EXHIBIT 10.13
MASTER LEASE AGREEMENT
dated as of September 14, 2004
between
CEF 2002, LLC, as Lessor,
and
WESTERN EXPRESS, INC., as Lessee
TABLE OF CONTENTS
Page
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1. LEASING 1
2. TERM, RENT AND PAYMENT 1
3. RENT ADJUSTMENT 2
4. TAXES 2
5 REPORTS 2
6. DELIVERY, USE AND OPERATION 3
7. MAINTENANCE 4
8. CASUALTY OCCURRENCE 5
9. LOSS OR DAMAGE 5
10. INSURANCE 5
11. RETURN OF EQUIPMENT 7
12. DEFAULT; REMEDIES 7
13. ASSIGNMENT 9
14. NET LEASE; NO SET-OFF. ETC 9
15. INDEMNIFICATION 9
16. DISCLAIMER 11
17. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE 11
18. INTENT; TITLE; SECURITY INTEREST 13
19. [INTENTIONALLY OMITTED] 14
20. MISCELLANEOUS 14
21. CHOICE OF LAW: JURISDICTION 16
22. CHATTEL PAPER 17
23. DEFINITIONS 17
EXHIBIT NO. 1 - EQUIPMENT SCHEDULE
ANNEX A - DESCRIPTION OF EQUIPMENT
ANNEX B - PURCHASE ORDER ASSIGNMENT
ANNEX C - CERTIFICATE OF ACCEPTANCE
ANNEX D - STIPULATED LOSS VALUE TABLE
ANNEX E - RETURN PROVISIONS
EXHIBIT NO. 2 -REMARKETING SUPPORT AGREEMENT
EXHIBIT NO. 3- FINANCIAL COVENANTS
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT, dated as of September __, 2004 ("AGREEMENT"),
between CEF 2002, LLC with an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (hereinafter called, together with its successors and assigns, if
any, "Lessor"), and WESTERN EXPRESS, INC., a Tennessee corporation with its
mailing address and chief place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "LESSEE").
WITNESSETH:
1. LEASING:
(a) This Agreement shall be effective from and after the date of execution
hereof. Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the Equipment described
in Annex A to any schedule signed by both parties pursuant hereto in
substantially the form attached hereto as Exhibit No. 1 (collectively, the
"Schedule"). Terms defined in a Schedule and not otherwise defined herein shall
have the meanings ascribed to them in such Schedule. Certain definitions are
provided in Section 23 hereof.
(b) The obligation of Lessor to purchase Equipment from the manufacturer or
supplier thereof ("SUPPLIER") and to lease the same to Lessee under any Schedule
shall be subject to receipt by Lessor, prior to the Basic Term Commencement Date
(with respect to such Equipment), of each of the following documents in form and
substance satisfactory to Lessor: (i) a Schedule relating to the Equipment then
to be leased hereunder, (ii) a Purchase Order Assignment and Consent in the form
of Annex B to the applicable Schedule ("Purchase ORDER ASSIGNMENT"), unless
Lessor shall have delivered its purchase order for such Equipment, (iii)
evidence of insurance which complies with the requirements of Section 10 hereof,
(iv) a Remarketing Support Agreement in substantially the form attached hereto
as Exhibit No. 2 ("REMARKETING SUPPORT AGREEMENT"), together with a Notice and
Acknowledgment of Assignment with respect thereto, executed by Lessee and Volvo
Trucks North America, Inc. ("VTNA"), (v) an appraisal in form and substance, and
by an appraiser, satisfactory to Lessor, with respect to the Equipment to be
acquired from Lessee then to be leased hereunder, and (vi) such opinions,
certificates and other documents as Lessor reasonably may request. As a further
condition to such obligations of Lessor, Lessee shall, upon delivery of such
Equipment (but not later than the Last Delivery Date specified in the applicable
Schedule) execute and deliver to Lessor a Certificate of Acceptance (in the form
of Annex C to the applicable Schedule) covering such Equipment, and deliver to
Lessor a ▇▇▇▇ of sale therefor (in form and substance satisfactory to Lessor)
from the Supplier. Lessor hereby appoints Lessee its agent for inspection and
acceptance of the Equipment. Upon execution by Lessee of any Certificate of
Acceptance, the Equipment described thereon shall be deemed to have been
delivered to, and irrevocably accepted by, Lessee for lease hereunder.
2. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder (the "RENT") and Lessee's right to use the
Equipment shall commence on the date of execution by Lessee of the Certificate
of Acceptance for such Equipment ("LEASE COMMENCEMENT DATE"). The term of this
Agreement (the "Term") shall be the period specified in the applicable Schedule.
If any Term is extended, the word "Term" shall be deemed to refer to all
extended terms, and all provisions of this Agreement shall apply during any
extended terms, except as otherwise may be specifically provided in writing.
(b) Rent shall be paid to Lessor by check (accompanied by a copy of
Lessor's invoice) sent to: ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
or to such other account as Lessor may direct in writing; and shall be effective
upon receipt. Payments of Rent shall be in the amount set forth in, and due in
accordance with, the provisions of the applicable Schedule. If one or more
Advance Rentals are payable, such Advance Rental shall be (i) set forth on the
applicable Schedule, (ii) due upon acceptance by Lessor of such Schedule, and
(iii) when received by Lessor, 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 Rental or any other Rent payments be refunded to Lessee. If
Rent is not paid within ten (10) days of its due date, Lessee agrees to pay a
late charge of Five Cents ($0.05)
per dollar on, and in addition to, the amount of such Rent but not exceeding
the lawful maximum, if any.
3. RENT ADJUSTMENT:
(a) The periodic Rent payments in each Schedule have been calculated on the
assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective Federal corporate income tax rate (including any surcharge but
exclusive of any minimum tax rate) for calendar-year taxpayers ("EFFECTIVE
RATE") will be thirty-five percent (35%) for each year of the Term.
(b) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition
to, the Internal Revenue Code of 1986, as now or hereafter amended ("Code"), the
Effective Rate is higher than thirty-five percent (35%) for 2004 or any
subsequent year during the Term, then Lessor shall have the right to increase
such Rent payments by requiring payment of a single additional sum equal to the
product of (i) the Effective Rate (expressed as a decimal) for such year less
..35 (or, in the event that any adjustment has been made hereunder for any
previous year, the Effective Rate (expressed as a decimal) used in calculating
the next previous adjustment), times (ii) the adjusted Stipulated Loss Value
divided by the difference between the new Effective Rate (expressed as a
decimal) and one (1). The adjusted Stipulated Loss Value shall be the Stipulated
Loss Value (calculated as of the first Rent due in the year for which such
adjustment is being made) less the product of the Tax Benefits that would be
allowable under Section 168 of the Code (as of the first day of the year for
which such adjustment is being made and all subsequent years of the Term) times
the Effective Rate (expressed as a decimal) (in the year for which such
adjustment is being made). Lessee shall pay to Lessor the full amount of the
additional Rent payment on the later of (i) receipt of notice, or (ii) the first
day of the year for which such adjustment is being made.
4. TAXES:
Except as provided in Sections 3 and 15(c) hereof, Lessee shall have no
liability for taxes imposed by the United States of America or any State or
political subdivision thereof which are on or measured by the net income of
Lessor. Lessee shall report (to the extent that it is legally permissible) and
pay promptly all other taxes, fees and assessments due, imposed, assessed or
levied against any Equipment (or the purchase, ownership, delivery, leasing,
possession, use or operation thereof), this Agreement (or any Rents or receipts
hereunder), any Schedule, Lessor or Lessee by any foreign, federal, state or
local government 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 (all hereinafter called "Taxes"). Lessee shall (i) reimburse
Lessor (on an after-tax basis) upon receipt of written request for
reimbursement for any Taxes charged to or assessed against Lessor, (ii) on
request of Lessor, submit to Lessor written evidence of Lessee's payment of
Taxes, (iii) on all reports or returns show the ownership of the Equipment by
Lessor, and (iv) send a copy thereof to Lessor.
5. REPORTS:
(a) Lessee will notify Lessor in writing, within ten (10) days after any
tax or other Lien shall attach to any Equipment, of the full particulars thereof
and of the location of such Equipment on the date of such notification.
(b) Lessee will deliver to Lessor, as soon as available and in any event
within one hundred twenty (120) days after the end of each fiscal year of
Lessee, audited annual consolidated and consolidating financial statements of
Lessee, including the notes thereto, consisting of a consolidated and
consolidating balance sheet at the end of such completed fiscal year and the
related consolidated consolidating statements of income, retained earnings, cash
flows and owners' equity for such completed fiscal year, which financial
statements shall be prepared and certified without qualification by ▇▇▇▇▇ ▇▇▇▇▇▇
and Company LLC or another independent certified public accounting firm
reasonably satisfactory to Lessor and accompanied by related management letters,
if available. Lessee will deliver to Lessor, as soon as available and in any
event within thirty (30) days after the end of each calendar month, unaudited
consolidated and consolidating financial statements of Lessee consisting of a
balance sheet and statements of income, retained earnings, cash flows and
owners' equity as of the end of the immediately preceding calendar month,
certified by the chief financial officer of Lessee. All such financial
statements shall be prepared in accordance with generally accepted accounting
principles ("GAAP")
consistently applied with prior periods. With each such financial statement,
Lessee shall also deliver a certificate of its chief financial officer stating
that (1) such person has reviewed the relevant terms of the Documents and the
condition of Lessee, (2) no Default or event which, with the giving of notice or
the lapse of time (or both) would become a Default has occurred or is
continuing, or if any of the foregoing has occurred or is continuing, specifying
the nature and status and period of existence thereof and the steps taken or
proposed to be taken with respect thereto, and (3) Lessee is in compliance with
all financial covenants specified in Section 17(b)(3) hereof. Such certificate
shall be accompanied by the calculations necessary to show compliance with the
financial covenants, in a form satisfactory to Lessor.
(c) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost, stolen or damaged (where the estimated repair costs would
exceed the greater of $20,000 or twenty percent (20%) of the Capitalized
Lessor's Cost of such item of Equipment), or is otherwise involved in an
accident causing personal injury or property damage.
(d) Within thirty (30) days after any request by Lessor, Lessee will
furnish a certificate of an authorized officer of Lessee stating that he has
reviewed the activities of Lessee and that, to the best of his knowledge, there
exists no Default or event which, with the giving of notice or the lapse of time
(or both), would become a Default.
(e) Lessee will promptly notify Lessor of any change in Lessee's state of
incorporation or organization.
(f) Lessee will promptly, and in any event within seven (7) days after
Lessee or any authorized officer of Lessee obtains knowledge thereof, notify
Lessor in writing of: (1) any pending or threatened litigation, suit,
investigation, arbitration, dispute resolution proceeding or administrative
proceeding brought or initiated by Lessee or otherwise affecting or involving or
relating to Lessee or any of its property or assets to the extent (A) the amount
in controversy exceeds $500,000 (provided that for any litigation relating to an
individual motor vehicle accident, to the extent the amount in controversy
exceeds $2,000,000), or (B) to the extent any of the foregoing seeks injunctive
or declarative relief; (2) any Default or event which, with the giving of notice
or the lapse of time (or both) would become a Default, which notice shall
specify the nature and status thereof, the period of existence thereof and what
action is proposed to be taken with respect thereto; (3) any other development,
event, fact, circumstance or condition that would reasonably be likely to have a
Material Adverse Effect, in each case describing the nature and status thereof
and the action proposed to be taken with respect thereto; (4) any notice
received by Lessee from any payor of a claim, suit or other action such payor
has, claims or has filed against Lessee; (5) any matter(s) affecting the
Equipment, including, without limitation, claims or disputes in the amount of
$100,000 or more in existence at any one time; (6) any notice given by Lessee to
any lender of Lessee, which notice to Lessor shall be accompanied by a copy of
the applicable notice given to the lender; or (7) receipt of any notice or
request from any Governmental Authority or governmental payor regarding any
liability or claim of liability.
6. DELIVERY, USE AND OPERATION:
(a) All Equipment shall be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all Applicable Laws and
any applicable insurance policies, and Lessee shall not permanently discontinue
use of the Equipment.
(c) Lessee shall not directly or indirectly create, incur, assume or suffer
to exist, any Lien on or with respect to the Equipment or any part thereof,
title thereto, or any interest of Lessor therein, or in this Agreement, except
Permitted Liens. Lessee will promptly, at its own expense, take or cause to be
taken such action as may be necessary to discharge any Lien with respect to the
Equipment which is not a Permitted Lien.
(d) Lessee shall permit any Person designated by Lessor, during normal
business hours upon reasonable notice to visit, inspect and survey the
Equipment, its condition, use and operation, and the records maintained in
connection therewith. None of Lessor or any of its designees shall have any duty
to make any such inspection and shall not incur any liability or obligation by
reason of not making any such inspection. The failure
of any such party to object to any condition or procedure observed or observable
in the course of an inspection hereunder shall not be deemed to waive or modify
any of the terms of this Agreement with respect to such condition or procedure.
(e) Lessee will use the Equipment, and cause the Equipment to be used,
solely within the Continental United States (provided, however, that, without
limiting Lessee's indemnification obligations pursuant to Section 15(c) hereof,
Lessee may use the Equipment, or cause the Equipment to be used, on an
occasional basis in Canada so long as such use does not cause the Equipment to
be deemed to constitute tangible property "used predominantly outside the United
States", within the meaning of the Code); and will not change the principal
garage location of any of the Equipment from the principal garage location
specified in the applicable Schedule without the prior written consent of
Lessor. Upon Lessor's request, Lessee promptly will notify Lessor in writing of
the state in which each item of the Equipment is titled, is registered and the
license plate number of such item of Equipment.
(f) Lessee will promptly apply for a certificate of title for each item of
the Equipment, reflecting Lessor as owner, and for a certificate of registration
issued in the name of Lessee or, if required by the titling authority, in the
name of Lessor in care of Lessee. Certificates of title shall be delivered to
Lessor upon receipt. Lessee shall take such action as shall be necessary from to
time to avoid suspension or revocation of any certificate of title with respect
to the Equipment, and to renew and maintain all certificates of registration
with respect to the Equipment. If Lessee is required to obtain a new certificate
of title or certificate of registration, after prior written notice to Lessor,
Lessee shall obtain such new certificate of title or certificate of registration
as provided herein.
7. MAINTENANCE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order, repair, condition and appearance in accordance with the
requirements of Annex E to the Schedule, manufacturer's recommendations (normal
wear and tear excepted) and Lessee's standard practices (but in no event less
than industry practices). Lessee's maintenance programs shall be subject to
review by Lessor. Lessee shall, if at any time reasonably requested by Lessor,
affix in a prominent position on each unit of Equipment plates, tags or other
identifying labels showing the interest therein of Lessor.
(b) Lessee will not, without the prior consent of Lessor, affix or install
any accessory, equipment or device on any Equipment if such addition will impair
the value, originally intended function, remaining useful life or use of such
Equipment. All additions, repairs, parts, supplies, accessories, equipment, and
devices furnished, attached or affixed to any Equipment which are not readily
removable shall be made only in compliance with Applicable Law, including
Internal Revenue Service guidelines, shall be free and clear of all Liens and
shall become the property of Lessor.
(c) Lessee shall maintain the Equipment in compliance with all Applicable
Laws. Any alterations or modifications to the Equipment that may, at any time
during the term of this Agreement, be required to comply with all Applicable
Laws, shall be made at the expense of Lessee, and shall be free and clear of all
Liens and shall become the property of Lessor.
8. CASUALTY OCCURRENCE:
Lessee shall promptly and fully notify Lessor in writing if any unit of
Equipment shall be or become worn out, lost, stolen, destroyed, irreparably
damaged in the reasonable determination of Lessee, or permanently rendered unfit
for use from any cause whatsoever (such occurrences being hereinafter called
"CASUALTY OCCURRENCES"). On the Rent Payment Date next succeeding a Casualty
Occurrence (the "PAYMENT DATE"), Lessee shall either (as selected by Lessee):
(a) replace the unit of Equipment having suffered the Casualty Occurrence
with equipment of comparable make and model, having an equal or greater current
value (but same estimated residual value) and utility, free and clear of all
Liens and shall deliver to Lessor a confirmation executed by VTNA that such
replacement unit is subject to the Remarketing Support Agreement, a ▇▇▇▇ of
sale, a Schedule, such UCC financing statements or statements of amendment and
such other documents, instruments, filings and/or
certificates as reasonably may be required by Lessor with respect to such
replacement Equipment; or
(b) pay Lessor the sum of (x) the Stipulated Loss Value of such unit
calculated in accordance with Annex D as of the Rent Payment Date next preceding
such Casualty Occurrence; and (y) all Rent and other amounts which are due
hereunder as of the Payment Date. Upon payment of all sums due hereunder, the
term of this lease as to such unit shall terminate and (except in the case of
the loss, theft or complete destruction of such unit) Lessor shall be entitled
to recover possession of such unit.
9. LOSS OR DAMAGE:
Lessee hereby assumes and 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.
10. INSURANCE:
(a) Coverage. Without limiting any of the other obligations or liabilities
of Lessee under this Agreement, Lessee shall, during the Term of this
Agreement, carry and maintain, at its own expense, at least the minimum
insurance coverage set forth in this Section 10. Lessee shall also carry and
maintain any other insurance that Lessor may reasonably require from time to
time. All insurance carried pursuant to this Section 10 shall be placed with
such insurers having a minimum A.M. Best rating of A:X, and be in such form,
with terms, conditions, limits, deductibles and self-insured retentions as shall
be acceptable to Lessor.
(i) All Risk Property Insurance. Lessee shall maintain all risk
property insurance covering against physical loss or damage to the
Equipment, including but not limited to fire and extended coverage,
collapse, flood and earth movement. Coverage shall be written in the
greater of replacement cost or Stipulated Loss Value. Such insurance policy
shall contain an agreed amount endorsement waiving any coinsurance penalty
and shall include expediting expense coverage; and,
(ii) Comprehensive General Liability Insurance. Lessee shall maintain
comprehensive general liability insurance written on an occurrence basis
with a limit of not less than $1,000,000. Such coverage shall include, but
not be limited to, premises/operations, explosion, collapse, underground
hazards, sudden and accidental pollution, contractual liability,
independent contractors, products/completed operations, property damage and
personal injury liability. Such insurance shall not contain an exclusion
for punitive or exemplary damages where insurable by law. Policy limit
requirements may be satisfied by any combination of primary and
excess/umbrella insurance; and,
(iii) Workers' Compensation/Employer's Liability. Lessee shall
maintain Workers' Compensation insurance in accordance with statutory
provisions covering accidental injury, illness or death of an employee of
Lessee while at work or in the scope of his employment with Lessee and
Employer's Liability in an amount not less than $1,000,000. Policy limit
requirements for Employer's Liability may be satisfied by any combination
of primary and excess/umbrella insurance. Such coverage shall not contain
any occupational disease exclusions; and,
(iv) Automobile Liability. Lessee shall maintain Automobile Liability
insurance covering owned, non-owned, leased, hired or borrowed vehicles
against bodily injury or property damage. Such coverage shall have a limit
of not less than $1,000,000. Policy limit requirements may be satisfied by
any combination of primary and excess/umbrella insurance; and,
(v) Cargo Insurance: Lessee shall maintain Cargo/Bailee and, if
necessary, Warehousemen's insurance in an amount not less than $500,000
covering the liabilities of Lessee assumed under a ▇▇▇▇ of lading, shipping
receipt, warehousing, etc., while goods are in the care, custody and
control of Lessee either in transit or at its warehouse or terminal
locations; and,
(b) Endorsements. Lessee shall cause all insurance policies carried and
maintained in accordance with this Section 10 to be endorsed as follows:
(i) Lessor shall be an additional named insured and loss payee with
respect to property
insurance policies described in Section 10(a)(i). Lessor shall be an
additional insured with respect to liability insurance policies described
in Sections 10(a)(ii), (a)(iii) to the extent allowed by law, and (a)(iv).
It shall be understood that any obligation imposed upon Lessee, including
but not limited to the obligation to pay premiums, shall be the sole
obligation of Lessee and not that of Lessor; and,
(ii) with respect to property insurance policies described in Section
10(a)(i), the interests of Lessor shall not be invalidated by any action or
inaction of Lessee, or any other person, and shall insure Lessor regardless
of any breach or violation by Lessee or any other person, of any
warranties, declarations or conditions of such policies; and,
(iii) inasmuch as the liability policies are written to cover more
than one insured, all terms conditions, insuring agreements and
endorsements, with the exception of the limits of liability, shall operate
in the same manner as if there were a separate policy covering each
insured; and,
(iv) the insurers thereunder shall waive all rights of subrogation
against Lessor, any right of setoff or counterclaim, and any other right to
deduction, whether by attachment or otherwise; and,
(v) such insurance shall be solely responsible to respond to Lessee's
losses (primary) without right of contribution of any other insurance
carried by or on behalf of Lessor as it relates to the Equipment; and,
(vi) if such insurance is canceled for any reason whatsoever,
including nonpayment of premium, or any changes are initiated by Lessee or
carrier which affect the interests of Lessor, such cancellation or change
shall not be effective as to Lessor until thirty (30) days, except for
non-payment of premium which shall be ten (10) days, after receipt by
Lessor of written notice sent by registered mail from such insurer.
(c) Certifications. On the date of execution of the initial Schedule, and
at each policy renewal, but not less than annually, Lessee shall provide to
Lessor approved certification from each insurer or by an authorized
representative of each insurer. Such certification shall identify the
underwriters, the type of insurance, the limits, deductibles, and term thereof
and shall specifically list the special provisions delineated in Section 10(b)
above for such insurance under this Section 10 pursuant hereto.
(d) Insurance Report. Concurrently with the furnishing of all certificates
referred to in this Section 10, Lessee shall furnish Lessor with an opinion from
an independent insurance broker, acceptable to Lessor, stating that (1) all
premiums then due have been paid, (2) in the opinion of such broker, the
insurance then maintained by Lessee is in accordance with this Section, and (3)
upon its first knowledge, such broker shall advise Lessor promptly in writing of
any default in the payment of any premiums or any other act or omission, on the
part of any person, which might invalidate or render unenforceable, in whole or
in part, any insurance provided by Lessee hereunder.
(e) Adjustment of Losses. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make proof of loss and claim for insurance, and to make
adjustments with insurers and to receive payment of and execute or endorse all
documents, checks or drafts in connection with payments made as a result of such
insurance policies. Any expense of Lessor in adjusting or collecting insurance
shall be borne by Lessee. Lessee will not make adjustments with insurers except
(1) with respect to claims for damage to any unit of Equipment where the repair
costs do not exceed ten percent (10%) of such unit's fair market value, or (2)
with Lessor's written consent. Said policies shall provide that the insurance
may not be altered or cancelled by the insurer until after thirty (30) days'
written notice to Lessor. Lessor may, at its option, apply proceeds of
insurance, in whole or in part, to (A) repair or replace Equipment or any
portion thereof, or (B) satisfy any obligation of Lessee to Lessor hereunder.
(f) General. Lessor shall be entitled, upon reasonable advance notice, to
review Lessee's insurance policies carried and maintained with respect to
Lessee's obligations under this Section 10. Upon request, Lessee shall furnish
Lessor with copies of all insurance policies, binders, and cover notes or other
evidence of such insurance. Notwithstanding anything to the contrary herein, no
provision of this Section 10 or any provision of this Agreement shall impose on
Lessor any duty or obligation to verify the existence or adequacy of the
insurance coverage maintained by Lessee, nor shall Lessor be responsible for any
representations or warranties made by or on behalf of Lessee to any insurance
broker, company or underwriter. Lessor, at its sole option, may obtain such
insurance if not provided by Lessee and in such event, Lessee shall reimburse
Lessor upon demand for the cost thereof, together with interest.
11. RETURN OF EQUIPMENT:
(a) Upon any expiration or termination of this Agreement or any Schedule,
Lessee shall promptly, at its own cost and expense: (i) perform any testing and
repairs required to place the affected units of Equipment in the same condition
and appearance as when received by Lessee (ordinary wear and tear excepted) and
in good working order for their originally intended purpose; (ii) if
deinstallation, disassembly or crating is required, cause such units to be
deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other service person as is satisfactory to Lessor; (iii)
return such units, free and clear of all Liens and encumbrances, and
Contaminants, to a street address within the continental United States as Lessor
shall direct; and (iv) satisfy the requirements of Annex E to the applicable
Schedule.
(b) Until Lessee fully has complied with the requirements of Paragraph (a)
above, Lessee's Rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the Term. Lessor may terminate such continued leasehold interest
upon ten (10) days' notice to Lessee. In addition to these Rents, Lessor shall
have all of its other rights and remedies available as a result of this
nonperformance.
12. DEFAULT; REMEDIES:
(a) Lessor may in writing declare this Agreement in default ("Default") if:
(1) Lessee breaches its obligation to pay Rent or any other sum as and when due;
(2) Lessee breaches any of its obligations under Section 17(b)(3) hereof or any
of its insurance obligations under Section 10 hereof; (3) Lessee breaches any of
its other obligations hereunder and fails to cure that breach within thirty (30)
days after written notice thereof; (4) any representation or warranty made by
Lessee in connection with this Agreement shall be false or misleading in any
material respect; (5) Lessee shall or shall attempt to (except as expressly
permitted by the provisions of this Agreement) sell, transfer, encumber (except
to the extent of a Permitted Lien), or assign, any Equipment or any part
thereof, or use any Equipment for an illegal purpose or permit the same to
occur; (6) any certificate, statement, representation, warranty or audit
contained herein or heretofore or hereafter furnished with respect hereto by or
on behalf of Lessee proving to have been false in any material respect at the
time as of which the facts therein set forth were stated or certified, or having
omitted any substantial contingent or unliquidated liability or claim against
it; (7) LESSEE becomes insolvent or ceases to do business as a going concern;
(8) Lessee shall file a voluntary petition in bankruptcy or a voluntary petition
or an answer seeking reorganization in a proceeding under any bankruptcy or
receivership laws (as now or hereafter in effect) or an answer admitting the
material allegations of a petition filed against Lessee in any such proceeding,
or Lessee shall, by voluntary petition, answer or consent, seek relief under the
provisions of any other now existing or future bankruptcy, receivership or other
similar law providing for the reorganization or liquidation of corporations, or
providing for an agreement, composition, extension or adjustment with its
creditors; (9) a petition is filed against Lessee in a proceeding under
applicable bankruptcy laws, receivership or other insolvency laws, as now or
hereafter in effect, and is not withdrawn, stayed or dismissed within sixty (60)
days thereafter, or if, under the provisions of any law providing for
reorganization or liquidation of corporations which may apply to Lessee, any
court of competent jurisdiction shall assume jurisdiction, custody or control of
Lessee or of any substantial part of its property, and such jurisdiction,
custody or control shall remain in force unrelinquished, unstayed or
unterminated for a period of sixty (60) days; (10) Lessee shall have terminated
its corporate existence, consolidated with, merged into, or conveyed or leased
substantially all of its assets as an entirety to any Person (such actions being
referred to as an "Event"), unless prior to such Event: (x) such Person is
organized and existing under the laws of the United States or any state, and
executes and delivers to Lessor an agreement containing an effective assumption
by such Person of the due and punctual performance of Lessee under this
Agreement; and (y) Lessor is reasonably satisfied as to the creditworthiness of
such Person; (11) Lessee shall be in default under any other agreement between
Lessee and Lessor or its Affiliates, or any material obligation (that is, for a
committed amount in excess of $5,000,000) for borrowed money, for the deferred
purchase price of property or any lease agreement; (12) effective control of
Lessee's voting capital stock, issued and outstanding from time to time, is not
retained by the present holders (unless: (A) Lessee shall have provided thirty
(30) days' prior written notice to
Lessor of the proposed disposition and Lessor shall have consented thereto in
writing; or (B) the disposition of Lessee's voting capital stock is pursuant to
an initial public offering of such stock); and (13) there occurs an anticipatory
repudiation of or a default under the Remarketing Support Agreement. Such
declaration shall apply to all Schedules except as specifically excepted by
Lessor. Any provision of this Agreement to the contrary notwithstanding, Lessor
may exercise all rights and remedies hereunder independently with respect to
each Schedule.
(b) After Default, at the request of Lessor, Lessee shall: (i) notify
Lessor in writing of the location of each item of the Equipment as of the date
of such notification; and/or (ii) comply with the provisions of Section 11(a)
hereof. Lessee hereby authorizes Lessor to enter, with or without legal process,
any premises where any Equipment is located and take possession thereof. Lessee
shall, without further demand, forthwith pay to Lessor (i) as liquidated damages
for loss of a bargain and not as a penalty, the Stipulated Loss Value of the
Equipment (calculated in accordance with Annex D as of the Rent Payment Date
next preceding the declaration of default), and (ii) all Rent and other sums
then due hereunder. Lessor may, but shall not be required to, sell the Equipment
at private or public sale, in bulk or in parcels, with notice, and without
having the Equipment present at the place of sale; or Lessor may, but shall not
be required to, lease, otherwise dispose of or keep idle all or part of the
Equipment; and Lessor may use Lessee's premises for any or all of the foregoing
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: (1) 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, (2) to the extent not previously paid by Lessee, to pay
Lessor all sums due from Lessee hereunder; then, (3) to reimburse to Lessee any
sums previously paid by Lessee as liquidated damages; and (4) any surplus shall
be retained by Lessor. Lessee shall pay any deficiency in clauses (1) and (2)
forthwith.
(c) In addition to the foregoing rights, Lessor may cancel the lease as to
any or all of the Equipment.
(d) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. If
permitted by Applicable Law, Lessee shall pay reasonable attorney's fees
actually incurred by Lessor in enforcing the provisions of this Agreement and
any ancillary documents. Waiver of any Default shall not be a waiver of any
other or subsequent default.
(e) Any default under the terms of this agreement may be declared by Lessor
a default under any other agreement between Lessee and Lessor or its Affiliates
for an amount in excess of $1,000,000.
13. ASSIGNMENT:
(a) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT
OR THE INTEREST OF LESSEE HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
(b) Lessor may, without the consent of Lessee, assign this Agreement or any
Schedule, or the right to enter into any Schedule. Lessee agrees that it will
pay all Rent and other amounts payable under each Schedule to the Lessor named
therein; provided, however, if Lessee receives written notice of an assignment
from Lessor, Lessee will pay all Rent and other a mounts payable under any
assigned Schedule to such assignee or as instructed by Lessor. Each Schedule,
incorporating by reference the terms and conditions of this Agreement,
constitutes a separate instrument of lease, and the Lessor named therein or its
assignee shall have all rights as "Lessor" thereunder separately exercisable by
such named Lessor or assignee as the case may be, exclusively and independently
of Lessor or any assignee with respect to other Schedules executed pursuant
hereto. Lessee agrees reasonably to cooperate with Lessor in connection with any
such proposed assignment, including the execution and delivery of such other
documents, instruments, notices, opinions, certificates and acknowledgments, as
reasonably may be required by Lessor or such assignee; and Lessee further agrees
to confirm in writing receipt of a notice of assignment as reasonably may be
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 or any other Person for any
reason whatsoever.
(c) Subject always to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
14. NET LEASE; NO SET-OFF, ETC.:
This Agreement is a net lease. Lessee's obligation to pay Rent and other
amounts due hereunder shall be absolute and unconditional. Lessee shall not be
entitled to any abatement or reductions of, or set-offs against, said Rent or
other amounts, including, without limitation, those arising or allegedly arising
out of claims (present or future, alleged or actual, and including claims
arising out of strict tort or negligence of Lessor) of Lessee against Lessor
under this Agreement or otherwise. This Agreement shall not terminate and the
obligations of Lessee shall not be affected by reason of any defect in or damage
to, or loss of possession, use or destruction of, any Equipment from whatsoever
cause. It is the intention of the parties that Rents and other amounts due
hereunder shall continue to be payable in all events in the manner and at the
times set forth herein unless the obligation to do so shall have been terminated
pursuant to the express terms hereof.
15. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify (on an after-tax basis), save and
keep harmless Lessor and its Affiliates, successors and assigns, directors,
officers, employees and agents, from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including legal expenses, of
whatsoever kind and nature, in contract or tort, whether caused by the active or
passive negligence of Lessor or otherwise, and including, but not limited to,
Lessor's strict liability in tort, arising out of (i) the selection,
manufacture, purchase, acceptance or rejection of the Equipment, the ownership
of the Equipment during the Term, and the delivery, lease, possession,
maintenance, uses, condition, return or operation of the 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 Loss or Environmental Claim), 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) This Agreement has been entered into on the assumption that: (i) this
Agreement will be treated for Federal income tax purposes as a true lease and
Lessor will be treated as the owner and lessor of the Equipment and Lessee will
be treated as the lessee of the Equipment; (ii) (1) on the Basic Term
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of deduction and credit, and (2) throughout the Term, Lessor will only
be required to include certain amounts in gross income, in each case as
specified in Section C of the applicable Schedule ("TAX BENEFITS") in the hands
of Lessor (all references to Lessor in this Section include Lessor and its
assignees and the consolidated taxpayer group of which Lessor and any assignee
is a member); (iii) each item of Equipment constitutes "qualified property"
pursuant to Section 168(k) of the Code, and is eligible for the additional
first-year depreciation deduction equal to fifty percent (50%) of the
Capitalized Lessor's Cost of the Equipment contemplated by the Code; (iv) the
Equipment shall be treated as originally placed in service not earlier than the
date of the execution and delivery of the Schedule with respect thereto; (v)
Lessee has not arranged to purchase, and Lessor is not purchasing the Equipment
pursuant to a binding written contract entered into before May 6, 2003; and (vi)
each item of Equipment shall be placed in service before January 1, 2005.
(c) If for any reason whatsoever (i) tax counsel of Lessor shall determine
that Lessor has no reasonable basis to claim on its Federal income tax return
all or any portion of the Tax Benefits with respect to any Equipment, or (ii)
any such Tax Benefit claimed on the Federal income tax return of Lessor is
disallowed or adjusted by the Internal Revenue Service, or (iii) any such Tax
Benefit is recomputed or recaptured, or (iv) Lessor shall become liable for
additional tax as a result of Lessee having added an attachment or made an
alteration to the Equipment, including (without limitation) any such attachment
or alteration which would increase the productivity or capability of the
Equipment so as to violate the provisions of Rev. Proc. 2001-28, 2001-1 C.B.
1156 (as the same may hereafter be modified or superseded), or (v) Lessor shall
be entitled to claim a lesser credit for foreign taxes against its Federal
income tax liability than that to which Lessor would have been entitled if each
item of income, gain, loss and deduction with respect to the Equipment had been
treated as income from sources within the United States pursuant to Section 861
of the Code (any such determination, disallowance, inclusion in income,
adjustment, recomputation or recapture being hereinafter called a "LOSS"),
then Lessee shall pay to Lessor, as an indemnity and as additional Rent, such
amount as shall, in the reasonable opinion of Lessor, cause Lessor's after-tax
economic yields and cash flows, computed on the same assumptions, including tax
rates (unless any adjustment has been made under Section 3 hereof, in which case
the Effective Rate used in the next preceding adjustment shall be substituted),
and were utilized by Lessor in originally evaluating the transaction (such
yields and flows being hereinafter called the "NET ECONOMIC Return") to equal
the Net Economic Return that would have been realized by Lessor if such Loss had
not occurred. Such amount shall be payable upon demand accompanied by a
statement describing in reasonable detail such Loss and the computation of such
amount. Anything in this Section to the contrary notwithstanding, Lessee shall
have no obligation to indemnify Lessor from or against any such Loss to the
extent that such Loss is caused by: (1) any failure by Lessor to properly or
timely claim on its Federal income tax return any Tax Benefits on any Equipment
(unless such failure is based upon a determination by tax counsel of Lessor that
Lessor has no reasonable basis to claim such Tax Benefits with respect to such
Equipment); (2) any failure of Lessor to have sufficient taxable income to
benefit from the Tax Benefits; (3) any liability of the Lessor for any
alternative minimum taxes; (4) the status of Lessor as a widely held C
corporation for purposes of Federal income taxes; (5) any sale or other
disposition of any Equipment by Lessor other than after a Default by Lessee
(except as a result of an act by Lessee); (6) any tax election made or not made
by Lessor relating to the Tax Benefits; or (7) any event which results in a
payment by Lessee in an amount equal to, or measured by, the Stipulated Loss
Value to the extent that such Loss was included in Lessor's calculation of such
Stipulated Loss Value.
16. DISCLAIMER:
LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY
ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT
MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED
HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY,
PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. ALL such risks, as
between Lessor and Lessee, are to be borne by Lessee. Without limiting the
foregoing, Lessor shall have no responsibility or liability to Lessee or any
other Person with respect to any of the following (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Equipment,
any inadequacy thereof, any deficiency or defect (latent or otherwise) therein,
or any other circumstance in connection therewith; (ii) the use, operation or
performance of any Equipment or any risks relating thereto; (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, at Lessee's sole cost
and expense, from time to time, in the name of and for the account of Lessor
and/or Lessee, as their interests may appear, whatever claims and rights Lessor
may have against any Supplier of the Equipment.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE:
(a) Lessee hereby represents and warrants to Lessor that on the date hereof
and on the date of execution of each Schedule:
(1) Lessee is and will be at all times during the Term a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation (specified in the first sentence of this Agreement);
and is duly qualified to transact business as a foreign corporation in good
standing wherever necessary to carry on its present business and operations,
including the jurisdictions where the Equipment is or is to be located, except
where the failure to be so qualified or to be in good standing would not have a
Material Adverse Effect.
(2) This Agreement, the Schedules, the Purchase Order Assignment, the
Remarketing Support Agreement and all related documents (collectively, 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 therein
provided may be limited under
applicable bankruptcy and insolvency laws, public policy and equitable
principles.
(3) No approval, consent or withholding of objections is required from
any Governmental Authority with respect to the entry into or performance by
Lessee of the Documents except such as have already been obtained.
(4) Lessee has adequate power and capacity to enter into, and perform
under, the Documents. 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 organizational documents, articles of
incorporation, charter or by-laws; or (ii) result in any breach of, constitute a
default under or result in the creation of any Lien upon any Equipment
pursuant to any indenture, mortgage, deed of trust, bank loan or credit
agreement or other instrument (other than this Agreement) to which Lessee is a
party.
(5) 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 will have a Material Adverse Effect. As used herein,
"MATERIAL ADVERSE EFFECT" shall mean (1) a materially adverse effect on the
business, condition (financial or otherwise), prospects, operations, performance
or properties of Lessee or any of Lessee's Affiliates, or (2) a material
impairment of the ability of Lessee to perform its obligations under or to
remain in compliance with the Documents.
(6) The Equipment accepted under any Certificate of Acceptance is and
will remain tangible personal property and is not and shall not constitute real
property fixtures.
(7) Each financial statement delivered by Lessee to Lessor has been
prepared in accordance with GAAP, and since the date of the most recent such
financial statement, there has been no material adverse change in the financial
condition of Lessee.
(8) Lessee's exact legal name and jurisdiction of organization
specified in the first paragraph hereof, and Lessee's Federal Employer
Identification Number and Organizational Number specified in Section B. of the
Equipment Schedule, are true and correct; and the "location" (as such term is
used in Article 9 of the UCC) of Lessee is the State of Tennessee; and Lessee
agrees to give Lessor prior written notice of any change of Lessee's name,
jurisdiction of organization, Federal Employer Identification Number,
Organizational Number or "location".
(b) Lessee hereby covenants and agrees with Lessor that:
(1) The Equipment will at all times be used for commercial or business
purposes.
(2) Lessee is and will remain in full compliance with all laws and
regulations applicable to it including, without limitation, (i) ensuring that no
person who owns a controlling interest in or otherwise controls Lessee is or
shall be (A) listed on the Specially Designated Nationals and Blocked Person
List maintained by the Office of Foreign Assets Control ("OFAC"), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation, or (B) a person designated
under Sections 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
and (ii) compliance with all applicable Bank Secrecy Act ("BSA") laws,
regulations and government guidance on BSA compliance and on the prevention and
detection of money laundering violations.
(3) At all times during the Term:
(A) Lessee shall not violate the financial covenants set forth on
Exhibit No. 3 attached hereto.
(B) Lessee shall not (i) declare, pay or make any dividend or
Distribution on any shares of Stock (other than dividends or Distributions
payable in its Stock, or split-ups or reclassifications of its Stock),
(ii) apply any of its funds, property or assets to the acquisition,
redemption or other retirement of any Stock or of any options to purchase
or acquire any of the
foregoing (provided, however, that Lessee may redeem its Stock from
terminated employees pursuant to, but only to that extent required under,
the terms of the related employment agreements as long as no Default or
event which, with the giving of notice or the lapse of time, or both, would
become a Default has occurred and is continuing or would be caused by or
result therefrom), (iii) otherwise make any payments or Distributions to
any stockholder, member, partner or other equity owner in such Person's
capacity as such, or (iv) make any payment of any management or service
fee; provided that Lessee shall not make or suffer to exist any such
payment described in clauses (i) through (iii) above if a Default or event
which, with the giving of notice or the lapse of time, or both, would
become a Default has occurred and is continuing or would result therefrom.
(C) Notwithstanding any other provision of this Agreement or any
other Document, Lessee shall not sell, lease, transfer, assign or otherwise
dispose of any interest in any properties or assets (other than obsolete
equipment or excess equipment no longer needed in the conduct of its
business in the ordinary course of business), or agree to do any of the
foregoing at any future time, except that:
(i) Lessee may lease (as lessee) real or personal property
or surrender all or a portion of a lease of the same, in each case in
the ordinary course of business (so long as such lease does not create
or result in and is not otherwise a Capitalized Lease Obligation
prohibited under this Agreement); provided, that an Estoppel/Waiver
Agreement and such other consents as are required by Lessor are signed
and delivered to Lessor with respect to any lease of real or personal
property, as applicable;
(ii) Lessee may license or sublicense intellectual property
or customer lists from third parties in the ordinary course of
business; provided, that such licenses or sublicenses shall not
interfere with the business or other operations of Lessee and that
Lessee's right, title and/or interest in or to such intellectual
property and customer lists and interests therein are pledged to
Lessor as further security for the Obligations;
(iii) Lessee may consummate such other sales or dispositions
of property or assets (including any sale or transfer or disposition
of all or any part of its assets and thereupon and within one (1) year
thereafter rent or lease the assets so sold or transferred) only to
the extent prior written notice has been given to Lessor and to the
extent Lessor has given its prior written consent thereto, such
consent not to be unreasonably withheld, subject in each case to such
conditions as set forth in such consent; and
(iv) Lessee may sell Designated Equipment.
18. INTENT; TITLE; SECURITY INTEREST:
(a) It is the express intent of the parties that this Agreement constitute
a true lease and not a sale of the Equipment. Title to the Equipment shall at
all times remain in Lessor, and Lessee shall acquire no ownership, title,
property, right, equity, or interest in the Equipment other than its leasehold
interest solely as Lessee subject to all the terms and conditions hereof. The
parties agree that the lease is a "Finance Lease" as defined in UCC Article 2A
-- Leases ("ARTICLE 2A"). Lessee acknowledges: (1) that Lessee has selected the
"Supplier" (as defined in Article 2A) and directed Lessor to purchase the
Equipment from the Supplier; and (2) that Lessee has been informed in writing in
this Lease, before signing this Lease, that Lessee is entitled under Article 2A
to the promises and warranties, including those of any third party, provided to
Lessor by the Supplier in connection with or as part of the contract by which
Lessor acquired the Equipment, and that Lessee may communicate with the Supplier
and receive an accurate and complete statement of those promises and warranties,
including any disclaimers and limitations of them or of remedies. To the extent
permitted by applicable law, Lessee hereby waives any and all rights and
remedies conferred upon a lessee in Article 2A and any rights now or hereafter
conferred by statute or otherwise which may limit or modify any of Lessor's
rights or remedies under Section 12 hereof; provided, however, that such waiver
shall not preclude Lessee from asserting any claim of Lessee against Lessor in a
separate cause of action; and provided further that such waiver shall not affect
Lessor's obligations of good faith, diligence, reasonableness and care.
(b) Notwithstanding the express intent of the parties, should a court of
competent jurisdiction determine that this Agreement is not a true lease, but
rather one intended as security, then solely in that event and for the expressly
limited purposes thereof, Lessee shall be deemed to have hereby granted Lessor a
security interest in the lease, the Equipment, and all accessions thereto,
substitutions and replacements therefor, and proceeds (including insurance
proceeds) thereof (but without power of sale); to secure the prompt payment and
performance as and when due of all obligations and indebtedness of Lessee (or
any affiliate of Lessee) to Lessor, now existing or hereafter created (the
"OBLIGATIONS").
(c) To secure the prompt payment and performance as and when due of all
obligations and indebtedness of Lessee to Lessor, now existing or hereafter
created, pursuant to that certain Terminal Rental Adjustment Addendum attached
to the Schedule (the "TERMINAL RENTAL ADJUSTMENT ADDENDUM"), Lessee hereby
assigns to Lessor for collateral security purposes, and grants to Lessor a
security interest in, all right, title and interest of Lessee in, to and under
the Remarketing Support Agreement, as now or hereafter amended, together with
all payments now or hereafter becoming due thereunder and all proceeds thereof.
19. [INTENTIONALLY OMITTED]
20. MISCELLANEOUS:
(A) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS LEASE, 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 (including, without limitation, contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
0RALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
(b) Any cancellation or termination by Lessor, pursuant to the provision 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.
(c) Time is of the essence of this Agreement. Lessor's failure at any time
to require strict performance by Lessee of any of the provisions hereof shall
not waive or diminish Lessor's right thereafter to demand strict compliance
therewith.
(d) Lessee authorizes Lessor to file such UCC financing statements and
amendments thereto as reasonably may be required in connection with this
transaction, describing the Equipment described in any and all Schedules now and
hereafter executed pursuant hereto and any other collateral described herein or
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 of the Equipment, and to
make proof of loss and claim for insurance, and to make adjustments with
insurers and to receive payment of and execute or endorse all documents, checks,
or drafts in connection with insurance payments, in each case pertaining to the
Equipment. Lessor shall not act as Lessee's attorney-in-fact unless Lessee is in
default. Lessee agrees, upon Lessor's request, to execute, or otherwise
authenticate, any document, record or instrument necessary or expedient for
filing, recording or perfecting the interest of Lessor, and to execute and
deliver to Lessor such further documents, instruments and assurances and to take
such further action as Lessor from time to time reasonably may request in order
to carry out the intent and purpose of the transaction contemplated hereunder.
(e) All notices required to be given hereunder shall be in writing,
personally delivered, delivered
by overnight courier service, sent by facsimile transmission (with confirmation
of receipt), or sent by certified mail, return receipt requested, addressed to
the other party at its respective address stated above or at such other address
as such party shall from time to time designate in writing to the other party;
and shall be effective from the date of receipt.
(f) This Agreement, the exhibits hereto and each Schedule and annexes
thereto constitute the entire agreement of the parties with respect to the
subject matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY
WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING
AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
(g) The representations, warranties and covenants of Lessee herein shall be
deemed to survive the closing hereunder. Lessor's obligations to acquire and
lease specific items of Equipment shall be conditioned upon Lessee providing to
Lessor such information with respect to Lessee's financial condition as Lessor
may require, and Lessor being satisfied that there shall have been no material
adverse change in the business or financial condition of VTNA or Lessee from the
date of execution hereof. The obligations of Lessee under Sections 3, 4, 11 and
15 hereof which accrue during the term of this Agreement and obligations which
by their express terms survive the termination of this Agreement, shall survive
the termination of this Agreement.
(h) In case of a failure of Lessee to 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; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance (together
with interest thereon at the Overdue Rate) shall constitute additional Rent due
to Lessor within five (5) 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.
(i) Any Rent or other amount not paid to Lessor when due hereunder shall
bear interest, both before and after any judgment or termination hereof, at the
lesser of (1) the maximum rate allowed by law, or (2) that percentage per annum
equal to the greater of twelve percent (12%) or the sum of the Prime Rate as of
the date of determination, plus five hundred (500) basis points (the "OVERDUE
RATE").
(j) Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(k) So long as no Default shall have occurred and be continuing hereunder,
and conditioned upon Lessee performing all of the covenants and conditions
hereof, as to claims of Lessor or Persons claiming under Lessor, Lessee shall
peaceably and quietly hold, possess and use the Equipment during the Term of
this Agreement subject to the terms and conditions hereof.
(l) Lessee agrees to pay on demand all reasonable costs and expenses
incurred by Lessor and any assignee in connection with the preparation,
execution, delivery, filing, recording, and administration of any of the
Documents, including (without limitation) the reasonable fees and expenses of
counsel for Lessor and any assignee, due diligence, appraisals, titling and
retitling of the Equipment, lien searches, UCC filing fees, and field audits;
and all costs and expenses, if any, in connection with the enforcement of any of
the Documents.
(m) (1) Each of Lessor and Lessee hereby agrees (for itself and its
Affiliates) that (i) it will not make any public announcement (except to the
extent required in connection with its financial disclosure or reporting
requirements or as otherwise required by Applicable Laws) or issue or release
for external publication any article or advertising or publicity matter relating
to the purchase by Lessor of the Equipment or the lease thereof by Lessor to
Lessee without the prior written consent of the other party hereto (which
consent shall not be unreasonably withheld), and (ii) unless otherwise required
by Applicable Laws and subject to Section 20(m)(2) hereof, it will maintain the
confidentiality of the transactions contemplated hereby and by the other
Documents and will not disclose, or cause to be disclosed, the same to any
Person, except (A) to prospective transferees or financiers of such Person's
interest in the Equipment or the Documents, (B) to its Affiliates and its
Affiliates' agents, directors, officers, employees, accountants, counsel or
other professional advisors that have, in each such
case, been instructed or otherwise bound by professional rules of conduct to
keep such information confidential, (C) as may be requested or required pursuant
to Applicable Laws by any Governmental Authority (including Internal Revenue
Service auditors or state taxing and regulatory authorities), (D) to the extent
required in connection with the performance by it of its obligations and the
exercise by it of its rights under the Documents, (E) to any nationally
recognized rating agency that requires access to information about such Person's
investment portfolio, (F) in response to any subpoena or other legal process or
in connection with any litigation to which such Person is a party (provided that
prior notice shall have been provided to the non-disclosing parties), (G) to the
extent, but only to the extent, that prior to such disclosure, such information
is in the public domain or has been provided to such party by a Person not a
party to this Agreement (other than by reason of a breach by such Person of the
confidentiality provisions hereof or as expressly contemplated herby), or (H)
with the prior written consent of each other party hereto (which consent shall
not be unreasonably withheld).
(2) There is no restriction (either express or implied) on any
disclosure or dissemination of the tax treatment or tax structure of the
transactions contemplated by this Agreement or any documents executed in
connection herewith. Further, each party hereto acknowledges that it has no
proprietary rights to any tax matter or tax idea or to any element of the
transaction structure contemplated by this Agreement; and each party hereto (and
any employee, representative or agent of any party hereto) may disclose to any
and all Persons (without limitation of any kind), the Federal tax treatment and
Federal tax structure of the transaction contemplated by this Agreement. This
Section 20(m)(2) is intended to cause the transaction contemplated by this
Agreement to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Code and Section 6111 of the Code and the Treasury Regulations promulgated
thereunder; and shall be construed in a manner consistent with such purpose.
(n) If Lessor is required by the terms hereof to pay to or for the benefit
of Lessee any amount received as a refund of any Tax or as insurance proceeds or
any amount pursuant to Paragraph (d) of the Terminal Rental Adjustment Addendum,
and a Default or event which, with the giving of notice or the lapse of time, or
both, would become a Default has then occurred and is continuing, Lessor shall
not be required to pay such amounts unless and until any such Default shall have
been cured or any such event which, with the giving of notice or the lapse of
time, or both, would become a Default shall have been waived by Lessor. In
addition, if Lessor is required by the terms hereof to cooperate with Lessee in
connection with certain matters, such cooperation shall not be required if a
Default has then occurred and is continuing. Lessor may set-off against any
amount which Lessor is required to pay to Lessee hereunder, any amount then due
by Lessee hereunder.
(o) This Agreement may be executed in multiple counterparts, each of which,
when taken together, shall constitute a single agreement.
21. CHOICE OF LAW; JURISDICTION:
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 NEW YORK (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. The parties agree that
any action or proceeding arising out of or relating to this Agreement may be
commenced in the United States District Court for the Southern District of New
York and the parties irrevocably submit to the jurisdiction of such court and
agree not to assert, by way of motion, as a defense or otherwise, in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of such suit, action or proceeding is
improper, or that this Agreement or the subject matter hereof or the transaction
contemplated hereby may not be enforced in or by such court.
22. CHATTEL PAPER:
To the extent that any Schedule would constitute chattel paper, as such
term is defined in the UCC 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".
23. DEFINITIONS:
The following terms when used in this Agreement or in the Schedules shall have
the following meanings:
"ADVERSE ENVIRONMENTAL CONDITION" shall refer to (i) the existence or the
continuation of the existence, of an Environmental Emission (including, without
limitation, a sudden or non-sudden accidental or non-accidental Environmental
Emission), of, or exposure to, any Contaminant, odor or audible noise in
violation of any Environmental Law, at, in, by, from or related to any
Equipment, (ii) the environmental aspect of the transportation, storage,
treatment or disposal of materials in connection with the operation of any
Equipment in violation of any Environmental Law, or (iii) the violation, or
alleged violation, of any Environmental Law connected with any Equipment.
"AFFILIATE" shall refer, with respect to any given Person, to (a) each Person
that directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Stock
having ordinary voting power in the election of directors of such Person, (b)
each Person that controls, is controlled by, or is under common control with,
such Person, or (c) each of such Person's officers, directors, members, joint
venturers and partners. For the purposes of this definition, "control" of a
Person means the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.
"AGREEMENT" shall have the meaning given such term in the preamble to this
Agreement.
"APPLICABLE LAWS" means all laws, judgments, decrees, ordinances and regulations
and any other governmental rules, orders and determinations and all requirements
having the force of law, now or hereafter enacted, made or issued, whether or
not presently contemplated, including (without limitation) compliance with all
requirements of zoning laws, labor laws and Environmental Laws, compliance with
which is required with respect to the Equipment, whether or not such compliance
shall require structural, unforeseen or extraordinary changes to any of the
Equipment or the operation, occupancy or use thereof.
"ARTICLE 2A" shall have the meaning given such term in Section 18(a) of this
Agreement.
"AS IS BASIS" shall mean the transfer on an AS IS, WHERE IS BASIS, without
recourse or warranty, express or implied of any kind whatsoever, of the interest
in the Equipment.
"BASIC TERM" shall have the meaning given such term in Section B of the
Schedule.
"BASIC TERM COMMENCEMENT DATE" shall have the meaning given such term in Section
B of the Schedule.
"BASIC TERM RENT" shall have the meaning given such term in Section D of the
Schedule. "BSA" shall have the meaning given such term in Section 17(b)(2) of
this Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, and any day
on which banking institutions located in the States of New York or Tennessee are
authorized by law or other governmental action to close.
"CAPITAL LEASE" shall mean, as to any Person, a lease of any interest in any
kind of property or asset by that Person as lessee that is, or should be or
should have been recorded as a "capital lease" in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" shall mean all obligations of any Person under
Capital Leases, in each case, taken at the amount thereof accounted for as a
liability in accordance with GAAP.
"CAPITALIZED LESSOR'S COST" shall have the meaning given such term in Section B
of the Schedule. "CASUALTY OCCURRENCE" shall have the meaning given such term in
Section 8 of this Agreement. "Code" shall have the
meaning given such term in Section 3 of this Agreement.
"CONTAMINANT" shall refer to those substances which are regulated by or form the
basis of liability under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls, and radioactive substances.
"DEFAULT" shall have the meaning given such term in Section 12(a) of this
Agreement.
"DESIGNATED EQUIPMENT" shall mean that portion of the equipment now owned or
hereafter acquired by Lessee, together with all additions, attachments,
accessories, improvements, parts, repairs and appurtenances thereto, and all
substitutions and replacements thereof, not constituting Equipment (as defined
herein), having a Fair Market Value as of the date of determination not in
excess of twenty percent (20%) of the aggregate Fair Market Value of such
equipment not constituting Equipment (as defined herein) owned by Lessee as of
the date on which the initial Schedule is executed hereunder.
"DISTRIBUTION" shall mean any fee, payment, bonus or other remuneration of any
kind, and any repayment of or debt service on loans or other indebtedness.
"DOCUMENTS" shall have the meaning given such term in Section 17(a)(2) of this
Agreement.
"ENVIRONMENTAL CLAIM" shall refer to any accusation, allegation, notice of
violation, claim, demand, abatement or other order or direction (conditional or
otherwise) by any Governmental Authority or any Person for personal injury
(including sickness, disease or death), tangible or intangible property damage,
damage to the environment or other adverse effects on the environment, or for
fines, penalties or restrictions, resulting from or based upon any Adverse
Environmental Condition.
"ENVIRONMENTAL EMISSION" shall refer to any actual or threatened release, spill,
omission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment, or into or out of
any of the Equipment, including, without limitation, the movement of any
Contaminant or other substance through or in the air, soil, surface water,
groundwater, or property.
"ENVIRONMENTAL LAW" shall mean any Federal, foreign, state or local law, rule or
regulation pertaining to the protection of the environment, health or safety,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 1361 et seq.), and the Occupational Safety and
Health Act (19 U.S.C. Section 651 et sec.), as these laws have been amended or
supplemented, and any analogous foreign, Federal, state or local statutes, and
the regulations promulgated pursuant thereto.
"ENVIRONMENTAL LOSS" shall mean any loss, cost, damage, liability, deficiency,
fine, penalty or expense (including, without limitation, reasonable attorneys'
fees, engineering and other professional or expert fees), investigation,
removal, cleanup and remedial costs (voluntarily or involuntarily incurred),
damages due to personal injury (including sickness, disease or death), and
damages to, loss of the use of or decrease in value of the Equipment arising out
of or related to any Adverse Environmental Condition.
"EQUIPMENT" shall mean (i) the equipment listed in Annex A to the Schedules,
(ii) Parts or components thereof, (iii) ancillary equipment or devices furnished
therewith under this Agreement, (iv) all manuals and records (other than Rent
records) with respect to such Equipment, and (v) all substitutions and
replacements of any and all thereof, including, but not limited to, any
replacement equipment which may from time to time be substituted, pursuant to
Section 8(a) hereof, for the Equipment leased hereunder; together in each case
with any and all Parts permanently incorporated or installed in or attached
thereto or any and all Parts temporarily removed therefrom. Except as otherwise
set forth herein, at such time as replacement equipment shall be so substituted
and leased hereunder, such replaced item of Equipment shall cease to be
Equipment hereunder.
"EVENT" shall have the meaning given such term in Section 12(a) of this
Agreement. "GAAP" shall have the meaning given such term in Section 5(b) of this
Agreement.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"INTERIM PERIOD" shall have the meaning given such term in Section D of the
Schedule.
"INTERIM RENT PAYMENT DATE" shall have the meaning given such term in Section D
of the Schedule.
"LAST DELIVERY DATE" shall have the meaning given such term in Section B of the
Schedule.
"LEASE COMMENCEMENT DATE" shall have the meaning given such term in Section 2(a)
of this Agreement.
"LESSEE" shall have the meaning given such term in the preamble to this
Agreement. "Lessor" shall have the meaning given such term in the preamble to
this Agreement.
"LESSOR'S LIEN" shall mean any Lien affecting the Equipment or any part thereof
arising as a result of (i) Lessor's rights under or pursuant to this Agreement;
(ii) any claim arising from any transfer by Lessor of an interest in the
Equipment or this Agreement; (iii) any claim against Lessor not related to the
transactions contemplated by this Agreement; (iv) any act or omission of Lessor
not expressly contemplated by this Agreement or not permitted without consent
(which consent has not been granted) by Lessee or that is in violation of any
term of this Agreement or not taken as a result of the occurrence and
continuance of a Default as permitted by this Agreement; or (v) taxes imposed
against Lessor or the consolidated group of taxpayers of which it is a member
which are not to be indemnified against by Lessee under this Agreement;
provided, however, that there shall be excluded from this definition and no
Lessor's Lien shall exist if such Lien is being diligently contested in good
faith so long as neither such proceedings nor Lien involves a material danger of
the sale, forfeiture or loss of the Equipment or adversely affects Lessee's
rights under this Agreement.
"LIEN" shall mean any mortgage, chattel mortgage, pledge, Lien, charge,
encumbrance, lease, exercise of rights, security interest, lease in the nature
of a security interest, statutory right in rem, or claim of any kind, including
any thereof arising under any conditional sale agreement, equipment trust
agreement or title retention agreement.
"LOSS" shall have the meaning given such term in Section 15(c) of this
Agreement.
"MATERIAL ADVERSE EFFECT" shall have the meaning given such term in Section
17(a) of this Agreement.
"NET ECONOMIC RETURN" shall have the meaning given such term in Section 15(c) of
this Agreement.
"OBLIGATIONS" shall have the meaning given such term in Section 18(b) of this
Agreement. "OFAC" shall have the meaning given such term in Section 17(b)(2) of
this Agreement.
"OVERDUE RATE" shall have the meaning given such term in Section 20(i) of this
Agreement.
"PARTS" shall mean all appliances, components, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever nature
which may now or from time to time be incorporated or installed in or attached
to, or were provided by the manufacturer with, the Equipment, including after
temporary removal from such Equipment.
"PAYMENT DATE" shall have the meaning given such term in Section 8 of this
Agreement.
"PERMITTED LIEN" shall mean (i) the rights of Lessor and Lessee as herein
provided, (ii) Lessor's Liens, (iii) Liens for taxes either not yet due or being
diligently contested in good faith by appropriate proceedings and so long as
adequate reserves are maintained with respect to such Liens and available to
Lessee for the payment of such taxes and only so long as neither such
proceedings nor such Liens involve any material danger of the sale, forfeiture,
loss or loss of use of the Equipment or any part thereof, or any interest of
Lessor therein or any risk of
criminal liability of Lessor and Lessee has given Lessor prior written notice of
Lessee's intent t o contest any such taxes and Lessee h as a greed t o indemnify
Lessor for any and all costs and expenses (including, without limitation
reasonable attorneys' fees) which Lessor may incur as a result of such contest,
(iv) inchoate materialmen's, mechanics', carriers', workmen's, repairmen's, or
other like inchoate Liens arising in the ordinary course of Lessee's business
for sums either not delinquent or being diligently contested in good faith and
only so long as neither such proceedings nor any such Liens involve any material
danger of the sale, forfeiture, loss or loss of use of the Equipment, or any
part thereof, or any interest of Lessor therein or any material risk of material
civil liability and further provided that adequate reserves are maintained with
respect to such Liens and provided that Lessee has given Lessor written notice
thereof, (v) the rights of others under agreements or arrangements to the extent
expressly permitted under this Agreement, (vi) Liens arising out of any judgment
or award against Lessee with respect to which at the time an appeal or
proceeding for review is being prosecuted in good faith by appropriate
proceedings diligently conducted and with respect to which there shall have been
secured a stay of execution pending such appeal or proceeding for review and so
long as adequate reserves are available to the Lessee for the payment of such
obligations and there is no material danger of sale, forfeiture, loss, or loss
of use of the Equipment or material risk of material civil liability and Lessee
shall have given Lessor written notice thereof, and (vii) any Lien against which
the Lessee causes to be provided a bond in such amount and under such terms and
conditions as are reasonably satisfactory to Lessor.
"PERSON" shall include any individual, partnership, corporation, trust, limited
liability entity, unincorporated organization, government or department or
agency thereof and any other entity.
"PURCHASE ORDER ASSIGNMENT" shall have the meaning given such term in Section
1(b) of this Agreement.
"REMARKETING SUPPORT AGREEMENT" shall have the meaning given such term in
Section 1(b) of this Agreement.
"RENT" shall have the meaning given such term in Section 2(a) of this Agreement.
"RENT PAYMENT DATE" shall have the meaning given such term in Section D of the
Schedule.
"SCHEDULE" shall have the meaning given such term in Section 1(a) of this
Agreement.
"STIPULATED LOSS VALUE" shall mean the amount calculated in accordance with
Annex D to the Schedule as of the date of determination.
"STOCK" shall mean the voting stock, membership interests or similar equity
interests of any Person.
"SUBSIDIARY" means, with respect to any Person, a corporation, limited liability
entity, partnership or other entity of which such Person and/or its other
subsidiaries own, directly or indirectly, more than fifty percent (50%) of the
Stock.
"SUPPLIER" shall have the meaning given such term in Section 1(b) of this
Agreement.
"TAX BENEFITS" shall have the meaning given such term in Section 15(b) of this
Agreement. "Taxes" shall have the meaning given such term in Section 4 of this
Agreement. "Term" shall have the meaning given such term in Section 2(a) of this
Agreement.
"TERMINAL RENTAL ADJUSTMENT ADDENDUM" shall have the meaning given such term in
Section 18(c) of this Agreement.
"UCC" shall mean the UCC as enacted in any applicable jurisdiction.
"VTNA" shall have the meaning given such term in Section 1(b) of this Agreement.
Rules of Construction. Unless otherwise specified, references in any Document or
any of the Appendices thereto to a Section, subsection or clause refer to such
Section, subsection or clause as contained in such Document. The words "herein,"
"hereof' and "hereunder" and other words of similar import used in any Document
refer to such Document as a whole, including all annexes, exhibits and
schedules, as the same may from time to time be
amended, restated, modified or supplemented, and not to any particular section,
subsection or clause contained in such Document or any such annex, exhibit or
schedule. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Documents) or, in the case of Governmental Authorities, Persons succeeding to
the relevant functions of such Persons; references to any agreement refer to
that agreement as from time to time amended or supplemented or as the terms of
such agreement are waived or modified in accordance with its terms; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Lessee and Lessor have caused this Master Lease
Agreement to be executed by their duly authorized representatives as of the date
first above written,
LESSOR: LESSEE:
CEF 2002, LLC WESTERN EXPRESS, INC.
By: /s/ ▇▇▇▇▇ L'Homme By: /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇ L'Homme Name: ▇▇▇▇▇ ▇▇▇▇
------------------------------- ----------------------------------
Title: Sr. Risk Manager Title: President
------------------------------ ---------------------------------
SAMPLE SCHEDULE
TO
SCHEDULE NO. _________________________________
DATED THIS __________________________________ DAY OF ____________, 2005
TO MASTER LEASE AGREEMENT DATED AS OF SEPTEMBER __, 2005
DESCRIPTION OF EQUIPMENT
Type and Model
Manufacturer VIN of Equipment Number of Units Cost per Unit
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