EXHIBIT 10.13
MASTER LEASE AGREEMENT
This MASTER LEASE AGREEMENT, dated as of the 4th day of June, 1998 ("Lease
Agreement") is made at Boston, Massachusetts by and between BancBoston
Leasing Inc. ("Lessor"), a Massachusetts corporation with its principal place
of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and Union
Tools, Inc. ("Lessee"), a Delaware with its principal place of business at
000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000-0000.
IN CONSIDERATION OF the mutual promises and covenants contained herein, Lessor
and Lessee hereby agree as follows:
1. Property Leased. At the request of Lessee and subject to the terms
and conditions of this Lease Agreement, Lessor shall lease to Lessee and
Lessee shall lease from Lessor such personal property ("Equipment") as may be
mutually agreed upon by Lessor and Lessee. The Equipment shall be selected
by or ordered at the request of Lessee, identified in one or more equipment
schedules substantially in the form of Exhibit A attached hereto ("Equipment
Schedule") and accepted by Lessee in one or more certificates of acceptance
("Certificate of Acceptance") in the form of Exhibit B attached hereto. Each
Equipment Schedule executed by Lessor and Lessee and each Certificate of
Acceptance executed by Lessee shall constitute a part of this Lease Agreement.
2. Certain Definitions.
2.1 The "Acquisition Cost" shall mean the total cost of the Equipment
paid by Lessor as set forth in the applicable Equipment Schedule.
2.2 The "Commencement Date" shall mean the date on which the Equipment
identified in the applicable Equipment Schedule is accepted and placed in
service by Lessee under this Lease Agreement. Each Commencement Date shall
be evidenced by the Certificate of Acceptance applicable to such Equipment
Schedule.
2.3 The "Rent Start Date" shall mean either (i) the first day of the
month following the month in which the Commencement Date occurs or (ii) the
Commencement Date, if the Commencement Date occurs on the first day of the
month.
2.4 The "Monthly Rent" shall mean the amount set forth in the
applicable Equipment Schedule as Monthly Rent for the Equipment identified on
such Equipment Schedule.
2.5 The "Daily Rent" shall mean one-thirtieth (1/30) of the Monthly
Rent.
2.6 The words "herein", "hereof", and "hereunder" shall refer to this
Lease Agreement as a whole and not to any particular section. All other
capitalized terms defined in this Lease Agreement shall have the meanings
assigned thereto.
3. Initial Term of Lease; Payment of Rent.
3.1 The term of lease for the Equipment ("Initial Term") shall begin on
the Commencement Date set forth in the applicable Certificate of Acceptance
and shall continue during and until the expiration of the number of full
calendar months set forth in the applicable Equipment Schedule, measured from
the Rent Start Date. The Initial Term may not be cancelled or terminated
except as set forth in Section 10.2 below.
3.2 At the expiration of the Initial Term, Lessor and Lessee may extend
the lease of the Equipment for any period as they may agree upon in writing
("Extended Term") at the then fair market rental value of the Equipment, as
determined in good faith by Lessor.
3.3 Aggregate Daily Rent shall be due and payable by Lessee on the Rent
Start Date in an amount equal to the Daily Rent multiplied by the actual number
of days elapsed from, and including, the Commencement Date to, but excluding,
the Rent Start Date. The Monthly Rent shall be due and payable on the Rent
Start Date and, thereafter on the first day of each month of the Initial Term or
any Extended Term. All Daily Rents and Monthly Rents shall be paid to Lessor at
its office in Boston, Massachusetts.
4. Acceptance of Equipment; Exclusion of Warranties.
4.1 Lessee shall signify its acceptance of the Equipment identified in the
applicable Equipment Schedule by promptly executing and delivering to Lessor a
Certificate of Acceptance. Lessee acknowledges that its execution and delivery
of the Certificate of Acceptance shall conclusively establish, as between Lessor
and Lessee, that the Equipment has been inspected by Lessee, is in good repair
and working order, is of the design, manufacture and capacity selected by
Lessee, and is accepted by Lessee under this Lease Agreement.
4.2 In the event the Equipment is ordered by Lessor from a manufacturer or
supplier at the request of Lessee, Lessor shall not be required to pay the
Acquisition Cost for such Equipment unless and until the applicable Certificate
of Acceptance has been received by Lessor. Lessee hereby agrees to indemnify,
defend and hold Lessor harmless from any liability to any manufacturer or
supplier arising from the failure of Lessee to lease any Equipment which is
ordered by Lessor at the request of Lessee or for which Lessor has assumed an
obligation to purchase.
4.3 Lessor leases the Equipment to Lessee and Lessee leases the Equipment
from Lessor "AS IS" and "WITH ALL FAULTS". Lessee hereby acknowledges that (i)
Lessor is not a manufacturer, supplier or dealer of such Equipment nor an agent
thereof; and (ii) LESSOR HAS NOT MADE, DOES NOT MAKE, AND HEREBY DISCLAIMS ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
EQUIPMENT INCLUDING, BUT NOT LIMITED TO, ITS DESIGN, CAPACITY, CONDITION,
MERCHANTABILITY, OR FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE. Lessee
further acknowledges that Lessor is not responsible for any repairs,
maintenance, service, latent or other defects in the Equipment or in the
operation thereof, or for compliance of any Equipment with requirements of any
laws, ordinances, governmental rules or regulations including, but not limited
to, laws with respect to environmental matters, patent, trademark, copyright or
trade secret infringement, or for any direct or consequential damages arising
out of the use of or inability to use the Equipment.
4.4 Provided no Event of Default, as defined in Section 16 below, has
occurred and is continuing, Lessor agrees to cooperate with Lessee, at the sole
cost and expense of Lessee, in making any claim against a manufacturer or
supplier of the Equipment arising from a defect in such Equipment. At the
request of Lessee, Lessor shall assign to Lessee all warranties on the Equipment
available from any manufacturer or supplier to the full extent permitted by the
terms of such warranties and by applicable law.
5. Ownership; Inspection; Maintenance and Use.
5.1 The Equipment shall at all times be the sole and exclusive property of
Lessor. Any Equipment subject to titling and registration laws shall be titled
and registered by Lessee on behalf of and in the name of Lessor at the sole cost
and expense of Lessee. Lessee shall cooperate with and provide Lessor with any
information or documents necessary for titling and registration of the
Equipment. Upon the request of Lessor, Lessee shall execute any documents or
instruments which may be necessary or appropriate to confirm, to record or to
give notice of the ownership of the Equipment by Lessor including, but not
limited to, financing statements under the Uniform Commercial Code. Lessee, at
the request of Lessor, shall affix to the Equipment, in a conspicuous place, any
label, plaque or other insignia supplied by Lessor designating the ownership of
the Equipment by Lessor.
5.2 The Equipment shall be located at the address specified in the
applicable Equipment Schedule and shall not be removed therefrom without the
prior written consent of Lessor. Lessor, its agents or employees shall have the
right to enter the premises of Lessee, upon reasonable notice and during normal
business hours, for the purpose of inspecting the Equipment.
5.3 Lessee shall pay all costs, expenses, fees and charges whatsoever
incurred in connection with the use and operation of the Equipment. Lessee
shall, at all times and at its own expense, keep the Equipment in good repair
and working order, reasonable wear and tear excepted. Any maintenance contract
required by a manufacturer or supplier for the care and upkeep of the Equipment
shall be entered into by Lessee at its sole cost and expense. Lessee shall
permit the use and operation of the Equipment only by personnel authorized by
Lessee and shall comply with all laws, ordinances or governmental rules and
regulations relating to the use and operation of the Equipment.
6. Alterations and Modifications. Lessee may make, or cause to be made
on its behalf, any improvement, modification or addition to the Equipment with
the prior written consent of Lessor, provided, however, that such improvement,
modification or addition is readily removable without causing damage to or
impairment of the functional effectiveness of the Equipment. To the extent that
such improvement, modification or addition is not so removable, it shall
immediately become the property of Lessor and thereupon shall be considered
Equipment for all purposes of this Lease Agreement.
7. Quiet Enjoyment; No Defense, Set-Offs or Counterclaims.
7.1 Provided no Event of Default, as defined in Section 16 below, has
occurred and is continuing, Lessee shall have the quiet enjoyment and use of the
Equipment in the ordinary course of its business during the Initial Term or any
Extended Term without interruption by Lessor or any person or entity claiming
through or under Lessor.
7.2 Lessee acknowledges and agrees that ANY DAMAGE TO OR LOSS,
DESTRUCTION, OR UNFITNESS OF, OR DEFECT IN THE EQUIPMENT, OR THE INABILITY OF
LESSEE TO USE THE EQUIPMENT FOR ANY REASON WHATSOEVER, SHALL NOT (i) GIVE RISE
TO ANY DEFENSE, COUNTERCLAIM, OR RIGHT OF SET-OFF AGAINST LESSOR, OR (ii) PERMIT
ANY ABATEMENT OR RECOUPMENT OF, OR REDUCTION IN DAILY OR MONTHLY RENT, OR (iii)
RELIEVE LESSEE OF THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AGREEMENT
INCLUDING, BUT NOT LIMITED TO, ITS OBLIGATION TO PAY THE FULL AMOUNT OF DAILY
RENT AND MONTHLY RENT, WHICH OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL, unless
and until this Lease Agreement is terminated with respect to such Equipment in
accordance with the provisions of Section 10.2 below. Any claim that Lessee may
have which arises from a defect in or deficiency of the Equipment shall be
brought solely against the manufacturer or supplier of the Equipment and Lessee
shall, notwithstanding any such claim, continue to pay Lessor all amounts due
and to become due under this Lease Agreement.
8. Adverse Claims and Interests.
8.1 Except for any liens, claims, mortgages, pledges, encumbrances or
security interests created by Lessor, Lessee shall keep the Equipment, at all
times, free and clear from all liens, claims, mortgages, pledges, encumbrances
and security interests and from all levies, seizures and attachments. Without
limitation of the covenants and obligations of Lessee set forth in the preceding
sentence, Lessee shall immediately notify Lessor in writing of the imposition of
any prohibited lien, claim, levy or attachment on or seizure of the Equipment at
which time Lessee shall provide Lessor with all relevant information in
connection therewith.
8.2 Lessee agrees that the Equipment shall be and at all times shall
remain personal property. Accordingly, Lessee shall take such steps as may be
necessary to prevent any person from acquiring, having or retaining any rights
in or to the Equipment by reason of its being affixed or attached to real
property.
9. Indemnities; Payment of Taxes.
9.1 Lessee hereby agrees to indemnify, defend and hold harmless Lessor,
its agents, employees, successors and assigns from and against any and all
claims, actions, suits, proceedings, costs, expenses, damages and liabilities
whatsoever arising out of or in connection with the manufacture, ordering,
selection, specifications, availability, delivery, titling, registration,
rejection, installation, possession, maintenance, ownership, use, leasing,
operation or return of the Equipment including, but not limited to, any claim or
demand based upon any STRICT OR ABSOLUTE LIABILITY IN TORT and upon any
infringement or alleged infringement of any patent, trademark, trade secret,
license,
copyright or otherwise. All costs and expenses incurred by Lessor in connection
with any of the foregoing including, but not limited to, reasonable legal fees,
shall be paid by Lessee on demand.
9.2 Lessee hereby agrees to indemnify, defend and hold Lessor harmless
against all Federal, state and local taxes, assessments, licenses, withholdings,
levies, imposts, duties, assessments, excise taxes, registration fees and other
governmental fees and charges whatsoever, which are imposed, assessed or levied
on or with respect to the Equipment or its use or related in any way to this
Lease Agreement ("Tax Assessments") except for taxes on or measured by the net
income of Lessor determined substantially in the same manner as under the
Internal Revenue Code of 1986, as amended. Lessee shall file all returns,
reports or other such documents required in connection with the Tax Assessments
and shall provide Lessor with copies thereof. If, under local law or custom,
Lessee is not authorized to make the filings required by a taxing authority,
Lessee shall notify Lessor in writing and Lessor shall thereupon file such
returns, reports or documents. Without limiting any of the foregoing, Lessee
shall indemnity, defend and hold Lessor harmless from all penalties, fines,
interest payments, claims and expenses including, but not limited to, reasonable
legal fees, arising from any failure of Lessee to comply with the requirements
of this Section 9.2.
9.3 The obligations and indemnities of Lessee under this Section 9 for
events occurring or arising during the Initial Term or any Extended Term shall
continue in full force and effect, notwithstanding the expiration or other
termination of this Lease Agreement.
10. Risk of Loss; Loss of Equipment.
10.1 Lessee hereby assumes and shall bear the entire risk of loss for
theft, damage, seizure, condemnation, destruction or other injury whatsoever to
the Equipment from any and every cause whatsoever. Such risk of loss shall be
deemed to have been assumed by Lessee from and after such risk passes from the
manufacturer or supplier by agreement or pursuant to applicable law.
10.2 In the event of any loss, seizure, condemnation or destruction of the
Equipment or damage to the Equipment which cannot be repaired by Lessee, Lessee
shall immediately notify Lessor in writing. Within thirty (30) days of such
notice, during which time Lessee shall continue to pay Monthly Rent, Lessee
shall, at the option of Lessor, either (i) replace the Equipment with equipment
of the same type and manufacture and in good repair, condition and working
order, transfer title to such equipment to Lessor free and clear of all liens,
claims and encumbrances, whereupon such equipment shall be deemed Equipment for
all purposes of this Lease Agreement, or (ii) pay to Lessor an amount equal to
the present value of both the aggregate of the remaining unpaid Monthly Rents
and the anticipated residual value of the Equipment plus any other costs
actually incurred by Lessor. Lessor and Lessee agree that the residual value of
the Equipment at the expiration of the Initial Term is reasonably anticipated to
be not less than twenty (20) percent of the Acquisition Cost of the Equipment.
The present value shall be determined by discounting the aggregate of the
remaining unpaid Monthly Rents and the anticipated residual value of the
Equipment to the date of payment by Lessee at the rate of five (5) percent per
annum. When and as requested by Lessor, Lessee shall also pay to Lessor amounts
due pursuant to Section 18 below, if any, arising as a result of the loss,
seizure, replacement, condemnation or destruction of the Equipment. Any
insurance or condemnation proceeds received by Lessor shall be credited to the
obligation of Lessee under this Section 10.2 and the remainder of such proceeds,
if any, shall be paid to Lessee by Lessor in full compensation for the loss of
the leasehold interest in the Equipment by Lessee.
10.3 Upon any replacement of or payment for the Equipment as provided in
Section 10.2 above, this Lease Agreement shall terminate only with respect to
the Equipment so replaced or paid for, and Lessor shall transfer to Lessee title
only to such Equipment "AS IS", "WITH ALL FAULTS", and WITH NO WARRANTIES
WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE.
Lessee shall pay any sales or use taxes due on such transfer.
11. Insurance.
11.1 Lessee shall keep the Equipment insured against all risks of loss or
damage from every cause whatsoever occurring during the Initial Term, or any
Extended Term for an amount not less than the higher of the full replacement
value of the Equipment or the aggregate of unpaid Daily Rent and Monthly Rent
for the balance of the Initial Term, or the Extended Term. Lessee shall also
carry public liability insurance, both personal injury and property damage,
covering the Equipment, and Lessee shall be liable for any deductible portions
of all required insurance.
11.2 All insurance required under this Section 11 shall name Lessor as
additional insured and loss payee. Such insurance shall also be with such
insurers and shall be in such forms and amounts as are satisfactory to Lessor.
All applicable policies shall provide that no act, omission or breach of
warranty by Lessee shall give rise to any defense against payment of the
insurance proceeds to Lessor. Lessee shall pay the premiums for such insurance
and, at the request of Lessor, deliver to Lessor duplicates of such policies or
other evidence satisfactory to Lessor of such insurance coverage. In any event,
Lessee shall provide Lessor with endorsements upon the policies issued by the
insurers which evidence the existence of insurance coverage required by this
Section 11 and by which the insurers agree to give Lessor written notice at
least twenty (20) days prior to the effective date of any expiration,
modification, reduction, termination or cancellation of any such policies.
11.3 The proceeds of insurance required under this Section 11 and payable
as a result of loss or damage to the Equipment shall be applied as set forth in
Section 10.2 above. Upon the occurrence of an Event of Default as defined in
Section 16 below, Lessee hereby irrevocably appoints Lessor as its
attorney-in-fact, which power shall be deemed coupled with an interest, to make
claim for, receive payment of, execute and endorse all documents, checks or
drafts received in payment for loss or damage under any insurance policies
required by this Section 11.
11.4 Notwithstanding anything herein, Lessor shall not be under any duty to
examine any evidence of insurance furnished hereunder, or to ascertain the
existence of any policy or coverage, or to advise Lessee of any failure to
comply with the provisions of this Section 11.
12. Surrender To Lessor. Immediately upon the expiration of the Initial
Term or any Extended Term or at any other termination of this Lease Agreement,
Lessee shall surrender the Equipment to Lessor in good repair and working order,
reasonable wear and tear excepted, by assembling and delivering the Equipment,
ready for shipment, to a place or carrier, as Lessor may designate, within the
state in which the Equipment was originally delivered to Lessee or to which the
Equipment was thereafter moved with the written consent of Lessor. All costs of
removal, assembly, packing and delivery of such Equipment to the place
designated by Lessor shall be borne by Lessee.
13. Fair Market Value Purchase Option. Lessor hereby grants to Lessee
the option to purchase all, but not less than all, Equipment set forth on any
Equipment Schedule at the expiration of the applicable Initial Term or
Extended Term. Any such purchase shall be for cash in an amount equal to the
then fair market value of such Equipment, as determined in good faith by
Lessor. This purchase option may be exercised by Lessee, provided that no
Event of Default, as defined in Section 16 below, has occurred and is
continuing. Lessee shall notify Lessor in writing of its intention to
exercise its purchase option at least thirty (30) days prior to the
expiration of the Initial Term or any Extended Term. Upon payment of the
fair market value by Lessee to Lessor, Lessor shall transfer title to the
Equipment to Lessee "AS IS", "WITH ALL FAULTS", and WITH NO WARRANTIES
WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY PARTICULAR
PURPOSE.
14. Financial Statements. Lessee shall annually, within ninety (90) days
after the close of the fiscal year for Lessee, furnish to Lessor financial
statements of Lessee, including a balance sheet as of the close of such year and
statements of income and retained earnings for such year, prepared in accordance
with generally accepted accounting principles, consistently applied from year to
year, and certified by independent public accountants for Lessee. If requested
by Lessor, Lessee shall also provide quarterly financial statements of Lessee,
similarly prepared for each of the first three quarters of each fiscal year,
certified (subject to normal year-end audit adjustments) by the chief financial
officer of Lessee and furnished to Lessor within sixty (60) days following the
end of the quarter, and such other financial information as may be reasonably
requested by Lessor.
15. Delayed Payment Charge. Lessee shall pay to Lessor interest upon the
amount of any Daily Rent, Monthly Rent or other sums not paid by Lessee when due
and owing under this Lease Agreement, from the due date thereof until
paid, at the rate of one and one half (1 1/2) percent per month, but if such
rate violates applicable law, then the maximum rate of interest allowed by such
law.
16. Default.
16.1 The occurrence of any of the following events shall constitute an
event of default ("Event of Default") under this Lease Agreement.
(a) Lessee fails to pay any Daily Rent or any Monthly Rent when due and such
failure to pay continues for ten (10) consecutive days; or
(b) Lessee fails to pay any other sum required hereunder, and such failure
continues for a period of ten (10) days following written notice from Lessor; or
(c) Lessee fails to maintain the insurance as required by Section 11 above and
such failure continues for ten (10) days after written notice from Lessor; or
(d) Lessee violates or fails to perform any other term, covenant or condition
of this Lease Agreement or any other document, agreement or instrument executed
pursuant hereto or in connection herewith, which failure is not cured within
thirty (30) days after written notice from Lessor; or
(e) Lessee ceases to exist or terminates its independent operations by reason
of any discontinuance, dissolution, liquidation, merger, sale of substantially
all of its assets, or otherwise ceases doing business as a going concern; or
(f) Lessee (i) applies for or consents to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or similar official
for itself or for all or a substantial part of its property, (ii) is generally
not paying its debts as such debts become due, (iii) makes a general assignment
for the benefit of its creditors, (iv) commences a voluntary case under the
United States Bankruptcy Code, as now or hereafter in effect, seeking
liquidation, reorganization or other relief with respect to itself or its debts,
(v) files a petition seeking to take advantage of any other law providing for
the relief of debtors, (vi) takes any action under the laws of its jurisdiction
of incorporation or organization similar to any of the foregoing, or (vii) takes
any corporate action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case is commenced, without the application or consent of
Lessee, in any court of competent jurisdiction, seeking (i) the liquidation,
reorganization, dissolution, winding up of Lessee or composition or readjustment
of the debts of Lessee, (ii) the appointment of a trustee, receiver, custodian,
liquidator or similar official for Lessee or for all or any substantial part of
its assets, or (iii) similar relief with respect to Lessee under any law
providing for the relief of debtors; or an order for relief is entered with
respect to Lessee in an involuntary case under the United States Bankruptcy
Code, as now or hereafter in effect, or an action under the laws of the
jurisdiction of incorporation or organization of Lessee, similar to any of the
foregoing, is taken with respect to Lessee without its application or consent;
or
(h) Lessee makes any representation or warranty herein or in any statement or
certificate at any time given in writing pursuant to or in connection with this
Lease Agreement, which is false or misleading in any material respect; or
(i) Lessee defaults under any promissory note, credit agreement, loan
agreement, conditional sales contract, guaranty, lease, indenture, bond,
debenture or other material obligation whatsoever, and a party thereto or a
holder thereof is entitled to accelerate the obligations of Lessee thereunder;
or Lessee defaults in meeting any of its trade, tax or other current obligations
as they mature, unless such obligations are being contested diligently and in
good faith; or
(j) Any party to any guaranty, letter of credit, subordination or credit
agreement or other undertaking, given for the benefit of Lessor and obtained in
connection with this Lease Agreement, breaches, fails to continue, contests, or
purports to terminate or to disclaim such guaranty, letter of credit,
subordination or credit agreement or other undertaking; or such guaranty, letter
of credit, subordination agreement or other undertaking becomes unenforceable;
or a guarantor of this Lease Agreement shall die, cease to exist or terminate
its independent operations.
16.2 No waiver by Lessor of any Event of Default shall constitute a waiver
of any other Event of Default or of the same Event of Default at any other time.
17. Remedies.
17.1 Upon the occurrence of an Event of Default and while such Event of
Default is continuing, Lessor, at its sole option, upon its declaration, and to
the extent not inconsistent with applicable law, may exercise any one or more of
the following remedies:
(a) Lessor may terminate this Lease Agreement whereupon all rights of Lessee to
the quiet enjoyment and use of the Equipment shall cease;
(b) Whether or not this Lease Agreement is terminated, Lessor may cause Lessee,
at the sole cost and expense of Lessee, to return any or all of the Equipment
promptly to the possession of Lessor in good repair and working order,
reasonable wear and tear excepted. Lessor, at its sole option and through its
employees, agents or contractors, may peaceably enter upon the premises where
the Equipment is located and take immediate possession of and remove the
Equipment, all without liability to Lessor, its employees, agents or contractors
for such entry. LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHTS TO NOTICE AND/OR HEARING PRIOR TO THE REPOSSESSION OR
REPLEVIN OF THE EQUIPMENT BY LESSOR, ITS EMPLOYEES, AGENTS OR CONTRACTORS;
(c) Lessor may proceed by court action to enforce performance by Lessee of this
Lease Agreement or pursue any other remedy Lessor may have hereunder, at law, in
equity or under any applicable statute, and recover such other actual damages as
may be incurred by Lessor;
(d) Lessor may recover from Lessee damages, not as a penalty but as liquidation
for all purposes and without limitation of any other amounts due from Lessee
under this Lease Agreement, in an amount equal to the sum of (i) any unpaid
Daily Rents and/or Monthly Rents due and payable for periods prior to the
repossession of the Equipment by Lessor plus any interest due thereon pursuant
to Section 15 above, (ii) the present value of all future Monthly Rents required
to be paid over the remaining Initial Term or any Extended Term after
repossession of the Equipment by Lessor, determined by discounting such future
Monthly Rents to the date of payment by Lessee at a rate of five (5) percent per
annum, and (iii) all costs and expenses incurred in searching for, taking,
removing, storing, repairing, restoring, refurbishing and leasing or selling
such Equipment; or
(e) Lessor may sell, lease or otherwise dispose of any or all of the Equipment,
whether or not in the possession of Lessor, at public or private sale and with
or without notice to Lessee, which notice is hereby expressly waived by Lessee,
to the extent permitted by and not inconsistent with applicable law. Lessor
shall then apply against the obligations of Lessee hereunder the net proceeds of
such sale, lease or other disposition, after deducting therefrom (i) the present
value of the residual value of the Equipment at the expiration of the Initial
Term, which is anticipated by Lessor and Lessee to be not less than twenty (20)
percent of the Acquisition Cost, such present value to be determined by
discounting the residual value to the date of sale, lease or other disposition
at a rate of five (5) percent per annum, and (ii) all costs incurred by Lessor
in connection with such sale, lease or other disposition including, but not
limited to, costs of transportation, repossession, storage, refurbishing,
advertising or other fees. Lessee shall remain liable for any deficiency, and
any excess of such proceeds over the total obligations owed by Lessee shall be
retained by Lessor. If any notice of such sale, lease or other disposition of
the Equipment is required by applicable law, ten (10) days written notice to
Lessee shall be deemed reasonable.
17.2 No failure on the part of Lessor to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise of any right or remedy hereunder shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
Each right and remedy provided hereunder is cumulative and not exclusive of any
other right or remedy including, without limitation, any right or remedy
available to Lessor at law, by statute or in equity.
17.3 Lessee shall pay all costs and expenses including, but not limited to,
reasonable legal fees incurred by Lessor arising out of or in connection with
any Event of Default or this Lease Agreement. Lessee shall also be liable for
any amounts due and payable to Lessor under any other provision of this Lease
Agreement including, but not limited to, amounts due and payable under Section
18 below.
18. Tax Indemnification.
18.1 Lessee represents and warrants that the Equipment is and will
remain, during the entire Initial Term and any Extended Term, property used
in a trade or business or for the production of income within the meaning of
Section 167 of the Internal Revenue Code of 1986, as amended ("Code").
Lessee further acknowledges and agrees that, pursuant to the Code, Lessor or
its affiliated group, as defined in Section 1504 of the Code ("Affiliated
Group"), shall be entitled to deductions for the recovery of the Acquisition
Cost of the Equipment over the recovery period as set forth in the applicable
Equipment Schedule, using the Accelerated Cost Recovery System as provided by
Section 168 (b) (1) of the Code ("ACRS Deductions").
18.2 If as a result of any reason or circumstance whatsoever, except as
specifically set forth in Section 18.3 below, Lessor or its Affiliated Group
shall not be entitled to, shall not be allowed, shall suffer recapture of or
shall lose any ACRS Deductions, then Lessee shall pay to Lessor, upon demand, a
sum to be computed by Lessor in the following manner. Such sum, after deduction
of all federal, state and local income taxes payable by Lessor as a result of
the receipt of such sum, shall be sufficient to restore Lessor or its Affiliated
Group to substantially the same position, on an after-tax basis, as it would
have been in but for the loss of such ACRS Deductions. In making its
computation, Lessor or its Affiliated Group shall Considers but shall not be
limited to, the following factors: (i) the amounts and timing of any net loss of
tax benefits resulting from any such lack of, entitlement to or loss, recapture,
or disallowance of ACRS Deductions but offset by any tax benefits derived from
any depreciation or other capital recovery deductions or exclusions from income
allowed to Lessor or its Affiliated Group with respect to the same Equipment;
(ii) penalties, interest or other charges imposed; (iii) differences in tax
years involved; and (iv) the time value of money at a reasonable rate
determined, in good faith, by Lessor. For purposes of computation only, the
amount of indemnification payments hereunder shall be calculated on the
assumption that Lessor and its Affiliated Group have or will have, in all tax
years involved, sufficient taxable income and the tax liability to realize all
tax benefits and incur all losses of tax benefits at the highest marginal
Federal corporate income tax rate in each year. Upon request, Lessor shall
provide Lessee with the methods of computation used in determining any sum that
may be due and payable by Lessee under this Section 18.
18.3 Lessee shall not be obligated to pay any sums required under this
Section 18 in the event that lack of entitlement to, or loss, recapture or
disallowance of any ACRS Deductions results from one or more of the following
events: (i) a disqualifying disposition due to the sale of the Equipment by
Lessor when no Event of Default, as defined in Section 16 above, has occurred,
(ii) a failure of Lessor or its Affiliated Group to timely claim any ACRS
Deductions for the Equipment in its tax return, and/or (iii) the fact that
Lessor or its Affiliated Group does not have, in any taxable year or years,
sufficient taxable income or tax liability to realize the benefit of any ACRS
Deductions that are otherwise allowable to Lessor or its Affiliated Group.
18.4 The representations, obligations and indemnities of Lessee under this
Section 18 shall continue in full force and effect, notwithstanding the
expiration or other termination of this Lease Agreement.
19. Assignment; Sublease.
19.1 Lessor may sell, assign or otherwise transfer all or any
part of its right, title and interest in and to the Equipment and/or this Lease
Agreement to a third-party assignee, subject to the terms and conditions of this
Lease Agreement including, but not limited to, the right to the quiet enjoyment
of the Equipment by Lessee as set forth in Section 7.1 above. Such assignee
shall assume all of the rights and obligations of Lessor under this Lease
Agreement and shall relieve Lessor therefrom. Thereafter, all references to
Lessor herein shall mean such assignee. Notwithstanding any such sale,
assignment or transfer, the obligations hereunder shall remain absolute and
unconditional as set forth in Section 7.2 above.
19.2 Lessor may also pledge, mortgage or grant a security interest in the
Equipment and assign this Lease Agreement as collateral. Each such pledgee,
mortgagee, lienholder or assignee shall have any and all rights as may be
assigned by Lessor but none of the obligations of Lessor hereunder. Any pledge,
mortgage or grant of security interest in the Equipment or assignment of this
Lease Agreement shall be subject to the terms and conditions hereof including,
but not limited to, the right to the quiet enjoyment of the Equipment by Lessee
as set forth in Section 7.1 above. Lessor, by reason of such pledge, mortgage,
grant of security interest or collateral assignment, shall not be relieved of
any of its obligations hereunder which shall remain absolute and unconditional
as set forth in Section 7.2 above. Upon the written request of Lessor, Lessee
shall acknowledge such obligations the pledgee, mortgagee, lienholder or
assignee.
19.3 LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, SUBLEASE, CONVEY OR PLEDGE
ANY OF ITS INTEREST IN THIS LEASE AGREEMENT OR ANY OF THE EQUIPMENT, WITHOUT THE
PRIOR WRITTEN CONSENT OF LESSOR. Any such sale, transfer, assignment, sublease,
conveyance or pledge, whether by operation of law or otherwise, without the
prior written consent of Lessor, shall be void.
20. Optional Performance By Lessor. If an Event of Default, as defined in
Section 16 above, occurs and is continuing, Lessor in its sole discretion may
pay or perform such obligation in whole or in part, without thereby becoming
obligated to pay or to perform the same on any other occasion or to pay any
other obligation of Lessee. Any payment or performance by Lessor shall not be
deemed to cure any Event of Default hereunder. Upon such payment or performance
by Lessor, Lessee shall pay forthwith to Lessor the amount of such payment or an
amount equal to all costs and expenses of such performance, as well as any
delayed payment charges on such amounts as set forth in Section 15 above.
21. Compliance and Approvals. Lessee warrants and agrees that this Lease
Agreement and the performance by Lessee of all of its obligations hereunder have
been duly authorized, do not and will not conflict with any provision of the
charter or bylaws of Lessee or of any agreement, indenture, lease or other
instrument to which Lessee is a party or by which Lessee or any of its property
is or may be bound. Lessee warrants and agrees that this Lease Agreement does
not and will not require any governmental authorization, approval, license or
consent except those which have been duly obtained and will remain in effect
during the entire Initial Term and any Extended Term.
22. Miscellaneous.
22.1 The section headings are inserted herein for convenience of reference
and are not part of and shall not affect the meaning or interpretation of this
Lease Agreement.
22.2 Any provision of this Lease Agreement which is unenforceable in whole
or in part in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such unenforceability without invalidating any remaining
part or other provision hereof and shall not be affected in any manner by reason
of such enforceability in any other jurisdiction. The validity and
interpretation of this Lease Agreement and the rights and obligations of the
parties hereto shall be governed in all respects by the laws of The Commonwealth
of Massachusetts without giving effect to the conflicts of laws provisions
thereof.
22.3 This Lease Agreement, including all Equipment Schedules and
Certificates of Acceptance, constitutes the entire agreement between Lessor and
Lessee. Lessor and Lessee agree that this Lease Agreement shall not be amended,
altered or changed except by a written agreement signed by the parties hereto.
LESSEE ACKNOWLEDGES THAT THERE HAVE BEEN NO REPRESENTATIONS, EXPRESS OR IMPLIED,
BY LESSOR OTHER THAN AS SET FORTH HEREIN AND LESSEE EXPRESSLY CONFIRMS THAT IT
HAS NOT RELIED UPON ANY REPRESENTATIONS BY LESSOR, EXCEPT THOSE SET FORTH
HEREIN, AS A BASIS FOR ENTERING INTO THIS LEASE AGREEMENT.
22.4 Any notice required to be given by Lessee or Lessor hereunder shall be
deemed adequately given if sent by registered or certified mail, return receipt
requested, to the other party at their respective addresses stated herein or at
such other place as either party may designate in writing to the other.
22.5 Lessee agrees to execute and deliver such additional documents and
to perform such further acts as may be reasonably requested by Lessor in
order to carry out and effectuate the purposes of this Lease Agreement. Upon
the written request of Lessor, Lessee further agrees to execute any
instrument necessary for filing or recording this Lease Agreement or to
confirm the ownership of the Equipment by Lessor. Lessor is hereby
authorized to insert in any Equipment Schedule the serial numbers of the
Equipment and other identifying marks or similar information and to sign, on
behalf of Lessee, any Uniform Commercial Code financing statements.
22.6 This Lease Agreement cannot be cancelled or terminated except as
expressly provided herein.
22.7 Whenever the context of this Lease Agreement requires, the singular
includes the plural and the plural includes the singular. Whenever the word
Lessor is used herein, it includes all assignees and successors in interest of
Lessor. If more than one Lessee are named in this Lease Agreement, the
liability of each shall be joint and several.
22.8 All agreements, indemnities, representations and warranties of Lessee
made herein and all rights and remedies of Lessor shall survive the expiration
or other termination of this Lease Agreement, whether or not expressly provided
herein.
22.9 Any waiver of any power, right, remedy or privilege of Lessor
hereunder shall not be effective unless in writing signed by Lessor.
22.10 This Lease Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee, each by its duly authorized officer or
agent, have duly executed and delivered this Lease Agreement, which is intended
to take effect as a sealed instrument, as of the day and year first written
above.
Accepted at Boston, Massachusetts
BANCBOSTON LEASING INC. UnionTools, Inc.
By: /s/ Xxxxxxx XxXxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Associate Vice President Title: Vice President - CFO
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