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EXHIBIT 4.9
Counterpart No. 2
MASTER EQUIPMENT FINANCING AGREEMENT
THIS MASTER EQUIPMENT FINANCING AGREEMENT (the "Agreement") is dated as
of the 18th day of June, 1996 by and between SENTRY FINANCIAL CORPORATION, a
Utah corporation ("Sentry"), having its principal office and place of business
at One Utah Center, 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx Xxxx, Xxxx
00000-0000 and VENTURI TECHNOLOGIES, INC., a Texas corporation ("Customer"),
having its principal office and place of business at 3629 Conflans, Xxxxxx,
Xxxxx 00000.
IN CONSIDERATION of the mutual agreements set forth hereinafter and the
payment of rent or loan payments as provided for herein, the parties agree as
follows:
1. PROPERTY FINANCED. This contract is a Master Equipment Financing
Agreement which contemplates that Sentry, from time to time, will (i) lease
equipment to Customer, and/or (ii) extend loans to Customer secured by
equipment. The terms of each Equipment Schedule hereto will indicate the nature
of the transaction, i.e., lease or loan, and will be subject to any and all
applicable conditions and provisions set forth herein as may from time to time
be amended. Each Equipment Schedule shall be in the form acceptable to Sentry,
shall incorporate therein all of the terms and conditions of this Agreement and
shall contain such additional terms and conditions as Sentry and Customer shall
agree upon. Each Equipment Schedule is enforceable according to the terms and
conditions contained therein. In the event of a conflict between the language of
this Agreement and any Equipment Schedule hereto, the language of the Equipment
Schedule shall prevail with respect to that Equipment Schedule.
Sentry, by its acceptance hereof at its home office, agrees to extend
equipment financing to Customer, by either lease or loan (as set forth on the
applicable Equipment Schedule), and Customer agrees to (i) lease from Sentry, in
accordance with the terms and conditions herein, the equipment and features
together with all replacements, parts, repairs, additions, attachments and
accessories incorporated therein (collectively called the "Equipment" and
individually called a "Financed Item") described in each executed Equipment
Schedule which shall be made a part hereof; and/or (ii) borrow money from Sentry
in accordance with the terms and conditions herein, the repayment of which will
be secured by the Equipment. If the structure of the transaction is a lease,
Customer shall have no right, title or interest in the Equipment, except as a
lessee as expressly set forth herein. If the structure of the transaction is a
loan, Customer shall (i) grant to Sentry a first priority security interest in
the Equipment, and (ii) keep such Equipment free and clear of all other liens
and encumbrances. Sentry shall have no obligation hereunder until the execution
and delivery of an Equipment Schedule by Sentry and Customer.
2. TERM, PAYMENTS AND TERMINATION. The term of this Agreement shall
commence on the date set forth above and shall continue thereafter so long as
any Equipment Schedule entered into pursuant to this Agreement remains in
effect.
The Initial Term, the Loan Amount (if the transaction is structured as
a loan), the interest rate (if the transaction is structured as a loan), and the
Periodic Payment payable with respect to each Financed Item, together with other
transaction specific terms and conditions, shall be as set forth in and as
stated in the respective Equipment Schedule(s). Customer or Sentry may terminate
any Equipment Schedule effective at the expiration of the Initial Term or any
renewal term thereof, by giving the other party 180 days prior written notice.
Where the transaction is structured as a lease: (i) if notice of termination is
not given at least 180 days prior to such expiration, then the Initial Term
shall be automatically extended for an additional period of six months on the
same terms provided for during the Initial Term. No notice of termination may be
revoked without prior written consent of the other party; and (ii) if, upon the
termination of the applicable Equipment Schedule as to any Financed Item,
Customer fails or refuses to return and deliver possession of such Financed Item
to Sentry within three business days after the expiration of the term of the
Equipment Schedule, in additional to all other rights and remedies available to
Sentry, Customer shall be liable to Sentry for all Periodic Payments on such
Financed Item until its return and direct damages Sentry may suffer by reason of
being unable to deliver such Financed Item to another party. Unless otherwise
specifically agreed in writing by Sentry, Customer shall have no right to
prepay, in whole or in part, any amounts financed hereunder.
3. ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY. Customer represents
and agrees that, as of the date each Financed Item is accepted hereunder (the
"ACCEPTANCE DATE"), each Financed Item is of a size, design, capacity and
manufacture selected by Customer and that Customer has inspected such Financed
Item, found it to be in good order, and unconditionally accepted such Financed
Item, without prejudice, however, to any right or remedy Customer may have
against the manufacturer or supplier thereof. On the Acceptance Date, Customer
will execute and deliver a Certificate of Acceptance (in a form acceptable to
Sentry) with respect to each Financed Item which certificate of acceptance will
be conclusive evidence of the foregoing. At Sentry's option, in lieu of a
separate Certificate of Acceptance, Sentry may incorporate the language that
would otherwise exist in a Certificate of Acceptance into the Equipment
Schedule, in which case it will have the same effect as if set forth in a
separate Certificate of Acceptance. SENTRY SHALL HAVE NO LIABILITY TO CUSTOMER
FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY,
INDIRECTLY, INCIDENTLY OR CONSEQUENTIALLY BY THE EQUIPMENT, BY ANY INADEQUACY
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Counterpart No. 2
THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY INCIDENT WHATSOEVER IN
CONNECTION THEREWITH, ARISING IN STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, OR
IN ANY WAY RELATED TO OR ARISING OUT OF THIS AGREEMENT. SENTRY MAKES NO EXPRESS
OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING THOSE OF MERCHANTABILITY,
DURABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
EQUIPMENT AND EXPRESSLY DISCLAIMS THE SAME. Notwithstanding the foregoing,
Customer will be entitled to the benefit of any applicable manufacturer's
warranties, and, to the extent assignable by Sentry, such warranties are hereby
assigned by Sentry for the benefit at Customer, and Customer shall take all
reasonable action to enforce such warranties where available to Customer.
4. ASSIGNMENT, OBLIGATION TO PAY PERIODIC PAYMENTS UNCONDITIONAL.
Sentry may (a) assign or sell all or a portion of its right, title and interest
in and to the Equipment, this Agreement, and/or any Equipment Schedule, and/or
(b) in the event the transaction is structured as a lease, grant a security
interest in the Equipment, any Financed Item, this Agreement, and/or any
Equipment Schedule; to one or more lenders or equity sources (individually
"Assignee," collectively the "Assignees"). Customer hereby (i) consents to such
assignments and/or grants, (ii) agrees to promptly execute and deliver, from
time to time and at no cost or expense to Sentry, such further acknowledgments,
agreements and other instruments as may be reasonably requested by Sentry or any
Assignee to effect such assignments and/or grants, and (iii) agrees to comply
fully with the terms of any such assignments and/or grants, provided that such
assignments and/or grants shall not change the timing or amount of Customer's
remaining payment obligations hereunder nor materially change Customer's other
remaining rights and obligations hereunder. Customer agrees that Sentry may
assign or transfer this Agreement or Sentry's interest in the Equipment even if
said assignment or transfer could be deemed to materially affect the interest of
Customer. In the event of an assignment, all references herein to Sentry shall
include Assignee; provided, however, that Assignee shall not be obligated to
perform the obligations of Sentry hereunder unless Assignee expressly agrees to
do so in writing.
This Agreement is a "net" lease or loan, as the case may be, and
Customer agrees that its obligation to pay all Periodic Payments and other sums
payable hereunder (collectively, "Payments"), and the rights of Sentry and
Assignee in and to such Payments, are absolute and unconditional and are not
subject to any abatement, reduction, setoff, defense, counterclaim or recoupment
due or alleged to be due, to or by reason of, any past, present or future claims
which Customer may have against Sentry, Assignee, the manufacturer or seller of
the Equipment, or against any person for any reason whatsoever. Customer shall
have no right to assign any Equipment Schedule or to sublease the Equipment
without the express prior written consent of Sentry, which consent may be
granted or withheld in Sentry's sole discretion.
5. INSTALLATION, MAINTENANCE AND REPAIR. Customer has selected the
type, quantity and supplier of each item of Equipment, and in reliance thereon,
such Equipment has been or will be ordered by Sentry from such supplier, or
Sentry has accepted or will accept an assignment of an existing purchase order
therefor. Customer shall, at its expense, be responsible for the delivery,
installation, deinstallation, redelivery, maintenance and repair of the
Equipment by a party acceptable to Sentry. Sentry shall have no liability for
any delay in delivery or failure by the supplier to deliver any Equipment or to
till nay purchase order or meet the conditions thereof. Customer agrees, at all
times during the term of each Equipment Schedule, at its sole expense, to keep
the Equipment in good repair, condition and working order, and to furnish all
parts, mechanisms or devices which may be required in the course of so doing.
Customer will at all times during the term of each Equipment Schedule maintain
in force a maintenance agreement covering the Equipment with the manufacturer
thereof or such other party as may be reasonably acceptable to Sentry and, if
the transaction is structured as a lease, upon the surrender of the Equipment to
Sentry, Customer shall provide a letter from the manufacturer(s) of the
Equipment certifying that the Equipment is eligible for maintenance. Sentry or
Assignee will have the right, but not the obligation, to inspect the Equipment
during reasonable business hours.
If the transaction is structured as a lease, Customer shall permit
manufacturer access to the Equipment to install "no charge" engineering changes
in order to keep the Equipment at current engineering levels.
6. REPRESENTATIONS AND WARRANTIES. Customer represents and warrants for
the benefit of Sentry and Assignee, and if requested by Sentry will provide an
opinion of counsel and other supporting documents to the effect that, at the
time of execution of this Agreement and of each Equipment Schedule:
(a) Customer is a legal entity, duty organized, validly existing and in
good standing under the laws of the jurisdiction where the Equipment will be
located and has adequate power to enter into and perform this Agreement and each
Equipment Schedule executed hereunder; and Customer will keep in full force and
effect its existence and rights as a corporation under the laws of the
jurisdiction of its incorporation and will obtain and preserve its right to do
business as a corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
and each Equipment Schedule:
(b) This Agreement and each Equipment Schedule executed hereunder have
been duly authorized, executed and delivered by Customer and together constitute
a valid, legal and binding agreement of Customer, enforceable in accordance with
their terms;
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Counterpart No. 2
(c) The entering into and performance of this Agreement and each
Equipment Schedule executed hereunder will not violate any judgment, order, law
or regulation applicable to Customer or any provision of Customer's articles of
incorporation or bylaws or result in any breach of, or constitute a default
under, or result in the creation of any lien, charge, security interest or other
encumbrance upon any assets of Customer or on the Equipment (except as granted
under this Agreement) pursuant to any instrument to which Customer is a party or
by which it or its assets may be bound;
(d) There are no actions, suits or proceedings pending or, to the
knowledge of Customer, threatened, before any court, administrative agency,
arbitrator or governmental body which will, if determined adversely to Customer,
materially adversely affect its ability to perform its obligations under this
Agreement, or any Equipment Schedule executed hereunder or any related agreement
to which Customer is a party;
(e) Customer is not a tax exempt organization;
(f) Customer is not in material default under any loan or lease
agreement;
(g) Customer is not insolvent and will not be rendered insolvent by any
transaction contemplated by this Agreement or any Equipment Schedule. In
addition, if the transaction is structured as a loan, Customer represents and
warrants, for the benefit of Sentry and Assignee, that:
(h) Customer owns the Equipment free and clear of off liens, charges,
and other encumbrances, and that this Agreement constitutes a valid lien on the
Equipment; Customer will warrant and defend its title in and to the Equipment
against the claims and demands of all persons and will maintain the lien created
under this Agreement; and
(i) Customer will execute and deliver, from time to time, all such
supplements and amendments hereto or to an Equipment Schedule, and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action, as Sentry reasonably
requests and deems necessary or advisable to (1) maintain or preserve the lien
created under this Agreement or carry out more effectively the purposes hereof,
and/or (11) perfect, publish notice of, or protect the validity of this
Agreement or any Equipment Schedule.
7. RISK OF LOSS AND DAMAGE. (a) Customer agrees to bear the entire risk
of loss with respect to any damage, destruction, loss, theft, or governmental
taking of any Financed Item, whether partial or complete and whether or not
through any default or neglect of Customer. Except as provided in this Section
7, no such event shall relieve Customer of its obligation to pay Payments
hereunder.
(a) If any Financed Item is damaged, Customer must promptly notify
Sentry and within 60 days of such damage shall, at Customer's expense, cause
such repairs to be made as are necessary to return such Financed Item to its
previous condition. Customer shall then and only then, be entitled to receive
from Sentry or Assignee, as the case may be, any insurance proceeds received or
attributable to such damage.
(b) In the event that any Financed Item is destroyed, damaged beyond
repair, lost, stolen, or taken by government action or a stated period extending
beyond the term of the applicable Equipment Schedule(s) (an "Event of Loss"),
Customer must promptly notify Sentry and Assignee and pay to Sentry or Assignee,
as the case may be, on the next Periodic Payment Date following the Event of
Loss, an amount equal to the Casualty Value of such Financed Item calculated
pursuant to the Casualty Value Table in effect on the date of the Event of Loss
and all Payments accrued on such item up to the date of payment. Upon payment of
such amounts, Customer's obligation to pay any further Periodic Payments will
cease with respect to that Financed Item (but not with respect to any remaining
Equipment) and Customer will be entitled to receive any insurance proceeds or
other recovery received by Sentry or Assignee in connection with such Event of
Loss.
(c) In the event of a governmental taking of a Financed Item for an
indefinite period or for a stated period which does not extend beyond the term
of the applicable Equipment Schedule(s), all obligations of Customer with
respect to such Financed Item (including payment of Payments) will continue. So
long as Customer is not in default hereunder, Sentry will pay to Customer all
sums received by Sentry by reason of such governmental taking up to the amount
paid by Customer during such period.
8. INSURANCE. Customer, at its sole expense, shall insure the Equipment
against all risks in such amounts (but not less then the Casualty Value) upon
terms and with carriers reasonably acceptable to Sentry. Such insurance policies
shall insure against, among other exposures, damage or destruction of the
Equipment, bodily and personal injury, property damage liabilities and other
risks customarily and reasonably insured against by Customer on Equipment owned
by Customer. All such insurance must name Sentry and Assignee as additional
insureds for all liability insurance and sole loss payee of all casualty
insurance, and must provide that such insurance may not be canceled or altered
without at least 30 days prior written notice to Sentry and Assignee. Upon
Sentry's and Assignee's prior written consent, Customer may act as a
self-insurer in amounts acceptable to Sentry and Assignee.
9. INDEMNITY. Customer agrees to indemnify, hold harmless and defend,
Sentry and Assignee from and against any and all claims, demands, actions,
suits, proceedings, costs, expenses, damages and liabilities, at law or in
equity, (including reasonable outside counsel fees, allocated costs of internal
counsel and disbursements for
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Counterpart No. 2
both), arising out of, connected with, or resulting from, this Agreement, any
Equipment Schedule executed hereunder, or the Equipment, including, without
limitation: (i) the manufacture, selection, purchase, delivery, possession,
condition, use, operation or return thereof; and (ii) the enforcement of this
Agreement, any Equipment Schedule, and any other documents delivered thereunder,
including any out-of-court workout or in any bankruptcy case. Any obligations
under this paragraph arising prior to the expiration of this Agreement or the
Initial Term (or any renewal term) of any Equipment Schedule, shall survive the
expiration or other termination of this Agreement or the applicable Equipment
Schedule.
10. LIENS AND TAXES. Customer will, at its sole expense, keep the
Equipment free and clear of all levies, liens and encumbrances. Customer shall
not assign or otherwise encumber this Agreement, any Equipment Schedule or any
of its rights hereunder without the prior written consent of Sentry. Customer
will declare and pay to the appropriate governmental authorities when due all
license fees, registration fees, assessments, charges and taxes, whether
municipal, state or federal, including, but not limited to, sales, use, excise
and property taxes, and penalties and interest with respect thereto, excluding,
however, any taxes measured solely by Sentry's net income. Customer shall
provide evidence of any payment hereunder upon request of Sentry. Any
obligations under this paragraph arising prior to the expiration of the Initial
Term (or any renewal term) shall survive the expiration or other termination of
the applicable Equipment Schedule.
11. CUSTOMER'S FAILURE TO PERFORM. Should Customer fail to make any
payment or fail to do any act required herein, Sentry has the right, but not the
obligation and without releasing Customer from any obligation hereunder to make
or do the same, to pay, purchase, contest or compromise any encumbrance, charge
or lien which, in the judgment of Sentry, appears to affect the Equipment and,
in exercising any such rights, incur any liability and expend whatever amount in
Sentry's absolute discretion Sentry may deem necessary therefor. All sums so
incurred or expended by Sentry shall be, without demand, immediately due and
payable by Customer, shall be considered Payments hereunder, and will bear
interest at the lesser of 2% per month or the highest interest rate legally
permissible ("Late Payment Rate").
12. EQUIPMENT IS PERSONAL PROPERTY; LOCATION OF EQUIPMENT. Customer
covenants and agrees that the Equipment is, and will at all times be and remain,
personal property and, in the case of a transaction structured as a lease, owned
by Sentry (or Assignee). If requested by Sentry, Customer will obtain, prior to
delivery of any Financed Item, a certificate in a form satisfactory to Sentry
from all parties with an interest in the premises wherein the Equipment may be
located, waiving any claim with respect to the Equipment.
Customer will not move any Financed Item nor permit any Financed Item
to be moved from the address set forth in the applicable Equipment Schedule
without Sentry's consent, which consent will not be unreasonably withhold;
provided, however, that in no event will any Financed Item be moved to a
location outside the United States of America.
13. DESIGNATION OF OWNERSHIP. If at any time during the term hereof
Customer is supplied with labels, plates or other markings stating that the
Equipment is owned by Sentry or Assignee, or is subject to any security interest
of Sentry or Assignee, Customer agrees to affix and keep the same prominently
displayed on the Equipment. Customer agrees to execute and file Uniform
Commercial Code financing statements and any and all other instruments necessary
to perfect Sentry's or Assignee's interest in this Agreement, Equipment
Schedule(s), the Payments or the Equipment. Sentry may file a copy of this
Agreement and appropriate Equipment Schedule(s) as a financing statement.
Customer agrees to pay all reasonable costs and expenses incurred by Sentry
including, without limitation, attorneys' fees and UCC search fees, in
connection with the actions taken by Sentry to complete each Equipment Schedule.
14. USE. Customer shall use the Equipment in a careful and proper
manner in conformance with manufacturer's specifications and shall comply with,
and conform to, all federal, state, municipal and other laws, ordinances and
regulations in any way relating to the possession, use or maintenance of the
Equipment.
15. SURRENDER OF EQUIPMENT. If the transaction is structured as a
lease, upon the expiration or earlier termination of each Equipment Schedule
with respect to any Financed Item, Customer shall, unless Customer has paid
Sentry in cash the Casualty Value of the Equipment pursuant to Section 7, return
the same to Sentry in good repair, condition and working order, ordinary wear
and tear resulting from proper use thereof alone excepted, to the location to be
advised by Sentry. Upon return, all components of the Equipment shall be clean,
and shall include all instruction manuals, operating software, and all other
items that are necessary to or would facilitate the operation of the Equipment
as intended by the manufacturer. All costs of replacing missing components and
repairing non-working components shall be borne by Customer. At Customer's
option, Sentry shall clean the returned Equipment (or cause it to be cleaned),
the reasonable costs of which shall be paid by Customer. The deinstallation of
the Equipment shall be done in a manner resulting in no harm or damage either to
the Equipment or to any equipment to which the Equipment is attached. Sentry
shall have the sole right and option to make all the arrangements for (i) the
transportation of each Financed Item to and the installation of each Financed
Item at the Equipment Location stated in the applicable Equipment Schedule, and
(ii) the discontinuance, disassembly, packing and transportation of each
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Counterpart No. 2
Financed Item from the Equipment Location to a location of Sentry's choice
within the continental United States upon the termination of the applicable
Equipment Schedule (by expiration or otherwise) as to such Financed Item. All
costs of deinstallation, packaging, insurance and transportation of the
Equipment will be borne by Customer.
16. DEFAULT. The occurrence of any of the following events, among
others, shall constitute an Event of Default and shall, at the option of Sentry,
terminate (a) any or all Equipment Schedule(s) with respect to which such Event
of Default relates and lb) Customer's right to possession of the Equipment:
(i) The nonpayment by Customer of any Payment within 10 days of the
date on which it is due.
(ii) The failure by Customer to perform or observe any other term,
covenant or condition of this Agreementor any Equipment Schedule, which is not
cured within 10 days after notice thereof from Sentry or Assignee.
(iii) Any affirmative act of insolvency by Customer, or the filing by
Customer of any petition or action under any bankruptcy, reorganization,
insolvency arrangement, liquidation, dissolution or moratorium law, or any other
law or laws for the relief of, or relating to debtors.
(iv) The filing of any involuntary petition against Customer under any
bankruptcy, reorganization, insolvency arrangement, liquidation, dissolution or
moratorium law for the relief of or relating to debtors which is not dismissed
within 60 days thereafter, or the appointment of any receiver, liquidator or
trustee to take possession of any substantial portion of the properties of
Customer, unless the appointment is set aside or ceases to be in effect within
60 days from the date of said filing or appointment.
(v) The subjection of a substantial part of Customer's property or any
Financed Item to any levy, seizure, assignment or sale for or by any creditor or
governmental agency.
(vi) Any representation or warranty made by Customer in this Agreement
or in any Equipment Schedule or in any document furnished by Customer to Sentry
or Assignee in connection with this Agreement or any Equipment Schedule or with
respect to the acquisition or use of the Equipment shall be untrue in any
material respect.
(vii) The default by Customer under any other lease or loan agreement.
17. REMEDIES. Upon the happening of any Event of Default:
(i) Customer will, without demand, on the next Payment Date following
the Event of Default, pay to Sentry, as liquidated damages and not as a penalty,
an amount equal to (a) if the transaction is structured as a lease, the sum of
(1) the Casualty Value set forth in the Casualty Value Table of such Equipment
Schedule, and (11) any Payments then due and owing by Customer hereunder (where
such sum is hereinafter referred to as the "Lease Default Value"); or lb) if the
transaction is structured as a loan, the sum of (1) the present value (using as
the discount rate a rate equal to four percentage points less than the interest
rate of the loan) of the remaining Payments to be paid during the Initial Term
(together with any required balloon or similar payments), determined as of the
date of the Event of Default, and (11) any Payments (and interest) then due and
owing by Customer (where such sum is hereinafter referred to as the "Loan
Default Value");
(ii) Sentry may, without notice to or demand upon Customer:
(a) Take possession of the Equipment and use commercially reasonable
efforts to sell and/or lease the same, or any portion thereof, in such manner or
amount, and to such entity as Sentry, in Sentry's discretion shall elect,
provided that, if the original transaction under the applicable Equipment
Schedule is structured as a loan, Sentry shall provide Customer reasonable
notice (which is hereby agreed to be ten (10) business days) of its intention to
sell and/or lease the same. The proceeds of such sale and/or lease will be
applied by Sentry (A) first, to pay all costs and expenses, including reasonable
legal fees and disbursements (in-house or otherwise) incurred by Sentry as a
result of the Event of Default and the exercise of Sentry's remedies with
respect thereto; (B) second, to pay Sentry an amount equal to the Lease Default
Value or the Loan Default Value, as the case may be, to the extent not
previously paid by Customer, and (C) third, to reimburse Customer for the Lease
Default Value or the Loan Default Value, as the case may be, to the extent
previously paid by Customer. Any surplus remaining thereafter will be retained
by Sentry, in the case of a transaction structured as a lease, or by Customer,
in the case of a transaction structured as a loan. To the extent Customer has
not paid Sentry the amounts specified in this Section 17, Customer will
forthwith pay such amounts to Sentry plus interest at the Late Payment Rate on
such amounts, computed from the date the Lease Default Value or the Loan Default
Value, as the case may be, is payable hereunder until such amounts are paid.
(b) Take possession of the Equipment and hold and keep idle the same or
any portion thereof. The exercise of any of the foregoing remedies by Sentry
will not constitute a termination of this Agreement or any Equipment Schedule
unless Sentry so notifies Customer in writing. No remedy referred to in this
Section 17 is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise available to Sentry
at law or in equity. In the event the transaction is structured as a loan (or is
otherwise determined to be a loan), Sentry shall have (in addition to all other
rights and remedies granted hereunder or otherwise) all the rights and remedies
provided to a secured party by the Uniform Commercial Code with respect to all
parts of the Equipment which are and which are deemed to be governed by the
Uniform Commercial Code.
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Counterpart No. 2
18. SPECIAL TERMS; CERTAIN DEFINITIONS. Any special terms set forth in
one or more Exhibits, Schedules or Riders to this Agreement as they apply to the
applicable Equipment Schedule(s) will be applicable as though fully set forth
herein. When used in this Agreement or any Equipment Schedule(s): (i) "Fair
Market Value" shall mean the in-place value of the Equipment to Customer, as
reasonably determined by Lessor, which would be obtained in an arms-length
transaction between an informed and willing buyer-user under no compulsion to
buy and an informed and willing seller under no compulsion to sell, where the
costs of installation, removal and advertising from the places the Equipment is
or will be located pursuant to this Agreement during the Initial Term shall not
be a deduction from such value; and (ii) "Fair Rental Value" shall mean the
in-place value of the Equipment to the Customer, as reasonably determined by
Lessor, which would be obtained in an arms-length transaction between an
informed and willing user under no compulsion to lease and an informed and
willing lessor under no compulsion to lease, where the costs of installation,
removal and advertising from the places the Equipment is or will be located
pursuant to this Agreement during the Initial Term shall not be a deduction from
such value.
19. ARTICLE 2A WAIVERS. To the full extent permitted by applicable law,
Customer hereby waives any and all rights and remedies conferred upon a lessee
by sections 2A-508 through 2A-522 of the Uniform Commercial Code ("UCC")
including, but not limited to, Customer's rights to: (i) cancel or repudiate
this Agreement or any Equipment Schedule; (ii) reject or revoke acceptance of
the Equipment after Customer has accepted such Equipment (pursuant to a
Certificate of Acceptance therefor or otherwise); (iii) a security interest in
the Equipment in Customer's possession or control for any reason; (iv) deduct
all or any part of any claimed damages resulting from Lessor's default, if any,
under this Agreement or any Equipment Schedule; (v) accept partial delivery of
the Equipment; (vi) "cover" by making any purchase or lease of or contract to
purchase or lease Equipment in substitution for those due from Lessor during the
Agreement term; (vii) recover any general, special, incidental or consequential
damages, for any reason whatsoever; and (viii) specific performance, replevin,
detinue, sequestration, claim and delivery or the like for any Equipment
identified to this Agreement. To the extent permitted by applicable law,
Customer also hereby waives any rights now or hereafter conferred by statute or
otherwise which may require Lessor to sell, lease or otherwise use any Equipment
in mitigation of Lessor's damages as set forth in Section 17 of this Agreement
or which may otherwise limit or modify any of Lessor's rights or remedies under
Section 17.
20. MISCELLANEOUS.
(a) EFFECT OF WAIVER. No delay or omission to exercise any right or
remedy accruing to Sentry upon any breach or default of Customer will impair any
such right or remedy or be construed to be a waiver of any such breach or
default, nor will a waiver of any single breach or default be deemed a waiver of
any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval on the part of Sentry of any breach or default under
this Agreement, or any Equipment Schedule or of any provision or condition
hereof or thereof, must be in writing specifically set forth. All remedies,
either under this Agreement or any Equipment Schedule, or at law or in equity or
otherwise afforded to Sentry, are cumulative and not alternate.
(b) NOTICES. Any notice required or permitted to be given by the
provisions hereof must be in writing and will be conclusively deemed to have
been received by a party hereto on the day it is delivered to such party at the
address indicated below (or at such other address as such party specifies to the
other party in writing) or, if sent by registered or certified U.S. mail, on the
third business day after the day on which mailed, addressed to such party at
such address:
IF TO SENTRY: One Utah Center
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000-0000
Attention: General Counsel
IF TO CUSTOMER: As set forth in the applicable Equipment
Schedule.
(c) APPLICABLE LAW. This Agreement and Equipment Schedule(s) will be
governed by, and construed in accordance with, the laws of the State of Utah
(without giving effect to principles relating to conflicts of laws). Customer
hereby irrevocably consents to the exclusive jurisdiction of the Third Judicial
District Court for Salt Lake County, State of Utah or, if such court for any
reason dies not have jurisdiction, then Customer hereby consents to the
exclusive jurisdiction of the United States Federal District Court for the State
of Utah, Central Division (the applicable court is hereafter referred to as (the
"Court"), for a determination of any dispute as to any matters hereunder
("Proceeding") and authorizes service of process by the Court for a
determination of any Proceeding as to any such matters by service of process on
Customer by certified or registered mail sent to Customer at the address
referred to in Section 1 9(b) above. Customer irrevocably waives, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter
have to the laying of venue of any Proceeding in the Court and any claim that
any Proceeding brought in the Court has been brought in an inconvenient forum.
Notwithstanding the foregoing,
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Counterpart No. 2
Sentry may bring a Proceeding in any court of any other jurisdiction where
Customer or any of its property may be found, and Customer irrevocably submits
to the jurisdiction of each such court in respect of any such Proceeding.
(d) SECURITY INTEREST.
(i) Each executed copy of this Agreement will be an original. To the
extent, if any, that this Agreement constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Agreement may be created through the
transfer or possession of any counterpart other than an original.
(ii) There shall be only one original of each Equipment Schedule to
this Agreement, and it shall be marked "Counterpart No. 1," and all other
counterparts will be marked "Counterpart No. 2." To the extent, if any, that any
Equipment Schedule(s) to this Agreement constitutes chattel paper (as such term
is defined in the Uniform Commercial Code., as in effect in any applicable
jurisdiction), no security interest in any Equipment Schedule(s) may be created
in any document(s) other than Counterpart No. 1.
(iii) If the transaction documented under an Equipment Schedule is
structured as a loan (or is determined to be other than a true lease under
applicable law), Customer hereby grants to Sentry a first priority security
interest in and to the Equipment described therein together with all proceeds
and products thereof and all after-acquired property.
(e) SUSPENSION OF OBLIGATIONS OF SENTRY. The obligations of Sentry
hereunder will be suspended to the extent that Sentry is hindered or prevented
from complying therewith because of labor disturbances including, but not
limited to, strikes and lockouts, acts of God, fires, storms, accidents, failure
of the manufacturer to deliver any Financed Item, governmental regulations or
interference or any cause whatsoever not within the sole and exclusive control
of Sentry.
(f) FINANCIAL STATEMENTS. Customer agrees promptly to furnish, or cause
to be furnished, to Sentry and Assignee (i) within forty-five (45) days of the
end of each fiscal quarter, and (ii) within one hundred twenty (120) days of the
end of each fiscal year, financial statements of Customer prepared in accordance
with generally accepted accounting principles and audited by a firm of
independent certified public accountants, together with such other financial and
related information respecting Customer or the Equipment as Sentry or Assignee
may from time to time reasonably request.
(g) ENTIRE AGREEMENT. Sentry and Customer acknowledge that there are no
agreements or understandings, written or oral, between Sentry and Customer with
respect to the Equipment, other than as set forth herein and in each Equipment
Schedule and that this Agreement and each Equipment Schedule contain the entire
agreement between Sentry and Customer with respect thereto. Neither this
Agreement nor any Equipment Schedule may be altered, modified, terminated or
discharged except by a writing signed by the party against which such
alteration, modification or discharge is sought.
(h) SEVERABILITY. Any provision of this Agreement or any Equipment
Schedule prohibited by, or unlawful or unenforceable under, any applicable law
or any jurisdiction shall, at the sole option of Sentry, be ineffective as to
such jurisdiction without invalidating the remaining provisions of this
Agreement; provided, however, that to the extent that the provisions of any such
applicable law can be waived, they are hereby waived by Customer.
(i) NONSPECIFIED FEATURES. If the transaction is structured as a lease
and if the Equipment delivered pursuant to any Equipment Schedule contains any
features not specified therein, Customer grants Sentry, at Sentry's option and
Sentry's expense, the right to remove or deactivate any of such features. Such
removal or deactivation shall be performed by the manufacturer or another party
reasonably acceptable to Customer upon the request of Sentry, at a time
convenient to Customer, provided that Customer shall not unreasonably delay the
removal of such features.
(j) QUIET ENJOYMENT. Provided that no Event of Default has occurred or
is continuing hereunder, Sentry (or Assignee) shall not interfere with
Customer's right of quiet enjoyment and use of the Equipment.
(k) SUBSTITUTION. If the transaction is structured as a lease, Sentry
may, upon written notice to Customer, provide Equipment with different serial
numbers and locations than those shown on the applicable Equipment Schedule. Any
such substituted Equipment will meet or exceed specifications of Equipment
specified on the applicable Equipment Schedule.
(l) ALTERATIONS. Customer shall be permitted with Sentry's prior
written consent and at Customer's own expense to make alterations or
improvements to the Equipment which are readily removable without causing
material damage to the Equipment and do not adversely affect any manufacturer's
warranties with respect to such Equipment. Any alterations that are not removed
by Customer prior to the return of the Equipment to or as directed by Sentry
shall become the sole and exclusive property of Sentry.
(m) HEADINGS. Section headings are for convenience only and shall not
be construed as part of this Agreement.
(n) SUCCESSORS. This Agreement shall inure to and bind the permitted
successors and assigns of the respective parties.
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Counterpart No. 2
(o) SUPPLIER NOT AN AGENT OF LESSOR. Customer understands and agrees
that neither the manufacturer, seller or supplier, nor any salesperson or other
agent of the manufacturer, seller or supplier, is an agent of Lessor. No
salesperson or agent of the manufacturer, seller or supplier is authorized to
waive or alter any term or condition of this Agreement, and no representation as
to Equipment or any other matter by manufacturer, seller or supplier shall in
any way affect Customer's duty to pay Rent and perform its other obligations as
set forth in this Agreement.
(p) STATUTE OF LIMITATIONS. Any action by Customer against Lessor for
any default by Lessor under this Agreement, including breach of warranty or
indemnity, shall be barred unless commenced within one (1) year after any such
cause of action accrues.
IN WITNESS WHEREOF, Sentry and Customer have caused this Agreement to
be duly executed as of the date first above written.
SENTRY: CUSTOMER:
SENTRY FINANCIAL CORPORATION, VENTURI TECHNOLOGIES, INC.
a Utah corporation a Texas corporation
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxxxx
----------------------- ----------------------
Name: Xxxxxxxx X. Xxxx Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer Title: Chairman and CEO
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