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EXHIBIT 10.12
LASALLE NATIONAL LEASING CORPORATION
EQUIPMENT LEASE GUARANTY
This Equipment Lease Guaranty is executed and delivered in favor of LASALLE
NATIONAL LEASING CORPORATION, its successors and assigns ("Lessor"), in
connection with that certain Master Lease Agreement dated as of June 18, 1999,
together with all Equipment Schedules executed or to be executed pursuant hereto
(the "Lease"), by and between Lessor and 3C1 Complete Compliance Corporation,
its successors and assigns ("Lessee").
In order to induce Lessor to enter into the Lease (execution and delivery
hereof being a condition precedent to Lessor's obligations under the Lease), and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, STERICYCLE, INC. ("Guarantor") hereby UNCONDITIONALLY
GUARANTEES (a) to pay Lessor in lawful money of the United States all rents and
other sums reserved in the Lease, or any substitutions therefor, in the amounts,
at the times and in the manner set forth in the Lease; and (b) to perform, at
the time and in the manner set forth in the Lease, all of the terms, covenants
and conditions therein required to be kept, observed or performed by Lessee
(collectively, the "Obligations").
1. This Guaranty is a continuing one and shall terminate only upon full
payment of all rents and all other sums due under the Lease and the performance
of all of the terms, covenants and conditions therein required to be kept,
observed or performed by Lessee, including such payment and performance under
all schedules made a part of said Lease, whether to be performed before or after
the last rent payment has been made under the Lease. This Guaranty is a guaranty
of prompt payment and performance (and not merely a guaranty of collection).
2. Guarantor authorizes Lessor, with Lessee's consent where required,
without notice or demand, and without affecting its liability hereunder, from
time to time to: (a) receive and hold security for the payment of this Guaranty
or the performance of the Lease, and exchange, enforce, waive and release any
such security; and (b) apply such security and direct the order or manner of
sale thereof as Lessor in its discretion may determine.
3. Guarantor waives any right to require Lessor to: (a) proceed against
Lessee; (b) proceed against or exhaust any security held from Lessee; (c) pursue
any other remedy in Lessor's power whatsoever; or (d) notify Guarantor of any
default by Lessee in the payment of any rent or other sums reserved in the Lease
or in the performance of any term, covenant or condition therein required to be
kept, observed or performed by Lessee. Guarantor waives any defense arising by
reason of any disability or other defense of Lessee (other than payment or
performance by Lessee of the Obligations), any lack of authority of Lessee with
respect to the Lease, the invalidity, illegality or lack of enforceability of
the Lease from any cause whatsoever, the failure of Lessor to acquire title to
the equipment subject to the Lease or to perfect or maintain perfection of any
interest therein or the cessation from any cause whatsoever of the liability of
Lessee; provided, however, that Guarantor does not waive any defense arising
from the due performance by Lessee of the terms and conditions of the Lease.
Upon demand, Guarantor agrees to pay and perform the Obligations regardless of
any existing or future offset or claim which may be asserted by Guarantor. This
Guaranty and Guarantor's payment obligations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment of any of
the Obligations is rescinded or must otherwise be restored or returned by
Lessor, all as though such payment had not been made. Lessor's good faith
determination as to whether a payment must be restored or returned shall be
binding on Guarantor. Until the payment of all rents and all other sums due
under the Lease and the performance of all of the terms, covenants and
conditions therein required to be kept, observed or performed by Lessee,
Guarantor shall have no right of subrogation against Lessee, and waives any
right to enforce any remedy which Lessor now has or hereafter may have against
Lessee, and waives any benefit of, and any right to participate in, any security
now or hereafter held by Lessor. Guarantor waives all presentments, demands for
performance, notices of non performance, protests, notices of dishonor, and
notices of acceptance of this Guaranty.
4. Guarantor represents and warrants to Lessor that:
(a) (1) Guarantor is a corporation duly organized and validly existing
in good standing under the laws of the state of its incorporation. (2) The
execution, delivery and performance hereof: (x) have been duly authorized by all
necessary corporate action on the part of Guarantor; (y) do not require the
approval of any stockholders, trustee or holder of any obligations of Guarantor
except such as have been duly obtained; and (z) do not and will not contravene
any law, governmental rule, regulation or order now binding on Guarantor, or the
charter or by-laws of Guarantor, or contravene the provisions of, or constitute
a default under, or result in the creation of any lien or encumbrance upon the
property of Guarantor under, any indenture, mortgage, contract or other
agreement to which Guarantor is a party or by which it or its property is bound.
(3) The financial statements of Guarantor (copies of which have been furnished
to Lessor) have been prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP"), and fairly present Guarantor's
financial condition and the results of its operations as of the date of and for
the period covered by such statements, and since the date of such statements
there has been no material adverse change in such conditions or operations.
(b) This Guaranty constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in accordance with the terms hereof,
except as limited by applicable bankruptcy insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, and by applicable laws (including any applicable common law and
equity) and judicial decisions which may affect the remedies provided herein.
(c) There are no pending actions or proceedings to which Guarantor is a
party, and there are no other pending or threatened actions or proceedings of
which Guarantor has knowledge, before any court, arbitrator or administrative
agency, which, either individually or in the aggregate, would have a Material
Adverse Effect. As used herein, "Material Adverse Effect" shall mean (1) a
materially adverse effect on the business, condition (financial or otherwise),
operations, performance or properties of Guarantor, or (2) a material impairment
of the ability of Guarantor to perform its obligations under or to remain in
compliance with this Guaranty. Further, Guarantor is not in default under any
material obligation for borrowed money, for the deferred purchase price of
property or any lease agreement which, either individually or in the aggregate,
would have the same such effect.
(d) Guarantor acknowledges and agrees that it will enjoy a substantial
economic benefit by virtue of the extension of credit by Lessor to Lessee
pursuant to the Lease.
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(e) Guarantor has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by Guarantor may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31,1999), and have made related
appropriate inquiry of material suppliers and vendors. Based on such review and
program, Guarantor believes that the "Year 2000 Problem" will not have a
Material Adverse Effect. From time to time, at the request of Lessor, Guarantor
shall provide to Lessor such updated information or documentation as is
requested regarding the status of its efforts to address the Year 2000 Problem.
5. Guarantor covenants and agrees that: (a) it will provide to Lessor: (1)
within one hundred twenty (120) days after the end of each fiscal year of
Guarantor, the balance sheet and related statement of income and statement of
cash flows of Guarantor, prepared in accordance with GMP, all in reasonable
detail and certified by independent certified public accountants of recognized
standing selected by Guarantor and reasonably acceptable to Lessor; (2) within
sixty (60) days after the end of each quarter of Guarantor's fiscal year, the
balance sheet and related statement of income and statement of cash flows of
Guarantor for such quarter, prepared in accordance with GAAP; and (3) within
thirty (30) days after the date on which they are filed, all regular periodic
reports, forms and other filings required to be made by Guarantor to the
Securities and Exchange Commission, if any; and (b)it will promptly execute and
deliver to Lessor such further documents, instruments and assurances and take
such further action as Lessor from time to time may reasonably request in order
to carry out the intent and purpose of this Guaranty and to establish and
protect the rights and remedies created or intended to be created in favor of
Lessor hereunder. Notwithstanding the foregoing, so long as Guarantor continues
to be a reporting entity pursuant to the Securities Exchange Act of 1934, as
amended, Guarantor shall not be required to comply with the provisions of
Section 5(a)(1) and (2) hereof.
6. Guarantor shall be deemed to be in default hereunder ("Default") if: (a)
Guarantor shall fail to perform or observe any covenant, condition or agreement
to be performed or observed by it hereunder and such failure shall continue
unremedied for a period of thirty (30) days after the earlier of the actual
knowledge of Guarantor or written notice thereof to Guarantor by Lessor; or (b)
Guarantor shall (1) be generally not paying its debts as they become due, (2)
take action for the purpose of invoking the protection of any bankruptcy or
insolvency law, or any such law is invoked against or with respect to Guarantor
or its property, and such petition filed against Guarantor is not dismissed
within sixty (60) days; or (c) there is an anticipatory repudiation of
Guarantor's obligations pursuant to this Guaranty; or (d) any certificate,
statement, representation, warranty or audit contained herein or heretofore or
hereafter furnished with respect to this Guaranty by or on behalf of Guarantor
proving to have been false in any material respect at the time as of which the
facts therein set forth were stated or certified, or having omitted any
substantial contingent or unliquidated liability or claim against Guarantor; or
(e) Guarantor shall be in default under any material obligation for borrowed
money, for the deferred purchase price of property or any lease agreement, and
the applicable grace period with respect thereto shall have expired; or (f)
Guarantor shall have terminated its corporate existence, consolidated with,
merged into, or conveyed or leased substantially all of its assets as an
entirety to any Person (such actions being referred to as an "Event"), unless
not less than sixty (60) days prior to such Event: (i) such person executes and
delivers to Lessor an agreement satisfactory in form and substance to Lessor, in
its sole discretion, containing such person's effective assumption, and its
agreement to pay, perform, comply with and otherwise be liable for, in a due and
punctual manner, all of Guarantor's obligations having previously arisen, or
then or thereafter arising, under this Guaranty; and (ii) Lessor is satisfied as
to the creditworthiness of such person, and as to such person's conformance to
the other standard criteria then used by Lessor for such purposes; or (g) there
is a material change in the ownership of Guarantor's capital stock, unless
Lessor is satisfied as to the creditworthiness of Guarantor and Guarantor's
conformance to the other standard criteria then used by Lessor for such
purposes, immediately after giving effect to such change in ownership.
Upon a Default hereunder, Lessor may, at its option, declare this Guaranty
to be in default by written notice to Guarantor (without election of remedies),
and at any time thereafter, may do any one or more of the following, all of
which are hereby authorized by Guarantor:
A. declare the Lease to be in default and thereafter ▇▇▇ for and
recover all liquidated damages, accelerated rentals and/or other sums otherwise
recoverable from Lessee thereunder; and/or
B. ▇▇▇ for and recover all damages then or thereafter incurred by
Lessor as a result of such Default; and/or
C. seek specific performance of Guarantor's obligations hereunder.
In addition, Guarantor shall be liable for all reasonable~attorneys' fees
and other costs and expenses incurred by reason of any Default or the exercise
of Lessor's remedies hereunder and/or under the Lease. No right or remedy
referred to in this Section is intended to be exclusive, but each shall be
cumulative, and shall be in addition to any other remedy referred to above or
otherwise available at law or in equity, and may be exercised concurrently or
separately from time to time.
The failure of Lessor to exercise the rights granted hereunder upon any
Default by Guarantor shall not constitute a waiver of any such right upon the
continuation or reoccurrence of any such Default.
The obligations of the undersigned hereunder are independent of the
obligations of Lessee. A separate action or actions may be brought and
prosecuted against Guarantor whether an action is brought against Lessee or
whether Lessee be joined in any such action or actions.
7. GUARANTOR AGREES THAT THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
LESSOR AND GUARANTOR HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY1 AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MARYLAND
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE). Guarantor
agrees that any action or proceeding arising out of or relating to this Guaranty
may be commenced in any state or Federal court in the State of Maryland, and
agrees that a summons and complaint commencing an action or proceeding in any
such court shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address hereinbelow set
forth, or as it may provide in writing from time to time, or as otherwise
provided under the laws of the State of Maryland.
8. GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
WHICH GUARANTOR AND LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY
PERTAINING TO THIS GUARANTY OR THE LEASE. IT IS HEREBY AGREED AND UNDERSTOOD
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
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CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS GUARANTY. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND GUARANTOR HEREBY ACKNOWLEDGES
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
9. This Guaranty shall inure to the benefit of Lessor, its successors and
assigns, and shall be binding upon the successors and assigns of Guarantor. The
obligations of Guarantor hereunder may not be assigned or delegated without the
prior written consent of Lessor.
10. All notices hereunder shall be in writing, personally delivered,
delivered by overnight courier service, sent by facsimile transmission (with
confirmation of receipt), or sent by certified mail, return receipt requested,
addressed as follows:
If to Guarantor: Stericycle, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Lessor: LaSalle National Leasing Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as such party shall from time to time designate in
writing to the other party; and shall be effective from the date of receipt.
11. This Guaranty constitutes the entire agreement between the parties with
respect to the subject matter hereof and shall not be rescinded, amended or
modified in any manner except by a document in writing executed by both parties.
Any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
IN WITNESS WHEREOF, Guarantor has caused this instrument to be duly
executed, under seal, as of the 18 day of June, 1999.
ATTEST: STERICYCLE, INC.
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ [SEAL]
-----------------------------
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------.
Title: CFO
-------------------------------.
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LASALLE NATIONAL LEASING CORPORATION
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (the "Lease") is made as of the 18th day of June,
1999, by and between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
The parties agree that Lessee shall lease from Lessor the property (the
"Equipment") described In the Equipment Schedule(s) to be executed pursuant
hereto (collectively, the "Equipment Schedule"), subject to the terms set forth
herein, in the Riders annexed hereto and in the Equipment Schedule. Certain
definitions and construction of certain of the terms used herein are provided in
Section 19 hereof. Each Equipment Schedule shall incorporate by reference the
terms and conditions of this Lease. Each Equipment Schedule, incorporating by
reference the terms and conditions of this Lease, shall constitute a separate
instrument of lease.
1. TERM. The term of lease with respect to any item of the Equipment shall
consist of the term set forth in the Equipment Schedule relating thereto;
provided, however, that this Lease shall be effective from and after the date of
execution hereof.
2. RENT. Lessee shall pay Lessor the rental installments in the aggregate
amounts specified in the Equipment Schedule, without prior notice or demand, and
all other amounts payable pursuant to this Lease (such installments and other
amounts, the "rent"). Each Equipment Schedule constitutes a non-cancelable net
lease, and Lessee's obligation to pay rent, and to otherwise perform its
obligations under this Lease, each such Equipment Schedule and all of the other
documents and agreements entered in connection herewith (collectively, the
"Lease Documents"), are and shall be absolute and unconditional and shall not be
affected by any right of setoff, counterclaim, recoupment, deduction, defense or
other right which Lessee may have against Lessor, the manufacturer or vendor of
the Equipment (the "Suppliers"), or anyone else, for any reason whatsoever.
Rental installments are payable as and when specified in the Equipment Schedule
by mailing the same to Lessor at its address specified pursuant to this Lease;
and payments of rent shall be effective upon receipt. Timeliness of Lessee's
payment and its other performance under the Lease Documents is of the essence.
If any rent is not paid within five (5) days after the due date, Lessor may
collect, and Lessee agrees to pay, a charge (the "Late Charge") calculated as
the product of the late charge rate specified in the Equipment Schedule (the
"Late Charge Rate") and the amount in arrears for the period such amount remains
unpaid from and after the original due date.
3. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants
that: (a) Lessee is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. (b) The execution,
delivery and performance of the Lease Documents: (1) have been duly authorized
by all necessary corporate action on the part of Lessee; (2) do not require the
approval of any stockholder, trustee or holder of any obligations of Lessee
except such as have been duly obtained; and (3) do not and will not contravene
any law, governmental rule, regulation or order now binding on Lessee, or the
charter or by-laws of Lessee, or contravene the provisions of, or constitute a
default under, or result in the creation of any lien or encumbrance upon the
property of Lessee under, any indenture, mortgage, contract or other agreement
to which Lessee is a party or by which it or its property is bound. (c) Each of
the Lease Documents, when entered into, will constitute legal, valid and binding
obligations of Lessee enforceable against Lessee, in accordance with the terms
hereof. (d) There are no pending actions or proceedings to which Lessee is a
party, and there are no other pending or threatened actions or proceedings of
which Lessee has knowledge, before any court, arbitrator or administrative
agency, which, either individually or in the aggregate, would have a Material
Adverse Effect. As used herein, "Material Adverse Effect" shall mean (1) a
materially adverse effect on the business, condition (financial or otherwise),
operations, performance or properties of Lessee, or (2) a material impairment of
the ability of Lessee to perform its obligations under or to remain in
compliance with the Lease Documents. Further, Lessee is not in default under any
obligation for borrowed money, for the deferred purchase price of property or
any lease agreement which, either individually or in the aggregate, would have
the same such effect. (e) Under the laws of the state(s) in which the Equipment
is to be located, the Equipment consists solely of personal property and not
fixtures. (f) The financial statements of Lessee (copies of which have been
furnished to Lessor) have been prepared in accordance with generally accepted
accounting principles consistently applied ("GAAP"), and fairly resent Lessee's
financial condition and the results of its operations as of the date of and for
the period covered by such statements, and since the date of such statements
there has been no material adverse change in such conditions or perations. (g)
The address stated below the signature of Lessee is the chief place of business
and chief executive office of Lessee; and Lessee does not conduct business under
a trade, assumed or fictitious name. (h) Lessee has reviewed the areas within
its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by Lessee may
be unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date on or after December 1,1999), and have made
related appropriate inquiry of material suppliers and vendors. Based on such
review and program, Lessee believes that the "Year 2000 Problem" will not have a
Material Adverse Effect. From time to time, at the request of Lessor, Lessee
shall provide to Lessor such updated information or documentation as is
reasonably requested regarding the status of its efforts to address the Year
2000 Problem.
4. FINANCIALS, FURTHER ASSURANCES AND NOTICES. Lessee covenants and agrees as
follows: (a) Lessee will furnish Lessor (1) within one hundred twenty (120) days
after the end of each fiscal year of Lessee, a balance sheet of Lessee 5 at the
end of such year, and the related statement of income and statement of cash
flows of Lessee for such fiscal year, prepared in accordance with GAAP, all in
reasonable detail and certified by independent certified public accountants of
recognized standing selected by Lessee; (2) within sixty (60) days after the end
of each quarter, a balance sheet of Lessee S at the end of such quarter, and the
related statement of income and statement of cash flows of Lessee for such
quarter, prepared in accordance with GMP; and (3) within thirty (30) days after
the date on which they are filed, all regular periodic reports, forms and other
filings required to be made by Lessee to the Securities and Exchange Commission,
if any. (b) Lessee ill promptly execute and deliver to Lessor such further
documents, instruments and assurances and take such further action s Lessor from
time to time may reasonably request in order to carry out the intent and purpose
of this Lease and to established protect the rights and remedies created or
intended to be created in favor of Lessor under the Lease Documents. (c) Lessee
shall provide written notice to Lessor: (1) thirty (30) days prior to any
contemplated change in the name or address of the chief executive office of
Lessee; (2) promptly upon the occurrence of any Default (as hereinafter defined)
or event which, with the lapse of time or the giving of notice, or both, would
become a Default (a "default"; except as used in Sections 15 and 16); and (3)
promptly upon Lessee becoming aware of any alleged violation of applicable law
relating to the Equipment or this Lease. Notwithstanding the foregoing, so long
as Lessee continues to be a reporting entity pursuant to the Securities Exchange
Act of 1934, as amended, Lessee shall not be required to comply with Sections
4(a)(1) and (2) hereof.
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5. CONDITIONS PRECEDENT. Lessor's obligations under each Equipment Schedule,
including its obligation to purchase and lease any Equipment to be leased
thereunder, are conditioned upon Lessor's determination that all of the
following have been satisfied: (a) Lessor having received the following, in form
and substance satisfactory to Lessor: (1) evidence as to due compliance with the
insurance provisions hereof; (2) Uniform Commercial Code financing statements
and all other filings and recordings as required by Lessor; (3) certificate of
Lessee's Secretary certifying: (i) resolutions of Lessee's Board of Directors
duly authorizing the leasing of the Equipment hereunder and the execution,
delivery and performance of this Lease and the Equipment Schedule and all
related instruments and documents, and (ii) the incumbency and signature of the
officers of Lessee authorized to execute such documents; (4) an opinion of
counsel for Lessee as to each of the matters set forth in sub-parts (a) through
(d) of Section 3 hereof; (5) the only manually executed original of the
Equipment Schedule and all other Lease Documents; (6) all purchase documents
pertaining to the Equipment (collectively, the "Supply Contract"); and (7) such
other documents, agreements, instruments, certificates, opinions, assurances, as
Lessor reasonably may require. (b) All representations and warranties provided
in favor of Lessor in any of the Lease Documents shall be true and correct on
the effective date of such Equipment Schedule with the same effect as though
made as of such date (Lessee's execution and delivery of the Equipment Schedule
shall constitute an acknowledgment of the same). (c) There shall be no default
or Default under he Equipment Schedule or any other Lease Documents. The
Equipment shall have been delivered to and accepted by Lessee, and shall be in
the condition and repair required hereby; and on the effective date of the
Equipment schedule, Lessor shall have received good title to the Equipment to be
leased thereunder, free and clear of any lien, claim or encumbrance of any kind.
6. DELIVERY; INSPECTION AND ACCEPTANCE BY LESSEE. Upon delivery, Lessee shall
inspect and, to the extent the Equipment conforms to the condition required by
the applicable Supply Contract, accept the Equipment and shall execute and
deliver to Lessor an Equipment Schedule containing a complete description of the
item of Equipment accepted; whereupon, as between Lessor and Lessee, the same
shall be deemed to have been finally accepted by Lessee pursuant to this Lease.
All expenses incurred in connection with Lessor's purchase of the Equipment
(including shipment, delivery and installation) shall be the responsibility of
Lessee and shall be paid upon demand. If Lessee shall, for reasonable cause,
refuse to accept delivery of any item of the Equipment, Lessee will be assigned
all rights and shall assume all obligations as purchaser of the Equipment.
7. USE AND MAINTENANCE. (a) Lessee shall: (1) use the Equipment solely in the
Continental United States and in the conduct of its business, for the purpose
for which the Equipment was designed, in a careful and proper manner, and shall
not permanently discontinue use of the Equipment; (2) operate, maintain, service
and repair the Equipment, and maintain all records and other materials relating
thereto, (i) in accordance and consistent with (A) the Supplier's
recommendations and all maintenance and operating manuals or service agreements,
whenever furnished or entered into, including any subsequent amendments or
replacements thereof, issued by the Supplier or service provider, (B) the
requirements of all applicable insurance policies, (C) the Supply Contract, so
as to preserve all of Lessee's and Lessor's rights thereunder, including all
rights to any warranties, indemnities or other rights or remedies, (D) all
applicable laws, and (E) the prudent practice of other similar companies in the
same business as Lessee, but in any event, to no lesser standard than that
employed by Lessee for comparable equipment owned or leased by it; and (ii)
without limiting the foregoing, so as to cause the Equipment to be in good
repair and operating condition and in at least the same condition as when
delivered to Lessee hereunder, except for ordinary wear and tear resulting
despite Lessee's full compliance with the terms hereof; (3) not change the
location of any Equipment (or the location of the principal garage of any
Equipment to the extent that such Equipment is mobile equipment) as specified in
the Equipment Schedule without the prior written consent of Lessor; (4) not
attach or incorporate the Equipment to or in any other item of equipment in such
a manner that the Equipment may be deemed to have become an accession to or a
part of such other item of equipment; and (5) cause each principal item of the
Equipment to be continually marked, in a plain and distinct manner, with the
name of Lessor followed by the words "Owner and Lessor," or other appropriate
words designated by Lessor on labels furnished by Lessor. (b) Within a
reasonable time, Lessee will replace any parts of the Equipment which become
worn out, lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, by new or reconditioned replacement parts which are free
and clear of all liens, encumbrances or rights of others and have value, utility
and remaining useful life at least equal to the parts replaced. Any modification
or addition to the Equipment which is required by law shall be made by Lessee,
at its expense. Title to all parts, improvements and additions to the equipment
immediately shall vest in Lessor, without cost or expense to Lesser or any
further action by any other person, and such parts, improvements and additions
shall be deemed incorporated in the Equipment and subject to the terms of this
Lease is if originally leased hereunder, if such parts are required by law or
are otherwise essential to the operation of the Equipment or cannot be detached
from the Equipment without materially interfering with the operation of the
Equipment or adversely affecting the value, utility and remaining useful life
which the Equipment would have had without the addition thereof. Lessee shall
not make any material alterations to the Equipment without the prior written
consent of Lessor. (c) Upon forty-eight (48) ours' notice, Lessee shall afford
Lessor access to the premises where the Equipment is located for the purpose of
inspecting such Equipment and all applicable maintenance or other records at any
reasonable time during normal business hours; provided, however, if a default or
Default shall have occurred and then be continuing, no notice of any inspection
by Lessor hall be required.
8. DISCLAIMER OF WARRANTIES. LESSOR IS NOT A SELLER, SUPPLIER OR MANUFACTURER
(AS SUCH TERMS ARE DEFINED OR USED, AS THE CASE MAY BE, IN THE UNIFORM
COMMERCIAL CODE), OR DEALER, NOR A SELLER'S OR A DEALER'S AGENT. THE EQUIPMENT
IS LEASED HEREUNDER "AS IS", AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS
LIABILITY FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO,
ANY AND ALL WARRANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT
TO THE EQUIPMENT, EITHER EXPRESS OR IMPLIED, ARISING BY APPLICABLE LAW OR
OTHERWISE, INCLUDING ANY OF THE SAME RELATING TO OR ARISING IN OR UNDER (a)
MERCHANTABILITY OR FITNESS FOR PARTICULAR USE OR PURPOSE, (b) COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE, OR (c) TORT (WHETHER OR NOT
ARISING FROM THE ACTUAL, IMPLIED OR IMPUTED NEGLIGENCE OF LESSOR OR STRICT
LABILITY) OR THE UNIFORM COMMERCIAL CODE (INCLUDING ARTICLE 2A, AS HEREINAFTER
DEFINED) OR OTHER APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING ITS
TITLE OR FREEDOM FROM LIENS, FREEDOM FROM TRADEMARK, PARENT OR COPYRIGHT
INFRINGEMENT, FREEDOM FROM LATENT DEFECTS WHETHER OR NOT DISCOVERABLE),
CONDITION, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW; it
being agreed that all such risks, as between Lessor and Lessee, are to be borne
by Lessee; and Lessor's agreement to enter into this Lease and any Equipment
Schedule is in reliance upon the freedom from and complete negation of liability
or responsibility for the matters waived and disclaimed herein. Lessor is not
responsible for any direct, indirect, incidental or consequential damage to or
losses resulting from the installation, operation or use of the Equipment or any
products manufactured thereby. All assignable warranties made by the Supplier to
Lessor are hereby assigned to Lessee for and during the term of this Lease and
Lessee agrees to resolve all such claims directly with the Supplier. Lessor
fully shall cooperate with Lessee with respect to the resolution of such claims,
in good faith and by appropriate proceedings at Lessee's expense. Any such claim
shall not affect in any manner the unconditional obligation of Lessee to make
rent payments
6
hereunder. Upon the occurrence of any default or Default hereunder, Lessor shall
have the exclusive right to assert any and all warranty claims with respect to
the Equipment.
9. FEES AND TAXES. (a) To the extent permitted by law, Lessee shall file any
necessary report and return for, shall pay promptly when due, shall otherwise be
liable to reimburse Lessor (on an after-tax basis) for, and agrees to indemnify
and hold Lessor harmless from: (i) all titling, recordation, documentary stamp
and other fees; and (ii) taxes (other than taxes calculated solely on the basis
of net Income), assessments and all other charges or withholdings of any nature
(together with any penalties, fines or interest thereon); arising at any time
upon or relating to the Equipment or this Lease or the delivery, acquisition,
ownership, use, operation or leasing or sale of the Equipment, or upon the rent,
whether the same be assessed to Lessor or Lessee (any of the foregoing, an
"Imposition"). (b) If any report, return or property listing, or any Imposition
is, by law, required to be filed by, assessed or billed to, or paid by, Lessor,
Lessee at its own expense will do all things required to be done by Lessor (to
the extent permitted by law) in connection therewith and is hereby authorized by
Lessor to act on behalf of Lessor in all respects, including the contest or
protest, in good faith and by appropriate proceedings, of the validity of any
Imposition, or the amount thereof. Lessor agrees fully to cooperate with Lessee
in any such contest, and Lessee agrees promptly to indemnify Lessor for all
reasonable expenses incurred by Lessor in the course of such cooperation. An
Imposition or Claim (as hereinafter defined) therefor shall be paid, subject to
refund proceedings, if failure to pay would adversely affect the title or rights
of Lessor. If Lessor obtains a refund of any Imposition which has been paid (by
Lessee, or by Lessor and for which Lessor has been reimbursed by Lessee), Lessor
shall promptly pay to Lessee the amount of such refund to the extent actually
received; provided, however, that if a default or Default has then occurred and
is continuing, in lieu of paying such amount to Lessee, Lessor shall apply the
amount of such refund to the extent actually received to the obligations of
Lessee hereunder. Lessee will cause all ▇▇▇▇▇▇▇▇ of such charges to Lessor to be
made to Lessor in care of Lessee and will, in preparing any report or return
required by law, show the ownership of the Equipment in Lessor, and shall send a
copy of any such report or return to Lessor. If Lessee fails to pay any such
charges when due, except any Imposition being contested in good faith and by
appropriate proceedings as above provided for a reasonable period of time,
Lessor at its option may do 30, in which event the amount so paid (including any
penalty or interest incurred as a result of Lessee's failure), plus interest
thereon at the Late Charge Rate, shall be paid by Lessee to Lessor with the next
periodic payment of rent. (c) As used herein, the term "Lessor" shall mean and
include Lessor and the consolidated Federal taxpayer group of which Lessor is a
member.
10. INTENT, TITLE AND LIENS. (a) The parties intend and agree that the Equipment
shall remain personal property, and that Lessor's title thereto not be impaired,
notwithstanding the manner in which it may be affixed to any real property.
Lessee will obtain and deliver to Lessor, from any person having an interest in
the property where the Equipment described on Equipment Schedules designated as
Series C (the "Series C Equipment") is to be located, waivers of any lien,
encumbrance or interest which such person might have or hereafter obtain or
claim with respect to the Equipment. (b) Lessee may not dispose of any of the
Equipment except to the extent expressly provided herein, notwithstanding the
fact that proceeds constitute a part of the Equipment. (c) Lessee further agrees
to maintain the Equipment free from all claims, liens, attachments, rights of
others and legal processes ("Liens") of creditors of Lessee or any other
persons, other than Liens for fees, taxes, levies, duties or other governmental
charges of any kind, Liens of mechanics, materialmen, laborers, employees or
suppliers and similar Liens arising by operation of law incurred by Lessee in
the ordinary course of business for sums that are not yet delinquent or are
being contested in good faith by negotiations or by appropriate proceedings
which suspend the collection thereof (provided, however, that such proceedings
do not involve any substantial danger (as determined in Lessor's sole reasonable
discretion) of the sale, forfeiture or loss of the Equipment or any interest
therein). Lessee will defend, at its own expense, Lessor's title to the
Equipment from such claims, Liens or legal processes. Lessee shall also notify
Lessor promptly upon receipt of notice of any Lien affecting the Equipment in
whole or in part.
11. INSURANCE. Lessee shall obtain and maintain all-risk insurance coverage with
respect to the Equipment insuring against, among other things: casualty
coverage, including loss or damage due to fire and the risks normally included
in extended coverage, malicious mischief and vandalism, for not less than the
greater of the full replacement value or the stipulated Loss Value (as defined
in Section 12 hereof); and general liability coverage, including both bodily
injury and property damage with a combined single limit per occurrence of not
less than the amount specified in the Equipment Schedule, having a deductible
reasonably satisfactory to Lessor. All said insurance shall be in form including
all endorsements required by Lessor) and amount and with companies reasonably
satisfactory to Lessor. All insurance for loss or damage shall provide that
losses, if any, shall be payable to Lessor as loss payee and Lessee shall
utilize its best efforts to have all checks relating to any such losses
delivered promptly to Lessor. Lessor shall be named as an additional insured
with respect to all such liability insurance. Lessee shall pay the premiums
therefor and deliver to Lessor evidence satisfactory to Lessor of such insurance
coverage. Lessee shall cause to be provided to Lessor, not less than fifteen
(15) days prior to the scheduled expiration or lapse of such insurance coverage,
evidence satisfactory to Lessor of renewal or replacement coverage. Each insurer
shall agree, by endorsement upon the policy or policies issued by it or by
independent instrument furnished to Lessor, that (a) it will give Lessor thirty
(30) days' prior written notice of the effective date of any material alteration
or cancellation of such policy; and (b) insurance as to the interest of any
named additional insured or loss payee other than Lessee shall not be
invalidated by any actions, inactions, breach of warranty or conditions or
negligence of Lessee or any person other than Lessor with respect to such policy
or policies. The proceeds of such insurance payable as a result of loss of or
damage to the Equipment shall be applied as required by the provisions of
Section 12 hereof.
12. LOSS AND DAMAGE. Lessee assumes the risk of direct and consequential loss
and damage to the Equipment. Except as provided in this Section for discharge
upon payment of Stipulated Loss Value, no loss or damage to the Equipment or any
part thereof shall release or impair any obligations of Lessee under this Lease.
Lessee agrees that Lessor shall not incur any liability to Lessee for any loss
of business, loss of profits, expenses, or any other Claims resulting to Lessee
by reason of any failure of or delay in delivery or any delay caused by any
non-performance, defective performance, or breakdown of the Equipment, nor shall
Lessor at any time be responsible for personal injury or the .355 or destruction
of any other property resulting from the Equipment. In the event of loss or
damage to any item of Equipment which does not constitute a Total Loss (as
hereinafter defined), Lessee shall, at its sole cost and expense, promptly
repair and restore such item of the Equipment to the condition required by this
Lease. Provided that no default or Default has occurred and is continuing, upon
receipt of evidence reasonably satisfactory to Lessor of completion of such
repairs, Lessor will apply any insurance proceeds received by Lessor on account
of such loss to the cost of repairs. Upon the occurrence of the actual or
constructive total loss of any item of the Equipment, or the loss,
disappearance, theft or destruction of any item of the Equipment or damage to
any item of the Equipment to such extent as shall make repair thereof
uneconomical or shall render any item of the Equipment permanently unfit for
normal use for any reason whatsoever, or the condemnation, confiscation,
requisition, seizure, forfeiture or other taking of title to or taking of use of
any item of the Equipment or the imposition of any Lien thereon by any
governmental authority (as established to the reasonable satisfaction of Lessor;
any such occurrence being herein referred to as a "Total Loss"), during the term
of this Lease, Lessee shall give prompt notice thereof to Lessor. On the next
date for the payment of rent, Lessee shall pay to Lessor the rent due on that
date plus the Stipulated Loss Value of the item or items of the Equipment with
respect to which the Total Loss has occurred and any other
7
sums due hereunder with respect to that Equipment (less any insurance proceeds
or condemnation award actually paid). Upon making such payment, this Lease and
the obligation to make future rental payments shall terminate solely with
respect to the Equipment or items thereof so paid for and (to the extent
applicable) Lessee shall become entitled thereto as is where is without
warranty, express or implied, with respect to any matter whatsoever. Lessor
shall deliver to Lessee a ▇▇▇▇ of sale transferring and assigning to Lessee
without recourse or warranty, all of Lessor's right, title and interest in and
to such Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of the Equipment or
any other matters. As used in this Lease, "Stipulated Loss Value" shall mean the
product of the Total Invoice Cost (designated on the appropriate Equipment
Schedule) of the Equipment and the applicable percentage factor set forth on the
Schedule of Stipulated Loss Values attached to the Equipment Schedule.
Stipulated Loss Value shall be determined as of the next date on which a payment
of rent is or would be due after a Total Loss or other termination of an
Equipment Schedule, after payment of any rent due on such date, and the
applicable percentage factor shall be that which is set forth with respect to
such rent payment. After payment of the final payment of rent due under the
original term of this Lease and during any renewal term thereof, Stipulated Loss
Value shall be determined as of the date of termination of such Equipment
Schedule (absent any renewal thereof) or, if during a renewal term, on the next
date on which a payment of rent is or would be due after a Total Loss or other
termination of such renewal term, after payment of any rent due on such date,
and the applicable percentage factor shall be the last percentage factor set
forth on the Schedule of Stipulated Loss Values attached to such Equipment
Schedule.
13. REDELIVERY. Upon the expiration or earlier termination of the term of any
Equipment Schedule (or of any renewal thereof, if applicable), Lessee shall, at
its own expense, return the Equipment to Lessor within ten (10) days (a) in the
same condition as when delivered to Lessee hereunder, ordinary wear and tear
resulting from proper use thereof excepted, (b) in such operating condition as
is capable of performing its originally intended use, (c) having been used,
operated, serviced and repaired in accordance with, and otherwise complying
with, Section 7 hereof, and (d) free and clear of all Liens whatsoever except
Liens resulting from claims against Lessor not relating to the ownership of such
Equipment. Lessee shall return the Equipment by delivering it to such place
within the Continental United States as Lessor shall specify. In addition to
Lessor's other rights and remedies hereunder, if the Equipment is not returned
in a timely fashion, or if repairs are necessary to place any Items of Equipment
in the condition required in this Section, Lessee shall continue to pay to
Lessor per diem rent at the last prevailing lease rate under the applicable
Equipment Schedule with respect to such items of Equipment, for the period of
delay in redelivery, or for the period of time reasonably necessary to
accomplish such repairs together with the cost of such repairs, as applicable.
Lessor's acceptance of such rent on account of such delay or repair does not
constitute a renewal of the term of the related Equipment Schedule or a waiver
of Lessor's right to prompt return of the Equipment in proper condition.
14. INDEMNITY. Lessee assumes and agrees to indemnify, defend and keep harmless
Lessor, and any assignee of Lessor's rights, obligations, title or interests
under any Equipment Schedule, its agents and employees ("Indemnitees"), from and
against any and all Claims (other than such as may directly and proximately
result from the negligence or willful misconduct of, such Indemnitees), by
paying (on an after-tax basis) or otherwise is charging same, when and as such
Claims shall become due. It is the express intention of both Lessor and Lessee,
that the indemnity provided for in this Section includes the agreement by Lessee
to indemnify the Indemnitees from the consequences of such Indemnitees' own
simple negligence, whether that negligence is the sole or concurring cause of
the Claims, and to further indemnify such Indemnitees with respect to Claims for
which the Indemnitees are strictly liable. Lessor shall give Lessee prompt
notice of any Claim hereby indemnified against and Lessee shall be entitled to
control the defense thereof, so long as no default or Default has occurred and
is then continuing; provided, however, that Lessor shall have the right to
approve defense counsel selected by Lessee. For the purposes of this Lease, the
term "Claims" shall mean all claims, allegations, ▇▇▇▇▇, judgments, good faith
settlements entered into, suits, actions, debts, obligations, damages (whether
incidental, consequential or direct), demands (for compensation,
indemnification, reimbursement or otherwise), losses, penalties, fines,
liabilities (including strict liability), charges that Lessor has incurred or
for which it is responsible, in the nature of interest, Liens, and costs
(including attorneys' fees and disbursements and any other legal or non-legal
expenses of investigation or defense of any Claim, whether or not such Claim is
ultimately defeated or enforcing the rights, remedies or indemnities provided
for hereunder, or otherwise available at law or equity to Lessor), of whatever
kind or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, by or against any person, arising on account of (a) any Lease
Document, or (b) the Equipment, or any part thereof, including the ordering,
acquisition, delivery, installation or rejection of the Equipment, the
possession, maintenance, use, condition, ownership or operation of any item of
Equipment, and by whomsoever owned, used or operated, during the term of any
Equipment Schedule with respect to that item of Equipment, the existence of
latent and other defects (whether or not discoverable by Lessor or Lessee) any
claim in tort for negligence or strict liability, and any claim for patent,
trademark or copyright infringement arising out of Lessor's ownership of the
Equipment, or the loss, damage, destruction, removal, return, surrender, sale or
other disposition of the Equipment, or any item thereof.
15. DEFAULT. (a) A default shall be deemed to have occurred hereunder and under
an Equipment Schedule ("Default") if (1) Lessee shall fail to make any payment
of rent hereunder or under an Equipment Schedule within ten (10) days after the
same shall have become due; or (2) Lessee shall fail to obtain and maintain the
insurance required herein; (3) Lessee shall fail to perform or observe any other
covenant, condition or agreement to be performed or observed by it under any
Lease Document and such failure shall continue unremedied for a period of thirty
(30) days after written notice thereof to Lessee by Lessor; or (4) Lessee shall
(i) be generally not paying its debts as they become due; or (ii) take action
for the purpose of invoking the protection of any bankruptcy or insolvency law,
or any such law is invoked against or with respect to Lessee or its property,
and any such petition filed against Lessee is not dismissed within sixty (60)
days; or (5) Lessee shall make or permit any unauthorized Lien against or
Equipment or transfer of, this Lease, an Equipment Schedule, the Equipment, or
any interest therein; or (6) any certificate, statement, representation,
warranty or audit contained herein or furnished with respect hereto by or on
behalf of Lessee proving to have been false in any material respect at the time
as of which the facts therein set forth were stated or certified, or having
omitted any substantial contingent or unliquidated liability or Claim against
Lessee; or (7) Lessee shall be in default under any (i) loan, lease, guaranty,
installment sale or other financing agreement or contract, of which Lessor, or
any of its affiliates, is a party or beneficiary, or (ii) material obligation
for borrowed money, for the deferred purchase price of property or any payment
under any lease agreement, and the applicable grace period with respect thereto
all have expired and such obligation shall have been declared to be in default;
or (8) Lessee shall have terminated its corporate existence, consolidated with,
merged into, or conveyed or leased substantially all of its assets as an
entirety to any person (such actions being referred to as an "Event"), unless
not less than sixty (60) days prior to such Event: (i) such person executes and
delivers to Lessor an agreement satisfactory in form and substance to Lessor, in
its sole discretion, containing such person's effective assumption, and its
agreement to pay, perform, comply with and otherwise be liable for, In a due and
punctual manner, all of Lessee's obligations having previously arisen, or then
or thereafter arising, under any and all of the Lease Documents; and (ii) Lessor
is satisfied as to the creditworthiness of such person, and as to such person's
conformance to the other standard criteria then used by Lessor for such
purposes; or (9) there occurs a default or anticipatory repudiation under any
guaranty executed in connection with this Lease; or (10) if Lessee is a publicly
held corporation and, as a result of or in connection with a material change in
the ownership of Lessee's capital stock, Lessee's Debt to
8
Tangible Net Worth equals or exceeds twice the ratio of Lessee's Debt to
Tangible Net Worth as of the date of this Lease, without the prior written
consent of Lessor. As used herein, "Debt" shall mean Lessee's total liabilities
which, in accordance with GAAP, would be included in the liability side of a
balance sheet; and "Tangible Net Worth" shall mean Lessee's tangible net worth
including the sum of the par or stated value of all outstanding capital stock,
surplus and undivided profits, less any amounts attributable to goodwill,
patents, copyrights, mailing lists, catalogs, trademarks, bond discount and
underwriting expenses, organization expense and other intangibles. Accounting
terms used herein shall be as defined, and all calculations hereunder shall be
made, in accordance with GAAP. (b) The occurrence of a Default with respect to
any Equipment Schedule shall, at the sole discretion of Lessor, constitute a
Default with respect to any or all Equipment Schedules to which it is then a
party. Notwithstanding anything set forth herein, Lessor may exercise all rights
and remedies hereunder independently with respect to each Equipment Schedule.
16. REMEDIES. Upon the occurrence of any Default under the provisions of Section
15 hereof, Lessor may, at its option, declare this Lease and such Equipment
Schedule to be in default. At any time after cancellation of an Equipment
Schedule or after declaration by Lessor that such Equipment Schedule is in
default, Lessor may, in addition to any other remedies provided herein or by
applicable law, exercise one or more of the remedies specified in the applicable
Equipment Schedule as Lessor in its sole discretion shall elect.
17. ASSIGNMENT. (a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (WHICH SHALL NOT
UNREASONABLY BE WITHHELD), EXCEPT IN ACCORDANCE WITH SECTION 15(a)(8) HEREOF
LESSEE WILL NOT ASSIGN, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR OBLIGATIONS
HEREUNDER OR UNDER ANY EQUIPMENT SCHEDULE, OR ITS LEASEHOLD INTEREST, SUBLET THE
EQUIP MENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO
COME INTO OR REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. No assignment or
sublease, whether authorized in this Section or in violation of the terms
hereof, shall relieve Lessee of its obligations, and Lessee shall remain
primarily liable, hereunder and under each Equipment Schedule. Any unpermitted
assignment, transfer, encumbrance, delegation or sublease by Lessee shall be
void ab initio. (b) Lessor may assign any or all of its rights, obligations,
title and interest hereunder, or the right to enter into any Equipment Schedule,
or may resell (through syndication, assignment, participation or placement) an
interest in any or all of the Equipment, this Lease or any Equipment Schedule.
Lessee agrees that it will pay all rent and other amounts payable under each
Equipment Schedule to the "Lessor" named therein; provided, however, if Lessee
receives written notice of an assignment from Lessor, Lessee will pay all rent
and other amounts payable under any assigned Equipment Schedule to such assignee
or as instructed by Lessor and such assignee. Each Equipment Schedule,
incorporating by reference the terms and conditions of this Lease, constitutes a
separate instrument of lease, and the "Lessor" named therein or its assignee
shall have all rights as "Lessor" thereunder separately exercisable by such
named Lessor or assignee as the case may be, exclusively and independently of
Lessor or any assignee with respect to other Equipment Schedules executed
pursuant hereto. Lessee agrees to confirm in writing receipt of any notice of
assignment, syndication, participation or placement, as reasonably may be
requested by Lessor or any such assignee or participant (collectively, the
"Assignee"). Lessee agrees not to assert against any such Assignee any defense,
setoff, recoupment, claim or counterclaim which Lessee has or may at any time
hereafter have against Lessor or any person other than such Assignee, for any
reason whatsoever, unless such Assignee has expressly assumed the obligations of
Lessor hereunder. Lessee will provide reasonable assistance to Lessor in
whatever manner necessary in order to permit Lessor to complete any resale,
syndication, assignment, participation or placement of the transaction
contemplated by this Lease. Lessee agrees that any such assignment shall not
materially change Lessee's duties or obligations under the Lease or any
Equipment Schedule nor materially increase Lessee's risks or burdens. Upon such
assignment and except as may otherwise be provided therein all references in
this Lease to Lessor shall include such assignee. (c) Subject always to the
foregoing, this Lease and each Equipment Schedule inure to the benefit of, and
are binding upon, the successors and assigns of the parties hereto and thereto,
as the case may be.
18. MISCELLANEOUS. (a) This Lease, the Riders annexed hereto, each Equipment
Schedule and any commitment letter between the parties, constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and shall not be rescinded, amended or modified in any manner except by
a document in writing executed by both parties. (b) Any provision of this Lease
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforce able such provision in any other jurisdiction. (c) The
representations, warranties and covenants of Lessee herein shall be deemed to be
continuing and to survive the execution and delivery of this Lease, each
Equipment Schedule and any other Lease Documents. Each execution by Lessee of an
Equipment Schedule shall be deemed a reaffirmation and warranty that there shall
have been no material adverse change in the business or financial condition of
Lessee from the date of execution hereof. With respect to each Equipment
Schedule, the obligations of Lessee under Sections 7, 8, 9,10, 13 and 14 hereof,
together with any of Lessee's obligations under the other provisions of this
Lease (as incorporated therein) which have accrued but not been fully satisfied,
performed or complied with prior to the cancellation or termination of such
Equipment Schedule, shall survive the cancellation or termination thereof to the
extent necessary for the full and complete performance of such obligations. (d)
Lessor represents and covenants to Lessee that Lessor has full authority to
enter into this Lease and any other Lease Documents to which it may become a
party, and so long as no default or Default occurs with respect to an Equipment
Schedule, neither Lessor nor any person authorized by Lessor shall interfere
with Lessee's right to peaceably and quietly possess and use the Equipment
during the term thereof, subject to the terms and provisions hereof. (e)
Expenses incurred by Lessor in connection with (1) the filing or recording of
real property waivers and Uniform Commercial Code statements, and (2) lien
search reports and copies of filings with respect to Lessee and/or the
Equipment, shall be for the account of Lessee and shall be payable by Lessee
upon demand. (f) If Lessee fails to perform any of its obligations hereunder
with respect to an Equipment Schedule, Lessor shall have the right, but shall
not be obligated, to effect such performance, and the amount of any out of
pocket and other reasonable expenses of Lessor incurred in connection with such
performance, together with interest thereon at the Late Charge Rate, shall be
payable by Lessee upon demand. Lessor's effecting such compliance shall not be a
waiver of Lessee's default. (g) Lessee irrevocably appoints Lessor as Lessee's
attorney-in-fact (which power shall be deemed coupled with an interest) to
execute, endorse and deliver any UCC statements and any documents and checks or
drafts relating to or received in payment for any loss or damage under the
policies of insurance required by the provisions of Section 11 hereof, but only
to the extent that the same relates to the Equipment. (h) LESSOR AND LESSEE
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND/OR
LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE.
LESSEE AUTHORIZES LESSOR TO FILE THIS PROVISION WITH THE CLERK OR JUDGE OF ANY
COURT HEARING ANY SUCH CLAIM. IT IS HEREBY AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST PARTIES TO
SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO THIS LEASE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE
BY THE PARTIES AND THE PARTIES HEREBY ACKNOWLEDGE THAT NO REPRESENTATIONS OF
FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR IN
9
ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. LESSOR AND LESSEE FURTHER ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS LEASE AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL,
AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. (i)
All notices (excluding ▇▇▇▇▇▇▇▇ and communications in the ordinary course of
business) hereunder shall be in writing, personally delivered, delivered by
overnight courier service, sent by facsimile transmission (with confirmation of
receipt), or sent by certified mail, return receipt requested, addressed to the
other party at its respective address stated below the signature of such party
or at such other address as such party shall from time to time designate in
writing to the other party; and shall be effective from the date of receipt. 0)
This Lease and all of the other Lease Documents shall not be effective unless
and until accepted by execution by an officer of Lessor at the address, in the
State of Maryland (the "State"), as set forth below the signature of Lessor.
THIS LEASE AND ALL OF THE OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE (WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES OF THE STATE), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE
EQUIPMENT. The parties agree that any action or proceeding arising out of or
relating to this Lease maybe commenced in any state or Federal court in the
State, and agree that a summons and complaint commencing an action or proceeding
in any such court shall be properly served and shall confer personal
jurisdiction if served personally or by certified mail to it at its address
herein below set forth, or as it may provide in writing from time to time, or as
otherwise provided under the laws of the State. (k) This Lease and all of the
other Lease Documents may be executed in any number of counterparts and by
different parties hereto or thereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together consist of but one and the same instrument; provided, however,
that to the extent that this Lease and/or the Equipment Schedule would
constitute chattel paper, as such term is defined in the Uniform Commercial Code
as in effect in any applicable jurisdiction, no security interest herein or
therein may be created through the transfer or possession of this Lease in and
of itself without the transfer or possession of the original of such Equipment
Schedule and incorporating the Lease by reference; and no security interest in
this Lease and an Equipment Schedule may be created by the transfer or
possession of any counterpart of such Equipment Schedule other than the original
thereof, which shall be identified as the document marked "Original" and all
other counterparts shall be marked "Duplicate".
19. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in
this Lease or in any of the Equipment Schedules have the following meanings: (1)
"applicable law" or "law": any law, rule, regulation, ordinance, order, code,
common law, interpretation, judgment, directive, decree, treaty, injunction,
writ, determination, award, permit or similar norm or decision of any
governmental authority; (2) "business day": any day, other than a Saturday,
Sunday, or legal holiday for commercial banks under the laws of the State; (3)
"UCC" or "Uniform Commercial Code": the Uniform Commercial Code as in effect in
the State or in any other applicable jurisdiction; and any reference to an
article (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such other applicable version of the
Uniform Commercial Code; (4) "governmental authority": any federal, state,
county, municipal, regional or other governmental authority, agency, board,
body, instrumentality or court, in each case, whether domestic or foreign; and
(5) "person": any individual, corporation, partnership, joint venture, or other
legal entity or a governmental authority, whether employed, hired, affiliated,
owned, contracted with, or otherwise related or unrelated to Lessee or Lessor.
(b) The following terms when used herein or in any of the Equipment Schedules
shall be construed as follows: "herein," "hereof," "hereunder," etc.: in, of,
under, etc. this Lease or such other Lease Document in which such term appears
(and not merely in, of, under, etc. the section or provision where the reference
occurs); "including": containing, embracing or involving all of the enumerated
items, but not limited to such items unless such term is followed by the words
"and limited to," or similar words; and "or": at least one, but not necessarily
only one, of the alternatives enumerated. Any defined term used in the singular
preceded by "any" indicates any number of the members of the relevant class. Any
Lease Document or other agreement or instrument referred to herein means such
agreement or instrument as supplemented and amended from time to time Any
reference to Lessor or Lessee shall include their permitted successors and
assigns. Any reference to a law shall also mean such law as amended, superseded
or replaced from time to time. Unless otherwise expressly provided herein to the
contrary, all actions that Lessee takes or is required to take under any Lease
Document shall be taken at Lessee's sole cost and expense, and all such costs
and expenses shall constitute Claims and be covered by Section 14 hereof. To the
extent Lessor is required to give its consent or approval with respect to any
matter, the reasonableness of Lessor's withholding of such consent shall be
determined based on the then existing circumstances; provided, that Lessor's
withholding of its consent shall be deemed reasonable for all purposes if (i)
the taking of the action that is the subject of such request, might result (in
Lessor's discretion), in (A) an impairment of Lessor's rights, title or
interests hereunder or under any Equipment Schedule or other Lease Document, or
to the Equipment, or (B) expose Lessor to any Claims, or (ii) to the extent
Lessee fails to provide promptly to Lessor any filings, certificates, opinions
or indemnities specified by Lessor to Lessee in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement
to be duly executed, under seal, as of the day and year first above set forth.
LASALLE NATIONAL LEASING CORPORATION 3C1 COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -------------------------[SEAL]
NAME: H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ . NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ .
------------------------------ -----------------------------
TITLE: SENIOR VICE PRESIDENT . TITLE: CFO, Secretary .
----------------------------- ----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ .
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ . ------------------------
------------------------- Federal Employer
Identification No.: ▇▇-▇▇▇▇▇▇▇ .
---------------
10
LASALLE NATIONAL LEASING CORPORATION
RIDER NO. 1
To and part of Master Lease Agreement dated as of the 18 day of June, 1999 (the
"Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
APPLICABILITY. This Rider shall be applicable solely with respect to items of
the Equipment described on Equipment Schedules designated as Series A (the
"Series A Equipment"); each reference herein to Equipment shall be deemed to
refer only to the Series A Equipment; and each reference herein to Equipment
Schedule shall be deemed to refer only to the Equipment Schedules designated as
Series A.
A. TERMINAL RENTAL ADJUSTMENT. It is presently anticipated that the fair
market value of the Equipment upon the expiration of the original lease term
relating thereto will be an amount equal to 25 percent of the Total Invoice Cost
of the Equipment (the "Estimated Residual Value"). Upon expiration of the
original lease term, Lessor will attempt to sell the Equipment. If the Net
Proceeds of Sale (as hereafter defined) is less than the Estimated Residual
Value, promptly upon demand Lessee shall pay to Lessor the amount of the
difference (not to exceed 12.35 percent of the Total Invoice Cost of the
Equipment). If the Net Proceeds of Sale exceeds the Estimated Residual Value,
the amount of the difference promptly shall be paid by Lessor to Lessee. If the
Equipment has not been sold on the expiration date of the original lease term
relating thereto, then the Net Proceeds of Sale shall be deemed to be zero; and
promptly upon demand Lessee shall pay to Lessor an amount equal to 12.35 percent
of the Total Invoice Cost of the Equipment. If Lessor hereafter shall sell the
Equipment, the Net Proceeds of Sale promptly shall be distributed as follows:
first, an amount equal to 12.65 percent of the Total Invoice Cost of the
Equipment shall be retained by Lessor (in addition to the amount previously paid
by Lessee to Lessor); and second, the balance (if any) promptly shall be paid by
Lessor to Lessee. Any such payment by either Lessee or Lessor shall be deemed to
be a Terminal Rental Adjustment with respect to the Equipment. As used herein,
"Net Proceeds of Sale" shall mean the gross selling price actually received by
Lessor less all (i) selling expenses incurred by Lessor, (ii) amounts which (if
not paid) would constitute a lien on the Equipment for which Lessee is
responsible under the Lease, and (iii) applicable sales or other transfer taxes
paid by Lessor.
As required by Section 7701(h) of the internal Revenue Code of 1986, as now or
hereafter amended, Lessee shall execute and deliver to Lessor the Certification
by Lessee in substantially the form attached hereto as Exhibit No. 1. Lessee
acknowledges that the Truth in Mileage Act of 1986 (and the regulations
promulgated thereunder) requires the lessee of motor vehicles (at the time such
motor vehicles are terminated from the lease) to provide a written disclosure to
the lessor regarding the mileage of such motor vehicles. Under this law, the
"failure to complete or providing false information may result in fines and or
imprisonment". Therefore, Lessee agrees to provide to Lessor (on a form provided
by Lessor) upon termination of a motor vehicle from the Lease the mileage
disclosure information required by the Federal regulations.
B. OPTION TO PURCHASE. Provided that Lessee is not then in Default, Lessee
shall have the option to purchase, upon the expiration of the term of this
Lease, or of any subsequent renewal term, if applicable, all but not less than
all of the Equipment subject to this Lease upon the following terms and
conditions: If Lessee desires to exercise this option it shall, at least two
hundred ten (210) days before expiration of the term of this Lease, give Lessor
written notice of its intention to exercise this option to purchase and shall
engage in negotiations with Lessor to determine the Purchase Price for the
Equipment. Not less than one hundred eighty (180) days before expiration of the
term of this Lease, Lessee shall give Lessor written notice of its election to
purchase on the terms mutually agreed upon during negotiations. Thereupon, at
the expiration of the term of this Lease, Lessee shall pay to Lessor in cash the
Purchase Price for the Equipment so purchased, determined as hereinafter
provided. Lessee's exercise of the purchase option contained herein shall
constitute a sale of the Equipment pursuant to Section A above and Lessee shall
be responsible for the performance of its obligations pursuant to Section A
above.
The Purchase Price of the Equipment shall be an amount equal to its then Fair
Market Value, together with all taxes and charges upon sale. For purposes of
this Section, "Fair Market Value" shall be deemed to be an amount equal to the
sale price obtainable in an arms' length transaction between a willing and
informed buyer and a willing and informed seller under no compulsion to sell
(and assuming that, as of the date of determination, the Equipment is in at
least the condition required by Section 13 of this Lease). If the parties are
unable to agree on the Fair Market Value of the Equipment, then Lessor and
Lessee shall at Lessee's expense obtain appraisal values from three independent
appraisers (one to be selected by Lessor, one by Lessee, and the other by the
two selected by Lessor and Lessee; each of whom must be associated with a
professional organization of equipment or personal property appraisers, such as
the American Society of Appraisers) and the average Fair Market Value as
determined by such appraisers shall be binding on the parties hereto.
Notwithstanding any election of Lessee to purchase, the provisions of this
Lease shall continue in full force and effect until the passage of ownership of
the Equipment upon the date of purchase. On the date of purchase, Lessor shall
deliver to Lessee a ▇▇▇▇ of sale transferring and assigning to Lessee, without
recourse or warranty, except (with respect to the status of title conveyed) in
respect of Lessor's acts, all of Lessor's right, title and interest in and to
the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of the Equipment or
any other matters.
LASALLE TIONAL LEASING CORPORATION 3C1 COMPLETE COMPLIANCE Corporation
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ [SEAL]
------------------------ -------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Senior Vice President CFO, Secretary
11
LASALLE NATIONAL LEASING CORPORATION
RIDER NO. 2
To and part of Master Lease Agreement dated as of the 18 day of June, 1999 (the
"Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
APPLICABILITY. This Rider shall be applicable solely with respect to items of
the Equipment described on Equipment Schedules designated as Series B (the
"Series B Equipment"); each reference herein to Equipment shall be deemed to
refer only to the Series B Equipment; and each reference herein to Equipment
Schedule shall be deemed to refer only to the Equipment Schedules designated as
Series B.
A. TERMINAL RENTAL ADJUSTMENT. It Is presently anticipated that the fair
market value of the Equipment upon the expiration of the original lease term
relating thereto will be an amount equal to 25 percent of the Total Invoice Cost
of the Equipment (the "Estimated Residual Value"). Upon expiration of the
original lease term, Lessor will attempt to sell the Equipment. If the Net
Proceeds of Sale (as hereafter defined) is less than the Estimated Residual
Value, promptly upon demand Lessee shall pay to Lessor the amount of the
difference (not to exceed 14.9 percent of the Total Invoice Cost of the
Equipment). If the Net Proceeds of Sale exceeds the Estimated Residual Value,
the amount of the difference promptly shall be paid by Lessor to Lessee. If the
Equipment has not been sold on the expiration date of the original lease term
relating thereto, then the Net Proceeds of Sale shall be deemed to be zero; and
promptly upon demand Lessee shall pay to Lessor an amount equal to 14.9 percent
of the Total Invoice Cost of the Equipment. !f Lessor thereafter shall sell the
Equipment, the Net Proceeds of Sale promptly shall be distributed as follows:
first, an amount equal to 10.1 percent of the Total Invoice Cost of the
Equipment shall be retained by Lessor (in addition to the amount previously paid
by Lessee to Lessor); and second, the balance (if any) promptly shall be paid by
Lessor to Lessee. Any such payment by either Lessee or Lessor shall be deemed to
be a Terminal Rental Adjustment with respect to the Equipment. As used herein,
"Net Proceeds of Sale" shall mean the gross selling price actually received by
Lessor less all (i) selling expenses incurred by Lessor, (ii) amounts which (if
not paid) would constitute a lien on the Equipment for which Lessee is
responsible under the Lease, and (iii) applicable sales or other transfer taxes
paid by Lessor.
As required by Section 7701(h) of the Internal Revenue Code of 1986, as now
or hereafter amended, Lessee shall execute and deliver to Lessor the
Certification by Lessee in substantially the form attached hereto as Exhibit No.
1. Lessee acknowledges that the Truth in Mileage Act of 1986 (and the
regulations promulgated thereunder) requires the lessee of motor vehicles (at
the time such motor vehicles are terminated from the lease) to provide a written
disclosure to the lessor regarding the mileage of such motor vehicles. Under
this law, the "failure to complete or providing false information may result in
fines and/or imprisonment". Therefore, Lessee agrees to provide to Lessor (on a
form provided by Lessor) upon termination of a motor vehicle from the Lease the
mileage disclosure information required by the Federal regulations.
B. OPTION TO PURCHASE Provided that Lessee is not then in Default, Lessee
shall have the option to purchase, upon the expiration of the term of this
Lease, or of any subsequent renewal term, if applicable, all but not less than
all of the Equipment subject to this Lease upon the following terms and
conditions: If Lessee desires to exercise this option it shall, at least two
hundred ten (210) days before expiration of the term of this Lease, give Lessor
written notice of its intention to exercise this option to purchase and shall
engage in negotiations with Lessor to determine the Purchase Price for the
Equipment. Not less than one hundred eighty (180) days before expiration of the
term of this Lease, Lessee shall give Lessor written notice of its election to
purchase on the terms mutually agreed upon during negotiations. Thereupon, at
the expiration of the term of this Lease, Lessee shall pay to Lessor in cash the
Purchase Price for the Equipment so purchased, determined as hereinafter
provided. Lessee's exercise of the purchase option contained herein shall
constitute a sale of the Equipment pursuant to Section A above and Lessee shall
be responsible for the performance of its obligations pursuant to Section A
above.
The Purchase Price of the Equipment shall be an amount equal to its then Fair
Market Value, together with all taxes and charges upon sale. For purposes of
this Section, "Fair Market Value" shall be deemed to be an amount equal to the
sale price obtainable in an arms' length transaction between a willing and
informed buyer and a willing and informed seller under no compulsion to sell
(and assuming that, as of the date of determination, the Equipment is in at
least the condition required by Section 13 of this Lease). If the parties are
unable to agree on the Fair Market Value of the Equipment, then Lessor and
Lessee shall at Lessee's expense obtain appraisal values from three independent
appraisers (one to be selected by Lessor, one by Lessee, and the other by the
two selected by Lessor and Lessee; each of whom must be associated with a
professional organization of equipment or personal property appraisers, such as
the American Society of Appraisers) and the average Fair Market Value as
determined by such appraisers shall be binding on the parties hereto.
Notwithstanding any election of Lessee to purchase, the provisions of this
Lease shall continue in full force and effect until the passage of ownership of
the Equipment upon the date of purchase. On the date of purchase, Lessor shall
deliver to Lessee a ▇▇▇▇ of sale transferring and assigning to Lessee, without
recourse or warranty, except (with respect to the status of title conveyed) in
respect of Lessor's acts, all of Lessor's right, title and interest in and to
the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of the Equipment or
any other matters.
LASALLE NATIONAL LEASING CORPORATION 3C1 COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
--------------------------- --------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
12
LASALLE NATIONAL LEASING CORPORATION
RIDER NO. 3
To and part of Master Lease Agreement dated as of the 18th day of June, 1999
(the "Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its Successors and
permitted assigns ( "Lessee").
A. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF LESSEE FOR SALE-LEASEBACK.
Lessee represents and warrants that: (1) The sale of those certain items of
equipment specified on the schedule attached to each Equipment ▇▇▇▇ of Sale
(collectively the "▇▇▇▇ of Sale") executed by Lessee, and the execution,
delivery and performance of the ▇▇▇▇ of Sale (a) have been duly authorized by
all necessary corporate action on the part of Lessee; (b) do not require the
consent of any stockholder, trustee or holders of any indebtedness of Lessee
except such as have been duly obtained; and (c) do not and will not contravene
any law, governmental rule, regulation or order now binding on Lessee, or the
charter or by-laws of Lessee, or contravene the provisions of, or constitute a
default under, or result in the creation of any lien or encumbrance upon the
property of Lessee under, any indenture, mortgage, contract or other agreement
to which Lessee is a party or by which it or its property is bound. (2) The ▇▇▇▇
of Sale transfers to Lessor valid title to the equipment described on the
schedule attached thereto free and clear of any and all encumbrances, liens,
charges or defects. Except for obtaining certificates of title with respect to
that portion of the Equipment consisting of motor vehicles, no filing or
recordation must be made, no notice must be given, and no other action must be
taken with respect to any state or local jurisdiction, or any person, in order
to preserve to Lessor all the rights transferred by the ▇▇▇▇ of Sale.
B. ADDITIONAL AUTHORIZATION. Lessor's obligations under the Lease are further
conditioned upon Lessor having received the ▇▇▇▇ of Sale and an opinion of
counsel for Lessee as to the matters set forth in paragraph A above.
LASALLE NATIONAL LEASING CORPORATION 3C1 COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
--------------------------- --------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
13
LASALLE NATIONAL LEASING CORPORATION
RIDER NO.4
To and part of Master Lease Agreement dated as of the 18 day of June 1999 (the
"Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
GUARANTOR. Lessor's obligations under the Lease are further conditioned upon
Lessor having received the following, in form and substance satisfactory to
Lessor: (1) the Equipment Lease Guaranty (the "Guaranty"), duly executed by
STERICYCLE, INC. (the "Guarantor"); (2) an opinion of counsel for Guarantor as
to each of the matters set forth in sub-parts (a)(1) and (2), (b) and (c) of
Section 4 of the Guaranty; and (3) a certificate of Guarantor's Secretary
certifying: (a) resolutions of Guarantor's Board of Directors duly authorizing
the undertaking to guarantee the performance of the obligations of Lessee under
the Lease, and (b) the incumbency and signature of the officers of Guarantor
authorized to execute the Guaranty.
LASALLE NATIONAL LEASING CORPORATION 3CI COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
--------------------------- --------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
14
LASALLE NATIONAL LEASING CORPORATION
RIDER NO.6
To and part of Master Lease Agreement dated as of the 18TH day of JUNE, 1999
(the "Lease") between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
1. As used herein, the following terms shall have the following meaning:
(a) "Adverse Environmental Condition": shall mean (i) the existence or the
continuation of the existence, of an Environmental Contamination
(including, without limitation, a sudden or non-sudden accidental or
non-accidental Environmental Contamination), of, or exposure to, any
substance, chemical, material, pollutant, Hazardous Substance, 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 Environmental Law,
permits or licenses of, by or from any governmental authority, agency or
court relating to environmental matters connected with any of the
Equipment.
(b) "Affiliate" shall mean, with respect to any given Person, 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) "Environmental Claim" shall mean 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
affects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
(d) "Environmental Contamination" shall mean any actual or threatened
release, spill, emission, leaking, pumping, injection, presence,
deposit, abandonment, 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
Hazardous Substance or other substance through or in the air, soil,
surface water, groundwater or property.
(e) "Environmental Law" shall mean any present or future federal, foreign,
state or local law, ordinance, order, rule or regulation and all
judicial, administrative and regulatory decrees, judgments and orders,
pertaining to health, industrial hygiene, the use, disposal or
transportation of Hazardous Substances, Environmental Contamination, or
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.), the Occupational Safety and Health Act (19 U.S.C. Section 651 et
seq.), the Noise Control Act of 1972 (42 U.S.C. Section 4901 et seq.),
and the Hazardous and Solid Waste Amendments (42 U.S.C. Section 2601 et
seq.), as these laws have been or may be amended or supplemented, and
any successor thereto, and any analogous foreign, state or local
statutes, and the rules, regulations and orders promulgated pursuant
thereto.
(f) "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.
(g) "Hazardous Substances" shall mean and include hazardous substances as
defined in CERCLA; oil of any kind, petroleum products and their
by-products, including, but not limited to, sludge or residue; asbestos
containing materials; polychlorinated biphenyls; any and all other
hazardous or toxic substances; hazardous waste, as defined in CERCLA;
medical waste; infectious waste; those substances listed in the United
States Department of Transportation Table (49 C.F.R. 172.101);
explosives; radioactive materials; and all other pollutants,
contaminants and other substances regulated or controlled by the
Environmental Laws and any other substance that requires special
handling in its collection, storage, treatment or disposal under the
Environmental Laws.
(h) "Person" shall mean any individual, partnership, corporation, trust,
unincorporated organization, government or department or agency thereof
and any other entity
2. Lessee hereby represents, warrants and covenants that: (a) it has conducted,
and will continue to conduct its business operations, and throughout the
term of the Lease will use the Equipment, so as to comply with all
Environmental Laws; (b) as of the date hereof, and as of the date of
execution of each Equipment Schedule, except as have been previously
disclosed in writing by Lessee to Lessor, there are no Hazardous Substances
generated, treated, handled, stored, transported, discharged, emitted,
released or otherwise disposed of in connection with Lessee's use of the
Equipment; and (c) Lessee has, and throughout the term of the Lease will
continue to have in full force and effect all federal, state and local
licenses, permits, orders and approvals required to operate the Equipment in
compliance with all Environmental Laws.
15
3. Lessee agrees that if required to return the Equipment or any item thereof
to Lessor or Lessor's agents, Lessee shall return such Equipment free from
all Hazardous Substances and otherwise fully in compliance with all
Environmental Laws.
4. Lessee shall fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless Lessor and its Affiliates, and their successors and
assigns, directors, officers, employees and agents, from and against any
Environmental Claim or Environmental Loss.
5. The provisions of this Rider shall survive any expiration or termination
of the Lease.
LASALLE NATIONAL LEASING CORPORATION 3CI COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
--------------------------- --------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
16
LASALLE NATIONAL LEASING CORPORATION
RIDER NO. 7
To and part of Master Lease Agreement dated as of the 18TH day of JUNE, 1999
(the "Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION, its successors and
permitted assigns ("Lessee").
APPLICABILITY. This Rider shall be applicable solely with respect to items of
the Equipment described on Equipment Schedules designated as Series C (the
"Series C Equipment"); each reference herein to Equipment shall be deemed to
refer only to the Series C Equipment; and each reference herein to Equipment
Schedule shall be deemed to refer only to the Equipment Schedules designated as
Series C.
TERMINATION RENTAL PREMIUM. Upon the expiration of the term or of any renewal
term (if applicable) of this Lease, Lessee promptly shall pay to Lessor without
notice or demand therefor and together with all other amounts then due and
payable hereunder, in cash, a Termination Rental Premium of One Dollar ($1.00).
Upon receipt by Lessor of the Termination Rental Premium, Lessor shall deliver
to Lessee a ▇▇▇▇ of sale transferring and assigning to Lessee without recourse
or warranty, except (with respect to the status of title conveyed) in respect of
Lessor's acts, all of Lessor's right, title and interest in and to the
Equipment. Lessor shall not be required to make and may specifically disclaim
any representation or warranty as to the condition of the Equipment or any other
matters.
LASALLE NATIONAL LEASING CORPORATION 3CI COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
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H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
17
LASALLE NATIONAL LEASING CORPORATION
RIDER NO. 8
To and part of Equipment Lease Agreement dated as of the 18th day of June, 1999
(the "Lease"), between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns ("Lessor"), and 3C1 COMPLETE COMPLIANCE CORPORATION ("Lessee").
RETURN PROVISIONS: In addition to the provisions of Section 13 of this Lease,
and provided that Lessee has not elected to exercise its option to purchase the
Equipment, Lessee shall, at its expense:
(1) ensure all Equipment and equipment operations conform to all applicable
local, state, and Federal laws, health and safety guidelines. Lessee will keep
all licenses and operating certificates required for operation of the Equipment
current during the term of the Lease. Lessee will at all times use the Equipment
in compliance with all applicable laws and regulations of any governmental,
local and regulatory agency;
(2) provide safe, secure storage for the Equipment for ninety (90) days
after expiration or earlier termination of the Lease at not more than two (2)
locations selected by Lessor;
(3) take such action as may be required so that, upon return, each unit of
Equipment must meet its manufacturer's specifications for performance under
full-rated loads, as confirmed through testing using a chassis dynamometer, and
the following conditions:
(a) Tires: All tires shall be of the same type (original size) and
manufacturer (i.e. matched) and have a minimum of fifty (50) percent
remaining tread on original or recapped casings without flat or bald spots,
dry rot, exposed cord or cuts in sidewall. The front tires will not be
recaps;
(b) General Condition: Upon return, there must be no structural or
mechanical damage. All rust or corrosion must be treated in a manner
consistent with standard industry practices. All Equipment must have a good
overall appearance and no material damage. The Equipment shall be cleaned,
de-contaminated (internal and external), with no missing or damaged parts.
Upon return, all commercial logos, advertising, graffiti, insignias and
lettering shall be removed and repaired in a workmanlike manner so as to
not damage the Equipment. Manufacturer's identity plates and markings shall
not be removed. With respect to each unit, the total cost of necessary
repairs for damage or other related costs necessary to place the Equipment
in such condition as to be in compliance with this Lease may not exceed
$150.00;
(c) Documents and Records: Written records of all maintenance and
repair work shall be kept throughout the term of the transaction. A copy
shall be provided to Lessor upon request during the term of the Lease, or
at Lease termination. All maintenance records, maintenance record jackets,
repair jackets, repair orders, license plates, registration certificates
and all other similar documents, in their entirety, must be returned to
Lessor;
(d) Brakes: Brake drums and linings shall not be cracked and shall not
exceed manufacturers' recommended wear limits. Brake linings shall have at
least fifty (50) percent remaining wear;
(e) Maintenance: Lessee shall follow the manufacturer's recommended
maintenance and service schedule, as required to validate any warranty, and
at Lessee's sole cost and expense. Any maintenance or repair work shall
comply with the guidelines and procedures as specified by the manufacturers
of the equipment and in accordance with standards in the industry. Lessee
will use only original manufacturer's or approved replacement parts and
components in the performance or any maintenance and repair of the
Equipment. Lessee will at all times maintain the Equipment in good
operational condition and appearance, and shall not discriminate such
maintenance between owned or leased equipment;
(f) Use: Lessee guarantees that the Equipment will not be or have been
loaded beyond the rated capacity as certified by the manufacturer at any
time during the Lease term. Lessee will not discriminate in the use of the
Equipment from any other similar equipment in its fleet; and
(g) Alterations: Lessee will not modify the Equipment without the
prior written approval of Lessor. In any event, Lessee will not make any
modifications or alterations that would impair the Equipment's use, value,
marketability or manufacturer's warranty and recommendations. Lessee will
not make any alterations to the Equipment that would damage or restrict the
use of the Equipment from its initial use and design and that cannot be
removed without damage to the unit. Changes, modifications or additions to
the Equipment mandated by Federal or state authorities will be completed by
Lessee and become property of Lessor; and
(4) prior to any return of the Equipment, an in-depth physical inspection
will be performed by a manufacturer's service representative(s). Any part,
component or function found not to be within the manufacturer's published or
recommended specifications, including but not limited to transmissions,
clutches, drive trains, and rear axles, will be replaced or repaired to meet
those specifications. Lessee shall obtain written certification from the
manufacturers or their authorized representative that the Equipment has been
returned in accordance with the terms set forth herein.
LASALLE NATIONAL LEASING CORPORATION 3CI COMPLETE COMPLIANCE CORPORATION
Lessor Lessee
By: /s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SEAL] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
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H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SENIOR VICE PRESIDENT CFO, Secretary
