EXHIBIT 10.7
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EQUIPMENT SCHEDULE XX. 00
XXXXXXXXX XXXXXXXX XX. 00 dated as of May 23, 1997 (this "Schedule")
between KEYCORP LEASING LTD. ("Lessor"), a Delaware corporation, and
GEOGRAPHICS, INC., a Wyoming corporation ("Lessee").
INTRODUCTION:
Lessor and Lessee have heretofore entered into that certain Master
Equipment Lease Agreement dated as of May 22, 1996 (the "Master Lease"; the
Master Lease and this Schedule hereinafter collectively referred to as, this
"Lease"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings specified in the Master Lease. The Master Lease
provides for the execution and delivery of a Schedule substantially in the
form hereof for the purpose of confirming the acceptance and lease of the
Equipment under this Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof and hereof.
NOW, THEREFORE, in consideration of the premises and other good and sufficient
consideration, Lessor and Lessee hereby agree as follows:
1. EQUIPMENT. Pursuant to the terms and conditions of this Lease,
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
equipment listed on EXHIBIT A attached hereto (the "Equipment"). The aggregate
Total Cost of such Equipment is $2,204,898.52.
2. TERM. The Initial Term of this Lease with respect to the Equipment
described on this Schedule shall commence on the date on which such Equipment
is delivered to Lessee, and, unless earlier terminated as provided herein,
shall expire on a date which is eighty-four (84) months after the Rent
Commencement Date (the "Initial Term Expiration Date").
3. RENT PAYMENT DATES; RENT. Lessee hereby agrees to pay Rent for the
Equipment throughout the Initial Term in eighty-four (84) consecutive
monthly installments payable in advance on the Rent Commencement Date and on
the same day each month thereafter (each, a "Rent Payment Date"). Each such
installment of Rent shall be in an amount equal to $35,535.99.
4. EQUIPMENT LOCATION; BILLING ADDRESS. The Equipment described on this
Schedule shall be located at, and except as otherwise provided in this Lease,
shall not be removed from, the following address: 0000 Xxxxx Xxxx, Xxxxxx, XX
00000. The billing address of Lessee is as follows: GEOGRAPHICS, INC., X.X.
Xxx 0000, Xxxxxx, XX 00000.
5. LESSEE'S PURCHASE AND RENEWAL OPTIONS. Lessee shall have the
purchase and renewal options set forth on the End of Lease Options Addendum
attached hereto and made a part hereof.
6. STIPULATED LOSS VALUE. There are no Stipulated Loss Values or
Stipulated Loss Value Supplements applicable to the Equipment described on
this Schedule.
7. SECURITY AGREEMENT. To secure the prompt payment and performance as
and when due of all obligations and indebtedness of Lessee, now existing or
hereafter created, to Lessor pursuant to this Lease or otherwise, Lessee
hereby grants to Lessor a security interest in the Equipment and all
accessions, substitutions and replacements thereto and therefor, and proceeds
(cash and non-cash), including, without limitation, insurance proceeds
thereof (but without power of sale). In furtherance of the foregoing, Lessee
shall execute and deliver to Lessor, to be recorded at Lessee's expense,
Uniform Commercial Code financing statements, statements of amendment and
statements of continuation as reasonably may be required by Lessor to perfect
and maintain perfected the security interest granted by Lessee herein.
8. NOTIFICATION OF TAX CONSEQUENCES. Lessee recognizes that, pursuant
to Section 18 of the Master Lease, it is Lessee's responsibility to include,
if required by Applicable Law, all equipment financed under this Lease in
Lessee's personal property tax returns and, if necessary, to pay any
resulting property tax bills. Lessor and Lessee acknowledge that personal
property tax policies vary from state to state and that, where uncertainty
exists as to a particular state's policies, Lessee shall contact its
attorneys or financial advisors (who may be familiar with such state's
personal property tax policy) for advice. It is expressly acknowledged by
Lessee that Lessor has made no warranties, statements or representations as
to such personal property tax matters, and Lessee hereby disclaims any
reliance on any such warranties, statements or representations made by Lessor
with respect thereto.
9. MODIFICATIONS TO MASTER LEASE. In addition to the modifications set
forth in Section 5 hereof, with respect to the Equipment described on this
Schedule, the Master Lease shall be modified as follows:
(a) The following shall be inserted as the penultimate sentence of
Section 11 of the Master Lease ("Use; Alterations"):
All such alterations, additions, modifications or improvements
immediately, and without further act, shall be deemed to constitute
items of Equipment and be fully subject to this Lease as if
originally leased hereunder.
(b) The following shall be inserted as the penultimate Section 12
of the Master Lease ("Repairs and Maintenance"):
Upon installation, attachment or incorporation in, on or into such
item of Equipment, such replacement part immediately, and without
further act, shall be deemed to constitute an Item of Equipment and
be fully subject to this Lease as if originally leased hereunder.
(c) Section 16(b) of the Master Lease ("Loss of or Damage to
Equipment") is hereby amended to delete subsection "(3)" and substitute the
following in its place:
(3) pay to Lessor an amount, with respect to such Item of Equipment,
equal to the Rent payable for such Item of Equipment for the
remainder of the Term, after discounting such Rent to present worth
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 the Loss or Damage not occurred.
(d) Section 16(b) of the Master Lease ("Loss of or Damage to
Equipment") is hereby amended to delete the second to last sentence and
substitute the following in its place:
If Lessee replaces the Item of Equipment pursuant to subsection (b)
above, such replacement equipment shall immediately (and without
further act) be deemed to constitute Items of Equipment and be fully
subject to this Lease as if originally leased hereunder.
(e) Section 17(a) of the Master Lease ("Insurance") is hereby
amended to delete subsection "(1)" and substitute the following in its place:
(1) Insurance against all risks 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.
(f) As used in Section 22(a) of the Master Lease ("Events of
Default"), the term "Event of Default" shall also mean any of the following
events: (1) a change in control occurs in Lessee; or (2) the death or
dissolution of Lessee.
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(g) Section 22(b) of the Master Lease ("Events of Default") is
hereby amended to delete subsection "(7)" and substitute the following in its
place:
(7) by written notice to Lessee specifying a payment date, may
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 the following amount which Lessor 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): 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 canceled or terminated.
(h) Section 22(b) of the Master Lease ("Events of Default") is
hereby amended as follows: (1) with respect to Section 22(b)(4), the word
"terminate" is hereby deleted and the words "cancel or terminate" are hereby
substituted in its place; and (2) with respect to Section 22(b)(6), the word
"termination" is hereby deleted and the words "cancellation or termination"
are hereby substituted in its place.
10. GOVERNING LAW. This Schedule is being delivered in the State of
New York and shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
11. COUNTERPARTS. This Schedule may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together one and the same instrument.
12. PERSONAL PROPERTY TAX. To insure Lessee's compliance with the
provisions of the Lease with respect to the payment of personal property
taxes on the Equipment described on this Schedule, Lessee hereby covenants
and agrees that, unless otherwise directed in writing by Lessor or otherwise
required by law, Lessee will list itself as owner of all Items of Equipment
for property tax purposes. Except in those jurisdictions in which Lessor is
required to list itself as owner of all such Items of Equipment, upon receipt
by Lessee of any property tax xxxx pertaining to such Items of Equipment from
the appropriate taxing authority, Lessee will promptly pay all such taxes
when due. In those jurisdictions in which Lessor is required to list itself
as owner of all such Items of Equipment, upon receipt by Lessee of any
property tax xxxx pertaining to such Items of Equipment, Lessee will promptly
forward to Lessor such property tax xxxx and related payment. Upon receipt by
Lessor of any such property tax xxxx and related payment, Lessor will pay
such tax.
13. ADDITIONAL ADDENDA. In addition to the End of Lease Options
Addendum, please see the following addenda to this Schedule, attached hereto
and made a part hereof, for additional terms and conditions governing the
leasing of the Equipment described on this Schedule: none.
14. MORE THAN ONE LESSEE. If more than one person or entity executes
this Schedule, and all addenda or other documents executed in connection
herewith, as "Lessee", the obligations of "Lessee" contained herein and
therein shall be deemed joint and several and all references to "Lessee"
shall apply both individually and jointly.
15. RELATIONSHIP TO MASTER LEASE; FURTHER ASSURANCES. This Schedule
shall be construed in connection with and as part of the Lease, and all terms
and conditions contained in the Master Lease are hereby incorporated herein
by reference with the same force and effect as if such terms and conditions
were fully stated herein. By execution of this Schedule, Lessee and Lessor
reaffirm all terms and conditions of the Master Lease except as they may be
modified hereby. To the extent that any of the terms and conditions of this
Schedule are contrary to or inconsistent with any terms and conditions of the
Master Lease, the terms and conditions of this Schedule shall govern. LESSEE
HEREBY CERTIFIES TO LESSOR THAT THE REPRESENTATIONS AND
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WARRANTIES MADE BY LESSEE IN THE MASTER LEASE (INCLUDING, WITHOUT LIMITATION,
SECTION 31 THEREOF) ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE
DATE OF THIS SCHEDULE WITH THE SAME EFFECT AS THOUGH MADE ON AND AS OF SUCH
DATE. Lessee shall take such additional actions and execute and deliver such
additional documents as Lessor shall deem necessary from time to time to
effectuate the terms of the Lease.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Schedule to be
duly executed and delivered on the day and year first above written.
LESSOR:
KEYCORP LEASING LTD.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
Regional Business Unit Manager
LESSEE:
GEOGRAPHICS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: CEO
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EXHIBIT A
TO EQUIPMENT SCHEDULE NO. 04
DATED AS OF MAY 23, 1997
TO MASTER EQUIPMENT LEASE AGREEMENT DATED AS OF MAY 22, 1996
VENDOR: MAN XXXXXX INC.
X.X. XXX 0000
XXXXXXX, XX 00000-0000
QTY EQUIPMENT DESCRIPTION
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1 DEMONSTRATION MAN XXXXXX 706 6/C PRINTING PRESS S/N: 7620 WITH ALL
STANDARD EQUIPMENT AND RELATED ACCESSORIES AS DESCRIBED IN
MACHINERY CONTRACT DATED 1/17/97
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THIS IS A CERTIFICATE ACKNOWLEDGING
ACCEPTANCE OF THE EQUIPMENT FOR
PURPOSES OF THE BELOW-REFERENCED LEASE.
THIS IS NOT A DELIVERY RECEIPT.
LESSEE ACKNOWLEDGMENT
(Certificate of Acceptance)
Lessee Name: GEOGRAPHICS, INC.
All the items of Equipment covered by Equipment Schedule No. 04 to
Master Equipment Lease Agreement dated as of May 22, 1996 (the "Lease")
between KeyCorp Leasing Ltd., as lessor ("KCL"), and the undersigned, as
lessee, (a) were received by the undersigned, (b) are satisfactory to the
undersigned in all respects and are acceptable to the undersigned for lease
under the Lease, (c) are suitable for the undersigned's purposes, (d) are in
good order, repair and condition, (e) have been installed and operate
properly, and (f) are subject to all of the terms and conditions of the
Lease (including, without limitation, Section 3 thereof).
To the extent that Article 2A ("Article 2A") of the Uniform Commercial
Code ("UCC") applies to the characterization of the Lease, the undersigned
hereby agree(s) that the Lease is a "Finance Lease" as defined therein. The
undersigned acknowledge(s): (i) that the undersigned has selected the
"Supplier" (as defined in the UCC) and has directed KCL to purchase the
Equipment from the Supplier in connection with the Lease, and (ii) that the
undersigned has been informed in writing in the Lease, before the
undersigned's execution of thereof, that the undersigned is entitled under
Article 2A to the promises and warranties, including those of any third
party, provided to KCL by the Supplier in connection with or as part of the
Purchase Agreement (as defined in the Lease), and that the undersigned may
communicate with the Supplier and receive an accurate and complete statement
of those promises and warranties, including any disclaimers and limitations
of them or of remedies.
Dated: , 19
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GEOGRAPHICS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: CEO
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END OF LEASE OPTIONS ADDENDUM
TO EQUIPMENT SCHEDULE NUMBER 05
TO MASTER EQUIPMENT LEASE AGREEMENT DATES AS OF MAY 22, 1996
BETWEEN KEYCORP LEASING LTD., AS LESSOR,
AND GEOGRAPHICS, INC., AS LESSEE.
(Dollar Purchase Option)
THIS END OF LEASE OPTIONS ADDENDUM is annexed to, and made a part of,
the above-referenced Equipment Schedule and Master Equipment Lease Agreement,
as it relates to such Equipment Schedule (collectively, the "Lease"). Unless
otherwise specified herein, all capitalized terms shall have the meanings
ascribed to them in the Lease. Lessor and Lessee hereby agree as follows:
LESSEE'S PURCHASE AND RENEWAL OPTIONS. (a) With respect to the
Equipment described on this Schedule, Section 32 of the Master
Lease ("Renewal and Purchase Options") is hereby deleted in its
entirety.
(b) On the Initial Term Expiration Date, Lessee shall pay to Lessor
an amount equal to $1.00. Upon payment in full by Lessee of all Rent
(and all other sums) payable to Lessor hereunder, Lessor shall release
its interest in the Equipment.
Except as modified hereby, all of the terms, covenants and conditions
of the 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 End of Lease
Options Addendum as of May 23, 1997.
LESSOR:
KEYCORP LEASING LTD.
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Regional Business Unit Manager
LESSEE:
GEOGRAPHICS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO