Exhibit 10.28
MELA IV
(01/99)
MASTER EQUIPMENT LEASE AGREEMENT
DATED JUNE 24, 2004
LESSEE: WESTERN DIGITAL TECHNOLOGIES, INC. LESSOR: CIT TECHNOLOGIES CORPORATION,
d/b/a CIT SYSTEMS LEASING
STREET ADDRESS: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CITY/STATE/ZIP: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ LEASE
NUMBER:
1. AGREEMENT. Lessor agrees to lease to Lessee and Lessee agrees to
lease from Lessor the equipment (Equipment) described in any schedule (Schedule)
that incorporates this Master Equipment Lease Agreement (Agreement) by
reference. A Schedule shall incorporate this Agreement by reference by listing
the above-referenced Lease Number thereon. Such lease shall be governed by the
terms and conditions of this Agreement, as well as by the terms and conditions
set forth in the applicable Schedule. Each Schedule shall constitute an
agreement separate and distinct from this Agreement and any other Schedule. In
the event of a conflict between the provisions of this Agreement and a Schedule,
the provisions of the Schedule shall govern.
2. ASSIGNMENT OF PURCHASE DOCUMENTS. Lessee shall execute and deliver
to Lessor a writing acceptable to Lessor whereby Lessor is assigned all of
Lessee's rights and interest in and to: (a) the Equipment described in the
applicable Schedule and (b) any purchase order, contract or other documents
(collectively, Purchase Documents) relating thereto that Lessee has entered into
with the Seller (as specified in the applicable Schedule). If Seller is not an
affiliate of Lessor, Lessee shall deliver to Lessor a writing acceptable to
Lessor whereby Seller acknowledges, and provides any required consent to, such
assignment. If Lessee has not entered into any Purchase Document for the
Equipment with Seller, Lessee authorizes Lessor to act as Lessee's agent to
issue a purchase order to Seller for the Equipment and for associated matters,
and such purchase order shall be subject to this Section 2 and all references in
this Agreement to Purchase Documents shall include such purchase order. By
executing the applicable Schedule, Lessee represents and warrants that Lessee
either (y) has reviewed, approved and received a copy of the applicable Purchase
Documents or (z) has been informed by Lessor (i) of the identity of the Seller,
(ii) that Lessee may have rights under the Purchase Documents and (iii) that
Lessee may contact Seller for a description of such rights. The foregoing
information shall not be applicable if the Equipment specified in the Schedule
is not new equipment being purchased by Lessor for lease to Lessee.
3. DELIVERY; ACCEPTANCE. Lessee shall cause the Equipment to be
delivered, at Lessee's expense, to Lessee at the Equipment Location (as
specified in the applicable Schedule) and Lessee shall accept the Equipment upon
the later of (a) the installation, at Lessee's expense, of the Equipment or (b)
the satisfaction of the acceptance criteria, if any, specified in the applicable
Purchase Documents. In any event, Lessee shall evidence its acceptance of the
Equipment and commencement of the lease with respect thereto by executing and
delivering to Lessor a commencement certificate (Commencement Certificate) in a
form acceptable to Lessor within five (5) business days after delivery. By
executing and delivering a Commencement Certificate to Lessor, (x) Lessee
represents and warrants that it has selected the Equipment and Seller specified
on the applicable Schedule and (y) Lessee has irrevocably accepted such
Equipment under lease. Lessee shall reimburse Lessor for any late payment,
interest on late payment or any other similar fee or charge imposed by Seller as
the result of Lessee's failure to timely furnish to Lessor all pertinent lease
documentation.
4. PURCHASE OF EQUIPMENT. Provided that no Event of Default (as defined
in Section 18) exists, and no event has occurred and is continuing that with
notice or the lapse of time or both would constitute an Event of Default, Lessor
shall be obligated to purchase the Equipment from Seller and to lease the
Equipment to Lessee if (and only if) Lessor receives on or before the Latest
Commencement Date (as specified in the applicable Schedule) the related
Commencement Certificate and Schedule (both executed by Lessee), and such other
documents or assurances as Lessor may reasonably request. The foregoing
information shall not be applicable if the Equipment specified in the Schedule
is not new equipment being purchased by Lessor for lease to Lessee.
5. TERM. The initial term of each Schedule (Initial Term) shall begin
on the date specified as the Commencement Date on the Commencement Certificate
with respect to such Schedule and shall continue for the period specified in
such Schedule. Any renewal term of a Schedule (Renewal Term) shall begin on the
expiration of, as applicable, the Initial Term or any preceding Renewal Term
(collectively, Term).
6. RENT; LATE CHARGES. Lessee shall pay Lessor the first Rental Payment
(as specified in the applicable Schedule) for the Equipment on or before the
Commencement Date of the applicable Schedule, and shall pay Lessor the remaining
periodic Rental Payments on or before the periodic payment dates specified in
the applicable Schedule or, if periodic payment dates are not specified, on or
before the corresponding day of each subsequent period during the Initial Term
of the applicable Schedule, regardless of whether Lessee has received notice
that such Rental Payments are due. Additionally, if pursuant to this Agreement
or the applicable Schedule the Term is extended or a renewal option exercised,
Lessee shall also pay all Rental Payments required with respect thereto. All
Rental Payments will be sent to Lessor's above-referenced address, or to such
other address as specified by Lessor in writing. Lessee agrees to pay Lessor
interest at the rate of 1-1/2% per month (or such lesser rate as is the maximum
rate allowable under applicable law) on any Rental Payment (or other amount due
hereunder) that is not paid within 10 days of its due date.
7. INSURANCE. At its own expense, Lessee shall provide and maintain the
following insurance: (a) insurance against the loss or theft of or damage to the
Equipment for the greater of the Stipulated Loss Value (computed as described in
the applicable Schedule) or full
replacement value thereof, naming Lessor as a loss payee; and (b) public
liability and third party property damage insurance, naming Lessor as an
additional insured. Such insurance shall be in a form, amount and with companies
reasonably satisfactory to Lessor, shall contain the insurer's agreement to give
Lessor 30 days' prior written notice before cancellation or material change
thereof, and shall be payable to Lessor pursuant to Section 7(a) above,
regardless of any act, omission or breach by Lessee. Lessee shall deliver to
Lessor the certificates of such insurance on or before the Commencement Date of
the applicable Schedule, and at such other times as Lessor may reasonably
request. If no Event of Default exists, and no event has occurred and is
continuing that with notice or the lapse of time or both would constitute an
Event of Default, the proceeds of any insurance required under clause (a) hereof
that have been paid to Lessor shall be applied against Lessee's obligations to
Lessor under Section 12 hereof.
8. TAXES. Lessee shall reimburse Lessor for (or pay directly, but only
if instructed by Lessor) all taxes, fees, and assessments that may be imposed by
any taxing authority on the Equipment, on its purchase, ownership, delivery,
possession, operation, rental, return to Lessor or its purchase by Lessee
(collectively, Taxes); provided, however, that Lessee shall not be liable for
any such Taxes (whether imposed by the United States of America or by any other
domestic or foreign taxing authority) imposed on or measured by Lessor's net
income or tax preference items. Lessee's obligation includes, but is not limited
to, the obligation to pay all license and registration fees and all sales, use,
personal property and other taxes and governmental charges, together with any
penalties, fines and interest thereon, that may be imposed during the Term of
the applicable Schedule. Lessee is liable for these Taxes whether they are
imposed upon Lessor, Lessee, the Equipment, this Agreement or the applicable
Schedule. If Lessee is required by law or administrative practice to make any
report or return with respect to such Taxes, Lessee shall promptly advise Lessor
thereof in writing and shall cooperate with Lessor to ensure that such reports
are properly filed and accurately reflect Lessor's interest in the Equipment.
Lessor has no obligation to contest any such Taxes, however Lessee may do so
provided that: (a) Lessee does so in its own name and at its own expense; (b)
the contest does not and will not result in any lien attaching to any Equipment
or otherwise jeopardize Lessor's right to any Equipment; and (c) Lessee
indemnifies Lessor for all expenses (including legal fees and costs),
liabilities and losses that Lessor incurs as a result of any such contest.
9. REPAIRS; USE; LOCATION; LABELS. Lessee shall: (a) at its own
expense, keep the Equipment in good repair, condition and working order and
maintained in accordance with the manufacturer's recommended engineering and
maintenance standards; (b) use the Equipment lawfully and exclusively in
connection with its business operations and for the purpose for which the
Equipment was designed and intended; and (c) without Lessor's prior written
consent, not move the Equipment from the Equipment Location. If Lessor supplies
Lessee with labels stating that the Equipment is owned by Lessor, Lessee shall
affix such labels to the Equipment pursuant to Lessor's instructions.
10. MAINTENANCE; INSPECTION; ALTERATIONS. At its own expense, Lessee
shall: (a) [in Lessee's reasonable discretion,] enter into and maintain a
maintenance agreement for the Equipment with the manufacturer or other party
acceptable to Lessor; (b) maintain the Equipment in the same condition as when
delivered, subject only to ordinary wear and tear, and in good operating order
and appearance; (c) make all alterations or additions to the Equipment that may
be required or supplied by the Seller, the manufacturer or which is otherwise
legally necessary; and (d) make no other alterations or additions to the
Equipment (except for alterations or additions that will not impair the value or
performance of the Equipment and that are readily removable without damage to
the Equipment). Any modifications, alterations or additions that Lessee makes to
the Equipment (except as permitted by Section 10(d) above) shall become Lessor's
property and shall also be deemed to be Equipment. Upon request, Lessor, or any
party designated by Lessor, shall have the right to inspect the Equipment and
Lessee's applicable maintenance agreement and records at any reasonable time.
11. PERSONAL PROPERTY; LIENS AND ENCUMBRANCES; TITLE. The Equipment
shall at all times remain personal property, notwithstanding that the Equipment,
or any part thereof, may be (or becomes) affixed or attached to real property or
any improvements thereon. Except for the interest of Lessor, Lessee shall keep
the Equipment free and clear of all levies, liens and encumbrances of any nature
whatsoever. Except as expressly set forth in this Agreement, the Equipment shall
at all times remain the property of Lessor and Lessee shall have no right, title
or interest therein.
12. RISK OF LOSS. As between Lessor and Lessee, Lessee shall bear the
entire risk of loss, theft, destruction or damage to the Equipment from any
cause whatsoever or requisition of the Equipment by any governmental entity or
the taking of title to the Equipment by eminent domain or otherwise
(collectively, Loss). Lessee shall advise Lessor in writing within 10 days of
any such Loss. Except as provided below, no such Loss shall relieve Lessee of
the obligation to pay Lessor Rental Payments and all other amounts owed
hereunder. In the event of any such Loss, Lessor, at its option, may: (a) if the
Loss has not materially impaired the Equipment (in Lessor's reasonable
judgment), require Lessee, upon Lessor's demand, to place the Equipment in good
condition and repair reasonably satisfactory to Lessor; or (b) if the Loss has
materially impaired the Equipment (in Lessor's reasonable judgment), require
Lessee, upon Lessor's demand, to pay Lessor its anticipated return (Lessor's
Return), which shall consist of the following amounts: (i) the Rental Payments
(and other amounts) then due and owing under the applicable Schedule; plus (ii)
the Stipulated Loss Value (computed as described in the applicable Schedule) of
the Equipment; plus (iii) all other amounts that become due and owing under the
applicable Schedule, but only to the extent such amounts are not included in the
moneys paid to Lessor pursuant to clauses (i) and (ii) above. Upon Lessor's full
receipt of such Lessor's Return: (y) the applicable Schedule shall terminate,
and except as provided in Section 24, Lessee shall be relieved of all
obligations under the applicable Schedule; and (z) Lessor shall transfer all of
its interest in the Equipment to Lessee "AS IS, WHERE IS," and without any
warranty, express or implied from Lessor, other than the absence of any liens or
claims by, through, or under Lessor. Notwithstanding clause (b) hereof, Lessee
may, at its option, continue Rental Payments under the applicable Schedule,
without interruption, and replace the damaged Equipment with Equipment of
identical model, manufacturer, and condition (Replacement Equipment) (in which
case Lessee shall cause the Replacement Equipment to be delivered to a location
acceptable to Lessor and shall convey title (lien free) to the Lessor whereupon
the Replacement Equipment shall be subject to all of the terms and conditions of
this Agreement and the applicable Schedule).
13. NON-CANCELABLE NET LEASE. ALL LEASES HEREUNDER SHALL BE
NON-CANCELABLE NET LEASES, AND LESSEE AGREES THAT IT HAS AN UNCONDITIONAL
OBLIGATION TO PAY ALL RENTAL PAYMENTS AND OTHER AMOUNTS WHEN DUE. LESSEE IS NOT
ENTITLED TO ▇▇▇▇▇ OR REDUCE RENTAL PAYMENTS OR ANY OTHER AMOUNTS DUE, OR TO SET
OFF ANY
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CHARGES AGAINST THOSE AMOUNTS. LESSEE IS NOT ENTITLED TO RECOUPMENTS,
CROSS-CLAIMS, COUNTERCLAIMS OR ANY OTHER DEFENSES TO ANY RENTAL PAYMENTS OR
OTHER AMOUNTS DUE HEREUNDER, WHETHER THOSE DEFENSES ARISE OUT OF CLAIMS BY
LESSEE AGAINST LESSOR, SELLER, THIS AGREEMENT, ANY SCHEDULE OR OTHERWISE.
NEITHER DEFECTS IN EQUIPMENT, DAMAGE TO IT, NOR ITS LOSS, DESTRUCTION OR LATE
DELIVERY SHALL TERMINATE THIS AGREEMENT OR ANY SCHEDULE, OR AFFECT LESSEE'S
OBLIGATIONS HEREUNDER. UNLESS LESSEE'S OBLIGATION TO PAY RENTAL PAYMENTS AND
OTHER AMOUNTS HAS BEEN TERMINATED PURSUANT TO THE EXPRESS TERMS OF THIS
AGREEMENT, ALL RENTAL PAYMENTS AND OTHER AMOUNTS SHALL CONTINUE TO BE DUE AND
PAYABLE HEREUNDER.
14. LESSOR DISCLAIMERS; LIMITATION OF REMEDIES. IT IS SPECIFICALLY
UNDERSTOOD AND AGREED THAT: (A) LESSOR SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR PROMISE MADE BY SELLER, NEITHER SELLER NOR LESSOR
SHALL ACT AS, OR BE DEEMED TO BE, AN AGENT OF THE OTHER, AND LESSOR SHALL NOT BE
BOUND BY, OR LIABLE FOR, ANY REPRESENTATION OR PROMISE MADE BY SELLER (EVEN IF
LESSOR IS AFFILIATED WITH SELLER); (B) LESSOR SHALL NOT BE LIABLE FOR ANY
FAILURE OF ANY EQUIPMENT OR ANY DELAY IN ITS DELIVERY OR INSTALLATION; (C)
LESSOR SHALL NOT BE LIABLE FOR ANY BREACH OF ANY WARRANTY THAT SELLER MAY HAVE
MADE; (D) LESSEE HAS SELECTED ALL EQUIPMENT WITHOUT LESSOR'S ASSISTANCE; (E)
LESSOR IS NOT A MANUFACTURER OF ANY EQUIPMENT; AND (F) LESSOR HAS NOT MADE AND
DOES NOT NOW MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE DESIGN, COMPLIANCE WITH SPECIFICATIONS, OPERATION, OR CONDITION
OF ANY EQUIPMENT (OR ANY PART THEREOF), THE MERCHANTABILITY OR FITNESS OF
EQUIPMENT FOR A PARTICULAR PURPOSE, OR ISSUES REGARDING PATENT INFRINGEMENT,
TITLE AND THE LIKE. IT IS FURTHER AGREED THAT LESSOR SHALL HAVE NO LIABILITY TO
LESSEE, LESSEE'S CUSTOMERS, OR ANY THIRD PARTIES FOR ANY DIRECT, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY SCHEDULE
OR CONCERNING ANY EQUIPMENT, OR FOR ANY DAMAGES BASED ON STRICT OR ABSOLUTE TORT
LIABILITY; PROVIDED, HOWEVER, THAT NOTHING IN THIS AGREEMENT SHALL DEPRIVE
LESSEE OF ANY RIGHTS IT MAY HAVE AGAINST ANY PERSON OTHER THAN LESSOR. LESSEE
SHALL LOOK SOLELY TO SELLER FOR ANY AND ALL CLAIMS AND WARRANTIES RELATING TO
THE EQUIPMENT. Lessor hereby assigns to Lessee for the term of the applicable
Schedule the right to enforce; provided no Event of Default then exists under
this Agreement and such enforcement is pursued in Lessee's name, any
representations, warranties and agreements made by Seller pursuant to the
purchase documents, and Lessee may retain any recovery resulting from any such
enforcement efforts. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A OF THE UCC
AND ANY RIGHTS NOW OR HEREINAFTER CONFERRED BY STATUTE OR OTHERWISE THAT MAY
LIMIT OR MODIFY LESSOR'S RIGHTS AS DESCRIBED IN THIS SECTION OR OTHER SECTIONS
OF THIS AGREEMENT.
15. LESSEE WARRANTIES. Lessee represents, warrants and covenants to
Lessor that: (a) unless it is an individual, Lessee is duly organized, validly
existing and in good standing under applicable law; (b) Lessee has the power and
authority to enter into this Agreement, all Schedules and all other related
instruments or documents hereunder (collectively, Fundamental Agreements); (c)
such Fundamental Agreements are enforceable against Lessee in accordance with
their terms and do not violate or create a default under any instrument or
agreement binding on Lessee; (d) there are no pending or threatened actions or
proceedings before any court or administrative agency that would have a material
adverse effect on Lessee or any Fundamental Agreement, unless such actions are
disclosed to Lessor and consented to in writing by Lessor; (e) Lessee shall
comply in all material respects with all Federal, state and municipal laws and
regulations the violation of which could have a material adverse effect upon the
Equipment or Lessee's performance of its obligations under any Fundamental
Agreement; (f) Lessee shall obtain all governmental approvals necessary for it
to enter into and perform each Fundamental Agreement; (g) each Fundamental
Agreement shall be effective against all creditors of Lessee under applicable
law, including fraudulent conveyance and bulk transfer laws, and shall raise no
presumption of fraud; (h) financial statements and other related information
furnished by Lessee shall be prepared in accordance with generally accepted
accounting principles and shall present Lessee's financial position as of the
dates given on such statements; (i) Lessee shall furnish Lessor with its
certified financial statements, opinions of counsel, resolutions, and such other
information and documents as Lessor may reasonably request; (J) ALL EQUIPMENT IS
LEASED FOR BUSINESS PURPOSES ONLY, AND NOT FOR PERSONAL, FAMILY OR HOUSEHOLD
PURPOSES; and (k) all Equipment is tangible personal property and shall not
become a fixture or real property under Lessee's use thereof. Lessee shall be
deemed to have reaffirmed the foregoing warranties each time it executes any
Fundamental Agreement.
16. GENERAL INDEMNITY. Lessee shall indemnify, hold harmless, and, if so
requested by Lessor, defend Lessor against all claims (Claims) directly or
indirectly arising out of or connected with the Equipment or any Fundamental
Agreement. Claims refers to all losses, liabilities, damages, penalties,
expenses (including legal fees and costs), claims, actions, and suits, whether
based on a theory of strict liability of Lessor or otherwise, and includes, but
is not limited to, matters regarding: (a) the selection, manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, maintenance, use,
condition, return or operation of the Equipment; (b) any latent defects or other
defects in any Equipment, whether or not discoverable by Lessor or by Lessee;
(c) any patent, trademark, or copyright infringement; and (d) the condition of
any Equipment arising or existing during Lessee's use.
17. SURRENDER; EXTENSION OF TERM. Unless Lessee purchases the Equipment
or renews the Term pursuant to the applicable Schedule, or acquires the
Equipment pursuant to Section 12 hereof, Lessee shall, at its expense,
deinstall, inspect and properly pack the Equipment, and return the Equipment at
the expiration of the Term, free of all liens and rights of others, by
delivering it on board such common carrier as Lessor may specify with freight
prepaid to any destination within the United States of America specified by
Lessor. The Equipment shall be accompanied by an original copy of the relocation
inventory or other applicable form completed by the agent performing the
deinstallation. If Lessor so requests, Lessor and its agents shall have the
right to enter upon any premises where Equipment may be located to perform any
of Lessee's tasks noted above in this Section 17, and Lessee shall reimburse
Lessor for all costs and expenses Lessor incurs in fulfilling such tasks. Lessee
agrees that the Equipment, when returned to Lessor, shall be in the same
condition as when delivered to Lessee, reasonable wear and tear excepted, and
certified as being eligible for the manufacturer's generally available
maintenance contract at then prevailing rates, without Lessor incurring any
expense to repair, rehabilitate or certify such Equipment (Lessee shall be
liable for all costs and expenses Lessor incurs to
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place the Equipment in such condition). If requested by Lessor, Lessee, at its
expense, shall store the Equipment on its premises for a reasonable period, not
to exceed ten (10) business days during which period the Equipment shall be
subject to all of the terms and conditions hereof, except for the obligation to
make Rental Payments. In all instances where Lessee is returning Equipment to
Lessor, Lessee shall provide Lessor with one hundred twenty days (120) written
notice thereof, and shall return the Equipment to Lessor within one week of
deinstallation. If Lessee fails to provide the aforementioned notice or return
the Equipment to Lessor in the time and manner provided above, the Term shall be
extended for successive one hundred twenty (120) day periods until Lessee
returns the Equipment in accordance with Section 17, or Lessor terminates this
Agreement or any Schedule by ten (10) days written notice to Lessee. If any
Schedule is extended pursuant to the preceding sentence, Lessee shall continue
to pay the higher of either the periodic Rental Payments in effect prior to the
expiration of the then existing term of the applicable Schedule (whether it be
the Initial Term or any Renewal Term (Applicable Term)) or the Fair Rental Value
(as defined below), whichever is greater, or such other periodic rental payment
amount as is specified for such extension period in the Schedule, and all other
provisions of this Agreement shall continue to apply. Fair Rental Value for the
Equipment shall be determined by agreement of Lessor and Lessee, or, at Lessee's
sole expense, by an independent appraiser selected by Lessor. Fair Rental Value
means the periodic amount which would be payable for the Equipment in an arm's
length transaction between an informed and willing Lessee and an informed and
willing Lessor, neither under the compulsion to lease.
18. EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default under this Agreement and all Schedules: (a) Lessee fails to pay any
Rental Payment or any other amount payable to Lessor hereunder within 10 days
after its due date; or (b) Lessee fails to perform or observe any other material
representation, warranty, covenant, condition or agreement to be performed or
observed by Lessee hereunder or in any other agreement with Lessor, , and Lessee
fails to cure any such material breach within 10 days after notice thereof; or
(c) any representation or warranty made by Lessee hereunder, or in any other
instrument provided to Lessor by Lessee, proves to be incorrect in any material
respect when made; or (d) Lessee makes an assignment for the benefit of
creditors, whether voluntary or involuntary; or (e) a proceeding under any
bankruptcy, reorganization, arrangement of debts, insolvency or receivership law
is filed by or against Lessee or Lessee takes any action to authorize any of the
foregoing matters, and, if any of the foregoing events is not voluntary, it
continues undismissed for ninety (90) days; or (f) Lessee becomes insolvent or
fails generally to pay its debts as they become due, the Equipment is levied
against, seized or attached, or Lessee seeks to effectuate a bulk sale of
Lessee's inventory or assets; or (g) Lessee voluntarily or involuntary dissolves
or is dissolved, or terminates or is terminated; or (h) any guarantor under this
Agreement is the subject of an event listed in clauses (b) through (g) above; or
(i) unless the same is promptly replaced by Lessee, any letter of credit
required pursuant to any Schedule is breached, canceled, terminated or not
renewed during the Term of any such Schedule.
19. REMEDIES. If an Event of Default occurs, Lessor may, in its sole
discretion, exercise one or more of the following remedies: (a) terminate this
Agreement or any or all Schedules; or (b) take possession of, or render
unusable, any Equipment wherever the Equipment may be located, without demand or
notice, without any court order or other process of law and without liability to
Lessee for any damages occasioned by such action, and no such action shall
constitute a termination of any Schedule; or (c) require Lessee to deliver the
Equipment at a location designated by Lessor; or (d) declare the Lessor's Return
(as defined in Section 12 hereof and calculated by Lessor as of the date of the
Event of Default) for each applicable Schedule due and payable as liquidated
damages for loss of a bargain and not as a penalty and in lieu of any further
Rental Payments under the applicable Schedule; or (e) proceed by court action to
enforce performance by Lessee of any Schedule and/or to recover all damages and
expenses incurred by Lessor by reason of any Event of Default; or (f) terminate
any other agreement that Lessor may have with Lessee; or (g) exercise any other
right or remedy available to Lessor at law or in equity. Also, Lessee shall pay
Lessor all costs and expenses (including legal fees and costs and fees of
collection agencies) incurred by Lessor in enforcing any of the terms,
conditions or provisions of this Agreement. Upon repossession or surrender of
any Equipment, Lessor shall lease, sell or otherwise dispose of the Equipment in
a commercially reasonable manner, with or without notice and at public or
private sale, and apply the net proceeds thereof (after deducting all expenses
(including reasonable and actual legal fees and costs) incurred in connection
therewith) to the amounts owed to Lessor hereunder; provided, however, that
Lessee shall remain liable to Lessor for any deficiency that remains after any
sale or lease of such Equipment. Lessee agrees that with respect to any notice
of a sale required by law to be given, 10 days' notice shall constitute
reasonable notice. These remedies are cumulative of every other right or remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise, and may be enforced concurrently therewith or from time to time.
20. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to
perform any of its obligations hereunder, then upon written notice to Lessee as
shall be reasonable under the circumstances, Lessor may perform any act or make
any payment that Lessor deems reasonably necessary for the maintenance and
preservation of the Equipment and Lessor's interests therein; provided, however,
that the performance of any act or payment by Lessor shall not be deemed a
waiver of, or release Lessee from, the obligation at issue. All sums so paid by
Lessor, together with expenses (including reasonable and actual legal fees and
costs) incurred by Lessor in connection therewith, shall be paid to Lessor by
Lessee immediately upon demand.
21. FINANCING OF ADDITIONS. If, under any Schedule, Lessee intends to
make any addition to the Equipment, Lessee shall, in writing, request Lessor to
finance the costs of such addition. Lessee shall provide Lessor with the terms
under which it hopes to obtain the financing, and upon receiving such a request
Lessor shall determine, in its sole discretion, whether to provide such
financing. If Lessor does not, within 20 days after receiving Lessee's request,
offer to finance the addition upon the terms requested by Lessee, Lessee may
obtain offers from third parties for financing the addition, and Lessee shall
notify Lessor of the details of any third party financing offer Lessee would
like to accept (Third Party Offer). If Lessor has not made a financing offer to
Lessee on terms substantially similar to the Third Party Offer within 20 days of
receiving Lessee's notice, Lessee may accept the Third Party Offer unless: (a)
the aggregate cost to Lessee of obtaining financing from the Third Party Offer
is greater than the aggregate cost under Lessor's financing offer; or (b) the
Third Party Offer would create a security interest in, or a lien on, the
Equipment ; or (c) the addition is not permitted under Section 10(d) hereof.
22. ASSIGNMENT BY LESSOR. Lessor shall have the unqualified right to
assign, pledge, transfer, mortgage or otherwise convey any of its interests
hereunder or in any Schedule or any Equipment, in whole or in part, without
notice to, or consent of, Lessee. If any Schedule is assigned, Lessee shall: (a)
unless otherwise specified by the Lessor and the assignee (Assignee) specified
by Lessor, from and after the effective date of such assignment, pay all amounts
due under the applicable Schedule to such Assignee, notwithstanding any defense,
setoff or
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counterclaim whatsoever that Lessee may have against Lessor or Assignee
(provided that Lessee shall not be required to make duplicate payments to
Assignee with respect to amounts that Lessor required Lessee to prepay pursuant
to the applicable Schedule(s)); (b) not enter into an amendment or waiver of the
applicable Schedule without the prior written consent of the Assignee; (c) not
require the Assignee to perform any obligations of Lessor, other than those that
are expressly assumed in writing by such Assignee; and (d) execute such
acknowledgments thereto as may be reasonably requested by Lessor. It is further
agreed that: (x) each Assignee shall be entitled to all of Lessor's rights,
powers and privileges under the applicable Schedule, to the extent assigned; (y)
any Assignee may reassign its rights and interest under the applicable Schedule
on the same conditions and with the same force and effect as the assignment
described herein; and (z) any payments received by the Assignee from Lessee with
respect to the assigned portion of the Schedule shall, to the extent thereof,
discharge the obligations of Lessee to Lessor with respect to the assigned
portion of the Schedule. LESSOR AGREES, AND LESSEE ACKNOWLEDGES, THAT ANY
ASSIGNMENT OR TRANSFER BY LESSOR OR ANY ASSIGNEE SHALL NOT CHANGE LESSEE'S
OBLIGATIONS UNDER THE ASSIGNED SCHEDULE.
23. ASSIGNMENT OR SUBLEASE BY LESSEE. WITHOUT LESSOR'S PRIOR WRITTEN
CONSENT, LESSEE SHALL NOT ASSIGN THIS AGREEMENT OR ANY SCHEDULE OR ASSIGN ITS
RIGHTS IN OR SUBLET THE EQUIPMENT OR ANY INTEREST THEREIN; provided, however,
that Lessee may sublease or assign a Schedule to an affiliate or a wholly-owned
subsidiary of Lessee if: (a) Lessee and such sublessee or assignee execute and
deliver to Lessor a writing (to be provided by Lessor) whereby the sublessee or
assignee agrees to assume joint and several liability with Lessee for the full
and prompt payment, observance and performance when due of all of the
obligations of the Lessee under such Schedule; and (b) Lessor consents to such
sublease or assignment, which consent shall not be unreasonably withheld. In no
event, however, shall any such sublease or assignment discharge or diminish any
of Lessee's obligations to Lessor under such Schedule.
24. SURVIVAL; QUIET ENJOYMENT. All representations, warranties and
covenants made by Lessee hereunder shall survive the termination of this
Agreement and shall remain in full force and effect. All of Lessor's rights,
privileges, and indemnities, to the extent they are fairly attributable to
events or conditions occurring or existing on or prior to the termination of
this Agreement, shall survive such termination and be enforceable by Lessor and
any successors and assigns. So long as no Event of Default exists, and no event
has occurred and is continuing that with notice or the lapse of time or both
would constitute an Event of Default, neither Lessor nor any Assignee will
interfere with Lessee's quiet enjoyment of the Equipment. Notwithstanding
anything to the contrary in the foregoing, nothing in this section is intended
to, nor shall it, waive or limit the effect of any applicable statute of
limitations.
25. FILING FEES; FURTHER ASSURANCES; NOTICES. Lessee will promptly
reimburse Lessor for any filing or recordation fees or expenses (including lien
search fees, reasonable and actual legal fees and costs) incurred by Lessor in
perfecting or protecting its interests in the Equipment and under this
Agreement. Lessee shall promptly execute and deliver to Lessor such documents
and take such further action as Lessor may from time to time reasonably request
in order to carry out the intent and purpose of this Agreement and to protect
the rights and remedies of Lessor created hereunder. All notices under this
Agreement shall be sent to the respective party at its address set forth on the
front page of this Agreement or on the applicable Schedule or at such other
address as the parties may provide to each other in writing from time to time.
Any such notice mailed to said address shall be effective when deposited in the
United States mail, duly addressed and with first class postage prepaid.
26. WAIVER OF JURY TRIAL; SUCCESSORS. LESSEE AND LESSOR EACH IRREVOCABLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY
OTHER LITIGATION OR PROCEEDING UPON, ARISING OUT OF, OR RELATED TO, THIS
AGREEMENT, ANY OTHER FUNDAMENTAL AGREEMENT, OR THE DEALINGS OR RELATIONSHIP
BETWEEN OR AMONG LESSOR, LESSEE, SELLER OR ANY OTHER PERSON. This Agreement and
all Schedules inure to the benefit of and are binding upon the permitted
successors or assigns of Lessor and Lessee.
27. NO WAIVER; LESSOR APPROVAL. Any failure of Lessor to require strict
performance by Lessee, or any written waiver by Lessor of any provision hereof,
shall not constitute consent or waiver of any other breach of the same or any
other provision hereof. Neither this Agreement nor any other Fundamental
Agreement shall be binding upon Lessor unless and until executed by Lessor.
28. CAPTIONS; COUNTERPARTS; LESSOR'S AND LESSEE'S AFFILIATES. The
captions contained in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement. Only one counterpart of the
Schedule shall be marked "Original" (Original), and all other counterparts
thereof shall be marked as, and shall be, duplicates. To the extent that any
Schedule constitutes chattel paper (as such term is defined in the Uniform
Commercial Code in effect in any applicable jurisdiction), no security interest
in such Schedule may be created through the transfer or possession of any
counterpart other than the Original. Lessee understands and agrees that The CIT
Group, Inc. or any affiliate or subsidiary thereof, may, as lessor, execute
Schedules under this Agreement, in which event the terms and conditions of the
applicable Schedule and this Agreement as it relates to the lessor under such
Schedule shall be binding upon and shall inure to the benefit of such entity
executing such Schedule as lessor, as well as any successors or assigns of such
entity. Lessor understands and agrees that Western Digital Corporation or a
wholly-owned subsidiary of Western Digital Corporation (as the case may be, the
"Affiliated Lessee") may, as lessee, execute Schedules which incorporate this
Agreement by reference in which event the terms and conditions of the applicable
Schedule and this Agreement as it relates thereto shall be binding upon and
inure to the benefit of the Affiliated Lessee. Lessee shall be jointly and
severally liable for the obligations of the Affiliated Lessee pursuant to any
Schedule so executed. It shall be an Event of Default for the Lessee under any
Schedule to cease to be a wholly-owned subsidiary of Western Digital
Corporation.
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29. CHOICE OF LAW; INTEGRATION; ENTIRE AGREEMENT. EACH LEASE UNDER THIS
AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF NEW JERSEY. If any provision of this Agreement or
such Schedule shall be prohibited by or invalid under that law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such Schedule. Lessor and Lessee consent to the
jurisdiction of any local, state or Federal court located within the State, and
waive any objection relating to improper venue or forum non conveniens to the
conduct of any proceeding in any such court. THIS AGREEMENT AND ALL OTHER
FUNDAMENTAL AGREEMENTS EXECUTED BY BOTH LESSOR AND LESSEE CONSTITUTE THE ENTIRE
AGREEMENT BETWEEN LESSOR AND LESSEE RELATING TO THE LEASING OF THE EQUIPMENT,
AND SUPERSEDE ALL PRIOR AGREEMENTS RELATING THERETO, WHETHER WRITTEN OR ORAL,
AND MAY NOT BE AMENDED OR MODIFIED EXCEPT IN A WRITING SIGNED BY THE PARTIES
HERETO.
WESTERN DIGITAL TECHNOLOGIES, INC. CIT TECHNOLOGIES CORPORATION,
(Lessee) d/b/a CIT SYSTEMS LEASING (Lessor)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------- -------------------------------
(Lessee Authorized Signature) (Lessor Authorized Signature)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------- ----------------------------------
(Type/Print Name) (Type/Print Name)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
V.P., Taxes and Treasurer Vice President and Senior Counsel
-------------------------------------- ----------------------------------
(Title) (Title)
6/25/04 6-28-04
-------------------------------------- ----------------------------------
(Date) (Date)
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