EXHIBIT 10.20
MASTER LEASE PURCHASE AGREEMENT
THIS AGREEMENT is entered into the 9/th/ day of July, 1998 between
METLIFE CAPITAL CORPORATION ("Lessor") whose address is 00000 X.X. 0xx Xxxxxx,
Xxxxx 000, mailing address C-97550, Xxxxxxxx, Xxxxxxxxxx 00000 and VITESSE
MANUFACTURING & DEVELOPMENT CORPORATION, a wholly owned subsidiary of Vitesse
Semiconductor Corporation ("Lessee") whose address is 000 Xxxxx Xxxxx,
Xxxxxxxxx, XX 00000.
Lessor and Lessee from time to time may enter into written agreements in the
form of "Lease Purchase Addenda" for the leasing of equipment by Lessor to
Lessee. To facilitate such transactions, Lessor and Lessee are entering into
this Master Lease Purchase Agreement (the "Master Lease"), the terms and
provisions of which shall be incorporated by reference in each such Lease
Purchase Addendum, and they MUTUALLY AGREE AS FOLLOWS:
1. LEASE PURCHASE ADDENDUM
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If Lessor agrees to lease equipment when requested by Lessee, the parties shall
sign a Lease Purchase Addendum ("Addendum") setting forth the particulars
regarding the transaction, including, without limitation, the list of items of
equipment (individually, an "Item" and, collectively, the "Equipment"), the
prices of each Item (including disclosure of all rebates, discounts and other
incentives received or receivable with respect thereto), "Related Costs",
including taxes, transportation, installation and other applicable costs, the
aggregate of the foregoing ("Total Cost"), length of the Basic Term, rental
rates, purchase and renewal options, if any, and other applicable provisions.
"Cost of an Item" shall mean the price of the Item plus its applicable portion
of Related Costs. In the absence of a signed Addendum, this Master Lease shall
not constitute a lease or a commitment by either party to enter into a lease.
2. REQUEST TO LEASE; EQUIPMENT ACCEPTANCE
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(A) Request; Specifications. Signing an Addendum shall constitute the
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request from Lessee to Lessor to lease the Equipment, and the Addendum and this
Master Lease shall constitute the lease and agreement (the "Lease") regarding
the Equipment. As security for all obligations of Lessee to Lessor now existing
or hereafter arising under this Lease, Lessee grants Lessor a security interest
in all Equipment. At the time of signing the Addendum, Lessee shall furnish
Lessor detailed specifications ("Specifications") of the Items, including
descriptions, prices, delivery terms and instructions, installation provisions
and all other applicable specifications. Lessee assumes full responsibility with
respect to the selection of Items supplied for lease and the specification
thereof; the Lessor shall have no liability or responsibility with respect
thereto regardless of whether the Specifications prove inadequate for the
intended purpose or use.
(B) Inspection; Acceptance. It is Lessee's responsibility to receive and
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promptly inspect and test each Item tendered for delivery by a supplier and the
installation thereof. Lessee shall give Lessor written notice of acceptance of
an Item as soon as it can be determined that the Item and its installation are
in compliance with Specifications. As between Lessee and Lessor, the giving of
such written notice shall constitute Lessee's irrevocable acceptance of the Item
or Items designated in the notice, whether or not such Items or their
installation are defective in any respect, and notwithstanding any failure of an
Item or its installation to conform to Specifications, without prejudice however
to rights which Lessor and Lessee, or either of them, may have against any other
person, whether with respect to design, manufacture, condition or otherwise.
(C) Purchase Cut-Off Date. If, by the "Purchase Cut-Off Date" set forth in
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an Addendum, Lessee shall not have given Lessor written notice of acceptance of
an Item, Lessor shall have no obligation to lease the Item to Lessee. In such
event, Lessee shall immediately pay all accrued Interim Rental and reimburse
Lessor for all sums Lessor may have paid for or with respect to the Item and for
all Lessor's costs and expenses with respect thereto, and Lessee shall indemnify
and defend Lessor against and hold Lessor harmless from any and all cost,
expense, loss, liability and damage that Lessor may suffer or that may be
asserted against Lessor by reason of Lessor's failure or refusal to lease such
Item. Any such Item shall be deemed to be deleted from the Addendum and no
longer included in the Equipment.
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(D) Conditions Precedent. Lessee shall deliver to Lessor such further
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instruments, documents and certifications as Lessor reasonably may request,
including without limitation evidences of authority (e.g., corporate
certificates, corporate resolutions, partnership documents and authorizations),
evidence of insurance, purchase orders and acceptances thereof, purchase and
sale agreements and public financial information, and instruments and documents
to implement, perfect or continue the perfection of Lessor's rights and remedies
as Lessor of the Equipment, including Uniform Commercial Code forms. Lessee's
delivery of the foregoing and of the Specifications are conditions precedent to
any obligation of Lessor to make any commitments to pay for the Equipment or any
Item.
(E) Supplemental Lease Request. If at any time prior to the Closing Date
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Lessee requests Lessor to add further Items to the Equipment, and if Lessor so
agrees, Lessee shall execute a Lease Purchase Addendum Supplement in a form
supplied by Lessor, which shall become part of the Addendum, subject to all of
its provisions and the provisions of this Master Lease, and the equipment
specified therein shall be Items of Equipment under the Lease.
(F) Closing. Following the date ("Closing Date") which is the earlier of
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(i) the date Lessee gives Lessor written notice of acceptance of the last Item
or (ii) the Purchase Cut-Off Date (or on such other day as is mutually agreed),
Lessor shall send Lessee a Closing Schedule ("Schedule"), setting forth any
adjustments to descriptions and Costs of Items and Total Cost and confirming the
Closing Date, amount of Periodic Rental installments, payment schedules, and
insurance requirements. Lessee's signature on any such Schedule shall signify
the Lessee's agreement that the Schedule is correct. Notwithstanding any
discrepancies or disagreements between Lessor and Lessee regarding the
Schedules, Lessee shall pay all rentals as they become due in accordance with
the terms and conditions of the Lease. If Lessee establishes an error that
affects the amount of rentals, Lessor shall give Lessee a credit for any
overpayment of rentals, and Lessee promptly shall pay Lessor any underpayments.
The Schedules are incorporated herein by reference.
3. LESSEE'S WARRANTIES
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(A) Lessee represents and warrants to Lessor that it is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and that it is qualified to do business
in every jurisdiction where the failure to qualify would have a materially
adverse effect on Lessor's rights hereunder; it has taken all corporate or
partnership action which may be required to authorize the execution, delivery
and performance of this Lease, and such execution, delivery and performance will
not conflict with or violate any provision of its Charter or Articles or
Certificate of Incorporation, By-laws or any provisions thereof, or in the case
of a partnership, its Certificate of Partnership or Limited Partnership and its
Partnership Agreement, or result in a default or acceleration of any obligation
under any agreement, order, decree or judgment to which it is a party or by
which it is bound, nor is it now in default under any of the same; there is no
litigation or proceeding pending or threatened against it which may have a
materially adverse effect on Lessee or which would prevent or hinder the
performance by it of its obligations hereunder; this Lease and the attendant
documents constitute valid obligations of the Lessee, binding and enforceable
against it in accordance with their respective terms; no action by or with any
commission or administrative agency is required in connection herewith; it has
the power to own its assets and to transact business in which it is engaged; it
will give to Lessor prompt notice of any change in its name, identity or
structure.
(B) Lessee's written acceptance of an Item and its installation shall
constitute a REPRESENTATION AND WARRANTY BY Lessee to Lessor that: (i) the Item
is personal property in good order and condition; (ii) the Item conforms to
Specifications; (iii) unless otherwise specified, the Item has not been placed
into commercial service by the Lessee for more than ninety (90) days prior to
its acceptance by Lessee; and (iv) at all times Lessee shall keep the Equipment
in Lessee's possession at the address specified in the Addendum unless Lessor
shall otherwise consent in writing. Lessee shall not cause, suffer or permit any
Item to be attached or affixed to real property or improvements thereon
(collectively, "Realty") unless Lessor
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first shall consent thereto in writing and Lessee shall have obtained from all
persons having any interest in the Realty written consents which approve such
attachment, waive any claims to or encumbrances upon attached Items and consent
to the detachment and removal of such Items at any time by Lessor or Lessee.
Notwithstanding attachment of any Items to Realty, all the Equipment at all
times shall be and remain personal property. Upon termination of Lessee's right
to possession of the Equipment, whether by expiration of the Term or otherwise,
Lessee at its sole cost and expense shall detach and remove the Equipment from
the Realty and save Lessor harmless from and indemnify and defend Lessor against
any claim, demand, loss, liability, and damage arising from such detachment or
removal, or both.
4. TERM OF LEASE
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The Term of the Lease ("Term") may consist of an "Interim Term" and a "Basic
Term." The Interim Term shall begin on the date that Lessee first gives Lessor
written notice of acceptance of an Item or written approval for partial payment,
whichever is earlier, and shall continue until the time the Basic Term begins.
The Basic Term shall begin on the Closing Date and shall continue for the length
of the Basic Term set forth in the Addendum.
5. INTERIM RENTAL
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During the Interim Term, if any, Lessee shall pay rent monthly ("Interim
Rental"), on a calendar month basis, in an amount determined by Lessor by
applying the "Interim Rental Rate" set forth in the Addendum to portions of the
Total Cost then or theretofore expended by Lessor, for the number of days such
sums are outstanding during such calendar month. The "prime rate" referred to in
this Lease shall mean the rate per annum publicly announced by Chase Manhattan
Bank, New York City, from time to time as its prime rate, whether or not such
rate is applied by said bank to any then outstanding loans, changing with each
announced change of such prime rate. Lessee shall pay Lessor each installment of
Interim Rental on the fifteenth day after the end of such calendar month.
6. PERIODIC RENTAL
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Lessee shall pay rent ("Periodic Rental") for the Basic Term in the amounts and
in accordance with the payment schedule set forth in the Addendum. THIS IS AN
IRREVOCABLE LEASE AND, ANY PRESENT OR FUTURE LAW TO THE CONTRARY
NOTWITHSTANDING, LESSEE'S OBLIGATION TO PAY LESSOR OR ITS ASSIGNS ALL AMOUNTS
DUE HEREUNDER IS ABSOLUTELY UNCONDITIONAL AND THIS LEASE SHALL NOT TERMINATE BY
OPERATION OF LAW OR OTHERWISE, EXCEPT UPON EXPIRATION OF THE BASIC TERM AND ANY
RENEWAL TERM AND PAYMENT OF ALL AMOUNTS REQUIRED TO BE PAID HEREUNDER. LESSEE
SHALL NOT BE ENTITLED TO ANY ABATEMENT, REDUCTION, SETOFF, COUNTERCLAIM, DEFENSE
OR DEDUCTION WITH RESPECT TO ANY OF THE RENTALS REQUIRED TO BE PAID HEREUNDER OR
ANY OTHER AMOUNTS PAYABLE BY THE LESSEE HEREUNDER, NOR SHALL ANY OBLIGATIONS OF
LESSEE HEREUNDER BE AFFECTED FOR ANY REASON WHATSOEVER, NO MATTER HOW, WHEN OR
AGAINST WHOM ASSERTED, ARISING OR CLAIMED, provided, however, that Lessee may
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institute an independent action or claim against Lessor (but not against any
collateral assignee of Lessor) for any alleged breach hereof.
7. LATE PAYMENT
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If any installment of rent or other sum owing under the Lease shall not be paid
when due and shall remain unpaid for ten (10) days, Lessee shall pay Lessor a
late charge equal to five percent (5%) of the amount delinquent, but in no event
at a rate greater than limited by any applicable law. Such late charge is in
addition to and not in lieu of other rights and remedies Lessor may have.
8. INSURANCE
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Lessee shall procure and continuously maintain and pay for (a) all risk
insurance, excluding earthquake and flood insurance, against loss or damage to
the Equipment for not less than the full replacement value thereof naming Lessor
as Loss Payee and (b) combined single limit liability insurance, insuring Lessor
and Lessee, all in such amounts and against such risks and hazards as are set
forth in the Addendum, with insurance companies and pursuant to contracts or
policies reasonably satisfactory to Lessor. All contracts and policies shall
include provisions for the protection of Lessor notwithstanding any act or
neglect of or breach or
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default by Lessee, shall provide that proceeds of all insurance shall be payable
first to Lessor to the extent of its liability or interest as the case may be,
shall provide that they may not be modified, terminated or canceled unless
Lessor is given at least thirty (30) days' advance written notice thereof, and
shall provide that the coverage is "primary coverage" for the protection of
Lessee and Lessor notwithstanding any other coverage carried by Lessee or Lessor
protecting against similar risks. Lessee shall promptly notify any appropriate
insurer and Lessor of each and every occurrence which may become the basis of a
claim or cause of action against the insureds and provide Lessor with all data
pertinent to such occurrence. Lessee shall furnish Lessor with certificates of
such insurance or copies of policies upon request, and shall furnish Lessor with
renewal certificates not less than ten (10) days prior to the renewal date.
9. TAXES
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Lessee shall pay all taxes, fees, assessments and other governmental charges of
whatsoever kind or character and by whomsoever payable on or relating to any
Item of Equipment or the sale, purchase, ownership, use, value, value added,
possession, shipment, transportation, delivery or operation thereof or the
exercise of any option, election or performance of any obligation by Lessee
hereunder, which may accrue or be levied, assessed or imposed during the Term
and any Renewal Term or which remain unpaid as of the date of surrender of such
Item to Lessor, and all taxes of any kind imposed by any federal, state, local,
or foreign taxing authority against Lessor on or measured by any amount payable
by Lessee hereunder, including, without limitation, all license and registration
fees and all sales, use, value, ad valorem, personal property, excise, gross
receipts, stamp or other taxes, imposts, duties and charges together with any
penalties, fines or interest thereon, except taxes of Lessor on net income
imposed by the United States or any state. Lessee shall reimburse Lessor for any
payments made by Lessor which are the obligation of Lessee under the Lease, but
Lessee shall not be obligated to pay any amount under this Section so long as it
shall in good faith and by appropriate proceedings contest the validity or the
amount thereof, unless such contest would adversely affect Lessor's interest in
any Item of Equipment or would subject any Item to forfeiture or sale. Lessee
shall indemnify Lessor on an after-tax basis against any loss, claim, demand and
expense, including legal expense, resulting from such nonpayment or contest and
further agrees to indemnify Lessor against any and all taxes, assessments and
other charges imposed upon Lessor under the laws of any federal, state, local or
foreign government or taxing authority, as a result of any payment made by
Lessee pursuant to this Section. On request of either Lessor or Lessee, the
other will submit written evidence of all payments required of it under this
Section.
10. MAINTENANCE, ETC.
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(A) Lessee at its expense at all times shall maintain, service and repair
any damage to the Equipment so as to; (1) keep the Equipment in good and
efficient working order, condition and repair, ordinary wear and tear resulting
from the proper use excepted, and make all inspections and repairs, including
replacement of worn parts (which replacement parts shall be free and clear of
all liens and encumbrances and shall, upon incorporation into the item, become
free and clear of all other liens and encumbrances subject Lessor's security,
interest and shall be kept, to effect the foregoing and to comply with
requirements of laws, regulations, rules and provisions and conditions of
insurance policies; and (ii) pay all costs, expenses, fees and charges incurred
in connection with the use or operation of the Equipment and of each item,
including but not limited to repairs, maintenance, storage and servicing. Lessee
shall, at its sole cost and expense, make all alterations, substitutions,
improvements or additions to the Equipment or items required in order to comply
with laws, regulations, rules and insurance policies ("Required Additions").
Additionally, Lessee may install any addition or improvement on an item which is
readily removable without causing material damage to such item and which does
not impair the value of such item as originally delivered to Lessee ("Severable
Additions"). Lessee shall not make any alterations, substitutions, improvements
or additions to the Equipment or any item, except Required Additions or
Severable Additions, unless Lessor first shall have consented thereto in
writing, Notwithstanding any consent of Lessor, Lessee shall pay all costs and
expenses of the foregoing. All replacements, repairs, improvements, alterations,
substitutions and additions shall constitute accessions to the Equipment and
upon incorporation into the Equipment shall become subject to Lessor's security
interest shall be kept free of any and all other liens; provided, however, that
Lessee may remove Severable Additions at any time, provided that Lessee shall
repair all damage to such Equipment
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resulting from such installation and removal so as to restore the Equipment to
the condition in which it existed prior to the installation of such Severable
Additions, ordinary wear and tear excepted. In performing its obligations under
this Section, Lessee will not treat the Equipment less favorable than similar
equipment that it owns or leases, or reduce its performance in contemplation of
expiration of the Term or any Renewal Term.
(B) Lessor hereby transfers and assigns to Lessee, for so long during the
Term and any Renewal Term as Lessee is not in default, Lessor's right, title and
interest in, under and to any assignable factory and dealer warranty, whether
express or implied, with respect to the Equipment. All claims and actions upon
any warranty shall be made and prosecuted by Lessee at its sole cost and
expense. Lessor shall have no obligation to make or prosecute any claim upon or
under a warranty. So long as Lessee shall not be in default, Lessor shall
cooperate with Lessee with respect to a claim on a non-assignable warranty, at
Lessee's expense. Lessee shall have proceeds of a warranty claim or recovery
paid to Lessor. Lessor shall make such proceeds available for any repair,
restoration or replacement to correct such warranted condition. Excess proceeds
shall be used to reduce Lessee's Lease obligations.
11. USE
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So long as Lessee shall not be in default, Lessee shall be entitled to the
possession, use and quiet enjoyment of the Equipment during the Term and any
Renewal Term in accordance with the terms of the Lease. Lessee warrants that the
Equipment will at all times be used and operated solely in the conduct of
Lessee's business for the purpose for which it was designed and intended and
under and in compliance with applicable laws and all lawful acts, rules,
regulations and orders of any governmental bodies or officers having power to
regulate or supervise the use of such property, except that Lessee may in good
faith and by appropriate proceedings contest the application of any such rule,
regulation or order in any reasonable manner that will not adversely affect the
interest of Lessor in any Equipment or subject the same to forfeiture or sale.
Lessee will not permit its rights or interest hereunder to be subject to any
lien, charge or encumbrance and will keep the Equipment free and clear of any
and all liens, charges, encumbrances and adverse claims (except those arising
from acts of Lessor).
12. NET LEASE; LOSS AND DAMAGE
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(A) This is a net lease. Lessee assumes all risk of and shall indemnify
Lessor against all damage to and loss of the Equipment from any cause
whatsoever, whether or not such loss or damage is or could have been covered by
insurance. Except as otherwise specifically provided herein, the Lease shall not
terminate and there shall be no abatement, reduction, suspension or deferment of
Interim or Periodic Rental for any reason, including damage to or loss of the
Equipment or any one or more Items. Lessee promptly shall give Lessor written
notice of any material loss or damage, describing completely and in detail the
cause and the extent of loss and damage. At the option Lessor, Lessee shall: (i)
repair or restore the damaged or lost Items to good condition and working order;
or (ii) replace the damaged or lost Items with similar equipment or equipment
which in Lessor's reasonable and sole determination is of equal or greater value
in good condition and working order; or (iii) pay Lessor in cash the Stipulated
Loss Value of the damaged or lost Items; provided, however, that the foregoing
shall be at Lessee's option rather than Lessor's option if the following
conditions are met at the time of such loss or damage: (1) Lessee has paid all
amounts that are required to be paid under this Master Lease and under any
Addendum hereto; (2) Lessee is not otherwise in default, and no event shall have
occurred that with the passage of time or the giving of notice or both would
constitute a default, under any Addendum hereto or this Master Lease; (3) Lessor
shall have determined, in its reasonable and sole discretion, that Lessee will
be able to perform its remaining obligations hereunder and under any Addendum
hereto; and (4) all Equipment then remaining subject to the Master Lease and all
addenda shall have a value that is, in Lessor's sole reasonable discretion,
adequate to satisfy all of Lessee's obligations then remaining due and unpaid
hereunder and under all addenda hereto. Upon Lessee's complying with the
foregoing, Lessor shall pay or cause to be paid over to Lessee the net proceeds
of insurance, if any, with respect to such damage or loss. "Damage" and "loss"
shall include damages and losses of any kind whatsoever including, without
limitation, physical
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damage and partial or complete destruction, including intentionally caused
damage and destruction, and theft.
(B) If Lessee pays Lessor the Stipulated Loss Value for an Item, then the
Lease shall terminate with respect to that Item, that Item shall no longer be
deemed part of the Equipment and Lessee shall be entitled to retain the Item.
However, it is understood that Lessor makes no representation or warranty with
respect to the Item, and further that Lessor shall have no obligation to pay any
tax with respect thereto. In the event that Lessee pays Lessor the Stipulated
Loss Value for an Item, no further Interim Rental shall be payable with respect
to the Item, and Periodic Rental for the remainder of the Term shall be reduced
accordingly.
13. STIPULATED LOSS VALUE
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The "Stipulated Loss Value" of an Item shall be the Total Cost for such Item.
14. SECURITY INTEREST AND MARKING
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(A) This lease is one intended as security and for tax purposes, both
parties will treat this transaction as a secured loan by Lessor to Lessee.
(B) If so requested by Lessor, Lessee will affix tags, supplied by
Lessor, reflecting Lessor's security interest in the Equipment.
15. LESSEE'S INDEMNITIES
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Lessee will defend, indemnify and hold harmless Lessor from and against any
claim, cause of action, damage, liability, cost or expense (including but not
limited to legal fees and costs) which may be asserted against or incurred in
any manner by or for the account of Lessor or Lessee: (i) relating to the
Equipment or any part thereof, including without limitation the manufacture,
construction, purchase, delivery, acceptance or rejection, installation,
ownership, sale, leasing, removal or return of the Equipment, or as a result of
the use, maintenance, repair, replacement, operation or the condition thereof
(whether defects are latent or discoverable); (ii) by reason or as a result of
any act or omission of Lessee for itself or as agent or attorney-in-fact for
Lessor hereunder; (iii) as a result of claims for patent, trademark or copyright
infringement; or (iv) as a result of product liability claims or claims for
strict liability.
16. LESSOR MAY PERFORM
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If Lessee at any time shall fail to pay to any person any sum which Lessee is
required by the Lease to pay or shall fail to do or perform any other thing
Lessee is required by the Lease to do or perform, Lessor at its option may pay
such sum or do or perform such thing, and Lessee shall reimburse Lessor on
demand for the amount of such payment and for the cost and expense which may be
incurred by Lessor for such acts or performance, together with interest thereon
at the Default Rate from the date of demand until paid.
17. EVENTS OF DEFAULT AND REMEDIES
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(A) Events Of Default. Each of the following shall constitute an event of
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default:
(i) Failure to perform and comply with the provisions and
conditions of Section 8 hereof; or
(ii) Failure to pay within 10 days of the date when due, any sum,
including installments of rental, owed by Lessee or any
affiliate of Lessee at anytime to Lessor; or
(iii) Failure to perform and comply with any other provision or
condition of the Lease within thirty (30) days after Lessor
shall have given Lessee written notice of default with respect
thereto; or
(iv) Any event of default occurs with respect to any obligations of
Lessee to Lessor (or to any affiliate of Lessor, including
without limitation, MetLife Capital, Limited Partnership and
Metropolitan Life Insurance Company and their respective
affiliates and/or
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subsidiaries) on or with respect to any transactions, debts,
undertakings or agreements other than the lease; or
(v) If any representation or warranty made by Lessee herein or
in any statement or certificate furnished by Lessee in
connection with this Agreement proves untrue in any material
respect as of the date of making thereof, and shall not be
made good within thirty (30) days after written notice
thereof to Lessee, or Lessee becomes insolvent or is
generally not paying its debts as they become due or makes
an assignment for benefit of creditors; or
(vi) Proceedings are commenced by Lessee under the Federal
Bankruptcy Code or any similar Federal or State laws for the
relief of debtors are commenced against Lessee and are not
dismissed within sixty (60) days after such commencement, or
a trustee or receiver is appointed for Lessee or a major
part of its property and is not discharged within thirty
(30) days after such appointment; or
(vii) Any item of Equipment is seized or levied on under legal or
governmental process against Lessee or against such item of
Equipment or for any reason Lessor deems itself insecure; or
(viii) The merger, consolidation, reorganization, conversion to a
Subchapter "S" status or dissolution of a corporate or
partnership Lessee which has a materially adverse effect
upon Lessor's position under the Lease.
(B) REMEDIES. The occurrence of an Event of Default shall terminate any
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obligation of Lessor to lease Equipment or Items thereof to Lessee. When an
Event of Default has occurred and is continuing, Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at
law or in equity, to enforce performance by the Lessee of
the applicable covenants of this Lease or to recover damages
for the breach thereof; and/or
(ii) Without notice or demand declare immediately due and payable
the entire Stipulated Loss Value of any and all Items of
Equipment then under lease plus any and all amounts which
under the terms of the Lease may be then due; and thereupon
MetLife shall have an immediate right to pursue all remedies
provided by law, and, in that regard, Lessee hereby agrees
as follows:
(a) Lessee agrees to put Lessor in possession of the
Equipment on demand;
(b) Lessor is authorized to enter any premises where
Equipment is situated and take possession thereof
without notice or demand and without legal proceedings;
(c) At Lessor's request, Lessee will assemble the Equipment
and make it available to Lessor at a place designated
by Lessor which is reasonably convenient to both
parties;
(d) Lessee agrees that ten (10) days from the time notice
is sent shall be a reasonable period of notification of
a sale or other disposition of the Equipment;
(e) Lessee agrees to pay on demand the amount of all
expenses reasonably incurred by Lessor in protecting or
realizing on the Equipment;
(f) If Lessor disposes of the Equipment, Lessee agrees to
pay any deficiency remaining after application of the
net proceeds to the amounts due hereunder.
If upon the occurrence of an Event of Default, Lessor brings suit or otherwise
incurs expenses for protection of Lessor's rights, Lessee will pay Lessor its
legal fees, in a reasonable amount, together with Lessor's collection expenses
and court costs. In addition, from and after an Event of Default, Lessee shall
be liable for interest on amounts due Lessor hereunder at a rate per annum
computed monthly which shall be five (5) percentage points above the prime rate,
but not greater than the maximum rate, if any, limited by applicable law
("Default Rate"); provided however, that Lessee shall not be assessed a late
charge during such period of time that Default Rate is accruing against Lessee
as herein stated. The remedies herein provided in favor of Lessor shall not be
deemed to be exclusive but shall be concurrent and cumulative and in addition to
all
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other remedies available at law or equity. The exercise or partial exercise of
any remedy shall not restrict Lessor from further exercise of that remedy or any
other remedy.
18. SURRENDER
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At any time that Lessee is required to deliver the Equipment to Lessor, Lessee
shall immediately cease using the Equipment and at Lessee's expense shall
redeliver and surrender the Equipment to Lessor in good order, condition and
repair, ordinary wear and tear excepted, securely crated and safely packed, at a
place to be designated by Lessor in the State where the Equipment by the terms
of the Addendum is required to be kept, and, if Lessor so specifies, loaded FOB
on a common or contract carrier designated by Lessor.
19. HOLDOVER
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If Lessee shall not immediately redeliver and surrender any Item of Equipment to
Lessor when required by the terms hereof, Lessee shall pay Lessor, at such time
or times as Lessor may demand, a sum equal to a one-month installment of
Periodic Rental for each calendar month or fraction of a month during which such
failure to redeliver and surrender continues.
20. INSPECTION; REPORTS
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Lessor, its agents and employees shall have the right to enter upon any premises
where the Equipment or Items are then located to inspect and examine the same
during normal business hours and, if Lessor reasonably believes any Items or
Lessor's rights are in jeopardy of damage or loss, at any other times. So long
as Lessee is not in default, Lessor shall give Lessee not less than forty-eight
(48) hours notice of such inspection. Lessee shall immediately give Lessor
written notice of any damage to or loss of the Equipment or any Items from any
cause, including without limitation damage or loss caused by accident, the
elements, intentional acts and theft. Such notice shall set forth an itemization
of the affected Items and a detailed account of the event, including names of
any injured persons and a description of any damaged property arising from any
such event or from any use or operation of the Equipment or any Items, and of
any attempt to take, distrain, levy upon, seize or attach the Equipment or any
Items. All rights granted to Lessor herein are for the benefit of Lessor and
shall not be construed to impose any obligation on Lessor, whether or not Lessor
makes any inspections or receives any reports.
21. FINANCIAL AND OTHER DATA
------------------------
During the Term and any Renewal Term, Lessee: (a) shall furnish Lessor annual
balance sheets and profit and loss statements of Lessee and any guarantor of
Lessee's obligations accompanied, at Lessor's request, by the audit report of an
independent certified public accountant reasonably acceptable to Lessor; and (b)
at Lessor's request, shall furnish Lessor all other publicly available financial
information and reports reasonably requested by Lessor when publicly available,
including quarterly or other interim balance sheets and profit and loss
statements of Lessee and any such guarantor. Lessee shall furnish such other
information as Lessor may reasonably request at any times concerning Lessee and
its affairs.
22. WARRANTY OF INFORMATION
-----------------------
Lessee warrants that all information furnished and to be furnished to Lessor is
accurate and that all financial statements it has furnished and hereafter may
furnish Lessor, including operating statements and statements of condition, are
and will be prepared in accordance with generally accepted accounting
principles, consistently applied, and reasonably reflect and will reflect, as of
their respective dates, results of the operations and the financial condition of
Lessee and of any other entity they purport to cover.
23. NON-WAIVER
----------
Neither the acceptance by Lessor of any payment or any other performance, nor
any act or failure of Lessor to act or to exercise any rights, remedies or
options in any one or more instances shall constitute a waiver of any such
right, remedy or option or of any other then existing or thereafter accruing
right, remedy or option, or of any breach or default then existing or thereafter
occurring. No purported waiver by Lessor of any right, remedy, option, breach or
default shall be binding unless in writing and signed by an officer of Lessor. A
written waiver by Lessor of any right, remedy, option, breach or default shall
not constitute a
Page 8
waiver of any other then existing or thereafter accruing right, remedy or option
or of any other then existing or thereafter occurring breach or default.
24. NOTICES; PAYMENTS
-----------------
(A) A written notice may be given: (i) by delivering the same to a
corporate officer of the party to whom it is directed (the "Addressee"), or to a
general partner if the Addressee is a partnership, or to the owner if the
Addressee is a sole proprietorship; or (ii) by mailing the notice to the
Addressee by first class mail, registered or certified, with postage prepaid,
addressed to the Addressee at the address following its name in the opening
paragraph of this Master Lease or to such other address as Addressee may specify
by notice in writing given in accordance with this Section. A notice so mailed
shall be deemed given on the third business day following the date of mailing. A
"business day" shall be any day that is not a Saturday or Sunday or a legal
holiday.
(B) The Lessee shall make all payments to Lessor at the place where
the notice is to be mailed to Lessor pursuant to subparagraph (A). Payments are
deemed paid when received by Lessor.
25. ASSIGNMENT
----------
(A) Lessee shall not assign the Lease or any rights in or to the
Equipment or Items. Any attempted assignment shall be of no effect, unless
Lessor first shall have consented thereto in writing. Lessor's consent to an
assignment in any one or more instances shall not impose any obligation upon
Lessor to consent to any other or further assignments. Lessor's consent to an
assignment shall not release Lessee from any obligations with respect to the
Lease unless expressly so stated in the written consent.
(B) All rights of Lessor hereunder may be assigned, pledged,
mortgaged, transferred or otherwise disposed of, either in whole or in part,
without notice to Lessee but subject always to the rights of Lessee under this
lease. If Lessee is given notice of any such assignment, Lessee shall
acknowledge receipt thereof in writing. In the event that Lessor assigns this
Lease or the rent due or to become due hereunder or any other interest herein,
whether as security for any of its indebtedness or otherwise, no breach or
default by Lessor hereunder or pursuant to any other agreement between Lessor
and Lessee, should there be one, shall excuse performance by Lessee of any
provision hereof, it being understood that in the event of such default or
breach by Lessor that Lessee shall pursue any rights on account thereof solely
against Lessor. No such assignee shall be obligated to perform any duty,
covenant or condition requested to be performed by Lessor under the terms of
this Lease.
26. SURVIVAL
--------
The representations, warranties, indemnities and agreements of Lessee, and
Lessee's obligations under any and all provisions of the Lease, shall survive
the expiration or other termination of the Lease, shall be binding upon its
successors and assigns and are expressly made for the benefit of and shall be
enforceable by Lessor and its successors and assigns.
27. MISCELLANEOUS
-------------
(A) The term "Lessor" shall mean the Lessor named herein and its
successors and assigns.
(B) Whenever the context so requires, any pronoun gender includes all
other genders, and the singular includes the plural. If more than one person
constitute Lessee, whether as a partnership or otherwise, all such persons are
and shall be jointly and severally liable for all agreements, undertakings and
obligations of Lessee.
(C) All captions and section, paragraph and other divisions and
subdivisions are for convenience of reference only and shall not affect the
construction, interpretation or meaning of the agreement or Lease or of any of
the provisions thereof.
Page 9
(D) This Lease shall be governed by and construed according to the law of
the State of Washington.
(E) This Lease shall be binding upon and, except as limited in Section 25
hereof, shall inure to the benefit of Lessor and Lessee and their respective
successors and assigns.
(F) This Lease cannot be canceled or terminated except as expressly
provided herein.
(G) Wherever Lessor's consent is required hereunder, such consent will not
be unreasonably withheld.
(H) Lessee's obligation to pay or reimburse Lessor for expenses as
provided hereunder shall be limited to reasonable expenses.
28. LESSOR'S DISCLAIMER
-------------------
Lessee acknowledges and agrees that it has selected both the Equipment of the
type and quantity which is the subject of this Lease and the supplier from whom
the Equipment was purchased. LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, AS TO THE DESIGN, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
QUALITY, WORKMANSHIP, OR THE SUITABILITY, ADEQUACY, OPERATION, USE OR
PERFORMANCE OF THE EQUIPMENT OR AS TO ITS MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. ANY DELAY IN DELIVERY SHALL NOT AFFECT THE VALIDITY OF THIS
LEASE. The Lessee understands and agrees that neither the supplier nor any
salesman or any agent of the supplier is an agent of Lessor. No salesman or
agent of supplier is authorized to waive or alter any term or condition of this
Lease, and no representation as to the Equipment or any other matter by the
supplier shall in any way affect Lessee's duty to pay the rent and perform its
obligations as set forth in this Lease. Lessor shall not be liable to Lessee for
any incidental, consequential, or indirect damages or for any act, neglect,
omission, breach or default by any third party.
29. NO AFFILIATION WITH SUPPLIERS
-----------------------------
Lessee warrants that neither it nor any of its officers, directors (if a
corporation) or partners (if a partnership) has, directly or indirectly, a
substantial financial interest in the manufacturer or supplier of any Equipment
except as previously disclosed in writing to Lessor.
30. ENTIRE AGREEMENT
----------------
This Master Lease and any Lease Purchase Addenda hereto shall constitute the
entire agreement between the parties and shall not be altered or amended except
by an agreement in writing signed by the parties hereto or their successors or
assigns.
IN WITNESS WHEREOF Lessor and Lessee have signed this agreement as of the
day and year first hereinabove written.
LESSOR: LESSEE:
METLIFE CAPITAL CORPORATION VITESSE MANUFACTURING &
DEVELOPMENT CORPORATION, a wholly
owned subsidiary of VITESSE
SEMICONDUCTOR CORPORATION
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------------ ---------------------------------
Its Xxxxx Xxxxxx
Vice President Its VP Finance
------------------------------ ---------------------------------
Page 10
LEASE PURCHASE ADDENDUM NO. 1
THIS ADDENDUM is entered into the 9 day June, 1998 of between MetLife
Capital Corporation ("Lessor") whose mailing address is C-97550, Xxxxxxxx,
Xxxxxxxxxx 00000 and VITESSE MANUFACTURING & DEVELOPMENT CORPORATION, a wholly
owned subsidiary of VITESSE SEMICONDUCTOR CORPORATION ("Lessee") whose address
is 000 Xxxxx Xxxxx, Xxxxxxxxx, XX 00000.
Lessee has requested to lease from Lessor the following items of
personal property (individually, an "Item" and, collectively, the "Equipment")
for the prices and for delivery as follows:
------------------------------------------------------------------------------------------------------------------
Name and Address Complete Description of Equipment
of Supplier Quantity Price
------------------------------------------------------------------------------------------------------------------
New Semiconductor Manufacturing Equipment 10,000,000.00
Serial No.
--------------------------------------------
TOTAL PRICE $10,000,000.00
--------------------------------------------
FED. EXCISE TAX $
--------------------------------------------
TRANSPORTATION $
--------------------------------------------
OTHER $
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Date Delivery Instructions to be
Delivery as specified by Lessee TOTAL COST: $10,000,000.00
Expected: May 15, 1998 to Supplier
------------------------------------------------------------------------------------------------------------------
SHIP TO
LESSEE AT: 0000 XXXXXX XXXX XXXXX, XXXXXXXX XXXXXXX, XX 00000 AND
000 XXXXX XXXXX, XXXXXXXXX, XX 00000
------------------------------------------------------------------------------------------------------------------
Lessee and Lessor AGREE that subject to the conditions and agreements herein and
in the Master Lease referred to below (i) Lessor shall lease the Equipment to
Lessee, and (ii) Lessee shall lease the Equipment from Lessor and perform and
comply with the provisions of this Agreement.
CERTAIN DEFINITIONS AND STIPULATIONS:
Purchase Cut-Off Date: September 30, 1998
Particular Lease Terms:
Length of Basic Term: 48 Months
"Interim Rental Rate": equal to Chase Manhattan Bank's Prime rate.
"Periodic Rental Rate" will be calculated at a variable rate equal to
the average weekly yield of the 30-Day Commercial Paper (financial) in
effect from time to time (as published in the Federal Reserve
Statistical Release H.15[519]) plus 1.5% (the "Variable Rate") computed
on the basis of a 360 day year of twelve consecutive 30 day months and
the payment is payable monthly in arrears.
Lessee shall make Monthly Rental Payments during the Basic Term and any
Renewal Term in an amount equal to (1) "Tranche A" interest only at a
rate equal to two percent (2%) per annum on an assumed original balance
of $8,000,000, and (2) "Tranche B" the "Level Payment Amount" set forth
in the following paragraph. In addition, Lessee shall make the annual
cleanup payments as set forth in the following paragraph.
For the first year of the Lease, the Level Payment Amount shall be
$11,666.67 per month. The monthly Level Payment Amount for each twelve
month period following the initial twelve months of the Basic Term,
including the Level Payment Amount for the Renewal Term, if any, will
be calculated by applying the then current Variable Rate over the
remaining Basic Term to the then outstanding amount due. Lessor will
adjust the Level Payment Amount in accordance with the preceding
formula on each anniversary of the Closing Date for each year during
the Basic Term and for the Renewal Term, if any.
On each anniversary of the Closing Date, the aggregate Level Payment
Amount for the preceding year will be compared with what the aggregate
monthly rental payments would have been for that year had they been
calculated monthly using the Variable Rate. (The aggregate amount that
would have been paid had the monthly payments been calculated using the
actual Variable Rate is referred to herein as the "Actual Aggregate
Amount"). If the Actual Aggregate Amount is greater than the aggregate
Level Payment Amount paid by Lessee for that year, then Lessee shall
remit the difference to Lessor upon receipt of an invoice therefor. If
the Actual Aggregate Amount is less than the aggregate Level Payment
Amount paid by Lessee for that year, then such over-payment shall be
credited to Lessee's rental payments for the subsequent year or, in the
case of the end of the Basic Term or any Renewal Term, such over-
payment shall be credited to the amount Lessee owes to Lessor under the
end of term provisions set forth below.
END OF TERM PROVISIONS
a) On the last day of the Basic Term, Lessee may purchase for
cash all but not less than all of the Equipment then under the Master
Lease and all schedules and addenda thereto for a price equal to 100%
of the Total Cost (the "Purchase Price").
(b) If Lessee elects not to purchase the Equipment pursuant to (a)
above, then Lessee may either (i) renew the Lease, pursuant to
Subsection (c) below, or (ii) sell the equipment in a commercially
reasonable manner, or, at Lessor's option, Lessor will sell the
Equipment as agent for Lessee. In no event will Lessee sell the
Equipment for less than 90% of the Total Cost without Lessor's prior
written consent. All net proceeds of sale shall be paid to Lessor;
provided, however, that if the net proceeds of sale exceed 100% of
-------- -------
the Total Cost, then such excess shall be paid to Lessee; and,
provided, further, that if the net proceeds of sale are less than 100%
-------- -------
of the Total Cost, then Lessee shall pay to Lessor the difference to
a maximum of 86% the Total Cost. (The amount payable to Lessor under
this subsection (b) is referred to herein as the "Sale Price.")
(c) If Lessee neither purchases nor sells the Equipment in
accordance with Sections (a) or (b) above, then on the last day of the
Basic Term the Lease will be renewed for a period of 12 months (the
"Renewal Term"). The Monthly Rental Payment and the Level Payment
Amount for the Renewal Term shall be an amount calculated by Lessor
pursuant to the provisions set forth above under the heading
"Particular Lease Terms" and shall be payable monthly in arrears. On
the last day of the Renewal Term, Lessee shall have the option to
purchase all but not less than all of the Equipment then under Lease
for a price equal to 100% of the Total Cost. If Lessee does not
exercise this purchase option, then Lessee shall sell the Equipment
or, at Lessor's option, Lessor shall sell the Equipment as agent for
Lessee, in a commercially reasonable manner. In no event will Lessee
sell the Equipment for less than 90% of the Total Cost without
Lessor's prior written consent. All net proceeds of sale shall be paid
to Lessor; provided, however, that if the net proceeds of sale exceed
-------- -------
100% of the Total Cost, then such excess shall be paid to Lessee; and
provided, further, that if the net proceeds of sale are less than 100%
-------- -------
of the Total Cost, then Lessee shall pay to Lessor the difference to a
maximum of 86% of the Total Cost.
Regardless of whether Lessee elects to purchase the Equipment, to sell
the Equipment, or to renew the Lease, in any such case Lessee shall
deliver to Lessor written notice of its election not less than one
hundred twenty (120) days prior to the last day of the Basic Term.
Premises where Equipment will be kept: 4323 Arrows West Drive,
--------------------------
Xxxxxxxx Xxxxxxx, XX 00000
--------------------------
000 Xxxxx Xxxxx, Xxxxxxxxx,
--------------------------
XX 00000
--------------------------
INSURANCE REQUIRED:
LIABILITY. Not less than $10,000,000.00 Combined Single Limit Liability
insurance, including bodily injury and death and property damage, naming
Lessor as additional insured.
PHYSICAL DAMAGE. Not less than $ 10,000,000 All risk physical damage
insurance, including loss by burglary, theft, and malicious mischief, for
full replacement value of the equipment, naming Lessor as loss payee.
Other: __________________________________________________________________
EARLY PURCHASE OR SALE/YIELD MAINTENANCE PREMIUM: Lessee shall have the option
at any time after the 2/nd/ anniversary of the Closing Date to purchase or sell
all but not less than all of the Equipment then remaining under the Master Lease
and all schedules and addenda thereto. The terms of any such purchase or sale
shall be as set forth under subsections (a) or (b), respectively, of the section
above titled "End of Term Provisions." In addition, it shall be a condition
precedent to Lessee's right to exercise the early purchase or sale option that
Lessee shall not then be in default hereunder or under the Master Lease and that
Lessee pays all amounts set forth in, and otherwise complies with the terms of,
this subsection. If Lessee elects to purchase or sell the Equipment, Lessee
shall deliver to Lessor not less than one hundred twenty (120) days prior
written notice of its election. At the end of the 120 day period (the day on
which the 120-day period ends being referred to herein as the "Termination
Date"), Lessee shall pay to Lessor, in cash, the sum of (i) the Purchase Price
or the Sale Price for all Equipment then under the Master Lease and any
schedules or addenda thereto plus (ii) the Yield Maintenance Amount calculated
as set forth below with respect to all Equipment then under the Master Lease and
all schedules and addenda thereto plus (iii) the Periodic Rental then due under
the Master Lease and any schedules and addenda thereto plus (iv) all other
amounts that have accrued and remain unpaid hereunder and under the Master Lease
and any schedules and addenda thereto as of the Termination Date.
The Yield Maintenance Amount (YMA) is determined by multiplying the YMA Premium
Factor by the Total Cost.
YMA Premium Factors
-------------------
YMA Premium Factor after the 2/nd/ anniversary of the Closing Date is 0.0860
YMA Premium Factor after the 3/rd/ anniversary of the Closing Date is 0.0442
MASTER LEASE: Lessor and Lessee are entering into or have entered into a Master
Lease Purchase Agreement ("Master Lease") dated July 9 1998. All of the terms,
conditions, agreements and provisions of the Master Lease are incorporated
herein by this reference and constitute a part of this Addendum. If there shall
be any conflict between any provision of the Master Lease and a provision of
this Addendum, the provision of the Addendum shall govern.
SUBSTITUTION OF EQUIPMENT: Notwithstanding any provision herein or in the Master
Lease to the contrary. Lessee shall have the right at any time during the term
of the Lease to deliver to Lessor a written request that Lessor accept as
substitute collateral, equipment that (1) has a then fair market value equal to
or greater than the then fair market value of the Equipment being substituted,
as determined by Lessor in its sole reasonable discretion, and (2) satisfies all
the other representations and warranties with respect to the Equipment that are
set forth herein and in the Master Lease. If Lessor determines that the
substitute equipment meets the preceding requirements, Lessor shall so notify
Lessee. Lessee shall execute and deliver to Lessor such filings and documents as
Lessor shall reasonably require with respect to the substitution and the
substitute equipment, including without limitation financing statements or
amendments thereto for filing in appropriate jurisdictions to perfect and
protect Lessor's interest in the substitute equipment. Lessee shall pay any and
all costs and expenses reasonably incurred by Lessor in connection with the
substitution including without limitation the cost of any lien searches
reasonably required by Lessor to ascertain that the substitute equipment is free
and clear of all liens and encumbrances. When Lessor has determined that it has
a perfected, first priority security interest in the substitute equipment, such
equipment shall become Equipment for all purposes hereunder and under the Master
Lease and the substituted Equipment shall be released from the lien of the
Master Lease.
RELEASE OF SECURITY INTEREST: Notwithstanding the provisions set forth in
Section 2(A) of the Master Lease to the contrary, if the following conditions
are met, Lessor shall release its security interest in the Equipment specified
in this Addendum: (1) Lessee has paid all amounts that are required to be paid
hereunder and under the Master Lease; (2) Lessee is not otherwise in default,
and no event shall have occurred that with the passage of time or the giving of
notice or both would constitute a default, under the Master Lease, this
Addendum, or any other addendum; (3) Lessor shall have determined, in its
reasonable and sole discretion, that Lessee will be able to perform its
remaining obligations under the Master Lease; and (4) all Equipment other than
the Equipment under this Schedule then remaining subject to the Master Lease and
all other addenda shall have a value that is, in Lessor's sole reasonable
discretion, adequate to satisfy all of Lessee's obligations then remaining due
and unpaid under the Master Lease and all addenda thereto.
LESSOR'S DISCLAIMER: Lessee acknowledges and agrees that it has selected both
the Equipment of the type and quantity which is the subject of this Addendum and
the supplier from whom Lessor purchased the Equipment. LESSOR MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE DESIGN, COMPLIANCE
WITH SPECIFICATIONS, CONDITION, QUALITY, WORKMANSHIP, OR THE SUITABILITY,
ADEQUACY, OPERATION, USE OR PERFORMANCE OF THE EQUIPMENT OR AS TO ITS
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. ANY DELAY IN DELIVERY
SHALL NOT AFFECT THE VALIDITY OF THE MASTER LEASE OR THIS ADDENDUM. The Lessee
understands and agrees that neither the supplier nor any salesman nor any agent
of the supplier is authorized to waive or alter any term or condition of the
Master Lease or this Addendum, and no representation as to the Equipment or any
other matter by the supplier shall in any way affect Lessee's duty to pay the
rent and perform its obligations as set forth in the Master Lease or this
Addendum. Lessor shall not be liable to Lessee for incidental, consequential, or
indirect damages or for any act, neglect, omission, breach or default by Lessor
or any third party.
LESSOR: LESSEE:
VITESSE MANUFACTURING & DEVELOPMENT CORPORATION, A
METLIFE CAPITAL WHOLLY OWNED SUBSIDIARY OF VITESSE SEMICONDUCTOR
CORPORATION CORPORATION
-------------------------------------------------
BY: /s/ XXXXX XXXXXX BY: /s/ XXXXXX XXXXXXX
---------------- ----------------------------
Its: VICE PRESIDENT ITS: V. PRESIDENT
---------------- ---------------------------
By: /s/ Xxxxx Xxxx
---------------------------
Its: CONTROLLER / ASST SECRETARY
---------------------------
LEASE PURCHASE CLOSING SCHEDULE
Lessee Name: Vitesse Manufacturing & Development Corporation
-----------------------------------------------
Lease Purchase Addendum No: One
-----------------------------------------------
Dated: July 29, 1998
-----------------------------------------------
Schedule Number: One
-----------------------------------------------
Closing Date: August 1, 1998
-----------------------------------------------
1. DESCRIPTION OF EQUIPMENT:
New Semiconductor Manufacturing Equipment as shown on the attached Exhibit
"A" hereby incorporated by this reference.
2. LOCATION OF EQUIPMENT: (Lessee agrees that the Equipment will at all times
remain in the possession and control of Lessee at the location(s)
specified below, and will not be removed without Lessor's prior written
consent.):
000 Xxxxx Xxxxx, Xxxxxxxxx, XX 00000 and
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
3. Tranche A Equipment Cost: $2,606,534.24
-------------------------
Tranche B Equipment Cost: $ 651,633.56
-------------------------
Total Equipment Cost: $3,258,167.80
-------------------------
4. PERIODIC RENT: As per Addendum No. 1 Particular Lease Terms section with
the assumed original balance on Tranche A of interest only payments at a
rate equal to 2% per annum on an assumed original balance of
$2,606,534.24, and:
Tranche B Level Payments for the first twelve months of the Lease shall
be $3,812.06; with annual adjustments calculated per Xxxxxxxx Xx. 0,
Xxxxxxx Definitions and Stipulations section.
5. PURCHASE: As per Addendum No. 1 End of Term Provisions section
6. INSURANCE REQUIRED: (All policies to require at lease 10 days' notice of
cancellation to Lessor)
a. Combined Single Limit Liability, including bodily injury and property
damage, of not less than $20,000,000.00 naming Lessor as
----------------------
additional insured.
b. All risk physical damage, including burglary and theft, for the full
replacement value of the Equipment, based on the original equipment cost
of $ 3,258,167.80 and Loss Payable Endorsement naming Lessor as
-----------------------
loss payee.
7. EARLY TERMINATION: As per Addendum No. 1 Early Purchase or Sale/Yield
Maintenance Premium section
8. STIPULATED LOSS VALUE:
During the Basic Term and any Renewal Term: $3,258,167.80
such terms are defined in the Lease Purchase Addendum No. One
--------------------------------------------------------------
Accepted and agreed this 29/th/ day of July, 1998, as Schedule No. One to that
certain Master Lease Purchase Agreement dated July 9, 1998 by and between the
parties hereto.
LESSOR: LESSEE:
VITESSE MANUFACTURING & DEVELOPMENT
CORPORATION, a wholly owned subsidiary of
METLIFE CAPITAL CORPORATION VITESSE SEMICONDUCTOR CORPORATION
By: By:
/S/ Xxxxx Xxxxxx /s/ Xxxxx Xxxx
--------------------------- ---------------------------------
Xxxxx Xxxxxx
Its Vice President Its CONTROLLER/ASST. SECRETARY
--------------------------- ---------------------------------
EXHIBIT "A"
TO THE LEASE PURCHASE CLOSING SCHEDULE NO. ONE
TOKYO ELECTRON LIMITED
0-0, XXXXXXX 0-XXXXX
XXXXXX-XX,XXXXX 000-0000, XXXXX
INVOICE #IV1358501
One (1) P-8 Full Auto Prober S/N PA05315
INVOICE #IV1358502
One (1) P-8 Full Auto Prober S/N PA05415
INVOICE #IV1358503
One (1) P-8 Full Auto Prober S/N PA05409
SCHLUMBERGER TECHNOLOGIES
0000 XXXXXXXXXX XXXXX
XXX XXXX, XX 00000-0000
INVOICE #163091
One (1) SX-l00 Automated Test System S/N 93136
Sub local memory - 192 pins, DPS Option,
Option HCDPS Mech Ready, Option Fail Capture Memory,
H V heat exchanger 00 xx, xxxx, xxxxx xxxx, xxx, 00XXX, DC
Ethernet thin add-on, GPIB/IEEE.488.I/F. Option
Parallel interface option, RSZ32 Fiber Opticserial I/F,
LM, HCKPS Expansion Option, LM, HCKPS Cal/Ver Loadboard
INVOICE #168812
One (1) SX-l00 Automated Test System S/N 93143
DPS Option, Option
HCDPS Mech Ready, Option Fail Capture Memory,
H V heat exchanger 00 xx, xxxx, xxxxx xxxx, xxx, 00XXX, DC
Ethernet thin add-on, GPIB/IEEE.488.I/F. Option
Parallel interface option, RSZ32 Fiber Opticserial I/F
YM
------------
Initial
------------
Initial
SR
------------
Initial
August 1, 1998
$2.606.534.24 Bellevue. Washington
------------- --------------------
PROMISSORY NOTE
RE: ADDENDUM NO. ONE ("ADDENDUM")
FOR VALUED RECEIVED, MetLife Capital Corporation ("Maker"), promises
to pay to the order of Vitesse Manufacturing & Development Corporation, a wholly
owned subsidiary of Vitesse Semiconductor Corporation ("Payee"), at its office
at 000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, the principal sum of Two
Million Six Hundred Six Thousand Five Hundred Thirty-Four Dollars and Twenty-
Four Cents ($2,606,534.24) together with interest on unpaid principal, subject
to the other provisions contained herein, from the date hereof until the
principal has been repaid in full at a rate of two percent (2%) per annum
("Rate") computed on the basis of a 360-day year of twelve consecutive thirty-
day months. Maker shall make monthly payments of interest only on the unpaid
principal commencing on August 1, 1998 and monthly thereafter on the 1/st/ day
of each month until the Maturity Date, as defined below, at which time the
entire principal and any accrued interest remaining unpaid shall be due and
payable.
The "Maturity Date" is (A) if Payee prepays all of its obligations
under Addendum No. One (the "Addendum") to that certain Master Lease Purchase
Agreement (the "Lease") dated July 8, 1998 between Payee and Maker, then the
Maturity Date shall be the date on which Payee prepays, and (B) if Payee does
not prepay all of its obligations under the Addendum, then the Maturity Date
shall be the later of (1) June 1, 2002 or (2) the date on which Payee has
performed all of its obligations to Maker under the Addendum and Maker.
Notwithstanding the foregoing, Maker may prepay the entire balance of the Note
at any time without penalty or premium.
No interest shall accrue hereunder for any period during which
interest is not accruing under the Addendum. If Payee fails to make any payment
that is required to be made to Maker under the Lease, Maker shall have the right
to set-off such amount against Maker's obligations under this Note without
notice to or the consent of Payee and without any obligation to confirm with
Payee in advance whether the set-off is valid. Nothing contained herein shall be
deemed to require Maker to set-off any amounts owed hereunder and Payee
acknowledges and agrees that Maker shall have no such set-off obligation. Payee
expressly waives any right it may have to require Maker to give any notice of
intent to set-off and waives any right to prohibit any set-off on any grounds;
provided, however, that the foregoing waiver shall not be construed as limiting
-----------------
any legal right Payee may have to challenge any set-off after the fact. If Maker
elects to exercise its set-off rights, the principal amount outstanding
hereunder shall be immediately reduced by the amount of the set-off. Maker shall
notify Payee of any set-off and the amount thereof, but if Maker fails to notify
Payee, such failure shall not affect or invalidate Maker's right to the set-off.
If Payee does not receive any payment on the date due, then, unless
Maker's failure to make such payment was a result of Maker exercising its
set-off rights, Maker will pay Payee a late charge of five percent (5%) of the
payment outstanding together with the payment and, provided said sum is received
within ten (10) days of the date due, Payee agrees not to demand immediate
payment of the whole sum of principal and interest as otherwise permitted
herein.
If, from any circumstances whatsoever, payment of any obligation due
under this Note at the time such performance shall be due shall involve
exceeding the maximum amount currently prescribed by any applicable usury
statute or any other applicable law, then such obligation shall be reduced to
such maximum amount, so that in no event shall any payment be possible under
this Note, or under any other instrument evidencing or securing the indebtedness
evidenced hereby, that is in excess of such maximum amount.
This Note shall be governed by and construed in accordance with the
laws of the State of Washington. No amendment to this Note shall be binding
unless it is in writing and duly signed by Maker and Payee.
IN WITNESS WHEREOF, Maker has caused this Promissory Note to be
executed by its duly authorized representative on the date first set forth
above.
METLIFE CAPITAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Manual X. Xxxxxxxx
Title: Vice President
---------------------------
VITESSE MANUFACTURING & DEVELOPMENT CORPORATION a wholly owned subsidiary of
VITESSE SEMICONDUCTOR CORPORATION hereby acknowledges and agrees to the terms of
the foregoing Promissory Note, including without limitation the terms regarding
set-off rights, waivers and abatement of interest.
VITESSE MANUFACTURING & DEVELOPMENT CORPORATION
A wholly owned subsidiary of VITESSE SEMICONDUCTOR CORPORPATION
By:/s/ XXXXX XXXX
------------------------------
XXXXX XXXX
Title: Controller/Asst. Secretary
---------------------------
