Exhibit 10.4
[LOGO]
DUPLICATE
GATX Technology Finance Inc.
MASTER LEASE AGREEMENT
NO. 1833
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This Master Lease Agreement ("Lease Agreement") is made as of the 1st day of
June, 1999, between GATX TECHNOLOGY FINANCE INC. of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ W., Sun Life
Centre, Suite 2411, Toronto, Ont. M5H 1J9 (the "Lessor") and RMH TELESERVICES
INTERNATIONAL INC. having its principal offices at Oromocto Business Complex,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "Lessee")
TERMS AND CONDITIONS
1. DEFINITIONS.
"Lease Order shall refer to that document wherein Lessor agrees to lease to
Lessee and Lessee agrees to lease from Lessor certain Equipment. Each Lease
Order shall be signed and submitted by Lessee to Lessor and, when so submitted,
shall constitute a firm irrevocable offer by Lessee to lease the Equipment
identified on the Lease Order subject to the terms of the Lease Order and this
Lease Agreement which, if accepted by Lessor by signing and returning to Lessee
one copy of the same within thirty (30) days of the date of the Lease Order
shall be deemed a duly executed and in force Lease Order.
"Initial Term" shall mean the period beginning on the Commencement Date and
continuing for the number of months set forth in each Lease Order.
"Equipment" shall mean the equipment identified in a duly executed and in
force Lease Order and all related replacements, parts, additions, software,
accessories, alterations and repairs incorporated therein or affixed thereto,
together with any items included on the related Lease Order including, but not
limited to, training, maintenance, license agreements, etc.
"Software" shall mean a computer program in any data, program description,
media or supporting documentation provided by a licensor as part of the
transaction.
"Delivery and Acceptance Date" shall mean the date that the Equipment
listed on the related Lease Order is accepted at Lessee's premises, such date
being specified in the related Delivery and Acceptance Receipt. Unless expressly
agreed otherwise by the parties or Lessee notifies Lessor in writing that the
Equipment has been rejected, the Equipment must be accepted within seven (7)
days after the delivery date, and if not accepted by such time the Delivery and
Acceptance Date shall be deemed to be seven (7) days after the delivery date.
"Commencement Date" means, as to the Equipment designated on any Lease
Order, where the Delivery and Acceptance Date for such Equipment tails on the
first day of the month, that date, or, in any other case, the first day of the
month or calendar quarter if so provided in the Lease Order, following the
Delivery and Acceptance Date, unless otherwise agreed by the parties.
"Progress Payment Rider" shall refer to that document wherein the seller of
the Equipment requires payment prior to the commencement of a Lease Order and
Lessee agrees to make payments prior to the commencement of a Lease Order.
2. NET LEASE.
THIS LEASE AGREEMENT TOGETHER WITH EACH LEASE ORDER CONSTITUTES A NET LEASE
AND LESSEE'S AGREEMENT TO PAY RENT AND ANY OTHER OBLIGATIONS HEREUNDER AND UNDER
ANY APPLICABLE LEASE ORDERS SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE
SUBJECT TO ANY ABATEMENT, REDUCTION, SET-OFF, DEFENSE, COUNTERCLAIM,
INTERRUPTION, DEFERMENT OR RECOUPMENT FOR ANY REASON WHATSOEVER. Lessor and
Lessee will enter into one or more Lease Orders pursuant to this Lease Agreement
Subject to the terms and conditions of this Lease Agreement and a duly executed
and in force Lease Order, Lessor agrees to lease to Lessee and Lessee agrees to
lease from Lessor the Equipment described in each Lease Order. This Lease
Agreement is a master lease and each Lease Order is subject to the terms of this
Lease Agreement. Each Lease Order shall be treated as a separate lease with
respect to the Equipment covered by such Lease Order. In the event of any
conflict between the language of this Lease Agreement and any Lease Order
entered into pursuant hereto, the language of the Lease Order shall prevail with
respect to that Lease Order and the Equipment covered thereby. NO EQUIPMENT
SHALL BE DEEMED LEASED HEREUNDER UNLESS IT IS THE SUBJECT OF A DULY EXECUTED AND
IN FORCE LEASE ORDER.
3. TERM.
The term of this Lease Agreement shall commence on the date set forth above
and shall continue in effect for the Initial Term of any Lease Order and any
extended term as provided herein.
The term of each lease as to any items of Equipment designated on any Lease
Order shall commence on the Delivery and Acceptance Date for such Equipment, and
shall continue for the Initial Term and any extended term provided herein.
(CONTINUED ON THE FOLLOWING 4 PAGES)
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IN WITNESS WHEREOF, the parties have executed this Lease Agreement effective as
of the date first above written.
LESSOR: GATX TECHNOLOGY FINANCE INC. LESSEE: RMH TELESERVICES INTERNATIONAL INC.
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Signature: /s/ ▇▇▇▇ ▇▇▇▇▇
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇
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(Print Name) (Print Name)
Title: VICE PRESIDENT Title: EVP & CFO
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Date: 06/02/99 Date: June 1, 1999
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DUPLICATE
4. RENTAL. Rental shall begin to accrue on the Delivery and Acceptance Date and
Lessee shall pay to Lessor, as rental for the Equipment during the Initial Term,
the rent set forth in the respective Lease Order, which shall be due and payable
in advance on the first day of each calendar month or quarter as specified in
the Lease Order during such Initial Term plus any extended term (each date being
hereinafter called a `Rent Payment Date"), unless modified by a Progress Payment
Rider. If the Delivery and Acceptance Date of any Equipment shall be other than
the first day of the month, Lessee shall make an initial payment based on the
Delivery and Acceptance Date in an amount equal to the fraction of the rent as
specified in the related Lease Order for each day from the Delivery and
Acceptance Date to (but not including) the Commencement Date. Rent shall be paid
to Lessor at the address set forth above or at any other place as Lessor shall
designate in writing, or if to an Assignee of Lessor, at such place as such
Assignee shall designate in writing, and shall be paid free and clear of all
claims, [ILLEGIBLE] or setoffs against Lessor or such Assignee. Whenever any
payment by Lessee (of rent or otherwise) is past due hereunder for more than
seven (7) days, Lessee shall pay to Lessor, as additional rent, interest on such
amount until and including the date of payment, at the lesser of 1.5% per month
(18% per annum) or the maximum allowable rate of interest permitted by law.
5. TAXES. Lessee covenants to promptly report, file, pay and indemnify and hold
Lessor harmless with respect to any and all Taxes, as hereinafter defined. The
term "Taxes' as used herein shall mean all taxes (including sales, use, excise,
personal property, ad valorem, stamp, documentary and other taxes), and all
other governmental fees, charges and assessments (general or special) due,
assessed or levied by any foreign, federal, state, provincial, county or local
government or taxing authority, and any penalties, fines or interest thereon,
which are imposed against, upon or relating to the Equipment or the use,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, shipment, transportation, delivery, ownership or operation
thereof, and on or relating to the lease thereof including the rentals or
receipts due under this Lease Agreement, but shall not include any taxes solely
based upon or measured by the income of Lessor. Lessee will, upon request by
Lessor, submit to Lessor written evidence of Lessee's payment of all Taxes due
hereunder. Any tax returns filed by Lessee shall show Lessor as the owner of the
Equipment.
6. INSTALLATION, USE, MAINTENANCE AND INSPECTION OF EQUIPMENT.
(a) Lessee shall pay all installation, transportation, rigging, unpacking
and repacking, drayage, handling and insurance charges on the Equipment upon
delivery to Lessee and upon redelivery to Lessor upon the expiration or earlier
termination of the Initial Term or any extension thereof, to such destination as
is specified by Lessor within Canada ("Return Location"). Lessee shall furnish
appropriate installation facilities for the Equipment. Lessee represents and
warrants that: (i) it has selected all Equipment based on its own judgment and
expressly disclaims any reliance upon statements made by Lessor; and (ii) as of
the Delivery and Acceptance Date, as between Lessee and Lessor, Lessee shall
have unconditionally accepted such Equipment. Lessee shall execute and deliver
to Lessor a Delivery and Acceptance Receipt which shall be conclusive evidence
that, without limitation, Lessee finds the Equipment complete, in good working
order and condition and satisfactory for its requirements.
(b) Lessee shall comply with all laws, regulations and orders of any
governmental branch or agency which relates to the installation, use, possession
or operation of the Equipment, and shall use the Equipment in the regular course
of its business only, within its normal capacity, without abuse.
(c) Lessee, at its own expense, shall maintain the Equipment in good
operating condition, repair and appearance, and protect the same from
deterioration other than normal wear and tear, and shall enter into, and keep in
force a maintenance agreement with the manufacturer of the Equipment. Lessee
shall cause the manufacturer to keep the Equipment in good and efficient working
order, less normal wear and tear in full compliance and in accordance with the
provisions of such maintenance agreement and shall furnish evidence of such
agreement to Lessor upon request. During Lessee's normal business hours, Lessee
shall provide the manufacturers field engineering representatives with access to
the equipment to install engineering changes necessary to keep the Equipment at
currently announced engineering change levels. Upon deinstallation of any
Equipment, Lessee shall provide Lessor evidence from the manufacturer stating
the Equipment is at currently announced engineering change levels and is
qualified for the manufacturers maintenance agreement. The Equipment shall be
returned in the same operating order, repair, condition and appearance as on the
Delivery and Acceptance Date, reasonable wear and tear excepted.
(d) During Lessee's normal business hours, upon prior written notice to
Lessee and subject to Lessee's reasonable security procedures, Lessee shall
permit Lessor or its designee to inspect the Equipment, Lessee's equipment log
and maintenance records.
(e) Prior to delivery of any Equipment, the obligations of Lessor may be
suspended to the extent that Lessor is hindered or prevented from complying
therewith because of labor disturbances, acts of God, fire, storms, accidents,
failure of the manufacturer to deliver any Equipment, governmental regulations
or any cause whatsoever not within the control of Lessor.
7. RELOCATION. Lessee shall not move or permit to be moved any Equipment from
the location set forth in the applicable Lease Order without the prior written
consent of Lessor, which will not be unreasonably withheld; provided however, in
no event shall any Equipment be moved to a location outside Canada. Risk of loss
and all costs and expenses incurred in connection with any movement of Equipment
shall be the responsibility of Lessee.
8. ALTERATIONS AND MODIFICATIONS. Lessee shall not make modifications,
alterations or additions to Equipment (other than normal operating accessories
or controls) without the prior written consent of Lessor, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, Lessee shall be
entitled to acquire and install, at Lessee's expense, such additional features
or options ("Modifications") which (I) will not impair the originally intended
function or use of the Equipment in which the Modifications are installed, (ii)
will not require removal of any part of the Equipment, (iii) will not interfere
with Lessee's ability to obtain and maintain the maintenance contract required
by Paragraph 6(c), and (iv) the addition of which will not have an adverse
impact upon the value of the underlying Equipment or Lessors rights therein.
Such Modifications shall be of the type which are readily installed and removed
without damage to the Equipment so as to restore the Equipment to the condition
in which it existed prior to the installation of such Modifications provided,
however, that if Lessor so agrees in writing, Lessee shall not be required to
remove such Modifications. Any Modifications not so removed shall become the
property of Lessor. All Modifications must qualify for the manufacturers
maintenance agreement and be maintained in accordance with Paragraph 6(c)
hereof. Lessee hereby grants to Lessor the right and opportunity to first submit
or match the last proposal for the lease, financing or supply of any
Modification.
9. SOFTWARE. Lessee and Lessor acknowledge that the Equipment may contain or
include a description of certain Software in which Lessor and Lessee may have no
ownership or other proprietary rights. Where required by the Software owner,
manufacturer or distributor, Lessee shall enter into a license or other
agreement for the use of such Software. Any Software agreement shall be separate
and distinct from this Lease Agreement and any Lease Order, and Lessor and
Assignee shall not have any obligations thereunder, but shall have the right to
require Lessee to terminate Lessee's use of the Software if an Event of Default
shall occur and shall be continuing hereunder. In the event rent specified in a
Lease Order includes an amount attributable to the financing by Lessor of
Lessee's fee for use of Software, Lessee agrees that such amount shall be deemed
rent and subject to all the provisions of this Lease Agreement. Upon termination
of this Lease Agreement for reasons other than default, Lessee hereby assigns to
Lessor, to the extent assignable, any and all rights and obligations relating to
software and applicable software licenses.
10. OWNERSHIP, SECURITY INTEREST. It is expressly understood that the Equipment
is, and shall at all times remain, personal property of Lessor. Lessee shall
have no right, title or interest in the Equipment except as expressly provided
herein. If requested by Lessor, Lessee will obtain, prior to delivery of any
Equipment, a certificate satisfactory to Lessor from all parties with a real
property interest in the premises where the Equipment shall be located, waiving
any claim with respect to the Equipment. If Lessor supplies Lessee with labels,
plates or other markings stating that the Equipment is owned by Lessor, Lessee
shall attach same in a prominent place on the Equipment Lessee shall cause to be
filed and recorded at such times and in such places as Lessor may reasonably
request, all such instruments, including without limitation financing statements
under applicable personal property security legislation, with respect to some or
all of the Equipment, in the various states or provinces where the Equipment or
Lessee's principal place of business may be located; the filing of any such
instrument shall be for informational purposes only and shall not imply that
Lessor has less than full legal and beneficial ownership of the Equipment.
Lessee authorizes Lessor to file a copy of the Master Lease or any Lease Order
or invoice as a financing statement. Lessee agrees to reimburse Lessor for all
recording and filing fees.
11. ASSIGNMENT OR SUBLETTING BY LESSEE. LESSEE SHALL NOT ASSIGN, TRANSFER,
PLEDGE OR OTHERWISE DISPOSE OF THIS LEASE AGREEMENT, ANY LEASE [ILLEGIBLE] OR
ANY OF ITS RIGHTS THEREUNDER NOR SUBLEASE OR LEND ANY OF THE EQUIPMENT TO ANY
OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF [ILLEGIBLE]. ANY PURPORTED
ASSIGNMENT, TRANSFER, PLEDGE, OR OTHER DISPOSITION OF THIS LEASE AGREEMENT, ANY
LEASE ORDER OR ANY OF LESSEE'S RIGHTS THEREUNDER, OR ANY PURPORTED SUBLEASE OR
LENDING OF THE EQUIPMENT, WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, AT LESSOR'S
OPTION, SHALL BE VOID AND OF NO EFFECT. FOR THE PURPOSES OF THIS PARAGRAPH 11,
ANY PURPORTED SALE OR OTHER TRANSFER OF A CONTROLLING OWNERSHIP INTEREST OF
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DUPLICATE
LESSEE (WHETHER IN ONE TRANSACTION OR SERIES OF RELATED TRANSACTIONS) SHALL BE
DEEMED AN ASSIGNMENT OF THE LESSEE'S RIGHTS HEREUNDER REQUIRING THE PRIOR
WRITTEN CONSENT OF THE LESSOR. As to any permitted assignment or sublease, the
following conditions shall apply:
(a) Lessee shall remain fully liable for all payments due under each Lease
Order and remain the primary obligor for all remaining obligations under this
Lease Agreement and any Lease Orders hereunder.
(b) Lessee shall give Lessor at least thirty (30) days written notice of
the location of the Equipment and the identity of the assignee or sublessee
prior to the installation at assignee's or sublessee's premises. Lessee shall be
responsible for ensuring that all such instruments, including without limitation
financing change statements under applicable personal property [ILLEGIBLE]
legislation, are filed or recorded in respect of any assignment or subletting so
as not to impair the to perfection or priority of Lessor's position.
(c) Any sublessee's interest in any permitted sublease hereunder shall be
subordinate to the interests of Lessor or any Assignee of Lessor.
12. DISCLAIMER OF WARRANTIES.
(a) LESSEE ACKNOWLEDGES THAT LESSOR IS NOT THE MANUFACTURER OF THE
EQUIPMENT, NOR THE AGENT OF THE MANUFACTURER AND THAT LESSOR HAS MADE NO
REPRESENTATIONS, WARRANTIES OR COVENANTS OF ANY KIND, EXPRESS OR IMPLIED
STATUTORY OR OTHERWISE, AS TO ANY MATTER WHATEVER, INCLUDING BUT NOT LIMITED TO:
THE DESIGN, CONDITION OR PERFORMANCE OF THE EQUIPMENT, ITS MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR THE QUALITY OF THE MATERIAL OR WORKMANSHIP
OF THE EQUIPMENT. FURTHER, LESSOR MAKES NO WARRANTIES WITH RESPECT TO THE
CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY LAW,
RULE, REGULATION, CONTRACT OR PURCHASE ORDER, OR WITH RESPECT TO PATENT,
TRADEMARK OR COPYRIGHT INFRINGEMENT MATTERS OR "YEAR 2000" COMPLIANCE. LESSOR
EXPRESSLY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES. AS TO LESSOR,
LESSEE LEASES THE EQUIPMENT "AS IS, WHERE IS".
(b) LESSEE AGREES THAT LESSOR SHALL NOT BE LIABLE TO THE LESSEE FOR ANY
CLAIM, LOSS OR DAMAGE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHERWISE,
INCLUDING WITHOUT LIMITATION, LOSS OF PROFIT, LOSS OF BUSINESS, OR OTHER
FINANCIAL LOSS, WHICH MAY BE CAUSED, DIRECTLY OR INDIRECTLY, BY THE EQUIPMENT,
THE INADEQUACY OF THE EQUIPMENT FOR ANY PURPOSE OR ANY USE THEREOF, BY ANY
DEFICIENCY OR DEFECT THEREIN, OR BY ANY INCIDENT WHATSOEVER IN CONNECTION
THEREWITH, ARISING IN STRICT LIABILITY, NEGLIGENCE, CONTRACT, TORT OR OTHERWISE,
OR IN ANY WAY RELATING TO OR ARISING OUT OF THE EQUIPMENT, THIS LEASE AGREEMENT
OR ANY LEASE ORDER. THE LESSEE AGREES THAT IT WILL, IRRESPECTIVE OF ANY SUCH
CLAIM, LOSS, DAMAGE OR EXPENSE, CONTINUE TO PAY SUCH MONTHLY RENTAL CHARGES AND
OTHER SUMS AS MAY COME DUE UNDER ANY LEASE ORDER HEREUNDER.
13. ASSIGNMENT OF MANUFACTURER'S WARRANTIES. Lessor hereby assigns to Lessee, to
the extent assignable, all manufacturer's warranties, service agreements and
patent indemnities with respect to the Equipment, if any, for the purpose of
making appropriate claims against the manufacturer, provided that the Lessor
shall retain at all times the right to be protected by these warranties,
agreements and indemnities as the owner of the Equipment. The Lessee's sole
remedy for the breach of any such warranty, indemnification or service agreement
shall be against the manufacturer, and not against Lessor or any Assignee of
Lessor, nor shall any such breach have any effect whatsoever on the rights and
obligations of either party with respect to this Lease Agreement. Lessor will,
upon request by Lessee and at Lessee's sole expense, cooperate with Lessee in
the enforcement of any benefit provided in any such warranties, service
agreements and patent indemnities.
14. INDEMNIFICATION. Lessee agrees that it will defend, indemnify and hold
Lessor harmless against any and all claims, demands, liabilities, obligations,
losses, damages, injuries, penalties, actions, costs and expenses, including
reasonable attorney's fees, of whatever kind and nature arising out of or in
connection with the possession, use, condition (including, but not limited to,
latent and other defects, whether or not discoverable by Lessor or Lessee),
operation, ownership by Lessor, selection, delivery, leasing or return of any
item of Equipment leased hereunder, regardless of where, how and by whom
operated, or any failure on the part of Lessee to accept the Equipment or
otherwise to perform or comply with the provisions of this Lease Agreement or
any Lease Order, except for Lessors gross negligence or willful misconduct. The
indemnities and assumptions of liabilities and obligations herein provided for
shall continue in full force and effect notwithstanding the expiration or
termination of the Initial Term, any renewal or extension thereof, or of any
Lease Order or this Lease Agreement
15. ASSIGNMENT BY LESSOR. LESSOR MAY ASSIGN OR TRANSFER THIS LEASE AGREEMENT OR
ANY LEASE ORDER HEREUNDER OR LESSOR'S INTEREST IN THE EQUIPMENT OR GRANT A
SECURITY INTEREST THEREIN TO ONE OR MORE ASSIGNEES WITHOUT NOTICE TO LESSEE. Any
Assignee of Lessor shall have all of the rights but none of the obligations of
Lessor hereunder unless expressly agreed in writing, and Lessee agrees that it
will not assert against any Assignee any defense or counterclaim that Lessee may
have against Lessor, Lessee shall have no greater obligations to any Assignee
than it had to Lessor at the time of assignment, and such assignment shall not
limit or otherwise restrict the rights afforded Lessee hereunder. Lessee hereby
(i) consents to such assignments and/or grants, (ii) agrees to promptly execute
and deliver an Acknowledgment and Consent of Assignment and such further
acknowledgments, agreements, certificates and other instruments as may be
reasonably requested by Lessor or Assignee to effect such assignments and/or
grants. Lessee acknowledges that any assignment or transfer by Lessor made in
accordance with the provisions of this paragraph shall not materially change
Lessee's duties or obligations under this Lease Agreement nor materially
increase the burdens or risks imposed on Lessee. In the event of an assignment,
all references herein to Lessor shall be deemed to include Assignee.
Notwithstanding any such assignment: (i) Lessor shall not be relieved of any of
its obligations hereunder; and (ii) the rights of Lessee to quiet enjoyment and
possession of the Equipment shall not be impaired so long as Lessee is not in
default under this Lease Agreement.
16. QUIET POSSESSION AND ENJOYMENT. Lessor covenants that so long as Lessee is
not in default hereunder, neither Lessor nor any Assignee will disturb Lessee's
quiet possession and enjoyment of the Equipment, subject to and in accordance
with the provisions of this Lease Agreement and the applicable Lease Order.
17. DAMAGE, DESTRUCTION OR LOSS.
(a) Upon delivery of the Equipment to Lessee until the Equipment is
redelivered to Lessor, Lessee shall bear the entire risk of loss, damage, or
destruction with respect to the Equipment resulting from any cause whatsoever.
(b) If any Equipment becomes damaged beyond repair, lost, stolen, destroyed
or permanently rendered unfit, or in the event of any condemnation or taking by
any governmental authority (any such occurrence being hereinafter referred to as
an "Event of Loss", then Lessee shall promptly notify Lessor and shall do either
of the following within thirty (30) days after the occurrence of an Event of
Loss:
(i) At its expense, promptly replace the affected Equipment with like
or better replacement equipment of identical make, model, configuration,
capacity and condition, in good repair, free and clear of all liens, in
which case any such replacement equipment shall become the property of
Lessor and for all purposes of this Lease Agreement shall be deemed to be
the Equipment which it replaced; or
(ii) Terminate the Lease Order with respect to the affected Equipment
and pay to Lessor on the next payment date, an amount equal to the present
value of the remaining rental payments discounted by five percent (5%),
plus the fair market value in continued use of the Equipment.
18. INSURANCE. Lessee shall, at its expense, insure the Equipment against all
risks and in such amounts as Lessor shall reasonably require (but not less than
the full replacement value) with carriers reasonably acceptable to Lessor, shall
maintain a loss payable endorsement in favor of Lessor and its assigns affording
to Lessor and its assigns such additional protection as Lessor and its assigns
shall reasonably require, and Lessee shall maintain liability insurance
reasonably satisfactory to Lessor and its assigns. All such insurance policies
shall name Lessee, Lessor and its assigns as additional insureds and shall name
Lessor and its assigns as loss payee(s), and shall provide that insurance
coverage shall not be canceled or altered without at least thirty (30) days
prior written notice to Lessor and Assignee, and that no breach of warranty by
Lessor shall invalidate such insurance with respect to any additional insured.
Lessee shall promptly furnish appropriate evidence of such insurance to Lessor
and any Assignee.
19. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants to
Lessor and any Assignees on the date hereof and on the date of each Lease Order
that (i) the execution and performance of this Lease Agreement and all Lease
Orders are duly authorized and this Lease Agreement and the Lease Orders
constitute legal, valid and binding obligations of Lessee enforceable in
accordance with their terms; (ii) the performance under the Lease Agreement and
all Lease Orders by Lessee will not result in any breach, default or violation
of Lessees articles of incorporation or by-laws, if applicable, or partnership
agreement, if applicable, or any agreement to which Lessee is a party; (iii)
Lessee is in good standing duly organized, and validly existing in its
jurisdiction of incorporation or organization and in any jurisdiction(s) in
which any of the Equipment is to be located; (iv) there are no actions, suits or
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DUPLICATE
proceedings pending or threatened, before any court, agency, or arbitrator which
will, if determined adversely to Lessee, materially adversely affect its ability
to perform its obligations under this Lease Agreement or any Lease Order; and
(v) any and all information with respect to Lessee heretofore furnished to
Lessor was, when furnished, true and complete.
20. FINANCIAL STATEMENTS, ETC.. During the term of this Lease Agreement, Lessee
shall furnish to Lessor and any Assignee Lessee's audited balance sheet, income
statement and statement of cash flows for its most recent fiscal year, within
ninety days and quarterly statements within forty-five days, all prepared in
accordance with generally accepted accounting principles consistently applied,
and, from time to time, such other information concerning the Equipment as
Lessor or any Assignee may reasonably request.
21. DEFAULT. The occurrence of any of the following events shall constitute an
"Event of Default" hereunder and under each Lease Order entered into pursuant
hereto:
(a) Lessee shall fail to pay any installment of rent or other charge due
under this Lease Agreement or any Lease Order thereunder within ten (10) days
after the same is due and payable;
(b) Lessee attempts to move, sell, assign, transfer, encumber, dispose of,
sublet or lend any of the Equipment without the prior written consent of Lessor;
(c) Except for defaults covered by Paragraph (a) above, Lessee shall fail
to perform or observe any covenant, condition or agreement to be performed or
observed by it hereunder or under any Lease Order and such failure continues
unremedied for fifteen (15) days after notice thereof to Lessee by Lessor;
(d) Any representation or warranty made by Lessee in this Lease Agreement,
any Lease Order, or in any document or certificate made or furnished to Lessor
in connection herewith or pursuant hereto shall prove to be false at any time in
any material respect;
(e) Lessee ceases doing business as a going concern; makes an assignment
for the benefit of creditors; admits in writing its inability to pay its debts
as they become due; files an assignment in bankruptcy; is adjudicated to be
bankrupt or insolvent; seeks for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar arrangement under
any present or future statute, law or regulation or files an answer admitting
the material allegations of a petition filed against it in any such proceeding;
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of it or of all or any substantial part of its assets or properties,
or if it or its shareholders shall take any action to effect a dissolution or
liquidation and, in the case of any such proceeding not being instituted by
Lessee, such proceeding is not dismissed or vacated within thirty (30) days.
22. REMEDIES. Upon the occurrence of any Event of Default and at any time
thereafter, Lessor may, with or without terminating this Lease Agreement, do any
one or more of the following:
(a) Proceed by appropriate court action to enforce performance by Lessee of
the applicable terms of this Lease Agreement or any Lease Order;
(b) Declare immediately payable all sums due and to become due hereunder
for the full term of any and all Lease Orders under this Lease Agreement;
(c) If the Lease Order provides for a Stipulated Loss Value or other fixed
value of the Equipment, recover (i) any then accrued and unpaid rent plus
interest thereon at the late payment rate, (ii) the Stipulated Loss Value or
other fixed value, at Lessors option, of the Equipment as of the rent payment
date immediately preceding Lessee's date of default, and (iii) all commercially
reasonable costs and expenses incurred by Lessor in any repossession, recovery,
storage, repair, sale, release or other disposition of the Equipment including
reasonable attorney's fees and costs incurred in connection therewith or
otherwise resulting from Lessee's default;
(d) If the Lease Order does not provide for a Stipulated Loss Value or
other fixed value for the Equipment, recover from Lessee damages, not as a
penalty, but herein liquidated for all purposes and in an amount equal to the
sum of (i) any then accrued and unpaid Rent plus interest thereon at the Late
Payment Rate, (ii) the present value of all remaining Rent contracted to be paid
over the unexpired portion of the Initial Term or any extended term, discounted
at an interest rate of five percent (5%) per annum plus prepayment penalty fees,
(iii) all commercially reasonable costs and expenses incurred by Lessor in any
repossession, recovery, storage, or repair, sale, re-lease or other disposition
of the Equipment, including reasonable attorney's fees and costs incurred in
connection therewith or otherwise resulting from Lessee's default and (iv) the
fair market residual value in continued use at the time of default of the
Equipment determined by Lessor;
(e) Re-lease or sell any or all of the Equipment at a public or private
sale, with the privilege of becoming the purchaser or Lessee thereof, on such
terms and notice as Lessor shall deem reasonable, and thereafter Lessor shall
apply the proceeds derived therefrom as follows, Lessee remaining liable for any
deficiency: First, to reimburse Lessor for all costs and expenses incurred by
Lessor in any repossession, recovery, storage, repair, sale, re-lease or other
disposition of the Equipment, including reasonable attorney's fees, commissions
and brokers fees and costs incurred in connection therewith or otherwise
resulting from Lessee's default; second, to pay Lessor any amounts owing
hereunder, third, to reimburse Lessee for any payment paid hereunder as a result
of Lessee's default; and fourth, any surplus remaining thereafter to Lessor;
(f) Take immediate possession of any or all of such Equipment wherever
situated, and for such purpose, enter upon any premises (by summary proceedings
or otherwise) where the Equipment is located without prejudice to any other
remedy or claim referred to herein; and
(g) Exercise any other right or remedy which may be available to it under
the Uniform Commercial Code or any other applicable law.
A termination hereunder shall occur only upon notice by Lessor and only as
to such Equipment as Lessor specifically elects to terminate and this Lease
Agreement and all Lease Orders hereunder shall continue in full force and effect
as to the remaining Equipment, if any. No remedy referred to in this Paragraph
22 is intended to be exclusive, but each shall be cumulative and in addition to
any other remedy referred to above or otherwise available to Lessor at law or in
equity. No express or implied waiver by Lessor of any default shall constitute a
waiver of any other default by Lessee or a waiver of any of Lessors rights.
23. LOSS OF ANTICIPATED TAX BENEFITS. Lessee acknowledges that unless otherwise
agreed to in writing by Lessor, Lessor intends to claim all available tax
benefits of ownership with respect to the Equipment (the `Tax Benefits'),
including, but not limited to, capital cost allowances as provided in the Income
Tax Act (Canada) (the `Tax Act'), with respect to each item of Equipment for
each of Lessors taxation years during the Initial Term and any extended or
renewal term. Notwithstanding anything herein to the contrary, if Lessor shall
not be entitled to, or shall be subject to recapture of the Tax Benefits as a
result of any act, omission or misrepresentation of Lessee, Lessee shall pay to
Lessor upon demand an amount sufficient to reimburse Lessor for such loss,
together with any related interest and penalties, based on the highest marginal
corporate income tax rate prevailing at the time of such loss, regardless of
whether Lessor or any member of a consolidated group of which Lessor is also a
member is then subject to any increase in tax as a result of such loss of Tax
Benefits. Lessee has not made, and does not hereby make, any representation or
warranty as to the tax consequences of Lessors entering into or performing this
Lease Agreement, any Lease Order or any other transactional document(s), or with
respect to the tax attributes of the Equipment or the tax character of this
Lease Agreement.
24. TERMINATION. Each Lease Order, with respect to all but not less than all of
the Equipment covered thereby, may be terminated by either party at the end of
the Initial Term or any renewal or extended term thereof provided written notice
of termination of a Lease Order is given between one hundred eighty days and
ninety days prior to the termination of the Lease Order. If proper notice of
termination is not given, or if the Equipment is not returned to Lessor as
notified, the term of the Lease Order shall be extended on the same terms and
conditions for six months. Thereafter, the Lease Order as so extended may be
terminated by either party at the end of any calendar month by giving the other
party ninety days prior written notice.
25. GENERAL
(a) This Lease Agreement and any Lease Order hereunder shall in all
respects be governed by, and construed in accordance with, the laws of the
Province of Ontario, including all matters of construction, validity and
performance, and the federal laws of Canada applicable in Ontario. Lessee hereby
consents and irrevocably attorns to the jurisdiction of the courts of the
Province of Ontario for all disputes relating to the construction,
interpretation, enforcement and performance of this Lease Agreement or any Lease
Order, hereby waiving all defenses based on venue or convenience of forum or
service of process outside of such jurisdiction and consenting to service by
mail pursuant to subsection 25(c) hereof.
(b) This Lease Agreement and all Lease Orders constitute the entire
agreement between Lessee and Lessor with respect to the Equipment covered
thereby and supersede any prior or contemporaneous agreements or understandings
relating thereto. No covenant, condition or other term or provision hereof or of
any Lease Order may be waived, changed, amended or modified except by a written
agreement signed by both Lessor and Lessee.
(c) All notices, consents or requests desired or required to be given
hereunder shall be in writing and shall be mailed, via certified mail, return
receipt requested, to the address of the party set forth on the first page
hereof or to such other address as such party shall have designated by a proper
notice.
(d) This Lease Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and assigns.
(e) Paragraph headings are for convenience of reference only and shall not
be construed as part of this Lease Agreement.
(f) It is expressly understood that all of the Equipment shall be and
remain personal property of the Lessor notwithstanding the manner in which the
same may be attached or affixed to realty, and Lessee shall do all acts and
execute all documents necessary to insure that the Equipment remains personal
property.
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DUPLICATE
(g) All agreements, representations and warranties contained in this Lease
Agreement, any Lease Order, and in any document delivered pursuant hereto or in
connection herewith shall be for the benefit of Lessor and any Assignee and
shall survive the execution and delivery, and the expiration or other
termination, of this Lease Agreement and any Lease Order.
(h) Time is of the essence of this Lease Agreement and each Lease Order.
(i) Lessee shall, upon request of Lessor, perform all such other acts and
execute and deliver to Lessor all such other documents which Lessor deems
reasonably necessary to implement the provisions of this Lease Agreement or any
Lease Order.
(j) This Lease Agreement and any Lease Order may be executed in one or more
counterparts, each of which shall be deemed an original, but there shall be only
one executed original of each Lease Order which shall be marked "Original" (the
"Original") and all other counterparts shall be marked "Duplicate". To the
extent, if any, that a Lease Order constitutes chattel paper (as such term is
defined in applicable personal property security legislation) no security
interest in the Lease Order may be created through the transfer or possession of
any counterpart other than the Original of the Lease Order accompanied by an
Original or certified copy of the Lease Agreement.
(k) The parties have expressly requested that this agreement be drawn up in
the English language. Les parties ont expressement demande que cette convention
soit redigee en langue anglaise.
(l) All references to dollar amounts in this Lease Agreement, any Lease
Order and any related document shall, unless otherwise expressly indicated, be
read as referring to lawful currency of Canada.
FOR USE IN CANADA ONLY
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ADDENDUM NO. 1
TO
MASTER LEASE AGREEMENT NO. 1833
This Addendum modifies, supplements and amends Master Lease Agreement No. 1833
(the "Lease") dated as of June 1, 1999, between GATX TECHNOLOGY FINANCE INC.
("Lessor) and RMH TELESERVICES INTERNATIONAL INC. ("Lessee") except as otherwise
defined herein, or as the context may otherwise require, capitalized terms shall
have the meanings assigned to them in the Lease. The terms of this Addendum
shall be deemed a part of the Lease and incorporated by this reference into each
Lease Order; provided, however, that any express language contained in a Lease
Order contrary to the terms of the Addendum shall control and be deemed to
supercede the language of this Addendum.
1. DEFINITIONS.
First paragraph, replace "thirty (30) days" with "seven (7) days"
2. NET LEASE.
At the end of the first sentence, add "provided however, that nothing contained
in this Lease Agreement shall impair the right of the Lessee to bring an
independent action against the Lessor or any Assignee with respect to any claim
it may have in connection herewith."
4. RENTAL.
In the last sentence, replace "lesser with "rate"; and delete everything after
"(18% per annum)."
6. INSTALLATION, USE, MAINTENANCE AND INSPECTION OF EQUIPMENT.
Subparagraph 6(c), second sentence; Delete "manufacturer to keep the" and,
insert after equipment, "to be kept".
8. ALTERATION AND MODIFICATIONS.
In the last sentence, delete ", financing or supply"
10. OWNERSHIP, SECURITY INTEREST.
In the fifth sentence, replace "Lessee" with "Lessor.
11. ASSIGNMENT OR SUBLETTING BY LESSEE.
At the end of the first sentence add "not to be unreasonably witheld."
20. FINANCIAL STATEMENT, ETC...
In the first sentence, after "Lessee's" add "Parent Company's".
DUPLICATE
21. DEFAULT.
Subparagraph 21(a), after "payable" add "and such failure continues for 10 days
after notice thereof to Lessee by Lessor;
Subparagraph 21(e), after "seeks for itself any" delete "reorganization,
arrangement, composition, readjustment,".
22. REMEDIES.
Subparagraph 22(e), in the first sentence, replace "Lessor shall deem" with "is
commercially".
Subparagraph 22(g), replace "the Uniform Commercial Code" with "Personal
Property security legislation".
23. LOSS OF ANTICIPATED TAX BENEFITS.
Insert the word "deliberate" between "any" and "act".
24. TERMINATION.
At the end of the second sentence, replace "six months" with "on a month to
month basis."
In the third sentence, replace "ninety" days with "sixty" days.
25. GENERAL.
Subparagraph 25(i), after "other" insert "reasonable".
RMH TELESERVICES INTERNATIONAL INC.
LESSEE
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Title: EVP & CEO
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GATX TECHNOLOGY FINANCE INC.
LESSOR
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT