Exhibit 10.14
AMENDMENT NO. 1
THIS AMENDMENT is made as of the eighteenth day of March, 2002, between
GENERAL ELECTRIC CAPITAL CORPORATION, together with its successors and assigns,
if any, and TXU COMMUNICATIONS VENTURES COMPANY in connection with SCHEDULE
NUMBER 001 of that certain MASTER LEASE AGREEMENT, dated or dated as of
FEBRUARY 25, 2002 ("AGREEMENT"). The terms of this Amendment are hereby
incorporated into the Agreement is though fully set forth therein. The Agreement
is hereby amended as follows:
Amend the following dates:
Section B. Financial Terms:
Subsection 5. Basic Term Commencement Date is April 1, 2002
Subsection 7. Last Delivery Date is April 1, 2002
Subsection 10. Interim Rent shall be due on March 31, 2002
Subsection 11. Unadjusted Basic Term Rent Commencing on April 1, 2002
Subsection 18. Secondary Term Rent Commencing on October 1, 2004
TERMS USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO
THEM IN THE AGREEMENT EXCEPT AS EXPRESSLY AMENDED HEREBY. THE AGREEMENT SHALL
REMAIN IN FULL FORCE AND EFFECT.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment by
signature of their respective authorized representative set forth below.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION TXU COMMUNICATIONS VENTURES COMPANY
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Risk Analyst Title: VICE PRESIDENT-FINANCE AND
ADMINISTRATION
EQUIPMENT SCHEDULE
(Fixed To Float One Month CPR)
SCHEDULE NO. 001
DATED THIS 3/18/02
TO MASTER LEASE AGREEMENT
DATED AS OF FEBRUARY 25, 2002
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
GENERAL ELECTRIC CAPITAL CORPORATION TXU COMMUNICATIONS VENTURES COMPANY
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
------------------------------------------------------------------------------------------
1 $869.118.88 Furniture, Fixtures, Equipment
and Telecommunications Equipment
at TXU Communications Ventures
Company's Headquarters at: ▇▇▇
▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
per the attached Exhibit A.
Equipment immediately listed above is located at: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B. FINANCIAL TERMS
1. Advance Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date: April 1, 2002
2. Capitalized Lessor's Cost: $869.118.88 6. Lessee Federal Tax ID No.: ▇▇▇▇▇▇▇▇▇
3. Basic Term (No. of Months): 30 MONTHS 7. Last Delivery Date: April 1, 2002
4. Basic Term Lease Rate Factor and Rental Number 0.01841928 8. Daily Lease Rate Factor: 0.00061398
9. First Termination Date: TWENTY-FOUR (24) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on March 31, 2002.
11. Unadjusted Basic Term Rent. Commencing on April 1, 2002 and on the same
day of each month thereafter (each, a "Rent Payment Date") during the
Basic Term, Lessee shall pay as rent ("Unadjusted Basic Term Rent") as
adjusted pursuant to Section B(15) below, the product of the Basic Term
Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule.
12. Base Index Rate: 1.74
13. Index Rate: A variable per annum interest rate ("Current Index") which,
except for purposes of Section 17 hereof, shall be equal to a per annum
interest rate as stated in the Federal Reserve Statistical Release H. 15
(519) for 1-Month Commercial Paper under the column indicating an average
monthly rate. The Current Index shall be the average monthly rate for the
second calendar month preceding the calendar month in which the applicable
Adjustment Period commences. For purposes of Section 17 hereof, "Current
Index" shall be a per annum interest rate as stated in the Federal Reserve
Statistical Release H. 15 (519) for U.S. Government Securities, Treasury
Constant Maturities for a term that most closely approximates the
remainder of the Basic Term as of the Rent Payment Date on which the first
installment of fixed Rent calculated under Section 17 shall become due.
If, for any reason whatsoever, the Current Index is not published, the
Current Index, except for purposes of Section 179 hereof, shall instead be
equal to the latest commercial paper rate for high grade unsecured notes
of 30 days maturity sold through dealers by major corporations in
multiples of $1,000, as indicated in the "MONEY RATES" column of the Wall
Street Journal, Eastern Edition, published on the first business day of
the calendar month preceding the calendar month in which the rental
payment being adjusted is due and payable
and for purposes of Section 17 hereof, shall be equal to the simple
average of all asked yields for Government Bonds and Notes with scheduled
maturities that most closely approximates the remainder of the Basic Term
as of the Rent Payment Date on which the first installment of fixed Rent
calculated under Section 17 shall become due as indicated in the "Treasury
Bonds, Notes & Bills" column of the Wall Street Journal, Eastern Edition,
published on the first business day of the calendar month preceding the
calendar month in which the rental payment being adjusted is due and
payable.
14. Adjustment Period: Shall mean a monthly period, the first of which shall
commence on, and include, the third monthly anniversary of the Basic Term
Commencement Date and continue to, but not include, the same date of the
next succeeding calendar month. Each subsequent Adjustment Period shall
commence on, and include, the date immediately following the expiration of
the prior Adjustment Period and continue to, but not include, the same
date of the next succeeding calendar month. If Lessee exercises its option
pursuant to Section 17 hereof, "Adjustment Period" as used in Section 17
shall also mean the remainder of the Basic Term.
15. Calculation of the Unadjusted Basic Term Rent: The calculation of the
Unadjusted Basic Term Rent (as defined below) is based on an assumption
that the Index Rate in effect from time to time throughout the Basic Term
would be equal to the Base Index Rate.
16. Adjustment for the Basic Term: From the Basic Term Commencement Date
through and including June 1, 2002 (that date and the same date of each
subsequent calendar month being a "Conversion Date"), Lessee shall pay as
rent the Unadjusted Basic Term Rent (as defined above). From each
Conversion Date through and including each date of payment, the Unadjusted
Basic Term Rent (as defined below) shall be adjusted once each calendar
month beginning with the Conversion Date applicable to that calendar
month, and such adjustment shall be effective during the adjustment period
("Adjustment Period") as hereinafter defined. Each Adjustment Period shall
commence at the close of business on the Conversion Date and shall
continue through the same day of the next succeeding calendar month. The
adjustment to the Unadjusted Basic Term Rent ("Adjustment Amount") shall
be calculated by multiplying the respective Basis Point increase or
decrease (rounded up to the nearest whole number of a basis point, when
necessary) between the Base Index Rate and the Index Rate for each
Adjustment Period by the applicable adjustment factor set forth on Exhibit
I attached hereto and multiplying the product by a fraction equal to the
Capitalized Lessor's Cost divided by one million. The resulting Adjustment
Amount shall then be added or subtracted, as the case may be, to the
Unadjusted Basic Term Rent.
17. Option to Fix Variable Rent. At any time from and after the first
Adjustment Period, Lessee may, upon the giving of written notice to
Lessor, deliver notice of Lessee's intention to elect to fix the monthly
Rent for the remainder of the Basic Term. Within ten (10) days after its
receipt of such notice, Lessor shall provide Lessee with a proposed
Amendment to this Schedule that adjusts each percentage used to calculate
the amount of the Purchase Option and Cancellation Option, respectively.
If Lessee returns to Lessor a properly executed original of the Amendment,
monthly Rent shall be fixed for the remainder of the Basic Term,
commencing on the first Rent Payment Date occurring 30 days after Lessor's
receipt of the executed Amendment. The fixed Rent shall be calculated by
multiplying the respective basis point increase or decrease (rounded up to
the nearest whole number of a basis point, when necessary) between the
Current Index and the Base Index for each Adjustment Period times (ii) the
applicable adjustment factor set forth in the attached table, times (iii)
a fraction in respect of which the Capitalized Lessor's Cost is the
numerator and one million is the denominator and the resulting amount
shall then be added or subtracted, as the case may be, to the Fixed Rent.
18. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on October 1, 2004 (the "Secondary Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for 30 months (the "Secondary Term"), Lessee shall
pay as rent ("Secondary Term Rent") the product of 0.01841928 (the
"Secondary Term Lease Rate Factor") times the Capitalized Lessor's Cost of
all Equipment on this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the -200% declining balance method, switching to
straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such
year will yield a larger allowance.
2. Recovery Period: 5 YEARS.
3. Basis: 100% of Capitalized Lessors Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN IRVING, TX: Lessee agrees that it will
not list any of such Equipment for property tax purposes or report any
property tax assessed against such Equipment until otherwise directed in
writing by Lessor. Upon receipt of any property tax ▇▇▇▇ pertaining to
such Equipment from the appropriate taxing authority, Lessor will pay such
tax and will invoice Lessee for the expense. Upon receipt of such invoice,
Lessee will promptly reimburse Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES
THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A)
THE PERSON(S) SUPPLYING THE EQUIPMENT IS TXU COMMUNICATIONS VENTURES
COMPANY (THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND
WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY
SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS
PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH
RESPECT TO SUCH EQUIPMENT. LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND
RECEIVE AN ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND
WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF
REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND
ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY
LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND
REMEDIES SECTION OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
Termination Stipulated
Rental Value Loss Value
Basic Percentage Percentage
1 105.411 105.671
2 103.974 104.503
3 102.530 103.327
4 101.078 102.145
5 99.619 100.955
6 98.154 99.759
7 96.682 98.555
8 95.202 97.345
9 93.716 96.128
10 92.223 94.903
11 90.722 93.672
12 89.215 92.433
13 87.701 91.188
14 86.178 89.934
15 84.646 88.672
16 83.106 87.400
17 81.556 86.119
18 79.999 84.831
19 78.434 83.535
20 76.859 82.229
21 75.278 80.917
22 73.688 79.596
23 72.088 78.265
24 70.482 76.928
25 68.869 75.583
26 67.249 74.233
27 65.623 72.875
28 63.990 71.511
29 62.351 70.141
30 60.704 68.764
31 59.052 67.380
32 57.392 65.989
33 55.726 64.592
34 54.053 63.188
35 52.373 61.777
36 50.686 60.359
37 48.992 58.934
38 47.293 57.504
39 45.589 56.069
40 43.880 54.629
41 42.166 53.183
42 40.444 51.731
43 38.717 50.273
44 36.985 48.810
45 35.246 47.340
46 33.502 45.864
47 31.752 44.383
48 29.995 42.895
49 26.231 41.400
50 26.461 39.899
51 24.686 38.393
52 22.906 36.882
53 21.120 35.366
54 19.328 33.842
55 17.529 32.312
56 15.725 30.777
57 13.914 29.235
58 12.098 27.688
59 10.276 26.135
60 8.446 24.574
*The Stipulated Loss Value or Termination Value for any unit of Equipment shall
be the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event that the Lease is for any
reason extended, then the last percentage figure shown above shall control
throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead:
b) The obligation of Lessor to purchase the Equipment from Lessee
and to lease the same to Lessee shall be subject to receipt by
Lessor, on or prior to the earlier of the Lease Commencement Date or
Last Delivery Date therefor, of each of the following documents in
form and substance satisfactory to Lessor: (i) a Schedule for the
Equipment (ii) evidence of insurance which complies with the
requirements of the INSURANCE Section of the Lease, and (iii) such
other documents as Lessor may reasonably request. Once the Schedule
is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease
shall be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction
and the Equipment is in Lessee's possession as of the Lease
Commencement Date.
3. ▇▇▇▇ OF SALE
Lessee, in consideration of the Lessor's payment of the amount set
forth in B 2. above, which includes any applicable sales taxes (which
payment Lessee acknowledges), hereby grants, sells, assigns, transfers and
delivers to Lessor the Equipment along with whatever claims and rights
Seller may have against the manufacturer and/or Supplier of the Equipment,
including but not limited to all warranties and representations. At
Lessors request Lessee will cause Supplier to deliver to Lessor a written
statement wherein the Supplier (i) consents to the assignment to Lessor of
whatever claims and rights Lessee may have against the Supplier, (ii)
agrees not to retain any security interest, lien or other encumbrance in
or upon the Equipment at any time, and to execute such documents as Lessor
may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final
purchase price of the Equipment (or a specified portion of such purchase
price) has been paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee
pursuant to the Lease. Lessee represents and warrants to Lessor that (i)
Lessor will acquire by the terms of this ▇▇▇▇ of Sale good title to the
Equipment free from all liens and encumbrances whatsoever; (ii) Lessee has
the right to sell the Equipment; and (iii) the Equipment has been
delivered to Lessee in good order and condition, and conforms to the
specifications, requirements and standards applicable thereto; and (iv)
the equipment has been accurately labeled, consistent with the
requirements of 40 CFR part 82 Subpart E, with respect to products
manufactured with a controlled (ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any
and all federal, state, municipal and local license fees and taxes of any
kind or nature, including, without limiting the generality of the
foregoing, any and all excise, personal property, use and sales taxes, and
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions and suits resulting therefrom and imposed upon,
incurred by or asserted against Lessor as a consequence of the sale of the
Equipment to Lessor.
4. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this
Schedule, Lessee hereby certifies and warrants that (i) all Equipment
listed above has been delivered and installed (if applicable); (ii) Lessee
has inspected the Equipment, and all such testing as it deems necessary
has been performed by Lessee, Supplier or the manufacturer; and (iii)
Lessee accepts the Equipment for all purposes of the Lease, the purchase
documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; (ii) the representations and warranties
made by Lessee pursuant to or under the Lease are true and correct on the
date hereof and (iii) Lessee has reviewed and approves of the purchase
documents for the Equipment, if any.
5. EQUIPMENT SPECIFIC PROVISIONS
RETURN PROVISIONS: In addition to the provisions provided for in the
RETURN OF EQUIPMENT Section of the Lease, and provided that Lessee has
elected not to exercise its option to purchase the Equipment, Lessee
shall, at its expense:
(a) at least ninety (90) days and not more than one hundred
twenty (120) days prior to lease termination: (i) ensure
Equipment has been maintained, and is operating, within
manufacturer's specifications; and; (ii) cause manufacturer's
representative or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and
test of all the components and capabilities of the Equipment
and provide a full inspection report to Lessor, and that there
shall be no missing screws, bolts, fasteners, etc.; the
furniture will be free from all large scratches, marks,
gouges, dents, discoloration or stains; all drawers, runners,
and locks will be in good working condition to include keys;
and there shall be no evidence of extreme use or overloading,
i.e. bowed or sagging shelves; (iii) if during such inspection
the Equipment is found not to be in compliance with the above,
then Lessee shall remedy them per the Lease Agreement and
provide a follow-up inspection to verify the Equipment meets
the return provisions.
(b) Upon lease termination, Lessee shall (i) have the
manufacturer's representative or other person acceptable to
Lessor de-install all Equipment including all wire, cable, and
mounting hardware; (ii) if applicable, ensure all necessary
permits and labor are obtained to deliver the Equipment; (iii)
the Equipment shall be packed properly and in accordance to
the manufacturer's recommendations; (iv) the Lessee shall
provide for the transportation of the Equipment in a manner
consistent with the manufacturer's recommendations and
practices to any locations within the continental United
States as Lessor
shall direct; and shall have the Equipment unloaded at such
locations; (v) at Lessor's choice, either (1) allow Lessor, at
Lessor's expense, and provided Lessor has provided reasonable
notice to Lessee, to arrange for an on-site auction of the
Equipment which will be conducted in a manner that will not
interfere with the Lessee's business operations, or (2) Lessee
shall provide free safe storage for the Equipment for a period
not to exceed sixty (60) days from the Lease expiration.
(c) Lessee shall no later than ninety (90) days prior to the
expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the
model and serial number of each major component
thereof), including, without limitation, all internal
circuit boards, module boards, and software features;
(ii) a complete and current set of all manuals,
equipment configuration, setup and operation diagrams,
maintenance records and other data that may be
reasonably requested by Lessor concerning the
configuration and operation of the Equipment; and
(iii) a certification of the manufacturer or of a
maintenance provider acceptable to Lessor that the
Equipment (1) has been tested and is operating in
accordance with manufacturers specifications (together
with a report detailing the condition of the Equipment),
the results of such test(s) and inspection(s) and all
repairs that were performed as a result of such test(s)
and inspection(s) and (2) that the Equipment qualifies
for the manufacturers used equipment maintenance
program.
(d) Upon the request of Lessor, Lessee shall, no later than
sixty (60) days prior to the expiration or other termination
of the Lease, make the Equipment available for on-site
operational inspection by persons designated by the Lessor who
shall be duly qualified to inspect the Equipment in its
operational environment.
(e) All Equipment shall be cleaned and treated with respect to
rust, corrosion and appearance in accordance with
manufacturers recommendations and consistent with the best
practices of dealers in used equipment similar to the
Equipment; shall have no Lessee installed markings or labels
which are not necessary for the operation, maintenance or
repair of the Equipment; and shall be in compliance with all
applicable governmental laws, rules and regulations.
(f) Without limitation, all internal fluids will either be
drained and disposed of or filled and secured in accordance
with manufacturers recommendations and applicable governmental
laws, rules and regulations.
The MAINTENANCE Section of the Lease is amended by adding the
following as the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will
comply with all original manufacturer's performance specifications
for new Equipment without expense to Lessor. Lessee shall, if
requested by Lessor, obtain a certificate or service report from the
manufacturer attesting to such condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the
existence or the continuation of the existence, of an
Environmental Emission (including, without limitation, a
sudden or non-sudden accidental or non-accidental
Environmental Emission), of, or exposure to, any substance,
chemical, material, pollutant, Contaminant, odor or audible
noise or other release or emission in, into or onto the
environment (including, without limitation, the air, ground,
water or any surface) at, in, by, from or related to any
Equipment, (ii) the environmental aspect of the
transportation, storage, treatment or disposal of materials in
connection with the operation of any Equipment or (iii) the
violation, or alleged violation of any statutes, ordinances,
orders, rules regulations, permits or licenses of, by or from
any governmental authority, agency or court relating to
environmental matters connected with any Equipment.
(b) "Affiliate" shall refer, with respect to any given Person,
to any Person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such Person.
(c) "Contaminant" shall refer to those substances which are
regulated by or form the basis of liability under any
Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls ("PCBs"), and radioactive
substances, or other material or substance which has in the
past or could in the future constitute a health, safety or
environmental hazard to any Person, property or natural
resources.
(d) "Environmental Claim" shall refer to any accusation,
allegation, notice of violation, claim, demand, abatement or
other order on direction (conditional or otherwise) by any
governmental authority or any Person for personal injury
(including sickness, disease or death), tangible or intangible
property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or
restrictions, resulting from or based upon any Adverse
Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or
threatened release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, or into
or out of any of the Equipment, including, without limitation,
the movement of any Contaminant or other substance through or
in the air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state
or local law, rule or regulation pertaining to the protection
of the environment, including, but not limited to, the
Comprehensive Environmental Response. Compensation and
Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801
et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section
1361 et seq.), and the Occupational Safety and Health Act (19
U.S.C. Section 651 et seq.), as these laws have been amended
or supplemented, and any analogous foreign, federal, state or
local statutes, and the regulations promulgated pursuant
thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage,
liability, deficiency, fine, penalty or expense (including,
without limitation, reasonable attorneys' fees, engineering
and other professional or expert fees), investigation,
removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or
decrease in value of the Equipment arising out of or related
to any Adverse Environmental Condition.
(h) "Person" shall include any individual, partnership,
corporation, trust, unincorporated organization, government or
department or agency thereof and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend,
indemnify and hold harmless Lessor and its Affiliates, successors and
assigns, directors, officers, employees and agents from and against any
Environmental Claim or Environmental Loss.
The provisions of this Schedule shall survive any expiration or
termination of the Lease and shall be enforceable by lessor, its
successors and assigns.
6. LEASE TERM OPTIONS
END OF BASIC TERM OPTIONS
At the expiration of the Basic Term (the "Basic Term Expiration
Date"), so long as no default has occurred and is continuing hereunder and
this Agreement has not been earlier terminated, Lessee shall exercise one
of the following options:
(1) EXTENSION OPTION. Lessee may extend the Lease beyond the Basic
Term Expiration Date with respect to all (but not less than all) of the
Equipment covered by this Schedule through the Secondary Term set forth in
this Schedule and Lessee shall pay Secondary Term Rent as set forth in
this Schedule.
(2) PURCHASE OPTION. Upon at least one hundred eighty (180) but not
more than two hundred seventy (270) days written notice to Lessor prior to
the Basic Term Expiration Date, Lessee may purchase all (but not less than
all) of the Equipment covered by this Schedule on an AS IS BASIS for cash
equal to the greater of (A) FIFTY-NINE AND 052/1000 percent (59.052%) of
the Capitalized Lessor's Cost (plus all applicable sales taxes) or (B) the
then Fair Market Value (as such term is defined in the PURCHASE OPTION
Section subsection (b) of the Lease hereof) of the Equipment (plus all
applicable sales taxes); provided that, Lessee shall concurrently exercise
its Purchase Option under account number ▇▇▇▇▇▇▇-001. On the Basic Term
Expiration Date, Lessor shall receive in cash the full purchase price
(plus all applicable sales taxes) together with any rent or other sums
then due under the Lease on such date. Lessee shall be deemed to have
waived its purchase option if it fails to (a) timely provide Lessor with
the required written notice of its election to exercise the same or (b)
provide Lessor with written notice of its irrevocable election to exercise
the same within fifteen (15) days after Fair Market Value is determined
(by agreement or appraisal).
Initial: /s/ LN
(a) If Lessee exercises its Purchase Option with respect to
the Equipment leased hereunder, then on the Basic Term
Expiration Date, and provided that no default has occurred and
is continuing Under the Lease or any other agreement between
Lessee and Lessor. Lessee shall pay to Lessor any Rent and
other sums due and unpaid on the Basic Term Expiration Date
and Lessee shall purchase the Equipment and pay the greater of
(A) FIFTY-NINE AND 052/1000 percent (59.052%) of the
Capitalized Lessor's Cost (plus all applicable sales taxes) or
(B) the then Fair Market Value of the Equipment (plus all
applicable sales taxes) by either:
(i) financing the applicable Purchase Option plus all
applicable sales taxes (collectively, the "Amount
Financed") with Lessor at the fixed rate per annum
simple interest set out below, payable in the number of
installments set out below and on the terms set out in
subsection (c) below:
Number of Payments: 30 scheduled monthly installments,
payable in arrears
Fixed, per annum simple interest rate: SEVEN AND 88/100
percent (7.88%) (the "Purchase Option Financing Rate"),
or
(ii) paying cash to Lessor equal to the Amount Financed
plus a prepayment premium equal to one percent (1%) of
Purchase Option price.
(b) If Lessee elects to purchase the Equipment by financing
the Amount Financed, THE AMOUNT FINANCED SHALL BE PAID TO
LESSOR. TOGETHER WITH INTEREST THEREON AT THE PURCHASE OPTION
FINANCING RATE SET FORTH ABOVE IN CONSECUTIVE EQUAL MONTHLY
INSTALLMENTS OF PRINCIPAL AND INTEREST, EXCEPT THAT THE FINAL
INSTALLMENT SHALL BE EQUAL TO THE TOTAL OUTSTANDING PRINCIPAL
AND INTEREST THEN DUE AND UNPAID. The first such installment
shall be due exactly one (1) month from the Purchase Option
date and such installments shall continue on the same day of
each month thereafter. All payments shall be applied first to
interest and then to principal. The acceptance by Lessor of
any payment which is less than payment in full of all amounts
due and owing at such time shall not constitute a waiver of
Lessor's right to receive payment in full at such time or at
any subsequent time. Interest shall be calculated on the basis
of a three hundred sixty (360) day year. Each payment may, at
the option of the Payee, be calculated and applied on an
assumption that such payment would be made on its due date. It
is the intention of the parties hereto to comply with the
applicable usury laws. Accordingly, it is agreed that
notwithstanding anything to the contrary contained herein, in
no event shall any provision contained herein require or
permit interest in excess of the maximum amount permitted by
applicable law to be paid. If necessary to give effect to
these provisions, Lessor will, at its option, in accordance
with applicable law, either refund any amount to Lessee to the
extent that it was in excess of that allowed by applicable law
or credit such excess amount against the then unpaid
principal.
(c) SECURITY AGREEMENT.
In the event Lessee exercises its Purchase Option and elects
to purchase the Equipment by financing the Purchase Option
price, then:
(i) To secure payment of the Amount Financed and the
interest thereon and any penalties, charges or
attorneys' fees arising or incurred following default
hereunder and to secure any and all other obligations of
the Lessee to the Lessor, whether existing on or arising
after the date of Lessee's exercise of its Purchase
Option, Lessee hereby grants, assigns, transfers,
pledges, conveys and mortgages to Lessor all of Lessee's
interest in and to the Equipment and all attachments,
accessions and additions thereto, substitutions and
accessories therefor and replacements and proceeds
(including insurance proceeds) thereof (all of which are
referred to herein as the "Collateral") including
Collateral added or arising after the Purchase Option
date. The terms "Lessor" and "Lessee" have been used in
this FAIR MARKET VALUE PURCHASE OPTION Section ("this
Section") for consistency of reference. However, upon
exercise of its Purchase Option, Lessee shall be a
"debtor" and Lessor a "secured party" as those terms are
used under the Uniform Commercial Code. This Agreement
and the Schedule shall continue to be referred to as the
"Lease".
(ii) All provisions of this Lease shall survive and
continue to remain in full force and effect until all
indebtedness secured hereby is paid in full except the
following Sections of the Lease: (i) TERM, RENT AND
PAYMENT; (ii) RENT ADJUSTMENT; (iii) EARLY TERMINATION,
and (iv) PURCHASE OPTION.
(iii) Except for the security interest granted under
this Section, LESSEE WARRANTS THAT THE COLLATERAL WILL
REMAIN FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES OF
EVERY KIND, NATURE AND DESCRIPTION AND THAT LESSEE SHALL
REMAIN THE SOLE AND LAWFUL OWNER AND IN POSSESSION OF
THE COLLATERAL UNTIL ALL OBLIGATIONS OF LESSEE TO LESSOR
HEREUNDER HAVE BEEN FULLY PERFORMED. Lessee will warrant
and defend the Collateral against all claims by all
persons.
(iv) The STIPULATED LOSS VALUE Section subsection (i) of
this Agreement is amended in its entirety to read: "the
portion of the principal balance outstanding as of the
Payment Date that is attributable to the affected unit
based upon the Capitalized Lessor's Cost of such unit
relative to the Capitalized Lessor's Cost of all the
units of Equipment, plus all interest accrued on such
portion as of the Payment Date.
(v) Upon request of Lessor from time to time, Lessee
shall do everything necessary or expedient to preserve
and perfect the security interest granted herein and its
priority, including without limitation obtaining and
delivering to Lessor, if applicable: (A) a certificate
of title showing the lien of Lessor with respect to the
Collateral and/or (B) landlord and mortgagee waivers
satisfactory to Lessor. Lessor is hereby granted power
to sign Lessee's name and on behalf of Lessee to execute
and file applications for title, transfer of title,
financing statements, notices of lien and other
documents pertaining to any or all of the Collateral. To
the extent allowed by applicable law, Lessee waives all
homestead and other property exemption laws. On and
after Lessee's exercise of its Purchase Option, Lessor
may at any reasonable time examine the books and records
of the Lessee and make copies thereof..
(vi) Lessee acknowledges receipt of a true copy of the
Lease, and waives acceptance hereof.
(vii) If any installment or other amount due under this
Section is not paid within ten (10) days after its due
date, Lessee agrees to pay a late charge of five cents
($.05) per dollar on, and in addition to, the amount of
said installment, but not exceeding the maximum lawful
charges. If (A) Lessee fails to make payment of any
amount due pursuant to this Section within ten (10) days
after the same becomes due and payable; or (B) Lessee is
in default under, or fails to perform under any other
term or condition contained in the Lease, then the
entire principal sum remaining unpaid under this
Section, together with all accrued interest thereon and
any other sum payable under this Lease, at the election
of Lessor, shall immediately become due and payable,
with interest thereon at the lesser of eighteen percent
(18%) per annum or the highest rate not prohibited by
applicable law from the date of such accelerated
maturity until paid (both before and after any
judgment). Lessee may prepay in full (but not in part)
its entire indebtedness under this Section, at any time
upon the payment of all amounts due and a prepayment
premium equal to one percent (1%) of the original Amount
Financed.
(viii) The provisions of this Section shall survive any
termination of the Lease caused by Lessee's exercise of
its Purchase Option. Lessor and any assignee of Lessor
may assign its rights and interests, in whole or in
part, under this Section.
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but
not more than two hundred seventy (270) days written notice to Lessor
prior to the Basic Term Expiration Date (the "Notice Date"), Lessee may
cancel the Agreement (the "Cancellation Option") with respect to all (but
not less than all) of the Equipment on this Schedule: provided that,
Lessee shall concurrently exercise its Cancellation Option under Schedule
002 hereof and its Termination Option under account number ▇▇▇▇▇▇▇-001. If
all of the terms and conditions of this Section are not fulfilled, this
Lease shall continue in full force and effect and Lessee shall continue to
be liable for all obligations thereunder, including, without limitation,
the obligation to continue paying rent. Lessee shall be deemed to have
waived this option if it fails to timely provide Lessor with the required
written notice of its election to exercise the same.
Initial: /s/ LN
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent, FORTY-FOUR AND
43/100 percent (44.43%) of the Capitalized Lessor's Cost
of the Equipment, plus all rent and all other sums due
and unpaid as of the Basic Term Expiration Date
(including, but not limited to, any rent payment due and
payable on the Basic Term Expiration Date and any sales
taxes and property taxes); and
(ii) return the Equipment in full compliance with the
RETURN OF EQUIPMENT Section of the Lease, such
compliance being independently verified by an
independent appraiser selected by Lessor (reasonably
acceptable to Lessee) to determine that the Equipment is
in such compliance, which determination shall be final,
binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such
costs, if any, to cause the Equipment to be in full
compliance with the RETURN OF EQUIPMENT Section of the
Lease on or prior to such Basic Term Expiration Date.
(b) From the applicable Notice Date through the Basic Term
Expiration Date, Lessee shall:
(i) continue to comply with all of the terms and
conditions of the Lease, including, but not limited to,
Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a
manner as to allow Lessor to market and demonstrate the
Equipment to potential purchasers or lessees from such
premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market
and demonstrate the Equipment to potential purchasers or
lessees from time to time, Lessee may still use the
Equipment until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiration Date through
the earlier of the date the Equipment is sold by Lessor to a
third party or thirty (30) days following the Basic Term
Expiration Date, comply with the following terms and
conditions:
(i) continue to provide insurance for the Equipment, at
Lessee's own expense, in compliance with the terms found
in the INSURANCE Section of the Lease, and
(ii) make the Equipment available to Lessor and/or allow
Lessor to store the Equipment at Lessee's premises, in
such a manner as to allow Lessor to market and
demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment
after Lessee has exercised its Cancellation Option shall be
for the sole benefit of Lessor and Lessee shall have no
interest in nor any claim upon any of such proceeds.
END OF SECONDARY TERM OPTIONS
The PURCHASE OPTION Section subsection (a) of the Lease is hereby
deleted in its entirety and the following is substituted therefor:
(a) So long as no default exists hereunder and the Lease has not
been earlier terminated, Lessee may at the expiration of the
Secondary Term upon at least one hundred eighty (180) days but not
more than two hundred seventy (270) days written notice to Lessor
prior to the end of the Secondary Term, purchase all (but not less
than all) of the Equipment in this Schedule on an AS IS, WHERE IS
BASIS, without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS") for cash equal to its then Fair Market Value
(plus all applicable sales taxes).
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
------------ ------- ------
TXU Communications Ventures Company ▇▇▇ ▇▇▇▇▇▇ ▇▇. $869,118.88
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding or
effective with respect to the Agreement or Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION TXU COMMUNICATIONS VENTURES COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: RISK ANALYST Title: VICE PRESIDENT-FINANCE AND
ADMINISTRATION
Exhibit A
to
Equipment Schedule No. 001
dated
March 18, 2002
Invoice
Vendor Invoice # Date Amount
------------------------------------ ---------- ------- ------------
ADI BPN04401 6/28/01 $ 34,412.66
ADI BPN04407 7/11/01 $ 160.55
ADI BPN04408 7/11/01 $ 1,660.50
ADI CBV41801 7/11/01 $ 398.28
ADI CNX19801 8/1/01 $ 189.98
ADI DLR29502 9/11/01 $ 40.54
ADI DLR29503 9/11/01 $ 432.35
ADI DLR29504 9/11/01 $ 19.00
ADI DLR29505 9/27/01 $ 5.79
Naman, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇ $ 3,115.00
Naman, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇ $ 698.75
Aspect Communications 570899 6/27/01 $ 251,847.31
Aspect Communications 80827 7/20/01 $ 4,942.51
Aspect Communications 572391 8/2/01 $ 1,170.91
Aspect Communications 572390 8/2/01 $ 2,556.51
Aspect Communications 572389 8/2/01 $ 4,104.49
Aspect Communications 50002798 8/31/01 $ 12,724.79
TXU Energy Trading 1000 8/15/01 $ 71,652.00
Global Computer Supplies 31148357 9/21/01 $ 1,147.27
Global Computer Supplies 31148264 9/21/01 $ 502.04
Graybar Electric Company, Inc. 1360479163 6/22/01 $ 273.56
Graybar Electric Company, Inc. 1360479164 6/25/01 $ 66.17
Graybar Electric Company, Inc. 1360502452 8/9/01 $ 1,407.14
▇▇▇▇▇▇▇▇ Communication Solutions LLC 2189469 8/21/01 $ 1,200.00
▇▇▇▇▇▇▇▇ Communication Solutions LLC 2189470 8/21/01 $ 31,053.80
NetVersant of Austin AI314 7/25/01 $ 9,799.35
NetVersant of Austin AI291 6/27/01 $ 19,598.69
Global Data Systems, Inc. 1019976 $ 100,563.91
Global Data Systems, Inc. 1020026-A $ 274,750.03
Time Trend Computers 288136 6/29/01 $ 37,134.00
Time Trend Computers 288486 7/12/01 $ 396.00
Time Trend Computers 290297 9/6/01 $ 1,095.00
------------
$ 869,118.88
Lessee's Initials: /s/ LN
Page 1 of 1
EXHIBIT I
TO SCHEDULE NO. 001
DATED AS OF 3/18/02
TO MASTER LEASE AGREEMENT
DATED AS OF FEBRUARY 25, 2002
floating
rate
payment adjustment
number factor
------- ----------
1 7.5119
2 7.3837
3 7.2553
4 7.1267
5 6.9978
6 6.8757
7 6.7464
8 6.6167
9 6.4939
10 6.3637
11 6.2333
12 6.1097
13 5.9859
14 5.8236
15 5.6610
16 5.4982
17 5.3352
18 5.2100
19 5.0464
20 4.8825
21 4.7566
22 4.5922
23 4.4275
24 4.3007
25 4.1737
26 4.0556
27 3.9373
28 3.8188
29 3.6999
30 3.5715
31 3.4521
32 3.3324
33 3.2031
34 3.0829
35 2.9624
36 2.8323
37 2.7019
38 2.6090
39 2.5158
40 2.4223
41 2.3285
42 2.1967
43 2.1024
44 2.0077
45 1.8750
46 1.7798
47 1.6843
48 1.5507
49 1.4168
50 1.3204
51 1.2237
52 1.1267
53 1.0294
54 0.8940
55 0.7961
56 0.6978
57 0.5615
58 0.4627
59 0.3635
60 0.2263
Rental Adjustment =
(Basis Point Change in Index) times
(Floating Rate Adjustment Factor) times
(Original Equipment Cost) divided by 1,000,000
Initials: /s/ WSA /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------- ----------------
Lessor Lessee
EQUIPMENT SCHEDULE
(Fixed To Float One Month CPR)
SCHEDULE NO. 002
DATED THIS 3/18/02
TO MASTER LEASE AGREEMENT
DATED AS OF FEBRUARY 25, 2002
LESSOR & MAILING ADDRESS : LESSEE & MAILING ADDRESS :
GENERAL ELECTRIC CAPITAL CORPORATION TXU COMMUNICATIONS VENTURES COMPANY
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
-------- ------------ ------------ ------------- ---------------------------
1 $1,876,744.72 Furniture, Fixtures, and Equipment at TXU
Communications Ventures Company's
Headquarters at: ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ per the attached Exhibit A.
Equipment immediately listed above is located at: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B. FINANCIAL TERMS
1. Advance Rent (if any): NOT APPLICABLE
2. Capitalized Lessor's Cost: $1,876,744.72
3. Basic Term (No. of Months): 30 MONTHS
4. Basic Term Lease Rate Factor and Rental Number: 0.01762779
5. Basic Term Commencement Date: April 1, 2002
6. Lessee Federal Tax ID No.: ▇▇▇▇▇▇▇▇▇
7. Last Delivery Date: April 1, 2002
8. Daily Lease Rate Factor: 0.00058759
9. First Termination Date: TWENTY-FOUR (24) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on March 31, 2002.
11. Unadjusted Basic Term Rent. Commencing on April 1, 2002 and on the same
day of each month thereafter (each, a "Rent Payment Date") during the
Basic Term, Lessee shall pay as rent ("Unadjusted Basic Term Rent") as
adjusted pursuant to Section B(15) below, the product of the Basic Term
Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment
on this Schedule.
12. Base Index Rate: 1.74
13. Index Rate: A variable per annum interest rate ("Current Index") which,
except for purposes of Section 17 hereof, shall be equal to a per annum
interest rate as stated in the Federal Reserve Statistical Release H.15
(519) for 1-Month Commercial Paper under the column indicating an
average monthly rate. The Current Index shall be the average monthly
rate for the second calendar month preceding the calendar month in which
the applicable Adjustment Period commences. For purposes of Section 17
hereof, "Current Index" shall be a per annum interest rate as stated in
the Federal Reserve Statistical Release H.15 (519) for U.S. Government
Securities, Treasury Constant Maturities for a term that most closely
approximates the remainder of the Basic Term as of the Rent Payment Date
on which the first installment of fixed Rent calculated under Section 17
shall become due. If, for any reason whatsoever, the Current Index is
not published, the Current Index, except for purposes of Section 179
hereof, shall instead be equal to the latest commercial paper rate for
high grade unsecured notes of 30 days maturity sold through dealers by
major corporations in multiples of $1,000, as indicated in the "MONEY
RATES" column of the Wall Street Journal, Eastern Edition, published on
the first business day of the calendar month preceding the calendar
month in which the rental payment being adjusted is due and payable and,
for purposes of Section 17 hereof, shall be equal to the simple average
of all asked yields for Government Bonds and Notes with scheduled
maturities that
most closely approximates the remainder of the Basic Term as of the Rent
Payment Date on which the first installment of fixed Rent calculated under
Section 17 shall become due, as indicated in the "Treasury Bonds, Notes &
Bills" column of the Wall Street Journal, Eastern Edition, published on the
first business day of the calendar month preceding the calendar month in
which the rental payment being adjusted is due and payable.
14. Adjustment Period: Shall mean a monthly period, the first of which shall
commence on, and include, the third monthly anniversary of the Basic Term
Commencement Date and continue to, but not include, the same date of the
next succeeding calendar month. Each subsequent Adjustment Period shall
commence on, and include, the date immediately following the expiration of
the prior Adjustment Period and continue to, but not include, the same date
of the next succeeding calendar month. If Lessee exercises its option
pursuant to Section 17 hereof, "Adjustment Period" as used in Section 17
shall also mean the remainder of the Basic Term.
15. Calculation of the Unadjusted Basic Term Rent: The calculation of the
Unadjusted Basic Term Rent (as defined below) is based on an assumption
that the Index Rate in effect from time to time throughout the Basic Term
would be equal to the Base Index Rate.
16. Adjustment for the Basic Term: From the Basic Term Commencement Date
through and including June 1, 2002 (that date and the same date of each
subsequent calendar month being a "Conversion Date"), Lessee shall pay as
rent the Unadjusted Basic Term Rent (as defined above). From each
Conversion Date through and including each date of payment, the Unadjusted
Basic Term Rent (as defined below) shall be adjusted once each calendar
month beginning with the Conversion Date applicable to that calendar month,
and such adjustment shall be effective during the adjustment period
("Adjustment Period") as hereinafter defined. Each Adjustment Period shall
commence at the close of business on the Conversion Date and shall continue
through the same day of the next succeeding calendar month. The adjustment
to the Unadjusted Basic Term Rent ("Adjustment Amount") shall be calculated
by multiplying the respective Basis Point increase or decrease (rounded up
to the nearest whole number of a basis point, when necessary) between the
Base Index Rate and the Index Rate for each Adjustment Period by the
applicable adjustment factor set forth on Exhibit 1 attached hereto and
multiplying the product by a fraction equal to the Capitalized Lessor's
Cost divided by one million. The resulting Adjustment Amount shall then be
added or subtracted, as the case may be, to the Unadjusted Basic Term Rent.
17. Option to Fix Variable Rent. At any time from and after the first
Adjustment Period, Lessee may, upon the giving of written notice to Lessor,
deliver notice of Lessee's intention to elect to fix the monthly Rent for
the remainder of the Basic Term. Within ten (10) days after its receipt of
such notice, Lessor shall provide Lessee with a proposed Amendment to this
Schedule that adjusts each percentage used to calculate the amount of the
Purchase Option and Cancellation Option, respectively. If Lessee returns to
Lessor a properly executed original of the Amendment, monthly Rent shall be
fixed for the remainder of the Basic Term, commencing on the first Rent
Payment Date occurring 30 days after Lessor's receipt of the executed
Amendment. The fixed Rent shall be calculated by multiplying the respective
basis point increase or decrease (rounded up to the nearest whole number of
a basis point, when necessary) between the Current Index and the Base Index
for each Adjustment Period times (ii) the applicable adjustment factor set
forth in the attached table, times (iii) a fraction in respect of which the
Capitalized Lessor's Cost is the numerator and one million is the
denominator and the resulting amount shall then be added or subtracted, as
the case may be, to the Fixed Rent.
18. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on October 1, 2004 (the "Secondary Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for 30 months (the "Secondary Term"), Lessee shall pay
as rent ("Secondary Term Rent") the product of 0.01762779 (the "Secondary
Term Lease Rate Factor") times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
2. Recovery Period: 7 YEARS.
3. Basis: 100% of Capitalized Lessors Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN IRVING, TX: Lessee agrees that it will
not list any of such Equipment for property tax purposes or report any
property tax assessed against such Equipment until otherwise directed in
writing by Lessor. Upon receipt of any property tax ▇▇▇▇ pertaining to such
Equipment from the appropriate taxing authority, Lessor will pay such tax
and will invoice Lessee for the expense. Upon receipt of such invoice,
Lessee will promptly reimburse Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS TXU COMMUNICATIONS VENTURES COMPANY (THE
"SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES,
INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S),
WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART OF THE
CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO
SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN
ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING
ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND
REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY
OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION OF
THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
Termination Stipulated Termination Stipulated
Rental Value Loss Value Value Loss Value
Basic Percentage Percentage Rental Percentage Percentage
----- ----------- ---------- ----- ----------- ----------
1 105.413 105.571 31 62.006 67.085
2 104.057 104.379 32 60.467 65.710
3 102.695 103.182 33 58.922 64.329
4 101.328 101.979 34 57.370 62.942
5 99.955 100.770 35 55.813 61.548
6 98.576 99.555 36 54.249 60.148
7 97.191 98.334 37 52.679 58.742
8 95.801 97.107 38 51.102 57.330
9 94.404 95.875 39 49.519 55.911
10 93.001 94.636 40 47.930 54.486
11 91.593 93.392 41 46.334 53.054
12 90.178 92.141 42 44.732 51.616
13 88.757 90.884 43 43.124 50.171
14 87.328 89.619 44 41.509 48.720
15 85.893 88.348 45 39.887 47.263
16 84.450 87.069 46 38.259 45.799
17 83.000 85.783 47 36.624 44.328
18 81.544 84.491 48 34.983 42.851
19 80.080 83.191 49 33.335 41.367
20 78.609 81.884 50 31.680 39.876
21 77.131 80.570 51 30.019 38.379
22 75.647 79.250 52 28.351 36.875
23 74.154 77.922 53 26.676 35.364
24 72.656 76.587 54 24.995 33.847
25 71.151 75.246 55 23.307 32.323
26 69.639 73.899 56 21.612 30.792
27 68.122 72.545 57 19.910 29.254
28 66.599 71.186 58 18.201 27.709
29 65.070 69.821 59 16.485 26.157
30 63.538 68.454 60 14.763 24.599
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in its
entirety and the following substituted in its stead:
b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or
prior to the earlier of the Lease Commencement Date or Last Delivery Date
therefor, of each of the following documents in form and substance
satisfactory to Lessor: (i) a Schedule for the Equipment (ii) evidence of
insurance which complies with the requirements of the INSURANCE Section of
the Lease, and (iii) such other documents as Lessor may reasonably
request. Once the Schedule is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease shall
be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.
3. ▇▇▇▇ OF SALE
Lessee, in consideration of the Lessor's payment of the amount set forth
in B 2. above, which includes any applicable sales taxes (which payment Lessee
acknowledges), hereby grants, sells, assigns, transfers and delivers to Lessor
the Equipment along with whatever claims and rights Seller may have against the
manufacturer and/or Supplier of the Equipment, including but not limited to all
warranties and representations. At Lessors request Lessee will cause Supplier to
deliver to Lessor a written statement wherein the Supplier (i) consents to the
assignment to Lessor of whatever claims and rights Lessee may have against the
Supplier, (ii) agrees not to retain any security interest, lien or other
encumbrance in or upon the Equipment at any time, and to execute such documents
as Lessor may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously conveyed full
title to the Equipment to Lessee, (y) that the Equipment was delivered to Lessee
and installation completed, and (z) that the final purchase price of the
Equipment (or a specified portion of such purchase price) has been paid by
Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant to
the Lease. Lessee represents and warrants to Lessor that (i) Lessor will acquire
by the terms of this ▇▇▇▇ of Sale good title to the Equipment free from all
liens and encumbrances whatsoever; (ii) Lessee has the right to sell the
Equipment; and (iii) the Equipment has been delivered to Lessee in good order
and condition, and conforms to the specifications, requirements and standards
applicable thereto; and (iv) the equipment has been accurately labeled,
consistent with the requirements of 40 CFR part 82 Subpart E, with respect to
products manufactured with a controlled (ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and
all federal, state, municipal and local license fees and taxes of any kind or
nature, including, without limiting the generality of the foregoing, any and all
excise, personal property, use and sales taxes, and from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions and suits
resulting therefrom and imposed upon, incurred by or asserted against Lessor as
a consequence of the sale of the Equipment to Lessor.
4. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above has
been delivered and installed (if applicable); (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier or the manufacturer; and (iii) Lessee accepts the Equipment for
all purposes of the Lease, the purchase documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
5. EQUIPMENT SPECIFIC PROVISIONS
RETURN PROVISIONS: In addition to the provisions provided for in the
RETURN OF EQUIPMENT Section of the Lease, and provided that Lessee has elected
not to exercise its option to purchase the Equipment, Lessee shall, at its
expense:
(a) at least ninety (90) days and not more than one hundred twenty (120)
days prior to lease termination: (i) ensure Equipment has been maintained,
and is operating, within manufacturer's specifications; and; (ii) cause
manufacturer's representative or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and test of all the
components and capabilities of the Equipment and provide a full inspection
report to Lessor, and that there shall be no missing screws, bolts,
fasteners, etc.; the furniture will be free from all large scratches,
marks, gouges, dents, discoloration or stains; all drawers, runners, and
locks will be in good working condition to include keys; and there shall
be no evidence of extreme use or overloading, i.e. bowed or sagging
shelves; (iii) if during such inspection the Equipment is found not to be
in compliance with the above, then Lessee shall remedy them per the Lease
Agreement and provide a follow-up inspection to verify the Equipment meets
the return provisions.
(b) Upon lease termination, Lessee shall (i) have the manufacturer's
representative or other person acceptable to Lessor de-install all
Equipment including all wire, cable, and mounting hardware; (ii) if
applicable, ensure all necessary permits and labor are obtained to deliver
the Equipment; (iii) the Equipment shall be packed properly and in
accordance to the manufacturer's recommendations; (iv) the Lessee shall
provide for the transportation of the
Equipment in a manner consistent with the manufacturer's recommendations
and practices to any locations within the continental United States as
Lessor shall direct; and shall have the Equipment unloaded at such
locations; (v) at Lessor's choice, either (1) allow Lessor, at Lessor's
expense, and provided Lessor has provided reasonable notice to Lessee, to
arrange for an on-site auction of the Equipment which will be conducted in
a manner that will not interfere with the Lessee's business operations, or
(2) Lessee shall provide free safe storage for the Equipment for a period
not to exceed sixty (60) days from the Lease expiration.
(c) Lessee shall no later than ninety (90) days prior to the expiration
or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and
serial number of each major component thereof), including, without
limitation, all internal circuit boards, module boards, and software
features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and
other data that may be reasonably requested by Lessor concerning the
configuration and operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance
provider acceptable to Lessor that the Equipment (1) has been tested
and is operating in accordance with manufacturers specifications
(together with a report detailing the condition of the Equipment),
the results of such test(s) and inspection(s) and all repairs that
were performed as a result of such test(s) and inspection(s) and (2)
that the Equipment qualifies for the manufacturers used equipment
maintenance program.
(d) Upon the request of Lessor, Lessee shall, no later than sixty (60)
days prior to the expiration or other termination of the Lease, make the
Equipment available for on-site operational inspection by persons
designated by the Lessor who shall be duly qualified to inspect the
Equipment in its operational environment.
(e) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations
and consistent with the best practices of dealers in used equipment
similar to the Equipment; shall have no Lessee installed markings or
labels which are not necessary for the operation, maintenance or repair of
the Equipment; and shall be in compliance with all applicable governmental
laws, rules and regulations.
(f) Without limitation, all internal fluids will either be drained and
disposed of or filled and secured in accordance with manufacturers
recommendations and applicable governmental laws, rules and regulations.
The MAINTENANCE Section of the Lease is amended by adding the following as
the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with all
original manufacturer's performance specifications for new Equipment without
expense to Lessor. Lessee shall, if requested by Lessor, obtain a certificate or
service report from the manufacturer attesting to such condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the existence
or the continuation of the existence, of an Environmental Emission
(including, without limitation, a sudden or non-sudden accidental or
non-accidental Environmental Emission), of, or exposure to, any substance,
chemical, material, pollutant, Contaminant, odor or audible noise or other
release or emission in, into or onto the environment (including, without
limitation, the air, ground, water or any surface) at, in, by, from or
related to any Equipment, (ii) the environmental aspect of the
transportation, storage, treatment or disposal of materials in connection
with the operation of any Equipment or (iii) the violation, or alleged
violation of any statutes, ordinances, orders, rules regulations, permits
or licenses of, by or from any governmental authority, agency or court
relating to environmental matters connected with any Equipment.
(b) "Affiliate" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
Person.
(c) "Contaminant" shall refer to those substances which are regulated by
or form the basis of liability under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls ("PCBs"), and
radioactive substances, or other material or substance which has in the
past or could in the future constitute a health, safety or environmental
hazard to any Person, property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation,
notice of violation, claim, demand, abatement or other order on direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or
in the air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or local
law, rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801
et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 1361 et
seq.), and the Occupational Safety and Health Act (19 U.S.C. Section 651
et seq.), as these laws have been amended or supplemented, and any
analogous foreign, federal, state or local statutes, and the regulations
promulgated pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation,
reasonable attorneys' fees, engineering and other professional or expert
fees), investigation, removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or decrease in
value of the Equipment arising out of or related to any Adverse
Environmental Condition.
(h) "Person" shall include any individual, partnership, corporation,
trust, unincorporated organization, government or department or agency
thereof and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless Lessor and its Affiliates, successors and assigns, directors,
officers, employees and agents from and against any Environmental Claim or
Environmental Loss.
The provisions of (his Schedule shall survive any expiration or termination of
the Lease and shall be enforceable by lessor, its successors and assigns.
6. LEASE TERM OPTIONS
END OF BASIC TERM OPTIONS
At the expiration of the Basic Term (the "Basic Term Expiration Date"), so
long as no default has occurred and is continuing hereunder and this Agreement
has not been earlier terminated. Lessee shall exercise one of the following
options:
(1) EXTENSION OPTION. Lessee may extend the Lease beyond the Basic Term
Expiration Date with respect to all (but not less than all) of the Equipment
covered by this Schedule through the Secondary Term set forth in this Schedule
and Lessee shall pay Secondary Term Rent as set forth in this Schedule.
(2) PURCHASE OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the Basic
Term Expiration Date, Lessee may purchase all (but not less than all) of the
Equipment covered by this Schedule on an AS IS BASIS for cash equal to the
greater of (A) SIXTY-TWO AND 006/1000 percent (62.006%) of the Capitalized
Lessor's Cost (plus all applicable sales taxes) or (B) the then Fair Market
Value (as such term is defined in the PURCHASE OPTION Section subsection (b) of
the Lease hereof) of the Equipment (plus all applicable sales taxes); provided
that, Lessee shall concurrently exercise its Purchase Option under account
number ▇▇▇▇▇▇▇-001. On the Basic Term Expiration Date, Lessor shall receive in
cash the full purchase price (plus all applicable sales taxes) together with any
rent or other sums then due under the Lease on such date. Lessee shall be deemed
to have waived its purchase option if it fails to (a) timely provide Lessor with
the required written notice of its election to exercise the same or (b) provide
Lessor with written notice of its irrevocable election to exercise the same
within fifteen (15) days after Fair Market Value is determined (by agreement or
appraisal).
Initial: /s/ LN
(a) If Lessee exercises its Purchase Option with respect to the
Equipment leased hereunder, then on the Basic Term Expiration Date,
and provided that no default has occurred and is continuing under
the Lease or any other agreement between Lessee and Lessor, Lessee
shall pay to Lessor any Rent and other sums due and unpaid on the
Basic Term Expiration Date and Lessee shall purchase the Equipment
and pay the greater of (A) SIXTY-TWO AND 006/1000 percent (62.006%)
of the Capitalized Lessor's Cost (plus all applicable sales taxes)
or (B) the then Fair Market Value of the Equipment (plus all
applicable sales taxes) by either:
(i) financing the applicable Purchase Option plus all
applicable sales taxes (collectively, the "Amount Financed")
with Lessor at the fixed rate per annum simple interest set
out below, payable in the number of installments set out below
and on the terms set out in subsection (c) below:
Number of Payments: 30 scheduled monthly installments, payable
in arrears
Fixed, per annum simple interest rate: SEVEN AND 88/100
(7.88%) percent (the "Purchase Option Financing Rate"), or
(ii) paying cash to Lessor equal to the Amount Financed plus
a prepayment premium equal to one percent (1%) of Purchase
Option price.
(b) If Lessee elects to purchase the Equipment by financing the
Amount Financed, THE AMOUNT FINANCED SHALL BE PAID TO LESSOR.
TOGETHER WITH INTEREST THEREON AT THE PURCHASE OPTION FINANCING RATE
SET FORTH ABOVE IN CONSECUTIVE EQUAL MONTHLY INSTALLMENTS OF
PRINCIPAL AND INTEREST, EXCEPT THAT THE FINAL INSTALLMENT SHALL BE
EQUAL TO THE TOTAL OUTSTANDING PRINCIPAL AND INTEREST THEN DUE AND
UNPAID. The first such installment shall be due exactly one (1)
month from the Purchase Option date and such installments shall
continue on the same day of each month thereafter. All payments
shall be applied first to interest and then to principal. The
acceptance by Lessor of any payment which is less than payment in
full of all amounts due and owing at such time shall not constitute
a waiver of Lessor's right to receive payment in full at such time
or at any subsequent time. Interest shall be calculated on the basis
of a three hundred sixty (360) day year. Each payment may, at the
option of the Payee, be calculated and applied on an assumption that
such payment would be made on its due date. It is the intension of
the parties hereto to comply with the applicable usury laws.
Accordingly, it is agreed that notwithstanding anything to the
contrary contained herein, in no event shall any provision contained
herein require or permit interest in excess of the maximum amount
permitted by applicable law to be paid. If necessary to give effect
to these provisions, Lessor will, at its option, in accordance with
applicable law, either refund any amount to Lessee to the extent
that it was in excess of that allowed by applicable law or credit
such excess amount against the then unpaid principal.
(c) SECURITY AGREEMENT.
In the event Lessee exercises its Purchase Option and elects to
purchase the Equipment by financing the Purchase Option price, then:
(i) To secure payment of the Amount Financed and the
interest thereon and any penalties, charges or attorneys' fees
arising or incurred following default hereunder and to secure
any and all other obligations of the Lessee to the Lessor,
whether existing on or arising after the date of Lessee's
exercise of its Purchase Option, Lessee hereby grants,
assigns, transfers, pledges, conveys and mortgages to Lessor
all of Lessee's interest in and to the Equipment and all
attachments, accessions and additions thereto, substitutions
and accessories therefor and replacements and proceeds
(including insurance proceeds) thereof (all of which are
referred to herein as the "Collateral") including Collateral
added or arising after the Purchase Option date. The terms
"Lessor" and "Lessee" have been used in this FAIR MARKET VALUE
PURCHASE OPTION Section ("this Section") for consistency of
reference. However, upon
exercise of its Purchase Option, Lessee shall be a "debtor"
and Lessor a "secured party" as those terms are used under the
Uniform Commercial Code. This Agreement and the Schedule shall
continue to be referred to as the "Lease".
(ii) All provisions of this Lease shall survive and continue
to remain in full force and effect until all indebtedness
secured hereby is paid in full except the following Sections
of the Lease: (i) TERM, RENT AND PAYMENT; (ii) RENT
ADJUSTMENT: (iii) EARLY TERMINATION, and (iv) PURCHASE OPTION.
(iii) Except for the security interest granted under this
Section, LESSEE WARRANTS THAT THE COLLATERAL WILL REMAIN FREE
AND CLEAR OF ALL LIENS AND ENCUMBRANCES OF EVERY KIND, NATURE
AND DESCRIPTION AND THAT LESSEE SHALL REMAIN THE SOLE AND
LAWFUL OWNER AND IN POSSESSION OF THE COLLATERAL UNTIL ALL
OBLIGATIONS OF LESSEE TO LESSOR HEREUNDER HAVE BEEN FULLY
PERFORMED. Lessee will warrant and defend the Collateral
against all claims by all persons.
(iv) The STIPULATED LOSS VALUE Section subsection (i) of this
Agreement is amended in its entirety to read: "the portion of
the principal balance outstanding as of the Payment Date that
is attributable to the affected unit based upon the
Capitalized Lessor's Cost of such unit relative to the
Capitalized Lessor's Cost of all the units of Equipment, plus
all interest accrued on such portion as of the Payment Date.
(v) Upon request of Lessor from time to time, Lessee shall
do everything necessary or expedient to preserve and perfect
the security interest granted herein and its priority,
including without limitation obtaining and delivering to
Lessor, if applicable: (A) a certificate of title showing the
lien of Lessor with respect to the Collateral and/or (B)
landlord and mortgagee waivers satisfactory to Lessor. Lessor
is hereby granted power to sign Lessee's name and on behalf of
Lessee to execute and file applications for title, transfer of
title, financing statements, notices of lien and other
documents pertaining to any or all of the Collateral. To the
extent allowed by applicable law, Lessee waives all homestead
and other property exemption laws. On and after Lessee's
exercise of its Purchase Option, Lessor may at any reasonable
time examine the books and records of the Lessee and make
copies thereof..
(vi) Lessee acknowledges receipt of a true copy of the Lease,
and waives acceptance hereof.
(vii) If any installment or other amount due under this
Section is not paid within ten (10) days after its due date,
Lessee agrees to pay a late charge of five cents ($.05) per
dollar on, and in addition to, the amount of said installment,
but not exceeding the maximum lawful charges. If (A) Lessee
fails to make payment of any amount due pursuant to this
Section within ten (10) days after the same becomes due and
payable; or (B) Lessee is in default under, or fails to
perform under any other term or condition contained in the
Lease, then the entire principal sum remaining unpaid under
this Section, together with all accrued interest thereon and
any other sum payable under this Lease, at the election of
Lessor, shall immediately become due and payable, with
interest thereon at the lesser of eighteen percent (18%) per
annum or the highest rate not prohibited by applicable law
from the date of such accelerated maturity until paid (both
before and after any judgment). Lessee may prepay in full (but
not in part) its entire indebtedness under this Section, at
any time upon the payment of all amounts due and a prepayment
premium equal to one percent (1%) of the original Amount
Financed.
(viii) The provisions of this Section shall survive any
termination of the Lease caused by Lessee's exercise of its
Purchase Option. Lessor and any assignee of Lessor may assign
its rights and interests, in whole or in part, under this
Section.
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but not
more than two hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date (the "Notice Date"), Lessee may cancel the Agreement
(the "Cancellation Option") with respect to all (but not less than all) of the
Equipment on this Schedule: provided that, Lessee shall concurrently exercise
its Cancellation Option under Schedule 001 hereof and its Termination Option
under account number ▇▇▇▇▇▇▇-001. If all of the terms and conditions of this
Section are not fulfilled, this Lease shall continue in full force and effect
and Lessee shall continue to be liable for all obligations thereunder,
including, without limitation, the obligation to continue paying rent. Lessee
shall be deemed to have waived this option if it fails to timely provide Lessor
with the required written notice of its election to exercise the same.
Initial: /s/ LN
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent. FORTY-SEVEN AND
327/1000 percent (47.327%) of the Capitalized Lessor's Cost of
the Equipment, plus all rent and all other sums due and unpaid
as of the Basic Term Expiration Date (including, but not
limited to, any rent payment due and payable on the Basic Term
Expiration Date and any sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN
OF EQUIPMENT Section of the Lease, such compliance being
independently verified by an independent appraiser selected by
Lessor (reasonably acceptable to Lessee) to determine that the
Equipment is in such compliance, which determination shall be
final, binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such costs,
if any, to cause the Equipment to be in full compliance with
the RETURN OF EQUIPMENT Section of the Lease on or prior to
such Basic Term Expiration Date.
(b) From the applicable Notice Date through the Basic Term
Expiration Date, Lessee shall:
(i) continue to comply with all of the terms and conditions
of the Lease, including, but not limited to, Lessee's
obligation to pay rent, and
(ii) make the equipment available to Lessor in such a manner
as to allow Lessor to market and demonstrate the Equipment to
potential purchasers or lessees from such premises at no cost
to Lessor; provided, however, that, subject to Lessor's right
to market
and demonstrate the Equipment to potential purchasers or
lessees from time to time, Lessee may still use the Equipment
until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiration Date through the
earlier of the date the Equipment is sold by Lessor to a third party
or thirty (30) days following the Basic Term Expiration Date, comply
with the following terms and conditions:
(i) continue to provide insurance for the Equipment, at
Lessee's own expense, in compliance with the terms found in
the INSURANCE Section of the Lease, and
(ii) make the Equipment available to Lessor and/or allow
Lessor to store the Equipment at Lessee's premises, in such a
manner as to allow Lessor to market and demonstrate the
Equipment to potential purchasers or lessees from such
premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment after
Lessee has exercised its Cancellation Option shall be for the sole
benefit of Lessor and Lessee shall have no interest in nor any claim
upon any of such proceeds.
END OF SECONDARY TERM OPTIONS
The PURCHASE OPTION Section subsection (a) of the Lease is hereby deleted
in its entirety and the following is substituted therefor:
(a) So long as no default exists hereunder and the Lease has not been
earlier terminated, Lessee may at the expiration of the Secondary Term
upon at least one hundred eighty (180) days but not more than two hundred
seventy (270) days written notice to Lessor prior to the end of the
Secondary Term, purchase all (but not less than all) of the Equipment in
this Schedule on an AS IS, WHERE IS BASIS, without recourse to or warranty
from Lessor, express or implied ("AS IS BASIS") for cash equal to its then
Fair Market Value (plus all applicable sales taxes).
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
----------------------------------------------------------------------------------
TXU Communications Ventures Company ▇▇▇ ▇▇▇▇▇▇ ▇▇. $ 1,706,738.36
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Furniture Service Group, Inc. via wire transfer to: $ 81,262.76
Bank of Oklahoma
Tulsa, OK
ABA No. ▇▇▇▇▇▇▇▇▇
Acct. No. 209907746
▇▇▇▇▇▇ Office Interiors via wire transfer $ 88,743.60
Total: $ 1,876,744.72
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding or
effective with respect to the Agreement or Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION TXU COMMUNICATIONS VENTURES COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------- -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: RISK ANALYST Title: Vice President - Finance and
Administration
Exhibit A
to
Equipment Schedule No. 002
dated
March 18, 2002
Invoice
Vendor Invoice # Date Amount
------------------------------------------------------------------------
Affordable Audio-Visual 1114 8/30/01 $ 28,352.84
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 9/20/01 $ 2,999.00
Archoustics ▇▇▇▇ ▇▇-1044-A 8/30/01 $ 26,638.15
JA-1045-B 9/18/01 $ 20,825.00
Global Alarm Systems 69255 9/11/01 $ 17,833.00
69256 9/21/01 $ 39,873.89
69258 9/21/01 $ 44,258.01
69259 9/21/01 $ 13,017.06
69261 9/24/01 $ 3,520.19
Pitney ▇▇▇▇▇ 410472 7/3/01 $ 12,004.87
▇▇▇▇▇▇ Office Interiors 92724 8/30/01 $ 163,733.10
93717 9/28/01 $ 46,271.35
Furniture Services Group,
Inc. 85000093 8/2/01 $ 2,409.78
85000094 8/3/01 $ 524,261.53
85000095 8/3/01 $ 630,456.11
85000106 8/16/01 $ 6,947.52
85000107 8/16/01 $ 1,868.84
85000110 8/16/01 $ 8,180.00
85000111 8/17/01 $ 14,128.30
85000112 8/17/01 $ 31,740.10
85000113 8/23/01 $ 56,569.61
85000150 9/20/01 $ 6,834.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10/09/01 $ 14,344.88
94230 10/15/01 $ 8,045.08
93941 10/05/01 $ 5,486.94
95016 11/06/01 $ 38,064.49
95068 11/08/01 $ 9,022.48
95597 11/29/01 $ 13,779.73
▇▇▇▇▇▇▇▇▇ Associates, Inc. 5318-1 11/16/01 $ 10,825.00
Furniture Services Group 85000172 10/04/01 $ 804.00
85000187 10/24/01 $ 59.40
85420984 10/25/01 $ 2,394.82
85000196 10/25/01 $ 1,362.49
85000192 10/24/01 $ 705.00
85000202 10/30/01 $ 4,833.46
85000203 10/30/01 $ 3,325.00
85000204 10/30/01 $ 6,532.00
85000209 11/02/01 $ 17,441.56
85000210 11/06/01 $ 2,233.44
85000215 11/8/01 $ 4,207.00
85000216 11/8/01 $ 7,040.63
85000226 11/15/01 $ 10,384.25
85000232 11/28/01 $ 875.00
85000233 11/28/01 $ 3,205.35
85000234 11/28/01 % 7,139.09
85000246 12/13/01 $ 1,911.38
-------------
$1,876,744.72
Page 1 of 1 Lessee's Initials: /s/ LN
EXHIBIT I
TO SCHEDULE NO. 002
DATED AS OF 3/18/02
TO MASTER LEASE AGREEMENT
DATED AS OF FEBRUARY 25, 2002
floating
rate
payment adjustment
number factor
1 7.5178
2 7.4151
3 7.3121
4 7.2089
5 7.1054
6 6.9906
7 6.8866
8 6.7824
9 6.6668
10 6.5620
11 6.4571
12 6.3407
13 6.2240
14 6.0932
15 5.9622
16 5.8309
17 5.6993
18 5.5814
19 5.4493
20 5.3169
21 5.1982
22 5.0653
23 4.9321
24 4.8125
25 4.6927
26 4.5847
27 4.4764
28 4.3678
29 4.2589
30 4.1377
31 4.0283
32 3.9186
33 3.7966
34 3.6863
35 3.5758
36 3.4529
37 3.3297
38 3.2368
39 3.1437
40 3.0503
41 2.9565
42 2.8319
43 2.7376
44 2.6430
45 2.5175
46 2.4223
47 2.3268
48 2.2004
49 2.0737
50 1.9906
51 1.9071
52 1.8234
53 1.7393
54 1.6111
55 1.5265
56 1.4415
57 1.3124
58 1.2268
59 1.1409
60 1.0108
Rental Adjustment =
(Basis Point Change in Index) times
(Floating Rate Adjustment Factor) times
(Original Equipment Cost) divided by
1,000,000
Initials: /s/ WSA /s/ LN
----------- -----------
Lessor Lessee
