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EXHIBIT 10(f)
MASTER EQUIPMENT LEASE AGREEMENT
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THIS MASTER EQUIPMENT LEASE AGREEMENT is made and dated effective as of
December 2, 1997 by and between KEYCORP LEASING, A DIVISION OF KEY CORPORATE
CAPITAL INC., a Michigan corporation with its principal place of business at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Lessor"), and CORE MATERIALS CORPORATION,
a Delaware 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
Lessor, the Equipment, subject to and upon the terms and conditions set forth
herein. Each Equipment Schedule shall constitute a separate and enforceable
lease incorporating all the terms and conditions of this Master Equipment Lease
Agreement as if such terms and conditions were set forth in full in such
Equipment Schedule. In the event that any term or condition of any Equipment
Schedule conflicts with or is inconsistent with any term or condition of this
Master Equipment Lease Agreement, the terms and conditions of the Equipment
Schedule shall govern.
2. DISCLAIMER OF WARRANTIES. LESSOR MAKES NO (AND SHALL NOT BE DEEMED
TO HAVE 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 ANY COMPONENT THERETO, 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
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, 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 PAY RENT AND PERFORM ITS OBLIGATIONS HEREUNDER ARE ABSOLUTE,
IRREVOCABLE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER AND
SHALL NOT BE SUBJECT TO ANY RIGHT OF SET OFF, COUNTERCLAIM, DEDUCTION, DEFENSE
OR OTHER RIGHT, WHETHER BY STATUTE OR OTHERWISE, 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
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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 HEREOF, OR ANY OTHER
OCCURRENCE WHATSOEVER, WHETHER SIMILAR OR DISSIMILAR TO THE FOREGOING, WHETHER
FORESEEN OR UNFORESEEN.
4. DEFINITIONS. Unless the context otherwise requires, as used in this
Lease, the following terms shall have the respective meanings indicated below
and shall be equally applicable to both the singular and the plural forms
thereof:
(a) "APPLICABLE LAW" shall mean all applicable Federal, state,
local and foreign laws (including, without limitation, any Environmental Law,
industrial hygiene and occupational safety or similar laws), ordinances,
judgments, decrees, injunctions, writs and orders of any Governmental Authority
and rules, regulations, orders, licenses and permits of any Governmental
Authority.
(b) "APPRAISAL PROCEDURE" shall mean the following procedure
for obtaining an appraisal of the 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. If Lessor and Lessee cannot agree upon
an Appraiser, each shall select one Appraiser, and the two selected Appraisers
shall select a third Appraiser. The selected Appraiser(s) 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, and if more than one Appraiser is
required, Lessee and Lessor shall each pay for the fees and expenses of the
Appraiser each selected, and shall each pay one-half of the fees and expenses of
the third Appraiser.
(c) "APPRAISER" shall mean a person engaged in the business of
appraising property that has at least ten years' experience in appraising
property similar to the Equipment.
(d) "AUTHORIZED SIGNER" shall mean those officers of Lessee,
set forth on an incumbency certificate (in form and substance satisfactory to
Lessor) delivered by Lessee to Lessor, who are authorized and empowered to
execute this Lease, the Equipment Schedules and all other documents the
execution of which is contemplated hereby.
(e) "CERTIFICATE OF ACCEPTANCE" shall mean a certificate of
acceptance, in form and substance satisfactory to Lessor, executed and delivered
by Lessee in accordance with Section 7 hereof indicating, among other things,
that the Equipment described therein has been accepted by Lessee for all
purposes of this Lease.
(f) "DEFAULT" shall mean any event or condition which, with
the passage of time or the giving of notice, or both, would constitute an Event
of Default.
(g) "ENVIRONMENTAL LAW" shall mean any federal, state, or
local statute, law, ordinance, code, rule, regulation, or order or decree
regulating, relating to or imposing liability upon a person in connection with
the use, release or disposal of any hazardous, toxic or dangerous substance,
waste, or material as same may relate to the Equipment or its operation.
(h) "EQUIPMENT" shall mean an item or items of personal
property designated from time to time 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.
(i) "EQUIPMENT GROUP" shall consist of all Items of Equipment
listed on a particular Equipment Schedule.
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(j) "EQUIPMENT LOCATION" shall mean the location of the
Equipment, as set forth on an Equipment Schedule, or such other location
(approved by Lessor) as Lessee shall from time to time specify in writing.
(k) "EQUIPMENT SCHEDULE" shall mean each equipment lease
schedule from time to time executed by Lessor and Lessee with respect to an
Equipment Group, pursuant to and incorporating by reference all of the terms and
conditions of this Master Equipment Lease Agreement.
(l) "EVENT OF DEFAULT" shall have the meaning specified in
Section 22 hereof.
(m) "FAIR MARKET RENTAL VALUE" or "FAIR MARKET SALE VALUE"
shall mean the value of 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, (a) 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 (b) there shall be excluded from the
calculation thereof the value of any upgrades and attachments made pursuant to
Section 14 hereof in which the Lessor does not own an interest; PROVIDED,
HOWEVER, that, unless otherwise provided in such Section 22, for purposes of
Section 22 of the Lease, Fair Market Sale Value of the Equipment shall be
determined based upon the actual facts and circumstances then prevailing without
regard to the assumptions in clause (a) above.
(n) "GOVERNMENTAL ACTION" shall mean all authorizations,
consents, approvals, 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.
(o) "GOVERNMENTAL AUTHORITY" shall mean any foreign, Federal,
state, county, municipal or other governmental authority, agency, board or
court.
(p) "GUARANTOR" shall mean any guarantor of Lessee's
obligations hereunder.
(q) "ITEM OF EQUIPMENT" shall mean each item of the Equipment.
(r) "LATE PAYMENT RATE" shall mean an annual interest rate
equal to the lesser of 18% or the maximum interest rate permitted by Applicable
Law.
(s) "LEASE", "HEREOF", "HEREIN and "HEREUNDER" shall mean,
with respect to an 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.
(t) "Lien" shall mean all mortgages, pledges, security
interests, liens, encumbrances, claims or other charges of any kind whatsoever.
(u) "PURCHASE AGREEMENT" shall mean any purchase agreement or
other contract entered into between the Supplier and Lessee for the acquisition
of the Equipment to be leased hereunder.
(v) "RELATED EQUIPMENT SCHEDULE" shall have the meaning set
forth in Section 27 hereof.
(w) "RENEWAL NOTICE" shall have the meaning set forth in
Section 32 hereof.
(x) "RETURN NOTICE" shall have the meaning set forth in
Section 13 hereof.
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(y) "RENT" shall mean the periodic rental payments due
hereunder for the leasing of 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.
(z) "RENT 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.
(aa) "RENT PAYMENT DATE" with respect to an Equipment Group,
shall have the meaning set forth in the Equipment Schedule associated therewith.
(ab) "STIPULATED LOSS VALUE" shall mean, as of any Rent
Payment Date and with respect 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.
(ac) "STIPULATED LOSS VALUE SUPPLEMENT" with respect to an
Equipment Group, shall have the meaning set forth in the Equipment Schedule
associated therewith.
(ad) "SUPPLIER" shall mean the manufacturer or the vendor of
the Equipment, as set forth on each Equipment Schedule.
(ae) "TERM" shall mean the Initial Term, as defined in Section
8 hereof, and any Renewal Term, as defined in Section 8 hereof.
(af) "TOTAL COST" shall mean, with respect to an Item of
Equipment, (1) the 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.
5. SUPPLIER NOT AN AGENT. LESSEE UNDERSTANDS AND AGREES THAT (i)
NEITHER THE 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 Supplier and, if appropriate, has entered into a Purchase Agreement
with respect thereto. Lessor shall 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
Commencement 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. DELIVERY AND ACCEPTANCE. Upon acceptance for lease by Lessee of any
Equipment 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
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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 and conditions of this Lease (including, without limitation,
Section 2 hereof).
8. TERM; SURVIVAL. With respect to any Item of Equipment, unless
otherwise specified thereon, 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. With respect to Each Item of Equipment, Lessee shall pay the
Rent set forth on the Equipment Schedule applicable to such Item of Equipment,
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 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 upon 24 hours notice to Lessee and during
normal business hours. At Lessor's request, Lessee shall affix labels stating
that the Equipment is owned by Lessor permanently 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 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, pending or
threatened investigation, inquiry, 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 to the
Equipment as may be required from time to time to meet the requirements of
Applicable Law or Governmental Action. Except as otherwise permitted herein,
Lessee shall not make any alterations, additions, modifications or improvements
to the Equipment without Lessor's prior written consent.
12. REPAIRS AND MAINTENANCE. Lessee, at Lessee's own cost and expense,
shall keep the Equipment in good repair, good operating condition and working
order and in compliance with the manufacturer's specifications (reasonable wear
and tear excepted), and maintain, service and repair the Equipment so as to keep
the Equipment in as good operating condition and working order as it was when it
first became subject to this Lease and in compliance with the manufacturer's
specifications. Upon Lessor's request, Lessee shall furnish Lessor with an
executed copy of third-party maintenance agreements, if any, with respect to any
Item of Equipment. 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
worn out, lost, stolen, destroyed, or otherwise rendered permanently unfit or
unavailable for use (whether or not such replacement is covered by the aforesaid
maintenance agreement), 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 is in the condition required by
this Lease). Such replacement part shall be free and clear of all Liens.
Notwithstanding the foregoing, this paragraph shall not apply to any Loss or
Damage (as defined in Section 16 hereof) of any Item of Equipment.
13. RETURN OF EQUIPMENT. Upon the expiration (subject to Section 32
hereof and except as otherwise provided in an Equipment Schedule) or earlier
termination of this Lease, Lessee, at its sole expense, shall 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
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Lessor shall specify, provided, however that such location shall be within the
continental United States. 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, without Lessor's incurring any
expense to repair or rehabilitate the Equipment. If, in the reasonable 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, assembling and delivering such Item of Equipment. Lessee shall give
Lessor ninety (90) days written notice (the "Return Notice") that Lessee is
returning the Equipment as provided for above. If Lessee falls 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.
14. EQUIPMENT UPGRADES/ATTACHMENTS. In addition to the requirements of
Section 11 hereof, Lessee, at its own expense, may from time to time add or
install upgrades or attachments to the Equipment during the Term; PROVIDED, that
such upgrades or attachments (a) are readily removable without causing material
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 applicable delivery date or the time of such upgrade or attachment. Any such
upgrades or attachments which are not required by Section 11 hereof and 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 or attachments and, upon
such removal, shall restore the Equipment to the condition required hereunder.
15. SUBLEASE AND ASSIGNMENT. (a) WITHOUT LESSOR'S PRIOR WRITTEN CONSENT
(SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD), LESSEE 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 OR LESSEE'S QUALIFIED
EMPLOYEES.
(b) Lessor, at any time with or without notice to Lessee, may
sell, transfer, assign and/or grant a security interest in this Lease, any
Equipment Schedule or any Item of Equipment. In any such event, any such
purchaser, transferee, assignee or secured party shall have and may exercise all
of Lessor's rights hereunder with respect to the items to which any such sale,
transfer, assignment and/or security interest relates, and LESSEE SHALL NOT
ASSERT AGAINST ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR SECURED PARTY 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 Lessor's successor or assign.
16. LOSS OF OR DAMAGE TO EQUIPMENT. (a) Lessee shall bear the entire
risk of loss, theft, destruction, disappearance of or damage to any and all
Items of Equipment ("Loss or Damage") from any cause whatsoever during the Term
hereof until the Equipment is returned to Lessor in accordance with Section 13
hereof. No Loss or Damage shall relieve Lessee of the obligation to pay Rent or
of any other obligation under this Lease.
(b) In the event of Loss or Damage to any Item of Equipment,
Lessee, at the option of Lessee so long as No Event of Default exists hereunder
and is continuing, otherwise at Lessor's option, shall within thirty (30) days
following such Loss or Damage: (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 immediately preceding the Loss
or Damage (assuming that such replaced Item of Equipment is the condition
required by this
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Lease), which replacement equipment 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 or
Damage with respect to such Item of Equipment, as set forth on the Schedule
applicable thereto. 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. If Lessee replaces the Item of
Equipment pursuant to subsection (b) above, title to such replacement equipment
shall immediately (and without further act) vest in Lessor and thereupon shall
be deemed to constitute Items of Equipment and be fully subject to this Lease as
if originally leased hereunder. If Lessee falls to either restore or replace the
Item of Equipment pursuant to subsection (1) or (2) above, respectively, Lessee
shall make the payment under subsection (3) above, provided, however, that in
the event replacement of such Item of Equipment cannot reasonably be
accomplished within such 30 day period, the period shall be extended to 90 days,
provided that Lessee commences acts to replace such Item of Equipment within the
30 day period and thereafter diligently pursues completion of the replacement.
17. INSURANCE. (a) Lessee, at all times during the Term hereof (until
the Equipment shall have been returned to Lessor) and at Lessee's own cost and
expense, shall maintain (1) insurance against all risks of physical loss or
damage to the Equipment (including theft and collision for Equipment consisting
of motor vehicles) in an amount not less than the full replacement value thereof
or the Stipulated Loss Value thereof, whichever is greater, 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 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 "KeyCorp and its subsidiaries and affiliated companies, including KeyCorp
Leasing Ltd." as an additional insured under the public liability policies and
name Lessor as sole loss 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 any of Lessor,
except for the insurers' salvage rights in the event of a Loss or Damage, 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 make available to Lessor at Lessee's offices an original
of all policies issued by the insurers thereunder for the insurance maintained
pursuant to this Section, and Lessee shall deliver to Lessor certificates of
insurance for such insurance coverage.
18. GENERAL TAX INDEMNIFICATION. Lessee shall pay when due and shall
indemnify 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 (together with interest and penalties thereon)
(including, without limitation, sales, use, gross receipts, personal property,
ad valorem, business and occupational, franchise, value added, leasing, leasing
use, documentary, stamp or other taxes) imposed upon or against Lessor, Lessor's
assigns, 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, net worth, or capital (other
than such taxes 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 determined
by Lessor to be the personal property or other taxes on said item which are not
yet payable, but for which Lessee is responsible, provided Lessor provides
Lessee with copies of tax bills supporting Lessor's request.
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19. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to perform or
comply with any of its obligations contained herein, Lessor may (but shall not
be obligated to do so) itself perform or comply with such obligations, and the
amount of the reasonable costs and expenses of Lessor incurred in connection
with such performance or compliance, together with interest on such amount at
the Late Payment Rate, shall be payable by Lessee to Lessor upon demand. No such
performance or compliance by Lessor shall be deemed a waiver of the rights and
remedies of Lessor or any assignee of Lessor against Lessee hereunder or be
deemed to cure the default of Lessee hereunder.
20. DELINQUENT PAYMENTS; INTEREST. If Lessee fails to pay any Rent or
other sums under this Lease within ten (10) days of 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 amounts 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 voluntary petition is filed by Lessee or any
Guarantor under any bankruptcy, insolvency or similar legislation, or an
involuntary petition is filed by against Lessee or any Guarantor under any
bankruptcy, insolvency or similar legislation and is not dismissed within 60
days; (5) Lessee or any Guarantor violates or fails to perform any material
provision of either this Lease or any other loan, lease or credit agreement or
any acquisition or purchase agreement with Lessor or KeyBank National
Association or its or their affiliates and assigns; (6) Lessee violates or fails
to perform any material covenant or representation made by Lessee herein; (7)
any representation or warranty made herein or in any Lease, certificate,
financial statement or other statement furnished to Lessor 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; or (9) Lessee fails to comply with the financial
covenants agreed upon by Lessor and Lessee in any document executed in
connection herewith. 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 and Lessee's
failure to cure the default within thirty (30) days of Lessor's notice to Lessee
thereof (except an unremedied default under Subsection (a)(5) above as to which
no additional notice shall be required), or failure of Lessee to cure within ten
(10) days of Lessor's notice to Lessee of a payment 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,
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 or its order
in the manner and condition required by, 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 termination of this Lease unless Lessor
notifies Lessee in writing to such effect; (7) by written notice to Lessee
specifying a payment date, demand that Lessee pay to Lessor, and Lessee shall
pay to Lessor, on the payment date specified in such notice, as liquidated
damages for loss of a bargain and not as a penalty, any unpaid Rent due prior to
the
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payment date specified in such notice plus whichever of the following amounts
Lessor, in its sole discretion, shall specify in such notice (together with
interest on such amount at the Late Payment Rate from the payment date specified
in such notice to the date of actual payment): (i) an amount, with respect to an
Item of Equipment, equal to the Rent payable for such Item of Equipment for the
remainder of the then current Term thereof, after discounting such Rent to
present worth as of the payment date specified in such notice 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 terminated; or
(ii) the Stipulated Loss Value, computed as of the payment date specified in
such notice or, if such payment date is not a Rent Payment Date, the Rent
Payment Date next following the payment date specified in such notice (provided,
however, that, with respect to any Item of Equipment returned to or repossessed
by Lessor, the amount recoverable under this clause (ii) shall be reduced (but
not below zero) by an amount equal to the Fair Market Sales Value (taking into
account its actual condition) of such Item of Equipment; (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 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, including without limitation the repayment in full of any costs
and expenses necessary to be expended in repairing any Item of Equipment in
order to cause it to be in compliance with all maintenance and regulatory
standards imposed by this Lease. If an Event of Default occurs, to the fullest
extent permitted by law, Lessee hereby waives any right to notice of sale and
further waives any defenses, rights, offsets or claims against Lessor because of
the manner or method of sale or disposition of any Items of 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 or its assigns at law or in equity.
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
communications 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 communications shall be effective upon receipt.
24. GENERAL INDEMNIFICATION. Lessee shall pay, and shall indemnify and
hold Lessor harmless 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) this Lease or any other written
agreement entered into in connection with the transactions contemplated hereby
and thereby (including, without limitation, a Purchase Agreement, if any) or any
amendment, waiver or modification of any of the foregoing or the enforcement of
any of the terms hereof or any of the foregoing, (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,
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 any
Environmental Law with respect to the Equipment or its operation or use, and (d)
Lessee's failure to perform any covenant, or 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 deliver promptly 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 any state, county or municipal
environmental or health agency concerning material claims, violations,
regulations or enforcement relating to the Equipment or its operation.
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25. SEVERABILITY; CAPTIONS. 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 attorneys' fees and the fees of any collection agencies,
incurred by Lessor in enforcing any of the terms, conditions or provisions
hereof.
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 60 days after the
end of each quarterly period (except the last) of each fiscal year, and, as soon
as available and in any event within 120 days after the last day of each fiscal
year, copies of Lessee's Securities Exchange Commission filings including
financial statements of Lessee and each Guarantor, in the case of fiscal year
end financial statements audited by an independent public accountant, and upon
Lessor's request, copies of all reports submitted by Lessee and each Guarantor
to KeyBank National Association under any credit agreements. Lessee shall also
furnish such other financial reports, information or data as Lessor may
reasonably request from time to time.
29. COMMITMENT FEE REQUIREMENT. An amount equal to the first periodic
payment of Rent must accompany each Lessee proposal for an Equipment Schedule
hereunder. THIS COMMITMENT FEE IS NON-REFUNDABLE; provided, however, that, upon
Lessor's acceptance of Lessee's proposal to enter into such Equipment Schedule,
such commitment fee shall be applied to the first periodic payment of Rent
thereunder.
30. NO AFFILIATION WITH THE SUPPLIER. Lessee hereby represents and
warrants to Lessor that, except as previously disclosed in writing to Lessor,
neither Lessee nor any of its officers or directors (if a corporation) or
partners (if a partnership) has, directly or indirectly, any financial interest
in the Supplier.
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) this Lease and all related
instruments and 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 pending actions or proceedings to which Lessee
is a party, and there are no other pending or threatened actions or proceedings
of which Lessee has knowledge, before any court, arbitrator or administrative
agency, 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,
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and since the date of such statements there has been no material adverse change
in such conditions or operations; (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; and (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.
32. RENEWAL AND PURCHASE OPTIONS. With respect to an Equipment Schedule
and the Equipment Group set forth thereon, so long as no Default or Event of
Default shall have occurred and is continuing, then, upon not less than ninety
(90) days prior written notice to Lessor, (the "Renewal Notice") Lessee may (a)
at the expiration of the Initial Term, or any Renewal Term, purchase all, but
not less than all, of the Equipment Group for the Fair Market Sale Value of such
Equipment Group, payable in cash to Lessor upon the expiration of the Initial
Term or any Renewal Term, as the case may be, (b) at the expiration of the
Initial Term, renew this Lease on a month to month basis at the same Rent
payable at the expiration of the Initial Term, or (c) at the expiration of the
Initial Term, renew this Lease for a minimum period of not less than twelve (12)
consecutive months at the then current Fair Market Rental Value. If Lessee fails
to give Lessor the Return Notice or the Renewal Notice at least ninety (90) days
before the expiration of the Initial Term, Lessee shall be deemed to have chosen
option (b) above. If Lessee exercises option (a) above, Lessee shall purchase
the Equipment "as is" and "where is" and without any warranties, express or
implied, by Lessor.
33. LESSEE'S WAIVERS. To the extent permitted by Applicable Law, Lessee
hereby waives (a) any and all rights and remedies which it may now have or which
at any time hereafter may be conferred upon it by statute (including, without
limitation, Article 2A of the Uniform Commercial Code, as applicable) or
otherwise, (1) which may limit or modify Lessor's rights or remedies hereunder,
(2) to terminate, cancel, quit, repudiate or surrender this Lease, except as
expressly provided herein; (3) to reject, revoke acceptance or accept partial
delivery of the Equipment; (4) to recover damages from Lessor for any breach of
warranty PROVIDED, HOWEVER, that no such waiver shall preclude Lessee from
asserting any such claim against Lessor in a separate cause of action; or
against Lessor's assignee in a separate cause of action relating to such
assignee's own conduct.
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 NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN
THE EQUIPMENT IN ALL APPLICABLE JURISDICTIONS.
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. Neither this Lease nor any Equipment Schedule may
be amended except by a writing signed by Lessor and Lessee. This Lease and each
Equipment Schedule shall be binding upon, and inure to the benefit of, the
parties hereto, their permitted 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 principal place of business as set forth
above. This Lease, and all other documents (the execution and delivery of which
by Lessee is contemplated hereunder), shall be executed on Lessee's behalf by
Authorized Signers of Lessee. THIS LEASE IS BEING DELIVERED IN THE STATE OF NEW
YORK AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
36. JURY TRIAL WAIVER. LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH LESSOR OR LESSEE MAY BE PARTIES ARISING OUT OF
OR IN ANY WAY PERTAINING TO THIS LEASE. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY
AND VOLUNTARILY BY THE LESSOR AND THE 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.
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37. MORE THAN ONE LESSEE. If more than one person or entity executes
this Lease, each Equipment Schedule, and all addenda or other documents executed
in connection herewith or therewith, 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 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 Equipment
Schedules, riders and addenda executed by Lessor and Lessee collectively
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. By
initialing below, Lessee hereby further acknowledges the conditions of this
Section 39.
Lessee's Initials: /S/ KB
40. EXECUTION IN COUNTERPARTS. 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.
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of
the day and year first above written.
LESSOR: LESSEE:
KEYCORP LEASING, CORE MATERIALS CORPORATION
A Division of Key Corporate
Capital, Inc.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President,
Treasurer and CFO
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AMENDMENT TO MASTER EQUIPMENT LEASE AGREEMENT
---------------------------------------------
THIS AMENDMENT dated effective as of December 2, 1997 amends that
certain Master Equipment Lease Agreement dated effective as of December 2, 1997
between KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC., as Lessor,
and CORE MATERIALS CORPORATION, as Lessee (the "Master Lease"). Unless otherwise
specified herein, all capitalized terms shall have the meanings ascribed to them
in the Master Lease or in the Credit Agreement between Lessee as Borrower and
KeyBank National Association as Lender dated December 2, 1997 ("Credit
Agreement").
For good and valuable consideration, the receipt of which is
acknowledged, Lessor and Lessee hereby agree that the Security Agreement will be
amended as follows:
LESSEE'S FINANCIAL COVENANTS. Lessee hereby covenants with Lessor as follows:
On a continuing basis, from the date of the Master Lease until the date
on which Lessee's obligations thereunder are fully paid and performed, Lessee
hereby covenants and agrees that:
I. It shall not permit the Maximum Senior Funded Debt to EBITDA Ratio (as
defined below) to exceed 4.00:1.00 as determined at the end of each
fiscal quarter, commencing December 31, 1998, calculated for the four
quarters then ended.
II. It shall not permit the Minimum Fixed Charge Coverage Ratio (as defined
below) to be less than 1.10:1.00 as determined at the end of each
fiscal quarter, commencing with the quarter ending December 31, 1999,
calculated for the four quarters then ended.
III. It shall not permit the Minimum Debt Service Coverage Ratio (as defined
below) to be less than 1.50:1.00 as determined at the end of each
fiscal quarter, commencing March 31, 1998, for the fiscal quarter then
ended; June 30, 1998, for the two quarters then ended; September 30,
1998, for the three quarters then ended; and December 31, 1998, and
each fiscal quarter thereafter for the four quarters then ended.
IV. It shall not incur Unfunded Capital Expenditures (as defined below) in
excess of $5,500,000 during the fiscal year ended December 31, 1998.
V. For the purposes of this section:
A. "Maximum Senior Funded Debt to EBITDA Ratio" shall mean the
(1) sum of the commitment amount of the Loan ($7,500,000 as of
the date hereof), the total of Sale/Leaseback obligations, and
the outstanding principal balances of the Industrial
Development Revenue Bonds and any other permitted debt (other
than the Subordinated Debt) divided by (2) EBITDA (as defined
below).
B. "Minimum Fixed Charge Coverage Ratio" shall mean the sum of
EBITDA and rent (lease) expense, including without limitation
rent payments in connection with the Sale/Leaseback and the
Operating Lease, for a given period, divided by the sum of (1)
interest expense (which shall not include interest on the
Subordinated Debt which is deferred and not paid), (2) rent
(lease) expense, including without limitation rent payments in
connection with the Sale/Leaseback and Operating Lease, (3)
principal payments on the Subordinated Debt, the Bonds, and
any other permitted debt, and (4) Unfunded Capital
Expenditures in the amounts disclosed by Lessee in its
financial statements, for such period.
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C. "Minimum Debt Service Coverage Ratio" shall mean the sum of
EBITDA and rent (lease) expense, including without limitation
rent payments in connection with the Sale/Leaseback and the
Operating Lease, for a given period, divided by the sum of (1)
interest expense (which shall not include interest on the
Subordinated Debt which is deferred and not paid), (2) rent
(lease) expense, including without limitation rent payments in
connection with the Sale/Leaseback and Operating Lease, and
(3) principal payments on the Subordinated Debt, The Bonds and
any other permitted debt, for such period.
D. "EBITDA" shall mean, for any period, (1) the sum of the
amounts for such period of (a) net income, (b) interest
expense, (c) charges for federal, state, local and foreign
income taxes, (d) depreciation and amortization expense, and
(e) extraordinary losses (and any unusual losses arising
outside the ordinary course of business not included in
extraordinary losses determined in accordance with generally
accepted accounting principles) minus (2) the sum of the
amounts for such period of (a) extraordinary gains (and any
unusual gains arising outside the ordinary course of business
not included in extraordinary gains determined in accordance
with generally accepted accounting principles) and (b) to the
extent not deducted from total interest expense, any net
payments received during such period under interest rate
contracts and any interest income received in respect of cash
investments.
E. "Unfunded Capital Expenditures" shall mean any capital
expenditure made for which no long-term funding source is
specifically available.
Except as modified hereby, all of the terms, covenants and conditions
of the Master Lease shall remain in full force and effect and are in all
respects hereby ratified and affirmed.
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as
of the date first above written.
LESSOR: LESSEE:
KEYCORP LEASING, CORE MATERIALS CORPORATION
A Division of Key Corporate
Capital, Inc.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President,
Treasurer and CFO
93