EXHIBIT 10.11
MASTER EQUIPMENT LEASE AGREEMENT
Agreement No. 129 Dated: November 17, 1995
LESSOR: LIGHTHOUSE CAPITAL PARTNERS, L.P., a Delaware limited partnership
("Lessor"), 000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx
00000
LESSEE: POWER INTEGRATIONS, INC., a California corporation ("Lessee"),
ADDRESS: 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000.
IN CONSIDERATION of the mutual covenants contained herein, the parties
agree as follows:
1. LEASE. Lessor leases to Lessee and Lessee leases from Lessor the
personal property described in each Equipment Schedule executed pursuant hereto,
subject to the terms and conditions of this Master Equipment Lease Agreement
("Master Lease") and the applicable Lease Line Schedule (defined below). The
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"Equipment" (as defined in the Lease Line Schedule) is being leased for
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commercial or business purposes only, and not for personal, home, or family
purposes. The parties agree that each Lease is a "finance lease" under the
Uniform Commercial Code (as in effect in the State of California during the term
of the Lease and referred to hereafter as the "UCC").
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2. Lease Line Schedule. "Lease Line Schedule" means a Lease Line Schedule
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in the form of EXHIBIT A, signed by Lessor and Lessee and incorporating by
reference the terms and provisions of this Master Lease.
3. Equipment Schedules. "Equipment Schedule" means an Equipment Schedule
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in the form of EXHIBIT B, signed by Lessor and Lessee and incorporating, by
reference, the terms and provisions of this Master Lease and the applicable
Lease Line Schedule. Each Equipment Schedule shall constitute a separate and
independent lease (a "Lease"); the original of such Lease shall consist of the
signed Equipment Schedule and a copy of the Master Lease and applicable Lease
Line Schedule. Capitalized terms used, but not defined, in this Master Lease
have the meanings given to such terms in the applicable Lease Line Schedule or
Equipment Schedule, as the case may be.
4. TERM AND RENTALS.
(a) Acceptance. The Lease shall commence with respect to
Equipment described on the Equipment Schedule upon the Acceptance Date. The
"Acceptance Date" shall be the date upon which Lessee executes a Delivery and
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Acceptance Certificate in the form of EXHIBIT C.
(b) Term and Payment of Rent. The lease term for the Equipment
shall be the "Lease Term" set forth in the Equipment Schedule which shall
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commence on the "Commencement Date" (as defined in the Lease Line Schedule).
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Lessee agrees to pay to Lessor the "Rental Payments" for the Lease Term, in the
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amounts and at the times set forth in the Equipment Schedule.
(c) Interim Period. If the Acceptance Date does not fall on the
Commencement Date, then Lessee agrees to pay to Lessor "Interim Rent" for the
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period commencing on the later of (i) the Acceptance Date or (ii) the
disbursement of funds by Lessor through and including the day preceding the
Commencement Date (the "Interim Period"). The Interim Rent payment for the
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Interim Period shall accrue at the "Interim Rate" (as defined in the Lease Line
Schedule) and shall be due and payable in full on the Commencement Date.
(d) Lease Termination. Lessee may terminate the Lease at the
expiration of the Lease Term or any renewal term (the "Lease Termination") by
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submitting to Lessor a Notice of Election in the form of EXHIBIT D. If a Notice
of Election is not submitted by Lessee to Lessor during the "Advance Notice
Period" (as defined in the Lease Line Schedule), then the Lease Term or any
renewal Term will be automatically extended for an additional period equal to
the "Automatic Extension Period" (as defined in the Lease Line Schedule). The
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Lease will continue to automatically extend until Lessee submits to Lessor a
Notice of Election. The Lease may only be
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terminated as expressly provided in this Section, in the applicable Lease Line
Schedule or in the applicable Equipment Schedule. Lessee agrees to continue
paying rent for the Equipment in the amount of the Rental Payment set forth in
the Equipment Schedule until the later of (i) the expiration of the Lease Term,
any renewal term and any Automatic Extension Period and (ii) either (A) the
purchase option price is paid pursuant to SECTION 6(A), or (B) a mutually agreed
renewal of the Lease takes effect pursuant to SECTION 6(B), or (C) the Equipment
is returned in the manner and condition prescribed in SECTION 6(C), in each case
after delivery of a Notice of Election.
(e) Net Lease. Each Equipment Schedule shall be a net lease,
and Lessee's obligation to pay all rent and other sums thereunder shall be
absolute and unconditional, and shall not be subject to any abatement,
reduction, set-off, defense, counterclaims, interruption, deferment or
recoupment, for any reason whatsoever.
5. LATE FEE. Lessee shall pay a late charge on any rent payments or other
sums due hereunder which are past due, in the amount specified in the Lease Line
Schedule, payable on demand. In addition, interest shall accrue daily at the
"Default Rate" (as defined in the Lease Line Schedule), or if such rate exceeds
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the maximum rate allowed by law, then at such maximum rate, and shall be payable
on demand.
6. LEASE TERMINATION OPTIONS. Upon Lease Termination, Lessee will have the
option to purchase the Equipment, renew the term of the Lease, or return the
Equipment to Lessor, as set forth below. Lessee shall specify its election of a
Lease Termination Option in the Notice of Election.
(a) Purchase Option. If Lessee exercises the option to
purchase, then, provided no Event of Default has occurred and is then
continuing, Lessee shall at the expiration of the Lease Term, renewal term or
extension, as the case may be, purchase the Equipment. The purchase price shall
be the Equipment's then fair market value ("FMV"). FMV, as applied to a purchase
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option, shall be determined by Lessor based on the price a willing buyer would
pay and a willing seller would accept (neither buyer nor seller being under
compulsion to act) for the Equipment as installed and in use, giving due
consideration to its condition, utility, revenue-producing capability, and
replacement costs. If Lessee fails to agree with Lessor's good faith
determination of the FMV, Lessee shall nevertheless pay Lessor's invoice and
provide Lessor with a written request for a determination of the FMV with or
prior to such payment. Within ten (10) days after such request Lessor and Lessee
shall agree on an appraiser to determine the FMV or, lacking such agreement,
shall each tender the name of an appraiser. The appraiser(s) shall, within
thirty (30) days, either agree on the FMV or select a third appraiser, to form a
committee to determine the FMV. Determination by the appraiser(s) shall be final
and binding on both parties. Within fifteen (15) days after such determination,
Lessor shall refund any excess received over the FMV, and/or Lessee shall pay
any additional amount of the FMV above the amount previously paid. Each party
shall bear the fees and expenses of any appraiser which it names and share
equally the fees and expenses of any appraiser(s) jointly selected. If the
appraised FMV is within 5% of the amount invoiced by Lessor, then Lessee shall
pay all appraiser fees and expenses. The purchase option price shall be paid not
later than the last day of the Lease Term.
(b) Renewal. If Lessee exercises the option to renew this
Lease, such renewal shall be upon the terms and conditions of this Master Lease
and the applicable Lease Line Schedule, for a rental period and rental amount to
be agreed upon by Lessee and Lessor.
(c) Return. If the Notice of Election specifies return of the
Equipment, Lessee at its own risk and expense (i) will immediately return the
Equipment to Lessor in the same condition as when delivered, ordinary wear and
tear excepted, at such location as Lessor shall designate; and (ii) in the case
of Equipment with respect to which a maintenance service contract is required
under the Lease Line Schedule will, on request from Lessor, obtain from the
Equipment supplier (or other maintenance service supplier approved by Lessor) a
certificate stating that the Equipment qualifies for continued maintenance
service at the standard rates and terms then in effect.
7. USE; MAINTENANCE.
(a) Lessee, at its expense, shall make all necessary site
preparations and cause the Equipment to be operated in accordance with any
applicable operating manuals and manufacturer's instructions. Notwithstanding
any transfer or assignment by Lessor and provided Lessee is not in default
hereunder, Lessee shall
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have the right to quietly possess and use the Equipment as provided herein
without interference by Lessor, its assigns or any other third party claiming
through or under Lessor.
(b) Lessee shall effect and bear the expense of all necessary
repair, maintenance, operation and replacements required to be made to maintain
the Equipment in good condition, reasonable wear and tear excepted, and to
comply with all domestic and international laws to which the use and operation
of the Equipment may be or become subject. All replacement Equipment and parts
furnished in connection with such maintenance or repair shall immediately become
the property of Lessor and part of the Equipment for all purposes hereof. All
such maintenance, repair and replacement services shall be immediately paid for
and discharged by Lessee with the result that no lien under any applicable laws
will attach to the Equipment as a result of the performance of such services or
the provision of any such material.
8. INSURANCE. Lessee shall obtain and maintain for the Lease Term (and
any renewal term or extension), at its own expense, (a) "all risk" insurance
against loss or damage to the Equipment, (b) commercial general liability
insurance (including contractual liability, products liability and completed
operations coverage) reasonably satisfactory to Lessor, and (c) such other
insurance against such other risks of loss and with such terms, as shall in each
case be reasonably satisfactory to or reasonably required by Lessor (as to
carriers, amounts and otherwise). The amount of the "all risk" insurance shall
be the lesser of (i) the Lessor's Cost or (ii) the Stipulated Loss Value (as
defined in SECTION 9 below) of all Equipment outstanding under the Lease Line
Schedule, and must otherwise be reasonably satisfactory to Lessor as of each
anniversary date of this Lease. Any increase in the amount of such insurance
coverage, other than "all risk", reasonably requested by Lessor shall be put
into effect on the next succeeding renewal date of such insurance.
Each "all risk" policy shall: (i) name Lessor as sole loss payee with
respect to the Equipment, (ii) provide for each insurer's waiver of its right of
subrogation against Lessor and Lessee, and (iii) provide that such insurance
shall not be invalidated by any action of, or breach of warranty by, Lessee of a
provision of any of its insurance policies, and shall waive set-off,
counterclaim or offset against Lessor.
Each liability policy shall name Lessor as an additional insured and
provide that such insurance shall have cross-liability and severability of
interest endorsements (which shall not increase the aggregate policy limits of
Lessee's insurance).
All insurance policies shall provide that Lessee's insurance shall be
primary without a right of contribution of Lessor's insurance, if any, or any
obligation on the part of Lessor to pay premiums of Lessee, and shall contain a
clause requiring the insurer to give Lessor at least 30 days' prior written
notice of its cancellation (other than cancellation for non-payment for which 10
days' notice shall be sufficient). Lessee shall on or prior to the date of
Equipment Schedule No. 1 and prior to each policy renewal, furnish to Lessor
certificates of insurance or other evidence satisfactory to Lessor that such
insurance coverage is in effect. Lessee further agrees to give Lessor prompt
notice of any damage to, or loss of, the Equipment, or any part thereof.
9. LOSS OR DAMAGE. If any items of Equipment shall become lost, stolen,
destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Lessee shall promptly pay to Lessor
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the applicable Stipulated Loss Value of the Equipment subject to the Event of
Loss. Upon payment by Lessee of the Stipulated Loss Value, Lessor will transfer
to Lessee, "AS IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all
of Lessor's right, title and interest, if any, in such items of Equipment. The
"Stipulated Loss Value" payable by Lessee under this Lease shall be an amount
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equal to the product of (a) Lessor's Cost of the affected Equipment and (b) the
percentage set forth in the table attached to the applicable Lease Line Schedule
as ANNEX A opposite the Rental Payment number next following the Event of Loss.
Stipulated Loss Values and Rental Payments shall not be prorated.
10. TITLE, INSPECTION AND LOCATION.
(a) Title. Lessor and Lessee confirm their intent that title
to the Equipment shall remain in Lessor (or its successors and assigns)
exclusively. If requested by Lessor, Lessee will affix plates or markings on
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the Equipment and on any operating manuals and manufacturer's instructions
indicating the interests of Lessor and its assigns therein, and Lessee will not
allow any other indicia of ownership or other interest in the Equipment to be
placed on the Equipment. Lessee shall not sell, assign, grant a security
interest in, sublet, pledge, hypothecate or otherwise encumber or suffer a lien
upon or against this Lease or the Equipment.
(b) Inspection. Lessor (through any of its officers, employees
or agents) shall have the right to inspect the Equipment during regular business
hours, with reasonable notice, and in compliance with Lessee's reasonable
security procedures; provided, that such inspections will be conducted no more
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often then once every six (6) months unless an Event of Default, or event which,
with notice or lapse of time or both, would become an Event of Default, has
occurred and is continuing.
(c) Location. In the case of Equipment other than mobile
Equipment, Lessee may move such Equipment from the installation address shown on
the Equipment Schedule (or any other location for which Lessee has complied with
this provision) only if (i) the new location is within the continental United
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States or Malaysia, and (ii) Lessee gives at least 30 days' prior written notice
of the relocation and provides UCC-1 financing statements, landlord waivers or
such other documentation as Lessor reasonably requests to protect its interest
in the Equipment. In the case of mobile equipment (including, without
limitation, lap-top computers), Lessee agrees to obtain from the person using
such mobile Equipment and deliver to Lessor, an Acknowledgment in the form of
EXHIBIT F. [SEE ADDED SENTENCE REGARDING NOTICE AND UCC]
(d) Lessee shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the locations specified in SECTION 10(C).
11. LESSEE'S REPRESENTATIONS, WARRANTIES AND WAIVERS. Upon execution of
the Master Lease and each Equipment Schedule, Lessee warrants and represents the
following:
(a) Lessee is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Lessee has
full power and authority and all necessary licenses and permits to carry on its
business as presently conducted, to own or hold under lease its properties and
to enter into this Master Lease, the Lease Line Schedule and each Equipment
Schedule and to perform its obligations thereunder; and Lessee is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of its properties or the nature of its
business or the performance of its obligations under this Master Lease, the
Lease Line Schedule and any Equipment Schedule requires such qualification,
except for such jurisdictions in which failure to qualify would not have a
material adverse effect on Lessee.
(b) The execution and delivery by Lessee of this Master Lease,
the Lease Line Schedule and each Equipment Schedule and the performance by
Lessee of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of Lessee; and do not and will not contravene the
provisions of, or constitute a default (either with or without notice or lapse
of time, or both) under, or result in the creation of any lien upon, the
Equipment or any property of Lessee under any indenture, mortgage, contract or
other instrument to which Lessee is a party or by which Lessee or its properties
is bound.
(c) No consent or approval of, giving of notice to,
registration with, or taking of any other action by, any state, federal, foreign
or other governmental commission, agency or regulatory authority or any other
person or entity is required for the consummation or performance by Lessee of
the transactions contemplated under this Master Lease, the Lease Line Schedule
and each Equipment Schedule.
(d) This Master Lease, the Lease Line Schedule and each
Equipment Schedule, when executed by Lessee, constitute legal, valid and binding
agreements of Lessee enforceable against Lessee in accordance with their terms,
except as limited by any bankruptcy, insolvency, reorganization, or other
similar laws of general application affecting the enforcement of creditor or
Lessor rights.
(e) There are no actions, suits or proceedings pending or
threatened against or affecting Lessee or any property of Lessee in any court,
before any arbitrator of any kind or before or by any federal state, municipal
or other government department, commission, board, bureau, agency or
instrumentality (collectively
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"Governmental Body"), which, if adversely determined, would materially adversely
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affect the business, financial condition, assets, or operations of Lessee, or
adversely affect the ability of Lessee to perform its obligations under this
Master Lease, the Lease Line Schedule and each Equipment Schedule; and Lessee is
not in default with respect to any order of any court, arbitrator or
Governmental Body or with respect to any material loan agreement, debt
instrument or contract with a supplier or customer of Lessee, except as
disclosed in writing to Lessor.
(f) To the extent permitted by applicable law, Lessee waives
any and all rights and remedies to: (i) cancel this Lease; (ii) repudiate this
Lease; (iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v)
recover damages from Lessor for any breaches of warranty or for any other
reason; (vi) claim a security interest in the Equipment in Lessee's possession
or control for any reason; (vii) deduct from Rental Payments all or any part of
any claimed damages resulting from Lessor's default, if any, under this Lease;
(viii) accept partial delivery of the Equipment; (ix) "cover" by making any
purchase or lease of or contract to purchase or lease equipment in substitution
for Equipment designated in the Lease; (x) recover any direct, general, special,
incidental, indirect, exemplary or consequential damages, for any reason
whatsoever; and (xi) obtain specific performance, replevin, detinue,
sequestration, claim and delivery or the like for any Equipment identified to
this Lease. To the extent permitted by applicable law, Lessee also waives any
rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Equipment in mitigation of Lessor's
damages or which may otherwise limit or modify any of Lessor's rights or
remedies.
12. ASSIGNMENT BY LESSOR. LESSEE ACKNOWLEDGES THAT LESSOR MAY SELL,
ASSIGN, GRANT A SECURITY INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF
ITS RIGHTS, TITLE AND INTEREST IN THIS LEASE AND THE EQUIPMENT WITHOUT NOTICE TO
OR CONSENT OF LESSEE. Upon Lessor's written notice to Lessee that this Lease,
or the right to the Rental Payments hereunder, have been assigned, Lessee shall,
if requested, pay directly to Lessor's assignee without abatement, deduction or
set-off all amounts which become due hereunder. Lessee waives and agrees it
will not assert against Lessor's assignee any counterclaim or set-off in any
action for rent under the Lease. Upon the assignment of this Lease, Lessor's
assignee shall have and be entitled to exercise any and all rights and remedies
(but none of the obligations) of lessor hereunder, and all references herein to
Lessor shall include Lessor's assignee. Lessee acknowledges that any assignment
or transfer by Lessor does not materially change Lessee's duties or obligations
under this Lease nor materially increase the burdens or risks imposed on Lessee.
13. ASSIGNMENT BY LESSEE. LESSEE MAY NOT, WITHOUT LESSOR'S PRIOR WRITTEN
CONSENT, (I) ASSIGN THIS LEASE, WHETHER BY OPERATION OF LAW OR OTHERWISE, OR
SUBLEASE THE EQUIPMENT OR ANY PART THEREOF OR (II) ASSIGN, GRANT A SECURITY
INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF ITS RIGHTS, TITLE AND
INTEREST IN AND TO THIS LEASE OR THE EQUIPMENT. Notwithstanding the foregoing,
in the event of a reincorporation merger Lessor shall not withhold its consent
to the assignment of this Lease to the successor entity if each of the following
conditions precedent is satisfied:
(i) Lessee gives Lessor at least thirty (30) days prior written notice of
such reincorporation;
(ii) such merger, sale of assets or other reorganization does not
adversely affect the rights of lessor;
(iii) the corporation that results from such merger or other reorganization
or which purchases the assets in the case of a sale of assets (the "Surviving
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Corporation") shall have executed and delivered to Lessor an agreement in form
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and substance reasonably satisfactory to Lessor, containing an assumption by
Surviving Corporation of the due and punctual performance and observance of each
covenant and condition of Lessee in the Master lease, Lease Line Schedule and
Equipment Schedules (the "Lease Documents") and making representations and
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warranties with respect to the Surviving Corporation similar in scope and
substance to the representations and warranties made by Lessee in the Lease
Documents;
(iv) the Surviving Corporation executes any precautionary financing
statements or amendments thereto reasonably requested by Lessor; and
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(v) immediately after giving effect of such merger, sale of assets or
other reorganization, no Event of Default or, event which with the lapse of time
or giving of notice or both, would result in an Event of Default shall have
occurred and be continuing.
In the event Lessee makes an assignment, sublease or other transfer (to
which Lessor has consented), Lessee shall not thereby be relieved of its duties
and obligations hereunder, for which it shall remain fully responsible and
liable (independent of its assignee).
14. TAXES.
(a) Lessee shall comply with all applicable federal, state,
local, foreign and international laws, regulations and orders relating to this
Lease. Lessee assumes liability for, and shall pay when due, and on a net after-
tax basis shall indemnify and defend Lessor against, all federal, state, local,
foreign and international fees, taxes and government charges (including, without
limitation, interest and penalties) of any nature imposed upon or in any way
relating to Lessor, Lessee, any item of Equipment or this Lease, except federal,
state and local taxes on or measured by Lessor's net income (other than any such
tax which is in substitution for or relieves Lessee from the payment of taxes it
would otherwise be obligated to pay to or reimburse Lessor for as herein
provided). Lessee shall at its expense file when due with the appropriate
authorities any and all tax and similar returns and reports required to be filed
with respect thereto or, if requested by Lessor, notify Lessor of all such
requirements and furnish Lessor with all information required for Lessor to
effect such filings, which filings shall also be at Lessee's expense. Any fees,
taxes or other charges paid by Lessor upon failure of Lessee to make such
payments shall at Lessor's option become immediately due from Lessee to Lessor.
(b) This Lease has been entered into on the assumption that
Lessor shall be entitled to all deductions, credits, and other tax benefits as
are provided in the Internal Revenue Code of 1986, including amendments as may
occur (the "Code"), to an owner of property including, without limitation,
depreciation deductions and interest deductions with respect to any debts
incurred to finance the purchase of the Equipment. If, as a result of any acts,
omissions or misrepresentations by Lessee, Lessor's projected after-tax economic
return resulting from ownership and lease of the Equipment is reduced, then
Lessee's Rental Payments shall be increased in an amount (based on Lessor's
reasonable calculations) sufficient to provide the same net after-tax economic
return as if such acts or omissions or changes had not occurred. Appropriate
increases shall also be made in the applicable Stipulated Loss Values for this
Lease. In the event the Equipment is sold by Lessor to another party, the net
after-tax economic returns considered shall be those of such other party.
15. EQUIPMENT WARRANTIES. Lessee acknowledges that (i) Lessee has
selected the supplier of the Equipment, (ii) Lessor acquired the goods or the
right to possession and use of the goods in connection with the Lease, and (iii)
Lessee received a copy of the contract by which Lessor acquired the Equipment or
the right to possession and use of the Equipment before signing the Lease.
LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR USE WITH RESPECT TO THE EQUIPMENT AND DISCLAIMS THE
SAME. Lessor shall have no liability for any damages, whether direct, indirect,
general, special, incidental, exemplary or consequential, incurred by Lessee as
a result of any defect or malfunction of the Equipment. Lessee shall look
solely to the Equipment supplier for any and all claims related to the
Equipment. Lessor assigns to Lessee, for and during the Lease Term, any
warranty on the Equipment provided by the supplier. Lessor and Lessee agree
that all limitations on remedies and liability contained in this Lease represent
a reasonable allocation of risks that is part of the fundamental bargain between
the parties.
16. EVENTS OF DEFAULT. An Event of Default shall occur if Lessee (i)
fails to pay any Rental Payment or other payment required under the Lease when
due and such failure continues for a period of five (5) days after written
notice from Lessor; or (ii) fails to perform or observe any other covenant,
condition or agreement to be performed or observed by it or breaches any
provision contained in the Lease or in any other document furnished to Lessor in
connection herewith, and such failure or breach continues for a period of thirty
(30) days after written notice from Lessor; or (iii) without Lessor's consent,
attempts to assign this Lease or sell, transfer, encumber, part with possession,
or sublet any item of Equipment; or (iv) makes any representation or warranty
herein or in any document furnished by Lessee in connection herewith, which
shall have been materially false or inaccurate when made or at the time to which
such representation or warranty relates; or (v) shall commit an act of
bankruptcy or
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become insolvent or bankrupt or make an assignment for the benefit of creditors
or consent to the appointment of a Trustee or Receiver or either shall be
appointed for Lessee or for a substantial part of its property without its
consent, or bankruptcy reorganization, or insolvency proceedings shall be
instituted by or against Lessee, and, if instituted against Lessee, shall not be
vacated or dismissed within sixty (60) days. Any Event of Default shall be
deemed material and a substantial impairment of Lessor's interests for the
purposes of this Lease, the UCC, and any other applicable law.
17. REMEDIES. Upon the occurrences of any Events of Default and at any
time thereafter, provided such Event of Default is then continuing, Lessor may,
in its discretion, do any one or more of the following:
(a) cancel any or all Leases which reference this Master Lease
or the Lease Line Schedule, upon notice to Lessee;
(b) recover any accrued and unpaid Rental Payments and other
amounts which are due and owing under the Leases so canceled on the Rental
Payment Date immediately preceding the date on which Lessor obtains possession
of the Equipment (or such earlier date as judgment is entered in favor of
Lessor) (the "Determination Date"), plus interest at the Default Rate;
(c) with or without canceling this Lease, recover such
Stipulated Loss Value as of the Rental Payment Date immediately preceding the
Determination Date;
(d) recover any amounts due under any indemnity then
determinable, plus interest at the Default Rate;
(e) require that Lessee provide the return and certification of
the Equipment in accordance with SECTION 6(C) hereof;
(f) enter the premises where such Equipment is located and take
immediate possession of and remove the same, all without liability to Lessor or
its agents for such entry;
(g) sell any or all of the Equipment at public or private sale,
with or without notice to Lessee or advertisement, or otherwise dispose of,
hold, use, operate, lease to others or keep idle such Equipment, all free and
clear of any rights of Lessee and without any duty to account to Lessee for such
action or inaction or for any proceeds with respect thereto; and
(h) exercise any other right or remedy which may be available
to it under the UCC or other applicable law including the right to recover
damages for the breach hereof.
In addition, Lessee shall be liable for, and reimburse Lessor for, all
reasonable legal fees and all commercially reasonable costs and expenses
incurred by Lessor as a result of the foregoing defaults or the exercise of
Lessor's remedies, including without limitation recovering possession of the
Equipment, selling or leasing the Equipment (including broker's and sales
representative's fees and commissions), and placing any Equipment in the
condition and obtaining the certificate required by SECTION 6(C) hereof. No
remedy referred to in this Section is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity. No express or implied waiver by Lessor
of any default shall constitute a waiver of any other default by Lessor, or a
waiver of any of Lessor's rights.
18. INDEMNIFICATION. Lessee assumes liability for, and shall pay when
due, and shall indemnify, reimburse and hold each Indemnified Person (defined
below) harmless from and against all Claims (defined below), directly or
indirectly relating to or arising out of the acquisition, use, manufacture,
purchase, shipment, transportation, delivery, installation, lease or sublease,
ownership, operation, possession, control, storage, return or condition of any
item of Equipment (regardless of whether such item of Equipment is at the time
in the possession of Lessee), the falsity of any non-tax representation or
warranty of Lessee or Lessee's failure to comply with the terms of the Lease
during the Lease Term. The foregoing indemnity shall cover, without limitation,
(i) any Claim in connection with a design or other defect (latent or patent) in
any item of Equipment, (ii) any Claim for
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infringement of any patent, copyright, trademark or other intellectual property
right, or (iii) any Claim for negligence or strict or absolute liability in
tort; provided, however, that Lessee shall not indemnify Lessor for any
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liability incurred by Lessor as a direct and sole result of Lessor's gross
negligence or willful misconduct.
"Claim" means all liabilities, losses, damages, actions, suits, demands,
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claims of any kind and nature (including, without limitation, claims relating to
environmental discharge, cleanup or compliance), and all costs and expenses
whatsoever to the extent they may be incurred or suffered by an Indemnified
Person in connection therewith (including, without limitation, reasonable
attorneys' fees and expenses), fines, penalties (and other charges of applicable
governmental authorities), licensing fees relating to any item of Equipment,
damage to or loss of use of property (including, without limitation,
consequential or special damages to third parties or damages to Lessee's
property), or bodily injury to or death of any person (including, without
limitation, any agent or employee of Lessee).
"Indemnified Person" means Lessor (including without limitation, each of
------------------
its partners) and each of their respective successors, assigns, agents,
officers, directors, shareholders, partners, servants, agents and employees.
Such indemnities shall continue in full force and effect, notwithstanding
the expiration or termination of this Lease. Upon Lessor's written demand,
Lessee shall assume and diligently conduct, at its sole cost and expense, the
entire defense of any Indemnified Person against any indemnified Claim described
in this SECTION 18. Lessee shall not settle or compromise any Claim against or
involving Lessor without first obtaining Lessor's written consent thereto, which
consent shall not be unreasonably withheld. Lessee shall give Lessor prompt
notice of any occurrence, event or condition in connection with which Lessor may
be entitled to indemnification hereunder. The provisions of this SECTION 18 are
in addition to, and not in limitation of, the provisions of SECTION 14(B).
19. NOTICES. Any notices or demands required or permitted hereunder shall
be given to the parties in writing and by personal delivery, regular or
certified mail, facsimile or telegram at the address set forth in the Lease Line
Schedule or to such other address as the parties may hereafter substitute by
written notice given in the manner prescribed in this Section. Such notices or
demands shall be deemed given upon receipt in the case of personal delivery and
upon mailing or transmission in the case of mail, facsimile or telegram. Lessee
agrees to provide Lessor with thirty (30) days' prior written notice of (a) any
merger or consolidation with or into any other business organization, (b) any
sale, lease or other disposition of assets not in the ordinary course of
business, and (c) any other material change in Lessee's financial structure or
ownership.
20. FURTHER ASSURANCES. Lessee will promptly execute and deliver to
Lessor such further reasonable documents and take such further reasonable action
as Lessor may request in order to more effectively carry out the intent and
purpose of this Lease or an assignment of Lessor's interest herein.
21. MISCELLANEOUS. This Lease shall be binding upon and inure to the
benefit of the parties hereto, their permitted successors and assigns. Any
provision of the Lease which is 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 in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; provided,
however, that to the extent that the provisions of any such applicable law can
be waived, they are waived by Lessee. Time is of the essence with respect to
the Lease. The captions set forth herein are for convenience only and shall not
define or limit any of the terms hereof. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES. LESSOR AND LESSEE
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM THIS LEASE.
THIS LEASE SHALL BECOME EFFECTIVE AND BINDING ON THE PARTIES, THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS, AND SHALL BE DEEMED EXECUTED AND PERFORMED IN
THE STATE OF CALIFORNIA, WHEN THE RELATED EQUIPMENT SCHEDULE IS ACCEPTED BY
LESSOR. LESSEE CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE COURTS
OF CALIFORNIA FOR THE RESOLUTION OF ANY DISPUTES HEREUNDER.
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22. AMENDMENTS, MODIFICATIONS, WAIVERS. NONE OF THE PROVISIONS OF THIS
LEASE MAY BE AMENDED, MODIFIED OR WAIVED EXCEPT IN A WRITING SIGNED BY LESSOR
AND LESSEE.
INITIALS _______________ (LESSEE) INITIALS _______________(LESSOR)
LESSEE: LESSOR:
POWER INTEGRATIONS, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
BY: BY: LIGHTHOUSE MANAGEMENT
----------------------------------- PARTNERS, L.P.,
NAME: Xxxxxx X. Xxxxxxx its general partner
---------------------------------
BY: LIGHTHOUSE CAPITAL
TITLE: Vice President of Finance PARTNERS, INC.,
& Administration its general partner
-------------------------------
BY:
NAME: Xxxxxxx X. Xxxxxxxxxxxx
-----------------------
TITLE: Managing Director
-----------------
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