EXHIBIT 10(ii)28
PNC LEASING
Master Equipment Lease Agreement
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MLA No. 02465
THIS MASTER EQUIPMENT LEASE AGREEMENT dated as of November 10, 2000 is made
by and between PNC Leasing, LLC ("Lessor") a subsidiary of PNC Bank, National
Association having an address at Two PNC Plaza, 13th Floor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ and IT CORPORATION, a California corporation with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Lessee").
TERMS AND CONDITIONS OF LEASE
1. Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from
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Lessor, the Equipment, subject to and uponthe terms set forth herein. Each
Equipment Schedule shall constitute a separate and enforceable lease
incorporating all the terms of this Master Equipment Lease Agreement as if such
terms were set forth in full in such Equipment Schedule. In the event that any
term of any Equipment Schedule conflicts with or is inconsistent with any term
of this Master Equipment Lease Agreement, the terms of the Equipment Schedule
shall govern.
2. Disclaimer of Warranties. LESSOR MAKES NO (AND SHALL NOT BE DEEMED TO HAVE
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MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE
QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE
THERETO OR OF ANY COMPONENT THEREOF, THE ABSENCE OF LATENT OR OTHER DEFECTS
(WHETHER OR NOT DISCOVERABLE), AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING
UNDERSTOOD THAT THE EQUIPMENT IS LEASED TO LESSEE "AS IS" AND ALL SUCH RISKS, IF
ANY, ARE TO BE BORNE BY LESSEE. NO DEFECT IN, OR UNFITNESS OF, THE EQUIPMENT, OR
ANY OF THE OTHER FOREGOING MATTERS, SHALL RELIEVE LESSEE OF THE OBLIGATION TO
PAY RENT OR OF ANY OTHER OBLIGATION HEREUNDER. LESSEE HAS MADE THE SELECTION OF
THE EQUIPMENT FROM THE SUPPLIER BASED ON ITS OWN JUDGMENT AND EXPRESSLY
DISCLAIMS ANY RELIANCE UPON ANY STATEMENTS OR REPRESENTATIONS MADE BY LESSOR.
LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS, SERVICE, MAINTENANCE OR DEFECT IN THE
EQUIPMENT OR THE OPERATION THEREOF. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER UNDER THE UCC OR OTHERWISE),
INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST OR DAMAGE TO LESSEE OR OTHERS
ARISING FROM ANY OF THE FOREGOING MATTERS, INCLUDING, WITHOUT LIMITATION,
DEFECTS, NEGLIGENCE, DELAYS, FAILURE OF DELIVERY OR NON-PERFORMANCE OF THE
EQUIPMENT. ANY WARRANTY BY THE SUPPLIER IS HEREBY ASSIGNED TO LESSEE BY LESSOR
FOR THE TERM OF THE LEASE WITHOUT RECOURSE. SUCH WARRANTY SHALL NOT RELEASE
LESSEE FROM ITS OBLIGATION TO LESSOR TO PAY RENT, TO PERFORM ALL OTHER
OBLIGATIONS HEREUNDER AND TO KEEP, MAINTAIN AND SURRENDER THE EQUIPMENT IN THE
CONDITION REQUIRED BY SECTIONS 12 AND 13 HEREOF. Lessee's execution and
delivery of a Certificate of Acceptance shall be conclusive evidence as between
Lessor and Lessee that the Items of Equipment described therein are in all of
the foregoing respects satisfactory to Lessee, and Lessee shall not assert any
claim of any nature whatsoever against Lessor based on any of the foregoing
matters; provided, however, that nothing contained herein shall in any way bar,
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reduce or defeat any claim that Lessee may have against the Supplier or any
other person (other than Lessor).
3. Non-Cancelable Lease. THIS LEASE IS A NET LEASE AND LESSEE'S OBLIGATION TO
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PAY RENT AND PERFORM ITS OBLIGATIONS HEREUNDER ARE ABSOLUTE, IRREVOCABLE AND
UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER (INCLUDING WITHOUT
LIMITATION THE BANKRUPTCY OF LESSOR) AND SHALL NOT BE SUBJECT TO ANY RIGHT OF
SET OFF, COUNTERCLAIM, DEDUCTION, DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE
AGAINST THE SUPPLIER, LESSOR OR ANY OTHER PARTY. LESSEE SHALL HAVE NO RIGHT TO
TERMINATE (EXCEPT AS EXPRESSLY PROVIDED HEREIN) OR CANCEL THIS LEASE OR TO BE
RELEASED OR DISCHARGED FROM ITS OBLIGATION HEREUNDER FOR ANY REASON WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, DEFECTS IN, DESTRUCTION OF, DAMAGE TO OR
INTERFERENCE WITH ANY USE OF THE EQUIPMENT (FOR ANY REASON WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, WAR, ACT OF GOD, STRIKE OR GOVERNMENTAL
REGULATION), THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY (OR ANY ALLEGATION
THEREOF) OF THIS LEASE OR ANY PROVISION
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HEREOF, OR ANY OTHER OCCURRENCE WHATSOEVER, WHETHER SIMILAR OR DISSIMILAR TO
THE FOREGOING, WHETHER FORESEEN OR UNFORESEEN.
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4. Definitions. Unless the context otherwise requires, as used in this Lease,
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the following terms shall have the respective meanings indicated below and shall
be equally applicable to both the singular and the plural forms thereof:
"Applicable Law" shall mean all applicable Federal, state, local and foreign
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laws, ordinances, judgments, decrees, injunctions, writs, rules, regulations,
orders, licenses and permits of any Governmental Authority. "Appraisal
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Procedure" shall mean the following procedure for obtaining an appraisal of the
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Fair Market Sales Value or the Fair Market Rental Value. Lessor shall provide
Lessee with the names of three independent Appraisers. Within ten (10) business
days thereafter, Lessee shall select one of such Appraisers to perform the
appraisal. The selected Appraiser shall be instructed to perform its appraisal
based upon the assumptions specified in the definition of Fair Market Sales
Value or Fair Market Rental Value, as applicable, and shall complete its
appraisal within twenty (20) business days after such selection. Any such
appraisal shall be final, binding and conclusive on Lessee and Lessor and shall
have the legal effect of an arbitration award. Lessee shall pay the fees and
expenses of the selected Appraiser.
"Appraise" shall mean a person engaged in the business of appraising property
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who has at least ten (10) years' experience in appraising property similar to
the Equipment.
"Authorized Signer" shall mean any officer of Lessee, set forth on an incumbency
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certificate (in form and substance satisfactory to Lessor) delivered by Lessee
to Lessor, who is authorized and empowered to execute the Lease Documents.
"Certificate of Acceptance" shall mean a certificate of acceptance, in form and
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substance satisfactory to Lessor, executed and delivered by Lessee in accordance
with Section 7 hereof.
"Default" shall mean any event or condition which, with the passage of time or
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the giving of notice, or both, would constitute an Event of Default.
"Default Rate" shall mean an annual interest rate equal to the lesser of 18% or
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the maximum interest rate permitted by Applicable Law.
"Equipment" shall mean an item or items of property designated from time to time
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by Lessee which are described on an Equipment Schedule and which are being or
will be leased by Lessee pursuant to this Lease, together with all replacement
parts, additions and accessories incorporated therein or affixed thereto
including, without limitation, any software that is a component or integral part
of, or is included or used in connection with, any Item of Equipment, but with
respect to such software, only to the extent of Lessor's interest therein, if
any.
"Equipment Group" shall consist of all Items of Equipment listed on a particular
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Equipment Schedule.
"Equipment Location" shall mean the location of the Equipment, as set forth on
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an Equipment Schedule, or such other location (approved in writing by Lessor) as
Lessee shall from time to time specify in writing.
"Equipment Schedule" shall mean each equipment lease schedule from time to time
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executed by Lessor and Lessee with respect to an Equipment Group, pursuant to
and incorporating by reference all of the terms of this Master Equipment Lease
Agreement.
"Event of Default" shall have the meaning specified in Section 22 hereof.
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"Fair Market Rental Value" or "Fair Market Sale Value" shall mean the value of
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each Item of Equipment for lease or sale, unless otherwise specified herein as
determined between Lessor and Lessee, or, if Lessor and Lessee are unable to
agree, pursuant to the Appraisal Procedure, which would be obtained in an arms-
length transaction between an informed and willing lessor or seller (under no
compulsion to lease or sell) and an informed and willing lessee or buyer (under
no compulsion to lease or purchase). In determining the Fair Market Rental Value
or Fair Market Sale Value of the Equipment, (i) such Fair Market Rental Value or
Fair Market Sale Value shall be calculated on the assumption that the Equipment
is in the condition and repair required by Sections 12 and 13 hereof, and (ii)
there shall be excluded from the calculation thereof the value of any Upgrade
made pursuant to Section 14 hereof in which the Lessor does not hold an
interest.
"GAAP" shall have the meaning specified in Section 31 hereof.
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"Governmental Action" shall mean all authorizations, consents, approvals,
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waivers, filings and declarations of any Governmental Authority, including,
without limitation, those environmental and operating permits required for the
ownership, lease, use and operation of the Equipment.
"Governmental Authority" shall mean any foreign, Federal, state, county,
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municipal or other governmental authority, agency, board or court.
"Guarantor" shall mean any guarantor of Lessee's obligations hereunder.
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"Item of Equipment" shall mean each Item of the Equipment.
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"Lease", "hereof", "herein" and "hereunder" shall mean, with respect to an
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Equipment Group, this Master Equipment Lease Agreement and the Equipment
Schedule on which such Equipment Group is described, including all addenda
attached thereto and made a part thereof.
"Lease Documents" shall mean this Lease and all other documents prepared by
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Lessor and now or hereafter executed in connection therewith.
"Lessor Assignee" shall have the meaning specified in Section 15 hereof.
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"Lessor Expense" shall have the meaning specified in Section 26 hereof.
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"Lessor Transfer" shall have the meaning specified in Section 15 hereof.
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"Liability" shall have the meaning specified in Section 24 hereof.
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"Lien" shall mean all mortgages, pledges, security interests, liens,
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encumbrances, claims or other charges of any kind whatsoever.
"Loss" shall have the meaning specified in Section 16 hereof.
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"Purchase Agreement" shall mean any purchase agreement or other contract entered
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into between the Supplier and Lessee for the acquisition of the Equipment to be
leased hereunder.
"Related Equipment Schedule" shall have the meaning specified in Section 27
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hereof. "Remedy Date" shall have the meaning specified in Section 22 hereof.
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"Rent" shall mean the periodic rental payments due hereunder for the leasing of
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the Equipment, as set forth on the Equipment Schedules, and, where the context
hereof requires, all such additional amounts as may from time to time be payable
under any provision of this Lease.
"Rent Commencement Date" shall mean, with respect to an Equipment Group, (i) the
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date on which Lessor receives an executed Certificate of Acceptance for such
Equipment from Lessee or (ii) the date on which Lessor disburses funds for the
purchase of such Equipment Group, as determined by Lessor in its sole
discretion.
"Rent Payment Date" with respect to an Equipment Group, shall have the meaning
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set forth in the Equipment Schedule associated therewith.
"Required Alteration" shall have the meaning specified in Section 11 hereof.
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"Stipulated Loss Value" shall mean, as of any Rent Payment Date and with respect
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to an Item of Equipment, the amount determined by multiplying the Total Cost for
such Item of Equipment by the percentage specified in the applicable Stipulated
Loss Value Supplement opposite such Rent Payment Date.
"Stipulated Loss Value Supplement" with respect to an Equipment Group, shall
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have the meaning set forth in the Equipment Schedule associated therewith.
"Supplier" shall mean the manufacturer or the vendor of the Equipment, as set
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forth on each Equipment Schedule.
"Term" shall mean the Initial Term or any Renewal Term, each as defined in
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Section 8 hereof, and any Extended Lease Term or Interim Term as defined in an
Equipment Schedule.
"Total Cost" shall mean, with respect to an Item of Equipment, (1) the
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acquisition cost of such Item of Equipment (including Lessor's capitalized
costs), as set forth on the Equipment Schedule on which such Item of Equipment
is described, or (2) if no such acquisition cost is specified, the Supplier's
invoice price for such Item of Equipment plus Lessor's capitalized costs, or (3)
if no such acquisition cost is specified and no such invoice price is
obtainable, an allocated price for such Item of Equipment based on the Total
Cost of all Items of Equipment set forth on the Equipment Schedule on which such
Item of Equipment is described, as determined by Lessor in its sole discretion.
"Upgrade" shall have the meaning specified in Section 14 hereof.
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5. Supplier Not an Agent. LESSEE UNDERSTANDS AND AGREES THAT (i) NEITHER THE
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SUPPLIER, NOR ANY SALES REPRESENTATIVE OR OTHER AGENT OF THE SUPPLIER, IS (1) AN
AGENT OF LESSOR OR (2) AUTHORIZED TO MAKE OR ALTER ANY TERM OR CONDITION OF THIS
LEASE, AND (ii) NO SUCH WAIVER OR ALTERATION SHALL VARY THE TERMS OF THIS LEASE
UNLESS EXPRESSLY SET FORTH HEREIN.
6. Ordering Equipment. Lessee has selected and ordered the Equipment from the
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Supplier and, if appropriate, has entered into a Purchase Agreement with respect
thereto. Lessor may accept an assignment from Lessee of Lessee's rights, but
none of Lessee's obligations, under any such Purchase Agreement. Lessee shall
arrange for delivery of the Equipment so that it can be accepted in accordance
with Section 7 hereof. If an Item of Equipment is subject to an existing
Purchase Agreement between Lessee and the Supplier, Lessee warrants that such
Item of Equipment has not been delivered to Lessee as of the date of the
Equipment Schedule applicable thereto. If Lessee causes the Equipment to be
modified or altered, or requests any additions thereto prior to the Rent
Conunencement Date, Lessee (i) acknowledges that any such modification,
alteration or addition to an Item of Equipment may affect the Total Cost, taxes,
purchase and renewal options (if any), Stipulated Loss Value and Rent with
respect to such Item of Equipment, and (ii) hereby authorizes Lessor to adjust
such Total Cost, taxes, purchase and renewal options (if any), Stipulated Loss
Value and Rent as appropriate. Lessee hereby authorizes Lessor to complete each
Equipment Schedule with the serial numbers and other identification data of the
Equipment Group associated therewith, as such data is received by Lessor.
7. Delively and Acceptance. Upon Lessee's acceptance for lease of any Equipment
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delivered to Lessee and described in any Equipment Schedule, Lessee shall
execute and deliver to Lessor a Certificate of Acceptance. LESSOR SHALL HAVE NO
OBLIGATION TO ADVANCE FUNDS FOR THE PURCHASE OF THE EQUIPMENT UNLESS AND UNTIL
LESSOR SHALL HAVE RECEIVED A CERTIFICATE OF ACCEPTANCE RELATING THERETO EXECUTED
BY LESSEE. Such Certificate of Acceptance shall constitute Lessee's
acknowledgment that such Equipment (a) was received by Lessee, (b) is
satisfactory to Lessee in all respects and is acceptable to Lessee for lease
hereunder, (c) is suitable for Lessee's purposes, (d) is in good order, repair
and condition, (e) has been installed and operates properly, and (f) is subject
to all of the terms of this Lease (including, without limitation, Section 2
hereof).
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8. Term; Survival. With respect to any Item of Equipment, unless otherwise
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specified on an Equipment Schedule, the initial term of this Lease (the "Initial
Term") shall commence on the date on which such Item of Equipment is delivered
to Lessee, and, unless earlier terminated as provided herein, shall expire on
the final Rent Payment Date for such Item of Equipment. With respect to an Item
of Equipment, any renewal term of this Lease (individually, a "Renewal Term"),
as contemplated hereby, shall commence immediately upon the expiration of the
Initial Term or any prior Renewal Term, as the case may be, and, unless earlier
terminated as provided herein, shall expire on the date on which the final
payment of Rent is due and paid hereunder. All obligations of Lessee hereunder
shall survive the expiration, cancellation or other termination of the Term
hereof.
9. Rent. Lessee shall pay the Rent set forth on the Equipment Schedule
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commencing on the Rent Commencement Date, and, unless otherwise set forth on
such Equipment Schedule, on the same day of each payment period thereafter for
the balance of the Term. Rent shall be due whether or not Lessee has received
any notice that such payments are due. All Rent shall be paid to Lessor at its
address set forth on the Equipment Schedule, or as otherwise directed by Lessor
in writing.
10. Location; Inspection; Labels. The Equipment shall be delivered to the
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Equipment Location and shall not be removed therefrom without Lessor's prior
written consent. Lessor shall have the right to enter upon the Equipment
Location and inspect the Equipment at any reasonable time. Lessor may, without
notice to Lessee, remove the Equipment if the Equipment is, in the opinion of
Lessor, being used beyond its capacity or is in any manner improperly cared for,
abused or misused. At Lessor's request, Lessee shall affix permanent labels
stating that the Equipment is owned by Lessor in a prominent place on the
Equipment and shall keep such labels in good repair and condition.
11. Use; Alterations. Lessee shall use the Equipment lawfully and only in the
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manner for which it was designed and intended and so as to subject it only to
ordinary wear and tear. Lessee shall comply with all Applicable Law. Lessee
shall immediately notify Lessor in writing of any existing or threatened
investigation, claim or action by any Governmental Authority in connection with
any Applicable Law or Governmental Action which could adversely affect the
Equipment or this Lease. Lessee, at its own expense, shall make such
alterations, additions or modifications or improvements (each, a "Required
Alteration") to the Equipment as may be required from time to time to meet the
requirements of Applicable Law or Governmental Action. All such Required
Alterations shall immediately, and without further act, be deemed to constitute
Items of Equipment and be fully subject to this Lease as if originally leased
hereunder. Except as otherwise permitted herein, Lessee shall not make any
alterations to the Equipment without Lessor's prior written consent.
12. Repairs and Maintenance. Lessee, at Lessee's own cost and expense, shall
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(a) keep the Equipment in good repair, good operating condition and working
order and in compliance with the manufacturer's specifications and Lessee's
standard practices (but with respect to the latter, in no event less than
industry practices), and (b) enter into and keep in full force and effect during
the Term hereof a maintenance agreement with the manufacturer of the Equipment,
or a manufacturer-approved maintenance organization, to maintain, service and
repair the Equipment as otherwise required herein. Upon Lessor's request, Lessee
shall furnish Lessor with an executed copy of any such maintenance agreement. An
alternate source of maintenance may be used by Lessee with Lessor's prior
written consent. Lessee, at its own cost and expense and within a reasonable
period of time, shall replace any part of any Item of Equipment that becomes
unfit or unavailable for use from any cause (whether or not such replacement is
covered by the aforesaid maintenance agreement), with a replacement part of the
same manufacture, value, remammg useful life and utility as the replaced part
immediately preceding the replacement (assuming that such replaced part was in
the condition required by this Lease). Such replacement part shall immediately,
and without further act, be deemed to constitute an Item of Equipment and be
fully subject to this Lease as if originally leased hereunder, and shall be free
and clear of all Liens.
13. Return of Equipment. Upon the expiration (subject to Section 32 hereof and
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except as otherwise provided in an Equipment Schedule) or earlier termination of
this Lease, Lessee, at its sole expense, shall assemble and return the Equipment
to Lessor by delivering such Equipment F.A.S. or F.O.B. to such location or such
carrier (packed for shipping) as Lessor shall specify. Lessee agrees that the
Equipment, when returned, shall be in the condition required by Section 12
hereof. All components of the Equipment shall have been properly serviced,
following the manufacturer's written operating and servicing procedures, such
that the Equipment is eligible for a manufacturer's standard, full service
maintenance contract without Lessor's incurring any expense to repair or
rehabilitate the Equipment. If, in the opinion of Lessor, any Item of Equipment
fails to meet the standards set forth above, Lessee agrees to pay on demand all
costs and expenses incurred in connection with repairing such Item of Equipment
and restoring it so as to meet such standards. If Lessee fails to return any
Item of Equipment as required hereunder, then, all of Lessee's obligations under
this Lease (including, without limitation, Lessee's obligation to pay Rent for
such Item of Equipment at the rental then applicable under this Lease) shall
continue in full force and effect until such Item of Equipment shall have been
returned in the condition required hereunder.
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14. Equipment Upgrades/Attachments. In addition to the requirements of Section
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11 hereof, Lessee, at its own expense, may from time to time add or install
upgrades or attachments (each an "Upgrade") to the Equipment during the Term;
provided, that such Upgrades (a) are readily removable without causing material
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damage to the Equipment, (b) do not materially adversely affect the Fair Market
Sale Value, the Fair Market Rental Value, residual value, productive capacity,
utility or remaining useful life of the Equipment, and (c) do not cause such
Equipment to become "limited use property" within the meaning of Revenue
Procedure 76-30, 1976-2 C.B. 647 (or such other successor tax provision), as of
the date of installation of such Upgrade. Any such Upgrades which can be removed
without causing damage to or adversely affecting the condition of the Equipment,
or reducing the Fair Market Sale Value, the Fair Market Rental Value, residual
value, productive capacity, utility or remaining useful life of the Equipment
shall remain the property of Lessee; and upon the expiration or earlier
termination of this Lease and provided that no Event of Default exists, Lessee
may, at its option, remove any such Upgrades and, upon such removal, shall
restore the Equipment to the condition required hereunder.
15. Sublease and Assignment. (a) WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, LESSEE
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SHALL NOT (i) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF THIS
LEASE, THE EQUIPMENT OR ANY INTEREST THEREIN, OR (ii) SUBLET OR LEND THE
EQUIPMENT TO, OR PERMIT THE EQUIPMENT TO BE USED BY, ANYONE OTHER THAN LESSEE.
(b) Lessor, at any time with or without notice to Lessee, may sell,
transfer, assign and/or grant a security interest, in all or any part of
Lessor's interest in this Lease, any Equipment Schedule or any Item of Equipment
(each, a "Lessor Transfer"), provided that no such Lessor Transfer will
materially increase Lessee's burdens or risks hereunder. In the event of a
Lessor Transfer, any purchaser, transferee, assignee or secured party (each a
"Lessor Assignee") shall have and may exercise all of Lessor's rights hereunder
with respect to the items to which any such Lessor Transfer relates, and LESSEE
SHALL NOT ASSERT AGAINST ANY SUCH LESSOR ASSIGNEE ANY DEFENSE, COUNTERCLAIM OR
OFFSET THAT LESSEE MAY HAVE AGAINST LESSOR. Lessee acknowledges that no such
sale, transfer, assignment and/or security interest will materially change
Lessee's duties hereunder or materially increase its burdens or risks hereunder.
Lessee agrees that upon written notice to Lessee of any such sale, transfer,
assignment and/or security interest, Lessee shall acknowledge receipt thereof in
writing and shall comply with the directions and demands of any such Lessor
Assignee.
16. Risk of Loss; Damage to Equipment. (a) Lessee shall bear the entire risk of
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loss (including without limitation, theft, destruction, disappearance of or
damage to any and all Items of Equipment ("Loss") from any cause whatsoever),
whether or not insured against, during the Term hereof until the Equipment is
returned to Lessor in accordance with Section 13 hereof. No Loss shall relieve
Lessee of the obligation to pay Rent or of any other obligation under this
Lease.
(b) In the event of Loss to any Item of Equipment, Lessee shall immediately
notify Lessor of same, and at the option of Lessor, Lessee shall within thirty
(30) days following such Loss: (1) place such Item of Equipment in good
condition and repair, in accordance with the terms hereof; (2) replace such
Item of Equipment with replacement equipment (acceptable to Lessor) in as good
condition and repair, and with the same value, remaining useful economic life
and utility, as such replaced Item of Equipment irnmediately preceding the Loss
(assuming that such replaced Item of Equipment was in the condition required by
this Lease), which replacement equipment shall immediately, and without further
act, be deemed to constitute Items of Equipment and be fully subject to this
Lease as if originally leased hereunder and shall be free and clear of all
Liens; or (3) pay to Lessor the sum of (i) all Rent due and owing hereunder with
respect to such Item of Equipment (at the time of such payment) plus (ii) the
Stipulated Loss Value as of the Rent Payment Date next following the date of
such Loss with respect to such Item of Equipment. Upon Lessor's receipt of the
payment required under subsection (3) above, Lessee shall be entitled to
Lessor's interest in such Item of Equipment, in its then condition and location,
"as is" and "where is", without any warranties, express or implied. In the event
Lessee elects to replace the Item of Equipment, Lessor's interest in such
replacement equipment shall be free and clear of all Liens of every kind or
nature whatsoever, and this Lease shall continue in full force and effect as
though such Loss had not occurred, except that the replacement equipment shall
become Equipment for all purposes of this Lease in lieu of the replaced
Equipment.
17. Insurance. (a) Lessee shall, at all times during the Term hereof (until the
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Equipment shall have been returned to Lessor) and at Lessee's own cost and
expense, maintain (1) insurance against all risks of physical loss or damage to
the Equipment (which shall include theft and collision for Equipment consisting
of motor vehicles, but shall not exclude loss resulting from flood or
earthquake) in an amount not less than the greater of the full replacement value
thereof or the Stipulated Loss Value thereof if applicable, and (2) commercial
general liability insurance (including blanket contractual liability coverage
and products liability coverage) for personal and bodily injury and property
damage in an amount satisfactory to Lessor.
(b) All insurance policies required hereunder shall (1) require thirty (30)
days' prior written notice of cancellation or material change in coverage to
Lessor (any such cancellation Or change, as applicable, not being effective
until the thirtieth (30th) day after the giving of such notice); (2) name Lessor
as an additional insured under the public liability policies and name Lessor as
sole loss
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payee under the property insurance policies; (3) not require contributions from
other policies held by Lessor; (4) waive any right of subrogation against
Lessor; (5) in respect of any liability of Lessor, except for the insurers'
salvage rights in the event of a loss, waive the right of such insurers to set-
off, to counterclaim or to any other deduction, whether by attachment or
otherwise, to the extent of any monies due Lessor under such policies; (6) not
require that Lessor pay or be liable for any premiums with respect to such
insurance covered thereby; (7) be in full force and effect throughout any
geographical areas at any time traversed by any Item of Equipment; and (8)
contain breach of warranty provisions providing that, in respect of the
interests of Lessor in such policies, the insurance shall not be invalidated by
any action or inaction of Lessee or any other person (other than Lessor) and
shall insure Lessor regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by Lessee or by any other
person (other than Lessor). Prior to the first date of delivery of any Item of
Equipment hereunder, and thereafter not less than 15 days prior to the
expiration dates of the expiring policies theretofore delivered pursuant to this
Section, Lessee shall deliver to Lessor a duplicate original of all policies (or
in the case of blanket policies, certificates thereof issued by the insurers
thereunder) for the insurance maintained pursuant to this Section.
18. General Tax Indemnification. Lessee shall pay when due and shall indemnify
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and hold Lessor harmless from and against (on an after-tax basis) any and all
taxes, fees, withholdings, levies, imposts, duties, assessments and charges of
any kind and nature arising out of or related to this Lease (together with
interest and penalties thereon and including, without limitation, sales, use,
gross receipts, personal property, real property, real estate excise, ad
valorem, business and occupational, franchise, value added, leasing, leasing
use, documentary, stamp or other taxes) imposed upon or against Lessor, any
Lessor Assignee, Lessee or any Item of Equipment by any Governmental Authority
with respect to any Item of Equipment or the manufacturing, ordering, sale,
purchase, shipment, delivery, acceptance or rejection, ownership, titling,
registration, leasing, subleasing, possession, use, operation, removal, return
or other dispossession thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease, excepting only all Federal,
state and local taxes on or measured by Lessor's net income (other than income
tax resulting from making any alterations, improvements, modifications,
additions, upgrades, attachments, replacements or substitutions by Lessee).
Whenever this Lease terminates as to any Item of Equipment, Lessee shall, upon
written request by Lessor, advance to Lessor the amount estimated by Lessor to
be the personal property or other taxes on said item which are not yet payable,
but for which Lessee is responsible. Lessor shall, at Lessee's request, provide
Lessee with Lessor's method of computation of anv estimated taxes.
19. Lessor's Right to Perform for Lessee. If Lessee fails to perform any of its
------------------------------------
obligations contained herein, Lessor may (but shall not be obligated to) itself
perform such obligations, and the amount of the reasonable costs and expenses of
Lessor incurred in connection with such performance, together with interest on
such amount at the Default Rate, shall be payable by Lessee to Lessor upon
demand. No such performance by Lessor shall be deemed a waiver of any rights or
remedies of Lessor or be deemed to cure the default of Lessee hereunder.
20. Delinquent Payment. If Lessee fails to pay any Rent or other sums under
------------------
this Lease on or before the date when the same becomes due, Lessee shall pay to
Lessor a late charge equal to five percent (5%) of such delinquent amount. Such
late charge shall be payable by Lessee upon demand by Lessor and shall be deemed
Rent hereunder. In no event shall such late charge exceed the maximum amount
permitted under Applicable Law.
21. Personal Property; Liens. Lessor and Lessee hereby agree that the Equipment
------------------------
is, and shall at all times remain, personal property notwithstanding the fact
that any Item of Equipment may now be, or hereafter become, in any manner
affixed or attached to real property or any improvements thereon. Lessee shall
at all times keep the Equipment free and clear from all Liens. Lessee shall (i)
give Lessor immediate written notice of any such Lien, (ii) promptly, at
Lessee's sole cost and expense, take such action as may be necessary to
discharge any such Lien, and (iii) indemnify and hold Lessor, on an after-tax
basis, harmless from and against any loss or damage caused by any such Lien.
22. Events of Default; Remedies. (a) As used herein, the term "Event of
---------------------------
Default" shall mean any of the following events: (1) Lessee fails to pay any
Rent within ten (10) days after the same shall have become due; (2) Lessee or
any Guarantor becomes insolvent or makes an assignment for the benefit of its
creditors; (3) a receiver, trustee, conservator or liquidator of Lessee or any
Guarantor or of all or a substantial part of Lessee's or such Guarantor's assets
is appointed with or without the application or consent of Lessee or such
Guarantor, respectively; (4) a petition is filed by or against Lessee or any
Guarantor under any bankruptcy, insolvency or similar legislation; (5) Lessee or
any Guarantor violates or fails to perform any provision of either this Lease or
any other loan, lease or credit agreement or any acquisition or purchase
agreement with Lessor or any other party; (6) Lessee violates or fails to
perform any covenant or representation made by Lessee herein; (7) any
representation or warranty made herein or in any certificate, financial
statement or other statement furnished to Lessor (or Lessor's parent,
subsidiaries or affiliates) shall prove to be false or misleading in any
material respect as of the date on which the same was made; (8) Lessee makes a
bulk transfer of furniture, furnishings, fixtures or other equipment or
inventory; (9) there is a material adverse change in Lessee's or any Guarantor's
financial
________________________________________________________________________________
Page 7 of 11
condition since the first Rent Conunencement Date of any Equipment Schedule
executed in connection herewith; (10) Lessee merges or consolidates with any
other corporation or entity, or sells, leases or disposes of all or
substantially all of its assets without the prior written consent of Lessor;
(11) a change in control occurs in Lessee or any Guarantor; or (12) the death or
dissolution of Lessee or any Guarantor. An Event of Default with respect to any
Equipment Schedule hereunder shall, at Lessor's option, constitute an Event of
Default for all Equipment Schedules hereunder and any other agreements between
Lessor and Lessee.
(b) Upon the occurrence of an Event of Default, Lessor may do one or more of
the following as Lessor in its sole discretion shall elect: (1) proceed by
appropriate court action or actions, either at law or in equity, to enforce
performance by Lessee of the applicable covenants of this Lease or to recover
damages for the breach thereof; (2) sell any Item of Equipment at public or
private sale; (3) hold, keep idle or lease to others any Item of Equipment as
Lessor in its sole discretion may determine; (4) by notice in writing to
Lessee, cancel or terminate this Lease, without prejudice to any other
remedies hereunder; (5) demand that Lessee, and Lessee shall, upon written
demand of Lessor and at Lessee's expense forthwith return all Items of
Equipment to Lessor in the manner and condition required by Section 13 hereof,
provided, however, that Lessee shall remain and be liable to Lessor for any
amounts provided for herein or other damages resulting from the Equipment not
being in the condition required by Section 12 hereof, and otherwise in
accordance with all of the provisions of this Lease, except those provisions
relating to periods of notice; (6) enter upon the premises of Lessee or other
premises where any Item of Equipment may be located and, without notice to
Lessee and with or without legal process, take possession of and remove all or
any such Items of Equipment without liability to Lessor by reason of such
entry or taking possession, and without such action constituting a
cancellation or termination of this Lease unless Lessor notifies Lessee in
writing to such effect, (7) by written notice to Lessee specifying a payment
date (the "Remedy Date"), demand that Lessee pay to Lessor, and Lessee shall
pay to Lessor, on the Remedy Date, as liquidated damages for loss of a bargain
and not as a penalty , any unpaid Rent due prior to the Remedy Date plus
whichever of the following amounts Lessor, in its sole discretion, shall
specify in such notice (together with interest on such amount at the Default
Rate from the Remedy Date to the date of actual payment): (i) an amount, with
respect to an Item of Equipment, equal to the Rent pavable for such Item of
Equipment for the remainder of the then current Term thereof, after
discounting such Rent to present worth as of the Remedy Date on the basis of a
per annum rate of discount equal to five percent (5%) from the respective
dates upon which such Rent would have been paid had this Lease not been
canceled or terminated; or (ii) the Stipulated Loss Value, computed as of the
Remedy Date or, if the Remedy Date is not a Rent Payment Date, the Rent
Payment Date next following the Remedy Date (provided, however, that, with
respect to any proceeds actually received by Lessor for any Item of Equipment
returned to or repossessed by Lessor, Lessor agrees that it shall first apply
such proceeds to satisfy Lessee's obligation to pay the Stipulated Loss Value
or, if Lessor has received payment in full of the Stipulated Loss Value from
Lessee, Lessor shall remit such proceeds to Lessee (after first deducting any
Lessor Expense) up to the amount of the Stipulated Loss Value; (8) cause
Lessee, at its expense, to promptly assemble any and all Items of Equipment
and return the same to Lessor at such place as Lessor may designate in
writing; and (9) exercise any other right or remedy available to Lessor under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof or to rescind this Lease.
In addition, Lessee shall be liable, except as otherwise provided above, for
any and all unpaid Rent due hereunder before or during the exercise of any of
the foregoing remedies, and for reasonable legal fees and other costs and
expenses incurred by reason of the occurrence of any Event of Default or the
exercise of Lessor's remedies with respect thereto. If an Event of Default
occurs, Lessee hereby agrees that ten (10) days prior notice to Lessee of (A)
any public sale or (B) the time after which a private sale may be negotiated
shall be conclusively deemed reasonable and, to the extent permitted by
Applicable Law, Lessee waives all rights and defenses with respect to such
disposition of the Equipment. None of Lessor's rights or remedies hereunder
are intended to be exclusive of, but each shall be cumulative and in addition
to any other right or remedy referred to hereunder or otherwise available to
Lessor at law or in equity, and no express or implied waiver by Lessor of any
Event of Default shall constitute a waiver of any other Event of Default or a
waiver of any of Lessor's rights.
23. Notices. All notices and other communications hereunder shall be in writing
-------
and shall be transmitted by hand, overnight courier or certified mail (return
receipt requested), postage prepaid. Such notices and other com-munications
shall be addressed to the respective party at the address set forth above or at
such other address as any party may from time to time designate by notice duly
given in accordance with this Section. Such notices and other cornmunications
shall be effective upon the earlier of receipt or three (3) days after mailing
if mailed in accordance with the terms of this section.
24. General Indemnification. Lessee shall pay, and shall indemnify and hold
-----------------------
Lessor ▇▇▇▇-▇▇▇▇ on an after-tax basis from and against, any and all
liabilities, causes of action, claims, suits, penalties, damages, losses, costs
or expenses (including attorneys' fees), obligations, liabilities, demands and
judgments, and Liens, of any nature whatsoever (collectively, a "Liability")
arising out of or in any way related to: (a) the Lease Documents, (b) the
manufacture, purchase, ownership, selection, acceptance, rejection, possession,
lease, sublease, operation, use, maintenance, documenting, inspection, control,
loss, damage, destruction, removal, storage, surrender, sale, use, condition,
delivery, nondelivery, return or other disposition of or any other matter
relating to any Item of Equipment or any part or portion thereof (including, in
each case and without limitation, latent or other defects, whether or not
discoverable, any claim for patent, trademark or copyright infringement) and any
and all Liabilities in any way relating to or arising out of injury to persons,
________________________________________________________________________________
Page 8 of 11
properties or the environment or any and all Liabilities based on strict
liability in tort, negligence, breach of warranties or violations of any
regulatory law or requirement, (c) a failure to comply fully with Applicable Law
and (d) Lessee's failure to perform any covenant, or Lessee's breach of any
representation or warranty, hereunder; provided, that the foregoing indemnity
--------
shall not extend to the Liabilities to the extent resulting solely from the
gross negligence or willful misconduct of Lessor. Lessee shall promptly deliver
to Lessor (i) copies of any documents received from the United States
Environmental Protection Agency or any state, county or municipal environmental
or health agency and (ii) copies of any documents submitted by Lessee or any of
its subsidiaries to the United States Environmental Protection Agency or to any
state, county or municipal environmental or health agency concerning the
Equipment or its operation
25. Severabilty; Caption. Any provision of this Lease or any Equipment Schedule
--------------------
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 shall not invalidate or render
unenforceable such provision in any other jurisdiction. Captions are intended
for convenience or reference only, and shall not be construed to define, limit
or describe the scope or intent of any provisions hereof.
26. Lessor's Expense. Lessee shall pay all costs and expenses of Lessor,
----------------
including, without hmitation, reasonable attornevs' and other professional fees,
the fees of any collection agencies and appraisers and all other costs and
expenses related to anv sale or release of the Equipment (including storage
costs), incurred by Lessor in enforcing any of the terms, conditions or
provisions hereof or in protecting Lessor's rights hereunder (each a "Lessor
Expense").
27. Related Equipment Schedules. In the event that any Item of Equipment
---------------------------
covered under any Equipment Schedule hereunder may become attached or affixed
to, or used in connection with, Equipment covered under another Equipment
Schedule hereunder (a "Related Equipment Schedule"), Lessee agrees that, if
Lessee elects to exercise a purchase or renewal option under any such Equipment
Schedule, or if Lessee elects to return the Equipment under any such Equipment
Schedule pursuant to Section 13 hereof, then Lessor, in its sole discretion, may
require that all Equipment leased under all Related Equipment Schedules be
similarly disposed of.
28. Financial and Other Data. During the Term hereof, Lessee shall furnish
------------------------
Lessor, as soon as available and in any event within 120 days after the last day
of each fiscal year, financial statements of Lessee and each Guarantor, in each
case compiled, reviewed or audited by an independent certified public accountant
as required by Lessor. Lessee shall also furnish such other financial reports,
information or data (including federal and state income tax returns and
quarterly or interim financial statements compiled, reviewed or audited by an
independent certified public accountant if required by Lessor) as Lessor may
reasonably request from time to time.
29. [RESERVED]
30. [RESERVED]
31. Representations and Warranties of Lessee. Lessee represents and warrants
----------------------------------------
that: (a) Lessee is a corporation duly organized and validly existing in good
standing under the laws of the state of its incorporation; (b) the execution,
delivery and performance of this Lease and all related instruments and
documents: (1) have been duly authorized by all necessary corporate action on
the part of Lessee, (2) do not require the approval of any stockholder, partner,
trustee, or holder of any obligations of Lessee except such as have been duly
obtained, and (3) do not and will not contravene any law, governmental rule,
regulation or order now binding on Lessee, or the charter or by-laws of Lessee,
or contravene the provisions of, or constitute a default under, or result in the
creation of any lien or encumbrance upon the property of Lessee under, any
indenture, mortgage, contract or other agreement to which Lessee is a party or
by which it or its property is bound; (c) the Lease Documents, when entered
into, will constitute legal, valid and binding obligations of Lessee enforceable
against Lessee in accordance with the terms thereof; (d) there are no actions or
proceedings to which Lessee is a party, and there are no other threatened
actions or proceedings of which Lessee has knowledge, before any Governmental
Authority, which, either individually or in the aggregate, would adversely
affect the financial condition of Lessee, or the ability of Lessee to perform
its obligations hereunder; (e) Lessee is not in default under any obligation for
the payment of borrowed money, for the deferred purchase price of property or
for the payment of any rent under any lease agreement which, either individually
or in the aggregate, would have the same such effect; (f) under the laws of the
state(s) in which the Equipment is to be located, the Equipment consists solely
of personal property and not fixtures; (g) the financial statements of Lessee
(copies of which have been furnished to Lessor) have been prepared in accordance
with generally acceptable accounting principles consistently applied ("GAAP"),
and fairly present Lessee's financial condition and the results of its
operations as of the date of and for the period covered by such statements, and
since the date of such statements there has been no material adverse change in
such conditions or operations;
________________________________________________________________________________
Page 9 of 11
(h) the address stated above is the chief place of business and chief executive
office, or in the case of individuals, the primary residence, of Lessee; (i)
Lessee does not conduct business under a trade, assumed or fictitious name; (j)
the Equipment is being leased hereunder solely for business purposes and that no
item of Equipment will be used for personal, family or household purposes; (k)
except as previously disclosed in writing to Lessor, neither Lessee nor any of
its officers or directors (if a corporation), partners (if a partnership) or
members (if a limited liability corporation) has, directly or indirectly, any
financial interest in the Supplier; and (1) so long as this Lease is in effect,
Lessee shall comply with the financial covenants as set forth in that certain
Second Amended and Restated Credit Agreement dated as of March 7,2000 (as
amended from time to time, the ("Agreement") made among THE IT GROUP, INC.
(formerly known as International Technology Corporation), a Delaware corporation
(the "Company"), it corporation, A California corporation and a wholly-owned
subsidiary of the Company ("ITC"), OHM Corporation, an Ohio corporation and a
wholly-owned subsidiary of the Company ("OHM") OHM REMEDIATION SERVICES CORP.,
an Ohio corporation and wholly-owned subsidiarv of OHM ("OHM Remediation"),
BENECO ENTERPRISES, INC., a Utah corporation and wholly-owned Subsidiary of OHM
("Beneco"), the institution from time to time thereto as Lenders, whether by
execution of the Agreement or an Assignment and Acceptance, the institutions
from time to time party thereto as Issuing Banks, whether by execution of the
Agreement or an Assigrunent and Acceptance, CITICORP USA, INC., a Delaware
corporation ("Citicorp"), in its capacity as admirdstrative agent and collateral
agent for the Lenders and the Issuing Banks, FLEET NATIONAL BANK, a national
banking association ("Fleet"), in its capacity as documentation agent for the
Lenders and the Issuing Banks and ROYAL BANK OF CANADA and CREDIT LYONNAIS NEW
YORK BRANCH, in their respective capacities as co-agents (the "Co-Agents"). Any
failure of Lessee to comply fully with the covenants as set forth in the
Agreement (including any modifications thereof made from time to time) shall be
a default under this Lease and any other loan, lease or credit agreement or any
acquisition or purchase agreement with PNCLLC, its affiliates and/or
subsidiaries, including without lin-fitation PNC Bank, National Association.
32. Renewal And Purchase Options With respect to an Equipment Schedule and the
----------------------------
Equipment Group set forth thereon, Lessee shall have the purchase and renewal
options set forth in such Equipment Schedule.
33. Lessee's Waivers. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE (A)
----------------
WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY SECTIONS 2A-
508 THROUGH 2A-522 OF THE UNIFORM COMMERCIAL CODE AND (B) ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE TO RECOVER INCIDENTAL OR
CONSEQUENTIAL DAMAGES FROM LESSOR FOR ANY BREACH OF WARRANTY OR FOR ANY OTHER
REASON OR TO SETOFF OR DEDUCT ALL OR ANY PART OF ANY CLAIMED DAMAGES RESULTING
FROM LESSOR'S DEFAULT, IF ANY, UNDER THIS LEASE PROVIDED, HOWEVER, THAT NO SUCH
WAIVER SHALL PRECLUDE LESSEE FROM ASSERTING ANY SUCH CLAIM AGAINST LESSOR IN A
SEPARATE CAUSE OF ACTION INCLUDING, WITHOUT LIMITATION, ANY CLAIM ARISING AS A
RESULT OF LESSOR'S BREACH OF SECTION 38 HEREOF.
34. UCC Filings. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS ITS TRUE AND
-----------
LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE
AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN LESSOR'S SOLE
DISCRETION ARE DEEMED NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN THE
EQUIPMENT IN ALL APPLICABLE JURISDICTIONS. Lessee hereby ratifies, to the
extent permitted by law, all that Lessor shall lawfully and in good faith do or
cause to be done by reason of and in compliance with this paragraph.
35. Miscellaneous. Time is of the essence with respect to this Lease. ANY
-------------
FAILURE OF LESSOR TO REQUIRE STRICT PERFORMANCE BY LESSEE OR ANY WAIVER BY
LESSOR OF ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A CONSENT OR WAIVER OF
ANY PROVISION OF THIS LEASE. This Lease and each Equipment Schedule shall be
binding upon, and inure to the benefit of, the parties hereto, their pern-dtted
successors and assigns. This Lease will be binding upon Lessor only if executed
by a duly authorized officer or representative of Lessor at Lessor's address set
forth above. The Lease Documents shall be executed on Lessee's behalf by an
Authorized Signer of Lessee. THIS LEASE IS BEING DELIVERED IN THE COMMONWEALTH
OF PENNSYLVANIA AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT
OF LAWS PROVISION OR RULE (WHETHER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE COMMONWEALTH OF PENNSYLVANIA.
36. Jury Trial Waiver. LESSOR AND LESSEE HEREBY EACH WAIVE THEIR RESPECTIVE
-----------------
RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THE
________________________________________________________________________________
Page 10 of 11
LEASE, THE LEASE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
IN ANY ACTION OR PROCEEDING TO WHICH LESSOR OR LESSEE MAY BE PARTIES, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. LESSEE AND LESSOR
AGREE THAT THEIR RESPECTIVE RIGHT TO JURY TRIAL IS WAIVED AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY, OF THIS AGREEMENT OR THE OTHER LEASE DOCUMENTS
OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND
VOLUNTARILY BY LESSOR AND LESSEE WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN
ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LEASE AND
THE LEASE DOCUMENTS.
37. More than One Lessee. If more than one person or entity executes the Lease
--------------------
Documents as "Lessee," the obligations of "Lessee" contained herein and therein
shall be deemed joint and several and all references to "Lessee" shall apply
both individually and jointly.
38. Quiet Enjoyment. So long as no Default or Event of Default has occurred and
---------------
is continuing, Lessee shall peaceably hold and quietly enjoy the Equipment
without interruption by Lessor or any person or entity claiming through Lessor.
39. Entire Agreement. This Lease, together with all other Lease Documents
----------------
constitute the entire understanding or agreement between Lessor and Lessee with
respect to the leasing of the Equipment, and there is no understanding or
agreement, oral or written, which is not set forth herein or therein. Neither
this Lease nor any Equipment Schedule may be amended except by a writing signed
by Lessor and Lessee.
Lessee's Initials: /s/ RRC
--------
40. Execution in Counterpart. This Master Equipment Lease Agreement may be
------------------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the day and
year first above written.
Lessor: Lessee:
PNC LEASING, LLC IT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- ----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President, Treasurer
Page 11 of 11
Equipment_Schedule No.-001
________________________________________________________________________________
EQUIPMENT SCHEDULE NO. -001 dated as of November 10, 2000 (this "Schedule")
between PNC Leasing, LLC ("Lessor") a subsidiary of PNC Bank, National
Association (the "Bank"), and IT CORPORATION, a California corporation
("Lessee").
INTRODUCTION:
-------------
Lessor and Lessee have heretofore entered into that certain Master
Equipment Lease Agreement dated as of , 2000, (the "Master Lease";
the Master Lease and this Schedule hereinafter collectively referred to as,
this "Lease"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings specified in the Master Lease. ne Master Lease
provides for the execution and delivery of a Schedule substantially in the
form hereof for the purpose of confirn-dng the acceptance and lease of the
Equipment under this Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof and hereof.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
EQUIPMENT & INVOICING TERMS
--------------------------------------------------------------------------------
1. EQUIPMENT. Pursuant to the terms and conditions of this Lease, Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the equipment
listed on Exhibit A attached hereto (the "Equipment"). The aggregate Total Cost
of such Equipment is $4,061,800.00.
2. TERM. The Initial Term of this Lease with respect to the Equipment
described on this Schedule shall conunence on the date on which such Equipment
is delivered to Lessee, and, unless earlier terminated as provided herein, shall
expire on a date which is sixty (60) months after the Rent Commencement Date
(the "Initial Term Expiration Date").
3. RENT PAYMENT DATES; RENT. Lessee hereby agrees to pay Rent for the
Equipment throughout the Initial Term in sixty (60) consecutive monthly
installments payable in arrears on the date which is one (1) month after the
Rent Commencement Date and on the same day of each month thereafter (each, a
"Rent Payment Date"). Each such installment of Rent shall be in an amount equal
to $74,826.60. In addition, for the period conunencing on the Interim Term
Commencement Date (as defined below) and ending on the day before the Rent
Conunencement Date in an amount equal to $2,494.22 per day, and agrees that with
respect to the Equipment described on this Schedule, the following modifications
are hereby made to the Master Lease: (a) "Rent Commencement Date" shall mean,
-------------------
with respect to an Equipment Group, the first (1st) day of the first month
following the date of the Certificate of Acceptance for such Equipment Group,
(b) "Interim Term Commencement Date" shall mean, with respect to an Equipment
---------------------------
Group, the date on which Lessor disburses funds for the purchase of such
Equipment Group, as determined by Lessor in its sole discretion, (c) Section 6
of the Master Lease ("Ordering Equipment") is hereby amended to delete the term
"Rent Commencement Date" and to substitute the term "Interim Term Commencement
Date" in its place and (d) Section 22(a)(9) of the Master Lease ("Events of
Default; Remedies") is hereby amended to delete the term "Rent Commencement
Date" and to substitute the phrase "Rent Commencement Date or Interim Term
Commencement Date, as the case may be," in its place.
4. EQUIPMENT LOCATION; BILLING ADDRESS. The Equipment described on this
Schedule shall be located at, and except as otherwise provided in this Lease,
shall not be removed from, the following address: See attached Exhibit A. The
billing address of Lessee is as follows: IT CORPORATION, Mr. ▇▇▇▇ ▇▇▇▇▇▇; OHM/IT
CORPORATION; ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
________________________________________________________________________________
________________________________________________________________________________
TRANSACTION TYPE TERMS
________________________________________________________________________________
5. PURCHASE, RENEWAL AND OPTION TERMS.
(a) FMV. With respect to the Equipment described on this Schedule, Section
32 of the Master Lease ("Renewal and Purchase Options") is hereby deleted in its
entirety and the following is substituted in its place:
So long as no Default or Event of Default shall have occurred and be
continuing and Lessee shall have given Lessor at least ninety (90) days but
not more than one hundred eighty (180) days prior written notice (the
"Option Notice"), Lessee shall have the following purchase and renewal
options at the expiration of the Initial Term, or any Renewal Term, to:
(i) purchase all, but not less than all, Items of Equipment for a purchase
price (the "Purchase Option Price") equal to the then Fair Market Sale
Value thereof; (ii) renew this Lease on a month to month basis at the same
Rent payable at the expiration of such Initial Term or Renewal Term, as the
case may be; (iii) renew this Lease for a minimum period of not less than
twelve (12) consecutive months at the then current Fair Market Rental
Value; or (iv) return such Equipment to Lessor pursuant to, and in the
condition required by, the Lease. If Lessee fails to give Lessor the Option
Notice, Lessee shall be deemed to have chosen option (ii) above.
Payment of the Purchase Option Price, applicable sales taxes, together with
all other amounts due and owing by Lessee under the Lease (including, without
limitation, Rent) during such Initial Term and Renewal Term shall be made on
the last day of the Initial Term or Renewal Term, as the case may be, in
immediately available funds against delivery of a ▇▇▇▇ of sale transferring to
Lessee all right, title and interest of Lessor in and to the Equipment ON AN "AS
IS" "WHERE IS" BASIS, WITHOUT ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE CONDITION OF THE EQUIPMENT,
ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. LESSOR MAY
SPECIFICALLY DISCLAIM ANY SUCH REPRESENTATIONS AND WARRANTIES.
(b) Early Buyout Option. So long as no Default or Event of Default shall
have occurred and be continuing, Lessee shall have the option to purchase all,
but not less than all, Items of Equipment on the date which is forty-eight (48)
months after the Rent Commencement Date (the "EBO Date") at a price (the "EBO
Price") equal to thirty-five and seventy-one hundredths percent (35.71%) of the
Total Cost of the Equipment, plus any applicable sales taxes. For Lessee to
exercise its option hereunder, Lessee shall notify Lessor in writing of its
desire to effect such option at least ninety (90) days (but not more than one
hundred eighty (180) days) prior to the EBO Date. Such notice shall be
irrevocable. The EBO Price represents the parties present best estimate of the
fair market value of the Equipment on the EBO Date determined by using
commercially reasonable methods which are standard in the industry. Payment of
the EBO Price, applicable sales taxes, together with all other amounts due and
owing by Lessee under the Lease (including, without limitation, Rent) on or
before the EBO Date, shall be made on the EBO Date in inunediately available
funds. Thereafter, upon Lessee's written request, Lessor shall deliver to Lessee
a ▇▇▇▇ of sale transferring to Lessee all right, title and interest of Lessor in
and to the Equipment ON AN "AS IS" "WHERE IS" BASIS, WITHOUT ANY WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER. If Lessee shall fail to pay all
amounts required to be paid under the Lease on the EBO Date, the Lease shall
continue in full force and effect and Lessee agrees to reimburse Lessor for all
reasonable costs, expenses and liabilities incurred in connection therewith.
(c) Termination for Obsolescence. (i) Lessee, at its option, shall have the
right on any Rent Payment Date to terminate this Lease as to any Items of
Equipment that in the good faith judgment of Lessee have become destroyed,
obsolete or surplus to Lessee's requirements or uneconon-dc to Lessee (the
"Terminated Equipment") so long as (A) no Default or Event of Default shall have
occurred and be continuing and (B) on or before the fifth (5th) business day
preceding a Rent Payment Date on which an Item of Equipment is to be terminated,
Lessee shall by notice to Lessor specifically identify the Terminated Equipment
and Lessee shall pay Lessor on such Rent Payment Date, in immediately available
funds: (x) the installment of Rent (which shall not include Rent on any
Equipment terminated on or before such Payment Date) together with any costs and
taxes then outstanding under the Lease,
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plus (y) an amount equal to the aggregate net sales price of the Terminated
Equipment, plus (z) the amount, if any, by which the aggregate Termination
Value (as hereinafter defined) of such Terminated Equipment exceeds such net
sales price. All of the net proceeds from the sale of any Terminated Equipment,
together with all applicable taxes and costs associated therewith shall be
payable by Lessee to Lessor as provided above. Unless otherwise directed by
Lessor, the Terminated Equipment shall be sold by Lessee, as Lessor's agent, to
third parties not affiliated with Lessee and as part of corrunercial equipment
sales transactions arranged and effected by Lessee in the ordinary course of its
business. Such sales of the Terminated Equipment shall be conducted in the same
manner as sales of similar Lessee-owned equipment, without disfavoring such
Terminated Equipment or favoring Lessee-owned equipment in any manner.
(ii) Lessee, (A) as Lessor's agent, will sell Items of Equipment pursuant
to this Section solely on an "AS-IS, WHERE-IS" BASIS WITHOUT RECOURSE TO, OR
WARRANTY BY, LESSOR, other than warranties as to the Terminated Equipment being
free and clear of claims by, through or under Lessor, and, (B) in its individual
capacity and not in its capacity as agent for Lessor, may make warranties as to
the Terminated Equipment being free and clear of all liens arising from claims
by, through or under the Lessee; and thereupon Lessee shall deliver such
Terminated Equipment, as agent for Lessor, to the purchaser in accordance with
the terms of this Lease.
Nothing in this paragraph shall diminish or affect Lessee's other obligations
under this Lease or its liability for the representations and warranties set
forth herein.
(iii) Upon the making of any termination payment required by this Section,
and payment of all other amounts then due, Lessee shall be relieved of all
obligations to pay Rent with respect to the Terminated Equipment and this
Lease shall thereupon terminate with respect to such Terminated Equipment,
except for such obligations as by the terms of this Lease survive the
termination thereof.
(iv) "Termination Value" as used in this Section with respect to any
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Terminated Equipment shall be an amount equal to the percentage set forth on the
Stipulated Loss Value Schedule (attached hereto as Attachment A) opposite the
--------------
Rent Payment Date on which the termination occurs, multiplied by the Total Cost
of such Terminated Equipment. If Lessee shall fail to pay all amounts required
to be paid hereunder, the Lease shall continue in full force and effect with
respect to the Terminated Equipment and Lessee agrees to reimburse Lessor for
all costs, expenses and liabilities incurred in connection therewith.
6. NATURE OF TRANSACTION; TRUE LEASE. (a) It is the express intent of the
parties that this Lease 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. To the extent that Article 2A ("Article 2A") of the
Uniform Commercial Code ("UCC") applies to the characterization of this Lease,
the parties hereby agree that this Lease is a "Finance Lease" as defined
therein. Lessee acknowledges: (i) that Lessee has selected the "Supplier" (as
defined in the UCC) and has directed Lessor to purchase the Equipment from the
Supplier in connection with this Lease, and (ii) that Lessee has been informed
in writing in this Lease, before Lessee's execution of 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 Purchase Agreement, and that Lessee may communicate with the
Supplier and receive an accurate and complete statement of those pron-dses and
warranties, including any disclaimers and limitations of them or of remedies.
The filing of UCC financing statements pursuant to Section 34 of the Master
Lease is precautionary and shall not be deemed to have any effect on the
characterization of this Lease. NOTWITHSTANDING THE FOREGOING, LESSOR HAS NOT
MADE, AND HEREBY DISCLAIMS ANY ADVICE, REPRESENTATIONS, WARRANTIES AND
COVENANTS, EITHER EXPRESSED OR IMPLIED, WITH RESPECT TO ANY LEGAL, ECONOMIC,
ACCOUNTING, TAX OR OTHER EFFECTS OF THE LEASE AND THE TRANSACTION(S)
CONTEMPLATED THEREBY, AND LESSEE HEREBY DISCLAIMS ANY RELIANCE ON ANY SUCH
WARRANTIES, STATEMENTS OR REPRESENTATIONS MADE BY LESSOR WITH RESPECT THERETO.
(b) Notwithstanding the express intent of Lessor and Lessee that this
agreement constitute a true lease and not a sale of the Equipment, 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 securitv
interest in the Equipment and all accessions, substitutions and replacements
thereto and therefor, and proceeds (cash and non-cash), including, without
limitation, 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, now existing or hereafter created, to Lessee pursuant to
this Lease or otherwise. In furtherance of the foregoing, Lessee shall execute
and deliver to Lessor, to be filed at Lessee's expense, Uniform Commercial Code
financing statements, statements of amendment and statements of continuation as
reasonably may be required by Lessor to perfect and maintain perfected such
security interest.
(c) In the event that the Supplier erroneously invoices Lessee for the
Equipment, Lessee agrees to forward said invoice to Lessor immediately. Lessee
acknowledges that the Equipment is, and shall at all times remain, the property
of Lessor, and that Lessee has no right, title or interest therein or thereto
except as expressly set forth in this Lease.
7. TAX INDEMNIFICATION. (a) Lessee acknowledges that Lessor has executed
this Lease, and that the Rent payable by Lessee under this Lease has been
computed, upon the assumptions that Lessor will (i) be entitled to depreciation
or cost recovery deductions ("MACRS Deductions") for Federal income tax purposes
under the Modified Accelerated Cost Recovery System provided for in Section 168
of the Internal Revenue Code of 1986, as amended (the "Code"), and depreciation
or cost recovery deductions ("State Depreciation Deductions") for state income
tax purposes for the Equipment Location, in each case on the basis that (1) each
Item of Equipment constitutes "5-year property" within the meaning of Section
168(e) of the Code, (2) the initial tax basis for each Item of Equipment will be
equal to the Total Cost, (3) deductions for each Item of Equipment will be
computed by using the method specified in Section 168(b)(1) of the Code over the
5-year recovery period described in Section 168(c) of the Code, and (4) the
applicable convention for each Item of Equipment under Section 168(d) of the
Code is the half-year convention; (ii) be entitled to deductions for Federal
income tax purposes (available in the manner and as provided by Section 163 of
the Code) for interest payable with respect to any indebtedness incurred by
Lessor in connection with any financing by Lessor of any portion of the Total
Cost of each Item of Equipment ("Interest Deductions"); and (iii) be subject to
tax for each year at a composite Federal and Delaware corporate income tax rate
equal to the then highest marginal rate for corporations provided for under the
Code and the laws of Delaware (the "Highest Marginal Tax Rate"). The MACRS
Deductions, State Depreciation Deductions and Interest Deductions are
hereinafter collectively referred to as the "Tax Benefits".
(b) Lessee represents and warrants to Lessor that (i) each Item of
Equipment constitutes "5-year property" within the meaning of Section 168(e) of
the Code, (ii) Lessee shall not attempt to claim such Tax Benefits, (iii) at and
after the time of delivery of the Equipment to Lessee pursuant to this Lease the
Lessee shall not claim any ownership or title in and to the Equipment, and (iv)
Lessee has not, and will not, at any time after such delivery throughout the
Term of this Lease, take any action or omit to take any action (whether or not
the same is pern-dtted or required hereunder) which will result in the loss by
Lessor of all or any part of such Tax Benefits.
(c) If, as a result of any act, omission or misrepresentation of Lessee,
(x) the Tax Benefits are lost, disallowed, deferred, eliminated, reduced,
recaptured, compromised or otherwise unavailable to Lessor, (y) for Federal,
foreign, state or local income tax purposes, any item of income, loss or
deduction with respect to any Item of Equipment is treated as derived from, or
allocable to, sources outside the United States, or (z) there shall be included
in the gross income of Lessor for Federal, state or local income tax purposes
any amount on account of any addition, modification, substitution or improvement
to or in respect of any Item of Equipment made or paid for by Lessee (any of the
foregoing being hereinafter a "Tax Loss"), then, within thirty (30) days of
Lessee's receipt of written notice from Lessor that such a Tax Loss has
occurred, Lessee shall pay to Lessor an amount which, after deduction therefrom
of all taxes to be paid in respect of the receipt thereof, will enable Lessor to
receive the same Net Economic Return (as hereinafter defined) that Lessor
would have realized on this Lease had such Tax Loss (together with any interest,
penalties or additions to tax) not occurred. Any event which, by the terms of
this Lease, requires payment by Lessee to Lessor of the Stipulated Loss Value of
the Equipment shall not constitute the act of Lessee for purpose of the
foregoing sentence.
(d) As used in this Section, the term "Net Economic Return" shall mean
Lessor's net after-tax yield, aggregate after-tax cash flow and return on
assets, based on (i) the assumptions used by Lessor in originally calculating
Rent and Stipulated Loss Value percentages, including the assumptions set forth
above (as such assumptions may have been revised pursuant to the last sentence
of this subsection) and (ii) the Highest Marginal Tax Rate actually in effect
during each year from the date of such original calculations to the date of such
Tax Loss, both dates inclusive. In the event Lessor shall suffer a Tax Loss with
respect to which Lessee is required to pay an indemnity hereunder, and the full
amount of such indemnity has been paid or provided for hereunder, the aforesaid
assumptions, without further act of the parties hereto, shall thereupon be and
be deemed to be amended, if and to the extent appropriate, to reflect such Tax
Loss.
________________________________________________________________________________
(e) For purposes of this Section, the term "Lessor" shall include the
entity or entities, if any, with which Lessor consolidates any tax return.
Lessee acknowledges that it has neither sought nor received tax advice from
Lessor as to the availability to Lessee of any tax benefits with respect to the
Equipment. All of Lessor's rights and privileges arising from the indemnities
contained in this Lease will survive the expiration or other termination or
cancellation of this Lease. Such indemnities are expressly made for the benefit
of, and are enforceable by, Lessor and its successors and assigns.
8. STIPULATED LOSS VALUE. The Stipulated Loss Values applicable to the
Equipment and this Lease are as set forth on a supplement (the "Stipulated Loss
Value Supplement") prepared by Lessor.
9. PERSONAL PROPERTY TAX. Unless otherwise directed in writing by Lessor or
required by Applicable Law, Lessee will not list itself as owner of any Item of
Equipment for property tax purposes. Upon receipt by Lessee of any property tax
▇▇▇▇ pertaining to such Item of Equipment from the appropriate taxing authority,
Lessee will promptly forward such property tax ▇▇▇▇ to Lessor. Upon receipt by
Lessor of any such property tax ▇▇▇▇ (whether from Lessee or directly from the
taxing authority), Lessor will pay such tax and will invoice Lessee for the
expense. Upon receipt of such invoice, Lessee will promptly reimburse Lessor for
such expense.
10. MODIFICATIONS TO MASTER LEASE. With respect to the Equipment described
on this Schedule, the Master Lease shall be modified as follows:
(a) Section 12 of the Master Lease ("Repairs and Maintenance") is hereby
deleted in its entirety and replaced with the following:
Lessee, at Lessee's own cost and expense, shall (a) keep the Equipment in
good repair, good operating condition and working order and in compliance
with the manufacturer's specifications and Lessee's standard practices (but
with respect to the latter, in no event less than industry practices), and
(b) maintain, service and repair the Equipment as otherwise required herein
in accordance with Lessee's and manufacturer's standard operating
maintenance procedures subject to a sen-d-annual inspection by a
manufacturer certified service representative who shall provide a written
report of his/her findings. Upon Lessor's request, Lessee shall furnish
Lessor with a copy of the written report prepared by such service
representative. Lessee, at its own cost and expense and within a reasonable
period of time, shall replace any part of any Item of Equipment that
becomes unfit or unavailable for use from any cause with a replacement part
of the same manufacture, value, remaining useful life and utility as the
replaced part immediately preceding the replacement (assuming that such
replaced part was in the condition required by this Lease). Such
replacement part shall immediately, and without further act, be deemed to
constitute an Item of Equipment and be fully subject to this Lease as if
originally leased hereunder, and shall be free and clear of all Liens.
(b) Section 22(b)(7) of the Master Lease ("Events of Default; Remedies"),
is hereby amended by adding the following after the first parenthetical "demand
that Lessee forthwith return all Items of Equipment to Lessor in the manner and
condition required by Section 22(b)(5) hereof and in addition".
________________________________________________________________________________
MISCELLANEOUS TERMS & CONDITIONS
________________________________________________________________________________
11. ADDITIONAL MAINTENANCE REQUIREMENTS. Section 13 of the Lease ("Return
of Equipment") shall be deleted in its entirety and the following substituted in
its place:
12. Return of Equipment. (a) Upon the expiration of the Term of any Lease
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or upon demand by Lessor pursuant to Section 22 hereof, Lessee, at its sole
expense, shall return all of the Equipment leased under the Lease by
delivering it in a manner consistent with the manufacturer's recommendations
and practices to such place or on board such carrier (packed properly and in
accordance with the manufacturer's instructions) as Lessor shall specify.
Lessee agrees that the Equipment, when returned, shall be free and clear of
all Liens, and in the same condition as when delivered to Lessee, reasonable
wear and tear excepted. Reasonable wear and tear shall mean that each item
of the Equipment has been maintained by Lessee in "Average Saleable
Condition" (as hereinafter defined) and that all components of the Equipment
have been properly serviced, following the manufacturer's written operating
and servicing procedures, such that the Equipment is eligible for a
manufacturer's standard, full service maintenance contract without Lessor's
incurring any expense to repair or rehabilitate the Equipment. If, in the
opinion of Lessor, any item of the Equipment fails to meet the standards set
forth in this Section 12, Lessee agrees to pay on demand all costs and
expenses incurred in connection with repairing the Equipment, restoring it
to such condition so as to meet such standards and assembling and delivering
such Item of Equipment pursuant to Lessor's
________________________________________________________________________________
instructions. If Lessee fails to return any Item of Equipment as required
hereunder, then, all of Lessee's obligations under this Lease (including,
without limitation, Lessee's obligation to pay Rent for such Item of
Equipment at the rental then applicable under this Lease) shall continue in
full force and effect until such Item of Equipment shall have been returned
in the condition required hereunder, and Lessee expressly acknowledges that
Section 24 of this Lease applies to Lessee's return of the Equipment leased
hereunder.
(b) Lessee shall give Lessor at least ninety (90), but not more than one
hundred eighty (180) days written notice that Lessee is returning the
Equipment as provided for above (the "Return Notice") and shall include with
such notice, all of the following:
(i) a detailed inventory of all components of the Equipment including
without limitation all of the model and serial numbers of any
components;
(h) a complete set of current and up to date service and operating
manuals for each Item of Equipment;
(iii) a complete set of current and up to date maintenance logs and
other appropriate documentation detailing the Equipment' s then
current configuration (including a description of all replacements and
additions thereto made during the Term of the Lease) and all operating
requirements and technical data regarding the setup, use and operation
of the Equipment;
(iv) an in-depth field service report (the "Report") detailing the
results of an inspection conducted by a representative of the
manufacturer or a qualified equipment maintenance provider acceptable
to Lessor certifying that the Equipment has been properly inspected,
examined, tested and is operating within the manufacturer's
specifications and addressing, at a n-tinimum the following areas:
(A) comprehensive physical inspection;
(B) testing of all material and workmanship of the Equipment, and
(C) conformation of all Equipment operations to Applicable Law
and confirming that the Equipment is otherwise in Average
Saleable Condition (as hereinafter defined).
If the Report discloses that any of the material, workmanship or
Equipment does not meet or, does not operate within, the manufacturer's
specifications or any Applicable Law, Lessee shall, at its sole
expense, take all necessary corrective measures and submit a second
Report from the same inspector evidencing that the Equipment has been
brought into conformity with the manufacturer's specifications and
Applicable Law.
(c) "Average Saleable Condition" shall mean that all of the following
minimum standards have been met:
(i) The Equipment has been, or will be, disassembled according to
manufacturer's recommendations and by a licensed rigger/erector
specializing in the equipment, including the proper blueprinting,
mapping, tagging and labeling of each individual part including
cables, electrical components and wires, all process fluids
and/or any hazardous materials have been removed from the
Equipment and disposed of in accordance with Applicable Law.
(ii) The Equipment is complete with all manuals, maintenance records,
log books, plans, drawings and schematics, inspection and
overhaul records, operating requirements or other materials
pertinent to the Equipment's operation, maintenance, assembly and
disassembly.
(iii) There is no structural or mechanical damage, frame, and the
structural members and accessories are structurally sound without
breaks or cracks, in compliance with Applicable Law and the
engine, hydraulics and transmission all operate properly at
fully rated loads.
(iv) Transmissions shift properly at full rated loads and speeds, the
mechanical drive train, differentials and final drives are in
good condition and operate quietly without vibrations or leaks.
(v) Tires are in recappable condition and track components have at
least 50% wear remaining.
(vi) Equipment with predictable or scheduled replacements or overhaul
lives including but not limited to tires, track components, power
train assembly, transmissions, converters, engines hydraulics,
axles, wheels, brakes, pumps, diggers, buckets, blades, rippers
and other attachments (including cutting edges) have not less
than 50% useful life remaining before the next such replacement
or overhaul and all cutting edges and other wear points have at
least 50% of their respective material design lives remaining.
(vii) All ground engaging tools (buckets, blades, rippers) and cabs,
canopies, enclosures, lights and other accessories are in good
condition and appearance.
________________________________________________________________________________
(viii) Periodic adjustments and inspections have been performed, and all
lubricants and hydraulic oils have been changed, Lessee has
maintained written records of preventative maintenance and
repairs indicating date and hour meter readings verified by parts
invoices, copies of these records are available to Lessor on
demand and all oil and hydraulic fluid samples are clean and with
no dirt or other foreign substances in either the oil or any
other operating fluids.
(ix) A complete set of current and up to date maintenance logs and
other appropriate documentation detailing the Equipmenf s then
current configuration (including a description of all
replacements and additions thereto made during the Term of the
Lease) and all operating requirements and technical data
regarding the setup, use and operation of the Equipment are
available to be returned with the Equipment.
(x) All Equipment has been cleaned and treated with respect to rust,
corrosion and appearance in accordance with the manufacturer's
recommendations and consistent with the best practices of
dealers in similar used equipment, and all residue of any kind
from any toxic or hazardous material has been removed from the
Equipment and disposed of properly in accordance with Applicable
Law.
(xi) The Equipment itself has been inspected by the appropriate
Governmental Authority and has been found to not constitute
"hazardous waste" or Hazardous material" as those or similar terms
may be used under Applicable Law.
(d) In addition to all other rights of Lessor under the Lease, Lessor shall have
the right to attempt to resell or auction the Equipment from Lessee's facility
with the Lessee's full cooperation and assistance, for a period commencing with
Lessor's receipt of the Return Notice and ending one hundred eighty (180) days
after the Initial Term Expiration Date. Lessee agrees to pay the reasonable
costs and expenses of such sale or auction (and all storage prior thereto),
and agrees that the Equipment shall remain capable of operation during this
period. Lessee shall provide adequate electrical power, lighting, heat, water
and all other requirements sufficient to allow for normal maintenance and for
demonstrations of the Equipment to any potential buyer.
13. GOVERNING LAW. This Schedule is being delivered in the Commonwealth of
Pennsylvania and shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania, including all matters of construction,
validity and performance without giving effect to any choice of law or conflict
of laws provision or rule (whether of the Commonwealth of Pennsylvania or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the Commonwealth of Pennsylvania.
14. COUNTERPARTS. This Schedule may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together one and the same instrument.
15. MORE THAN ONE LESSEE. If more than one person or entity executes this
Schedule, or any other Lease Documents executed in connection herewith, as
"Lessee," the obligations of "Lessee" contained herein and therein shall be
deemed joint and several and all references to "Lessee" shall apply both
individually and jointly.
16. RELATIONSHIP TO MASTER LEASE; FURTHER ASSURANCES. This Schedule shall
be construed in connection with and as part of this Lease, and all terms
contained in the Master Lease are hereby incorporated herein by reference with
the same force and effect as if such terms were fully stated herein. By
execution of this Schedule, Lessee and Lessor reaffirm all terms of the Master
Lease except as they may be modified hereby. To the extent that any of the terms
of this Schedule are contrary to or inconsistent with any terms of the Master
Lease, the terms of this Schedule shall govern. LESSEE HEREBY CERTIFIES TO
LESSOR THAT THE REPRESENTATIONS AND WARRANTIES MADE BY LESSEE IN THE MASTER
LEASE (INCLUDING, WITHOUT LIMITATION, SECTION 31 THEREOF) ARE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS AS OF THE DATE OF THIS SCHEDULE WITH THE SAME EFFECT AS
THOUGH MADE ON AND AS OF SUCH DATE. Lessee shall take such additional actions
and execute and deliver such additional documents as Lessor shall deem necessary
from time to time to effectuate the terms of this Lease.
16. POWER OF ATTORNEY. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS ITS
TRUE AND LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO
EXECUTE AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN
LESSOR'S SOLE DISCRETION ARE NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN
THE EQUIPMENT IN ALL APPLICABLE JURISDICTIONS. Lessee hereby ratifies, to the
extent permitted by law, all that Lessor shall lawfully and in good faith do or
cause to be done by reason of and in compliance with this paragraph.
________________________________________________________________________________
IN WITNESS WHEREOF, Lessor and Lessee have caused this Schedule to be duly
executed and delivered on the day and year first above written.
Lessor: Lessee:
PNC LEASING, LLC IT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: VICE PRESIDENT Title: VICE PRESIDENT, TREASURER
COUNTERPART NO. 1 OF 1 SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE
EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL
CODE, NO SECURITY INTEREST MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF
ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
