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Exhibit 10.58
MASTER LEASE AGREEMENT
dated as of AUGUST 9, 1999 ("AGREEMENT")
THIS AGREEMENT, is between GENERAL ELECTRIC CAPITAL CORPORATION (together
with its successors and assigns, if any, "LESSOR") and ▇▇▇▇▇▇▇▇.▇▇▇, inc.
("LESSEE"). Lessor has an office at ONE LINCOLN CENTRE, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇.▇. ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Lessee is a corporation organized and existing
under the laws of the State of Delaware. Lessee's mailing address and chief
place of business is ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. This Agreement
contains the general terms that apply to the leasing of Equipment from Lessor to
Lessee. Additional terms that apply to the Equipment (term, rent, options, etc.)
shall be contained on a schedule ("SCHEDULE").
1. LEASING:
(a)Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor,
the equipment ("EQUIPMENT") described in any Schedule signed by both parties.
(b)Lessor shall purchase Equipment from the manufacturer or supplier
("SUPPLIER") and lease it to Lessee if on or before the Last Delivery Date
Lessor receives (i) a Schedule for the Equipment, (ii) evidence of insurance
which complies with the requirements of Section 9, and (iii) such other
documents as Lessor may reasonably request. Each of the documents required above
must be in form and substance satisfactory to Lessor. Lessor hereby appoints
Lessee its agent for inspection and acceptance of the Equipment from the
Supplier. Once the Schedule is signed, the Lessee may not cancel the Schedule.
2. TERM, RENT AND PAYMENT:
(a)The rent payable for the Equipment and Lessee's right to use the
Equipment shall begin on the earlier of (i) the date when the Lessee signs the
Schedule and accepts the Equipment or (ii) when Lessee has accepted the
Equipment under a Certificate of Acceptance ("LEASE COMMENCEMENT DATE"). The
term of this Agreement shall be the period specified in the applicable Schedule.
The word "term" shall include all basic and any renewal terms.
(b)Lessee shall pay rent to Lessor at its address stated above, except as
otherwise directed by Lessor. Rent payments shall be in the amount set forth in,
and due as stated in the applicable Schedule. If any Advance Rent (as stated in
the Schedule) is payable, it shall be due when the Lessee signs the Schedule.
Advance Rent shall be applied to the first rent payment and the balance, if any,
to the final rent payment(s) under such Schedule. In no event shall any Advance
Rent or any other rent payments be refunded to Lessee. If rent is not paid
within ten (10) days of its due date, Lessee agrees to pay a late charge of five
cents ($.05) per dollar on, and in addition to, the amount of such rent but not
exceeding the lawful maximum, if any.
3. RENT ADJUSTMENT:
(a)If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, ("CODE")), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for calendar-year
taxpayers ("EFFECTIVE RATE") is higher than thirty-five percent (35%) for any
year during the lease term, then Lessor shall have the right to increase such
rent payments by requiring payment of a single additional sum. The additional
sum shall be equal to the product of (i) the Effective Rate (expressed as a
decimal) for such year less .35 (or, in the event that any adjustment has been
made hereunder for any previous year, the Effective Rate (expressed as a
decimal) used in calculating the next previous adjustment) times (ii) the
adjusted Termination Value (defined below), divided by (iii) the difference
between the new Effective Rate (expressed as a decimal) and one (1). The
adjusted Termination Value shall be the Termination Value (calculated as of the
first rent due in the year for which the adjustment is being made) minus the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all future years of
the lease term). The Termination Values and Tax Benefits are defined on the
Schedule. Lessee shall pay to Lessor the full amount of the additional rent
payment on the later of (i) receipt of notice or (ii) the first day of the year
for which such adjustment is being made.
(b)Lessee's obligations under this Section 3 shall survive any expiration or
termination of this Agreement.
4. TAXES: If permitted by law, Lessee shall report and pay promptly all taxes,
fees and assessments due, imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing, possession, use or operation thereof),
this Agreement (or any rents or receipts hereunder), any Schedule, Lessor or
Lessee by any governmental entity or taxing authority during or related to the
term of this Agreement, including, without limitation, all license and
registration fees, and all sales, use, personal property, excise, gross
receipts, franchise, stamp or other taxes, imposts, duties and charges, together
with any penalties, fines or interest thereon (collectively "TAXES"). Lessee
shall have no liability for Taxes imposed by the United States of America or any
state or political subdivision thereof which are on or measured by the net
income of Lessor except as provided in Sections 3 and 14(c). Lessee shall
promptly reimburse Lessor (on an after tax basis) for any Taxes charged to or
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assessed against Lessor. Lessee shall show Lessor as the owner of the Equipment
on all tax reports or returns, and send Lessor a copy of each report or return
and evidence of Lessee's payment of Taxes upon request.
5. REPORTS:
(a)If any tax or other lien shall attach to any Equipment, Lessee will
notify Lessor in writing, within ten (10) days after Lessee becomes aware of the
tax or lien. The notice shall include the full particulars of the tax or lien
and the location of such Equipment on the date of the notice.
(b)Lessee will deliver to Lessor, Lessee's complete financial statements,
certified by a recognized firm of certified public accountants within ninety
(90) days of the close of each fiscal year of Lessee. Lessee will deliver to
Lessor copies of Lessee's quarterly financial report certified by the chief
financial officer of Lessee, within ninety (90) days of the close of each fiscal
quarter of Lessee. Lessee will deliver to Lessor all Forms 10-K and 10-Q, if
any, filed with the Securities and Exchange Commission within thirty (30) days
after the date on which they are filed.
(c)Lessor may inspect any Equipment during normal business hours after
giving Lessee reasonable prior notice.
(d)Lessee will keep the Equipment at the Equipment Location (specified in
the applicable Schedule) and will give Lessor prior written notice of any
relocation of Equipment. If Lessor asks, Lessee will promptly notify Lessor in
writing of the location of any Equipment.
(e)If any Equipment is lost or damaged (where the estimated repair costs
would exceed the greater of ten percent (10%) of the original Equipment cost or
ten thousand and 00/100 dollars ($10,000)), or is otherwise involved in an
accident causing personal injury or property damage, Lessee will promptly and
fully report the event to Lessor in writing.
(f)Lessee will furnish a certificate of an authorized officer of Lessee
stating that he has reviewed the activities of Lessee and that, to the best of
his knowledge, there exists no default or event which with notice or lapse of
time (or both) would become such a default within thirty (30) days after any
request by Lessor.
6. DELIVERY, USE AND OPERATION:
(a)All Equipment shall be shipped directly from the Supplier to Lessee.
(b)Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable laws,
regulations and insurance policies and Lessee shall not discontinue use of the
Equipment.
(c)Lessee will not move any equipment from the location specified on the
Schedule, without the prior written consent of Lessor.
(d)Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor.
(e)Lessor shall not disturb Lessee's quiet enjoyment of the Equipment during
the term of the Agreement unless a default has occurred and is continuing under
this Agreement.
7. MAINTENANCE:
(a)Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order and repair, normal wear and tear excepted. The Lessee shall also
maintain the Equipment in accordance with manufacturer's recommendations. Lessee
shall make all alterations or modifications required to comply with any
applicable law, rule or regulation during the term of this Agreement. If Lessor
requests, Lessee shall affix plates, tags or other identifying labels showing
ownership thereof by Lessor. The tags or labels shall be placed in a prominent
position on each unit of Equipment.
(b)Lessee will not attach or install anything on any Equipment that will
impair the originally intended function or use of such Equipment without the
prior written consent of Lessor. All additions, parts, supplies, accessories,
and equipment ("ADDITIONS") furnished or attached to any Equipment that are not
readily removable shall become the property of Lessor. All Additions shall be
made only in compliance with applicable law. Lessee will not attach or install
any Equipment to or in any other personal or real property without the prior
written consent of Lessor.
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8. STIPULATED LOSS VALUE: If for any reason any unit of Equipment becomes worn
out, lost, stolen, destroyed, irreparably damaged or unusable ("CASUALTY
OCCURRENCES") Lessee shall promptly and fully notify Lessor in writing. Lessee
shall pay Lessor the sum of (i) the Stipulated Loss Value (see Schedule) of the
affected unit determined as of the rent payment date prior to the Casualty
Occurrence; and (ii) all rent and other amounts which are then due under this
Agreement on the Payment Date (defined below) for the affected unit. The Payment
Date shall be the next rent payment date after the Casualty Occurrence. Upon
Payment of all sums due hereunder, the term of this lease as to such unit shall
terminate.
9. INSURANCE:
(a)Lessee shall bear the entire risk of any loss, theft, damage to, or
destruction of, any unit of Equipment from any cause whatsoever from the time
the Equipment is shipped to Lessee.
(b)Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts and against such hazards as Lessor may reasonably require. All such
policies shall be with companies, and on terms, reasonably satisfactory to
Lessor. The insurance shall include coverage for damage to or loss of the
Equipment, liability for personal injuries, death or property damage. Lessor
shall be named as additional insured with a loss payable clause in favor of
Lessor, as its interest may appear, irrespective of any breach of warranty or
other act or omission of Lessee. The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00)
total liability per occurrence, unless otherwise stated in any Schedule. The
casualty/property damage coverage shall be in an amount equal to the higher of
the Stipulated Loss Value or the full replacement cost of the Equipment. No
insurance shall be subject to any co-insurance clause. The insurance policies
shall provide that the insurance may not be altered or canceled by the insurer
until after thirty (30) days written notice to Lessor. Lessee agrees to deliver
to Lessor evidence of insurance reasonably satisfactory to Lessor.
(c)Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make proof
of loss and claim for insurance, and to make adjustments with insurers and to
receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessee's
attorney-in-fact unless Lessee is in default. Lessee shall pay any reasonable
expenses of Lessor in adjusting or collecting insurance. Lessee will not make
adjustments with insurers except with respect to claims for damage to any unit
of Equipment where the repair costs are less than the lesser of ten percent
(10%) of the original Equipment cost or ten thousand and 00/100 dollars
($10,000). Lessor may, at its option, apply proceeds of insurance, in whole or
in part, to (i) repair or replace Equipment or any portion thereof, or (ii)
satisfy any obligation of Lessee to Lessor under this Agreement.
10. RETURN OF EQUIPMENT:
(a)At the expiration or termination of this Agreement or any Schedule,
Lessee shall perform any testing and repairs required to place the units of
Equipment in the same condition and appearance as when received by Lessee
(reasonable wear and tear excepted) and in good working order for the original
intended purpose of the Equipment. If required the units of Equipment shall be
deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other service person as is reasonably satisfactory to
Lessor. Lessee shall remove installed markings that are not necessary for the
operation, maintenance or repair of the Equipment. All Equipment will be
cleaned, cosmetically acceptable, and in such condition as to be immediately
installed into use in a similar environment for which the Equipment was
originally intended to be used. All waste material and fluid must be removed
from the Equipment and disposed of in accordance with then current waste
disposal laws. Lessee shall return the units of Equipment to a location within
the continental United States as Lessor shall direct. Lessee shall obtain and
pay for a policy of transit insurance for the redelivery period in an amount
equal to the replacement value of the Equipment. The transit insurance must name
Lessor as the loss payee. The Lessee shall pay for all costs to comply with this
section (a).
(b)Until Lessee has fully complied with the requirements of Section 10(a)
above, Lessee's rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the lease term. Lessor may terminate the Lessee's right to use
the Equipment upon ten (10) days notice to Lessee.
(c) Lessee shall provide to Lessor a detailed inventory of all components of
the Equipment including model and serial numbers. Lessee shall also provide an
up-to-date copy of all other documentation pertaining to the Equipment. All
service manuals, blue prints, process flow diagrams, operating manuals,
inventory and maintenance records shall be given to Lessor at least ninety (90)
days and not more than one hundred twenty (120) days prior to lease termination.
(d)Lessee shall make the Equipment available for on-site operational
inspections by potential purchasers at least one hundred twenty (120) days prior
to and continuing up to lease termination. Lessor shall provide Lessee with
reasonable notice prior to any inspection. Lessee shall provide personnel, power
and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment.
11. DEFAULT AND REMEDIES:
(a)Lessor may in writing declare this Agreement in default if: (i) Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section 9; (iii) Lessee breaches any of its other obligations
and fails to cure that breach within thirty (30) days after written notice from
Lessor; (iv) any representation or warranty made by Lessee in connection with
this Agreement shall be false or misleading in any material respect; (v) Lessee
or any guarantor or other obligor for the Lessee's obligations hereunder
("GUARANTOR") becomes insolvent or ceases to
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do business as a going concern; (vi) any Equipment is illegally used; (vii) if
Lessee or any Guarantor is a natural person, any death or incompetency of Lessee
or such Guarantor; or (viii) a petition is filed by or against Lessee or any
Guarantor under any bankruptcy or insolvency laws and in the event of an
involuntary petition, the petition is not dismissed within forty-five (45) days
of the filing date. The default declaration shall apply to all Schedules unless
specifically excepted by Lessor.
(b)After a default, at the request of Lessor, Lessee shall comply with the
provisions of Section 10(a). Lessee hereby authorizes Lessor to peacefully enter
any premises where any Equipment may be and take possession of the Equipment.
Lessee shall immediately pay to Lessor without further demand as liquidated
damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of
the Equipment (calculated as of the rent payment date prior to the declaration
of default), and all rents and other sums then due under this Agreement and all
Schedules. Lessor may terminate this Agreement as to any or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may, but shall not be required to, sell Equipment at private or public
sale, in bulk or in parcels, with or without notice, and without having the
Equipment present at the place of sale. Lessor may also, but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment. Lessor may use Lessee's premises for a reasonable period of time for
any or all of the purposes stated above without liability for rent, costs,
damages or otherwise. The proceeds of sale, lease or other disposition, if any,
shall be applied in the following order of priorities: (i) to pay all of
Lessor's costs, charges and expenses incurred in taking, removing, holding,
repairing and selling, leasing or otherwise disposing of Equipment; then, (ii)
to the extent not previously paid by Lessee, to pay Lessor all sums due from
Lessee under this Agreement; then (iii) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (iv) any surplus shall be
retained by Lessor. Lessee shall immediately pay any deficiency in (i) and (ii)
above .
(c)The foregoing remedies are cumulative, and any or all thereof may be
exercised instead of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, defense or preservation of Lessor's rights and remedies
under this Agreement, or if prohibited by law, such lesser sum as may be
permitted. Waiver of any default shall not be a waiver of any other or
subsequent default.
(d)Any default under the terms of this or any other agreement between Lessor
and Lessee may be declared by Lessor a default under this and any such other
agreement.
12. ASSIGNMENT: LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY
EQUIPMENT OR THE INTEREST OF LESSEE IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. Lessor may, without the consent of Lessee, assign this
Agreement, any Schedule or the right to enter into a Schedule. Lessee agrees
that if Lessee receives written notice of an assignment from Lessor, Lessee will
pay all rent and all other amounts payable under any assigned Schedule to such
assignee or as instructed by Lessor. Lessee also agrees to confirm in writing
receipt of the notice of assignment as may be reasonably requested by assignee.
Lessee hereby waives and agrees not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which Lessee has or may at
any time have against Lessor for any reason whatsoever.
13. NET LEASE: Lessee is unconditionally obligated to pay all rent and other
amounts due for the entire lease term no matter what happens, even if the
Equipment is damaged or destroyed, if it is defective or if Lessee no longer can
use it. Lessee is not entitled to reduce or set-off against rent or other
amounts due to Lessor or to anyone to whom Lessor assigns this Agreement or any
Schedule whether Lessee's claim arises out of this Agreement, any Schedule, any
statement by Lessor, Lessor's liability or any manufacturer's liability, strict
liability, negligence or otherwise.
14. INDEMNIFICATION:
(a)Lessee hereby agrees to indemnify Lessor, its agents, employees,
successors and assigns (on an after tax basis) from and against any and all
losses, damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Agreement, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Lessor's
gross negligence or willful misconduct ("CLAIMS"). This indemnity shall include,
but is not limited to, Lessor's strict liability in tort and Claims, arising out
of (i) the selection, manufacture, purchase, acceptance or rejection of
Equipment, the ownership of Equipment during the term of this Agreement, and the
delivery, lease, possession, maintenance, uses, condition, return or operation
of Equipment (including, without limitation, latent and other defects, whether
or not discoverable by Lessor or Lessee and any claim for patent, trademark or
copyright infringement or environmental damage) or (ii) the condition of
Equipment sold or disposed of after use by Lessee, any sublessee or employees of
Lessee. Lessee shall, upon request, defend any actions based on, or arising out
of, any of the foregoing.
(b)Lessee hereby represents, warrants and covenants that (i) on the Lease
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of deduction and credit specified in Section C of the applicable
Schedule ("TAX BENEFITS") in the hands of Lessor, and (ii) at no time during the
term of this Agreement will Lessee take or omit to take, nor will it permit any
sublessee or assignee to take or omit to take, any action (whether or not such
act or omission is otherwise permitted by Lessor or by this Agreement), which
will result in the disqualification of any Equipment for, or recapture of, all
or any portion of such Tax Benefits.
(c)If as a result of a breach of any representation, warranty or covenant of
the Lessee contained in this Agreement or any Schedule (i) tax counsel of Lessor
shall determine that Lessor is not entitled to claim on its Federal income tax
return all or any portion of the Tax Benefits with respect to any Equipment, or
(ii) any Tax Benefit claimed on the Federal income tax return of Lessor is
disallowed or adjusted by the Internal Revenue Service, or (iii) any Tax Benefit
is recalculated or
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recaptured (any determination, disallowance, adjustment, recalculation or
recapture being a "LOSS"), then Lessee shall pay to Lessor, as an indemnity and
as additional rent, an amount that shall, in the reasonable opinion of Lessor,
cause Lessor's after-tax economic yields and cash flows to equal the Net
Economic Return that would have been realized by Lessor if such Loss had not
occurred. Such amount shall be payable upon demand accompanied by a statement
describing in reasonable detail such Loss and the computation of such amount.
The economic yields and cash flows shall be computed on the same assumptions,
including tax rates as were used by Lessor in originally evaluating the
transaction ("NET ECONOMIC RETURN"). If an adjustment has been made under
Section 3 then the Effective Rate used in the next preceding adjustment shall be
substituted.
(d)All references to Lessor in this Section 14 include Lessor and the
consolidated taxpayer group of which Lessor is a member. All of Lessor's rights,
privileges and indemnities contained in this Section 14 shall survive the
expiration or other termination of this Agreement. The rights, privileges and
indemnities contained herein are expressly made for the benefit of, and shall be
enforceable by Lessor, its successors and assigns.
15. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED UNDER THIS AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following; (i) any
liability, loss or damage caused or alleged to be caused directly or indirectly
by any Equipment, any inadequacy thereof, any deficiency or defect (latent or
otherwise) of the Equipment, or any other circumstance in connection with the
Equipment; (ii) the use, operation or performance of any Equipment or any risks
relating to it; (iii) any interruption of service, loss of business or
anticipated profits or consequential damages; or (iv) the delivery, operation,
servicing, maintenance, repair, improvement or replacement of any Equipment. If,
and so long as, no default exists under this Agreement, Lessee shall be, and
hereby is, authorized during the term of this Agreement to assert and enforce
whatever claims and rights Lessor may have against any Supplier of the Equipment
at Lessee's sole cost and expense, in the name of and for the account of Lessor
and/or Lessee, as their interests may appear.
16. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee makes each of the following
representations and warranties to Lessor on the date hereof and on the date of
execution of each Schedule.
(a)Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the "DOCUMENTS"). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b)The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws.
(c)No approval, consent or withholding of objections is required from any
governmental authority or entity with respect to the entry into or performance
by Lessee of the Documents except such as have already been obtained.
(d)The entry into and performance by Lessee of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.
(e)There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which if decided against Lessee will have a material adverse effect on
the ability of Lessee to fulfill its obligations under this Agreement.
(f)The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g)Each financial statement delivered to Lessor has been prepared in
accordance with generally accepted accounting principles consistently applied.
Since the date of the most recent financial statement, there has been no
material adverse change.
(h)Lessee is and will be at all times validly existing and in good standing
under the laws of the State of its incorporation (specified in the first
sentence of this Agreement).
(i)The Equipment will at all times be used for commercial or business
purposes.
17. EARLY TERMINATION:
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(a)On or after the First Termination Date (specified in the applicable
Schedule), Lessee may, so long as no default exists hereunder, terminate this
Agreement as to all (but not less than all) of the Equipment on such Schedule as
of a rent payment date ("TERMINATION DATE"). Lessee must give Lessor at least
ninety (90) days prior written notice of the termination.
(b)Lessee shall, and Lessor may, solicit cash bids for the Equipment on an
AS IS, WHERE IS BASIS without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall (i) certify
to Lessor any bids received by Lessee and (ii) pay to Lessor (A) the Termination
Value (calculated as of the rent due on the Termination Date) for the Equipment,
and (B) all rent and other sums due and unpaid as of the Termination Date.
(c)If all amounts due hereunder have been paid on the Termination Date,
Lessor shall (i) sell the Equipment on an AS IS BASIS for cash to the highest
bidder and (ii) refund the proceeds of such sale (net of any related expenses)
to Lessee up to the amount of the Termination Value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the Termination
Value (less any expenses incurred by Lessor) to Lessee.
(d)Notwithstanding the foregoing, Lessor may elect by written notice, at any
time prior to the Termination Date, not to sell the Equipment. In that event, on
the Termination Date Lessee shall (i) return the Equipment (in accordance with
Section 10) and (ii) pay to Lessor all amounts required under Section 17(b) less
the amount of the highest bid certified by Lessee to Lessor.
18. PURCHASE OPTION:
(a)Lessee may at lease expiration purchase all (but not less than all) of
the Equipment in any Schedule on an AS IS BASIS for cash equal to its then Fair
Market Value (plus all applicable sales taxes). Lessee must notify Lessor of its
intent to purchase the Equipment in writing at least one hundred eighty (180)
days in advance. If Lessee is in default or if the Lease has already been
terminated Lessee may not purchase the Equipment.
(b)"Fair Market Value" shall mean the price that a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's-length transaction to a willing seller under no compulsion
to sell. In determining the Fair Market Value the Equipment shall be assumed to
be in the condition in which it is required to be maintained and returned under
this Agreement. If the Equipment is installed it shall be valued on an installed
basis. The costs of removal from current location shall not be a deduction from
the value of the Equipment. If Lessor and Lessee are unable to agree on the Fair
Market Value at least one hundred thirty-five (135) days before lease
expiration, Lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee) to determine Fair Market Value. The independent appraiser's
determination shall be final, binding and conclusive. Lessee shall bear all
costs associated with any such appraisal.
(c)Lessee shall be deemed to have waived this option unless it provides
Lessor with written notice of its irrevocable election to exercise the same
within fifteen (15) days after Fair Market Value is told to Lessee.
19. MISCELLANEOUS:
(a)LESSEE AND LESSOR UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF
THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
(b)The Equipment shall remain Lessor's property unless Lessee purchases the
Equipment from Lessor and until such time Lessee shall only have the right to
use the Equipment as a lessee. Any cancellation or termination by Lessor of this
Agreement, any Schedule, supplement or amendment hereto, or the lease of any
Equipment hereunder shall not release Lessee from any then outstanding
obligations to Lessor hereunder. All Equipment shall at all times remain
personal property of Lessor even though it may be attached to real property. The
Equipment shall not become part of any other property by reason of any
installation in, or attachment to, other real or personal property .
(c)Time is of the essence of this Agreement. Lessor's failure at any time to
require strict performance by Lessee of any of the provisions hereof shall not
waive or diminish Lessor's right at any other time to demand strict compliance
with this Agreement. Lessee agrees, upon Lessor's request, to execute any
instrument necessary or expedient for filing, recording or perfecting the
interest of Lessor. All notices required to be given hereunder shall be deemed
adequately given if sent by registered or certified mail to the addressee at its
address stated herein, or at such other place as such addressee may have
specified in writing. This Agreement and any Schedule and Annexes thereto
constitute the entire agreement of the parties with respect to the subject
matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF
ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED
BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
7
(d)If Lessee does not comply with any provision of this Agreement, Lessor
shall have the right, but shall not be obligated, to effect such compliance, in
whole or in part. All reasonable amounts spent and obligations incurred or
assumed by Lessor in effecting such compliance shall constitute additional rent
due to Lessor. Lessee shall pay the additional rent within five days after the
date Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(e)Any rent or other amount not paid to Lessor when due shall bear interest,
from the due date until paid, at the lesser of eighteen percent (18%) per annum
or the maximum rate allowed by law. Any provisions in this Agreement and any
Schedule that are in conflict with any statute, law or applicable rule shall be
deemed omitted, modified or altered to conform thereto.
(f)Lessee hereby irrevocably authorizes Lessor to adjust the Capitalized
Lessor's Cost up or down by no more than ten percent (10%) within each Schedule
to account for equipment change orders, equipment returns, invoicing errors, and
similar matters. Lessee acknowledges and agrees that the rent shall be adjusted
as a result of the change in the Capitalized Lessor's Cost. Lessor shall send
Lessee a written notice stating the final Capitalized Lessor's Cost, if it has
changed.
(g)THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
(h)Any cancellation or termination by Lessor, pursuant to the provisions of
this Agreement, any Schedule, supplement or amendment hereto, of the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(i)To the extent that any Schedule would constitute chattel paper, as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked "Original" and all other counterparts shall be
marked "Duplicate".
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION ▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------
Title: Senior Risk Analyst Title: C.E.O
----------------------------- -----------------------
8
COMPUTER EQUIPMENT SCHEDULE
SCHEDULE NO. 01
DATED THIS ____________________
TO MASTER LEASE AGREEMENT
DATED AS OF AUGUST 9, 1999
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
------------------------- -------------------------
GENERAL ELECTRIC CAPITAL CORPORATION ▇▇▇▇▇▇▇▇.▇▇▇, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇. 3 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor
agrees to Lease to Lessee the Equipment described below (the
"EQUIPMENT").
NUMBER CAPITALIZED
OF UNITS LESSOR'S COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
----------------------------------------------------------------------------------------------------------------------------------
$ 3,250,730.07 Numerous Personal Computers, monitors,
printers, software and the
various equipment needed for
installation and running of the
systems.
SEE COLLATERAL SCHEDULE A ATTACHED HERETO FOR THE VARIOUS
EQUIPMENT, SERIAL NUMBERS AND COSTS.
Equipment immediately listed above is located at: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B. FINANCIAL TERMS
1. Advance Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date:
2. Capitalized Lessor's Cost: $ 3,250,730.07 6. Lessee Federal Tax ID No.: ▇▇▇▇▇▇▇▇▇
3. Basic Term (No. of Months): 36 Months. 7. Last Delivery Date: OCTOBER 1, 1999
4. Basic Term Lease Rate Factor: 2.843469% 8. Daily Lease Rate Factor: N/A
9. First Termination Date: THIRTY-SIX (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on NOT APPLICABLE.
11. Basic Term Rent. Commencing on OCTOBER 1, 1999 and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic
Term, Lessee shall pay as rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200 % declining balance method, switching
to straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such year
will yield a larger allowance.
2. Recovery Period: FIVE (5) YEARS.
3. Basis: 100 % of the Capitalized Lessor's Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇: Lessee agrees that it will not list any of such Equipment for
property tax purposes or report any property tax assessed against such Equipment
until otherwise directed in writing by Lessor. Upon receipt of any property tax
▇▇▇▇ pertaining to such Equipment from the appropriate taxing authority, Lessor
will pay such tax and will invoice Lessee for the expense. Upon receipt of such
invoice, Lessee will promptly reimburse Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment responsibilities.
1
9
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES
THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A)
THE PERSON(S) SUPPLYING THE EQUIPMENT IS ADVANCED SYSTEMS GROUP, KENT DATA
COMM, ORACLE, ACCRUE SOFTWARE, INC. (THE "SUPPLIER(S)"), (B) LESSEE IS
ENTITLED TO THE PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY THIRD
PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S), WHICH IS SUPPLYING THE
EQUIPMENT IN CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR
ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT, LESSEE MAY
COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN ACCURATE AND COMPLETE
STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY DISCLAIMERS AND
LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A
LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE
OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES
UNDER THE DEFAULT AND REMEDIES SECTION OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
Termination Stipulated Termination Stipulated
Value Loss Value Value Loss Value
Rental Percentage Percentage Rental Percentage Percentage
------ ---------- ---------- ------ ---------- ----------
1 103.656 107.834 19 61.007 68.541
2 101.452 105.816 20 58.481 66.202
3 99.219 103.769 21 55.942 63.849
4 96.955 101.692 22 53.389 61.482
5 94.675 99.598 23 50.818 59.098
6 92.378 97.488 24 48.233 56.699
7 90.065 95.361 25 45.634 54.287
8 87.735 93.218 26 43.017 51.856
9 85.389 91.059 27 40.386 49.412
10 83.027 88.883 28 37.741 46.953
11 80.648 86.690 29 35.077 44.476
12 78.251 84.480 30 32.395 41.980
13 75.839 82.254 31 29.697 39.469
14 73.409 80.011 32 26.983 36.941
15 70.962 77.750 33 24.252 34.396
16 68.499 75.473 34 21.505 31.836
17 66.018 73.179 35 18.739 29.256
18 63.519 70.867 36 15.956 26.661
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. EQUIPMENT SPECIFIC PROVISIONS
The MAINTENANCE Section of the Lease is amended by adding the
following as the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with
all original manufacturer's performance specifications for new Equipment
without expense to Lessor. Lessee shall, if requested by Lessor, obtain a
certificate or service report from the manufacturer attesting to such
condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the
existence or the continuation of the existence, of an Environmental
Emission (including, without limitation, a sudden or non-sudden accidental
or non-accidental Environmental Emission), of, or exposure to, any
substance, chemical, material, pollutant, Contaminant, odor or audible
noise or other release or emission in, into or onto the environment
(including, without limitation, the air, ground, water or any surface) at,
in, by, from or related to any Equipment, (ii) the environmental aspect of
the transportation, storage, treatment or disposal of materials in
connection with the operation of any Equipment or (iii) the violation, or
alleged violation of any statutes, ordinances, orders, rules regulations,
permits or licenses of, by or from any governmental authority, agency or
court relating to environmental matters connected with any Equipment.
(b) "Affiliate" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries,
controls, or
2
10
is controlled by, or is under common control with, such Person.
(c) "Contaminant" shall refer to those substances which are regulated
by or form the basis of liability under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls ("PCBs"), and
radioactive substances, or other material or substance which has in the
past or could in the future constitute a health, safety or environmental
hazard to any Person, property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation,
notice of violation, claim, demand, abatement or other order on direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or
in the air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or
local law, rule or regulation pertaining to the protection of the
environment, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") (42
U.S.C. Section 9601 et seq.), the Hazardous Material Transportation Act
(49 U.S.C. Section 1801 et seq .), the Federal Water Pollution Control Act
(33 U.S.C. Section 1251 et seq .), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq .), the Clean Air Act (42 U.S.C.
Section 7401 et seq .), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq .), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 1361 et seq .), and the Occupational
Safety and Health Act (19 U.S.C. Section 651 et seq .), as these laws have
been amended or supplemented, and any analogous foreign, federal, state or
local statutes, and the regulations promulgated pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage,
liability, deficiency, fine, penalty or expense (including, without
limitation, reasonable attorneys' fees, engineering and other professional
or expert fees), investigation, removal, cleanup and remedial costs
(voluntarily or involuntarily incurred) and damages to, loss of the use of
or decrease in value of the Equipment arising out of or related to any
Adverse Environmental Condition.
(h) "Person" shall include any individual, partnership, corporation,
trust, unincorporated organization, government or department or agency
thereof and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend,
indemnify and hold harmless Lessor and its Affiliates, successors and
assigns, directors, officers, employees and agents from and against any
Environmental Claim or Environmental Loss.
The provisions of this Schedule shall survive any expiration or
termination of the Lease and shall be enforceable by lessor, its
successors and assigns.
RETURN CONDITIONS: In addition to the provisions provided for in the
RETURN OF EQUIPMENT Section of the Lease, and provided that the Lessee has
not elected its option to purchase the Equipment, Lessee shall, at its
expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety
(90) days prior to the expiration or other termination of the Lease
provide:
(i) a detailed inventory of the Equipment (including the model
and serial number of each major component thereof), including, without
limitation, all internal circuit boards, module boards, and software
features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and other
data that may be reasonably requested by Lessor concerning the
configuration and operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance
provider acceptable to Lessor that the Equipment (1) has been tested and
is operating in accordance with manufacturers specifications (together
with a report detailing the condition of the Equipment), the results of
such test(s) and inspection(s) and all repairs that were performed as a
result of such test(s) and inspection(s) and (2) that the Equipment
qualifies for the manufacturers used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty
(60) days prior to the expiration or other termination of the Lease, make
the Equipment available for on-site operational inspection by persons
designated by the Lessor who shall be duly qualified to inspect the
Equipment in its operational environment.
(c) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations
and consistent with the best practices of dealers in used equipment
similar to the Equipment; shall have no Lessee installed markings or
labels which are not necessary for the operation, maintenance or repair of
the Equipment; and shall be in compliance with all applicable governmental
laws, rules and regulations.
(d) The Equipment shall be deinstalled and packed by or under the
supervision of the manufacturer or such other person acceptable to Lessor
in accordance with manufacturers recommendations. Without limitation, all
internal fluids will either be drained and disposed of or filled and
secured in accordance with manufacturers recommendations and applicable
governmental laws, rules and regulations.
(e) Provide for transportation of the Equipment in a manner
consistent with the manufacturer's recommendations and practices to any
locations within the continental United States as Lessor shall direct; and
shall have the Equipment unloaded at such locations.
2. LEASE TERM OPTIONS
EARLY LEASE TERM OPTIONS
The Lease is hereby amended by adding the following to the end
thereof:
3
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CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly
provided that all of the terms and conditions of this Provision are
fulfilled, Lessee may cancel the Agreement as to all (but not less than
all) of the Equipment on this Schedule as of any one of the Cancellation
Dates set forth below (each, a "Cancellation Date") upon at least 90 days
prior written notice (the "Notice Date") to Lessor (which notice shall be
irrevocable and shall be sent to the attention of Lessor's Asset
Management Organization, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇).
Such notice shall state the Cancellation Date which shall apply. If all of
the terms and conditions of this Provision are not fulfilled, this Lease
shall continue in full force and effect and Lessee shall continue to be
liable for all obligations thereunder, including, without limitation, the
obligation to continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the
Cancellation Value (set forth below for the applicable Cancellation Date)
for the Equipment, plus (B) all rent and all other sums due and unpaid as
of the Cancellation Date (including, but not limited to, any Rent payment
due and payable on the Cancellation Date and any sales taxes and property
taxes); and
(ii) return the Equipment in full compliance with the
RETURN OF EQUIPMENT Section of the Lease, such compliance being
independently verified by an independent appraiser selected by Lessor
(reasonably acceptable to Lessee) to determine that the Equipment is in
such compliance, which determination shall be final, binding and
conclusive. Lessee shall bear all costs associated with such appraiser's
determination and such costs, if any, to cause the Equipment to be in full
compliance with the RETURN OF EQUIPMENT Section of the Lease on or prior
to such Cancellation Date.
(c) The Cancellation Dates and the applicable Cancellation
Values are as set forth below:
October 1, 2001 1,350,028.20
(d) Lessee shall, from the applicable Notice Date through the
Cancellation Date,
(i) continue to comply with all of the terms and
conditions of the Lease, including, but not limited to, Lessee's
obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a
manner as to allow Lessor to market and demonstrate the Equipment to
potential purchasers or lessees from such premises at no cost to Lessor;
provided, however, that, subject to Lessor's right to market and
demonstrate the Equipment to potential purchasers or lessees from time to
time, Lessee may still use the Equipment until the Cancellation Date.
(e) Lessee shall, from the applicable Cancellation Date through
the earlier of the date the Equipment is sold by Lessor to a third party
or 30 days following the Cancellation Date, comply with the following
terms and conditions:
(i) Continue to provide insurance for the Equipment, at
Lessee's own expense, in compliance with the terms found in the INSURANCE
Section of the Lease, and
(ii) Make the Equipment available to Lessor and/or allow
Lessor to store the Equipment at Lessee's premises, in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential
purchasers or lessees from such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after
Lessee has exercised its Cancellation Option shall be for the sole benefit
of Lessor and Lessee shall have no interest in or any claim upon any of
such proceeds.
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
------------ ------- ------
Advanced Systems Group, Inc. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ $ 1,831,694.00
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Kent Datacomm ▇.▇. ▇▇▇ ▇▇▇▇▇▇ $ 525,931.07
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Oracle Wire Transfer Information: $ 570,326.00
▇▇▇▇▇ Fargo Bank
Chicago, IL
ABA# ▇▇▇▇▇▇▇▇▇
Account # 4522-020841
Accrue Software, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ $ 322,779.00
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
4
12
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding or
effective with respect to the Agreement or Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION ▇▇▇▇▇▇▇▇.▇▇▇, inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------
Title: Senior Risk Analyst Title: C.E.O
----------------------------- -----------------------
5
13
[GENERAL ELECTRIC LETTERHEAD]
October 4, 1999
▇▇▇▇▇▇▇▇.▇▇▇, inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇:
General Electric Capital Corporation ("GE Capital") is pleased to offer
the following commitment to ▇▇▇▇▇▇▇▇.▇▇▇, inc. for the financing of certain
computer equipment ("Equipmen") - similar to the equipment leased pursuant to
Schedule No. 1 to Master Lease Agreement dated August 8, 1999 ("Lease") The
following is a summary of the principal terms and conditions of this commitment:
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS.
- Transaction: Single Investor Guideline Lease.
- Lessee: ▇▇▇▇▇▇▇▇.▇▇▇, inc.
- Guarantor: Action Performance Companies, Inc.
- Lessor: GE Capital or one of its wholly-owned
subsidiaries or Assignees.
- Equipment Location: Tempe, AZ
- Equipment Cost: Approximately
US$7,000,000.00. To
date GE Capital has
leased approximately
$3,250,000.00 which
leaves an available
amount under this
commitment of
$3,750,000.00.
- Depreciation Deductions: (1)Method: 200% declining
balance method over
the Recovery Period,
switching to straight
line method for the
first taxable year for
which using the
straight line method
with respect to the
adjusted basis as of
the beginning of such
year will yield a
larger allowance.
(2) Recovery Period: _ years.
(3) Basis: 100% of Equipment Cost.
- Delivery Assumptions: The Equipment is anticipated to be delivered on or before 12-31-99. The
Last Delivery Date is 12-31-99.
- Basic Term: Thirty-Six (36) months
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14
- Basic Term Rent: Equal to the Equipment Cost multiplied by the Basic Term Rental Factor.
Paid monthly in advance.
- Basic Term Rental Factor: To be mutually agreed upon by Lessee and Lessor
- Cancellation Option: Similar to the Cancellation Option in Schedule No. 1
- Lease Expiration
Purchase Option: Fair Market Value. Lessee would be
able to purchase all
(but not less than
all) of the Equipment
at its then Fair
Market Value at lease
expiration.
- Commitment Valid Until: 12-31-99.
GE Capital's commitment to enter into the Lease shall be subject to the
following additional conditions: (i) execution by you and all other parties
involved in the transaction of all documentation required by GE Capital and in
form and substance satisfactory to GE Capital in its sole discretion; (ii) the
satisfaction of all conditions precedent set forth in the documentation, and,
(iii) no material adverse change in the financial or operating condition of
Lessee and Guarantor. The willingness of GE Capital to enter into further
schedules to the Lease is expressly conditioned upon GE Capital's determination
that all of the foregoing conditions ("Foregoing Conditions") have been
satisfied as required herein and in the Lease, which determination shall be in
GE Capital's and its counsel's sole discretion. In the event that GE Capital
determines that any of the Foregoing Conditions have not been satisfied, GE
Capital shall have no obligation whatsoever to enter into further schedules to
the Lease with you and shall have no liability whatsoever to you under this
letter or the Lease. In such case, this letter shall be of no further force and
effect.
It is understood that if, as a result of further investigation and
analysis by GE Capital and its counsel, information which GE Capital is not now
aware of may be revealed and/or certain other impediments to closing may come to
its attention, GE Capital may require that the transaction be restructured or
otherwise modified. As the potential Lessor, GE Capital shall be the sole judge
of what is an impediment and whether the impediment is so serious as to preclude
closing.
Thank you for your interest in GE Capital. If there are any questions,
please do not hesitate to call.
Very truly yours,
General Electric Capital Corporation
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Senior Risk Manager
15
CORPORATE GUARANTY
Date: 08/09 99
---------------, 19---
General Electric Capital Corporation
One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B. 3
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To induce you to enter into, purchase or otherwise acquire, now or at any
time hereafter, any promissory notes, security agreements, chattel mortgages,
pledge agreements, conditional sale contracts, lease agreements, and/or any
other documents or instruments evidencing, or relating to, any lease, loan,
extension of credit or other financial accommodation (collectively "ACCOUNT
DOCUMENTS" and each an "ACCOUNT DOCUMENT") to ▇▇▇▇▇▇▇▇.▇▇▇, inc., a CORPORATION
organized and existing under the laws of the State of DELAWARE ("CUSTOMER"),
but without in any way binding you to do so, the undersigned, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, does hereby guarantee to you, your successors and assigns, the
due regular and punctual payment of any sum or sums of money which the Customer
may owe to you now or at any time hereafter, whether evidenced by an Account
Document, on open account or otherwise, and whether it represents principal,
interest, rent, late charges, indemnities, an original balance, an accelerated
balance, liquidated damages, a balance reduced by partial payment, a deficiency
after sale or other disposition of any leased equipment, collateral or
security, or any other type of sum of any kind whatsoever that the Customer may
owe to you now or at any time hereafter, and does hereby further guarantee to
you, your successors and assigns, the due, regular and punctual performance of
any other duty or obligation of any kind or character whatsoever that the
Customer may owe to you now or at any time hereafter (all such payment and
performance obligations being collectively referred to as "OBLIGATIONS").
Undersigned does hereby further guarantee to pay upon demand all losses, costs,
attorneys' fees and expenses which may be suffered by you by reason of
Customer's default or default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance (and not
merely a guaranty of collection). Nothing herein shall require you to first
seek or exhaust any remedy against the Customer, its successors and assigns, or
any other person obligated with respect to the Obligations, or to first
foreclose, exhaust or otherwise proceed against any leased equipment,
collateral or security which may be given in connection with the Obligations.
It is agreed that you may, upon any breach or default of the Customer, or at
any time thereafter, make demand upon the undersigned and receive payment and
performance of the Obligations, with or without notice or demand for payment or
performance by the Customer, its successors or assigns, or any other person.
Suit may be brought and maintained against the undersigned, at your election,
without joinder of the Customer or any other person as parties thereto. The
obligations of each signatory to this Guaranty shall be joint and several.
The undersigned agrees that its obligations under this Guaranty shall be
primary, absolute, continuing and unconditional, irrespective of and unaffected
by any of the following actions or circumstances (regardless of any notice to
or consent of the undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other document; (b) any
extension, renewal, amendment, change, waiver or other modification of the
Account Documents or any other document; (c) the absence of, or delay in, any
action to enforce the Account Documents, this Guaranty or any other document;
(d) your failure or delay in obtaining any other guaranty of the Obligations
(including, without limitation, your failure to obtain the signature of any
other guarantor hereunder); (e) the release of, extension of time for payment
or performance by, or any other indulgence granted to the Customer or any other
person with respect to the Obligations by operation of law or otherwise; (f)
the existence, value, condition, loss, subordination or release (with or
without substitution) of, or failure to have title to or perfect and maintain a
security interest in, or the time, place and manner of any sale or other
disposition of any leased equipment, collateral or security given in connection
with the Obligations, or any other impairment (whether intentional or
negligent, by operation of law or otherwise) of the rights of the undersigned;
(g) the Customer's voluntary or involuntary bankruptcy, assignment for the
benefit of creditors, reorganization, or similar proceedings affecting the
Customer or any of its assets; or (h) any other action or circumstances which
might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor.
This Guaranty, the Account Documents and the Obligations may be assigned
by you, without the consent of the Undersigned. The Undersigned agrees that if
it receives written notice of an assignment from you, the Undersigned will pay
all amounts due hereunder to such assignee or as instructed by you. The
Undersigned also agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by assignee. The Undersigned hereby
waives and agrees not to assert against any such assignee any of the defenses
set forth in the immediate preceding paragraph.
This Guaranty may be terminated upon delivery to you (at your address
shown above) of a written termination notice from the undersigned. However, as
to all Obligations (whether matured, unmatured, absolute, contingent or
otherwise) incurred by the Customer prior to your receipt of such written
termination notice (and regardless of any subsequent amendment, extension or
other modification which may be made with respect to such Obligations), this
Guaranty shall nevertheless continue and remain undischarged until all such
Obligations are indefeasibly paid and performed in full.
The undersigned agrees that this Guaranty shall remain in full force and
effect or be reinstated (as the case may be) if at any time payment or
performance of any of the Obligations (or any part thereof) is rescinded,
reduced or must otherwise be restored or returned by you, all as though such
payment or performance had not
16
been made. If, by reason of any bankruptcy,
insolvency or similar laws effecting the rights of creditors, you shall be
prohibited from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you and the
undersigned, such prohibition shall be of no force and effect, and you shall
have the right to make demand upon, and receive payment from, the undersigned
of all amounts and other sums that would be due to you upon a default with
respect to the Obligations.
Notice of acceptance of this Guaranty and of any default by the Customer
or any other person is hereby waived. Presentment, protest demand, and notice
of protest, demand and dishonor of any of the Obligations, and the exercise of
possessory, collection or other remedies for the Obligations, are hereby
waived. The undersigned warrants that it has adequate means to obtain from the
Customer on a continuing basis financial data and other information regarding
the Customer and is not relying upon you to provide any such data or other
information. Without limiting the foregoing, notice of adverse change in the
Customer's financial condition or of any other fact which might materially
increase the risk of the undersigned is also waived. All settlements,
compromises, accounts stated and agreed balances made in good faith between the
Customer, its successors or assigns, and you shall be binding upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the undersigned by the
Customer or any other obligor for any of the Obligations is hereby subordinated
in right of payment to the indefeasible payment in full to you of all
Obligations and is hereby assigned to you as a security therefor. The
undersigned hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims against the
Customer, any other obligor for any of the Obligations, any collateral
therefor, or any other assets of the Customer or any such other obligor, for
subrogation, reimbursement, exoneration, contribution, indemnification, setoff
or other recourse in respect of sums paid or payable to you by the undersigned
hereunder, and the undersigned hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which it might otherwise
directly or indirectly receive or be entitled to receive by reason of any
amounts paid by, or collected or due from, it, the Customer or any other
obligor for any of the Obligations, or realized from any of their respective
assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE
RELATED DOCUMENTS, ANY DEALINGS BETWEEN US RELATING TO THE SUBJECT MATTER
HEREOF OR THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
US. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE
OBLIGATIONS GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
As used in this Guaranty, the word "person" shall include any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or any government or any political
subdivision thereof.
This Guaranty is intended by the parties as a final expression of the
guaranty of the undersigned and is also intended as a complete and exclusive
statement of the terms thereof. No course of dealing, course of performance or
trade usage, nor any paid evidence of any kind, shall be used to supplement or
modify any of the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its provisions may
only be waived, modified, varied, released, terminated or surrendered, in whole
or in part, by a duly authorized written instrument signed by you. No failure
by you to exercise your rights hereunder shall give rise to any estoppel
against you, or excuse the undersigned from performing hereunder. Your waiver
of any right to demand performance hereunder shall not be a waiver of any
subsequent or other right to demand performance hereunder.
This Guaranty shall bind the undersigned's successors and assigns and the
benefits thereof shall extend to and include your successors and assigns. In
the event of default hereunder, you may at any time inspect undersigned's
records, or at your option, undersigned shall furnish you with a current
independent audit report.
If any provisions of this Guaranty are in conflict with any applicable
statute, rule or law, then such provisions shall be deemed null and void to the
extent that they may conflict therewith, but without invalidating any other
provisions hereof.
Each signatory on behalf of a corporate guarantor warrants that he had
authority to sign on behalf of such corporation and by so signing, to bind said
guarantor corporation hereunder.
IN WITNESS WHEREOF, this Guaranty is executed the day and year above
written.
ACTION PERFORMANCE COMPANIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
(Signature)
Title: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
(Officer's Title)
17
ATTEST: ▇. ▇▇▇▇▇▇▇
___________________________________
Secretary/Assistant Secretary