Exhibit 10.4
MASTER LEASE AGREEMENT
(Quasi)
Dated as of November 6, 2001 ("Agreement")
THIS AGREEMENT is between General Electric Capital Corporation (together with
its successors and assigns, if any, "Lessor") and Ortec International Inc.
("Lessee"). Lessor has an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇.
Lessee is a corporation organized and existing under the laws of the state of
Delaware. Lessee's mailing address and chief place of business is Audubon
Business and Tech, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇. ▇▇ ▇▇▇▇▇. This Agreement contains
the general terms that apply to the Leasing of Equipment from Lessor to Lessee.
Additional terms that apply to the Equipment (term, rent, options, etc) shall be
contained on a schedule ("Schedule").
1. LEASING
(a) Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor,
the equipment and other property ("Equipment") described in any Schedule signed
by both parties,
(b) Lessor shall purchase Equipment from the manufacturer or supplier
("Supplier") and lease it to Lessee if on or before the Last Delivery Date
(specified in the Schedule) Lessor receives (i) a Schedule for the Equipment,
(ii) evidence of insurance which complies with the requirements of Section 8.
and (iii) such other documents as Lessor may reasonably request. Each of the
documents required above must be in form and substance satisfactory to Lessor.
Lessor hereby appoints Lessee its agent for inspection and acceptance of the
Equipment from the Supplier. Once the Schedule is signed, the Lessee may not
cancel the Schedule.
2. TERM. RENT AND PAYMENT
(a) The rent payable for the Equipment and Lessee's right to use the Equipment
shall begin on the earliest of (i) the date when the Lessee signs the Schedule
and accepts the Equipment or (ii) when Lessee has accepted the Equipment under a
Certificate of Acceptance ("Lease Commencement Date"). The term of this
Agreement shall be the period specified in the applicable Schedule. The word
"term" shall include all basic and any renewal terms.
(b) Lessee shall pay rent to Lessor at its address stated above, except as
otherwise directed by Lessor. Rent payments shall be in the amount set forth in,
and due as stated in the applicable Schedule. If any Advance Rent (as stated in
the Schedule) is payable, it shall be due when the Lessee signs the Schedule.
Advance Rent shall be applied to the first rent payment and the balance, if any,
to the final rent payment(s) under such Schedule. In no event shall any Advance
Rent or any other rent payments be refunded to Lessee. If rent is not paid
within fifteen (15) days of its due date, Lessee agrees to pay a late charge of
five cents ($.05) per dollar on, and in addition to, the amount of such rent but
not exceeding the lawful maximum, if any.
(c) Lessor shall not disturb Lessee's quiet enjoyment of the Equipment during
the term of the Agreement unless default has occurred and is continuing under
this Agreement.
3. TAXES
(a) If permitted by law, Lessee shall report and pay promptly all taxes, fees,
and assessments due, imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing, possession, use or operation thereof),
this Agreement (or as rents or receipts hereunder), any Schedule, Lessor or
Lessee by any governmental entity or taxing authority during or related to the
term of this Agreement, including, without limitation, all license and
registration fees, and all sales, use, personal property, excise, gross
receipts, franchise, stamp or other taxes, imposts, duties and charges, together
with any penalties, fines or interest thereon (collectively "Taxes"). Lessee
shall have no liability for Taxes imposed by the United States of America or any
State or political subdivision thereof which are on or measure by the net income
of Lessor. Lessee shall promptly reimburse Lessor (on an after tax basis) for
any Taxes charged to or accessed against Lessor. Lessee shall send Lessor a copy
of each report or return and evidence of Lessee's payment of Taxes upon request.
(b) Lessee's obligations, and Lessor's rights and privileges, contained in this
Section 3 shall survive the expiration or other termination of this Agreement.
4. REPORTS
(a) If any tax or other lien shall attach to any Equipment, Lessee will notify
Lessor in writing, within ten (10) days after Lessee becomes aware of the tax or
lien. The notice,; shall include the full particulars of the tax or lien and the
location of such Equipment on the date of the notice.
(b) Lessee will deliver to Lessor Lessees complete financial statements,
certified by a recognized firm of certified public accountants, within ninety
(90) days of the close of each fiscal year of Lessee. If Lessor requests, Lessee
will deliver to Lessor copies of Lessee's quarterly financial report certified
by the chief financial officer of Lessee, within ninety (90) days of the close
of each fiscal quarter of Lessee. Lessee will deliver to Lessor all Forms 10-K
and 10Q, if any, filed with the Securities and Exchange Commission within thirty
(30) days after the date on which they are filed.
(c) Lessor may inspect any Equipment during normal business hours after giving
Lessee reasonable prior notice.
(d) Lessee will keep the Equipment at the Equipment Location (specified in the
applicable Schedule) and will give Lessor prior written notice of any relocation
of Equipment. If Lessor requests, Lessee will promptly notify Lessor in writing
of the location of any Equipment.
(e) If any Equipment is lost or damaged (where the estimated repair costs would
exceed the greater often percent (10%) of the original Equipment cost or ten
thousand and 00/100 dollars ($10,000) or is otherwise involved in an accident
causing personal injury or property damage, Lessee will promptly and fully
report the event to Lessor in writing.
(f) Lessee will furnish a certificate of an authorized officer of Lessee stating
that he has reviewed the activities of the Lessee and that, to the best of his
knowledge, there exists no default or event which with notice or lapse of time
(or both) would become such a default within thirty(30) days after any request
by Lessor,
(g) Lessee will promptly notify Lessor of any change in Lessee's state of
incorporation or organization.
5. DELIVERY, USE AND OPERATION
(a) All Equipment shall be shipped directly from the Supplier to Lessee
(b) Lessee agrees that the Equipment wi1 be used by Lessee solely in the conduct
of its business and in a manner complying with all applicable laws, regulations
and insurance policies, and Lessee shall not discontinue use of the Equipment.
(c) Lessee will not move any equipment from the location specified on the
Schedule, without prior written consent of Lessor.
(d) Lessee will keep the Equipment free and clear of all lines and encumbrances
other than those which result from acts of Lessor.
(e) Lessor shall not disturb Lessees quiet enjoyment of the Equipment during the
term of the Agreement unless default has occurred and is continuing under this
Agreement.
6. MAINTENANCE
(a) Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order and repair, normal wear and tear excepted. The Lessee shall also
maintain the equipment in accordance with manufacturers recommendations. Lessee
shall make all alterations or modifications required, comply with any applicable
law, rule or regulation during the term of this Agreement. If Lessor requests,
Lessee shall affix plates, tags, or other identifying labels showing ownership
thereof by Lessee and Lessor's security interest therein. The tags or labels
shall be placed in a prominent position on each unit of Equipment
(b) Lessee will not attach or install anything on the Equipment that will impair
the originally intended function or use of such Equipment without the prior
written consent of Lessor. All additions, parts, supplies, accessories, and
equipment ("Additions") furnished or attached to any Equipment that are not
readily removable shall become subject to the lien of Lessor. All Additions
shall be made only in compliance with applicable law. Lessee will not attach or
install any Equipment to or in any other personal or real property without the
prior written consent of Lessor.
7. STIPULATED LOSS VALUE
If for any reason any unit of Equipment becomes worn out, lost, stolen,
destroyed, irreparably damaged or unusable ("Casualty Occurrences") Lessee shall
promptly and fully notify Lessor in writing. Lessee shall pay Lessor the sum of
(i) the Stipulated Loss Value (see Schedule) of the affected unit determined as
of the rent payment date prior to the Casualty Occurrence; and (ii) all rent and
other amount which are then due under this Agreement on the Payment Date
(defined below) for the affected unit. The Payment Date shall be the next rent
payment date after the Casualty Occurrence. Upon payment of all sums due
hereunder, the term of this lease as to such unit shall terminate.
8. INSURANCE
(a) Lessee shall bear the entire risk of any loss, theft, damage to or
destruction of any unit of Equipment from any cause whatsoever from the time the
Equipment is shipped to Lessee.
(b) Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts and against such hazards as Lessor may reasonably require. All such
policies shall be with companies, and on terms, reasonably satisfactory to
Lessor. The insurance shall include coverage for damage to or loss of the
Equipment, liability for personal injuries, death, or property damage. Lessor
shall be named as additional insured with a loss payable clause in favor of
Lessor, as its interest may appear, irrespective of any breach of warranty or
other act or omission of Lessee. The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION US DOLLARS($1,000,00000)
total liability per occurrence, unless otherwise stated in any Schedule. The
casualty/property damage coverage shall be in an amount equal to the higher of
the Stipulated Loss value or the full replacement cost of the Equipment. No
insurance shall be subject to any co-insurance clause. The insurance policies
shall provide that the insurance may not be altered or canceled by the insurer
until after thirty (30) days written notice to Lessor. Lessee agrees to deliver
to Lessor evidence of insurance reasonably satisfactory to Lessor.
(c) Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make proof of
loss and claim for insurance, and to make adjustments with insurers and to
receive payment of and execute and endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessees attorney-in-
fact unless Lessee is in default. Lessee shall pay any reasonable expenses of
Lessor inadjusting or collecting insurance. Lessee will not make adjustments
with insurers except with respect to claims for damage to any unit of Equipment
where the repair costs are less than the lesser of ten percent (10%) of the
original Equipment cost or ten thousand and 00/100 dollars ($10,000). Lessor
may, at its option, apply proceeds of insurance, in whole or in part, to (i)
repair or replace Equipment or any portion thereof, or (ii) satisfy any
obligation of Lessee to Lessor under this Agreement.
9. RETURN OF EQUIPMENT
(a) At the expiration or termination of this Agreement or any Schedule, Lessee
shall perform any testing and repairs required to place the units of Equipment
in the same condition and appearance as when received by Lessee (reasonable wear
and tear excepted) and in good working order for
the original intended purpose of the Equipment. If required the units of
Equipment shall be deinstalled, disassembled and crated by an authorized
manufacturer's representative or such other service person as it is reasonably
satisfactory to Lessor. Lessee shall remove installed markings that are not
necessary for the operation, maintenance or repair of the Equipment. All
Equipment will be cleaned, cosmetically acceptable, and in such condition as to
be immediately installed into use in a similar environment for which the
Equipment was originally intended to be used. All waste material and fluid must
be removed from the Equipment and disposed of in accordance with then current
waste disposal laws. Lessee shall return the units of Equipment to a location
within the continental United States as Lessor shall direct. Lessee shall obtain
and pay for a policy of transit insurance for the redelivery period in an amount
equal to the replacement value of the Equipment. The transit insurance must name
Lessor as the loss Payee. The Lessee shall pay for all costs to comply with this
section (a).
(b) Until Lessee has fully complied with the requirements of Section9(a) above,
Lessee's rent payment obligation and all other obligations under this
notwithstanding any expiration or termination of the lease term, Lessor may
terminate the Lessee's right to use the Equipment upon ten (10) days notice to
the Lessee.
(c) Lessee shall provide to Lessor a detailed inventory of all components of the
Equipment including model and serial numbers. Lessee shall also provide an
up-to-date copy of all other documentation pertaining to the Equipment. All
service manuals, blue prints, process flow diagrams, operating manuals,
inventory and maintenance records shall be given to Lessor at least ninety(90)
days and not more than one hundred twenty (120) days prior to lease termination.
(d) Lessee shall make the equipment available for on-site operational
inspections by potential purchases at least one hundred twenty (120) days prior
to and continuing up to lease termination. Lessor shall provide Lessee with
reasonable notice prior to any inspection. Lessee shall provide personnel,
power, and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment.
10. DEFAULT AND REMEDIES
(a) Lessor may in writing declare this Agreement in default if: (i) Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section8; (iii) Lessee breaches any of its other obligations
and fails to cure its breach within thirty (30) days after written notice from
Less; (iv) any representation or warranty made by Lessee in connection with this
Agreement shall be false or misleading in any material respect; (v) Lessee or my
guarantor or other obligor for the Lessee obligations hereunder ("Guarantor")
becomes insolvent or ceases to do business as a going concern; (vi) any
Equipment is illegally used; (vii) if Lessee or any Guarantor is a natural
person, any death or incompetency of Lessee or such Guarantor; or (viii) a
petition is filed by or against Lessee or any Guarantor under any bankruptcy or
insolvency laws and in the event of an involuntary petition, the petition is not
dismissed within forty-five (45) days of the filing date. The default
declaration shall apply to all Schedules unless specifically excepted by Lessor.
(b) After a default, at the request of Lessor, Lessee shall comply with the
provisions of Section 9(a). Lessee hereby authorizes Lessor to peacefully enter
any premises where any Equipment may be and take possession of the Equipment.
Lessee shall immediately pay to Lessor without further demand as liquidated
damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of
the Equipment (calculated as of the rent payment date prior to the declaration
of default), and all rents and other sums then due under this Agreement and all
Schedules. Lessor may terminate this Agreement as to any or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may but shall not be required to sell Equipment at private or public
sale, in bulk or in parcels, with or without notice, and without having the
Equipment present at the place of sale. Lessor may also, but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment. Lessor may use Lessee's premises for a reasonable period of time for
any or all of the purposes stated above without liability for rent,
costs/damages or otherwise. The proceeds of sale, lease or other disposition, if
any, shall be applied in the following order of priorities: (i) to pay all of
Lessor's costs, charges, and expenses incurred in taking, removing, holding,
repairing and selling, leasing or otherwise disposing of Equipment; then, (ii)
to the extent not previously paid by Lessee, to pay Lessor all sums due from
lessee under this Agreement; then (iii) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and then (iv) to Lessee, if
there exists any surplus, Lessee shall immediately pay any deficiency ill (i)
and (ii) above.
(c) The foregoing remedies are cumulative, and any or all thereof may be
exercised instead of or in addition to each other or any remedies at law, in
equity, or under statutes. Lessor's waives notice of sale or other disposition
(and the time and place thereof), and the manner and place of any advertising.
Lessee shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, defense or preservation of Lessor's rights and remedies
under this Agreement, or if prohibited by law, such lesser sum as may be
permitted. Waiver of any default shall not be a waiver of any other or
subsequent default.
(d) Any default under the terms of this or any other agreement Lessor and Lessee
may be declared by Lessor a default under this and any such other agreement.
11. ASSIGNMENT
LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY EQUIPMENT OR THE
INTEREST OF LESSEE IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
Lessor may, without the consent of Lessee, assign this Agreement, any Schedule
or the right to enter into a Schedule. Lessee agrees that if Lessee receives
written notice of an assignment from Lessor, Lessee will pay all rent and all
other amounts payable under any assigned Schedule to such assignee or as
instructed by Lessor. Lessee also agrees to confirm in writing receipt of the
notice of assignment as may be reasonably requested by assignee. Lessee hereby
waives and agrees not to assert against any such assignee any defense, set-off,
recoupment claim or counterclaim which Lessee has or may at any time have
against Lessor for any reason whatsoever.
12. NET LEASE
Lessee is unconditionally obligated to pay all rent and other amount due for the
entire lease term no matter what happens, even if the Equipment is damaged or
destroyed, if it is detective or if lessee no longer can use it Lessee is not
entitled to reduce or set-off against rent or other amounts due to Lessor or to
anyone to whom Lessor assigns this Agreement or any Schedule whether Lessee's
claim arises out of this Agreement, any Schedule, any statement by Lessor,
Lessor's liability or any manufacturers liability, strict liability, negligence
or otherwise
13. INDEMNIFICATION
(a) Lessee hereby agrees to indemnify Lessor, its agents, employees, successors
and assigns (on an after tax basis) from and against any and all losses,
damages, penalties. Injuries, claims, actions, and suits including legal
expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Agreement, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Lessor's
gross negligence or willful misconduct ("Claims"). This indemnity shall include,
but is not limited to, Lessor's strict liability in tort and claims, arising out
of (i) the selection, Manufacture, purchase, acceptance or rejection of
Equipment, the ownership of Equipment during the term of this Agreement, and the
delivery, lease, possession, maintenance, uses, condition, return or operation
of Equipment (including, without limitation, latent and other defects, whether
or not discoverable by Lessor or Lessee and any claim for patent, trademark or
copyright infringement or environmental damage) or (ii) the condition of
Equipment sold or disposed of after use by Lessee, any sublessee or employees of
Lessee. Lessee shall, upon request, defend any actions based on, or arising out
of, any of the foregoing.
(b) All of Lessor's rights, privileges and indemnities contained in this Section
1.3 shall survive the expiration or other termination of this Agreement. The
rights, privileges and indemnities contained herein are expressly made for the
benefit of, and, shall be enforceable by Lessor, its successors and assigns.
14. DISCLAIMER
LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY ASSISTANCE
FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT MADE, NOR
SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANT OR REPRESENTATION, EITHER
EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED UNDER
THIS AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY,
PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All such risks, as
between Lessor and Lessee, are to be borne by Lessee. Without limiting the
forgoing, Lessor shall have no responsibility or liability to Lessee or any
other person with respect to any of the following: (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Equipment,
any inadequacy thereof, any
deficiency or defect (latent or otherwise) of the Equipment, or any other
circumstance in connection with the Equipment; (ii) the use, operation or
performance of any Equipment Dr any risks relating In it; (iii) any interruption
of service, loss of business, or anticipated profits or consequential damages;
or (iv) the delivery, operation, servicing, maintenance, repair, improvement or
replacement of any Equipment. If, and so long as, no default exists under this
Agreement, Lessee shall be, and hereby is, authorized during the term of this
Agreement to assert and enforce, whatever claims and rights Lessor may have
against any Supplier of the Equipment at Lessee's sole cost and expense, in the
name of and for the account of Lessor and/or Lessee, as their interests may
appear.
15. REPRESENTATIONS AND WARRANTIES OF LESSEE
Lessee makes each of the following representations and warranties to Lessor on
the date hereof and on the date of execution of each Schedule:
(a} 'Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the "Documents"). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal, and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is required from any
government authority or entity with respect to the entry into or performance by
Lessee of the Documents except such as have already been obtained.
(d) The entry into and performance by Lessee of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed or trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or before
any commission, board, or other administrative agency against or affecting
Lessee, which if decided against Lessee will have a material adverse effect on
the ability of Lessee to fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each financial statement delivered to Lessor has been prepared in accordance
with generally accepted accounting principles consistently applied. Since the
date of the most recent financial
statement, there has been no material adverse change, material adverse change to
be defined as a marked, adverse change from the Lessee's projections, business
plan, or budget, failure to raise equity or subordinated debt consistent with
Lessee's needs, loss key personnel, partners or collaborators, repeated clinical
failures or any like unexpected adverse change in the Lessee's financial,
technical or organizational structure. Lessor acknowledges that Lessee is a
company in development that will not show positive internally generated cash
flow for the foreseeable future.
(h) Lessee's exact legal name is as set forth in the first sentence of this
Agreement and Lessee is and will be at all times validly existing and in good
standing under the Laws of the State of its incorporation (specified in the
first sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business purposes.
16. OWNERSHIP FOR TAX PURPOSES. GRANT OF SECURITY INTEREST; USURY SAVINGS
(a) For income tax purposes, the parties hereto agree that it is their mutual
intention that Lessee shall be considered the owner of the Equipment.
Accordingly, Lessor agrees (i) to treat Lessee as the owner of the Equipment on
its federal income tax return, (ii) not to take actions or positions
inconsistent with such treatment on or with respect to its federal income tax
return, and (iii) not to claim any tax benefit available to an owner of the
Equipment on or with respect to its federal income tax return. The foregoing
undertakings by Lessor shall not be violated by Lessor's taking a tax position
inconsistent with the foregoing sentence to the extent such a position is
required by law or is taken through inadvertence so long as such inadvertent tax
position is reversed by Lessor promptly upon its discovery. Lessor shall in no
event be liable to Lessee if Lessee fails to secure any of the tax benefits
available to the owner of the Equipment.
(b) Lessee hereby grants to Lessor a first security interest in the Equipment,
together with all additions. attachments, accessions, accessories and accessions
thereto whether or not furnished by the Supplier of the Equipment and any and
all substitutions, replacements or exchanges therefore, and any and all
insurance and/or other proceeds of the property in and against which a security
interest is granted hereunder. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, to the extent that Lessor asserts a
purchase money security interest in any items of Equipment ("PMSI Equipment"):
(i) the PMSI Equipment shall secure only those sums which have been advanced by
Lessor for the purchase of the PMSI Equipment. or the acquisition of rights
therein, or the use thereof (the "PMSI Indebtedness), and (ii) no other
Equipment shall secure the PMSI Indebtedness.
(c) It is the intention of the parties hereto to comply with any applicable
usury laws to the extent that any Schedule is determined to be subject to such
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in any Schedule or this Agreement, in no event shall any Schedule
require the payment or permit the collection of interest in excess of the
maximum amount permitted by applicable law. If any such interest is contracted
for, charged, or received under any Schedule or this Agreement, or in the event
that all of the principal balance shall be prepaid, so that under any of such
circumstances the amount of interest contracted for,
charged or received under any Schedule or this Agreement shall exceed the
maximum amount of interest permitted by applicable law, then in such event (i)
the provisions of this paragraph shall govern and control, (ii) neither Lessee
nor any other person or entity now or hereafter liable for the payment hereof
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the maximum amount of interest permitted by applicable law, (iii)
any such excess which may have been collected shall be either applied as a
credit against the then unpaid principal balance or refunded to Lessee but the
option of the Lessor, and (iv) the effective rate of interest shall be
automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction
thereof. It is further agreed that without limitation of the forging, all
calculations of the rate of interest contracted for, charged or received under
any Schedule of this Agreement which are made for the purpose of determining
whether such rate exceeds the maximum lawful contract rate, shall be made, to
the extent permitted by applicable law, by amortizing, prorating, allocating and
spreading in equal parts during the period of the full stated term of the
indebtedness evidenced hereby, all interest at any time contracted for, charged
or received from Lessee or otherwise by Lessor in connection with such
indebtedness; provided, however, that if any applicable state law is amended or
the law of the United States of America preempts any applicable state law, so
that it becomes lawful for Lessor to receive a greater interest per annum rate
than is presently allowed, the Lessee agrees that, on the effective date of such
amendment or preemption, as the case may be, the lawful maximum hereunder shall
be increased to the maximum interest per annum rate allowed by the amended state
law or the law of the United States of America
17. EARLY TERMINATION
(a) On or after the Termination Date (specified in the applicable Schedule),
Lessee may, so long as not default exists hereunder, terminate this Agreement as
to all (but not less than all) of the Equipment on such Schedule as of a rent
payment date ("Termination Date") Lessee must give Lessor at least ninety (90)
days prior written notice of the term
(b) Lessee shall and Lessor may solicit cash bids for the Equipment on an AS IS,
WHERE IS BASIS without recourse to or warranty from Lessor, express or implied
("AS IS BASIS"). Prior to the Termination Date, Lessee shall (i) certify to
Lessor any bids received by Lessee and (ii) pay to Lessor (A) the Termination
Value (calculated as of the rent due on the Termination Date) for the Equipment,
and (B) all rent and other sums due and unpaid as of the Termination Date.
(c) If all amounts due hereunder have been paid on the Termination Date, Lessor
shall (i) sell the Equipment on an AS IS BASIS for cash to the highest bidder
and (ii) refund the proceeds of such sale (net of any related expenses) to
Lessee up to the amount of the Termination Value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the Termination
Value (less any expenses incurred by Lessor) to Lessee
(d) Notwithstanding the foregoing, Lessor may elect by written notice, at any
time prior to the Termination Date, not to sell the Equipment. In that event, on
the Termination Date, Lessee shall (i) return the Equipment (in accordance with
Section 9) and (ii) pay to Lessor all amounts required under Section 17(b) less
the amount of the highest bid certified by Lessee to Lessor.
18. EARLY PURCHASE OPTION
(a) Lessee may purchase on an AS IS BASIS all (but not less than all) of the
Equipment on any Schedule on any Rent Payment Date after the First Termination
Date specified in the applicable Schedule but prior to the last Rent Payment
Date of such Schedule (the "Early Purchase Date"), for a price equal to (i) the
Termination Value (calculated as of the Early Purchase Date) for the Equipment,
and (ii) all rent and other sums due and unpaid as of the Early Purchase Date
(the "Early Option Price"), plus all applicable sales taxes. Lessee must notify
Lessor of its intent to purchase the Equipment in writing at least thirty (30)
days, but not more than two hundred seventy (270) days, prior to the Early
Purchase Data. If Lessee is in default or if the Schedule or this Agreement has
already been terminated, Lessee may not purchase the Equipment. (the purchase
option grunted by this subsection shall be referred to herein as the "Early
Purchase Option").
(b) If Lessee exercises its Early Purchase Option, then on the Early Purchase
Date, Lessee shall pay to Lessor any rent and other sums due and unpaid on the
Early Purchase Date and Lessee sha1l pay the Early Option Price, plus ail
applicable sales taxes, to Lessor in cash.
19. END OF LEASE PURCHASE OPTION
Lessee may, at lease expiration, purchase all (but not less than all)of the
Equipment on any Schedule on an AS IS BASIS for cash equal to the amount
indicated on such Schedule (the "Option Payment"), plus all applicable sales
taxes. The Option Payment, plus all applicable sales taxes shall be due and
payable in immediately available funds on the expiration date of such Schedule.
Lessee must notify Lessor of its intent to purchase the Equipment in writing at
least one hundred eighty (180) days prior to the expiration date of the
Schedule. If Lessee is in default; or if the Schedule or this Agreement has
already been terminated, Lessee shall not purchase the Equipment.
20. MISCELLANEOUS:
(a) LESSEE AND LESSOR UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT Of THIS AGREEMENT, ANY OF
THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) Any cancellation or termination by Lessor of this Agreement, any Schedule,
supplement or amendment hereto, or the lease of any Equipment hereunder shall
not release Lessee from any then outstanding obligations to Lessor hereunder.
All Equipment shall at all times remain personal property even though it may be
attached to real property, The Equipment shall not become part of any other
property by reason of any installation in, or attachment to, other real or
personal property.
(c) Time is of the essence of this Agreement. Lessor's failure at anytime to
require strict performance of Lessee of any of the provisions hereof shall not
waive or diminish Lessor's right at any other time to demand strict compliance
with this Agreement. Lessee agrees upon Lessor's request, to execute, or other
authenticate, any document, record or instrument necessary or expedient for
filing, recording or perfecting the interest of Lessor or to carry out the
intent of this Agreement. In addition, Lessee hereby authorizes Lessor to file a
financing statement and amendments thereto describing the Equipment described in
any and all Schedules now and hereafter executed pursuant hereto and adding any
other collateral described therein and containing any other information required
by the applicable Uniform Commercial Code. Lessee irrevocably grants to Lessor
the power to sign Lessee's name and generally to act on behalf of Lessee to
execute and file financing statements and other documents pertaining to any or
all Office Equipment. All notices required to be given hereunder shall be deemed
adequately given if sent by registered or certified mail to the addressee at its
address stated herein, or at such other place as such addressee may have
specified in writing. This Agreement and any Schedule and Annexes thereto
constitute the entire Agreement of the parties with respect to the subject
matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF
ANY OF ITS PROVISIONS OR CONDITIONS SHALL BE VALID UNLESS IN WRITING AND SIGNED
BY AN AUTHOIRIZED REPRESENTATIVE OF THE PARTIES HERETO
(d) If Lessee does not comply with any provision of this Agreement, Lessor shall
have the right, but shall not be obligated, to effect such compliance, in whole
or in part. All reasonable amounts spent and obligations incurred or assumed by
Lessor in effecting such compliance shall constitute additional rent due to
Lessor. Lessee shall pay the additional rent within five days after the date
Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(e) Any rent or other amount not paid to Lessor when due shall bear interest,
from the due date until paid, at the lesser of eighteen percent (18%) per annum
or the maximum rate allowed by law. Any provisions in this Agreement and any
Schedule that are in conflict with any statute, law or applicable rule shall be
deemed omitted, modified or altered conform thereto.
(f) Lessee hereby irrevocably authorizes Lessor to adjust the Capitalized
Lessor's Cost up or down by no more than ten percent (10%) within each Schedule
to account for equipment change orders, equipment returns, invoicing errors, and
similar matters. Lessee acknowledges and agrees that the rent shall be adjusted
as a result of the change in the Capitalized Lessor's Cost. Lessor shall send
Lessee a written notice stating the final Capitalized Lessor's Cost, if it has
changed.
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT
(h) Any cancellation or termination by Lessor, pursuant to the provisions of
this Agreement, any Schedule, supplement or amendment hereto, of the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(i) To the extent that any Schedule would constitute chattel paper, as such
terms is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference, and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked Original and all other counterparts shall be
marked Duplicate.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written
LESSOR:
General Electric Capital Corporation
By: ▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇
Title: SVP
LESSEE:
Ortec International, Inc.
By: ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice Chair/CFO