceable against it in accordance with their respective
terms.
(iii) No approval, consent or withholding of
objections is required from any governmental authority or instrumentality, or
any person or entity, with respect to the entry into or performance by Lessee of
the Documents except such as have already been obtained.
- 12 -
(iv) The entry into and performance by Lessee
of its obligations under the Documents will not (1) violate any judgment, order,
law or regulation applicable to Lessee or any provision of Lessee's Articles or
Certificate of Incorporation or By-Laws; or (2) result in any breach of,
constitute a default under or result in the creation of any Lien, pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument to which Lessee is a party.
(v) There are no suits or proceedings pending
or threatened in any court or by or before any governmental agency against or
affecting Lessee, which, if adversely determined, would have a material adverse
effect on the ability of Lessee to fulfill its obligations under this Lease or
its financial condition or prospects.
(vi) Each balance sheet, profit and loss
statement, and cash flow statement delivered to Lessor has been prepared in
accordance with generally accepted accounting principles, and since the date of
the most recent such balance sheet, profit and loss statement, and cash flow
statement, there has been no material adverse change in the financial condition
or prospects of Lessee.
The foregoing representations and warranties shall survive the
execution and delivery of this Lease and each Schedule.
(b) Lessee covenants that during the Term:
(i) The Equipment will at all times be used for
commercial or business purposes.
(ii) Lessee will not, directly or indirectly:
(1) merge with or consolidate into any other entity or permit any other entity
to merge into or with or consolidate with it unless Lessee is the surviving
corporation and its tangible net worth subsequent to such merger or
consolidation at least equals Lessee's tangible net worth prior thereto; (2)
liquidate or dissolve; (3) sell, transfer or otherwise dispose of, in any
transaction or a series of related or contemporaneous transactions, all or an
excess of forty percent of its assets; (4) redeem, purchase or otherwise
reacquire, in one or more transactions, an amount greater than forty percent of
its outstanding stock; (5) change its form or organization; or (6) change its
name or principal place of business without giving at least 30 days' prior
notice to Lessor.
19. MISCELLANEOUS: (a) Nothing herein contained shall
give or convey to Lessee any right, title or interest in and to any Equipment
leased hereunder except as a lessee. Should Lessor permit the use of any
Equipment beyond the specified Term thereof, the obligations of Lessee hereunder
shall continue (including the obligation to pay the Basic Rent at the highest
rate applicable during the Term with respect thereto) and such permissive use
shall not be construed as renewal of the Term thereof nor as a waiver of any
right or continuation of any obligation of Lessor hereunder. Lessee's
obligations pursuant to Sections 10, 11, 12 and 13 shall survive the expiration
or earlier termination of this Lease and Lessee
- 13 -
shall remain liable therefor. Equipment shall at all times remain personal
property of Lessor notwithstanding any affixation to the real estate.
(b) Lessee agrees to execute any instrument or instruments
necessary or expedient for filing, recording, perfecting, or notifying of the
interest of Lessor in the Equipment upon request of, and as determined by,
Lessor. Lessee hereby specifically authorizes Lessor to file financing
statements not signed by Lessee or to execute same for and on behalf of Lessee
as Lessee's attorney-in-fact, irrevocably and coupled with an interest, for such
purposes.
(c) To the extent permitted by applicable law, Lessee hereby
waives any and all rights and remedies conferred upon a lessee to: (i) cancel
this Lease, (ii) repudiate this Lease; (iii) reject the Equipment; (iv) revoke
acceptance of the Equipment; (v) recover damages from Lessor for any breaches of
warranty or for any other reason; (vi) a security interest in the Equipment in
Lessee's possession or control for any reason; (vii) deduct all or any part of
any claimed damages resulting from Lessor's default, if any, under this Lease;
(viii) accept partial delivery of the Equipment; (ix) "cover" by making any
purchase or lease of, or contract to purchase or lease, Equipment in
substitution for that due from Lessor; (x) recover any general, special,
incidental or consequential damages, for any reason whatsoever; and (xi) obtain
specific performance replevin, detinue, sequestration, claim and delivery or the
like for any Equipment identified to this Lease. To the extent permitted by
applicable law, Lessee also hereby waives any rights now or hereafter conferred
by statute or otherwise which may require Lessor to sell, lease or otherwise use
any Equipment in mitigation of Lessor's damages as set forth in Section 15 of
this Lease or which may otherwise limit or modify any of Lessor's rights or
remedies under Section 15.
/s/ OLV
[LESSEE'S INITIALS]
LESSOR AND LESSEE EACH WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
LITIGATION ARISING HEREFROM OR IN RELATION HERETO.
(d) This Lease, together with all Schedules and the
Termination, Purchase and Renewal Option Addendum, constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes and replaces any prior or contradictory representations, warranties
or agreements by Lessor and Lessee, except that the provisions of the Commitment
Letter dated March 1, 1996 between Lessee and Lessor shall govern with respect
to (i) the obligations of Lessor and Lessee with respect to entering into
Schedules covering Items (and the Rent to be paid therefor), provided, however,
that Lessee shall be obligated to deliver to Lessor in connection with each
Schedule covering Items an opinion of counsel acceptable to Lessor in form and
substance substantially similar to the opinion delivered to Lessor on the date
hereof, an agreement between Lessor and Elbit Vision Systems Ltd. ("Elbit")
pursuant to which Elbit agrees to purchase any Item manufactured by it in form
and substance satisfactory to Lessor and in accordance with the March 1, 1996
Commitment Letter (if applicable) and all other documents reasonably requested
by Lessor including,
- 14 -
without limitation, bills of sale, mortgagee and landlord waivers and consents,
resolutions, purchase order assignment agreements and certificates of
acceptance; (ii) funding dates, amounts and conditions; (iii) Lessee's
obligation to pay the Unused Line Fee, the Transaction Fee and the Transaction
Expenses set forth therein; and (iv) application of the Transaction Fee. Unless
set forth in a Schedule or rider hereto, signed by an authorized manager of
Lessor, Lessee shall have no right to purchase or otherwise acquire title to or
ownership of any Item. No agent or employee of any supplier or manufacturer is
authorized to bind Lessor to this Lease or any Schedule, or to waive, alter or
add to the terms and conditions printed herein and in any Schedule. THIS LEASE,
ANY AMENDMENTS TO, VARIATION OR MODIFICATION OF THIS LEASE, ANY WAIVER OF ITS
PROVISIONS OR CONDITIONS, ANY CONSENT HEREUNDER AND ALL SCHEDULES SHALL NOT BE
VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED OFFICER OR MANAGER OF LESSOR
AND LESSEE.
/s/ OLV
[LESSEE'S INITIALS]
(e) All notices, requests and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to such party at
its address or telecopy number set forth below, or at such other address or
telecopy number as such party may hereafter specify for the purpose of notice to
Lessor and Lessee. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section telephonic confirmation of receipt
thereof is obtained (in the case of telecopy), or (ii) if given by mail, prepaid
overnight courier or any other means, when received at the address specified in
this Section or when delivery at such address is refused.
Lessee: With a copy to:
Texfi Industries, Inc. Xxxxxxx Xxxxxx, Esq.
0000 Xxxxxxxx Xxxxxx #000 Xxxxxx Xxxx Xxxxxx Xxxx & Xxxxxxx, Xxxxx
Xxxxxxxx 00000 Xxxxxxxxxx L.L.P.
Telecopy: (919) 783-4739 000 X. Xxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
- 15 -
Lessor: With a copy to:
NationsCredit Commercial Corporation Jan Xxxxx Xxxxxx
One Canterbury Green Xxxxxxxx & Xxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 One Mercantile Center
Attention: Manager, Xxxxxxxx Xxxxx 0000
Xxxxxxxxxxxxxx Xx. Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
(f) If Lessee fails to perform any of its obligations
hereunder Lessor may, but shall not be obligated to, perform the same (without
such performance constituting a cure or waiver of Lessee's failure to so
perform) and Lessee will on demand reimburse Lessor for all its costs and
expenses incurred in connection therewith. In such event, all monies advanced or
expended by Lessor, and all expenses of Lessor in effecting such compliance,
shall be deemed to be additional Rent, and shall be paid by Lessee to Lessor at
the time of the next periodic payment of Rent.
(g) UNLESS OTHERWISE SPECIFIED IN A SCHEDULE OR
ADDENDA, THIS LEASE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CONNECTICUT INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF
LAWS. LESSOR AND LESSEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED IN CONNECTICUT, FOR ALL LEGAL PROCEEDINGS ARISING
DIRECTLY OR INDIRECTLY FROM THIS LEASE OR ANY SCHEDULE OR ANY ADDENDA AND EACH
IRREVOCABLY WAIVES ANY OBJECTION TO ANY SUCH PROCEEDING BASED ON VENUE OR
INCONVENIENT FORUM. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO
IRREVOCABLY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE MADE BY
SENDING THE SAME BY REGISTERED MAIL OR CERTIFIED MAIL AT ITS ADDRESS SET FORTH
HEREIN. If any provision of this Lease shall contravene or be invalid under
applicable law or regulation, such contravention or invalidity shall not affect
the entire Lease, the provisions held to be invalid to be deemed deleted or
modified and the Lease interpreted and construed as though such invalid
provision or provisions were not part hereof or conformed thereto.
20. BROKER: Lessee represents and warrants that except for Commercial
Trading Company, Inc. ("CTC"), there is no broker or other intermediary
("Broker") involved in the transaction contemplated hereby, and agrees to
indemnify and hold Lessor harmless from any claim for any brokerage commission,
fee or other compensation except that compensation which has been expressly
agreed to by Lessor with CTC. Such compensation shall be payable only in
accordance with conditions satisfactory to Lessor. No Broker or other party has
any authority to act for or bind Lessor. Lessor shall not be liable for any
expenses of any broker or intermediary, including CTC, except as expressly
provided herein.
- 16 -
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the 11th day of July, 1996.
NATIONSCREDIT COMMERCIAL TEXFI INDUSTRIES, INC.
CORPORATION
(Lessor) (Lessee)
By:/s/ Xxxx X. Xxxxx By:/s/ Xxxx X. Xxxxxxx
Title: Division President Title: CFO, VP + Treasurer
- 17 -
MASTER LEASE SCHEDULE
Master Lease Agreement No.: 002
Master Lease Agreement Date: July 11, 1996
Schedule No.: 001
Schedule Date: July 11, 1996
Name and Address of Lessee:
Texfi Industries, Inc.
0000 Xxxxxxxx Xxxxxx #000
Xxxxxxx, XX 00000
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the
Equipment described below, for the term and the rental payments
provided herein, all subject to the terms and conditions of the Master
Lease Agreement referenced above.
A. Equipment
This Schedule covers the Equipment listed on Annex A attached hereto
and made a part hereof.
B. Equipment Location: See Annex A attached hereto and made a
part hereof.
C. Terms
Basic Term (number of months): sixty (60)
Commencement Date: July 11, 1996
Total Equipment Cost: $1,491,466.00
Lease Rate Factor: 1.9346666%
Monthly Rent during Basic Term: $28,854.89
D. Rent
Basic Rent payments will be due for each month of the Basic Term,
payable in advance, commencing on July 11, 1996 and subsequently on the same day
of each month thereafter. Lessee shall pay as Basic Rent the product of the
Lease Rate Factor times the Equipment Cost of all Equipment covered by this
Schedule, set forth above as the Monthly Rent during the Basic Term.
E. Stipulated Loss Value
The Stipulated Loss Value of each Item of Equipment shall equal the
product of the Equipment Cost of such Item multiplied by the percentage in the
column headed "Stipulated Loss Value % of Equipment Cost" on Annex B attached
hereto corresponding to the Basic Rent payment date immediately preceding the
date of the Event of Loss.
In the event Lessee renews the Lease upon the expiration of the Basic
Term, the Stipulated Loss Value of each Item during any Renewal Term shall equal
30% of the Equipment Cost of such Item at the end of the Basic Term.
F. Miscellaneous
Lessee hereby irrevocably authorizes Lessor to insert in this Schedule
the Commencement Date and the due date of the first Basic Rent payment.
This Schedule is executed and delivered as a Schedule to and part of
the above-referenced Master Lease Agreement.
Capitalized terms not defined herein shall have the meanings assigned
to them in the Master Lease Agreement identified above.
NATIONSCREDIT COMMERCIAL TEXFI INDUSTRIES, INC.
CORPORATION (Lessor) (Lessee)
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
Title: V.P. Title: CFO, VP + Treasurer
TERMINATION, PURCHASE AND RENEWAL ADDENDUM
To Master Lease Agreement Between
NationsCredit Commercial Corporation ("Lessor")
and
Texfi Industries, Inc. ("Lessee")
Dated July 11, 1996
Master Lease Agreement No. 002
This Addendum is a part of the Lease described above and applies to all
Schedules (as defined in the Lease, capitalized terms not otherwise defined
herein having the meanings assigned therein). Lessor grants an early termination
option, two purchase options and a renewal option to Lessee upon the following
terms:
1. Early Termination Option. Provided that no Event of
Default shall have occurred and be continuing, Lessee, at its option, may
terminate the Lease with respect to all, but not less than all, of the Equipment
on all Schedules for a cash purchase price equal to the Stipulated Loss Value
for the Equipment plus a premium in the amount of five percent (5%) of the
Stipulated Loss Value for the Equipment. In order to exercise such option,
Lessee shall notify Lessor in writing of Lessee's irrevocable intention to
exercise such option at least ninety (90) days prior to the Basic Rent payment
date in October 1999 for Schedule No. 1. The purchase price and premium payment
for all Equipment subject to each Schedule shall be paid by Lessee to Lessor in
cash on or before the Basic Rent payment date in October 1999 for each Schedule.
Once Lessee exercises this option it shall be obligated to acquire all
Equipment subject to all Schedules and the termination shall occur, as to all
Equipment subject to any Schedule, on the Basic Rent payment date in October
1999 with respect to such Schedule. Upon termination of the Lease under this
Section 1 and payment of the cash purchase price and premium, Lessor shall
transfer to Lessee all of the Equipment on all Schedules. Such transfer of
Lessor's interest in the Equipment shall be on an "as-is", "where-is", "with all
faults" basis with no representation or warranty by Lessor other than that the
Equipment is free and clear of Lessor Liens and that Lessor has not conveyed any
interest in any of the Equipment to any third party. Lessee shall pay any
applicable sales or other taxes assessed thereon.
2. End of Term Options.
A. Initial Purchase Option. Upon expiration of the
Basic Term of each Schedule and payment by Lessee of all rentals and other sums
due as set forth in the Schedules, and provided that no Event of Default shall
have occurred and be continuing, Lessee, at its option, may purchase all, but
not less than all, of the Equipment on all Schedules for a cash purchase price
equal to the aggregate of 20% of the Equipment Cost with respect to the
Equipment manufactured by Elbit Vision Systems Ltd. plus 30% of the Equipment
Cost for all other Equipment. In order to exercise such option, Lessee shall
notify Lessor in writing of Lessee's irrevocable intention to
exercise such option at least ninety (90) days prior to the expiration of the
Basic Term for Schedule No. 1.
Such purchase shall be on an "as-is", "where-is", "with all faults"
basis with no representation or warranty by Lessor other than that the Equipment
is free and clear of Lessor Liens and that Lessor has not conveyed any interest
in any of the Equipment to any third party. Lessee shall pay any applicable
sales or other taxes assessed thereon. Once Lessee exercises this option it
shall be obligated to acquire all Equipment subject to all Schedules and the
purchases shall occur, as to all Equipment subject to any Schedule, at the end
of the Basic Term with respect to such Schedule.
The purchase price for all Equipment subject to each Schedule shall be
paid by Lessee to Lessor in cash on or before the expiration of the Basic Term
of such Schedule.
B. Renewal Option. If the Lessee for any reason does not give
notice to Lessor pursuant to Section 2(A) above of its election to purchase the
Equipment or does not fulfill the Equipment purchase terms in accordance with
Section (2)(A) hereof, the Basic Term set forth in each Schedule shall
automatically be extended for an additional term of twenty-four (24) months (the
"Renewal Term"). All of the terms and conditions of the Lease shall apply during
the Renewal Term except that Basic Rent during the Renewal Term shall equal
fifty percent (50%) of the Basic Rent for the Equipment during the Basic Term.
3. Subsequent Purchase Option. So long as Lessee has
exercised the Renewal Option and no Event of Default exists, Lessee may elect to
purchase all, but not less than all, of the Equipment on all Schedules at the
end of each Renewal Term thereof for a cash purchase price equal to its then
fair market value and otherwise on the terms and conditions set forth for the
Basic Term purchase option in Section 2(A) hereof. "Fair market value" shall be
determined as follows: In the event that Lessor and Lessee do not agree on such
fair market value before the 90th day prior to the end of the Renewal Term for
Schedule No. 1, fair market value shall be determined by an independent
appraiser selected by Lessee and acceptable to Lessor. The fees and expenses of
such appraiser shall be paid by Lessee. In order to exercise such option, Lessee
shall notify Lessor in writing of Lessee's irrevocable intention to exercise
such option at least ninety (90) days prior to the expiration of the Renewal
Term for Schedule No. 1. If Lessee does not elect to purchase the Equipment,
Lessee shall return all Equipment to Lessor at the expiration of the Renewal
Term applicable to each Schedule in accordance with the terms of the Lease.
NATIONSCREDIT COMMERCIAL TEXFI INDUSTRIES, INC.
CORPORATION (Lessor) (Lessee)
By:/s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
Title: Division President Title: CFO, VP + Treasurer
