[LOGO] KeyCorp Leasing Ltd.
EXHIBIT 10.4
MASTER EQUIPMENT LEASE AGREEMENT
THIS MASTER EQUIPMENT LEASE AGREEMENT dated as of May 22, 1996 is made
by and between KEYCORP LEASING LTD., a Delaware corporation with its
principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
("Lessor"), and GEOGRAPHICS, INC., a Wyoming corporation with its principal
place of business at 0000 Xxxxx Xxxx, Xxxxxx, XX 00000 ("Lessee").
TERMS AND CONDITIONS OF LEASE
1. LEASE. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Equipment, subject to and upon the terms and conditions set forth
herein. Each Equipment Schedule shall constitute a separate and enforceable
lease incorporating all the terms and conditions of this Master Equipment
Lease Agreement as if such terms and conditions were set forth in full in
such Equipment Schedule. In the event that any term or condition of any
Equipment Schedule conflicts with or is inconsistent with any term or
condition of this Master Equipment Lease Agreement, the terms and conditions
of the Equipment Schedule shall govern.
2. DISCLAIMER OF WARRANTIES. LESSOR MAKES NO (AND SHALL NOT BE DEEMED
TO HAVE MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION
OR, OR THE QUALITY OF THE MATERIAL EQUIPMENT OR WORKMANSHIP IN, THE
EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. THE
STATE OF TITLE THERETO OR ANY COMPONENT THERETO, THE ABSENCE OF LATENT OR
OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), AND LESSOR HEREBY DISCLAIMS THE
SAME; IT BEING UNDERSTOOD THAT THE EQUIPMENT IS LEASED TO LESSEE "AS IS" AND
ALL SUCH RISKS, IF ANY, ARE TO BE BORNE BY LESSEE. NO DEFECT IN, OR UNFITNESS
OF, THE EQUIPMENT, OR ANY OF THE OTHER FOREGOING MATTERS, SHALL RELIEVE
LESSEE OF THE OBLIGATION TO PAY RENT OR OF ANY OTHER OBLIGATION HEREUNDER.
LESSEE HAS MADE THE SELECTION OF THE EQUIPMENT FROM THE SUPPLIER BASED ON ITS
OWN JUDGMENT AND EXPRESSLY DISCLAIMS ANY RELIANCE UPON ANY STATEMENTS OR
REPRESENTATIONS MADE BY LESSOR. LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS,
SERVICE, MAINTENANCE OR DEFECT IN THE EQUIPMENT OR THE OPERATION THEREOF IN
NO EVENT SHALL LESSOR BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES (WHETHER UNDER THE UCC OR OTHERWISE), INCLUDING, WITHOUT LIMITATION,
ANY LOSS, COST OR DAMAGE TO LESSEE OR OTHERS ARISING FROM ANY OF THE
FOREGOING MATTERS, INCLUDING, WITHOUT LIMITATION, DEFECTS, NEGLIGENCE,
DELAYS, FAILURE OF DELIVERY OR NON-PERFORMANCE OF THE EQUIPMENT. ANY WARRANTY
BY THE SUPPLIER IS HEREBY ASSIGNED TO LESSEE BY LESSOR WITHOUT RECOURSE. SUCH
WARRANTY SHALL NOT RELEASE LESSEE FROM ITS OBLIGATION TO LESSOR TO PAY RENT,
TO PERFORM ALL OTHER OBLIGATIONS HEREUNDER AND TO KEEP, MAINTAIN AND
SURRENDER THE EQUIPMENT IN THE CONDITION REQUIRED BY SECTIONS 12 AND 13
HEREOF. Lessee's execution and delivery of a Certificate of Acceptance shall
be conclusive evidence as between Lessor and Lessee that the Items of
Equipment described therein are in all of the foregoing respects satisfactory
to Lessee, and Lessee shall not assert any claim of any nature whatsoever
against Lessor based on any of the foregoing matters; PROVIDED, HOWEVER, that
nothing contained herein shall in any way bar, reduce or defeat any claim
that Lessee may have against the Supplier or any other person (other than
Lessor).
3. NON-CANCELABLE LEASE. THIS LEASE IS A NET LEASE AND LESSEE'S
OBLIGATION TO PAY RENT AND PERFORM ITS OBLIGATIONS HEREUNDER ARE ABSOLUTE,
IRREVOCABLE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER AND
SHALL NOT BE SUBJECT TO ANY RIGHT OF SET OFF, COUNTERCLAIM, DEDUCTION,
DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE AGAINST THE SUPPLIER, LESSOR OR
ANY OTHER PARTY. LESSEE SHALL HAVE NO RIGHT TO TERMINATE (EXCEPT AS EXPRESSLY
PROVIDED HEREIN) OR CANCEL THIS LEASE OR TO BE RELEASED OR DISCHARGED FROM
ITS OBLIGATION HEREUNDER FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, DEFECTS IN, DESTRUCTION OF, DAMAGE TO OR INTERFERENCE WITH ANY
USE OF THE EQUIPMENT (FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, WAR, ACT OF GOD, STRIKE OR GOVERNMENTAL REGULATION), THE
INVALIDITY, ILLEGALITY OR UNENFORCEABILITY (OR ANY ALLEGATION THEREOF) OF
THIS LEASE OR ANY PROVISION HEREOF, OR ANY OTHER OCCURRENCE WHATSOEVER,
WHETHER SIMILAR OR DISSIMILAR TO THE FOREGOING, WHETHER FORESEEN OR
UNFORESEEN.
4. DEFINITIONS. Unless the context otherwise requires, as used in this
Lease, the following terms shall have the respective meanings indicated below
and shall be equally applicable to both the singular and the plural forms
thereof:
(a) "APPLICABLE LAW" shall mean all applicable Federal, state, local
and foreign laws (including, without limitation, any Environmental Law,
industrial hygiene and occupational safety or similar laws), ordinances,
judgments, decrees, injunctions, writs and orders of any Governmental
Authority and rules, regulations, orders, licenses and permits of any
Governmental Authority.
(b) "APPRAISAL PROCEDURE" shall mean the following procedure for
obtaining an appraisal of the Fair Market Sales Value or the Fair Market
Rental Value. Lessor shall provided Lessee with the names of three independent
Appraisers. Within ten (10) business days thereafter, Lessee shall select one
of such Appraisers to perform the appraisal. The selected Appraiser shall be
instructed to perform its appraisal based upon the assumptions specified in
the definition of Fair Market Sales Value or Fair Market Rental Value, as
applicable, and shall complete its appraisal within twenty (20) business days
after such selection. Any such appraisal shall be final, binding and
conclusive on Lessee and Lessor and shall have the legal effect of an
arbitration award. Lessee shall pay the fees and expenses of the selected
Appraiser.
(c) "APPRAISER" shall mean a person engaged in the business of
appraising property who has at least ten years' experience in appraising
property similar to the Equipment.
(d) "AUTHORIZED SIGNER" shall mean those officers of Lessee, set
forth on an incumbency certificate (in form and substance satisfactory to
Lessor) delivered by Lessee to Lessor, who are authorized and empowered to
execute this Lease, the Equipment Schedules and all other documents the
execution of which is contemplated hereby.
(e) "CERTIFICATE OF ACCEPTANCE" shall mean a certificate of
acceptance, in form and substance satisfactory to Lessor, executed and
delivered by Lessee in accordance with Section 7 hereof indicating, among
other things, that the Equipment described therein has been accepted by
Lessee for all purposes of this Lease.
(f) "DEFAULT" shall mean any event or condition which, with the
passage of time or the giving of notice, or both, would constitute an Event
of Default.
(g) "ENVIRONMENTAL LAW" shall mean any federal, state, or local
statute, law, ordinance, code, rule, regulation, or order or decree
regulating, relating to or imposing liability upon a person in connection
with the use, release or disposal of any hazardous, toxic or dangerous
substance, waste, or material as same may relate to the Equipment or its
operation.
(h) "EQUIPMENT" shall mean an item or items of personal property
designated from time to time by Lessee which are described on an Equipment
Schedule and which are being or will be leased by Lessee pursuant to this
Lease, together with all replacement parts, additions and accessories
incorporated therein or affixed thereto.
(i) "EQUIPMENT GROUP" shall consist of all Items of Equipment listed
on a particular Equipment Schedule.
(j) "EQUIPMENT LOCATION" shall mean the location of the Equipment,
as set forth on an Equipment Schedule or such other location (approved by
Lessor) as Lessee shall from time to time specify in writing.
(k) "EQUIPMENT SCHEDULE" shall mean each equipment lease schedule
from time to time executed by Lessor and Lessee with respect to an Equipment
Group, pursuant to an incorporating by reference all of the terms and
conditions of this Master Equipment Lease Agreement.
(l) "EVENT OF DEFAULT" shall have the meaning specified in Section 22
hereof.
(m) "FAIR MARKET RENTAL VALUE" or "FAIR MARKET SALE VALUE" shall mean
the value of each Item of Equipment for lease or sale, unless otherwise
specified herein as determined between Lessor and Lessee, or, if Lessor and
Lessee are unable to agree, pursuant to the Appraisal Procedure, which would
be obtained in an arms-length transaction between an informed and willing
lessor or seller (under no compulsion to lease or sell) and an informed and
willing lessee or buyer (under no compulsion to lease or purchase). In
determining the Fair Market Rental Value or Fair Market Sale Value of the
Equipment, (a) such Fair Market Rental Value or Fair Market Sale Value shall
be calculated on the assumption that the Equipment is in the condition and
repair required by Sections 12 and 13 hereof, and (b) there shall be excluded
from the calculation thereof the value of any upgrades and attachments made
pursuant to Section 14 hereof in which the Lessor does not own an interest;
PROVIDED, HOWEVER, that, unless otherwise provided in such Section 22, for
purposes of Section 22 of the Lease. Fair Market Sale Value of the Equipment
shall be determined based upon the actual facts and circumstances then
prevailing without regard to the assumptions in clause (a) above.
(n) "GOVERNMENTAL ACTION" shall mean all authorizations, consents,
approvals, waivers, filings and declarations of any Governmental Authority,
including, without limitation, those environmental and operating permits
required for the ownership, lease, use and operation of the Equipment.
(o) "GOVERNMENTAL AUTHORITY" shall mean any foreign, Federal, state,
county, municipal or other governmental authority, agency, board or court.
(p) "GUARANTOR" shall mean any guarantor of Lessee's obligations
hereunder.
(q) "ITEM OF EQUIPMENT" shall mean each item of the Equipment.
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(r) "LATE PAYMENT RATE" shall mean an annual interest rate equal
to the lesser of 16% or the maximum interest rate permitted by Applicable Law.
(s) "LEASE", "HEREOF", "HEREIN" and "HEREUNDER" shall mean, with
respect to an Equipment Group, this Master Equipment Lease Agreement and the
Equipment Schedule on which such Equipment Group is described, including all
addenda attached thereto and made a part thereof.
(t) "LIEN" shall mean all mortgages, pledges, security interests,
liens, encumbrances, claims or other charges of any kind whatsoever.
(u) "PURCHASE AGREEMENT" shall mean any purchase agreement or
other contract entered into between the Supplier and Lessee for the
acquisition of the Equipment to be leased hereunder.
(v) "RELATED EQUIPMENT SCHEDULE" shall have the meaning set forth
in Section 27 hereof.
(w) "RENEWAL NOTICE" shall have the meaning set forth in Section
32 hereof.
(x) "RETURN NOTICE" shall have the meaning set forth in Section
13 hereof.
(y) "RENT" shall mean the periodic rental payments due hereunder
for the leasing of the Equipment, as set forth on the Equipment Schedules,
and, where the context hereof requires, all such additional amounts as may
from time to time be payable under any provision of this Lease.
(z) "RENT COMMENCEMENT DATE" shall mean, with respect to an
Equipment Group, the date on which Lessor disburses funds for the purchase of
such Equipment Group, as determined by Lessor in its sole discretion.
(aa) "RENT PAYMENT DATE" with respect to an Equipment Group, shall
have the meaning set forth in the Equipment Schedule associated therewith.
(ab) "STIPULATED LOSS VALUE" shall mean, as of any Rent Payment
Date and with respect to an Item of Equipment, the amount determined by
multiplying the Total Cost for such Item of Equipment by the percentage
specified in the applicable Stipulated Loss Value Supplement opposite such
Rent Payment Date.
(ac) "STIPULATED LOSS VALUE SUPPLEMENT" with respect to an
Equipment Group, shall have the meaning set forth in the Equipment Schedule
associated therewith.
(ad) "SUPPLIER" shall mean the manufacturer or the vendor of the
Equipment, as set forth on each Equipment Schedule.
(ae) "TERM" shall mean the Initial Term, as defined in Section 8
hereof, and any Renewal Term, as defined in Section 8 hereof.
(af) "TOTAL COST" shall mean, with respect to an Item of
Equipment, (1) the acquisition cost of such Item of Equipment (including
Lessor's capitalized costs), as set forth on the Equipment Schedule on which
such Item of Equipment is described, or (2) if no such acquisition cost is
specified, the Supplier's invoice price for such Item of Equipment plus
Lessor's capitalized costs, or (3) if no such acquisition cost is specified
and no such invoice price is obtainable, an allocated price for such Item of
Equipment based on the Total Cost of all Items of Equipment set forth on the
Equipment Schedule on which such Item of Equipment is described, as
determined by Lessor in its sole discretion.
5. SUPPLIER NOT AN AGENT. LESSEE UNDERSTANDS AND AGREES THAT (i)
NEITHER THE SUPPLIER, NOR ANY SALES REPRESENTATIVE OR OTHER AGENT OF THE
SUPPLIER IS (1) AN AGENT OF LESSOR OR (2) AUTHORIZED TO MAKE OR ALTER ANY
TERM OR CONDITION OF THIS LEASE, AND (ii) NO SUCH WAIVER OR ALTERATION SHALL
VARY THE TERMS OF THIS LEASE UNLESS EXPRESSLY SET FORTH HEREIN.
6. ORDERING EQUIPMENT. Lessee has selected and ordered the Equipment
from the Supplier and, if appropriate, has entered into a Purchase Agreement
with respect thereto. Lessor shall accept an assignment from Lessee of
Lessee's rights, but none of Lessee's obligations, under any such Purchase
Agreement. Lessee shall arrange for delivery of the Equipment so that it can
be accepted in accordance with Section 7 hereof. If an Item of Equipment is
subject to an existing Purchase Agreement between Lessee and the Supplier,
Lessee warrants that such Item of Equipment has not been delivered to Lessee
as of the date of the Equipment Schedule applicable thereto. If Lessee causes
the Equipment to be modified or altered, or requests any additions thereto
prior to the Rent Commencement Date, Lessee (i) acknowledges that any such
modification, alteration or addition to an Item of Equipment may affect the
Total Cost, taxes, purchase and renewal options, if any, Stipulated Loss
Value and Rent with respect to such Item of Equipment, and (ii) hereby
authorizes Lessor to adjust such Total Cost, taxes, purchase and renewal
options, if any, Stipulated Loss Value and Rent as appropriate. Lessee hereby
authorizes Lessor to complete each Equipment Schedule with the serial numbers
and other identification data of the Equipment Group associated therewith, as
such data is received by Lessor.
7. DELIVERY AND ACCEPTANCE. Upon acceptance for lease by Lessee of
any Equipment delivered to Lessee and described in any Equipment Schedule,
Lessee shall execute and deliver to Lessor a Certificate of Acceptance.
LESSOR SHALL HAVE NO OBLIGATION TO ADVANCE FUNDS FOR THE PURCHASE OF THE
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EQUIPMENT UNLESS AND UNTIL LESSOR SHALL HAVE RECEIVED A CERTIFICATE OF
ACCEPTANCE RELATING THERETO EXECUTED BY LESSEE. Such Certificate of
Acceptance shall constitute Lessee's acknowledgment that such Equipment (a)
was received by Lessee, (b) is satisfactory to Lessee in all respects and is
acceptable to Lessee for lease hereunder, (c) is suitable for Lessee's
purposes, (d) is in good order, repair and condition, (e) has been installed
and operates properly, and (f) is subject to all of the terms and conditions
of this Lease (including, without limitation, Section 2 hereof).
8. TERM; SURVIVAL. With respect to any Item of Equipment, unless
otherwise specified thereon, the initial term of this Lease (the "Initial
Term") shall commence on the date on which such Item of Equipment is
delivered to Lessee, and, unless earlier terminated as provided herein, shall
expire on the final Rent Payment Date for such Item of Equipment. With
respect to an Item of Equipment, any renewal term of this Lease
(individually, a "Renewal Term"), as contemplated hereby, shall commence
immediately upon the expiration of the Initial Term or any prior Renewal
Term, as the case may be, and, unless earlier terminated as provided herein,
shall expire on the date on which the final payment of Rent is due and paid
hereunder. All obligations of Lessee hereunder shall survive the expiration,
cancellation or other termination of the Term hereof.
9. RENT. With respect to Each Item of Equipment, Lessee shall pay
the Rent set forth on the Equipment Schedule applicable to such Item of
Equipment, commencing on the Rent Commencement Date, and, unless otherwise set
forth on such Equipment Schedule, on the same day of each payment period
thereafter for the balance of the Term. Rent shall be due whether or not
Lessee has received any notice that such payments are due. All Rent shall be
paid to Lessor at its address set forth on the Equipment Schedule, or as
otherwise directed by Lessor in writing.
10. LOCATION; INSPECTION; LABELS. The Equipment shall be delivered to
the Equipment Location and shall not be removed therefrom without Lessor's
prior written consent. Lessor shall have the right to enter upon the
Equipment Location and inspect the Equipment at any reasonable time. Lessor
may, without notice to Lessee, remove the Equipment if the Equipment is, in
the opinion of Lessor, being used beyond its capacity or is in any manner
improperly cared for, abused or misused. At Lessor's request, Lessee shall
affix labels stating that the Equipment is owned by Lessor permanently in a
prominent place on the Equipment and shall keep such labels in good repair
and condition.
11. USE; ALTERATIONS. Lessee shall use the Equipment lawfully and
only in the manner for which it was designed and intended and so as to
subject it only to ordinary wear and tear. Lessee shall comply with all
Applicable Law. Lessee shall immediately notify Lessor in writing of any
existing, pending or threatened investigation, inquiry, claim or action by
any Governmental Authority in connection with any Applicable Law or
Governmental Action which could adversely affect the Equipment or this Lease.
Lessee, at its own expense, shall make such alterations, additions or
modifications or improvements to the Equipment as may be required from time
to time to meet the requirements of Applicable Law or Governmental Action.
Except as otherwise permitted herein, Lessee shall not make any alterations,
additions, modifications or improvements to the Equipment without Lessor's
prior written consent.
12. REPAIRS AND MAINTENANCE. Lessee, at Lessee's own cost and
expense, shall (a) keep the Equipment in good repair, good operating
condition and working order and in compliance with the manufacturer's
specifications, and (b) enter into and keep in full force and effect during
the Term hereof a maintenance agreement with the manufacturer of the
Equipment, or a manufacturer-approved maintenance organization, to maintain,
service and repair the Equipment so as to keep the Equipment in as good
operating condition and working order as it was when it first became subject
to this Lease and in compliance with the manufacturer's specifications. Upon
Lessor's request, Lessee shall furnish Lessor with an executed copy of any
such maintenance agreement. An alternate source of maintenance may be used by
Lessee with Lessor's prior written consent. Lessee, at its own cost and
expense and within a reasonable period of time, shall replace any part of any
Item of Equipment that becomes worn out, lost, stolen, destroyed, or otherwise
rendered permanently unfit or unavailable for use (whether or not such
replacement is covered by the aforesaid maintenance agreement), with a
replacement part of the same manufacture, value, remaining useful life and
utility as the replaced part immediately preceding the replacement (assuming
that such replaced part is in the condition required by this Lease). Such
replacement part shall be free and clear of all Liens. Notwithstanding the
foregoing, this paragraph shall not apply to any Loss or Damage (as defined
in Section 16 hereof) of any Item of Equipment.
13. RETURN OF EQUIPMENT. Upon the expiration (subject to Section 32
hereof and except as otherwise provided in an Equipment Schedule) or earlier
termination of this Lease, Lessee, at its sole expense, shall return the
Equipment to Lessor by delivering such Equipment F.A.S. or F.O.B. to such
location or such carrier (packed for shipping) as Lessor shall specify.
Lessee agrees that the Equipment, when returned, shall be in the condition
required
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by Section 12 hereof. All components of the Equipment shall have been
properly serviced, following the manufacturer's written operating and
servicing procedures, such that the Equipment is eligible for a
manufacturer's standard, full service maintenance contract without Lessor's
incurring any expense to repair or rehabilitate the Equipment. If, in the
opinion of Lessor, any Item of Equipment fails to meet the standards set
forth above, Lessee agrees to pay on demand all costs and expenses incurred
in connection with repairing such item of Equipment and restoring it so as to
meet such standards, assembling and delivering such Item of Equipment. Lessee
shall give Lessor ninety (90) days written notice (the "Return Notice") that
Lessee is returning the Equipment as provided for above. If Lessee fails to
return any Item of Equipment as required hereunder, then, all of Lessee's
obligations under this Lease (including, without limitation, Lessee's
obligation to pay Rent for such Item of Equipment at the rental then
applicable under this Lease) shall continue in full force and effect until
such Item of Equipment shall have been returned in the condition required
hereunder.
14. EQUIPMENT UPGRADE/ATTACHMENTS. In addition to the requirements of
Section 11 hereof, Lessee, at its own expense, may from time to time add or
install upgrades or attachments to the Equipment during the Term, PROVIDED,
that such upgrades or attachments (a) are readily removable without causing
material damage to the Equipment, (b) do not materially adversely effect the
Fair Market Sale Value, the Fair Market Rental Value, residual value,
productive capacity, utility or remaining useful life of the Equipment, and
(c) do not cause such Equipment to become "limited use property" within the
meaning of Revenue Procedure 76-30, 1976-2 C.B. 647 (or such other successor
tax provision), as of the applicable delivery date or the time of such
upgrade or attachment. Any such upgrades or attachments which are not
required by Section 11 hereof and which can be removed without causing
damage to or adversely affecting the condition of the Equipment, or reducing
the Fair Market Sale Value, the Fair Market Rental Value, residual value,
productive capacity, utility or remaining useful life of the Equipment shall
remain the property of Lessee; and upon the expiration or earlier termination
of this Lease and provided that no Event of Default exists, Less may, at its
option, remove any such upgrades or attachments and, upon such removal, shall
restore the Equipment to the condition required hereunder.
15. SUBLEASE AND ASSIGNMENT. (A) WITHOUT LESSOR'S PRIOR WRITTEN CONSENT,
LESSEE SHALL NOT (1) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE
DISPOSE OF THIS LEASE, THE EQUIPMENT OR ANY INTEREST THEREIN, OR (II) SUBLET
OR LEND THE EQUIPMENT TO, OR PERMIT THE EQUIPMENT TO BE USED BY, ANYONE OTHER
THAN LESSEE OR LESSEE'S QUALIFIED EMPLOYEES.
(b) Lessor, at any time with or without notice to Lessee, may sell,
transfer, assign and/or grant a security interest in this Lease, any
Equipment Schedule or any item of Equipment. In any such event, any such
purchaser, transferee, assignee or secured party shall have and may exercise
all of Lessor's rights hereunder with respect to the items to which any such
sale, transfer, assignment and/or security interest relates, and LESSEE SHALL
NOT ASSERT AGAINST ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR SECURED PARTY
ANY DEFENSE, COUNTERCLAIM OR ASSET THAT LESSEE MAY HAVE AGAINST LESSOR.
Lessee acknowledges that no such sale, transfer, assignment and/or security
interest will materially change Lessee's duties hereunder or materially
increase its burdens or risk hereunder. Lessee agrees that upon written
notice to Lessee of any such sale, transfer, assignment and/or security
interest, Less shall acknowledge receipt thereof in writing and shall comply
with the directions and demands of Lessor's successor or assign.
16. LOSS OF OR DAMAGE TO EQUIPMENT. (a) Lessee shall bear the entire risk
of loss, theft, destruction, disappearance of or damage to any and all items
of Equipment ("Loss of Damage") from any cause whatsoever during the Term
hereof until the Equipment is returned to Lessor in accordance with Section
13 hereof. No loss or Damage shall relieve Lessee of the obligation to pay
Rent or of any other obligation under this Lease.
(b) In the event of Loss or Damage to any item of Equipment, Lessee, at
the option of Lessor, shall within thirty (30) days following such Loss or
Damage: (1) place such Item of Equipment in good condition and repair, in
accordance with the terms hereof: (2) replace such item of Equipment with
replacement equipment (acceptable to Lessor) in as good condition and repair,
and with the same value, remaining useful economic life and utility, as such
replaced Item of Equipment immediately preceding the Loss or Damage (assuming
that such replaced Item of Equipment is the condition required by this
Lease), which replacement equipment shall be free and clear of all Liens, or
(3) pay to Lessor the sum of (i) all Rent due and owing hereunder with
respect to such Item of Equipment (at the time of such payment) plus (ii) the
Stipulated Loss Value as of the Rent Payment Date next following the date of
such Loss or Damage with respect to such Item of Equipment, as set forth on
the Schedule applicable thereto. Upon Lessor's receipt of the payment
required under subsection (3) above, Lessee shall be entitled to Lessor's
interest in such Item of Equipment, in its then condition and location, "as
is" and "where is", without any warranties, express or implied. If Lessee
replaces the Item of Equipment pursuant to subsection (b) above, title to
such replacement equipment shall immediately (and without further act) vest
in Lessor and thereupon shall be deemed to constitute Items of Equipment and
be fully subject to this Lease as if originally leased hereunder. If Lessee
fails to either restore or replace the Item of
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Equipment pursuant to subsection (1) or (2) above, respectively, Lessee shall
make the payment under subsection (3) above.
17. INSURANCE. (a) Lessee, at all times during the Term hereof (until the
Equipment shall have been returned to Lessor) and at Lessee's own cost and
expense, shall maintain (1) insurance against all risk of physical loss or
damage to the Equipment (including theft and collision for Equipment
consisting of motor vehicles) in an amount not less than the full replacement
value thereof or the Stipulated Loss Value thereof, which is greater, and (2)
comprehensive public liability insurance including blanket contractual
liability for personal and bodily injury and property damage in an amount
satisfactory to Lessor.
(b) All insurance policies required hereunder shall (1) require 30 days'
prior written notice of cancellation or material change in coverage to Lessor
(any such cancellation or change, as applicable, not being effective until
the thirtieth (30th) day after the giving of such notice); (2) name Lessor as
an additional insured under the public liability policies and name Lessor as
sole loss payee under the property insurance policies; (3) not require
contributions from other policies held by Lessor; (4) waive any right of
subrogation against Lessor; (5) in respect of any liability of any of Lessor,
except for the insurers' salvage rights in the event of a Loss or Damage,
waive the right of such insurers to set-off, to counterclaim or to any other
deduction, whether by attachment or otherwise, to the extent of any monies
due Lessor under such policies; (6) not require that Lessor pay or be liable
for any premiums with respect to such insurance covered thereby; (7) be in
full force and effect throughout any geographical areas at any time traversed
by any Item of Equipment; and (8) contain breach of warranty provisions
providing that, in respect of the interests of Lessor in such policies, the
insurance shall not be invalidated by any action or inaction of Lessee or any
other person (other than Lessor) and shall insure Lessor regardless of any
breach or violation of any warranty, declaration or condition contained in
such policies by Lessee or by any other person (other than Lessor). Prior to
the first date of delivery of any Item of Equipment hereunder, and thereafter
not less than 15 days prior to the expiration dates of the expiring policies
theretofore delivered pursuant to this Section, Lessee shall deliver to
Lessor a duplicate original of all policies (or in the case of blanket
policies, certificates thereof issued by the insurers thereunder) for the
insurance maintained pursuant to this Section.
18. GENERAL TAX INDEMNIFICATION. Lessee shall pay when due and shall
indemnify and hold Lessor harmless from and against (on an after-tax basis)
any and all taxes, fees, withholdings, levies, imposts, duties, assessments
and charges of any kind and nature (together with interest and penalties
thereof)(including, without limitation, sales, use, gross receipts, personal
property, ad valorem, business and occupational, franchise, value added,
leasing, leasing use, documentary, stamp or other taxes) imposed upon or
against Lessor, Lessor's assigns, Lessee or any Item of Equipment by any
Governmental Authority with respect to any Item of Equipment or the
manufacturing, ordering, sale, purchase, shipment, delivery, acceptance or
rejection, ownership, titling, registration, leasing, subleasing, possession,
use, operation, removal, return or other dispossession thereof or upon the
rents, receipts or earnings arising therefrom or upon or with respect to this
Lease, excepting only all Federal, state and local taxes on or measured by
lessor's net income (other than income tax, resulting from making any
alterations, improvements, modifications, additions, upgrades, attachments,
replacements or substitutions by Lessee). Whenever this Lease terminates as
to any Item of Equipment, Less shall, upon written request by Lessor, advance
to Lessor the amount determined by Lessor to be the personal property or
other taxes on said item which are not yet payable, but for which Lessee is
responsible, provided Lessor provides Lessee with copies of tax bills
supporting Lessor's request.
19. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to perform or
comply with any of its obligations contained herein, Lessor may (but shall
not be obligated to do so) itself perform or comply with such obligations,
and the amount of the reasonable costs and expenses of Lessor incurred in
connection with such performance or compliance, together with interest on
such amount at the late Payment Rate, shall be payable by Lessee to Lessor
upon demand. No such performance or compliance by Lessor shall be deemed a
waiver of the rights and remedies of Lessor or any assignee of Lessor against
Lessee hereunder or be deemed to cure the default of Lessee hereunder.
20. DELINQUENT PAYMENTS: INTEREST. If Lessee fails to pay any Rent or
other sums under this Lease when the same becomes due, Lessee shall pay to
Lessor a late charge equal to five percent (5%) of such delinquent amount.
Such late charge shall be payable by Lessee upon demand by Lessor and shall
be deemed Rent hereunder. In no event shall such late charge exceed the
maximum amounts permitted under Applicable Law.
21. PERSONAL PROPERTY: LIENS. Lessor and Lessee hereby agree that the
Equipment is, and shall at all times remain, personal property
notwithstanding the fact that any Item of Equipment may now be, or hereafter
become, in any manner affixed or attached to real property or any
improvements thereon. Lessee shall at all times keep the Equipment free and
clear from all Liens. Lessees shall (i) give Lessor immediate written notice
of any such Lien, (ii) promptly, at Lessee's sole cost and expense, take such
action as may be necessary to discharge any such Lien, and
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(iii) indemnify and hold Lessor, on an after-tax basis, harmless from and
against any loss or damage caused by any such Lien.
22. EVENTS OF DEFAULT: REMEDIES. (a) As used herein, the term "Event
of Default" shall mean any of the following events: (1) Lessee fails to pay
any Rent within ten (10) days after the same shall have become due; (2)
Lessee or any Guarantor becomes insolvent or makes an assignment for the
benefit of its creditors; (3) a receiver, trustee, conservator or liquidator
of Lessee or any Guarantor or of all or a substantial part of Lessee's or
such Guarantor's assets is appointed with or without the application or
consent of Lessee or such Guarantor, respectively; (4) a petition is filed by
or against Lessee or any Guarantor under any bankruptcy, insolvency or
similar legislation; (5) Lessee or any Guarantor violates or fails to perform
any provision of either this Lease or any other loan, lease or credit
agreement or any acquisition or purchase agreement with Lessor or any other
party; (6) Lessee violates or fails to perform any covenant or representation
made by Lessee herein; (7) any representation or warranty made herein or in
any Lease, certificate, financial statement or other statement furnished to
Lessor shall prove to be false or misleading in any material respect as of
the date on which the same was made; (8) Lessee makes a bulk transfer of
furniture, furnishings, fixtures or other equipment or inventory; or (9)
there is a material adverse change in Lessee's or any Guarantor's financial
condition since the first Rent Commencement Date of any Equipment Schedule
executed in connection herewith. An Event of Default with respect to any
Equipment Schedule hereunder shall, at Lessor's option, constitute an Event
of Default for all Equipment Schedules hereunder and any other agreements
between Lessor and Lessee.
(b) Upon the occurrence of an Event of Default, Lessor may do one
or more of the following as Lessor in its sole discretion shall elect: (1)
proceed by appropriate court action or actions, either at law or in equity,
to enforce performance by Lessee of the applicable covenants of this Lease or
to recover damages for the breach thereof; (2) sell any Item of Equipment at
public or private sale; (3) hold, keep idle or lease to others any Item of
Equipment as Lessor in its sole discretion may determine; (4) by notice in
writing to Lessee, terminate this Lease, without prejudice to any other
remedies hereunder; (5) demand that Lessee, and Lessee shall, upon written
demand of Lessor and at Lessee's expense forthwith return all Items of
Equipment to Lessor or its order in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease, except
those provisions relating to periods of notice; (6) enter upon the premises
of Lessee or other premises where any Item of Equipment may be located and,
without notice to Lessee and with or without legal process, take possession
of and remove all or any such Items of Equipment without liability to Lessor
by reason of such entry or taking possession, and without such action
constituting a termination of this Lease unless Lessor notifies Lessee in
writing to such effect; (7) by written notice to Lessee specifying a payment
date, demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on
the payment date specified in such notice, as liquidated damages for loss of
a bargain and not as a penalty, any unpaid Rent due prior to the payment date
specified in such notice plus whichever of the following amounts Lessor, in
its sole discretion, shall specify in such notice (together with interest on
such amount at the Late Payment Rate from the payment date specified in such
notice to the date of actual payment): (i) an amount, with respect to an Item
of Equipment, equal to the Rent payable for such Item of Equipment for the
remainder of the then current Term thereof, after discounting such Rent to
present worth as of the payment date specified in such notice on the basis of
a per annum rate of discount equal to five percent (5%) from the respective
dates upon which such Rent would have been paid had this Lease not been
terminated; or (ii) the Stipulated Loss Value, computed as of the payment
date specified in such notice or, if such payment date is not a Rent Payment
Date, the Rent Payment Date next following the payment date specified in such
notice (provided, however, that, with respect to any Item of Equipment
returned to or repossessed by Lessor, the amount recoverable under this
clause (ii) shall be reduced (but not below zero) by an amount equal to the
Fair Market Sales Value (taking into account its actual condition) of such
Item of Equipment; (8) cause Lessee, at its expense, to promptly assemble any
and all Items of Equipment and return the same to Lessor at such place as
Lessor may designate in writing; and (9) exercise any other right or remedy
available to Lessor under applicable law or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the breach
hereof or to rescind this Lease. In addition, Lessee shall be liable, except
as otherwise provided above, for any and all unpaid Rent due hereunder before
or during the exercise of any of the foregoing remedies, and for legal fees
and other costs and expenses incurred by reason of the occurrence of any
Event of Default or the exercise of Lessor's remedies with respect thereto,
including without limitation the repayment in full of any costs and expenses
necessary to be expended in repairing any Item of Equipment in order to cause
it to be in compliance with all maintenance and regulatory standards imposed
by this Lease. If an Event of Default occurs, to the fullest extent permitted
by law, Lessee hereby waives any right to notice of sale and further waives
any defenses, rights, offsets or claims against Lessor because of the manner
or method of sale of disposition of any Items of Equipment. None of Lessor's
rights or remedies hereunder are intended to be exclusive of, but each shall
be cumulative and in addition to any other right or remedy referred to
hereunder or otherwise available to Lessor or its assigns at law or in
equity. No express or implied waiver by Lessor of any Event of Default shall
constitute a waiver of any other Event of Default or a waiver of any of
Lessor's rights.
7
23. NOTICES. All notices and other communications hereunder shall be
in writing and shall be transmitted by hand, overnight courier or certified
mail (return receipt requested), postage prepaid. Such notices and other
communications shall be addressed to the respective party at the address set
forth above or at such other address as any party may from time to time
designate by notice duly given in accordance with this Section. Such notices
and other communications shall be effective upon receipt.
24. GENERAL INDEMNIFICATION. Lessee shall pay, and shall indemnify
and hold Lessor harmless on an after-tax basis from and against, any and all
liabilities, causes of action, claims, suits, penalties, damages, losses,
costs or expenses (including attorneys' fees), obligations, liabilities,
demands and judgments, and Liens, of any nature whatsoever (collectively, a
"Liability") arising out of or in any way related to: (a) this Lease or any
other written agreement entered into in connection with the transactions
contemplated hereby and thereby (including, without limitation, a Purchase
Agreement, if any) or any amendment, waiver or modification of any of the
foregoing or the enforcement of any of the terms hereof or any of the
foregoing, (b) the manufacture, purchase, ownership, selection, acceptance,
rejection, possession, lease, sublease, operation, use, maintenance,
documenting, inspection, control, loss, damage, destruction, removal,
storage, surrender, sale, use, condition, delivery, nondelivery, return or
other disposition of or any other matter relating to any Item of Equipment or
any part or portion thereof (including, in each case and without limitation,
latent or other defects, whether or not discoverable, any claim for patent,
trademark or copyright infringement and any and all Liabilities in any way
relating to or arising out of injury to persons, properties or the
environment or any and all Liabilities based on strict liability in tort,
negligence, breach of warranties or violations of any regulatory law or
requirement, (c) a failure to comply fully with any Environmental Law with
respect to the Equipment or its operation or use, and (d) Lessee's failure to
perform any covenant, or breach of any representation or warranty, hereunder;
PROVIDED, that the foregoing indemnity shall not extend to the Liabilities to
the extent resulting solely from the gross negligence or willful misconduct
or Lessor. Lessee shall deliver promptly to Lessor (i) copies of any
documents received from the United States Environmental Protection Agency or
any state, county or municipal environmental or health agency and (ii) copies
of any documents submitted by Lessee or any of its subsidiaries to the United
States Environmental Protection Agency or any state, county of municipal
environmental or health agency concerning the Equipment or its operation.
25. SEVERABILITY; CAPTIONS. Any provision of this Lease or any
Equipment Schedule which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability shall not invalidate or
render unenforceable such provision in any other jurisdiction. Captions are
intended for convenience or reference only, and shall not be construed to
define, limit or describe the scope of intent of any provisions hereof.
26. LESSOR'S EXPENSE. Lessee shall pay all costs and expenses of
Lessor, including attorneys' fees and the fees of any collection agencies,
incurred by Lessor in enforcing any of the terms, conditions or provisions
hereof or in protecting Lessor's rights hereunder.
27. RELATED EQUIPMENT SCHEDULES. In the event that any Item of
Equipment covered under any Equipment Schedule hereunder may become attached
or affixed to, or used in connection with, Equipment covered under another
Equipment Schedule hereunder (a "Related Equipment Schedule"), Lessee agrees
that, if Lessee elects to exercise a purchase or renewal option under any
such Equipment Schedule, or if Lessee elects to return the Equipment under
any such Equipment Schedule pursuant to Section 13 hereof, then Lessor, in
its sole discretion, may require that all Equipment under all Related
Equipment Schedules be similarly disposed of.
28. FINANCIAL AND OTHER DATA. During the Term hereof, Lessee shall
furnish Lessor, as soon as available and in any event within 60 days after
the end of each quarterly period (except the last) of each fiscal year, and,
as soon as available and in any event within 120 days after the last day of
each fiscal year, financial statements of Lessee and each Guarantor, in each
case certified by an independent public accountant if customarily available
or requested. Lessee shall also furnish such other financial reports,
information or data as Lessor may reasonably request from time to time.
29. COMMITMENT FEE REQUIREMENT. An amount equal to the first periodic
payment of Rent must accompany each Lessee proposal for an Equipment Schedule
hereunder. THIS COMMITMENT FEE IS NON-REFUNDABLE; provided, however, that,
upon Lessor's acceptance of Lessee's proposal to enter into such Equipment
Schedule, such commitment fee shall be applied to the first periodic payment
of Rent thereunder.
8
30. NO AFFILIATION WITH THE SUPPLIER. Lessee hereby represents and
warrants to Lessor that, except as previously disclosed in writing to Lessor,
neither Lessee nor any of its officers or directors (if a corporation) or
partners (if a partnership) has, directly or indirectly, any financial
interest in the Supplier.
31. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and
warrants that: (a) Lessee is a corporation duly organized and validly
existing in good standing under the laws of the state of its incorporation;
(b) the execution, delivery and performance of this Lease and all related
instruments and documents: (1) have been duly authorized by all necessary
corporate action on the part of Lessee, (2) do not require the approval of
any stockholder, partner, trustee, or holder of any obligations of Lessee
except such as have been duly obtained, and (3) do not and will not
contravene any law, governmental rule, regulation or order now binding
on Lessee, or the charter or by-laws of Lessee, or contravene the provisions
of, or constitute a default under, or result in the creation of any lien or
encumbrance upon the property of Lessee under, any indenture, mortgage,
contract or other agreement to which Lessee is a party or by which it or its
property is bound; (c) this Lease and all related instruments and documents,
when entered into, will constitute legal, valid and binding obligations of
Lessee enforceable against Lessee in accordance with the terms thereof; (d)
there are no pending actions or proceedings to which Lessee is a party, and
there are no other pending or threatened actions or proceedings of which
Lessee has knowledge, before any court, arbitrator or administrative agency,
which, either individually or in the aggregate, would adversely affect the
financial condition of Lessee, or the ability of Lessee to perform its
obligations hereunder, (e) Lessee is not in default under any obligation for
the payment of borrowed money, for the deferred purchase price of property or
for the payment of any rent under any lease agreement which, either
individually or in the aggregate, would have the same such effect; (f) under
the laws of the state(s) in which Equipment is to be located, the Equipment
consists solely of personal property and not fixtures; (g) the financial
statements of Lessee (copies of which have been furnished to Lessor) have
been prepared in accordance with generally acceptable accounting principles
consistently applied ("GAAP"), and fairly present Lessee's financial
condition and the results of its operations as of the date of and for the
period covered by such statements, and since the date of such statements
there has been no material adverse change in such conditions or operations; (h)
the address stated above is the chief place of business and chief executive
offices, or in the case of individuals, the primary residence, of Lessee; (i)
Lessee does not conduct business under a trade, assumed or fictitious name;
and (j) the Equipment is being leased hereunder solely for business purposes
and that no item of Equipment will be used for personal, family or household
purposes.
32. RENEWAL AND PURCHASE OPTIONS. With respect to an Equipment Schedule
and the Equipment Group set forth thereon, so long as no Default or Event of
Default shall have occurred and is continuing, then, upon not less than
ninety (90) days prior written notice to Lessor, (the "Renewal Notice")
Lessee may (a) at the expiration of the Initial Term, or any Renewal Term,
purchase all, but not less than all, of the Equipment Group for the Fair
Market Sale Value of such Equipment Group, payable in cash to Lessor upon the
expiration of the Initial Term of any Renewal Term, as the case may be, (b)
at the expiration of the Initial Term, renew this Lease on a month to month
basis at the same Rent payable at the expiration of the Initial Term, or (c)
at the expiration of the Initial Term, renew this Lessee for a minimum period
of not less than twelve (12) consecutive months at the then current Fair
Market Rental Value. If Lessee fails to give Lessor the Return Notice or the
Renewal Notice at least ninety (90) days before the expiration of the Initial
Term, Lessee shall be deemed to have chosen option (b) above. If Lessee
exercises option (a) above, Lessee shall purchase the Equipment "as is" and
"where is" and without any warranties, express or implied, by Lessor.
33. LESSEE'S WAIVERS. To the extent permitted by Applicable Law, Lessee
hereby waives (a) any and all rights and remedies which it may now have or
which at any time hereafter may be conferred upon it by statute (including,
without limitation, Article 2A of the Uniform Commercial Code, as applicable)
or otherwise, (1) which may limit or modify Lessor's rights or remedies
hereunder; (2) to terminate, cancel, quit, repudiate or surrender this Lease,
except as expressly provided herein; (3) to reject, revoke acceptance or
accept partial delivery of the Equipment; (4) to recover damages from Lessor
for any breach of warranty or for any other reason PROVIDED, HOWEVER, that no
such waiver shall preclude Lessee from asserting any such claim against
Lessor in a separate cause of action; or (5) to setoff or deduct all or any
part of any claimed damages resulting from Lessor's default, if any, under
this Lease.
34. UCC FILINGS. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS ITS
TRUE AND LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST,
TO EXECUTE AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN
LESSOR'S SOLE DISCRETION ARE NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST
IN THE EQUIPMENT IN ALL APPLICABLE JURISDICTIONS.
35. MISCELLANEOUS. TIME IS OF THE ESSENCE WITH RESPECT TO THIS LEASE. ANY
FAILURE OF LESSOR TO REQUIRE STRICT PERFORMANCE BY LESSEE OR ANY WAIVER BY
LESSOR OF ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A
9
CONSENT OR WAIVER OF ANY PROVISION OF THIS LEASE. Neither this Lease nor any
Equipment Schedule may be amended except by a writing signed by Lessor and
Lessee. This Lease and each Equipment Schedule shall be binding upon, and
inure to the benefit of, the parties hereto, their permitted successors and
assigns. This Lease will be binding upon Lessor only if executed by a duly
authorized officer or representative of Lessor at Lessor's principal place of
business as set forth above. This Lease, and all other documents (the
execution and delivery of which by Lessee is contemplated hereunder), shall
be executed on Lessee's behalf by Authorized Signers of Lessee. THIS LEASE IS
BEING DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
36. JURY TRIAL WAIVER. LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO WHICH LESSOR OR LESSEE MAY BE PARTIES ARISING OUT OF
OR IN ANY WAY PERTAINING TO THIS LEASE. THIS WAIVER IS MADE KNOWINGLY,
WILLINGLY AND VOLUNTARILY BY THE LESSOR AND THE LESSEE WHO EACH ACKNOWLEDGE
THAT NO REPRESENTATIONS HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
37. MORE THAN ONE LESSEE. If more than one person or entity executes this
Lease, each Equipment Schedule, and all addenda or other documents executed in
connection herewith or therewith, as "Lessee", the obligations of "Leases"
contained herein and therein shall be deemed joint and several and all
references to "Lessee" shall apply both individually and jointly.
38. QUIET ENJOYMENT. So long as no Event of Default has occurred and is
continuing, Lessee shall peaceably hold and quietly enjoy the Equipment
without interruption by Lessor or any person or entity claiming through
Lessor.
39. ENTIRE AGREEMENT. This Lease, together with all Equipment Schedules,
riders and addenda executed by Lessor and Lessee collectively constitute the
entire understanding or agreement between Lessor and Lessee with respect to
the leasing of the Equipment, and there is no understanding or agreement,
oral or written, which is not set forth herein or therein. By initialing
below, Lessee hereby further acknowledges the conditions of this Section 30.
Lessee's Initials TF
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40. EXECUTION IN COUNTERPARTS. This Master Equipment Lease Agreement may
be executed in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the day
and year first above written.
LESSEE:
GEOGRAPHICS, INC.
By: /s/ Xxxxx Xxxx
------------------------
Name: Xxxxx Xxxx
Title: Vice President Finance and Secretary
LESSOR:
KEYCORP LEASING LTD.
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Regional Business Unit Manager
10
CERTIFICATE OF SECRETARY
OF
GEOGRAPHICS, INC
I, Xxxxx Xxxx the duly elected and qualified Secretary of GEOGRAPHICS,
----------
INC., (the "Corporation"), do hereby certify:
a. That attached hereto as EXHIBIT A are complete and correct
copies of resolutions adopted by the Board of Directors of the Corporation,
authorizing the actions referred to therein; sad resolutions constitute all
of the resolutions adopted by such Board of Directors relating to such
matters; such resolutions have not been in any way modified, amended,
annulled, rescinded or revoked and are in full force and effect as of the date
hereof; and
b. The persons listed in EXHIBIT B attached hereto are duly
qualified and acting officers of the Corporation, holding on the date hereof
the offices set forth opposite their names and the signatures appearing
opposite their names are the genuine signatures of such officers.
IN WITNESS WHEREOF, I have hereunto signed my name this 24 day of
--
May 1996.
--- --
/s/ Xxxxx Xxxx
-------------------
Secretary
EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS OF
GEOGRAPHICS, INC.
DATED MAY 24, 1996
WHEREAS, the Board of Directors of GEOGRAPHICS, INC. (the "Corporation")
desire that the Corporation enter into an equipment leasing transaction with
KeyCorp Leasing Ltd., as lessor, for the purpose of leasing the equipment
(the "Equipment") described in a Master Equipment Lease Agreement and various
equipment schedules from time to time entered into with respect thereto
(collectively, the "Lease");
NOW, THEREFORE, BE IT RESOLVED, that (i) the execution and delivery of
the Lease by the Corporation and the financing of the acquisition of the
Equipment are hereby authorized, approved, ratified and confirmed in all
respects, and (ii) the Corporation hereby is, and the Authorized Officers (as
defined below) hereby are, authorized and empowered to negotiate and enter
into the Lease and such other documents as may be necessary, advisable, or
proper in connection with the above transaction, and be it
FURTHER RESOLVED, that Xxxxx Xxxx of the Corporation, and
---------- -------------
of the Corporation (herein the "Authorized Officers") be, and hereby are,
authorized to execute and deliver the Lease and any and all certificates,
documents, instruments or other papers as may be necessary or desirable in
order to consummate the transactions therein contemplated, and that all
actions heretofore taken or taken hereinafter by the Authorized Officers in
furtherance of the actions herein authorized are ratified, confirmed, adopted
and approved in all respects.
EXHIBIT B
INCUMBENCY CERTIFICATE
Name: Office: Signature:
XXXXXX X. XXXXX CHAIRMAN, PRESIDENT & CEO /s/ XXXXXX X. XXXXX
-------------------------- ------------------------------ --------------------
XXXX X. XXXXX DIRECTOR, EXECUTIVE VP /s/ XXXX X. XXXXX
-------------------------- ------------------------------ --------------------
R. XXXXX XXXXX DIRECTOR, EXECUTIVE VP /s/ R. XXXXX XXXXX
-------------------------- ------------------------------ --------------------
-------------------------- ------------------------------ --------------------
-------------------------- ------------------------------ --------------------
-------------------------- ------------------------------ --------------------
-------------------------- ------------------------------ --------------------
-------------------------- ------------------------------ --------------------
[LOGO] KEYCORP LEASING LTD.
AMENDMENT TO MASTER EQUIPMENT LEASE AGREEMENT
THIS AMENDMENT dated as of May 22, 1996 amends that certain Master
Equipment Lease Agreement dates as of May 22, 1996 between KEYCORP LEASING
LTD., as Lessor, and GEOGRAPHICS, INC., as Lessee (the "Master Lease"),
Unless otherwise specified herein, all capitalized terms shall have the
meanings ascribed to them in the Master Lease.
Lessor and Lessee hereby agree that the Master Lease will be amended,
with respect to each Equipment Schedule executed in connection therewith, to
add the following section:
LESSEE'S FINANCIAL COVENANTS, Lessee hereby covenants with Lessor as follows:
I. LEVERAGE RATIO: its Leverage Ratio shall not exceed 2.0 to 1.00, as
measured on an annual basis.
II. WORKING CAPITAL: its Working Capital shall not be less than $2,000,000,
as measured on an annual basis.
III. FREE CASH FLOW RATIO: its Free Cash Flow Ratio shall not be less than 1.25
to 1.00, as measured on an annual basis.
IV. DEFINITIONS:
A. "LEVERAGE RATIO" shall mean the ratio of Total Liabilities to
Tangible Net Worth.
B. "TOTAL LIABILITIES" shall mean all debt and other obligations,
INCLUDING, without limitation, Current Liabilities and long term
debt (INCLUDING, without limitation, term loans, bond issuances,
debentures or notes, capital leases and deferred credit).
C. "TANGIBLE NET WORTH" shall mean (1) the gross book value of
all assets, excluding goodwill, patents, trademarks, licenses, trade
names, organizational expenses, treasury stock, unamortized debt
discount and expense, deferred research and developmental costs, and
other like intangibles, LESS (2) Total Liabilities.
D. "WORKING CAPITAL" shall mean Current Assets LESS Current Liabilities.
E. "CURRENT ASSETS" shall mean the gross book value of all
assets that are expected to be realized in cash or sold or consumed
during a normal operating cycle or within one year, INCLUDING, without
limitation, cash, cash equivalents, accounts and notes receivable, and
inventories, but EXCLUDING prepaid expenses.
F. "CURRENT LIABILITIES" shall mean all debt and other obligations
that are to be paid by use of Current Assets during a normal operating
cycle or within one year, INCLUDING, without limitation, deposits
received, advance payments, trade acceptances, accrued expenses, notes
payable, short-term bank loans, current maturities of long term debt
and capital leases, accrued and deferred income taxes, and any reserves
against assets.
G. "FREE CASH FLOW" shall mean the ratio of (1) the sum of net
income, depreciation, amortization, other non-cash expenses, and common
stock issues, EXCLUDING any non-financed capital expenditures, any
dividends or distributions to shareholders, and long term investments
to (2) the SUM of current maturities of long term debt and capital
lease obligations.
Except as modified hereby, all of the terms, covenants and conditions of
the Master Lease shall remain in full force and effect and are in all respects
hereby ratified and affirmed.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of
the date first above written.
LESSOR:
KEYCORP LEASING LTD.
By: /s/ Xxxxxx X. XxXxxxx
------------------------
Name: Xxxxxx X. XxXxxxx
Title: Vice President
LESSEE:
GEOGRAPHICS, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxx
Title: Corporate Controller
