EXHIBIT 10.65
MASTER LEASE AGREEMENT FOR EQUIPMENT
THIS AGREEMENT dated September 7, 1995, between SALEM
CAPITAL CORPORATION, having its principal place of business at
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and ELECTROSOURCE, INC. having its principal place of business at
▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Lessee").
Lessor agrees to lease to Lessee, and Lessee agrees to lease
from Lessor the machines and features (the "Equipment" described
in the Equipment Schedules now or hereafter executed and attached
from time to time by Lessor and Lessee covering such items of
Equipment as are delivered to and accepted by Lessee on or prior
to the Final Delivery Date for each item of Equipment. Each
Equipment Schedule, with Attached Certificate of Acceptance and
such other attachments as are referred to in the Equipment
Schedule shall constitute a separate Lease incorporation all the
terms and conditions of this Agreement.
The terms "Date of Certificate of Acceptance," "Daily Lease Rate
Factor," "Basic Lease Rate Factor," "Overdue Rate," "Interim Rent
Date," "First Basic Rent Date," "Last Basic Rent Date,"
"Expiration Date," "Casualty Value," and "lessor's Cost" shall
have the meaning set forth in the relevant Equipment Schedule.
Section 1. TERM OF LEASE
Upon delivery of the Equipment, Lessee shall inspect such
Equipment and, if it is found to be in good order, execute and
deliver to Lessor a Certificate of Acceptance in the form
attached to the Equipment Schedule. All items of Equipment
listed on such Certificate of Acceptance shall be deemed accepted
by lessee and shall be deemed to conform to this Agreement
despite any defect. The Lease term shall commence on the date of
Lessee's execution of such Certificate of Acceptance. The Lease
term shall end on the Expiration Date unless otherwise terminated
or extended pursuant to the provisions of this Agreement.
Section 2 RENTAL CHARGES AND OTHER REQUIRED PAYMENTS
(a) Lessee shall pay to Lessor as Basic Rent ("Basic Rent")
for each item of equipment, the following:
(i) On the Interim Rent Date, an amount equal to the
Daily Lease Rate Factor multiplied by the Lessor's
Cost of each item of equipment for each day from and
including the date of the Certificate of Acceptance
to and including the day immediately preceding the
Interim Rent Date;
(ii) On the First Basic Rent Date, and on each Basic
Rent Date thereafter, to and including the Last Basic
Rent Date, an amount equal to the Basic Lease Rate
Factor multiplied by the Lessor's Cost of each item
of equipment.
(b) Lessee shall pay the following amounts (herein referred
to as "Supplemental Rent" and, together with Basic Rent,
as "Rent"):
(i) On or before the applicable due date, all taxes,
however designated, which are levied or imposed by
any governmental authority upon the Equipment or its
sale, purchase, ownership or use, or upon Rent on
this Agreement, including but not limited to sales or
use taxes, personal property taxes, privilege or
excise taxes, franchise taxes ad valorem or value-
added taxes, leasing taxes, and stamp taxes, together
with any penalties, fines or interest thereon,
excluding, however, income taxes measured solely by
the net income of Lessor. To the extent permitted by
applicable law, Lessee shall prepare (in such manner
as will show Lessor's ownership of the Equipment) and
timely file all tax returns required in connection
with taxes payable by Lessee hereunder. With respect
to any such tax return required to be filed by
Lessor, Lessee shall notify Lessor of such equipment
and furnish Lessor with all forms and information
necessary for proper and timely filing of such
returns. Lessee shall inform Lessor as to any
governmental jurisdiction imposing personal property
taxes on the Equipment, and as to the amount of such
taxes.
(ii) On or before the date required by the terms
hereof (or upon Lessor's demand if no such date is
specified herein), any other amount which the Lessee
is obligated to pay hereunder, including but not
limited to indemnity payments and payments of
Casualty Value.
(c) On any payment of Basic Rent, Supplemental Rent, Other
Required Payment and Casualty Value Payment, which is
not paid on its due date, Lessee shall pay to Lessor
late charges computed from such payments due date until
paid, all the overdue Rate (computed on the basis of a
360-day year).
Section 3. NET LEASE
This lease is a net lease and Lessee's obligation to pay all
Rent shall be absolute and unconditional and, except as expressly
provided herein, shall not be subject to any abatement,
reduction, defense, counterclaim, setoff, or recoupment,
including any present or future claim against Lessor or the
manufacturer of the Equipment. Except as expressly proved
herein, this Lease shall not terminate for any reason, including
any defect in the Equipment or Lessor's title thereto or any
destruction or loss of use of any item of Equipment.
Section 4. OWNERSHIP OF EQUIPMENT
The Equipment shall at all times remain the property of
Lessor and may be removed by Lessor at any time after termination
of this Agreement.
Lessee shall affix tags, decals or plates to the Equipment
indicating Lessor's ownership, which type of tag, decal or plate
and location may be specified by Lessor, and Lessee shall not
permit their removal or concealment. Lessee shall cause each
item of Equipment to be kept numbered with the serial number
specified in the Equipment Schedule. Lessee shall provide to
Lessor any document (including UCC financing statements and
landlord or mortgagee waivers) reasonably requested by Lessor for
the purpose of evidencing or protecting Lessor's title and
interest in the Equipment. Lessee shall, at its own expense
protect and defend Lessor's title in the Equipment against all
claims and liens of Lessee's creditors and keep the Equipment
free and clear of all claims, liens and encumbrances except those
resulting from the agreements or acts of Lessor and not resulting
from Lessee's failure to perform its obligations under this
Agreement.
Section 5. POSSESSION
Lessor warrants to Lessee that Lessee shall be entitled, as
against all persons claiming by, through or under Lessor, to
possess the Equipment subject to the terms of this Agreement so
long as Lessee is not in default hereunder.
Upon expiration or termination of this Lease, Lessee at its
sole cost and expense shall return the Equipment to Lessor at the
place within the continental United States designated by Lessor
and in as good condition as when delivered to Lessee, reasonable
wear and tear excepted, subject to the terms of this Agreement.
At the time of such return, Lessee shall at its own expense
effect such repairs including any necessary engineering changes
as are required for the Equipment to remain qualified for
manufacturer's contract maintenance at then standard rates.
Section 6. MAINTENANCE
(a) Lessee shall either enter into and maintain in force a
manufacturer's maintenance agreement covering
maintenance of the Equipment, or maintain the Equipment
under manufacturer's specifications. Upon Lease
Expiration or any other surrender of the Equipment,
Lessee will provide to Lessor, its successors or
assigns, evidence that the Equipment complies with all
maintenance standards of the Manufacturer and that the
Equipment meets all current Manufacturer specifications
for this equipment type (this will include but not be
limited to such engineering changes and improvements to
the equipment which are available without additional
charge). Lessee shall bear all expenses involved in
producing such evidence from the Manufacturer. In the
event that the Equipment does not meet the
Manufacturer's standards and specifications the Lessee
shall immediately cause the Manufacturer to bring the
equipment up to said standards and specifications. All
expenses involved in bringing the Equipment up to said
standards and specifications shall be paid by Lessee.
Lessee shall also pay to the Lessor, it successors or
assigns, any economic loss in the value of the Equipment
that may result from the Equipment not being up to the
Manufacturer's standards and specifications and any
delay involved in causing the Equipment to be brought up
to said standards and specifications.
(b) All maintenance and service charges related to the
Equipment shall be borne by Lessee.
(c) The required suitable electric current to operate the
Equipment and a suitable place of installation shall be
furnished by Lessee. The installation facilities shall
be as specified in the manufacturer's installation
manual and shall at all times meet the minimum standard
of the National Board of Fire Underwriters for the
protection of Electronic Computer Systems as recommended
by the Nation Fire Protection Association. All supplies
consumed or required by the Equipment shall be furnished
by Lessee.
Section 7. LOCATION AND USE OF EQUIPMENT
(a) During the term of the lease, the Equipment shall be
located at the address indicated in the Certificate of
Acceptance. No Equipment shall be removed from the
above address without the prior written consent of
Lessor. Any relocation of the Equipment shall be at the
risk and the expense of the Lessee and in accordance
with the Manufacturer's specifications.
(b) Lessee covenants and warrants that during the period
that any Equipment is leased to Lessee hereunder, such
Equipment will at all times be used and operated in
compliance with the laws of the jurisdictions in which
it is located, and in compliance with all acts, rules,
regulations, and orders of any commission, board or
other legislative, administrative, or judicial body or
officer having power to regulate or supervise the use or
operation of the Equipment. Lessee shall not install or
use the Equipment in such manner or in such
circumstances that any part of the Equipment is deemed
to be an accession to other personal property or deemed
to be real property or a fixture thereon.
Section 8. INSURANCE
During the period that any Equipment is leased to Lessee
hereunder, Lessee will at all times and at its expense carry and
maintain or cause to be carried and maintained insurance for loss
of or damage to the Equipment caused by fire, lightening,
sprinkler breakage, tornado and windstorms, explosion, smoke and
smudge, aircraft and motor vehicle damage, strikes, riots and
civil commotion, burglary and theft, vandalism and malicious
mischief, and other casualty events customarily insured against
with respect to similar equipment, in an amount not less than the
Casualty Value of the Equipment. Lessee shall also carry and
maintain or cause to be carried and maintained at its expense
public liability insurance covering the Equipment, in such
amounts and against such risks as is customary with respect to
similar equipment. Lessee shall furnish appropriate evidence of
such insurance to Lessor naming Lessor as an additional insured
and naming Lessor's Assignee as loss payee. All required
insurance shall provide for ten (10) days' notice to Lessor and
its assign of any cancellations and shall not modify nor alter
said insurance without prior written consent of Lessor and its
Assignee.
Section 9. RISK OF LOSS, EVENT OF LOSS
Lessee hereby assumed and shall bear the entire risk of loss
or damage including but not limited to destruction, theft, or
governmental taking of any item of Equipment ("Event of Loss"),
whether partial or complete and whether or not covered by
insurance. No such loss or damage shall relieve Lessee of any of
its obligations under this Lease. Lessee shall immediately
notify Lessor of any Event of Loss involving the Equipment.
If an Event of Loss occurs with respect to any item of
Equipment, Lessee, at the option of Lessor, shall:
(a) repair or restore the equipment to good repair,
condition and working order; or
(b) replace the Equipment with identical equipment in good
repair, condition and working order; or
(c) pay Lessor in cash the Casualty Value for such item as
set forth in the relevant Equipment Schedule.
Upon payment of the Casualty Value and all other amounts due
hereunder with respect to such, this Lease shall terminate with
respect to the item of Equipment for which Lessor has received
payment, and Lessee shall become entitled to such item of
equipment AS-IS, WHERE-IS, without any warranty, express or
implied, with respect to any matter whatsoever. If Lessee has
paid the Casualty Value and such other amounts with respect to
such item of Equipment and if Lessee is not in default hereunder,
property damage insurance proceeds from such Event of Loss shall
be paid to Lessee up to the amount of said Casualty Value.
Section 10. ENFORCEMENT OF WARRANTY
(a) Upon receipt of written request from Lessee, and so long
as this Agreement shall remain in force, Lessor shall
take all reasonable action requested by Lessee to
enforce any manufacturer's warranty, express or implied,
issued on or applicable to the Equipment, which is
enforceable by Lessor in its own name, provided,
however, that Lessor shall not be obligated to resort to
litigation to enforce any such warranty unless Lessee
shall pay all expenses in connection therewith.
(b) Similarly, if any warranty shall be enforceable by
Lessee in its own name, Lessee hereby agrees, upon
receipt of written request from lessor and so long as
this Agreement shall remain in force, to take all
reasonable action requested by Lessor to enforce any
such warranty.
(c) Lessor hereby assigns to Lessee any warranty rights
which Lessor may have against the manufacturer with
respect to the Equipment, to the extent such warranty
rights are assignable, which assignment shall remain
effective so long as Lessee is not in default hereunder.
With respect to such warranty rights as are not
assignable, Lessor hereby appoints Lessee as its agent
and attorney-in-fact for purpose of enforcing such
warranty rights at Lessee's expense.
Section 11. DISCLAIMER OF WARRANTIES
LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS, IN WHATEVER
CONDITION IT MAY BE, WITHOUT ANY AGREEMENT, WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, LESSOR EXPRESSLY DISCLAIMS ANY
IMPLIED WARRANTY OR MERCHANTABILITY, FITNESS OR ADEQUACY FOR ANY
PARTICULAR PURPOSE OR USE, QUALITY, PRODUCTIVENESS OR CAPACITY.
LESSOR HEREBY ASSIGNS TO LESSEE (TO THE EXTENT TO WHICH THE SAME
MAY BE ASSIGNABLE), ANY WARRANTY OF THE MANUFACTURER RELATIVE TO
THE EQUIPMENT.
Section 12 INDEMNIFICATION
Lessor and its successors and assigns shall not be liable to
Lessee for, and Lessee shall indemnify and hold Lessor and its
successors and assigns harmless with respect to any third party,
from any liability (including liability for negligence), claim,
loss, damage or expense (including litigation expense) of any
kind or nature caused, directly or indirectly, by
(i) the inadequacy of any Equipment for any purpose,
(ii) any deficiency or defect in any Equipment,
(iii) the use or performance of any Equipment,
(iv) any interruption or loss of service, use or performance
of any Equipment,
(v) any patent, trademark, or copyright infringement
relating to the Equipment, or
(vi) any loss of business of other consequential damage
whether or not resulting from any of the foregoing.
IN PARTICULAR, LESSOR AND ITS SUCCESSORS AND ASSIGNS SHALL
NOT BE LIABLE FOR INJURIES TO PERSONS OR DAMAGES TO THE EQUIPMENT
OR OTHER PROPERTY UNDER ANY THEORY OF STRICT LIABILITY, AND LESS
SHALL INDEMNIFY AND SAVE LESSOR AND ITS SUCCESSORS AND ASSIGNS
HARMLESS FROM ANY SUCH LIABILITY AND ALL COSTS AND EXPENSES IN
DEFENDING THE SAME.
All of Lessor's rights under this Section 12 shall survive
the termination of this Agreement, however, Lessee shall not be
required to indemnify Lessor for claims arising from events which
occur after the Equipment has been redelivered to Lessor.
Section 13. MODIFICATIONS OF EQUIPMENT
(a) Provided the manufacturer permits changes, alterations,
modifications or attachment to the Equipment
(hereinafter called "Equipment Change") and consents to
the Equipment Change in writing and such Equipment
Change does not adversely affect the operation of the
Equipment in relation to its normal use and purpose and
a copy of the approval of the Equipment Change is
delivered to Lessor and its Assignee, the Lessee may, at
its own expense, make or cause to be made alterations or
attachments to the Equipment, so long as such
alternations or attachments do not interfere with the
normal operation of the Equipment. Any such alteration
or attachment, if Lessor so directs in writing, shall be
removed by Lessee and the Equipment shall be restored to
its original condition, reasonable wear and tear
excepted, upon termination of this Agreement. If an
alteration or attachment interferes with the normal and
satisfactory operation or maintenance of any part of the
Equipment, Lessee shall, upon notice from Lessor to that
effect, promptly remove the alteration or attachment and
restore the Equipment to its normal condition.
(b) If Lessee desires to add special features or model
changes ("Additional Special Features") to the Equipment
subsequent to the commencement of this Lease, Lessee
shall either:
(i) give Lessor an opportunity to obtain such Additional
Special Features at Lessor's expense and lease such
Additional Special Features to Lessee upon such terms
and conditions as Lessor and Lessee agree to (it
being understood that the monthly rental for such
Additional Special Features must be sufficient to
cover Lessor's related monthly debt payments, that
any such Additional Special Features obtained by
Lessor shall be deemed to be part of the Equipment,
and that Lessee shall be responsible for all related
transportation and installation charges, to the
extent provided in Section 14); or
(ii) upon Lessor's prior written consent (which
consent will not be unreasonably withheld), purchase
and install such Additional Special Features at
Lessee's own expense with no rend due Lessor for such
Additional Special Features, but such Additional
Special Features shall be subject to the provisions
of this Section 13, as if they were alterations or
attachments. Upon termination of this Agreement,
Lessor may direct in writing that Lessee remove such
Additional Special Features
(c) All alterations, attachments and Additional Special
Features shall become the property of Lessor.
Section 14. TRANSPORTATION EXPENSES
All transportation and installation expenses incurred in
connection with delivery of the Equipment to Lessee are to be
paid by Lessee. Necessary packing cases for the return of the
Equipment, and such labor as may be necessary for packing and
unpacking the Equipment when in the possession of Lessee, shall
be furnished by Lessee at its expenses. Transportation expenses
incurred in connection with redelivery to Lessor shall be paid by
Lessee.
Section 15. INSPECTION AND REPORTS
(a) Upon request, Lessee shall permit Lessor or persons
designated by Lessor to inspect the Equipment.
(b) Lessee shall immediately notify Lessor of any accident
arising out of the alleged or apparent improper
manufacturing, functioning or operation of the
Equipment, the time, place and nature of the accident
and damage, the names and addresses of parties involved
persons injured, witnesses and owners of property
damaged, and such other relevant information as may be
known, and shall promptly advise Lessor of all
correspondence, papers, notices and documents received
by Lessee in connection with any claim or demand related
to improper manufacturing, functioning or operation of
the Equipment or charging Lessor with liability, and
shall aid in the investigation and defense of all such
claims and shall aid in the recovery of damages from
third persons.
(c) Lessee shall furnish to Lessor and any assignee of
Lessor
(i) within one hundred twenty (120) days after the end of
each of Lessee's fiscal years, the annual financial
statement of Lessee, including a balance sheet and an
income and retained earnings statement for the fiscal
year covered thereby, setting forth in comparative
form, the figures for the previous fiscal year, all
in reasonable detail and duly certified by Lessee's
independent certified public accountant,
(ii) copies of such financial statements and reports
as Lessee shall send to its stockholders or file with
the Securities and Exchange Commission or any
governmental agency substitute therefor, and
(iii) such other information respecting the financial
condition and affairs of Lessee as may be necessary
to determine compliance with the terms and conditions
of this Lease.
Section 16. EVENTS OF DEFAULT AND LESSOR'S REMEDIES
(a) Should
(i) Lessee fail to pay any Basic Rent or other amount
due under this Agreement within ten (10) days of the
applicable due date;
(ii) Lessee attempt to remove, sell, transfer, encumber,
part with possession of, assign or sublet (except as
expressly permitted by the provisions hereof) the
Equipment or any part thereof;
(iii) any representation or warranty made by Lessee
in this Agreement or in any document or certificate
furnished to Lessor in connection herewith prove to
have been incorrect in any material respect when
made;
(iv) Lessee fail in the performance of any other of its
obligations under this Agreement for a continuous
period of thirty (30) days after receipt by Lessee
of written notice thereof from Lessor;
(v) Lessee cease doing business as a going concern;
(vi) a petition be filed by or against Lessee under the
Federal Bankruptcy Act or any amendment thereto
(including a petition for reorganization or
arrangement) which shall not have been discharged
within sixty (60) days after such filing.
(vii) a receiver be appointed for Lessor or its
property;
(viii) Lessee commit an act of bankruptcy, become
insolvent, make an assignment for the benefit of
creditors, or offer a composition of any of its
indebtedness;
(ix) the issuance of any writ or order of attachment or
execution or other legal process against any
Equipment which is not discharged or satisfied
within fifteen (15) days; or
(x) to the extent that Lessee is a corporation, if a
controlling interest of the stock of Lessee is
transferred (whether in increments or on one
occasion) to persons or other legal entities other
than those holding said controlling interest at the
date of execution of this Agreement,
then in any such event (herein referred to as an "Event
of Default"), Lessor may, at its option, exercise any
one or more of the remedies set forth in subsection (b)
of this Section 16 (in addition to any other remedy
Lessor may have under applicable law). Failure of
Lessee to pay or perform any obligation under any
Agreement with Lessor shall constitute a default as to
all Agreements between Lessor and Lessee.
(b) Upon the occurrence or continuation of any Event of
Default as specified in subsection (a) of this Section
16, Lessor may
(i) declare immediately due and payable by Lessee, as
liquidated damages for loss of a bargain, an amount
equal to the Casualty Value of the Equipment at the
date of the occurrence of any event of default,
(ii) terminate this Agreement;
(iii) take possession of the Equipment during Lessee's
normal working hours without demand or notice,
wherever the Equipment may be located, without court
order or other process of law (Lessee hereby waiving
any right it may have to notice and hearing before
repossession). Lessee hereby waives any and all
damages occasioned by such taking of possession. Any
taking of possession pursuant to this subsection
16(b) shall not in itself constitute termination of
this Agreement and shall not, in any event, relieve
Lessee of its obligations hereunder.
Lessee shall reimburse Lessor for all reasonable expenses
(including attorney's fees) incurred by Lessor in enforcing
its rights under this Section 16. Any overdue rent, and any
unpaid Casualty Value payable as liquidated damages pursuant
to clause (i) of this subsection 16(b), shall bear interest
at the Overdue Rate until paid in full. Upon taking
possession of the Equipment, Lessor may, at its option and
without notice to Lessee lease the repossessed Equipment to
any third party on such terms and conditions as Lessor may
determine, or sell said Equipment at public auction or at
private sale.
In the event that Lessor leases or sells repossessed
Equipment, the Net Proceeds (as defined below) shall first
be credited to amounts due and owing by Lessee, and shall
then be used to reimburse Lessee for any liquidated damage
payment made by Lessee pursuant to clause (i) of this
subsection 16(b). Any surplus shall be retained by Lessor.
Lessee shall remain liable for an amount equal to the
Casualty Value of the Equipment at the date of an occurrence
of an Event of Default less the Net Proceeds. As used in
this subsection 16(b), "Net Proceeds" shall mean the cash
sale price of the Equipment, or the aggregate rent payable
pursuant to a lease of the Equipment discounted at the rate
of twelve (12%) percent less all costs and expenses
(including reasonable attorneys' fees and disbursements)
incurred by Lessor as a result of Lessee's default and
Lessor's exercise of its remedies with respect thereto.
Lessor's rights and remedies in respect of any of the terms
and conditions of this Lease shall be cumulative and non-
exclusive and shall be in addition to any and all other
rights and remedies which may be provided by law.
Lessee acknowledges and agrees, for itself and for all
successors and assigns including any bankruptcy trustees of
Lessee (hereinafter collectively referred to as the
"Benefited Parties"), knowingly, voluntarily and
intentionally stipulate and agree, to the fullest extent
allowed by law and with the full intention that such
stipulation and agreement shall survive the filing of any
bankruptcy, that, in the event any of the Benefited Parties
become a debtor or debtor in possession in a case under the
United States Bankruptcy Code (11 U.S.C. 101 et seq.),
then pursuant to 11 U.S.C. 362(d)(1) and (2) Lessor shall
be entitled to the immediate termination of the automatic
stay to permit Lessor to exercise all of Lessor's legal
rights and remedies against Lessee under the lease,
including, without limitation, the right to repossess the
leased equipment and to setoff and apply to any amounts owed
by lessee to Lessor any security deposit or other sums
delivered to Lessor by Lessee from time to time as security
for the Lessee's performance under the lease.
Section 17. SUBLEASES AND ASSIGNMENTS
(a) Lessee may sublet the Equipment if Lessee notifies
Lessor of the proposed new location of the Equipment and
receives Lessor's prior written consent. No such
sublease shall in any way discharge or diminish any of
Lessee's obligations under this Agreement. Each
sublease shall be approved in form and content by lessor
(including, without limitation, any provisions granting
such sublessee an option to terminate such sublease) and
shall expressly provide that it is subject and
subordinate to this Lease. No amendment or modification
of any of the terms and conditions of such sublease
shall be made without the prior written consent of
Lessor.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and (to the extent specified in any
assignment) assigns. Lessee shall not assign this
Agreement without the prior written consent of Lessor.
Lessor may assign any or all of its rights under this
Agreement, and Lessee agrees to acknowledge in writing
any such assignment within five (5) days after receipt
of written notice thereof.
(c) So long as Lessor's rights hereunder are assigned to any
Assignee, Lessee may not assert against any such
Assignee any defense, counterclaim, recoupment, or set-
off Lessee may have against Lessor. Lessee agrees that
it will not seek to cancel or terminate this Agreement
(except as expressly permitted in this Agreement) or
otherwise avoid its obligations hereunder as against
such Assignee, and further agrees that it will pay to
such Assignee all Rent Due hereunder and assigned to
such Assignee, without regard to any such defense,
counterclaim, recoupment, or set-off, and will not seek
to recover any part of the same from such Assignee.
However, nothing herein shall be construed to prevent
Lessee from exercising against Lessor any claim for
damages or injunctive relief which Lessee may have
against Lessor.
Section 18. LESSEE'S AND LESSOR'S WARRANTIES
(a) Lessee hereby warrants and represents to Lessor, its
successors and assigns:
(i) that Lessee's execution and performance of this
Agreement have been duly authorized by all necessary
corporate action and are not in conflict with
Lessee's charter or bylaws, or with any indenture,
contract or agreement by which it is bound, or with
any statute, judgment, decree, rule or regulation
binding upon it;
(ii) that no consent or approval of any trustee or
holder of any indebtedness or obligation of Lessee,
and no consent or approval of any governmental
authority, is necessary (or, if required, has been
obtained) for Lessee's execution or performance of
this Agreement; and
(iii) that this Agreement is valid and binding and
enforceable against Lessee in accordance with its
terms, subject to enforcement limitations imposed by
rules of equity or by bankruptcy or similar laws.
Upon Lessor's request, Lessee shall submit to Lessor an
opinion of Lessee's counsel that the above warranties
and representations are true.
(b) Lessor hereby warrants and represents to Lessee, it
successors and assigns:
(i) that Lessor's execution and performance of this
Agreement have been duly authorized by all necessary
corporate or partnership action and are not in
conflict with Lessor's charter and bylaws or
partnership agreement, or with any indenture,
contract or agreement by which it is bound, or with
any statute, judgment, decree, rule or regulation
binding upon it;
(ii) that no consent or approval of any trustee or
holder of any indebtedness or obligation of Lessor,
and no consent or approval of any governmental
authority, is necessary for Lessor's execution or
performance of this Agreement;
(iii) that this Agreement is valid and binding and
enforceable against Lessor in accordance with its
terms, subject to enforcement limitations imposed by
rules of equity or by bankruptcy or similar laws; and
(iv) Lessor is the owner of the Equipment and said
Equipment is free and clear of all liens and
encumbrances, except the lien of and security
interest granted by Lessor to its Assignee.
Upon Lessee's request, Lessor shall submit to Lessee an
opinion of Lessor's counsel that the above warranties and
representations are true.
Section 19. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of and jurisdiction shall be in the
Commonwealth of Massachusetts.
Section 20. AMENDMENTS
This Agreement constitutes the entire agreement between
Lessor and Lessee with respect to the Equipment and may be
amended or modified only by a writing signed by the parties
hereto or their respective successors and assigns.
Section 21. ADDRESS FOR COMMUNICATIONS
Any communication in connection with this Agreement shall be
made in writing to the address shown in the first paragraph of
this Agreement, or to such other address as has been most
recently designated in writing by one party to the other. Unless
otherwise specified herein any notice or communication shall
become effective when deposited in the United States mail
properly addressed with proper postage for first-class mail
prepaid.
Section 22. UNIFORM COMMERCIAL CODE DOCUMENTATION
Lessee agrees to execute such Uniform Commercial Code
("UCC") financing statements and other documents deemed necessary
by Lessor or its Assignees to perfect and protect the interests
of Lessor and its Assignees in the Lease and the Equipment. With
respect to each Lease, there shall be a single executed original
Equipment Schedule, which shall be marked "Original" and all
other counterparts shall be marked "Conformed Copy". To the
extent that this Lease may constitute chattel paper (as defined
in the Uniform Commercial Code) no security interest may be
created through the possession of any counterpart of the
Equipment Schedule other than the Original.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed.
SALEM CAPITAL CORPORATION ELECTROSOURCE, INC.
(Lessor) (Lessee)
By /s/ By /s/
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Title President CFO
Date 10/17/95 Date 9/19/95