Document Schedule
for Assignment of Lease and Sale of Equipment leased
under Schedule Nos. 83, 84, 85, and 86,
each as amended by Amendment No. 1 thereto ("Schedules")
to Master Lease Agreement dated December 14. 1995
between Varilease Corporation, as Lessor,
and America Online, Inc., as Lessee ("Master Lease")
PARTIES
Seller: Varilease Corporation
28525 Orchard Lake Road
Farmington Hills, Michigan 48334
Attention: Majorie Biglin
Telephone: (248) 488 - 0100
Telecopy: (248) 488 - 0162
Purchaser: American Finance Group, Inc.
24 School Street
Boston, MA 02108
Jason Howard, Account Manager
Telephone: (617) 557-9335
Telecopy: (617) 557-9348
E-mail:Jhoward@afgnet.com
Lessee: America Online, Inc.
8619 Westwood Center Drive
Suite 2000
Vienna, Virginia 22180
Attention: __________________
Telephone: ___-___-____
Telecopy: ___-___-____
Lender: Interpool, Inc.
211 College Road East
Princeton, NJ 08540
Attention: Raoul J. Witteveen, President
Telecopy: (609) 951-0362
Closing: December 30, 1997 at 10:00 a.m., at the offices of American Finance
Group, Inc. in Boston or by mail. (All documents will be dated as of
the Closing Date except as indicated.)
LEASE DOCUMENTS
1. Seller Certified copy of Master Lease Agreement dated as
of December 14, 1995, as amended by Amendment No. 1
thereto, between Seller as Lessor and Lessee.
2. Seller Certified copy of the below-listed Schedules each
between Seller as Lessor and Lessee, together with each
Amendment No. 1 thereto and each Acceptance Certificate.
a. Schedule No. 83
b. Schedule No. 84
c. Schedule No. 85
d. Schedule No. 86
3. Seller UCC-1 Financing Statements showing Lessee as Debtor
and Lender as Secured Party relating to the Equipment
leased pursuant to the Schedules.
4. Seller Copy of Opinion of Counsel of Lessee.
5. Seller Copy of Incumbency Certificate of Lessee.
6. Seller Insurance Certificate naming Purchaser as
additional insured and loss payee with respect to the
Schedule and the Equipment leased thereunder, as its
interests may appear.
TRANSFER DOCUMENTS
1. Purchaser Purchase & Sale Agreement.
2. Purchaser Assignment and Assumption Agreement and Bill of Sale.
3. Seller Letter of Instructions for Disbursement of Purchase
Price and Acquisition Fee.
4. Purchaser Lessee Notice and Acknowledgment of Assignment
(Consent & Agreement).
5. Seller Incumbency Certificate of the Assistant Secretary of
Seller.
6. Purchaser Incumbency Certificate of Purchaser
7. Seller Release of Lien from Seller
8. Seller UCC-1 financing statements between Seller, as Debtor and Purchaser, as
Secured Party.
9. Purchaser Resale Certificate for the all applicable states.
LOAN DOCUMENTS
1. Seller Certified copy of the Limited Recourse Loan and
Security Agreement dated September 30, 1997
between Seller as Debtor and Lender.
2. Seller Certified copy of the below-listed Limited
GRecourse Term Notes between Seller as Debtor and Lender,
to that certain Limited Recourse Loan and Security
Agreement with Amortization Schedule and Disbursement
Letter.
a. Term Note in the amount of $2,258,663.82 for
Schedule 83
b. Term Note in the amount of $2,015,220.47 for
Schedule 84
c. Term Note in the amount of $3,043,252.30 for
Schedule 85
d. Term Note in the amount of $3,043,252.30 for
Schedule 86
3. Seller Copy of Consent to Assignment and Agreement among Seller, Lender and
Lessee.
4. Seller Transferee Agreement among Lender, Seller and Purchaser.
MISCELLANEOUS DOCUMENTS
1. Seller Copies of vendor invoices, bills of sale and proof of
payment.
2. Seller Billing Instructions for Lessee invoices.
3. Seller Copies of tax filings or evidence of payment of taxes, if applicable.
4. Seller Lessee tax exemption certificates (if applicable)
5. Purchaser Equipment Appraisal and Inspection Report
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") made as of December 30,
1997, by and between AMERICAN FINANCE GROUP, INC., a Delaware corporation having
a principal place of business at 24 School Street, 7th Floor, Boston,
Massachusetts 02108 ("Purchaser"), and VARILEASE CORPORATION, a Michigan
corporation having a principal place of business at 28525 Orchard Lake Road,
Farmington Hills, Michigan, 48334 ("Seller").
Background:
Seller, as lessor, has entered into Schedule Nos. 83, 84, 85 and 86 each
dated September 16, 1997 to the Master Lease Agreement (the "Master Lease")
dated as of December 14, 1995 (such Schedule and the Master Lease solely to the
extent incorporated therein by reference being hereinafter collectively referred
to as the "Lease") with America Online, Inc., as lessee ("Lessee"), with respect
to the leasing by Lessee of various Ascend and U.S.
Robotics Industrial Modems (as further described in the Lease, the "Equipment").
Seller has financed its purchase of the Equipment leased under the
Schedules with Interpool, Inc. (the "Lender") pursuant to those certain Limited
Recourse Term Notes each dated September 30, 1997 ("Notes"), to that certain
Limited Recourse Loan and Security Agreement dated September 30, 1997 ("Security
Agreement"), and that Notice and Acknowledgement dated September 25, 1997
("Consent") in the total original principal amounts of $10,360,388.89 (the
Notes, together with the Security Agreement and the Consent hereinafter
collectively referred to as the "Debt Documents") and the debt represented
thereby, the "Debt").
Seller now wishes to sell and assign, and Purchaser wishes to purchase
and assume, all of the Seller's right, title and interest in and to the
Equipment, and all of Seller's right, title, interest duties and obligations in,
to and under the Lease, subject to the Debt and the Lender's security interest
in and to the Schedule and the Equipment, all on the terms and conditions
hereinafter set forth.
Agreement:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE. Seller hereby
agrees to sell, and hereby Purchaser agrees to purchase, all of Seller's right,
title and interest in and to the Equipment (including, but not limited to, the
residual value of the Equipment at the termination of the Lease), and Seller
hereby further agrees to assign, and Purchaser agrees to accept and assume, all
of Seller's right, title, interest, duties and obligations in, to and under the
Lease and all documents and instruments executed and delivered in connection
therewith (including, but not limited to, any and all agreements with the
vendors (if any) solely as they relate to the Equipment, opinions, certificates,
and other documents and instruments, collectively the "Lease Documents), subject
to the Debt. Simultaneously upon receipt by Seller of the Purchase Price of the
Equipment set forth below and delivery by Seller and Purchaser of the executed
documentation substantially in the form set forth as schedules hereto or
otherwise required hereunder, and satisfaction of the conditions precedent
specified in Section 7 hereof (the "Closing"), Seller will execute and deliver
to Purchaser on the Closing Date (as hereinafter defined) an Assignment and
Assumption Agreement and Bill of Sale (the "Assignment") in substantially the
form attached hereto as Schedule 1.
2. PURCHASE PRICE. The purchase price of the Equipment is $10,494,698.31
("Purchase Price"), payable in immediately available funds on the Closing Date
in the amount of $494,724.28, to be further described as $107,854.62 related to
Schedule No. 83, $96,229.84 related to Schedule No. 84, $145,319.91 related to
Schedule No. 85 and $145,319.91 related to Schedule No. 86, attributable to the
equity purchase price of the Equipment to be further described in the manner set
forth by Seller pursuant to a purchase price disbursement letter in
substantially the form attached hereto as Schedule 2; and by the assumption by
Purchaser of Seller's non-recourse liability to Lender pursuant to Transferee
Agreements in substantially the form attached hereto as Schedule 3 in the
aggregate principal amount of $2,180,089.93 related to Schedule No. 83,
$1,945,115.44 related to Schedule No. 84, $2,937,384.33 related to Schedule No.
85 and $2,937,384.33 related to Schedule No. 86, which non-recourse liability is
scheduled to be amortized and retired during the Base Term of the Master Lease
by the collateral assignment to Lender of the Lessee's rental obligations under
the Lease.
3. TAXES. Seller shall be responsible for all Taxes (as hereinafter
defined), payable or accrued, and for the submission for all necessary filings
to the applicable taxing authorities, relating to (i) its acquisition or
ownership, or Lessee's use or leasing of the Equipment, and (ii) the payment of
monthly rentals or other sums due under the Lease, including without limitation
all sales, use and property taxes, including interest and penalties thereon
("Taxes"), for all periods through and including the Closing Date. Accrued and
unpaid Taxes as of the Closing Date which are the responsibility of Seller
hereunder shall result in an adjustment to the Purchase Price as defined in
Section 2 hereof. As between Purchaser and Seller, Purchaser shall be
responsible for all Taxes and for the submission of all filings required by the
applicable taxing authorities with respect to Taxes after the Closing Date. All
Taxes of any nature whatsoever, including without limitation all sales or
transfer taxes arising out of or in connection with the sale or assignment of
the Lease or the Equipment contemplated herein, shall be solely for the account
of the Seller. Seller shall indemnify Purchaser from and against all costs,
claims or liabilities arising out of or relating to this Section 3 which result
from any obligation, liability, act, failure to act, or breach, violation or
untruth of any of the terms, conditions or covenants of this Section 3.
Purchaser shall provide to Seller a valid resale certificate for the applicable
states where the Equipment may be located, or other evidence reasonably
requested by Seller to establish that the sale of the Equipment is not subject
to tax.
4. SUBORDINATION. Purchaser and Seller acknowledge and agree that
Purchasers' right, title and interest in the Equipment, the Lease, and all
proceeds thereof and therefrom, will be subject and subordinate in all respects
to the Debt and Lender's security interest and the rights of the Lessee under
the Lease.
5. ASSUMPTION OF DEBT. Purchaser hereby agrees to assume the Debt
subject to the benefit of the non-recourse provisions thereof, and acknowledges
receipt of the Debt Documents. Notwithstanding anything to the contrary
contained herein, in no event shall Purchaser assume or incur any liability for
breaches by Seller of its representations, warranties, or covenants contained in
the Debt Documents. Each of Purchaser and Seller shall indemnify the other for
any recourse liability incurred by the indemnified party under the Debt
Documents as a result of any breach of the representations, warranties, or
covenants contained therein caused by the indemnifying party's acts or
omissions.
6. CONSENT OF LENDER. As a condition precedent to Closing hereunder,
Seller and Purchaser agree to execute and deliver on the Closing Date a
Transferee Agreement, which shall have been duly executed by Lender.
7. CONSENT OF LESSEE. As a condition precedent to Closing hereunder,
Seller agrees to deliver to Purchaser on the Closing Date a Notice and
Acknowledgment of Assignment of even date herewith in substantially the form
attached hereto as Schedule 4 (the "Notice") executed by the Lessee.
8. ADDITIONAL CONDITIONS PRECEDENT. Purchaser's obligations hereunder
are subject to satisfaction by Seller of the following conditions precedent on
or before the Closing Date:
A. Lessee shall have inspected, approved and accepted the
Equipment for lease pursuant to a Certificate of Acceptance under the Lease on
or before Closing Date;
B. Seller shall have delivered to Purchaser one certified copy of
the Lease and the Lease Documents (including the original executed copy of the
Schedule marked "Counterpart No. 1" and all schedules and attachments thereto,
the Certificate of Acceptance, and a certified true and complete copy of the
Master Lease, all as may have been amended from time to time up to and including
the Closing Date) in substantially the form that has been presented to
Purchaser, comprising all of the fully executed "originals" thereof except only
those in the possession of Lender or Lessee;
C. Seller shall have delivered to Purchaser documentation
reasonably supporting the validity and enforceability of Lessee's obligations
under the Lease, the Lease Documents and the Notice, which may include, without
limitation, a secretary's certificate regarding incumbency and corporate
resolutions and an opinion of counsel;
D. Seller shall have delivered to Purchaser documentation
reasonably supporting the validity and enforceability of Seller's obligations
under the Lease Documents and the Transfer Documents, which shall include,
without limitation, a secretary's certificate regarding incumbency and corporate
resolutions and an opinion of counsel;
E. Seller shall have delivered to Purchaser appropriate
"Lessee/Lessor" UCC-1 financing statements signed by Seller and Lessee, as
assigned to Purchaser;
F. Lessee shall not, between the date hereof and the Closing Date, have
(i) ceased doing business as a going concern or, in the reasonable opinion of
Purchaser, suffered a material adverse change in its financial or operating
condition through and including the Closing Date; (ii) made an assignment for
the benefit of creditors, admitted in writing its inability to pay its debts as
they mature or generally failed to pay its debts as they become due; (iii)
initiated any voluntary bankruptcy or insolvency proceeding; (iv) failed to
obtain the discharge of any bankruptcy or insolvency proceeding initiated
against it by others within 60 days of the date such proceedings were initiated;
or (v) requested or consented to the appointment of a trustee or receiver with
respect to itself or for a substantial part of Lessee's property.
G. Seller shall have provided Purchaser with (i) copies of vendor
invoices, (ii) purchase documentation, (iii) equipment specifications, (iv)
documentation evidencing Seller's payment to vendor for the Equipment and (v)
other materials reasonably requested by Purchaser establishing Seller's title in
and to the Equipment and supporting that the Purchase Price of the Equipment
does not exceed the fair market value thereof;
H. All required licenses, approvals, consents and notifications
necessary in respect of the transactions contemplated hereby shall have been
obtained or made, and executed or certified copies thereof shall have been
delivered to Purchaser;
I. Seller shall have performed and complied in all material
respects with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing; and
J. Seller shall have provided Purchasers with documentation
requested by Purchasers confirming the filing and payment of all sales, use,
property and other taxes relating to the Equipment and the Lease.
9. REPRESENTATIONS AND WARRANTIES.
(A) Seller represents and warrants that:
(1) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan with adequate
power to enter into each of this Agreement, the Lease Documents, the
Assignment, and each instrument, document or agreement attached or
otherwise related hereto (hereinafter the "Transfer Documents") to which
it is a party and is duly qualified to do business in every jurisdiction
in which its failure to so qualify would have a material adverse effect
upon the business or property of Seller.
(2) The Transfer Documents executed by Seller have been duly
authorized, executed and delivered by Seller, and assuming their due
authorization, execution and delivery by each of the other parties
thereto, constitute a valid, legal and binding agreement, enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights.
(3) The entering into and performance by Seller of the Transfer
Documents executed by Seller does not violate any judgment, order, law
or regulation applicable to Seller or any provision of Seller's
Certificate of Incorporation or By-Laws or result in any breach of, or
constitute a default under any indenture, mortgage, deed of trust, bank
loan or credit agreement or other instrument to which Seller is a party.
(4) Seller is not in default under any indenture, mortgage, loan
agreement or other instrument, in each case of a material nature, to
which the Seller is a party, nor is Seller in violation of any law,
order, injunction, decree, rule or regulation applicable to Seller of
any court or administrative body, which default or violation materially
and adversely affects the business, property or assets, operations or
condition, financial or otherwise, of Seller. No Event of Default, as
defined in the Lease (or an event which, with the passage of time or the
giving of notice, or both, would constitute an Event of Default) would
occur upon the execution and delivery of each such Transfer Document.
(5) There is no litigation, proceedings or investigation pending
or, to the knowledge of Seller, threatened against or involving Seller
or its assets or properties that, individually or in the aggregate, if
adversely determined, would restrain, enjoin or materially frustrate the
consummation by Seller of the transactions contemplated herein, the
performance of the obligations contained herein or the enjoyment of the
benefits contained herein. There are no outstanding judgments, decrees,
orders of any courts or any governmental authority against Seller or
affecting Seller's ability to transfer and lease the Equipment.
(6) No approval, consent or withholding of objection is required
from any governmental authority with respect to the entering into or
performance by Seller of the Transfer Documents to which it is a party.
(7) Seller has good and marketable title to the Equipment, free
and clear of all liens, claims and encumbrances except such liens,
claims or encumbrances which Lessee is required to discharge pursuant to
the Lease and the security interest of, and prior assignment to, the
Lender. The purchase price for the Equipment has been paid in full.
Seller has not heretofore sold, assigned, or encumbered the title and
interest to be conveyed pursuant to this Agreement, except to the
Lender.
(8) The Master Lease, the Schedules and the Notice delivered to
Purchaser in connection herewith are true, correct and complete as of
the date hereof and such documents delivered to Purchaser contain the
entire agreement made between Seller and Lessee in connection with the
lease of the Equipment.
(9) To the best of Seller's knowledge based on Lessee's
secretary's certificate of incumbency and authority, the Lease was
executed by officers of the Lessee who had authority to execute the
same, and the Lease is valid, binding and enforceable in accordance with
its terms.
(10) No Event of Default (as such term is defined in the Lease)
or event which, with the giving of notice or the passage of time, or
both, would become an Event of Default, has occurred; all rentals due as
of the Closing Date have been or will be paid in full when due; there
has been no prepayment of rent and the aggregate amount of unpaid
rentals for the Lease is as specified in the Notice, and rentals are due
in scheduled payments following the Closing Date in accordance with the
terms of the Lease.
(11) All taxes which are the responsibility of Seller relating to
(i) the acquisition, ownership, use or leasing of the Equipment through
the closing date, and (ii) the payment of monthly rentals or other sums
due under the Lease, including without limitation all sales, use and
property taxes, including interest and penalties thereon, have been or
when due will promptly be remitted to the applicable taxing authorities
with the necessary filings.
(12) The representations and warranties of Seller contained in
the Debt Documents are true and correct as of the date hereof and no
Event of Default has occurred under the Security Agreement dated
September 30, 1997 between Lender and Seller.
(B) Purchaser represents and warrants that:
(1) Purchaser is a corporation duly organized and validly
existing under the laws of the State of Delaware, with adequate power to
enter into the Transfer Documents to which it is a party and is duly
qualified to do business in every jurisdiction in which its failure to
so qualify would have a material adverse effect upon the business or
property of Purchaser.
(2) The Transfer Documents executed by Purchaser have been duly
authorized, executed and delivered by Purchaser and, assuming their due
authorization, execution and delivery by each of the other parties
thereto, constitute a valid, legal and binding agreement, enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights.
(3) The entering into and performance by Purchaser of each of
this Agreement and each instrument, document or agreement attached or
otherwise related hereto executed by Purchaser does not violate any
judgment, order, law or regulation applicable to Purchaser or any
provision of Purchaser's Second Amended and Restated Partnership
Agreement, as amended or result in any breach of, or constitute a
default under any indenture, mortgage, deed of trust, bank loan or
credit agreement or other instrument to which Purchaser is a party.
(4) There is no litigation, proceedings or investigation pending
or, to the knowledge of Purchaser, threatened against or involving
Purchaser or its assets or properties that, individually or in the
aggregate, if adversely determined, would restrain, enjoin or materially
frustrate the consummation by Purchaser of the transactions contemplated
herein, the performance of the obligations contained herein or the
enjoyment of the benefits contained herein. There are no outstanding
judgments, decrees, orders of any courts or any governmental authority
against Purchaser or affecting Purchaser's ability to acquire the
Equipment.
(5) No approval, consent or withholding of objection is required
from any governmental authority of the United States of America or the
Commonwealth of Massachusetts with respect to the entering into or
performance by Purchaser of this Agreement and each instrument, document
or agreement attached or otherwise related hereto to which it is a
party.
(6) So long as there is no Event of Default under the Lease,
Purchaser shall not disturb the peaceful and quiet use and enjoyment of
the Equipment by Lessee.
10. INDEMNITY
Seller hereby agrees to indemnify, defend and hold Purchaser, its
officers, directors, shareholders, partners, employees, agents, trustees,
beneficial owners, executive committee members, successors and assigns
(collectively, the "Indemnities") harmless from and against any and all claims,
losses, damages or liabilities suffered or incurred by Purchaser resulting or
arising from the breach, violation or untruth of any of the terms, conditions,
representations or warranties binding upon or made by Seller contained in this
Agreement or any of the other Transfer Documents to which it is a party or any
instrument, document or agreement attached hereto or otherwise related hereto to
which Seller is a party, except any such claims, losses, damages or liabilities
resulting from Purchaser's negligence or misconduct. Purchaser hereby agrees to
indemnify, defend and hold Seller and its Indemnities harmless from and against
any and all claims, losses, damages or liabilities suffered or incurred by
Seller resulting or arising from the breach, violation or untruth of any of the
terms, conditions, representations or warranties binding upon or made by
Purchaser contained in this Agreement or any of the other Transfer Documents to
which it is a party or any instrument, document or agreement attached hereto or
otherwise related hereto to which Purchaser is a party, except any such claims,
losses, damages or liabilities resulting from Seller's negligence or misconduct.
11. ARBITRATION
In the event that any dispute arises under any of the Transfer Documents
including, without limitation, any claim of default or breach of a covenant or
representation hereunder, either party in the case of a dispute, or the claiming
party in the case of a claim of default or breach shall submit the matter for
arbitration in Boston, Massachusetts, by and pursuant to the rules of the
American Arbitration Association ("AAA"). The single arbitrator who hears the
case will be selected by AAA and AAA shall be advised that the parties have
agreed in advance that any matter submitted to AAA for resolution shall be heard
in a reasonably expeditious manner. The powers of the arbitrator shall expressly
include both the right to issue injunctive orders and to order the payment of
money damages. The resolution of the matter by arbitration shall be binding upon
the parties hereto and judgment upon the award of the arbitrator may be entered
in any court of competent jurisdiction. Costs of arbitration and legal fees
shall be awarded to the prevailing party; provided, however, that the arbitrator
shall have the power to make a different allocation of costs and legal fees
whenever it is fair or reasonable to do so as determined by the arbitrator.
12. MISCELLANEOUS.
A. This Agreement, together with Schedules 1, 2, 3 and 4 hereto,
constitute the entire agreement between Seller and Purchaser with respect to the
proposed purchase and sale, and assignment and assumption, of the Equipment and
the Lease. Any provision of this Agreement 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 in any such
jurisdiction shall not invalidate or render unenforceable such provision in any
such jurisdiction.
B. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
C. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, including all
matters of construction, validity, performance and enforcement.
D. The titles appearing in this Agreement and in any other
documents relating to this transaction are inserted only as a matter of
convenience and in no way define, limit or describe the scope or intent of such
sections or articles nor in any way affect this agreement or any other documents
relating to this transaction.
E. The parties hereto agree to execute and deliver, or cause to
be executed and delivered, such further instruments or documents and take such
other action as may be reasonably required effectively to carry out the
transactions contemplated herein.
F. The parties hereto covenant and agree to promptly remit to the
other party payments incorrectly received by such party after the Closing Date.
Without the prior written consent of the other party, neither Seller nor
Purchaser shall take any action which impairs the rights of the other party (or
its assignee or successor) with respect to any Schedule executed pursuant to the
Master Lease in and to which such party has no right, title or interest,
provided, that the foregoing covenant shall not require either party to obtain
the consent of the other party prior to exercising any of its rights and
remedies under the Master Lease if such exercise relates solely to a Schedule
executed pursuant to the Master Lease then owned by such party. Purchaser may,
at all reasonable times after giving Seller prior written notice thereof,
inspect and audit such of Seller's books as are directly relevant to the lease.
G. This Agreement may be amended or rescinded only by written
instrument signed by all the parties hereto.
H. Notwithstanding any other conditions contained herein, it is
hereby agreed that the representations, warranties, indemnities and assurances
of each party hereto shall survive the expiration or termination of this
Agreement and inure to the benefit of and be binding upon each of the parties
hereto and their respective successors and assigns.
I. All notices and communications delivered hereunder or with
respect hereto shall be in writing and shall be forwarded by certified mail,
return receipt requested, postage prepaid, or personally delivered, and
addressed to Seller and Purchaser at the addresses set forth below or to such
other address as shall be provided to the parties:
Notice (con't)
To Purchaser:
American Finance Group, Inc.
24 School Street
Boston, Massachusetts 02108
Attention: Operations
To Seller:
Varilease Corporation
28525 Orchard Lake Road
Farmington Hills, Michigan 48334
Attention: _____________
J. Whether or not the transaction contemplated hereby is
consummated, each of the Seller and Purchaser shall bear and be responsible for
its own costs and expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement, and any documents
delivered pursuant or related hereto, and shall not have any right of
reimbursement or indemnity for such costs and expenses as against each other.
K. This Agreement may be executed in counterparts each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
L. This Agreement contemplates a sale of 100% ownership interest
in the Equipment and the lease and shall in no way be construed as an extension
of credit by Purchaser to Seller. Seller waives and releases any right, title or
interest that it may have (whether pursuant to a cross-collateralization
provision or otherwise) in and to the Equipment and/or the Lease.
13. RESIDUAL SHARING
Upon the expiration of the Base Term, Seller shall be entitled to fifty percent
(50%) of all net proceeds in excess of $1,057,103.16 to be further described as
$230,458.59 related to Schedule No. 83, $205,619.31 related to Schedule No. 84,
$310,512.63 related to Schedule No. 85 and $310,512.63 related to Schedule No.
86, (i) generated from the sale of the Equipment or (ii) from the present value
of future rentals pursuant to any lease or re-lease of the Equipment discounted
at 19.475% per annum.
In the event the Lease terminates early either by voluntary termination,
casualty, or otherwise ("Early Termination"), and the sum of the proceeds of any
such Early Termination, inclusive of termination proceeds, casualty proceeds and
penalties ("Termination Proceeds"), exceed the total amount owed under the lease
to the Lender, Seller shall be entitled to fifty percent (50%) of all
Termination Proceeds after Buyer has received a net annualized return of 19.475%
("Target Yield") on the cash portion of its Purchase Price, hereunder. The
dollar amount needed to meet the Target Yield shall be calculated by future
valuing the cash paid by Buyer to Seller on the Closing Date to the date the
Termination Proceeds are received.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and do each hereby warrant and represent that their respective
signatures appearing below have been and are on the date of this Agreement, and
will be on the Closing Date, duly authorized by all necessary and appropriate
action to execute this Agreement.
PURCHASER: SELLER:
AMERICAN FINANCE GROUP, INC. VARILEASE CORPORATION
BY:________________________ BY:_________________________
TITLE: Vice President TITLE:______________________
Schedule 1
ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE
ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE ("Assignment")
dated as of December 30, 1997, by and between AMERICAN FINANCE GROUP, INC., a
Delaware corporation having a principal place of business at 24 School Street,
Boston, Massachusetts 02108 ("Purchaser"), and VARILEASE CORPORATION, a Michigan
corporation having a principal place of business at 28525 Orchard Lake Road,
Farmington Hills, Michigan 48334 ("Seller"). (Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in a Purchase
and Sale Agreement between Seller and Purchaser dated as of December 30, 1997).
l. ASSIGNMENT OF LEASE
Seller hereby assigns, transfers and sets over unto Purchaser, and
Purchaser hereby assumes, all of Seller's right, title, interest and obligations
in, to and under those certain Schedule Nos. 83, 84, 85 and 86, each as amended
by Amendment No. 1 thereto, to the Master Lease Agreement (the "Master Lease")
dated as of December 14, 1995, as amended by Amendment No. 1 thereto dated
October 1, 1996 (such Schedules and the Master Lease solely as incorporated
therein by reference hereinafter referred to as the "Lease") between Seller, as
lessor, and America Online, Inc., as lessee ("Lessee"), with respect to the
leasing by Lessee of various Ascend and U.S. Robotics Industrial Modems (as
further described in the Lease, the "Equipment"). Seller's assignment of its
right, title, interest and obligations in Schedules shall be subject to a
security interest in favor of Interpool, Inc. (the "Lender"), as referenced in
the Purchase and Sale Agreement among Seller and Purchasers of even date
herewith. Seller represents and warrants that, so long as no breach or event of
default, or event which, with the giving of notice or the passage of time or
both, would constitute an event of default, has occurred and is continuing under
the Lease, Seller shall warrant Lessee's right of quiet use and possession of
the Equipment thereunder against all persons claiming by or through Seller.
2. SALE OF THE EQUIPMENT
In consideration of the sum of $10,494,698.31 ("Purchase Price"),
payable in immediately available funds in the amount of $494,724.28, to be
further described as $107,854.62 related to Schedule No. 83, $96,229.84 related
to Schedule No. 84, $145,319.91 related to Schedule No. 85 and $145,319.91
related to Schedule No. 86, attributable to the equity purchase price of the
Equipment, and by the assumption by Purchaser of Seller's non-recourse liability
to Lender pursuant to the Transferee Agreement in the principal amount
$2,180,089.93 related to Schedule No. 83, $1,945,115.44 related to Schedule No.
84, $2,937,384.33 related to Schedule No. 85 and $2,937,384.33 related to
Schedule No. 86, Seller ereby sells and transfers to Purchaser all of its right,
title and interest in and to the Equipment, together with all warranties,
express or implied, received from the manufacturer or vendor thereof. Seller
hereby represents and warrants to Purchasers that Seller is conveying good title
to the Equipment, free and clear of all liens and encumbrances other than (i)
the leasehold estate of Lessee under the Lease, and (ii) the security interest
of the Lender in and to the Schedules and the Equipment leased thereunder.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
(a) Seller, in order to induce Purchaser to enter into this Agreement,
hereby represents and warrants to Purchaser that (i) each of this Agreement and
each agreement and instrument related hereto has been duly authorized, executed
and delivered by the Seller, and is enforceable against Seller in accordance
with their respective terms; (ii) the Lease, together with Lessee's Notice and
Acknowledgment of Assignment, represent the entire agreement between the Seller
as lessor and Lessee with respect to the leasing of the Equipment; (iii) of the
only duplicate originals of the Rental Schedule, one has been delivered to the
Lessee, one has been delivered to the Lender, and any other originals thereof
will be delivered to the Purchaser herewith; (iv) the Lease is in full force and
effect, without modification or amendment; (v) Lessee has accepted the Equipment
for lease and is thereby bound by the terms and conditions of the Lease; (vi) no
event of default has occurred and is continuing thereunder; (vii) the rents
payable under the Lease are not subject to any defenses, set-offs or
counterclaims; (viii) except for the security interest of Lender, Seller has not
granted any liens on the Equipment or made any assignment of the Lease; (ix) as
of the date hereof there are no sales taxes or other governmental charges due
with respect to the Equipment other than those payable by Lessee under the Lease
and excluding any taxes that are based on or measured by the net income of
lessor under the Lease; (x) beginning with and including the rental payment due
January 1, 1998, there are 46 payments of Base Monthly Rental due Purchaser from
Lessee under each Schedule; and (xi) there has been no prepayment of any rents
not yet due and payable. Purchaser agrees to provide Seller with a resale tax
exemption certificate for the applicable states where the Equipment may be
located.
(b) EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN THE PURCHASE AND SALE
AGREEMENT OF EVEN DATE HEREWITH, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER CONCERNING THE EQUIPMENT,
INCLUDING, WITHOUT LIMITATION, THE SELECTION, QUALITY, OR CONDITION OF THE
EQUIPMENT, OR ITS MERCHANTABILITY, ITS SUITABILITY, ITS FITNESS FOR ANY
PARTICULAR PURPOSE, THE OPERATION OR PERFORMANCE OF THE EQUIPMENT OR PATENT
INFRINGEMENT OR THE LIKE.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser, in order to induce Seller to enter into this Agreement,
hereby represents and warrants to Seller that each of this Agreement and each
agreement and instrument related hereto has been duly authorized, executed and
delivered by Purchaser, and is enforceable against it in accordance with their
respective terms.
5. ASSUMPTION OF THE LEASE BY PURCHASER
The Purchaser hereby assumes all the right, title and interest of the
Seller under the Lease.
6. GOVERNING LAW. EXECUTION IN COUNTERPARTS.
This Agreement is to be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts. This Agreement may be executed in
multiple counterparts, each of which, taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement and Bill of Sale to be executed and delivered as of the date first
above written.
AMERICAN FINANCE GROUP, INC. VARILEASE CORPORATION
PURCHASER: SELLER:
By: _______________________________ By:__________________________
Title: Vice President Title:_________________________
Schedule 2
December 30, 1997
American Finance Group, Inc.
24 School Street
Boston, MA 02108
Attn: Vice President - Operations
RE: Instructions for Disbursement of Proceeds of sale and assignment
by Varilease Corporation ("Seller"), and purchase and assumption
by American Finance Group, Inc., of Schedule Nos. 83, 84, 85 and
86, each as amended by Amendment No. 1 thereto, to the Master
Lease Agreement dated as of December 14, 1995, as amended by
Amendment No. 1 dated October 1, 1996 between Seller, as lessor,
and America Online, Inc., as lessee ("Lessee") and Equipment
leased thereunder.
Ladies and Gentlemen:
The proceeds of the above-referenced sale and assignment payable by
American Finance Group, Inc. are $_______.__, payable in immediately available
funds in the amount of $_______.__ attributable to the equity purchase price of
the Equipment and $______.__ as an Acquisition Fee with respect thereto in the
manner set forth below. Please disburse the referenced equity proceeds directly
to the undersigned as follows:
AMOUNT WIRE TRANSFER
$---------- -----------------------
-----------------------
ABA #_________________
ACT # _________________
For the Account of:_______
-----------------------
Reference:______________
$ TOTAL
Very truly yours,
VARILEASE CORPORATION
By:_______________________________
Title:______________________________
Schedule 3
TRANSFEREE AGREEMENT
EXHIBIT A TO TRANSFEREE AGREEMENT
Schedule 4
NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE
ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE ("Assignment")
dated as of December 30, 1997, by and between AMERICAN FINANCE GROUP, INC., a
Delaware corporation having a principal place of business at 24 School Street,
Boston, Massachusetts 02108 ("Purchaser"), and VARILEASE CORPORATION, a Michigan
corporation having a principal place of business at 28525 Orchard Lake Road,
Farmington Hills, Michigan 48334 ("Seller"). (Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in a Purchase
and Sale Agreement between Seller and Purchaser dated as of December 30, 1997).
l. ASSIGNMENT OF LEASE
Seller hereby assigns, transfers and sets over unto Purchaser, and
Purchaser hereby assumes, all of Seller's right, title, interest and obligations
in, to and under those certain Schedule Nos. 83, 84, 85 and 86, each as amended
by Amendment No. 1 thereto, to the Master Lease Agreement (the "Master Lease")
dated as of December 14, 1995, as amended by Amendment No. 1 thereto dated
October 1, 1996 (such Schedules and the Master Lease solely as incorporated
therein by reference hereinafter referred to as the "Lease") between Seller, as
lessor, and America Online, Inc., as lessee ("Lessee"), with respect to the
leasing by Lessee of various Ascend and U.S. Robotics Industrial Modems (as
further described in the Lease, the "Equipment"). Seller's assignment of its
right, title, interest and obligations in Schedules shall be subject to a
security interest in favor of Interpool, Inc. (the "Lender"), as referenced in
the Purchase and Sale Agreement among Seller and Purchasers of even date
herewith. Seller represents and warrants that, so long as no breach or event of
default, or event which, with the giving of notice or the passage of time or
both, would constitute an event of default, has occurred and is continuing under
the Lease, Seller shall warrant Lessee's right of quiet use and possession of
the Equipment thereunder against all persons claiming by or through Seller.
2. SALE OF THE EQUIPMENT
In consideration of the sum of $10,494,698.31 ("Purchase Price"),
payable in immediately available funds in the amount of $494,724.28 attributable
to the equity purchase price of the Equipment , and by the assumption by
Purchaser of Seller's non-recourse liability to Lender pursuant to the
Transferee Agreement in the principal amount $2,180,089.93 related to Schedule
No. 83, $1,945,115.44 related to Schedule No. 84, $2,937,384.33 related to
Schedule No. 85 and $2,937,384.33 related to Schedule No. 86, Seller hereby
sells and transfers to Purchaser all of its right, title and interest in and to
the Equipment, together with all warranties, express or implied, received from
the manufacturer or vendor thereof. Seller hereby represents and warrants to
Purchasers that Seller is conveying good title to the Equipment, free and clear
of all liens and encumbrances other than (i) the leasehold estate of Lessee
under the Lease, and (ii) the security interest of the Lender in and to the
Schedules and the Equipment leased thereunder.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
(a) Seller, in order to induce Purchaser to enter into this Agreement,
hereby represents and warrants to Purchaser that (i) each of this Agreement and
each agreement and instrument related hereto has been duly authorized, executed
and delivered by the Seller, and is enforceable against Seller in accordance
with their respective terms; (ii) the Lease, together with Lessee's Notice and
Acknowledgment of Assignment, represent the entire agreement between the Seller
as lessor and Lessee with respect to the leasing of the Equipment; (iii) of the
only duplicate originals of the Rental Schedule, one has been delivered to the
Lessee, one has been delivered to the Lender, and any other originals thereof
will be delivered to the Purchaser herewith; (iv) the Lease is in full force and
effect, without modification or amendment; (v) Lessee has accepted the Equipment
for lease and is thereby bound by the terms and conditions of the Lease; (vi) no
event of default has occurred and is continuing thereunder; (vii) the rents
payable under the Lease are not subject to any defenses, set-offs or
counterclaims; (viii) except for the security interest of Lender, Seller has not
granted any liens on the Equipment or made any assignment of the Lease; (ix) as
of the date hereof there are no sales taxes or other governmental charges due
with respect to the Equipment other than those payable by Lessee under the Lease
and excluding any taxes that are based on or measured by the net income of
lessor under the Lease; (x) beginning with and including the rental payment due
January 1, 1998, there are 46 payments of Base Monthly Rental due Purchaser from
Lessee under each Schedule; and (xi) there has been no prepayment of any rents
not yet due and payable. Purchaser agrees to provide Seller with a resale tax
exemption certificate for the applicable states where the Equipment may be
located.
(b) EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN THE PURCHASE AND SALE
AGREEMENT OF EVEN DATE HEREWITH, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER CONCERNING THE EQUIPMENT,
INCLUDING, WITHOUT LIMITATION, THE SELECTION, QUALITY, OR CONDITION OF THE
EQUIPMENT, OR ITS MERCHANTABILITY, ITS SUITABILITY, ITS FITNESS FOR ANY
PARTICULAR PURPOSE, THE OPERATION OR PERFORMANCE OF THE EQUIPMENT OR PATENT
INFRINGEMENT OR THE LIKE.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser, in order to induce Seller to enter into this Agreement,
hereby represents and warrants to Seller that each of this Agreement and each
agreement and instrument related hereto has been duly authorized, executed and
delivered by Purchaser, and is enforceable against it in accordance with their
respective terms.
5. ASSUMPTION OF THE LEASE BY PURCHASER
The Purchaser hereby assumes all the right, title and interest of the
Seller under the Lease.
6. GOVERNING LAW. EXECUTION IN COUNTERPARTS.
This Agreement is to be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts. This Agreement may be executed in
multiple counterparts, each of which, taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement and Bill of Sale to be executed and delivered as of the date first
above written.
AMERICAN FINANCE GROUP, INC. VARILEASE CORPORATION
PURCHASER: SELLER:
By: _______________________________ By:__________________________
Title: Vice President Title:_________________________