EXHIBIT 10.56
CHASE EQUIPMENT LEASING, INC.
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MASTER LEASE AGREEMENT
This Master Lease Agreement ("Agreement") is made as of
December 4, 1996, between CHASE EQUIPMENT LEASING, INC.,
having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Lessor") and STAFF BUILDERS,
INC. , a Corporation Partnership Proprietorship having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Lessee").
1. LEASE: Subject to the terms and conditions contained
herein, Lessor hereby leases to Lessee and Lessee shall
lease from Lessor, various items of personal property
(collectively the "Equipment" or individually an "Item")
described in one or more Equipment Schedules to be
executed substantially in the form attached hereto. The
terms "Equipment" and "Item" include, as applicable, any
associated software systems and programming. Each
Equipment Schedule incorporates the terms and conditions
of this Agreement, and shall constitute a separate,
distinct and independent lease and contractual
relationship between Lessor and Lessee. The term "Lease"
shall mean the applicable Equipment Schedule which
incorporates the terms and conditions of this Agreement.
The term "Subsidiary" means any corporation, the majority
of the shares of voting stock of which at any time
outstanding is, owned directly or indirectly by Lessee or
by one or more of its other subsidiaries or by Lessee in
conjunction with one or more of its other subsidiaries.
By execution of this Agreement, the parties hereto agree
to the terms and conditions pursuant to which Equipment
may be leased from time to time by Lessor to Lessee.
2. TERMS AND RENTAL PAYMENTS: The term of this Agreement
shall commence on the date set forth above and shall
continue in effect thereafter so long as any Lease
remains in effect. The term of each Equipment Schedule
as to all or any Item of Equipment designated on any
Equipment Schedule shall commence on the date on which
the Lessee executes a Certificate of Acceptance for such
Equipment (the "Acceptance Date") and shall continue for
a period ending that number of months from the date the
first periodic rental payment is due as specified on the
applicable Equipment Schedule.
Rent shall be specified and payable in accordance with
the terms as set forth in the Equipment Schedule. All
payments shall be made at the office of Lessor at ▇▇▇
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directed by Lessor in writing.
If Lessee fails to pay any periodic rent payment or other
sum to be paid to Lessor after ten days of the due date,
then Lessee shall pay a late charge of five cents per
dollar on, and in addition to, the amount of such payment
but not exceeding the maximum amount, if any, permitted
by law ("Late Charge").
3. NET LEASE: This Lease is a net lease. Lessee's
obligation to pay all rent and any other amounts due
hereunder shall be absolute and unconditional and, except
as expressly provided, shall not be subject to any
abatement, deferment, reduction, defense, counterclaim,
set-off, or recoupment, including, but not limited to,
for example, (i) any existing or future claims of
whatever kind or nature against Lessor or the
manufacturer(s) or supplier(s) of the Equipment or (ii)
termination of Lessee's right of possession and/or the
taking of possession of the Equipment thereof by or
through Lessor in accordance with this Lease. Except as
expressly provided herein, this Lease shall not terminate
for any reason, including, but not limited to, any defect
in the Equipment or Lessor's title thereto or any
destruction or loss of use of any Item of Equipment.
4. LOCATION AND USE OF EQUIPMENT: Lessee shall be solely
responsible to install the Equipment or have it
installed, to inspect the Equipment during installation,
upon completion of installation to test the Equipment and
to accept it pursuant to the terms of this Lease. The
full risk of loss arising out of or in connection with
delays, partial performance or nonperformance by
supplier(s) shall be on Lessee, and Lessor shall not be
liable for specific performance of this Lease or for
damages if, for any reason, any supplier delays or fails
to fill or improperly fills an order.
During the term of this Lease, the Equipment shall be
located at the address specified in the Equipment
Schedule and shall not be removed from that address
without the prior written consent of Lessor. Lessee
covenants and warrants that during the period that any
Equipment is leased to Lessee, or its successors or
assigns, the Equipment will at all times be used and
operated in compliance with the laws of the jurisdictions
in which it is located, and in compliance with all acts,
rules, regulations, and orders of any commission, board
or other legislative, administrative, or judicial body or
officer having power to regulate or supervise the use or
operation of the Equipment. Lessee shall not install or
use the Equipment in such manner or in such circumstances
that any part of the Equipment is deemed to be an
accession to other personal property or deemed to be real
property or a fixture thereon.
5. ERRORS IN ESTIMATED COST: As used herein, "Total Cost"
means the cost to Lessor of purchasing and delivering the
Equipment to Lessee, including taxes and transportation
and other charges. The amount of each rental payment set
forth on the Equipment Schedule is based on the Total
Cost initially set forth which is an estimate, and each
shall be adjusted proportionally if the actual cost of
the Equipment differs from said estimate. Lessee hereby
authorizes Lessor to correct the figures set forth on the
Equipment Schedule(s) when the actual cost is known, and
to add to the amount of each rental payment any sales,
use or other tax that may be imposed on or measured by
rental payments. If the actual cost of the Equipment
differs from the estimated cost by more than ten percent
(10%) however, either party at its option may terminate
the Lease with respect to the Equipment as to subsequent
obligations by giving written notice to the other party
within fifteen (15) days after receiving notice of the
actual cost or the corrected rentals and Lessee shall
reimburse and indemnify Lessor for any existing
obligation and/or expenses incurred by Lessor such as but
not limited to, open purchase orders and progress
payments made to supplier(s).
6. INSPECTION: Lessee shall, whenever requested, advise
Lessor of the exact location and condition of the
Equipment and shall give Lessor immediate notice of any
attachment or other judicial processes, liens or
encumbrances affecting the Equipment and indemnify and
save Lessor harmless from any loss or damage caused
thereby. Lessor may for the purpose of inspection, at
all reasonable business hours, enter any building or
place where the Equipment is located. Lessor shall be
entitled to review Lessee's maintenance records relating
to the Equipment.
7. PRESERVATION OF LESSEE'S EXISTENCE AND BUSINESS:
(a) Lessee will preserve and keep in full force and
effect Lessee's existence, rights, licenses and
franchises and those of any Subsidiaries, necessary and
material to Lessee's and Subsidiaries' operations taken
as a whole.
(b) Lessee will not make or permit to be made any
material change in the character of Lessee's business or
operations.
8. FINANCIAL INFORMATION AND REPORTING:
(a) Lessee shall annually, within ninety (90) days after
the close of Lessee's fiscal year, furnish to Lessor,
financial statements of Lessee (including a balance sheet
as of the close of such year and statements of income,
changes in financial condition and shareholder's equity
for such year) prepared in accordance with generally
accepted accounting principles and certified by Lessee's
independent public accountants. Lessee shall also
provide quarterly financial statements of Lessee
similarly prepared for each of the first three quarters
of each fiscal year, which shall be certified (subject to
normal year-end adjustments) by Lessee's chief financial
officer and furnished to Lessor within sixty (60) days
following the end of the quarter.
(b) Lessee will furnish Lessor with any and all
information regarding Lessee's business, condition or
operations, financial or otherwise which Lessee furnishes
to any other creditor. This information shall be
furnished to Lessor at the same time it is furnished to
that creditor, provided Lessor will execute a
Confidentiality Agreement if requested by Lessee.
(c) Within three business days after a request, Lessee
will furnish Lessor with such further public information
regarding Lessee's business, condition, property, assets
or operations, financial or otherwise, as Lessor may from
time to time reasonably request, all prepared in form and
detail.
(d) Lessee will at all times maintain true and
complete records and books of account including, without
limiting the generality of the foregoing, appropriate
reserves for possible losses and liabilities, all in
accordance with generally accepted accounting principles
consistently applied.
(e) Lessee shall permit, and cause any Subsidiary to
permit, representatives of Lessor (i) to visit and
inspect any of the properties of Lessee or any Subsidiary
(ii) to examine its or their corporate or partnership
books and records, (iii) to make extracts or copies of
such books and records, and (iv) to discuss its or their
affairs, finances and accounts with its or their officers
or partners, as applicable. The foregoing may be done at
any time within regular business hours, upon reasonable
notice to Lessee.
(f) Lessee will promptly notify Lessor in writing of
the commencement of any litigation to which Lessee or any
of its affiliates may be a party (except for litigation
in which Lessee's (or the affiliate's) contingent
liability is fully covered by insurance) which, if
decided adversely to Lessee would adversely affect or
impair the title of Lessor to the Equipment or which, if
decided adversely to Lessee would materially adversely
affect the business operations or financial condition of
Lessee, taken as a whole. In addition, Lessee will
immediately notify Lessor, in writing, of any judgment
against Lessee if such judgment would have the effect
described in the preceding sentence.
9. PAYMENT OF TAXES, DEBTS AND OBLIGATIONS:
(a) Lessee shall pay all taxes, assessments, fees,
charges, penalties and fines imposed upon the Equipment
and/or arising out of the lease, use, possession or
operation thereof and whether levied or assessed against
Lessee or against Lessor. All taxes, fees and similar
charges imposed on the ownership, possession or use of
the Equipment during the term of this Lease shall be paid
by Lessee. In case of failure of Lessee to pay said
taxes, fees and similar charges, Lessor may pay the same,
and the amount thereof shall be payable by Lessee as
additional rent with the next rental payment.
(b) Except with respect to amounts not material (in
the good faith determination of Lessor) to Lessee taken
as a whole, Lessee will cause to be paid and discharged
all its obligations when due and all lawful taxes,
assessments and governmental charges or levies imposed
upon Lessee or any Subsidiary, or upon any property,
real, personal or mixed, belonging to Lessee or any
Subsidiaries, or upon any part thereof, before the same
shall become in default, as well as all lawful claims for
labor, materials and supplies which, if unpaid, might
become a lien or charge upon the property or any part of
it. Notwithstanding the previous sentence, neither
Lessee nor any Subsidiary shall be required to cause to
be paid and discharged any obligation, tax, assessment,
charge, levy or claim so long as its validity is
contested in the normal course of business and in good
faith by appropriate and timely proceedings and Lessee or
any Subsidiary, as the case may be, sets aside on its
books adequate reserves with respect to each tax,
assessment, charge, levy or claim so contested, nor shall
Lessee nor any Subsidiary be required to pay or discharge
any trade Indebtedness which is not past its stated due
date by more than thirty (30) days.
10. MAINTENANCE: Lessee will cause the Equipment to be kept
in good working order, repair and maintenance and will
make all necessary adjustments and repairs to the
Equipment. Any parts installed or replacements made by
Lessee to any Item pursuant to Lessee's obligation to
maintain the Equipment shall be considered accessions and
title thereto shall immediately vest in Lessor. Each
manufacturer or service organization is hereby authorized
to accept the directions of Lessee with respect thereto.
Lessee shall allow the manufacturer(s) or service
organization full and free access to the Equipment. All
maintenance and service charges, whether under a
maintenance agreement or otherwise, shall be borne by
Lessee, including the expenses, if any, of a
manufacturer's or service organization's customer
engineer charged in connection with maintenance and
repair services. Lessee covenants that the Equipment will
at all times be used and operated in accordance with each
manufacturer's instructions and in compliance with any
restriction contained in each manufacturer's warranties
regarding the Equipment.
11. ALTERATIONS AND ATTACHMENTS: Except with respect to
any addition less than $1,000, upon prior written notice
to Lessor, Lessee may, at its own expense, make
alterations in or add attachments to the Equipment
provided any alteration or attachment shall not interfere
with the normal operation of the Equipment. The
manufacturer may incorporate engineering changes or make
temporary alterations to the Equipment upon request by
Lessee. All such alterations and attachments, unless
Lessor shall otherwise agree in writing, shall be removed
by Lessee and the Equipment restored to its original
condition, reasonable wear and tear excepted, upon
termination of this Lease. If the alteration or
attachment interferes with the normal and satisfactory
operation or maintenance of the Equipment in a manner as
to increase the cost of maintenance of the Equipment, or
create a safety hazard, Lessee shall promptly remove the
alteration or attachment and restore the Equipment to its
normal condition.
12. INSURANCE; NOTICE OF ACCIDENT:
(a) At its sole expense, Lessee shall secure and
maintain in full force and effect throughout the term of
all Equipment Schedules and any extensions or renewals
thereof, insurance against all risks including, but not
limited to, theft, damage, or destruction of the
Equipment in an amount equal to the aggregate Total Cost
of all Equipment Schedules written in the broadest form
available on usual commercial terms and with carriers
acceptable to Lessor. Lessee shall also maintain public
liability insurance satisfactory to Lessor and with at
least the minimum limits as set forth in the Equipment
Schedule.
(b) Upon execution of the Certificate of Acceptance,
Lessee shall deliver the policy or policies or duplicates
or certificates thereof, to Lessor. Lessee shall maintain
a loss payable endorsement on all such policies in favor
of Lessor and its successors and assigns and shall afford
to Lessor and its successors and assigns such additional
protection as Lessor and its successors and assigns shall
reasonably require. All such insurance policies shall
name Lessor, its successors and assigns, as additional
insureds and expressly provide that any obligations
imposed upon the insureds (including, without limitation,
the obligation to pay premiums) shall be the obligation
solely of Lessee and not the obligations of Lessor, its
successors and assigns. Each policy shall expressly
provide that (1) the insurance as to Lessor and its
successors and assigns shall not be invalidated by any
act, omission or neglect of Lessee, (2) the same may not
be cancelled, modified or allowed to lapse (for failure
to renew or otherwise) without at least thirty (30) days
prior written notice to Lessor or its successors and
assigns, and (3) the insurance shall be primary, without
right or contribution of any other insurance carried by
or on behalf of Lessor with respect to its interests.
In the event that any policies insuring against liability
risks described above shall now or hereafter provide
coverage on a "claims made" basis, Lessee shall continue
to maintain such policies in effect for a period of not
less than three years after the expiration of the Lease
term of any Equipment Schedule.
(c) Lessor and its successors and assigns may apply
the proceeds of insurance to replace or repair the
Equipment and/or to satisfy Lessee's obligations
hereunder, as determined in Lessor's sole discretion. If
Lessee fails to pay when due any insurance premium for
any policy written hereunder, then Lessor may make such
premium payment and add the amount thereof to the next
rent payment, and such premium amounts shall become rent.
Lessee appoints Lessor as Lessee's attorney-in-fact to
make any claim for, to receive payment for and to execute
and endorse any documents, checks or other instruments in
payment for loss, theft or damage under any such
insurance policy. Lessor shall be under no duty to
ascertain the existence of any insurance coverage or to
examine any certificate of insurance or other evidence of
insurance coverage or to advise Lessee in the event the
insurance coverage does not comply with the requirements
of this Agreement. Lessee will promptly notify the
appropriate insurer, Lessor and any assignee, of an
accident or occurrence which may become the basis of a
claim against the insured. In connection with any claim
against Lessor and/or Lessee arising out of the
ownership, operation, maintenance and use of the
Equipment, Lessee agrees to cooperate with Lessor in
defending against such claims, including making Lessee's
employees available to Lessor without charge.
(d) Lessee will maintain, and cause any Subsidiaries
to maintain, insurance from duly licensed and responsible
insurers on all property of Lessee and any Subsidiaries
to its full insurable value, except to the extent limited
by applicable insurance law. This insurance shall be
against risks of fire and all other risks as fall within
"extended coverage" as that term is generally understood
in the insurance industry. Lessee shall also maintain,
and cause any Subsidiaries to maintain, additional
insurance in such amounts and against such risks,
including, without limitation, product liability,
personal injury, property damage, and workers'
compensation, as is usually carried by owners of similar
businesses of similar size and profits or as Lessor may
reasonably require.
13. INDEMNIFICATION: To the fullest extent permitted by
law, Lessor, its officers, employees, agents, successors
and assigns, shall not be liable to Lessee for, and
Lessee shall indemnify and hold Lessor, its officers,
employees, agents, successors and assigns, harmless with
respect to any third-party from any liability (including
liability for Lessee negligence), claim, loss, damage or
expense (including litigation expense) of any kind or
nature arising out of this Lease, or the transactions
contemplated in this Lease, including, but not limited
to: (a) the inadequacy of any Item of Equipment for any
purpose; (b) any deficiency or defect in any Item of
Equipment; the use or performance or maintenance of any
Item of Equipment; (d) any interruption or loss of
service, use or performance of any Item of Equipment; or
(e) any loss of business or other consequential damage
whether or not resulting from any of the foregoing. IN
PARTICULAR, LESSOR AND ITS SUCCESSORS AND ASSIGNS SHALL
NOT BE LIABLE FOR INJURIES TO PERSONS OR DAMAGE TO ANY
ITEM OF EQUIPMENT OR OTHER PROPERTY UNDER ANY THEORY OF
STRICT LIABILITY, AND LESSEE SHALL INDEMNIFY AND SAVE
LESSOR AND ITS SUCCESSORS AND ASSIGNS HARMLESS FROM ANY
SUCH LIABILITY AND ALL COSTS AND EXPENSES IN DEFENDING
THE SAME. This obligation to indemnify shall apply from
the date of the execution of the Equipment Schedule out
of which the claim arises, notwithstanding that the lease
term may not have commenced. All of Lessor's and its
successors' and assigns' rights under this section shall
survive the termination of this Lease. However, Lessee
shall not be required to indemnify Lessor or its
successors or assigns for claims arising from events
which occur after the Equipment has been redelivered to
Lessor, its successors or assigns.
14. RISK OF LOSS:
(a) Lessee hereby assumes and shall bear the entire
risk of loss, theft, damage and destruction of the
Equipment, whether partial or complete, from any cause
whatsoever. No loss, theft, damage or destruction of
Equipment shall relieve Lessee of the obligation to pay
rent or any other obligation of this Lease, and, except
as provided below, this Lease shall remain in full force
and effect. Lessee shall promptly notify Lessor in
writing of any such loss, theft, damage or destruction of
the Equipment. Lessor shall not be liable to Lessee for
any loss, damage or expense of any kind or nature, caused
directly or indirectly by any Item of Equipment or by the
use, maintenance, repair, failure, destruction or damage
of any Equipment.
(b) In the event of damage of any kind whatsoever to
the Equipment (unless the same is damaged beyond repair),
Lessee, shall at Lessee's expense (i) place the same in
good repair, condition and working order, or (ii) replace
the same with like Equipment of the same or a later
model, and in good repair, condition and working order
and provide Lessor good and valid title thereto.
(c) In the event that the Equipment is lost, stolen,
destroyed or damaged beyond repair (any such event is
referred to as an "Event of Loss"), Lessee, shall (i) at
Lessee's expense replace the same with like Equipment of
the same or a later model, in good repair, condition and
working order and provide Lessor good and valid title
thereto or (ii) pay to Lessor an amount equal to the
unpaid balance of the rent and any other sums then due or
past due, plus the Stipulated Loss Value attributable to
the Equipment (as set forth on Attachment 1 to the
Equipment Schedule) calculated on the rental payment date
immediately preceding the date of the loss (this option
(ii) shall only be applicable if a Stipulated Loss Value
table is referenced in the Equipment Schedule), or (iii)
pay to Lessor an amount equal to the unpaid balance of
the rent and any other sums then due, plus the balance of
any remaining rents (discounted at the rate of six (6)
percent per annum) attributable to the Equipment during
the term and extension thereof, if any, of this Lease.
Upon such payment Lessee's obligation to pay further rent
for such Equipment shall cease, and Lessee thereupon
shall become entitled to the Equipment paid for "as-is-
where-is", without recourse or warranty, express or
implied, with respect to any matter whatsoever.
(d) To the extent of Lessee's expense actually
incurred to repair or replace the Equipment or of
Lessee's payment to Lessor for the loss, theft, damage or
destruction of any Item of Equipment, Lessee shall then
be entitled to receive from Lessor any insurance or
recovery received by Lessor in connection with such loss,
theft, damage or destruction, and any amount of insurance
or recovery received by Lessor in excess of Lessee's
expenses actually incurred or paid to Lessor shall belong
to Lessee. Lessor shall not be obligated to deliver to
Lessee any insurance or recovery received by Lessor in
connection with any loss, theft, damage or destruction
until Lessee has provided Lessor with such documents as
Lessor shall deem necessary or desirable for purposes of
evidencing that the Equipment has been repaired or
replaced in accordance with this Section 14.
15. OWNERSHIP OF EQUIPMENT: The Equipment shall at all
times remain personal property, and title thereto shall
remain solely in Lessor. The Equipment may be removed by
Lessor at any time after termination of this Lease.
Lessee shall affix tags, decals or plates to the
Equipment indicating Lessor's ownership, which type of
tag, decal or plate and location may be specified by
Lessor, and Lessee shall not permit their removal or
concealment. Lessee shall cause each Item of Equipment
to be kept numbered with the serial number specified in
the Certificate of Acceptance. Lessee shall, at its own
expense, protect and defend Lessor's title in the
Equipment against all claims and liens of Lessee's
creditors and keep the Equipment free and clear of all
claims, liens and encumbrances except those resulting
from the agreements or acts of Lessor. At Lessor's
request Lessee shall obtain and record such instruments
and take such steps as may be necessary to prevent any
entity from acquiring any rights in the Equipment by
reason of the Equipment being claimed as or deemed as
real property.
In the event this Agreement or any Equipment Schedule
thereto shall be adjudged or determined not to be a
Lease, then Lessor's retention of title to the Equipment
shall be construed to be, and Lessee does hereby grant to
Lessor, a security interest in the Equipment, insurance
covering the Equipment and all of the proceeds of the
foregoing.
16. ASSIGNMENT: Neither this Lease nor Lessee's rights
hereunder shall be assignable in whole or in part by
Lessee except with Lessor's prior written consent, and
the provisions hereof shall bind any permitted successors
and assigns of Lessee. Lessor shall have the right to
assign this Lease or any part thereof. If Lessor assigns
the rentals reserved herein or all or any of Lessor's
other rights hereunder, or amounts equal thereto, the
right of the Assignee to receive the rentals as well as
any other right of the Assignee shall not be subject to
any defense, setoff, counterclaim, or recoupment which
may arise out of any breach or obligation of Lessor in
connection herewith or by reason of any other
indebtedness or liability at any time owing by Lessor to
Lessee. All rentals due hereunder shall be payable to
the Assignee by Lessee whether or not this Lease is
terminated by operation of law or otherwise, including
without limitation, termination arising out of
bankruptcy, reorganization or similar proceedings
involving Lessor. On receipt of notification of such
assignment, Lessee, subject to its rights hereunder,
shall become the pledgeholder of the Equipment for and on
behalf of the Assignee and will relinquish possession
thereof only to the Assignee or pursuant to its written
order. Lessee, on receiving notice of any such
assignment, shall abide thereby and make payment as may
therein be directed. Following any such assignment the
term "Lessor" shall be deemed to include or refer to
Lessor's Assignee, provided that no such Assignee shall
be deemed to assume any obligation or duty imposed upon
Lessor hereunder, and Lessee shall look only to Lessor
for performance thereof.
Lessee is further directed that after assignment of a
Lease only Assignee shall have the right or power to
compromise, settle, extend or otherwise negotiate the
terms of payment under that Lease.
17. SECURITY INTEREST: Where appropriate, Lessor shall
file all necessary documents, including UCC financing
statements, in connection with this Lease so as to
perfect Lessor's security interest under the Lease.
Lessee shall execute and deliver to Lessor such documents
(including UCC financing statements) as Lessor shall deem
necessary or desirable for purposes of evidencing,
protecting or recording the rights and interest of Lessor
in the Equipment or this Lease and in furtherance of the
performance of the terms and conditions of this Lease.
All reasonable expenses (including UCC search and filing
fees) related thereto shall be paid by Lessee. Lessee
hereby irrevocably appoints Lessor as its lawful attorney
and agent to execute UCC financing statements on Lessee's
behalf and hereby authorizes Lessor to file, at Lessee's
expense, such UCC financing statements in any appropriate
public office.
18. DISPOSITION: In the event Lessee does not exercise the
purchase option, contained in the Addendum, at the
expiration or termination of this Lease by lapse of time,
or otherwise, Lessee shall return the Equipment to Lessor
or its designee at a location designated by Lessor within
New York State, with transportation charges (including
in-transit insurance), prepaid by Lessee, in the same
condition as when received by Lessee, ordinary wear and
tear alone excepted, and free of any lien created or
suffered by Lessee. To the extent the Lease does not
terminate at the end of the Lease term thereof, or the
Equipment is not returned to Lessor or its designee, and
other rental amounts are not specified therein or
mutually agreed to in writing, then the same amount of
rent shall continue to be due and payable by Lessee until
the Equipment is returned to Lessor or its designee.
Lessee shall remain responsible to maintain in full force
and effect insurance in accordance with paragraph 12 of
this Agreement.
19. EVENTS OF DEFAULT AND LESSOR'S REMEDIES:
(a) Each of the following events shall constitute an
event of default ("Event of Default") hereunder: (i)
Lessee fails to pay any rent or other amount due
hereunder within ten (10) days after the same is due and
payable; or (ii) Lessee fails to perform any other
obligation or observe any material condition of this
Lease required to be performed or observed by Lessee; or
(iii) any representation, warranty or statement made in
writing to Lessor by Lessee (or any guarantor of Lessee's
obligations under this Agreement) in connection with the
transactions contemplated under this Lease shall have
been false in any material respect on a consolidated
basis when made; or (iv) Lessee attempts to sell,
transfer, encumber, part with possession of, assign or
sublet (except as expressly permitted by the provisions
hereof) any Item of Equipment; or (v) Lessee fails to
insure (pursuant to Section 12 hereof) any Item of
Equipment; or (vi) Lessee fails to deliver and such
failure continues for a period of (10) days to Lessor any
documents reasonably required by Lessor under the Lease;
or (vii) Lessee (or any guarantor of Lessee's obligations
under this Agreement) is in default under any other
agreement with Lessor or any of its affiliates; or (viii)
Lessee ceases doing business as a going concern; or (ix)
Lessee shall consolidate with or merge into any other
entity, or convey, transfer or lease substantially all of
its assets to any other entity; or (x) the corporate
existence of Lessee shall terminate; or (xi) any of
Lessee's issued and outstanding shares of capital stock
are sold, assigned, pledged, transferred, exchanged in a
corporate reorganization or otherwise disposed of or new
shares of such stock are issued and such sale,
assignment, pledge, transfer, exchange, issuance or other
disposition results in vesting the "control" of such
corporation in a person (or persons) not presently having
control and not approved by Lessor in writing prior to
such vesting (except for involuntary transfers of such
stock by operation of law). "Control" shall be deemed
vested in the person or persons owning more than fifty
percent (50%) of the number of issued and outstanding
shares of such stock, however designated, or holding more
than fifty percent (50%) of the voting power for the
election of members of the Board of Directors of the
Lessee; or (xii) Lessee (a) incurs any accumulated
funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended from
time to time and the regulations thereunder, equal to 5%
of Consolidated Tangible Net Worth of Lessee or (b)
incurs any liability of comparable size to the Pension
Benefit Guaranty Corporation; or (xiv) Lessee is, or
permits any subsidiary to be, in violation of any law or
regulation, order, writ, injunction or decree of any
court or governmental instrumentality or in breach of any
agreement or instrument to which Lessee or any Subsidiary
is subject or in default thereunder which is material to
Lessee's operations when taken as a whole; or (xv) Lessee
(or any guarantor of Lessee's obligations under this
Agreement) applies for or consents to the appointment of
a receiver, trustee, assignee, custodian or liquidator of
its business or any substantial part of its property; or
(xvi) Lessee (or any guarantor of Lessee's obligations
under this Agreement) fails to pay its debts generally as
they become due; or (xvii) Lessee (or any guarantor of
Lessee's obligations under this Agreement) makes a
general assignment for the benefit of creditors; or
(xviii) Lessee (or any guarantor of Lessee's obligations
under this Agreement) fails within sixty (60) days to
lift any execution, garnishment or attachment of such
consequences as will impair its ability to carry on its
operations under this Lease; or (xix) Lessee (or any
guarantor of Lessee's obligations under this Agreement)
commences (as the debtor) a case in bankruptcy (including
a petition for reorganization or arrangement) under the
United States Bankruptcy Code or a proceeding under any
state or federal insolvency law; or (xx) a case in
bankruptcy or any other proceeding (including a petition
for reorganization or arrangement) under the United
States Bankruptcy Code or any case or proceeding under
any other insolvency law shall be commenced against
Lessee (or any guarantor of Lessee's obligations under
this Agreement) (as the debtor) involuntarily or a decree
or order for relief against Lessee (or any guarantor of
Lessee's obligations under this Agreement) (as the
debtor) shall be entered in any court of competent
jurisdiction, and such case, proceeding or decree or
order is not dismissed within forty (40) days after such
commencement or entry, or Lessee (or any guarantor of
Lessee's obligations under this agreement) shall consent
to or admit the material allegations against it in any
such case or proceeding; or (xxi) a trustee, assignee,
receiver, custodian or agent (however named) is appointed
or authorized to take charge of any substantial part of
Lessee's (or any guarantor of Lessee's obligations under
this Agreement) property.
(b) Upon the occurrence of any Event of Default,
Lessor may declare the Lessee in default. At its option,
Lessor may declare a default in all Leases and any other
agreement between Lessor, or any affiliate of Lessor, and
Lessee except as specifically exempted therefrom by
Lessor in such declaration. In the case of an Event of
Default, Lessor or its agents shall have the right, at
their option, to exercise any or all of the rights and
remedies available to a secured party under the Uniform
Commercial Code and, in addition, to do any or all of the
following: (i) to declare immediately due and payable
without notice or demand to Lessee an amount equal to the
balance of unpaid rent and any other sums then due plus
the balance of the rent and any other sums to become due
(discounted at the rate of four (4) percent per annum)
during the term and extension thereof, if any, of this
Lease; and/or (ii) to ▇▇▇ for and recover from Lessee an
amount equal to the unpaid balance of rent and any other
sums then due plus the balance of rents and any other
sums to become due (discounted at the rate of four (4)
percent per annum) during the term and extension thereof,
if any, of this Lease (hereinafter "Unpaid Rent"); and/or
(iii) to take possession of any or all Item(s) of
Equipment without demand or notice wherever the same may
be located without any court order or other process of
law, provided that Lessor will allow Lessee to safeguard
its data. Upon taking possession of any or all Item(s)
of Equipment, Lessor at its option may (i) lease the
repossessed Equipment to any third party on such terms
and conditions as Lessor may determine, or (ii) sell the
Equipment or any part thereof at public auction or at
private sale. In the event Lessor re-lets the
repossessed Equipment, then Lessor shall credit against
the Unpaid Rent the present value of the aggregate of the
rent to be received from the re-lease during the
remaining term of the applicable Equipment Schedules
(discounted at a rate equal to the sum of the prime
interest rate in effect at The Chase Manhattan Bank, on
the date such re-lease is entered into plus 2%). In the
event Lessor sells the repossessed Equipment, then Lessor
shall credit all amounts received from the sale, less
expenses incurred in connection therewith, to the Unpaid
Rent due. Lessee hereby agrees to peaceably deliver the
Equipment to Lessor upon demand after an Event of Default
is declared by Lessor; Lessee waives any and all damages
occasioned by such taking possession. Any such taking of
possession shall not constitute a termination of this
Lease and shall not relieve Lessee of its original
obligation hereunder unless Lessor expressly so notifies
Lessee in writing.
(c) Should any proceeding be instituted by Lessor to
recover any monies due and/or to become due hereunder
and/or for the possession of the Equipment, Lessee shall
pay a reasonable sum as attorney's fees and collection
agency fees, court costs and repossession expenses.
The exercise, or the beginning of exercise by the Lessor
of any one or more of such remedies described above shall
not constitute the exclusive election of such remedies
and shall not preclude the simultaneous or later exercise
by Lessor of any or all of such other remedies.
20. LESSEE'S AND LESSOR'S WARRANTIES: (a) Lessee hereby
warrants and represents to Lessor, its successors and
assigns that: (i) Lessee's execution and performance of
this Lease has been duly authorized by all necessary
corporate action and is not now and will not be in
conflict with Lessee's charter or by-laws, or with any
indenture, contract or agreement by which it is bound, or
with any statute, judgment, decree, rule or regulation
binding upon it; (ii) no consent or approval of any
trustee or holder of any indebtedness or obligation of
Lessee, and no consent or approval of any governmental
authority, is necessary for Lessee's execution or
performance of this Lease; (iii) there is no litigation
or other proceeding pending, or to the best of the
Lessee's knowledge, threatened against or affecting
Lessee which, if decided adversely to Lessee would
adversely affect or impair the title of Lessor to the
Equipment or which, if decided adversely to Lessee would
materially adversely affect the business operations or
financial condition of Lessee; (iv) all balance sheets,
statements of profit and loss and other financial data
that have been delivered to Lessor with respect to Lessee
are complete and correct in all material respects, fairly
present the financial condition of the Lessee on the
dates for which, and the results of its operations for
the periods for which, the same have been furnished and
have been prepared in accordance with generally accepted
accounting principles consistently applied; (v) there has
been no material adverse change in the condition of
Lessee, financial or otherwise, since the date of the
most recent financial statements delivered to Lessor;
(vi) this Lease is valid and binding and enforceable
against Lessee in accordance with its terms, subject to
enforcement limitations imposed by rules of equity or by
bankruptcy or similar laws. Upon Lessor's request,
Lessee shall submit to Lessor an opinion of Lessee's
counsel that the above warranties and representations are
true.
(b) Lessor hereby warrants and represents to Lessee,
its successors and assigns that: (i) Lessor's execution
and performance of this Lease has been duly authorized by
all necessary corporate action and is not now and will
not be in conflict with Lessor's charter and by-laws, or
with any indenture, contract or agreement by which it is
bound, or with any statute, judgment, decree, rule or
regulation binding upon it; (ii) no consent or approval
of any trustee or holder of any indebtedness or
obligation of Lessor, and no consent or approval of any
governmental authority, is necessary for Lessor's
execution or performance of this Lease; and (iii) this
Lease is valid and binding and enforceable against Lessor
in accordance with its terms, subject to enforcement
limitations imposed by rules of equity or by bankruptcy
or similar laws.
21. JOINT AND SEVERAL LIABILITY; AUTHORITY TO SIGN;
SUBSIDIARIES; PURCHASE OF EQUIPMENT: If more than one
party executes this Lease as Lessee, each such party
shall be jointly and severally bound by the terms and
provisions of this Lease. Any person who signs as an
officer or agent for a corporation, partnership or other
entity warrants that he has authority from such
corporation, partnership or other entity to enter into
this Lease on its behalf. Each Item of Equipment
delivered pursuant to this Lease by Lessor to a
Subsidiary of Lessee or to any entity or person
designated by Lessee, whether at the request of Lessee or
such Subsidiary, entity or person shall be Equipment for
all purposes of this Lease, and Lessee shall be and
remain primarily liable for its obligations under this
Lease with respect to such Equipment. Lessor shall not
be obligated to purchase and deliver any Item of
Equipment unless Lessor has executed an Equipment
Schedule covering the Equipment.
22. MODIFICATION: No change, modification, or alteration
of, and no additions to, the terms of this Lease shall be
effective or binding on Lessor unless the same is in
writing and signed by Lessor (except if the Lease term is
automatically extended per Section 18 hereof). In the
event of conflict between the terms of this Lease and the
Equipment Schedule, the Equipment Schedule shall govern.
23. NOTICES:
(a) Lessee will immediately notify Lessor in writing
with full details if (i) any event occurs or any
condition exists which constitutes, or which but for a
requirement of lapse of time or notice or both would
constitute, an Event of Default under Part 19, or which
might materially and adversely affect the financial
condition or operations of Lessee or of any Subsidiary or
(ii) any representation or warranty made in the Master
Lease Agreement or in any writing related to it may for
any reason cease in any material respect to be true and
complete.
(b) All notices relating to this Lease, shall be in
writing and shall be deemed given when delivered or when
deposited in the U.S. mail, certified, postage prepaid
and addressed with the full name and address of the
appropriate party set forth above, or to such other
address as may have been furnished by written notice from
the party to whom notice is sent.
24. TIME OF ESSENCE; ENTIRE AGREEMENT; WAIVER; SURVIVAL OF
TERMS: Time is of the essence of this Lease. This Lease
constitutes the entire agreement between the parties and
shall be binding upon the parties and their respective
successors or assigns, and shall only be amended by a
written instrument signed by Lessor and Lessee. Any
waiver of the performance of any of the terms, conditions
or covenants hereof by either party shall not be
construed as thereafter waiving any such terms,
conditions or covenants, but the same shall remain in
full force and effect, as if no such waiver has occurred.
Lessee's obligations and liabilities under this Lease
shall not be affected by the expiration or earlier
termination of this Lease.
25. APPLICABLE LAW: This Lease shall be governed by and in
accordance with the laws of the State of New York. At
Lessor's option, any action or proceeding relating
directly or indirectly to this Lease shall be tried in a
court of competent jurisdiction located in the State of
New York. Lessee hereby consents to jurisdiction of any
court of competent jurisdiction chosen by Lessor. This
Lease shall be deemed to have been made in the State of
New York, regardless of the order in which it was
executed.
26. HEADINGS: The headings of each numbered paragraph are
for reference only and constitute no part of this Lease.
27. ACKNOWLEDGEMENTS AND WARRANTIES: Lessee acknowledges
that it has selected both (a) the Equipment and (b) the
manufacturer and/or supplier from whom Lessor is to
purchase it. LESSOR MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING THE
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE, AND, AS TO LESSEE,
LESSOR LEASES THE EQUIPMENT AS IS. NO DEFECT OR
UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE OF THE
OBLIGATION TO PAY RENT OR OF ANY OTHER OBLIGATION UNDER
THIS LEASE. LESSOR WARRANTS TO LESSEE THAT, SO LONG AS
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
LESSOR WILL NOT INTERFERE WITH THE LESSEE'S USE AND
POSSESSION OF THE EQUIPMENT.
If the Equipment is unsatisfactory for any reason, Lessee
shall make any claim on account thereof solely against
the manufacturer or supplier. Lessor hereby agrees to
assign to Lessee, solely for the purpose of making and
prosecuting any such claim, all of the rights which
Lessor has against such manufacturer or supplier for
breach of warranty or other representation respecting the
Equipment to the extent the same are assignable.
28. LESSOR'S RIGHT TO CURE: Upon Lessee's failure to
perform any of its duties under a Lease, Lessor may, but
shall not be obligated to, perform any or all such
duties, and Lessee shall pay an amount equal to the
expenses thereof to Lessor forthwith upon demand by
Lessor. No such performance of any or all such duties by
Lessor shall be deemed to cure any Event of Default of
Lessee.
29. ADDITIONAL ASSURANCES: If Lessor shall request, Lessee
shall execute and deliver to Lessor such documents as
Lessor shall reasonably deem necessary or desirable.
Lessee hereby authorizes Lessor to make corrections, if
necessary, to the description of Equipment, quantities,
model numbers, and/or serial numbers, on the Equipment
Schedule, Certificate of Acceptance, UCC-1 financing
statements covering the Equipment and all other related
documents. Lessor will provide Lessee with a copy of the
corrected Equipment Schedule.
30. MODIFICATIONS/ADDITIONAL PROVISIONS: See attached
Addendum, if there are any modifications or additions
hereto.
_____________________________________________
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT
TO BE DULY EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
CHASE EQUIPMENT LEASING, INC. LESSEE: STAFF
BUILDERS, INC.
BY: /s/ ▇▇▇▇▇▇ ▇. Quinlides BY: /s/ ▇▇▇▇
▇▇▇▇▇
TITLE: 2nd Vice President TITLE: Sr. Vice
President,
Chief Financial
Officer
(REV.2/93)
