Exhibit 10.20
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MASTER EQUIPMENT LEASE AGREEMENT NO. 34293
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LESSOR: FLEET CAPITAL CORPORATION LESSEE: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.
a Rhode Island corporation a Missouri Limited Partnership
ADDRESS: One Financial Plaza ADDRESS: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Providence, Rhode Island ▇▇. ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ 63131
1. LEASE OF EQUIPMENT
Subject to the terms and conditions set forth herein (the "MASTER
LEASE") and in any Lease Schedule incorporating the terms of this Master
Lease (each, a "LEASE SCHEDULE"), Lessor agrees to lease to Lessee, and
Lessee agrees to lease from Lessor, the items and units of personal property
described in each such Lease Schedule, together with all replacements, parts,
additions, accessories and substitutions therefor (collectively, the
"EQUIPMENT"). As used in this Lease, the term "ITEM OF EQUIPMENT" shall mean
each functionally integrated and separately marketable group or unit of
Equipment subject to this Lease. Each Lease Schedule shall constitute a
separate, distinct and independent lease of Equipment and contractual
obligation of Lessee. References to "THE LEASE," "THIS LEASE" or "ANY LEASE"
shall mean and refer to any Lease Schedule which incorporates the terms of
this Master Lease, together with all exhibits, addenda, schedules,
certificates, riders and other documents and instruments executed and
delivered in connection with such Lease Schedule or this Master Lease, all as
the same may be amended or modified from time to time. The Equipment is to be
delivered and installed at the location specified or referred to in the
applicable Lease Schedule. The Equipment shall be deemed to have been
accepted by Lessee for all purposes under this Lease upon Lessor's receipt of
an Acceptance Certificate with respect to such Equipment, executed by Lessee
after receipt of all other documentation required by Lessor with respect to
such Equipment. Lessor shall not be liable or responsible for any failure or
delay in the delivery of the Equipment to Lessee for whatever reason. As used
in this Lease, "ACQUISITION COST" shall mean (a) with respect to all
Equipment subject to a Lease Schedule, the amount set forth as the
Acquisition Cost in the Lease Schedule and the Acceptance Certificate
applicable to such Equipment; and (b) with respect to any item of Equipment,
the total amount of all vendor or seller invoices (including Lessee invoices,
if any) for such item of Equipment, together with all acquisition fees and
costs of delivery, installation, testing and related services, accessories,
supplies or attachments procured or financed by Lessor from vendors or
suppliers thereof (including items provided by Lessee) relating or allocable
to such item of Equipment ("RELATED EXPENSES"). Provided no event of Default
has occurred and remains uncured hereunder and upon the satisfaction of all
preconditions deemed necessary by Lessor, Lessor shall satisfy the obligation
to pay the Acquisition Cost within thirty (30) days of the Lease Term
Commencement Date. As used in this Lease with respect to any Equipment, the
terms "ACCEPTANCE DATE," "RENTAL PAYMENT(S)," "RENTAL PAYMENT DATE(S),"
"RENTAL PAYMENT NUMBERS," "RENTAL PAYMENT COMMENCEMENT DATE," "LEASE TERM"
and "LEASE TERM COMMENCEMENT DATE" shall have the meanings and values
assigned to them in the Lease Schedule and the Acceptance Certificate
applicable to such Equipment.
2. TERM AND RENT
The Lease Term for any Equipment shall be as specified in the applicable
Lease Schedule. Rental Payments shall be in the amounts and shall be due and
payable as set forth in the applicable Lease Schedule. Lessee shall, in
addition, pay interim rent to Lessor as provided in the Lease Schedule from
the Acceptance Date to the Lease Term Commencement Date set forth in the
applicable Acceptance Certificate, payable on such Lease Term Commencement
Date. If any rent or other amount payable hereunder shall not be paid within
10 days of the date when due, Lessee shall pay as an administrative and late
charge overdue interest on any delinquent payment or other amounts due under
the Lease (by reason of acceleration or otherwise) from the due date until
paid at the rate of 1 1/2% per month or the maximum amount permitted by
applicable law, whichever is lower. All payments to be made to Lessor shall
be made to Lessor in immediately available funds at the address shown above
or at such other place, as Lessor shall specify in writing. THIS IS A
NON-CANCELABLE, NON-TERMINABLE LEASE OF EQUIPMENT FOR THE ENTIRE LEASE TERM
PROVIDED IN EACH LEASE SCHEDULE HERETO.
3. POSSESSION; PERSONAL PROPERTY
No right, title or interest in the Equipment shall pass to Lessee other
than the right to maintain possession and use of the Equipment for the Lease
Term (provided no Event of Default has occurred) free from interference by
any person claiming by, through, or under Lessor. The Equipment shall always
remain personal property even though the Equipment may hereafter become
attached or affixed to real property. Lessee agrees to give and record such
notices and to take such other action at its own expense as may be necessary
to prevent any third party (other than an assignee of Lessor) from acquiring
or having the right under any circumstances to acquire any interest in the
Equipment or this Lease. Provided no Event of Default has occurred and
remains uncured hereunder, Lessor warrants that neither Lessor nor persons or
entities claiming through Lessor shall interfere with Lessee's quiet use and
possession of the Equipment in accordance with the terms of this Lease.
4. DISCLAIMER OF WARRANTIES
LESSOR IS NOT THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, NOR THE
AGENT THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES
AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE
MERCHANTABILITY OF THE EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS
DESIGN OR CONDITION, ITS CAPACITY OR DURABILITY, THE QUALITY OF THE MATERIAL
OR WORKMANSHIP IN THE MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT, OR THE
CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY
PURCHASE ORDER RELATING THERETO, OR PATENT INFRINGEMENTS, AND LESSOR HEREBY
DISCLAIMS ANY SUCH WARRANTY. LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS OR
SERVICE TO THE EQUIPMENT, DEFECTS THEREIN OR FAILURES IN THE OPERATION
THEREOF. Lessee has made the selection of each item of Equipment and the
manufacturer and/or supplier thereof based on its own judgment and expressly
disclaims any reliance upon any statements or representations made by Lessor.
For so long as no Event of Default (or event or condition which, with the
passage of time or giving of notice, or both, would become such an Event of
Default) has occurred and is continuing, Lessee shall be the beneficiary of,
and shall be entitled to, all rights under any applicable manufacturer's or
vendor's warranties with respect to the Equipment, to the extent permitted
by law.
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If the Equipment is not delivered, is not properly installed, does not
operate as warranted, becomes obsolete, or is unsatisfactory for any reason
whatsoever, Lessee shall make all claims on account thereof solely against
the manufacturer or supplier and not against Lessor, and Lessee shall
nevertheless pay all rentals and other sums payable hereunder. Lessee
acknowledges that neither the manufacturer or supplier of the Equipment, nor
any sales representative or agent thereof, is an agent of Lessor, and no
agreement or representation as to the Equipment or any other matter by any
such sales representative or agent of the manufacturer or supplier shall in
any way affect Lessee's obligations hereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
Lessee represents and warrants to and covenants with Lessor that:
(a) Lessee has the form of business organization indicated above and
is duly organized and existing in good standing under the laws of the state
listed in the caption of this Master Lease and is duly qualified to do
business wherever necessary to carry on its present business and operations
and to own its property; (b) this Lease has been duly authorized by all
necessary action on the part of Lessee consistent with its form of
organization, does not require any further shareholder or partner approval,
does not require the approval of, or the giving notice to, any federal,
state, local or foreign governmental authority and does not contravene any
law binding on Lessee or contravene any certificate or articles of
incorporation or by-laws or partnership certificate or agreement, or any
agreement, indenture, or other instrument to which Lessee is a party or by
which it may be bound; (c) this Lease has been duly executed and delivered
by authorized officers or partners of Lessee and constitutes a legal, valid
and binding obligation of Lessee enforceable in accordance with its terms;
(d) Lessee has not and will not, directly or indirectly, create, incur or
permit to exist any lien, encumbrance, mortgage, pledge, attachment or
security interest on or with respect to the Equipment or this Lease (except
those of persons claiming by, through or under Lessor); (e) the Equipment
will be used solely in the conduct of Lessee's business and will remain in
the location shown on the applicable Lease Schedule unless Lessee provides
Lessor with prior written notice of its intention to relocate the Equipment
and has completed all other notifications, filings, recordings and other
actions in such new location as Lessor may reasonably request to protect
Lessor's interest in the Equipment; (f) there are no pending or threatened
actions or proceedings before any court or administrative agency which
materially adversely affect Lessee's financial condition or operations, and
all credit, financial and other information provided by Lessee or at Lessee's
direction is, and all such information hereafter furnished will be, true,
correct and complete in all material respects; (g) Lessor has not selected,
manufactured or supplied the Equipment to Lessee and has acquired any
Equipment subject hereto solely in connection with this Lease and Lessee has
received and approved the terms of any purchase order or agreement with
respect to the Equipment; (h) until all obligations of Lessee under all
Leases hereunder shall have been paid and/or performed in full, Lessee
covenants and agrees to provide to Lessor a copy of Lessee's FOCUS Report (or
successor applicable form) as of the end of each calendar quarter as soon as
such FOCUS Report is available, but in no case later than thirty (30)
from the end of such calendar quarter; and (i) Lessee shall maintain a
Required Capital Ratio as of the end of each calendar quarter of not less than
3.75 to 1.00. "Required Capital Ratio" means, at any date with respect to the
Lessee, the ratio of (i) its Net Capital to (ii) its Minimum Net Capital
Requirement. "Net Capital" means, at any date, the net capital of Lessee
as (i) computed from time to time in accordance with paragraph (c) of
Rule 15c3-1 and reported on line 3750 of Lessee's FOCUS Report (or successor
applicable form) as of such date or (ii) in the event Lessee's Net Capital is
no longer reported in its FOCUS Report (or successor applicable form),
computed in a manner consistent with the methodology used to calculate Net
Capital for Lessee's last available FOCUS Report and as otherwise acceptable
to Lessor and Lessee and certified as true and correct by Lessee's Chief
Financial Officer on a quarterly basis ("Compliance Certificate"). "Minimum
Net Capital Requirement" means, at any date, the minimum Net Capital required
for Lessee and its affiliates (i) computed in accordance with, and reported on
line 3760 of Lessee's FOCUS Report (or successor applicable form) as of such
date or (ii) in the event Lessee's Minimum Net Capital Requirement is no
longer reported in Lessee's FOCUS Report (or successor applicable form),
computed in a manner consistent with the methodology used to calculate Minimum
Net Capital Requirement for Lessee's last available FOCUS Report and as
otherwise acceptable to Lessor and Lessee and as certified as true and
correct by Lessee's Chief Financial Officer on a quarterly basis in the
Compliance Certificate.
6. INDEMNITY
Lessee assumes the risk of liability for, and hereby agrees to indemnify
and hold safe and harmless on an after tax basis, and covenants to defend,
Lessor, its employees, servants and agents from and against: (a) any and all
liabilities, losses, damages, claims and expenses (including legal expenses
of every kind and nature) arising out of the manufacture, purchase, shipment
and delivery of the Equipment to Lessee, acceptance or rejection, ownership,
titling, registration, leasing, possession, operation, use, return or other
disposition of the Equipment, including, without limitation, any liabilities
that may arise from patent or latent defects in the Equipment (whether or not
discoverable by Lessee), any claims based on absolute tort liability or
warranty and any claims based on patent, trademark or copyright infringement;
(b) any and all loss or damage of or to the Equipment; and (c) any obligation
or liability to the manufacturer or any supplier of the Equipment arising
under any purchase orders issued by or assigned to Lessor.
7. TAXES AND OTHER CHARGES
Lessee agrees to comply with all laws, regulations and governmental
orders related to this Lease and to the Equipment and its use or possession,
and to pay when due, and to defend and indemnify Lessor against liability for
all license fees, assessments, and sales, use, property, excise, privilege
and other taxes (including any related interest or penalties) or other
charges or fees now or hereafter imposed by any governmental body or agency
upon any Equipment, or with respect to the manufacturing, ordering, shipment,
purchase, ownership, delivery, installation, leasing, operation, possession,
use, return, or other disposition thereof or the rentals hereunder (other
than taxes on or measured solely by the net income of Lessor). Any fees,
taxes or other lawful charges paid by Lessor upon failure of Lessee to make
such payments shall at Lessor's option become immediately due from Lessee to
Lessor. Provided no Event of Default has occurred and remains uncured, Lessee
shall prepare, pay and file all personal property tax returns with respect to
the Equipment on or before the due date therefor and shall indemnify and hold
Lessor harmless from and against any and all claims, costs, penalties,
interest arising as a result of Lessee assuming responsibility for such
property taxes.
8. DEFAULT
Lessee shall be in default of this Lease upon the occurrence of any one
or more of the following events (each an "EVENT OF DEFAULT"):
(a) Lessee shall fail to make any payment, of rent or otherwise, under
any Lease within 10 days of the date when due (provided Lessor is not
restricted under applicable law in its ability to provide notice to Lessee,
Lessor shall provide notice to Lessee of the failure to pay an amount when
due hereunder prior to declaring an Event of Default); or (b) Lessee shall
fail to obtain or maintain any of the insurance required under any Lease;
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or (c) Lessee shall fail to perform or observe any covenant, condition or
agreement under any Lease, and such failure continued for 30 days after
notice thereof to Lessee; or (d) Lessee shall default in the payment or
performance of any indebtedness or obligation to Lessor having a principal
balance of $5,000,000 or more under any loan, note, security agreement,
lease, guaranty, title retention or conditional sales agreement or any other
instrument or agreement evidencing such indebtedness with Lessor; or (e) any
representation or warranty made by Lessee herein or in any certificate,
agreement, statement or document hereto or hereafter furnished to Lessor in
connection herewith, including without limitation, any financial information
disclosed to Lessor, shall prove to be false or incorrect in any material
respect; or (f) death or judicial declaration of incompetence of Lessee, if
an individual; the commencement of any bankruptcy, insolvency, arrangement,
reorganization, receivership, liquidation or other similar proceeding by
Lessee or any of its properties or businesses, or the appointment of a
trustee, receiver, liquidator or custodian for Lessee or any of its
properties of business, or if Lessee suffers the entry of an order for relief
under Title 11 of the United States Code; or the making by Lessee of a
general assignment or deed of trust for the benefit of creditors; or the
commencement of any bankruptcy, insolvency, arrangement, reorganization,
receivership, liquidation or other similar proceeding against Lessee or any
of its properties or businesses, or the appointment of a trustee, receiver,
liquidator or custodian for Lessee or any of its properties of business, or
if Lessee suffers the entry of an order for relief under Title 11 of the
United States Code and in each case such involuntary proceeding is not
dismissed with sixty (60) days of the filing thereof; or (g) Lessee shall
default in any payment or other obligation under a material agreement
(original principal amount of $5,000,000 or more) and any applicable grace or
cure period with respect thereto has expired; or (h) Lessee shall terminate
its existence by merger, consolidation, sale of substantially all of its
assets or otherwise, unless otherwise consented to by Lessor, such consent
not to be unreasonably withheld or delayed; or (i) if Lessee is a privately
held entity, and during any rolling twelve month period more than 50% of
Lessee's voting capital stock or other equivalent ownership interest, or
effective control of such stock or interest in Lessee, issued and outstanding
from time to time, is not retained by the holders of such stock or interest
as of the beginning of such rolling twelve month period, unless otherwise
consented to by Lessor, such consent not to be unreasonably withheld or
delayed; or (j) if Lessee is a publicly held corporation, there shall be a
change in the ownership of Lessee's stock such that Lessee is no longer
subject to the reporting requirements of the Securities Exchange Act of 1934,
or no longer has a class of equity securities registered under Section 12 of
the Securities Act of 1933, unless otherwise consented to by Lessor, such
consent not to be unreasonably withheld or delayed; or (k) any event or
condition set forth in subsections (b) through (k) of this Section 8 shall
occur with respect to any guarantor or other person responsible, in whole or
in part, for payment or performance of this Lease; or (l) any event or
condition set forth in subsections (d) through (j) shall occur with respect
to any affiliated firm or entity controlling, controlled by or under common
control with Lessee. Lessee shall promptly notify Lessor of the occurrence of
any Event of Default or the occurrence or existence of any event or
condition, which, upon the giving of notice of lapse of time, or both, may
become an Event of Default.
9. REMEDIES; MANDATORY PREPAYMENT
Upon the occurrence of any Event of Default, Lessor may, at its sole
option and discretion, exercise one or more of the following remedies with
respect to any or all of the Equipment: (a) cause Lessee to promptly return,
at Lessee's expense, any or all Equipment to such location as Lessor may
designate in accordance with the terms of Section 18 of this Master Lease, or
Lessor, at its option, may enter upon the premises where the Equipment is
located and take immediate possession of and remove the same by summary
proceedings or otherwise and at all times in compliance with applicable law,
all without liability to Lessor for or by reason of damage to property or
such entry or taking possession except for Lessor's gross negligence or
willful misconduct; (b) sell any or all Equipment at public or private sale
or otherwise dispose of, hold, use, operate, lease to others or keep idle the
Equipment, all as Lessor in its sole discretion may determine and all free
and clear of any rights of Lessee and otherwise in compliance with applicable
law; (c) remedy such default, including making repairs or modifications to
the Equipment, for the account and expense of Lessee, and Lessee agrees to
reimburse Lessor for all of Lessor's costs and expenses; (d) by written
notice to Lessee, cancel the Lease with respect to any or all Lease Schedules
and the Equipment subject thereto, as such notice shall specify, and, with
respect to such cancelled Lease Schedules and Equipment, declare immediately
due and payable and recover from Lessee, as liquidated damages for loss of
Lessor's bargain and not as a penalty, an amount equal to the Stipulated Loss
Value, calculated as of the next following Rental Payment Date; (e) apply any
deposit or other cash collateral or sale or remarketing proceeds of the
Equipment at any time to reduce any amounts due to Lessor, and (f) exercise
any other right or remedy which may be available to Lessor under applicable
law, or proceed by appropriate court action to enforce the terms hereof or to
recover damages for the breach hereof, including reasonable attorneys' fees
and court costs. Notice of Lessor's intention to accelerate, notice of
acceleration, notice of nonpayment, presentment, protest, notice of dishonor,
or any other notice whatsoever are hereby waived by Lessee and any endorser,
guarantor, surety or other party liable in any capacity for any of the
Lessee's obligations under or in respect of the Lease. No remedy referred to
in this Section 9 shall 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.
The exercise or pursuit by Lessor of any one or more of such remedies
shall not preclude the simultaneous or later exercise or pursuit by Lessor of
any or all such other remedies, and all remedies hereunder shall survive
termination of this Lease. At any sale of the Equipment pursuant to this
Section 9, Lessor may bid for the Equipment. Notice required, if any, of any
sale or other disposition hereunder by Lessor shall be satisfied by the
mailing of such notice to Lessee at least seven (7) days prior to such sale
or other disposition. In the event Lessor takes possession and disposes of
the Equipment, the proceeds of any such disposition shall be applied in the
following order: (1) to all of Lessor's costs, charges and expenses incurred
in taking, removing, holding, repairing and selling or leasing the Equipment;
(2) to the extent not previously paid by Lessee, to pay Lessor for any
damages then remaining unpaid hereunder; (3) to reimburse Lessee for any sums
previously paid by Lessee as damages hereunder; and (4) the balance, if any,
shall be retained by Lessor. A cancellation shall occur only upon written
notice by Lessor and only with respect to such Equipment, as Lessor shall
specify in such notice. Cancellation under this Section 9 shall not affect
Lessee's duty to perform Lessee's obligations hereunder to Lessor in full.
Lessee agrees to reimburse Lessor on demand for any and all costs and
expenses incurred by Lessor in enforcing its rights and remedies hereunder
following the occurrence of an Event of Default, including, without
limitation, reasonable attorney's fees, and the costs of repossession,
storage, insuring, reletting, selling and disposing of any and all Equipment.
The term "STIPULATED LOSS VALUE" with respect to any item of Equipment
shall mean the Stipulated Loss Value as set forth in any Schedule of
Stipulated Loss Values attached to and made a part of the applicable Lease
Schedule. If there is no such Schedule of Stipulated Loss Values, then the
Stipulated Loss Value with respect to any item of Equipment on any Rental
Payment Date during the Lease Term shall be an amount equal to the sum of:
(a) all Rental Payments and other amounts then due and owing to Lessor under
the Lease, together with all accrued interest and late charges thereon
calculated through and including the date of payment; plus (b) the net
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present value of: (i) all Rental Payments then remaining unpaid for the
Lease Term, plus (ii) the amount of any purchase obligation with respect to
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such item of Equipment or, if there is no such obligation, then the fair
market value of such item of Equipment at the end of the Lease Term, as
estimated by Lessor in its sole discretion (accounting for the amount of any
unpaid Related Expenses for such item of Equipment and, with respect to any
such item of Equipment that has been attached to or installed on or in any
other property leased or owned by Lessee, such value shall be determined on
an installed basis, in place
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and in use), all discounted to net present value at a discount rate equal to the
1-year Treasury Constant Maturity rate as published in the Selected Interest
Rates table of the Federal Reserve statistical release H.15(519) for the week
ending immediately prior to the original Acceptance Date for such Equipment,
plus fifty basis points.
Lessee is or may become indebted under or in respect of one or more
leases, loans, notes, credit agreements, reimbursement agreements, security
agreements, title retention or conditional sales agreements, or other
documents, instruments or agreements, whether now existing or hereafter
arising, evidencing Lessee's obligations for the payment of borrowed money or
other financial accommodations ("OBLIGATIONS") owing to FCC, or to one or
more affiliated persons, firms or entities controlling, controlled by or
under common control with Lessor ("AFFILIATES"). If Lessee pays or prepays
all or substantially all of its Obligations owing to any Affiliate, whether
or not such payment or prepayment is voluntarily or involuntarily made by
Lessee before or after any default or acceleration of such Obligations, then
Lessee shall pay, at Lessor's option and immediately upon notice from Lessor,
all or any part of Lessee's Obligations owing to Lessor, including but not
limited to Lessee's payment of Stipulated Loss Value for all or any Lease
Schedules as set forth in such notice from Lessor.
10. ADDITIONAL SECURITY
For so long as any obligations of Lessee shall remain outstanding under
any Lease, Lessee hereby grants to Lessor a security interest in all of
Lessee's rights in and to Equipment subject to such Lease from time to time,
to secure the prompt payment and performance when due (by reason of
acceleration or otherwise) of each and every indebtedness, obligation or
liability of Lessee, or any affiliated person, firm, or entity controlling,
controlled by, or under common control with Lessee, owing to Lessor, whether
now existing or hereafter arising, including but not limited to all of such
obligations under or in respect of any Lease. The extent to which Lessor
shall have a purchase money security interest in any item of Equipment under
a Lease which is deemed to create a security interest under Section 1-201(37)
of the Uniform Commercial Code shall be determined by reference to the
Acquisition Cost of such item financed by Lessor. In order to more fully
secure its rental payments and all other obligations to Lessor hereunder,
Lessee hereby grants to Lessor a security interest in any deposit of Lessee
to Lessor under Section 3(d) of any Lease Schedule hereto. Such security
deposit shall not bear interest, may be commingled with other funds of Lessor
and shall be immediately restored by Lessee if applied under Section 9. Upon
expiration of the Lease Term of this Lease and satisfaction of all of
Lessee's obligations, the security deposit shall be returned to Lessee. The
term "LESSOR" as used in this Section 10 shall include any affiliated person,
firm or entity controlling, controlled by or under common control with
Lessor.
11. NOTICES
Any notices or demands required or permitted to be given under this
Lease shall be given in writing and by regular mail and shall become
effective when deposited in the United States mail with postage prepaid to
Lessor to the attention of Customer Accounts, and to Lessee at the address
set forth above and to the attention ▇▇▇▇▇ ▇▇▇▇▇, or to such other address as
the party to receive notice hereafter designates by such written notice.
12. USE; MAINTENANCE; INSPECTION; LOSS AND DAMAGE
During the Lease Term for each item of Equipment, Lessee shall, unless
Lessor shall otherwise consent in writing: (a) permit each item of Equipment
to be used only within the United States by qualified personnel solely for
business purposes and the purpose for which it was designed and shall, at its
sole expense, service, repair, overhaul and maintain each item of Equipment
in the same condition as when received, ordinary wear and tear excepted, in
good operating order, consistent with prudent industry practice (but, in no
event less than the same extent to which Lessee maintains other similar
equipment in the prudent management of its assets and properties) and in
compliance with all applicable laws, ordinances, regulations, and conditions
of all insurance policies required to be maintained by Lessee under the Lease
and all manuals, orders, recommendations, instructions and other written
requirements as to the repair and maintenance of such item of Equipment
issued at any time by the vendor and/or manufacturer thereof; (b) furnish to
Lessor such information concerning the condition, location, use and operation
of the Equipment as Lessor may request; (c) permit any person designated by
Lessor to visit and inspect any Equipment and any records maintained in
connection therewith, provided, however, that the failure of Lessor to
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inspect the Equipment or to inform Lessee of any noncompliance shall not
relieve Lessee of any of its obligations hereunder; (d) if any Equipment
does not comply with the requirements of this Lease, Lessee shall, within 30
days of written notice from Lessor, bring such Equipment into compliance;
(e) not use any Equipment, nor allow the same to be used, for any unlawful
purpose, nor in connection with any property or material that would subject
the Lessor to any liability under any state or federal statute or regulation
pertaining to the production, transport, storage, disposal or discharge of
hazardous or toxic waste or materials; and (f) make no additions,
alterations, modifications or improvements (collectively, "IMPROVEMENTS") to
any item of Equipment that are not readily removable without causing
material damage to such item of Equipment or which will cause the value,
utility or useful life of such item of Equipment to materially decline. If
any such Improvement is made and cannot be removed without causing material
damage or decline in value, utility or useful life (a "NON-SEVERABLE
IMPROVEMENT"), then Lessee warrants that such Non-Severable Improvement
shall immediately become Lessor's property upon being installed and shall be
free and clear of all liens and encumbrances and shall become Equipment
subject to all of the terms and conditions of the Lease. All such
Improvements that are not Non-Severable Improvements shall be removed by
Lessee prior to the return of the item of Equipment hereunder or such
Improvements shall also become the sole and absolute property of Lessor
without any further payment by Lessor to Lessee and shall be free and clear
of all liens and encumbrances whatsoever. Lessee shall repair all damage to
any item of Equipment caused by the removal of any Improvement so as to
restore such item of Equipment to the same condition which existed prior to
its installation and as required by this Lease. Notwithstanding any
provision contained herein to the contray, provided no Event of Default has
occurred and remains uncured, Lessee may during the Term of a Lease
Schedule, exchange items of Equipment subject thereto for items of equipment
which are identical to such items of Equipment (same manufacturer, model
number, model year, features, capacity, year of manufacture and as otherwise
required by Lessor, "Substitute Equipment"), provided such Substitute
Equipment is not then subject to any other financing by Lessor and can be
made subject to the applicable Lease Schedule in the condition required
hereunder. Immediately upon such exchange, title to the Substitute Equipment
shall be conveyed to Lessor free from all liens and encumbrances, and such
Substitute Equipment shall be deemed items of Equipment for the purposes of
such Lease Schedule. Lessee shall promptly notify Lessor of any and all
exchanges and shall provide Lessor with any and all bills of sale and/or
other documentation as Lessor may deem necessary or prudent in order to
perfect Lessor's interest in the Substitute Equipment and confirm that the
Substitute Equipment is subject to the appropriate Lease Schedule. Upon
confirmation that the Substitute Equipment has been made subject to the
Lease Schedule and provided no Event of Default has occurred and remains
uncured, Lessor shall release its interest in the items of Equipment which
were the subject of the exchange.
Lessee hereby assumes all risk of loss, damage or destruction for
whatever reason to the Equipment from and after the earlier of the date
(i) on which the Equipment is ordered or (ii) Lessor pays the purchase price
of the Equipment, and continuing until the Equipment has been returned to,
and accepted by, Lessor in the condition required by Section 18 hereof upon
the expiration of the Lease Term. If during the Lease Term all or
4
any portion of an item of Equipment shall become lost, stolen, destroyed,
damaged beyond repair or rendered permanently unfit for use for any
reason, or in the event of any condemnation, confiscation, theft or seizure
or requisition of title to or use of such item, Lessee shall immediately
pay to Lessor an amount equal to the Stipulated Loss Value of such item
of Equipment, as of the next following Rental Payment Date.
13. INSURANCE
Lessee shall procure and maintain insurance in such amounts and upon
such terms and with such companies as Lessor may approve, such approval not
to be unreasonably withheld or delayed, during the entire Lease Term and
until the Equipment has been returned to, and accepted by, Lessor in the
condition required by Section 18 hereof, at Lessee's expense, provided that
in no event shall such insurance be less than the following coverages and
amounts: (a) Worker's Compensation and Employer's Liability Insurance, in the
full statutory amounts provided by law; (b) Comprehensive General Liability
Insurance including product/completed operations and contractual liability
coverage, with minimum limits of $1,000,000 each occurrence, and Combined
Single Limit Body Injury and Property Damage, $1,000,000 aggregate, where
applicable; and (c) All Risk Physical Damage Insurance, including earthquake
and flood, on each item of Equipment, in an amount not less than the greater
of the Stipulated Loss Value of the Equipment or (if available) its full
replacement value. Lessor will be included as an additional insured and loss
payee as its interest may appear. Such policies shall be endorsed to provide
that the coverage afforded to Lessor shall not be rescinded, impaired or
invalidated by any act or neglect of Lessee. Lessee agrees to waive Lessee's
right and its insurance carrier's rights of subrogation against Lessor for
any and all loss or damage. Provided no Event of Default has occurred
and remains uncured hereunder, Lessee may, except as set forth below,
self-insure for the risk of loss and/or damage to the Equipment described in
Section 13(c) above, to the extent it self insures similar equipment which
it owns or leases against loss and damage, and provided further that such
self-insurance program (i) is consistent with prudent industry practice with
respect to equipment similar to the Equipment, (ii) is primary, without right
of contribution from any insurance carried by Lessor and (iii) Lessee
guarantees payment to Lessor for any loss or damage to any item of Equipment.
Lessee agrees that if items of Equipment having an original cost of $1,000,000
are located in one facility at any time ("Equipment Concentration"), Lessee
shall procure the risk of loss insurance coverage described in (c) above for
such Equipment Concentration through an insurance provider acceptable to
Lessor and shall provide Lessor with evidence of such insurance coverage.
All policies shall be endorsed or contain a clause requiring the insurer
to use best efforts to furnish Lessor with at least 30 days' prior written
notice of any material change, cancellation or non-renewal of coverage. Upon
execution of this Lease, Lessee shall furnish Lessor with a certificate of
insurance or other evidence satisfactory to Lessor that such insurance
coverage is in effect, provided, however, that Lessor shall be under no duty
-------- -------
either to ascertain the existence of or to examine such insurance coverage or
to advise Lessee in the event such insurance coverage should not comply with
the requirements hereof. In case of failure of Lessee to procure or maintain
insurance, Lessor may at its option obtain such insurance, the actual cost of
which will be paid by the Lessee as additional rentals. Lessee hereby
irrevocably appoints Lessor, as Lessee's attorney-in-fact to file, settle or
adjust, and receive payment of claims under any such insurance policy and to
endorse Lessee's name on any checks, drafts or other instruments on payment
of such claims, provided, however, so long as no Event of Default has
occurred and remains uncured hereunder, Lessor shall permit Lessee to settle,
adjust and otherwise resolve insurance claims with respect to items of
Equipment. Lessee further agrees to give Lessor prompt notice of any damage
to or loss of, the Equipment, or any part thereof.
14. LIMITATION OF LIABILITY
Lessor shall have no liability in connection with or arising out of the
ownership, leasing, furnishing, performance or use of the Equipment (except
to the extent directly caused by Lessor's gross negligence or willful
misconduct) or any special, indirect, incidental or consequential damages of
any character, including, without limitation, loss of use of production
facilities or equipment, loss of profits, property damage or lost production,
whether suffered by Lessee or any third party.
15. FURTHER ASSURANCES
Lessee shall promptly execute and deliver to Lessor such further
documents and take such further action as Lessor may require in order to
more effectively carry out the intent and purpose of this Lease. Lessee
shall provide to Lessor, within 120 days after the close of each of Lessee's
fiscal years, and, upon Lessor's request, within 45 days of the end of each
quarter of Lessee's fiscal year, a copy of its financial statements prepared
in accordance with generally accepted accounting principles and, in the case
of annual financial statements, audited by independent certified public
accountants, and in the case of quarterly financial statements certified by
Lessee's chief financial officer. Lessee shall execute and deliver to Lessor
upon Lessor's request any and all schedules, forms and other reports and
information as Lessor may deem necessary or appropriate to respond to
requirements or regulations imposed by any governmental authorities. Lessee
shall execute and deliver to Lessor upon Lessor's request such further and
additional documents, instruments and assurances as Lessor reasonably deems
necessary (a) to acknowledge and confirm, for the benefit of Lessor or any
assignee or transferee of any of Lessor's rights, title and interests
hereunder (an "ASSIGNEE"), all of the terms and conditions of all or any
part of this Lease and Lessor's or Assignee's rights with respect thereto,
and Lessee's compliance with all of the terms and provisions hereof and (b)
to preserve, protect and perfect Lessor's or Assignee's right, title or
interest hereunder and in any Equipment, including, without limitation, such
UCC financing statements or amendments, corporate resolutions, certificates
of compliance, notices of assignment or transfers of interests, and
restatements and reaffirmations of Lessee's obligations and its
representations and warranties with respect thereto as of the dates
requested by Lessor from time to time. In furtherance thereof, Lessor may
file or record this Lease or a memorandum or a photocopy hereof (which for
the purposes hereof shall be effective as a financing statement) so as to
give notice to third parties, and Lessee hereby appoints Lessor as its
attorney-in-fact to execute, sign, file and record UCC financing statements
and other lien recordation documents with respect to the Equipment where
Lessee fails or refuses to do so after Lessor's written request, and Lessee
agrees to pay or reimburse Lessor for any filing, recording or stamp fees or
taxes arising from any such filings. Lessor may file or record a memorandum
of this Lease so as to give notice to third parties.
16. ASSIGNMENT
This Lease and all rights of Lessor hereunder shall be assignable by
Lessor absolutely or as security, without notice to Lessee, subject to the
rights of Lessee hereunder for the use and possession of the Equipment for so
long as no Event of Default has occurred and is continuing hereunder. Any
such assignment shall not relieve Lessor of its obligations hereunder unless
specifically assumed by the assignee, and LESSEE AGREES IT SHALL NOT ASSERT
ANY DEFENSE, RIGHTS OF SET-OFF OR COUNTERCLAIM AGAINST ANY ASSIGNEE TO WHICH
LESSOR SHALL HAVE ASSIGNED ITS RIGHTS AND INTERESTS HEREUNDER, NOR HOLD OR
ATTEMPT TO HOLD SUCH ASSIGNEE LIABLE FOR ANY OF LESSOR'S OBLIGATIONS
HEREUNDER. No such assignment shall materially increase Lessee's obligations
hereunder. LESSEE SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS RIGHTS OR
OBLIGATIONS UNDER THIS LEASE OR ENTER INTO ANY SUBLEASE WITH RESPECT TO ANY
OF THE EQUIPMENT WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF LESSOR WHICH
WILL NOT BE UNREASONABLY WITHHELD OR DELAYED.
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17. LESSEE'S OBLIGATION UNCONDITIONAL
This Lease is a net lease and Lessee hereby agrees that it shall not be
entitled to any abatement of rents or of any other amounts payable hereunder
by Lessee, and that its obligation to pay all rent and any other amounts
owing hereunder shall be absolute and unconditional under all circumstances,
including, without limitation, the following circumstances: (i) any claim by
Lessee to any right of set-off, counterclaim, recoupment, defense or other
right which Lessee may have against Lessor, any seller or manufacturer of any
Equipment or anyone else for any reason whatsoever; (ii) the existence of any
liens, encumbrances or rights of others whatsoever with respect to any
Equipment, whether or not resulting from claims against Lessor not related to
the ownership of such Equipment; or (iii) any other event or circumstances
whatsoever. Each Rental Payment or other amount paid by Lessee hereunder
shall be final and Lessee will not seek to recover all or any part of such
payment from Lessor for any reason whatsoever.
18. RETURN OF EQUIPMENT
Upon the expiration or earlier termination of the Lease Term with
respect to any Equipment, and provided that Lessee has not validly exercised
any purchase option with respect thereto, Lessee shall: (a) return the
Equipment to a location and in the manner designated by the Lessor within the
continental United States and no more than 1,000 miles from the location of
such Equipment while being used by Lessee, including, as reasonably required
by Lessor, securing arrangements for the disassembly and packing for shipment
by an authorized representative of the manufacturer of the Equipment,
shipment with all parts and pieces on a carrier designated or approved by
Lessor, and then reassembly (including, if necessary, repair and overhaul) by
such representative at the return location in the condition the Equipment is
required to be maintained by the Lease and in such condition as will make the
Equipment immediately able to perform all functions for which the Equipment
was originally designed (or as upgraded during the Lease Term), and
immediately qualified for the manufacturer's (or other authorized servicing
representative's) then-available service contract or warranty; (b) cause the
Equipment to qualify for all applicable licenses or permits necessary for its
operation for its intended purpose and to comply with all specifications and
requirements of applicable federal, state and local laws, regulations and
ordinances; (c) upon Lessor's request, provide suitable storage, acceptable
to Lessor, for the Equipment for a period not to exceed 90 days from the date
of return; (d) cooperate with Lessor in attempting to remarket the Equipment,
including display and demonstration of the Equipment to prospective
purchasers or lessees, and allowing Lessor to conduct any private or public
sale or auction of the Equipment on Lessee's premises. All costs incurred in
connection with any of the foregoing shall be the sole responsibility of the
Lessee. During any period of time from the expiration or earlier termination
of the Lease until the Equipment is returned in accordance with the
provisions hereof or until Lessor has been paid the applicable purchase
option price if any applicable purchase option is exercised, Lessee agrees to
pay to Lessor additional per diem rent ("HOLDOVER RENT"), payable promptly on
demand in an amount equal to 100% of the highest monthly Rental Payment
payable during the Lease Term divided by 30, provided, however, that nothing
-------- -------
contained herein and no payment of Holdover Rent hereunder shall relieve
Lessee of its obligation to return the Equipment upon the expiration or
earlier termination of the Lease.
19. RELATED LEASE SCHEDULES
"RELATED LEASE SCHEDULES" means and refers to Leases covering Equipment
intended to be or which otherwise becomes attached to, affixed to, or used in
connection with other Equipment subject to any other Lease hereunder. Lessee
agrees that if: (a) if Lessee elects to exercise any purchase option, early
termination option, renewal option, purchase obligation or early purchase
option under any Related Lease Schedule; or (b) Lessee elects to return the
Equipment under any Related Lease Schedule in accordance therewith, then, in
----
either case, Lessor shall have the right, in its sole discretion, to require
Lessee to elect the same or similar disposition for all Equipment subject and
pursuant to the terms and provisions of one or more other Related Lease
Schedules.
20. TAX INDEMNIFICATION
20.1 This Lease has been entered into by Lessor and Lessee under the
assumption that Lessor or its affiliated group ("Affiliated Group"), as
defined in Section 1504 of the Internal Revenue Code of 1986, as amended,
(the "Code") will be treated as the owner of the Equipment and will be
entitled to such deductions and other benefits that are provided by the Code
including, without limitation, deductions for the recovery of the Acquisition
Cost of the Equipment, over the recovery period ("Recovery Period") set forth
on the applicable Equipment Schedule, using the Modified Accelerated Cost
Recovery System as provided by Section 168 of the Code ("MACRS Deductions").
Notwithstanding such assumption, Lessee shall not be liable to Lessor in the
event that such assumption (or any part thereof) is determined to be
incorrect, except as provided in Section 20.3(a) hereof.
20.2 Lessee represents, covenants and warrants the following: (a)
Neither Lessee, nor any affiliate of Lessee, nor any other party since the
Lease Term Commencement Date (i) has claimed or will claim any MACRS
Deductions, or any other deductions in the nature of cost recovery or
depreciation with respect to the Equipment, or (ii) has made or will make
any election under the Code regarding the method or the period for cost
recovery or deductions for personal property which will be binding upon
Lessor and which will adversely affect the assumptions set forth in Section
20.1 above with respect to the Equipment or (iii) shall, at any time, take
any action or file any returns or other documents inconsistent with the
assumptions set forth in Section 20.1 above, provided that entering into
this Lease shall not be construed as an inconsistent action within the
meaning of this Subsection (iii). (b) In the event the Equipment has been
sold to Lessor by Lessee and leased back from Lessor by Lessee, such
Equipment does not constitute property placed in service in a churning
transaction within the meaning of Section 168(f)(5) of the Code. (c) The
Equipment has not been manufactured or produced in any foreign country which
is subject to an Executive Order of the President of the United States that
would deny the availability of MACRS Deductions to Lessor. (d) The
Acquisition Cost of the Equipment does not exceed the fair market value of
the Equipment. (e) When delivered and accepted under the Lease, the
Equipment will not require any improvements, modifications, or additions
(other than ancillary or incidental items of removable equipment) in order
to be rendered complete for its intended use by Lessee. (f) At the time the
Equipment is accepted under the Lease, Lessee and, if applicable, any member
of its Affiliated Group shall have been fully reimbursed for any portion of
the Acquisition Cost of the Equipment which it may have furnished;
furthermore, on the applicable Lease Term Commencement Date and during the
Lease Term, neither Lessee nor any member of its Affiliated Group shall have
any investment in the Equipment. (g) The Equipment will be placed in service
on the applicable Lease Term Commencement Date and will be used in a trade
or business or will be held for the production of income within the meaning
of Section 167 of the Code. (h) From the applicable Lease Term Commencement
Date and during the Lease Term, the Equipment will constitute and will be
treated as (i) "recovery property" within the meaning of Section 168 of the
Code, and (ii) property with the Recovery Period set forth in the applicable
Equipment Schedule determined in accordance with Section 168(c) of the Code.
(i) From the applicable Lease Term Commencement Date and during the Lease
Term, the Equipment will not constitute, or be treated as, (i) "tax exempt
use property" within the meaning of Section 168(h) of the Code which would
cause Lessor to fail to realize, lose, or suffer diminution, deferral, or
recapture of any of the MACRS Deductions described in Section 18.1 above, or
(ii) "limited use property" within the meaning of Rev. Proc. 2001-26,
2001-19 I.R.B. (j) During the Lease Term, the Equipment will not be used
"predominantly
6
outside the United States" within the meaning of Section 168(g)(4) of the
Code. (k) During the Lease Term, Lessor shall not be required to include in
its gross income for Federal income tax purposes any amount derived from the
cost of any alteration, addition, improvement, modification, replacement, or
substitution of the Equipment (unless such alteration, addition,
improvement, modification, replacement or substitution is required by the
provisions of this Lease) or from any refund or credit from the manufacturer
or supplier of the Equipment.
20.3 A tax loss ("Tax Loss") shall be deemed to have occurred under
this Section 18 if Lessor or its Affiliated Group, for Federal income tax
purposes, shall not be entitled to, shall not be allowed, shall suffer
recapture of or shall lose any of the MACRS Deductions, as a result of:
(a) Lessee's breach of, or its failure to comply with, any representation,
covenant, or warranty set forth in Section 20.2 above, or the inaccuracy of
any such representation; (b) the occurrence of an Event of Default as defined
in Section 8 of the Master Lease; (c) the replacement, substitution, loss,
seizure, condemnation, destruction or governmental requisitioning of the
Equipment; or (d) any act (whether or not permitted or required under this
Master Lease) or any omission of Lessee, any affiliate of Lessee, any
sublessee or assignee of Lessee, or any entity, other than Lessor, having
possession control or use of the Equipment (whether or not such possession,
control or use may be authorized or unauthorized).
20.4 (a) Except as provided in Sections 20.4(b), if a Tax Loss occurs,
then Lessee shall pay to Lessor, upon demand a sum to be computed by Lessor
in the following manner. Such sum, after deduction of all Federal, state and
local income taxes payable by Lessor as a result of the receipt of such
sum, shall be sufficient to restore Lessor or its Affiliated Group to
substantially the same position, on an after-tax basis, as it would have
been in but for the loss of such MACRS Deductions. In making its computation,
Lessor or its Affiliated Group shall consider, but shall not be limited to,
the following factors: (i) the amounts and timing of any net loss of tax
benefits resulting from any such lack of entitlement to or loss, recapture,
or disallowance of MACRS Deductions but offset by any tax benefits derived
from any depreciation or other capital recovery deductions or exclusions
from income allowed to Lessor or its Affiliated Group with respect to the
same Equipment; (ii) penalties, interest or other charges imposed;
(iii) difference in tax years involved; and (iv) the time value of money at
a reasonable rate determined, in `good faith', by Lessor. For purposes of
computation only, the amount of indemnification payments hereunder shall be
calculated on the assumption that Lessor and its Affiliated Group have or
will have, in all tax years involved, sufficient taxable income and tax
liability to realize all tax benefits and incur all losses of tax benefits at
the highest marginal Federal corporate income tax rate in each year. Upon
request, Lessor shall provide Lessee with the methods of computation used
in determining any sum that may be due and payable by Lessee under this
Section 20. (b) If Lessor shall suffer a Tax Loss with respect to the
Equipment, Lessee shall not be required to make any indemnity payment to
Lessor provided for in this Section 20 unless Lessor shall have received
either (i) written advice from the Internal Revenue Service of a proposed
disallowance or adjustment which gives rise to an indemnity obligation under
this Section 20 and, in the event Lessee has requested Lessor to contest such
disallowance or adjustment pursuant to Section 20.5 and except for any
provisional payment required thereunder, the expiration or abandonment of any
such contest shall have occurred, or (ii) an opinion of independent tax counsel
selected by Lessor and reasonably acceptable to Lessee which opinion provides
that there is no reasonable basis to claim such MACRS Deductions, or to avoid
reporting such recapture income. In the case of a Tax Loss arising by reason
of any refund or credit described in Section 20.2(k), Lessor agrees, on the
date on which a tax adjustment is made, to adjust the Monthly Rent payable
by Lessee under this Lease to reflect the decreased Acquisition Cost resulting
from such credit or refund (including any refund due on prior rents paid by
Lessee hereunder).
20.5(a) Upon receipt by Lessor of written advice from the Internal
Revenue Service of a proposed disallowance or adjustment which gives rise to
an indemnity obligation under this Section 18 (the "Claim"), Lessor will
notify Lessee in writing. Upon the written request of Lessee which must be
received by Lessor within 45 days of such notice, Lessor shall contest the
Claim provided that (i) an Event of Default under Section 8 of this Master
Lease has not occurred and is continuing, (ii) Lessee has furnished Lessor
with a written opinion of independent tax counsel acceptable to Lessor to
the effect that there is a meritorious defense to the Claim, and (iii)
Lessee shall have agreed, in writing, to pay Lessor, on demand and
regardless of the outcome, all expenses which Lessor may incur in contesting
the Claim including, without limitation, legal and accounting fees. Lessor
shall, thereupon, contest the Claim in any permissible forum selected by
Lessor either by resisting payment of the Claim or by making payment of the
Claim and suing for a refund. If Lessor determines to pay the Claim and ▇▇▇
for a refund, Lessee shall, within 10 days of Lessor's written request, pay
to Lessor an amount equal to the sum, on an after-tax basis, of the Claim
which the Internal Revenue Service requires to be paid. During any
proceedings in connection with the Claim, Lessor shall control all
negotiations and litigation but shall, from time to time, consult with
Lessee or its counsel. Upon any adverse decision on the Claim in the forum
chosen by Lessor, Lessor shall institute an appeal if requested to do so by
Lessee provided that independent tax counsel acceptable to Lessor furnishes
Lessor with a written opinion to the effect that there is a meritorious
basis for an appeal. Notwithstanding the foregoing, Lessor shall not be
obligated to appeal any such adverse decision beyond the United States
District Courts or the United States Tax Court. (b) A "Final Determination"
of the Claim means a final decision of the Internal Revenue Service or a
court of competent jurisdiction after all contests or appeals requested by
Lessee pursuant to Section 20.5(a) have been either exhausted or terminated
as may be agreed upon by Lessor and Lessee. If the Final Determination of
the Claim is all or partly adverse to Lessor, the liability, of Lessee to
indemnify Lessor shall be fixed and payable as provided in Section 20.4
provided, however, that Lessor shall credit Lessee with any amounts
previously paid by Lessee under Section 20.5(a) above. If the Final
Determination of the Claim is all or partly in favor of Lessor, then Lessor,
upon receipt of any refund from the Internal Revenue Service, shall
reimburse Lessee the portion of such refund which exceeds the indemnity
obligation of Lessee under this Section 20 with respect to any portion of
the Claim not resolved in favor of Lessor. (c) Notwithstanding the
provisions of this Section 20.5, Lessor may decline to contest all or any
portion of the Claim upon written notice to Lessee and Lessee shall
thereupon be relieved of its obligation to indemnify Lessor under this
Section 20 with respect to the portion of the Claim described in the notice.
(d) Nothing in this Section 20.5 shall be construed as granting any right to
Lessee to request a contest of any lack of entitlement to, or any loss,
disallowance or recapture of MACRS Deductions arising in connection with
events described in the second paragraph of Section 12 of the Master Lease,
or from a sale or other disposition of the Equipment upon an Event of
Default as set forth in Section 8 of the Master Lease.
20.6 The representations, obligations and indemnities of Lessee under
this Section 20 shall continue in full force and effect, notwithstanding the
expiration or other termination of this Lease.
21. MISCELLANEOUS; ENFORCEABILITY AND GOVERNING LAW
The term "LESSEE" as used in the Lease shall mean and include any and
all Lessees who sign below, each of whom shall be jointly and severally
liable under the Lease. This Master Lease will not be binding on Lessor until
accepted and executed by Lessor, notice of which is hereby waived by Lessee.
Any waiver of the terms hereof shall be effective only in the specific
instance and for the specific purpose given. Time is of the essence in the
payment and performance of all of Lessee's obligations under the Lease. The
captions in this Lease are for convenience only and shall not define or limit
any of the terms hereof.
Any provisions of this Lease which are unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
unenforceability without invalidating the remaining provisions hereof, and
any such unenforceability in any jurisdiction shall not render unenforceable
such provisions in any other jurisdiction. To the extent permitted by
applicable law, Lessee hereby waives; (a) any provisions of law which
render any provision hereof unenforceable in any respect; (b) all rights
and remedies under Rhode Island General Laws Sections 6A-2.1-508 through 522
or corresponding provisions of the Uniform Commercial Code article or division
pertaining to personal property leasing in any jurisdiction in which
enforcement of this Lease is sought.
THIS LEASE AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF RHODE ISLAND, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF
LAW. LESSEE HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF RHODE ISLAND AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
RHODE ISLAND FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING
OUT OF ITS OBLIGATIONS HEREUNDER, AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT
MAY HAVE TO THE VENUE OF SUCH COURTS. LESSEE HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS
LEASE. Any action by Lessee against Lessor for any cause of action relating
to this Lease shall be brought within one year after any such cause of action
first arises.
THIS LEASE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES CONCERNING
THE LEASE OF THE EQUIPMENT AND CONSTITUTES THE ENTIRE AGREEMENT BETWEEN
THE PARTIES SUPERSEDING ANY AND ALL CONFLICTING TERMS OR PROVISIONS OF ANY
PRIOR PROPOSALS, COMMITMENT LETTERS, TERM SHEETS OR OTHER AGREEMENTS OR
UNDERSTANDINGS BETWEEN THE PARTIES. THIS LEASE MAY NOT BE CONTRADICTED BY
EVIDENCE OF (i) ANY PRIOR WRITTEN OR ORAL AGREEMENTS OR UNDERSTANDINGS, OR
(ii) ANY CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS
BETWEEN THE PARTIES, AND LESSEE ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL
OR WRITTEN AGREEMENTS OR UNDERSTANDINGS EXIST AS OF THE DATE OF THIS LEASE.
THIS LEASE MAY NOT BE AMENDED, NOR MAY ANY RIGHTS UNDER THE LEASE BE WAIVED,
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY CHARGED WITH SUCH
AMENDMENT OR WAIVER.
Executed and delivered by duly authorized representatives of the parties
hereto as of the date set forth below.
DATED AS OF: AUGUST 22, 2001
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FLEET CAPITAL CORPORATION ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------- -----------------------------
Title: Vice-President Title: Principal
----------------------------- -----------------------------
Lessee's Taxpayer ID #:▇▇-▇▇▇▇▇▇▇
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