MASTER LEASE AGREEMENT
[LOGO]
Banc One Leasing Corporation
This MASTER LEASE AGREEMENT is made, entered and dated as of October 30, 1996,
by and between:
LESSOR: LESSEE: STB SYSTEMS, INC.
BANC ONE LEASING CORPORATION 1651 N. GLENVILLE
2400 Corporate Exchange Drive RICHARDSON, TX 75081
Columbus, Ohio 43231
1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from Lessor,
all the property described in the Lease Schedules which are signed from time to
time by Lessor and Lessee.
2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by Lessee
and Lessor which incorporates the terms of this Master Lease Agreement, together
with all exhibits, riders, attachments and addenda thereto. "Equipment" means
the property described in each Schedule, together with all attachments,
additions, accessions, parts, repairs, improvements, replacements and
substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar
words mean this Master Lease Agreement and all Schedules, together with all
exhibits, riders, attachments and addenda to any of the foregoing, as the same
may from time to time be amended, modified or supplemented. "Prime Rate" means
the prime rate of interest announced from time to time as the prime rate by Bank
One, Columbus, NA; provided, that the parties acknowledge that the Prime Rate is
not intended to be the lowest rate of interest charged by said bank in
connection with extensions of credit. "Lien" means any security interest, lien,
mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ,
levy, other judicial process or claim of any nature whatsoever by or of any
person. "Fair Market Value" means the amount which would be paid for an item of
Equipment by an informed and willing buyer (other than a used equipment or scrap
dealer) and an informed and willing seller neither under a compulsion to buy or
sell. "Lessor's Cost" means the invoiced price of any item of Equipment plus any
other cost to Lessor of acquiring an item of Equipment. All terms defined in the
Lease are equally applicable to both the singular and plural form of such terms.
3. LEASE TERM AND RENT: The term of the lease of the Equipment described in
each Schedule ("Lease Term") commences on the date stated in the Schedule and
continues for the term stated therein. As rent for the Equipment described in
each Schedule, Lessee shall pay Lessor the rent payments and all other amounts
stated in such Schedule, payable on the dates specified therein. All payments
due under the Lease shall be made in United States dollars at Lessor's office
stated in the opening paragraph or as otherwise directed by Lessor in writing.
4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an event of
default occurs or if for any reason Lessee does not accept, or revokes its
acceptance of, equipment covered by a purchase order or purchase contract or if
any commitment or agreement of Lessor to lease equipment to Lessee expires,
terminates or is otherwise canceled, then automatically upon notice from Lessor,
any purchase order or purchase contract and all obligations thereunder shall be
assigned to Lessee and Lessee shall pay and perform all obligations thereunder.
Lessee agrees to pay, defend, indemnify and hold Lessor harmless from any
liabilities, obligations, claims, costs and expenses (including reasonable
attorney fees and expenses) of whatever kind imposed on or asserted against
Lessor in any way related to any purchase orders or purchase contracts. Lessee
shall make all arrangements for, and Lessee shall pay all costs of,
transportation, delivery, installation and testing of Equipment. The Equipment
shall be delivered to Lessee's premises stated in the applicable Schedule and
shall not be removed without Lessor's prior written consent. Lessor has the
right upon reasonable notice to Lessee to inspect the Equipment wherever
located. Lessor may enter upon any premises where Equipment is located and
remove it immediately, without notice or liability to Lessee, upon the
expiration or other termination of the Lease Term.
5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense: (a) repair
and maintain the Equipment in good condition and working order and supply and
install all replacement parts or other devices when required to so maintain the
Equipment or when required by applicable law or regulation, which parts or
devices shall automatically become part of the Equipment; (b) use and operate
the Equipment in a careful manner in the normal course of its business and only
for the purposes for which it was designed in accordance with the manufacturer's
warranty requirements, and comply with all laws and regulations relating to the
Equipment, and obtain all permits or licenses necessary to install, use or
operate the Equipment; and (c) make no alterations, additions, subtractions,
upgrades or improvements to the Equipment without Lessor's prior written
consent, but any such alterations, additions, upgrades or improvements shall
automatically become part of the Equipment. The Equipment will not be used or
located outside of the United States.
6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease. Lessee's
obligation to pay all rent and all other amounts payable under the Lease is
absolute and unconditional under any and all circumstances and shall not be
affected by any circumstances of any character including, without limitation,
(a) any setoff, claim, counterclaim, defense or reduction which Lessee may have
at any time against Lessor or any other party for any reason, or (b) any defect
in the condition, design or operation of, any lack of fitness for use of, any
damage to or loss of, or any lack of maintenance or service for any of the
Equipment. Each Schedule is a noncancelabIe lease of the Equipment described
therein and Lessee's obligation to pay rent and perform all other obligations
thereunder and under the Lease are not subject to cancellation or termination by
Lessee for any reason.
7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS, AND
WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT LIMITATION: ITS
MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS DESIGN, CONDITION,
QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR WORKMANSHIP; ITS NON-
INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR
OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE WITH ANY LAW, RULE,
SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING THERETO. Lessor hereby
assigns to Lessee the benefit of any assignable manufacturer's or supplier's
warranties, but Lessor, at Lessee's written request, will cooperate with Lessee
in pursuing any remedies Lessee may have under such warranties. Any action taken
with regard to warranty claims against any manufacturer or supplier by Lessee
will be at Lessee's sole expense. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED OF ANY KIND AS TO THE FINANCIAL CONDITION OR FINANCIAL
STATEMENTS OF ANY PARTY OR AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES
OF THE LEASE, THE EQUIPMENT OR THE RENTAL PAYMENTS.
8. INSURANCE: Lessee at its sole expense shall at all times keep each item of
Equipment insured against all risks of loss or damage from every cause
whatsoever for an amount not less than the greater of the full replacement value
or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall
at all times carry public liability and property damage insurance in amounts
satisfactory to Lessor protecting Lessee and Lessor from liabilities for
injuries to persons and damage to property of others relating in any way to the
Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall
deliver to Lessor satisfactory evidence of such coverage. Proceeds of any
insurance covering damage or loss of the Equipment shall be payable to Lessor as
loss payee and shall, at Lessor's option, be applied toward (a) the replacement,
restoration or repair of the Equipment, or (b) payment of the obligations of
Lessee under the Lease. Proceeds of any public liability or property insurance
shall be payable first to Lessor as additional insured to the extent of its
liability, then to Lessee. If an event of default occurs and is continuing, or
if Lessee fails to make timely payments due under Section 9 hereof, then Lessee
automatically appoints Lessor as Lessee's attorney-in-fact with full power and
authority in the place of Lessee and in the name of Lessee or Lessor to make
claim for, receive payment of, and sign and endorse all documents, checks or
drafts for loss or damage under any such policy. Each insurance policy will
require that the insurer give Lessor at least 30 days prior written notice of
any cancellation of such policy and will require that Lessor's interests remain
insured regardless of any act, error, omission, neglect or misrepresentation of
Lessee. The insurance maintained by Lessee shall be primary without any right of
contribution from insurance which may be maintained by Lessor.
9. LOSS AND DAMAGE: (a) Lessee bears the entire risk of loss, theft, damage or
destruction of Equipment in whole or in part from any reason whatsoever
("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee from the
obligation to pay rent or from any other obligation under the Lease.
Page 1 of 4
MM-1A (3/94)
9. LOSS AND DAMAGE (continued): In the event of Casualty Loss to any item of
Equipment, Lessee shall immediately notify Lessor of the same and Lessee shall,
if so directed by Lessor, immediately repair the same. If Lessor determines that
any item of Equipment has suffered a Casualty Loss beyond repair ("Lost
Equipment"), then Lessee, at the option of Lessor, shall: (1) Immediately
replace the Lost Equipment with similar equipment in good repair, condition and
working order free and clear of any Liens and deliver to Lessor a bill of sale
covering the replacement equipment, in which event such replacement equipment
shall automatically be Equipment under the Lease; or (2) On the rent payment
date which is at least 30 but no more than 60 days after the date of the
Casualty Loss, pay to Lessor all amounts then due and payable by Lessee under
the Lease for the Lost Equipment plus the Stipulated Loss Value for such Lost
Equipment as of the date of the Casualty Loss. Upon payment by Lessee of all
amounts due under the above clause (2), the lease of the Lost Equipment will
terminate and Lessor shall transfer to Lessee all of Lessor's right, title and
interest in such Equipment on an "as-is, where-is" basis with all faults,
without recourse and without representation or warranty of any kind, express or
implied.
(b) "Stipulated Loss Value" of any item of Equipment during its Lease Term
equals the present value discounted in arrears to the applicable date at the
applicable SLV Discount Rate of (1) the remaining rents and all other amounts
[including, without limitation, any balloon payment and, as to a terminal rental
adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any
other payments required to be paid by Lessee at the end of the applicable Lease
Term] payable under the Lease for such item on and after such date to the end of
the applicable Lease Term and (2) an amount equal to the Economic Value of the
Equipment. For any item of Equipment, "Economic Value" means the Fair Market
Value of the Equipment at the end of the applicable Lease Term as originally
anticipated by Lessor at the Commencement Date of the applicable Schedule:
provided, that Lessee agrees that such value shall be determined by the books of
Lessor as of the Commencement Date of the applicable Schedule. After the payment
of all rent due under the applicable Schedule and the expiration of the Lease
Term of any item of Equipment, the Stipulated Loss Value of such item equals the
Economic Value of such item. Stipulated Loss Value shall also include any Taxes
payable by Lessor in connection with its receipt thereof. For any item of
Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in
effect on the Commencement Date of the Schedule for such item minus two
percentage points.
10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the basis
that Lessor shall be entitled to such deductions, credits and other tax benefits
as are provided by federal, state and local income tax law to an owner of the
Equipment (the "Tax Benefits") including, without limitation: (1) modified
accelerated cost recovery deductions on each item of Equipment under Section 168
of the Code (as defined below) in an amount determined commencing with the
taxable year in which the Commencement Date of the applicable Schedule occurs,
using the maximum allowable depreciation method available under Section 168 of
the Code, using a recovery period (as defined in Section 168 of the Code)
reasonably determined by Lessor, and using an initial adjusted basis which is
equal to the Lessor's Cost of such item; (2) amortization of the expenses paid
by Lessor in connection with the Lease on a straight-line basis over the term of
the applicable Schedule; and (3) Lessor's federal taxable income will be subject
to the maximum rate on corporations in effect under the Code as of the
Commencement Date of the applicable Schedule.
(b) If on any one or more occasions (1) Lessor shall lose, shall not have
or shall lose the right to claim all or any part of the Tax Benefits, (2) there
shall be reduced, disallowed, recalculated or recaptured all or any part of the
Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a change
in law or regulation (each of the events described in subparagraphs 1, 2 or 3 of
this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30 days
written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee shall
pay Lessor an amount which, in the reasonable opinion of Lessor and after the
deduction of all taxes required to be paid by Lessor with respect to the receipt
of such amount, will provide Lessor with the same after-tax net economic yield
which was originally anticipated by Lessor as of the Commencement Date of the
applicable Schedule.
(c) A Tax Loss shall occur upon the earliest of: (1) the happening of any
event (such as disposition or change in use of an item of Equipment) which may
cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority of
the tax increase resulting from such Tax Loss; or (3) the adjustment of Lessor's
tax return to reflect such Tax Loss.
(d) Lessor shall not be entitled to payment under this section for any Tax
Loss caused solely by one or more of the following events: (1) a disqualifying
sale or disposition of an item of Equipment by Lessor prior to any default by
Lessee; (2) Lessor's failure to timely or properly claim the Tax Benefits in
Lessor's tax return; (3) a disqualifying change in the nature of Lessor's
business or liquidation thereof; (4) a foreclosure by any person holding through
Lessor a security interest on an item of Equipment which foreclosure results
solely from an act of Lessor; or (5) Lessor's failure to have sufficient taxable
income or tax liability to utilize the Tax Benefits.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended. For
the purposes of this section 10, the term "Lessor" shall include any affiliate
group (within the meaning of section 1504 of the Code) of which Lessor is a
member for any year in which a consolidated income tax return is filed for such
affiliated group. Lessee's obligations under this section shall survive the
expiration, cancellation or termination of the Lease.
11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify and hold
Lessor harmless on an after-tax basis from, any and all Taxes (as defined below)
and related audit and contest expenses on or relating to (a) any of the
Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease,
possession, use, operation, transportation, return or other disposition of any
of the Equipment, and (d) rentals or earnings relating to any of the Equipment
or the Lease. "Taxes" means present and future taxes or other governmental
charges that are not based on the net income of Lessor, whether they are
assessed to or payable by Lessee or Lessor, including, without limitation (i)
sales, use, excise, licensing, registration, titling, franchise, business and
occupation, gross receipts, stamp and personal property taxes, (ii) levies,
imposts, duties, assessments, charges and withholdings, (iii) penalties, fines,
and additions to tax and (iv) interest on any of the foregoing. Unless Lessor
elects otherwise, Lessor will prepare and file all reports and returns relating
to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee
will reimburse Lessor for all such payments promptly on request. On or after any
applicable assessment/levy/lien date for any personal property Taxes relating to
any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to
Lessor the personal property Taxes which Lessor reasonably anticipates will be
due, assessed, levied or otherwise imposed on any Equipment during its Lease
Term. If Lessor elects in writing, Lessee will itself prepare and file all such
reports and returns, pay all such Taxes directly to the taxing authority, and
send Lessor evidence thereof. Lessee's obligations under this section shall
survive the expiration, cancellation or termination of the Lease.
12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and shall
defend, indemnify and keep Lessor harmless on an after-tax basis from, any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses, including reasonable attorney fees and expenses, of
whatsoever kind and nature imposed on, incurred by or asserted against Lessor,
in any way relating to or arising out of the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, any claim for latent or other defects,
whether or not discoverable by Lessee or any other person, any claim for
negligence, tort or strict liability, any claim under any environmental
protection or hazardous waste law and any claim for patent, trademark or
copyright infringement). Lessee will not indemnify Lessor under this section for
loss or liability arising from events which occur after the Equipment has been
returned to Lessor or for loss or liability caused directly and solely by the
gross negligence or willful misconduct of Lessor. In this section, "Lessor" also
includes any director, officer, employee, agent, successor or assign of Lessor.
Lessee's obligations under this section shall survive the expiration,
cancellation or termination of the Lease.
13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment is, and
shall at all times remain, separately identifiable personal property. Upon
Lessor's request, Lessee shall furnish Lessor a landlord's and/or mortgagee's
waiver and consent to remove all Equipment. Lessor may display notice of its
interest in the Equipment by any reasonable identification. Lessee shall not
alter or deface any such indicia of Lessor's interest.
14. DEFAULT: Each of the following events shall constitute an event of default
under the Lease: (a) Lessee fails to pay any rent or other amount due under the
Lease within ten days of its due date; or (b) Lessee fails to perform or observe
any of its obligations in Sections 8, 18, or 22 hereof; or (c) Lessee fails to
perform or observe any of its other obligations in the Lease for more than 30
days after Lessor notifies Lessee of such failure; or (d) Lessee or any Lessee
affiliate defaults in the payment, performance or observance of any obligation
under any loan, credit agreement or other lease in which Lessor or any
subsidiary (direct or indirect) of Banc One Corporation (which is Lessor's
ultimate parent corporation) is the creditor or lessor; or (e) any statement,
representation or warranty made by Lessee in the Lease, in any Schedule or in
any document, certificate or financial statement in connection with the Lease
proves at any time to have been untrue or misleading in any material respect as
of the time when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee
admits its inability to pay its debts as they mature, or Lessee makes an
assignment for the benefit of creditors, or Lessee applies for, institutes or
consents to the appointment of a receiver, trustee or similar official for
Lessee or any substantial part of its property or any such official is appointed
without Lessee's consent, or Lessee applies for, institutes or consents to any
bankruptcy, insolvency, reorganization, debt moratorium, liquidation, or similar
proceeding relating to Lessee or any substantial part of its property under the
laws of any jurisdiction or any such proceeding is instituted against Lessee
without stay or dismissal for more than 30 days, or Lessee commences any act
amounting to a business failure or a winding up of its affairs, or Lessee ceases
to do business as a going concern or (g) with respect to any guaranty, letter of
credit, pledge agreement, security agreement, mortgage, deed of trust, debt
subordination agreement or other credit enhancement or credit support agreement
(whether now existing of hereafter arising) signed or issued by any party in
connection with all or any part of Lessee's obligations under the Lease, the
party signing or issuing any such agreement defaults in its obligations
thereunder or any such agreement shall cease to be in full force and effect or
shall be declared to be null, void, invalid or unenforceable by the party
signing or issuing it; or (h) there shall occur in Lessors reasonable opinion
any material adverse change in the financial condition, business or operations
of Lessee.
Page 2 of 4
14. DEFAULT (continued)
As used in this section 14, the term "Lessee" also includes any guarantor
(whether now existing or hereafter arising) of all or any part of Lessee's
obligations under the Lease and/or any issuer of a letter of credit (whether
now existing or hereafter arising) relating to all or any part of Lessee's
obligations under the Lease, and the term "Lease" also includes any guaranty
or letter of credit (whether now existing or hereafter arising) relating to
all or any part of Lessee's obligations under the Lease.
15. REMEDIES. If any event of default exists, Lessor may exercise in any order
one or more of the remedies described in the lettered subparagraphs of this
section, and Lessee shall perform its obligations imposed thereby:
(a) Lessor may require Lessee to return any or all Equipment as provided
in the Lease.
(b) Lessor or its agent may repossess any or all Equipment wherever found,
may enter the premises where the Equipment is located and disconnect, render
unusable and remove it, and may use such premises without charge to store or
show the Equipment for sale.
(c) Lessor may sell any or all Equipment at public or private sale, with
or without advertisement or publication, may re-lease or otherwise dispose of it
or may use, hold or keep it.
(d) Lessor may require Lessee to pay to Lessor on a date specified by
Lessor, with respect to any or all Equipment (i) all accrued and unpaid rent,
late charges and other amounts due under the Lease on or before such date, plus
(ii) as liquidated damages for loss of a bargain and not as a penalty, and in
lieu of any further payments of rent, the Stipulated Loss Value of the Equipment
on such date, plus (iii) interest at the Overdue Rate on the total of the
foregoing ("Overdue Rate" means an interest rate per annum equal to the higher
of 18% or 2% over the Prime Rate, but not to exceed the highest rate permitted
by applicable law). The parties acknowledge that the foregoing money damage
calculation reasonably reflects Lessor's anticipated loss with respect to the
Equipment and the related Lease resulting from the event of default. If an event
of default under section 14(f) of this Master Lease Agreement exists, then
Lessee will be automatically liable to pay Lessor the foregoing amounts as of
the next rent payment date unless Lessor otherwise elects in writing.
(e) Lessee shall pay all costs, expenses and damages incurred by Lessor
because of the event of default or its actions under this section, including,
without limitation any collection agency and/or attorney fees and expenses, any
costs related to the repossession, safekeeping, storage, repair, reconditioning
or disposition of the Equipment and any incidental and consequential damages.
(f) Lessor may terminate the Lease and/or any or all Schedules, may sue to
enforce Lessee's performance of its obligations under the Lease and/or may
exercise any other right or remedy then available to Lessor at law or in equity.
Lessor is not required to take any legal process or give Lessee any notice
before exercising any of the above remedies. None of the above remedies is
exclusive, but each is cumulative and in addition to any other remedy available
to Lessor. Lessor's exercise of one or more remedies shall not preclude its
exercise of any other remedy. No action taken by Lessor shall release Lessee
from any of its obligations to Lessor. No delay or failure on the part of Lessor
to exercise any right hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise of any
right preclude any other exercise thereof or the exercise of any other right.
After any default, Lessor's acceptance of any payment by Lessee under the Lease
shall not constitute a waiver by Lessor of such default, regardless of Lessor's
knowledge or lack of knowledge at the time of such payment, and shall not
constitute a reinstatement of the Lease if the Lease has been declared in
default by Lessor, unless Lessor has agreed in writing to reinstate the Lease
and to waive the default.
If Lessor actually repossesses any Equipment, then it will use commercially
reasonable efforts under the then current circumstances to attempt to mitigate
its damages; provided, that Lessor shall not be required to sell, re-lease or
otherwise dispose of any Equipment prior to Lessor enforcing any of the remedies
described above. Lessor may sell or re-lease the Equipment in any manner it
chooses, free and clear of any claims or rights of Lessee and without any duty
to account to Lessee with respect thereto except as provided below. If Lessor
actually sells or re-leases the Equipment, it will credit the net proceeds of
any sale of the Equipment, or the net present value (discounted at the then
current Prime Rate) of the rents payable under any new lease of the Equipment,
against and up to (but not exceeding) the Stipulated Loss Value of the Equipment
and any other amounts Lessee owes Lessor, or will reimburse Lessee for and up to
(but not exceeding) Lessee's payment thereof. The term "net" as used above shall
mean such amount after deducting the costs and expenses described in clause (e)
above of this section. If Lessor elects in writing not to sell or re-lease any
Equipment, it will similarly credit or reimburse Lessee for Lessor's reasonable
estimate of such Equipment's Fair Market Value.
16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment under the
Lease or fails to perform any of its other agreements in the Lease (including,
without limitation, its agreement to provide insurance coverage as stated in the
Lease), Lessor may itself make such payment or perform such agreement, and the
amount of such payment and the amount of the expenses of Lessor incurred in
connection with such payment or performance shall be deemed to be additional
rent, payable by Lessee on demand.
17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual financial
statements setting forth the financial condition and results of operation of
Lessee (financial statements shall include the balance sheet, income statement
and changes in financial position and all notes thereto) within 120 days of the
end of each fiscal year of Lessee; (b) quarterly financial statements setting
forth the financial condition and results of operation of Lessee within 60 days
of the end of each of the first three fiscal quarters of Lessee; and (c) such
other financial information as Lessor may from time to time reasonably request
including, without limitation, financial reports filed by Lessee with federal or
state regulatory agencies. All such financial information shall be prepared in
accordance with generally accepted accounting principles. If Lessee fails to
furnish the annual financial statements to Lessor within 30 days of Lessor's
written request, then Lessor may, at its option, charge Lessee a non-performance
fee equal to all the rentals due under the Lease for the then current month
(unless otherwise prohibited by law) and such fees shall be deemed to be
additional rent, payable by Lessee on demand.
18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or suspend
business; (b) sell, transfer or otherwise dispose of all or a majority of its
assets, except that Lessee may sell its inventory in the ordinary course of its
business; (c) enter into any merger, consolidation or similar reorganization
unless it is the surviving corporation; (d) transfer all or any substantial part
of its operations or assets outside of the United States of America; or (e)
without 30 days advance written notice to Lessor, change its name or chief place
of business. Lessee shall at all times maintain a tangible net worth which is no
less than the greater of 75% of its tangible net worth as of the date of the
Master Lease Agreement or 75% of its highest tangible net worth thereafter.
19. LATE CHARGES: If any rent or other amount payable under the Lease is not
paid when due, then as compensation for the administration and enforcement of
Lessee's obligation to make timely payments, Lessee shall pay with respect to
each overdue payment on demand an amount equal to the greater of fifteen dollars
($15.00) or five percent (5%) of the each overdue payment (but not to exceed the
highest late charge permitted by applicable law) plus any collection agency fees
and expenses.
20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the Lease
shall be sufficient if given personally or couriered or mailed to the party
involved at its respective address set forth herein or at such other address as
such party may provide in writing from time to time. Any such notice mailed to
such address shall be effective three days after deposit in the United States
mail with postage prepaid, (b) With respect to any power of attorney covered by
the Lease, the powers conferred on Lessor thereby: are powers coupled with an
interest; are irrevocable; are solely to protect Lessor's interests under the
Lease; and do not impose any duty on Lessor to exercise such powers. Lessor
shall be accountable solely for amounts it actually receives as a result of its
exercise of such powers.
21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or without
notice to or consent of Lessee, may sell, assign, transfer or grant a security
interest in all or any part of Lessor's rights, obligations, title or interest
in the Equipment, the Lease, any Schedule or the amounts payable under the Lease
or any Schedule to any entity ("transferee"). The transferee shall succeed to
all of Lessor's rights in respect to the Lease (including, without limitation,
all rights to insurance and indemnity protection described in the Lease). Lessee
agrees to sign any acknowledgement and other documents reasonably requested by
Lessor or the transferee in connection with any such transfer transaction.
Lessee, upon receiving notice of any such transfer transaction, shall comply
with the terms and conditions thereof. Lessee agrees that it shall not assert
against any transferee any claim, defense, setoff, deduction or counterclaim
which Lessee may now or hereafter be entitled to assert against Lessor. Unless
otherwise agreed in writing, the transfer transaction shall not relieve Lessor
of any of it obligations to Lessee under the Lease and Lessee agrees that the
transfer transaction shall not be construed as being an assumption of such
obligations by transferee.
22. NO ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT DIRECTLY OR
INDIRECTLY, (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE
LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b)
SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY
PART THEREFOR TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO
EXIST ANY LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF.
Page 3 of 4
23. EXPIRATION OF LEASE TERM: (a) At least 90 days (or earlier if otherwise
specified), but no more than 270 days prior to expiration of the Lease Term
of each Schedule, Lessee shall give Lessor written notice of its electing one
of the following options for all (but not less than all) of the Equipment
covered by such Schedule: return the Equipment under clause (b) below; or
purchase the Equipment under clause (c) below. The election of an option
shall be irrevocable. If Lessee fails to give timely notice of its election,
it shall be deemed to have elected to return the Equipment.
(b) If Lessee elects or is deemed to have elected to return the
Equipment at the expiration of the Lease Term of a Schedule or if Lessee is
obligated at any time to return the Equipment, then Lessee shall, at its sole
expense and risk, deinstall, disassemble, pack, crate, insure and return the
Equipment to Lessor (all in accordance with applicable industry standards) at
any location in the continental United States of America selected by Lessor.
The Equipment shall be in the same condition as when received by Lessee,
reasonable wear, tear and depreciation resulting from normal and proper use
excepted (or, if applicable, in the condition set forth in the Lease or the
Schedule), shall be in good operating order and maintenance as required by
the Lease, shall be certified as being eligible for any available
manufacturer's maintenance program, shall be free and clear of any Liens as
required by the Lease, shall comply with all applicable laws and regulations
and shall include all manuals, specifications, repair and maintenance records
and similar documents. Until Equipment is returned as required above, all
terms of the Lease shall remain in full force and effect including, without
limitation, obligations to pay rent and insure the Equipment; provided, that
after the expiration of any Schedule and before Lessee has completed its
return of the Equipment or its purchase option (if elected), the term of the
lease of the Equipment covered by such Schedule shall be month-to-month or
such shorter period as may be specified by Lessor.
(c) If Lessee gives Lessor timely notice of its election to purchase
Equipment, then on the expiration date of the applicable Schedule Lessee
shall purchase all (but not less than all) of the Equipment and shall pay to
Lessor the Fair Market Value of the Equipment plus all Taxes (other than
income taxes on Lessor's gains on such sale), costs and expenses incurred or
paid by Lessor in connection with such sale plus all accrued but unpaid
amounts due with respect to the Equipment and/or the Schedule. The Stipulated
Loss Value or Economic Value of any item of Equipment shall have no bearing
or influence on the determination of Fair Market Value under this clause (c).
Upon payment in full of the above amounts, and if no default has occurred and
is continuing under the Lease, Lessor shall transfer title to such Equipment
to Lessee "as-is, where-is" with all faults and without recourse to Lessor
and without any representation or warranty of any kind whatsoever by Lessor,
express or implied.
(d) For purposes of the purchase option of the Lease, the determination
of the Fair Market Value of any Equipment shall be determined (1) without
deducting any costs of dismantling or removal from the location of use, (2)
on the assumption that the Equipment is in the condition required by the
applicable return and maintenance provisions of the Lease and is free and
clear of any Liens as required by the Lease, and (3) shall be determined by
mutual agreement of Lessee and Lessor or, if Lessor and Lessee are not able
to agree on such value, by the Appraisal Procedure. "Appraisal Procedure"
means the determination of Fair Market Value by an independent appraiser
acceptable to Lessor and Lessee or, if the parties are unable to agree on an
acceptable appraiser, by averaging the valuation (disregarding the one which
differs the most from the other two) of three independent appraisers, the
first appointed by Lessor, the second appointed by Lessee and the third
appointed by the first two appraisers. For purposes of the "Remedies" section
of the Lease, the Fair Market Value shall be determined by Lessor in good
faith and any such valuation shall be on an "as-is, where is" basis without
regard to the first sentence of this clause (d). Lessee, at its sole expense,
shall pay all fees, costs and expenses of the above described appraisers.
24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF THE
LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO ANY
ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE,
LESSEE HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE
OR FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO. WHERE LESSOR HAS ITS PRINCIPAL
PLACE OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE.
25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors and assigns. (b) This Master
Lease Agreement and each Schedule may be executed in any number of
counterparts, which together shall constitute a single instrument. Only one
counterpart of each Schedule shall be marked "Lessor's Original" and all
other counterparts shall be marked "Duplicate". A security interest in any
Schedule may be created through transfer and possession only of the
counterpart marked "Lessor's Original". (c) Section and paragraph headings in
this Master Lease Agreement and the Schedules are for convenience only and
have no independent meaning. (d) The terms of the Lease shall be severable
and if any term thereof is declared unconscionable, invalid, illegal or void,
in whole or in part, the decision so holding shall not be construed as
impairing the other terms of the Lease and the Lease shall continue in full
force and effect as if such invalid, illegal, void or unconscionable term
were not originally included herein. (e) All indemnity obligations of Lessee
under the Lease and all rights, benefits and protections provided to Lessor
by warranty disclaimers shall survive the cancellation, expiration or
termination of the Lease. (f) Lessor shall not be liable to Lessee for any
indirect, consequential or special damages for any reason whatsoever. (g)
Each payment made by Lessee shall be applied by Lessor in such manner as
Lessor determines in its discretion which may include, without limitation,
application as follows: first, to accrued late charges; second, to accrued
rent; and third, the balance to any other amounts then due and payable by
Lessee under the Lease. (h) If the Lease is signed by more than one Lessee,
each of such Lessees shall be jointly and severally liable for payment and
performance of all of Lessee's obligations under the Lease.
26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN
AGREEMENTS OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee
agrees that Lessor is not the agent of any manufacturer or supplier, that no
manufacturer or supplier is an agent of Lessor, and that any representation,
warranty or agreement made by a manufacturer, supplier or their employees,
sales representatives or agents shall not be binding, on Lessor.
27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT.
STB SYSTEMS, INC.
BANC ONE LEASING CORPORATION /s/ [NAME ILLEGIBLE]
----------------------------------------
(Name of Lessee)
Lessor
By: /s/ [NAME ILLEGIBLE] By: /s/ [NAME ILLEGIBLE]
-------------------------------- ----------------------------------
Title: Funding Authority Title: Chief Operating Officer
----------------------------- -------------------------------
Lessee's Witness: Craig Kennington
--------------------
Regardless of any prior, present or future oral agreement or course of
dealing, no term or condition of the Lease may be amended, modified, waived,
discharged, cancelled or terminated except by a written instrument signed by
the party to be bound: except Lessee authorizes Lessor to complete the
Acceptance Date of each Schedule and the serial numbers of any Equipment.
STB SYSTEMS, INC.
/s/ [NAME ILLEGIBLE]
-------------------------------------
(Name of Lessee)
By:
----------------------------------
Title:
-------------------------------
Page 4 of 4
MASTER LEASE ADDENDUM
Dated October 30, 1996
Master Lease Agreement Dated As Of October 30, 1996
Lessee: STB Systems, Inc.
Reference is made to the above Master Lease Agreement ("Master Lease")
by and between Banc One Leasing Corporation ("Lessor") and the above lessee
("Lessee"). This Addendum modifies the terms and conditions of the Master
Lease. Unless otherwise defined herein, capitalized terms defined in the
Master Lease shall have the same meaning when used herein. As part of the
valuable consideration to induce the execution of the Master Lease, Lessor
and Lessee hereby agree as follows:
1. In addition to all other events of default set forth in section 14
of the Master Lease, any of the following events shall also be an event
default under the Master Lease:
(a) STB de Mexico, S.A. de C. V. fails for any reason to pay or perform
any of STB de Mexico, S.A. de C. V.'s obligations under any present or
future agreement or contract with Lessor or Lessee, including, without
limitation, any present or future guaranty, or sublease or bailment
agreement; or
(b) Lessee defaults in the payment or performance of any of Lessee's
obligations under any Material Indebtedness, provided, that "Material
Indebtedness" means (i) any obligations of Lessee to Sanwa Business Credit
Corporation under the Loan and Security Agreement dated as of December 21,
1993 or any replacement or substitution with Sanwa Business Credit
Corporation for said loan and security agreement, or (ii) any present or
future loan, lease or other extension of credit which has an unpaid
balance of $10,000,000.00 or more.
2. Lessor agrees that any notice under clause (c) of Section 14 of the
Master Lease shall be in writing.
3. Clause (h) of Section 14 of the Master Lease, which is the material
adverse change event of default, is deleted.
4. Clause (e) of Section 15 of the Master Lease is deleted and
replaced with the following:
"(e) Lessee shall pay all reasonable costs, expenses and damages incurred
by Lessor because of the event of default or its actions under this
section, including, without limitation any collection agency and/or
attorney fees and expenses, any costs related to the repossession,
safekeeping, storage, repair, reconditioning or disposition of the
Equipment."
5. On the same dates that Lessee is required to supply Lessor with
financial
Page 1 of 2
statements under clauses (a) or (b) section 17 of the Master Lease, Lessee
agrees to supply Lessor with a certificate signed by a senior officer of
Lessee that Lessee is in compliance with all of its obligations under all
agreements relating to then current Material Indebtedness. The last sentence
of Section 17 of the Master Lease, which describes the fee payable for
Lessee's failure to deliver annual financial information, is deleted.
6. Clause (d) of Section 18 of the Master Lease is deleted and the
following sentence is added to said Section 18:
"At all times, Lessee shall be a corporation organized and in good standing
under the laws of a state of the United States of America, Lessee shall
have its corporate headquarters located in the United States of America and
Lessee shall undertake substantially all of its operations that are
conducted outside of the United States of America through subsidiaries or
affiliates that are owned and controlled no less than 50% by Lessee."
7. Section 19 of the Master Lease is deleted.
8. The fourth sentence of Section 21 of the Master Lease is deleted and
replaced with the following:
"Lessee, upon receiving notice of any such transfer transaction, shall
comply with the reasonable terms and conditions thereof."
9. In Section 24 of the Master Lease, the phrase "Franklin County, Ohio"
is deleted and replaced with the phrase "Dallas County, Texas".
10. Except as expressly amended by this Addendum and other written
instruments signed by the party to be bound, the Master Lease remains unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the date referenced above.
STB SYSTEMS, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ [Name Illegible] By: [Name Illegible]
------------------------------- -------------------------------
Title: Funding Authority Title: COO
---------------------------- ----------------------------
Page 2 of 2
BANC ONE LEASING CORPORATION
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 1
- ---------- ---------------------------------------------------------------------
- ---------- ---------------------------------------------------------------------
"ALL PROPERTY DESCRIBED IN THE INVOICES IDENTIFIED BELOW WHICH PROPERTY MAY
BE GENERALLY DESCRIBED AS MANUFACTURING EQUIPMENT."
LOCATION: STB DE MEXICO
VICENTE GUERRERO 7470
CIUDAD JUAREZ, CHIHUHUA
MEXICO
COST: $4,235,997.50
VENDOR INVOICE # INVOICE AMT
- ------ --------- -----------
MPM 70414 $ 23,577.00
MPM 70562 $ 58,942.50
MPM 70563 $ 35,365.50
MPM 69568 $ 24,615.00
MPM 69989 $ 61,537.50
MPM 69990 $ 36,922.50
MPM 68917 $ 24,390.00
MPM 69510 $ 60,975.00
MPM 69511 $ 36,585.00
MPM 61627 $ 24,642.00
MPM 61813 $ 61,626.69
MPM 61814 $ 36,963.00
MPM 72570 $475,570.63
MPM 71660 $323,284.01
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIoNS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000054536 and
constitutes a true and accurate description of the equipment.
Lessee:
STB SYSTEMS, INC.
- ---------------------------------------
By: [NAME ILLEGIBLE]
-----------------------------------
Date: October 30, 1996
---------------------------------
BANC ONE LEASING CORPORATION
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 2
- ---------- ---------------------------------------------------------------------
- ---------- ---------------------------------------------------------------------
PANASONIC CS29547-001 $ 400,000.00
PANASONIC CS29547-002 $ 400,000.00
PANASONIC CS29547-003 $ 400,000.00
ZEVATECH 10312325 $1,443,931.17
TDK 280616 $ 307,070.00
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000054536 and
constitutes a true and accurate description of the equipment.
Lessee:
STB SYSTEMS, INC.
- ---------------------------------------
By: [NAME ILLEGIBLE]
-----------------------------------
Date: October 30, 1996
---------------------------------
SCHEDULE ADDENDUM
Dated October 30, 1996
Lease Schedule No. 1000054536 Dated October 30, 1996
Lessee: STB Systems, Inc.
Reference is made to the above Lease Schedule ("Schedule") and to the
Master Lease Agreement ("Master Lease") identified in the Schedule, which are by
and between Banc One Leasing Corporation ("Lessor") and the above lessee
("Lessee"). As used herein: "Lease" shall mean the Schedule and the Master
Lease, but only to the extent that the Master Lease relates to the Schedule; and
"Equipment" shall mean the equipment covered by the Schedule. This Schedule
Addendum amends and supplements the terms and conditions of the Lease. Unless
otherwise defined herein, capitalized terms defined in the Lease shall have the
same meaning when used herein. SOLELY FOR PURPOSES OF THE SCHEDULE, LESSOR AND
LESSEE AGREE AS FOLLOWS:
1. Notwithstanding anything to the contrary in the Lease, with respect to
the Schedule, Lessor consents to the sublease or bailment of the Equipment
described in the Schedule by Lessee as sublessor or bailor to STB de Mexico,
S.A. de C. V. as sublessee or bailee pursuant to the terms and conditions of a
Gratuitous Bailment Agreement and to the location of the Equipment covered by
the Schedule in the City of Ciudad Juarez, State of Chihuahua, Mexico; provided,
that (a) the Gratuitous Bailment Agreement must be satisfactory in form and
substance to Lessor (such satisfaction to be evidenced by Lessor's signature
thereon); and (b) STB de Mexico, S.A. de C. V. shall execute and deliver to
Lessor a guaranty which must be satisfactory in form and substance to Lessor
(such satisfaction to be evidenced by Lessor's signature thereon).
2. As used herein, "Political Risk Insurance" shall mean a policy of
insurance issued by National Union Fire Insurance Company of Pittsburgh, PA
("Insurance Company") which insures Lessee and Lessor (or Banc One Texas Leasing
Corporation or Bank One, Texas, NA as Lessor's assignee) against risks of
expropriation or deprivation of the Equipment by the government of the United
Mexican States ("Political Loss") as set forth in such policy of insurance
Lessee acknowledges that it has reviewed a copy of the Political Risk Insurance
policy.
(a) With respect to the Schedule, Lessor agrees that Lessee shall not be
required to carry any insurance against Political Loss under Section 8 of
the Master Lease or to pay the premiums for any insurance against Political
Loss that Lessor may deem desirable. Lessor agrees to acquire the Political
Loss Insurance and to pay the premiums for such Political Loss Insurance.
(b) If a Political Loss occurs, such event shall be deemed a Casualty Loss
under Section 9 of the Master Lease; provided, that (1) Lessee agrees to
continue to pay
Page 1
rent and perform its other obligations under the Lease until the earlier
of the date that the Insurance Company pays the amounts due under the
Political Risk Insurance or the date that Lessor has exhausted its
rights and remedies under the Political Risk Insurance; (2) Lessor
agrees that it will pursue with reasonable diligence its rights against
the Insurance Company under the Political Risk Insurance; and (3)
notwithstanding anything to the contrary in Section 9 of the Master
Lease as it relates to the Schedule, within thirty (30) days of the
earlier of the date that the Insurance Company pays the amounts due
under the Political Risk Insurance or the date that Lessor has exhausted
its rights and remedies under the Political Risk Insurance, Lessee shall
pay to Lessor the Stipulated Loss Value of the Equipment affected by the
Political Loss less the aggregate of the amount that the Insurance
Company has paid to Lessor under the Political Risk Insurance and the
amount that the United Mexican States has paid to Lessor as a result of
the Political Loss.
3. With respect to clause (1) of Subsection 9(b) of the Master Lease,
Lessor and Lessee agree that: (i) remaining rents include all rents payable
under the Schedule as if Lessee had elected to renew the Lease Term for the
First Renewal Term and the Second Renewal Term as described in the Renew,
Purchase or Return Addendum to the Schedule; and (ii) no amount is due under the
Schedule as is described in the bracketed provisions of said clause (1). With
respect to clause (2) of Subsection 9(b) of the Master Lease, Lessor and Lessee
agree that Economic Value will be determined as of the end of the above-
described Second Renewal Term.
4. Notwithstanding anything to the contrary in paragraph A on the reverse
side of the Schedule, if Lessor executes and delivers the Schedule to Lessee and
if Lessor pays all of the suppliers of the Equipment the full Lessor's Cost of
the Equipment (the date as of which both of said events shall have occurred will
be called the "Funding Date"), then except as otherwise specified in writing by
Lessor to Lessee before said Funding Date, all conditions to the Schedule being
binding on Lessor will be deemed satisfied.
5. The out-of-pocket expenses described as being payable by Lessee in the
last sentence of paragraph B on the reverse side of the Schedule shall not
exceed $600.00.
6. With respect to clause (a) of Paragraph D on the reverse side of the
Schedule, the following phrase is deleted: "and is qualified to do business and
is in good standing under the laws of each other state in which the Equipment is
or will be located".
7. With respect to clause (c) of Paragraph D on the reverse side of the
Schedule, said representation is true and accurate except to the extent
enforcement is limited by State and Federal laws regarding bankruptcy,
insolvency or debt reorganization or other similar laws of general application
or the application of principles of equity.
Page 2
8. In the event of any conflict between the terms of the Master Lease and
the terms of the Schedule as each is amended by its addenda, the terms of the
Schedule shall control.
9. Except as expressly amended or supplemented by this Addendum and other
instruments signed by Lessor, the Lease remains unchanged and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the date referenced above.
STB Systems, Inc. Banc One Leasing Corporation
(Lessee) (Lessor)
By: /s/ [NAME ILLEGIBLE] By: /s/ [NAME ILLEGIBLE]
--------------------------- -----------------------------
Title: Chief Operating Officer Title: Funding Authority
------------------------ --------------------------
Page 3
CORPORATE GUARANTY
Dated October 30, 1996
Lessee Name: STB Systems, Inc.
Master Lease Agreement Dated October 30, 1996
Equipment Cost: Up To $4,400,000.00
1. For valuable consideration, the receipt of which is hereby
acknowledged, STB DE MEXICO, S.A. DE C.V. (hereinafter called the
"undersigned" or "Guarantor") guarantees to BANC ONE LEASING CORPORATION
(hereinafter called "Lessor") the full and prompt performance by the lessee
identified above (hereinafter called "Lessee"), of all obligations which
Lessee now has or may hereafter have to Lessor, including but not limited to
obligations under equipment leases and promissory notes executed in
connection with anticipated equipment leases (including but not limited to
all present and future lease schedules and promissory notes under the Master
Lease identified above, with a total original equipment cost to the Lessor of
no more than the amount of the Equipment Cost set forth above), and
unconditionally guarantee the prompt payment when due (whether at scheduled
maturity, upon acceleration or otherwise) of any and all sums, indebtedness
and liabilities of whatsoever nature, due or to become due, direct or
indirect, absolute or contingent, now or hereafter at any time owed or
contracted by Lessee to Lessor, and all costs and expenses of and incidental
to collection of any of the foregoing, including reasonable attorneys' fees
(all of the foregoing hereinafter called "Obligations"). It is the
undersigned's express intention that this guaranty in addition to covering
all present Obligations of Lessee to Lessor, shall extend to all future
Obligations of Lessee to Lessor, whether or not such Obligations are reduced
or entirely extinguished and thereafter increased or are reincurred, whether
or not such Obligations are related to the Master Lease identified above,
whether or not such Obligations exceed the Equipment Cost identified above,
and whether or not such Obligations are specifically contemplated by the
undersigned, Lessee, and Lessor as of the date hereof.
2. This is an absolute and unconditional guarantee of payment and not of
collection. Lessor shall not be required, as a condition of the liability of the
undersigned, to resort to, enforce or exhaust any of its remedies against the
Lessee or any other party who may be liable for payment on any Obligation or to
resort to, marshall, enforce or exhaust any of its remedies against any leased
property or any property given or held as security for this Guaranty or any
Obligation.
3. The undersigned hereby waive and grant to Lessor, without notice to the
undersigned and without in any way affecting the liability of the undersigned,
the right at any time and from time to time, to extend other and additional
credit, leases, loans or financial accommodations to Lessee apart from the
Obligations, to deal in any manner as it shall see fit with any Obligation of
Lessee to Lessor and with any leased property or security for such Obligation,
including, but not limited to, (i) accepting partial payments on account of any
Obligation, (ii) granting extensions or renewals of all or any part of any
Obligation, (iii) releasing, surrendering, exchanging, dealing with, abstaining
from taking, taking, abstaining from perfecting, perfecting, or accepting
substitutes for any or all leased property or security which it holds or may
hold for any Obligation, (iv) modifying, waiving, supplementing or otherwise
changing any of the terms, conditions or provisions contained in any Obligation
and (v) the addition or release of any other party or person liable hereon,
liable on the Obligations or liable on any other guaranty executed to guarantee
any of Lessee's Obligations. The undersigned jointly and severally hereby agree
that any and all settlements, compromises,
Page 1
compositions, accounts stated and agreed balances made in good faith between
Lessor and Lessee shall be binding upon the undersigned.
4. Every right, power and discretion herein granted to Lessor shall be for
the benefit of the successors or assigns of Lessor and of any transferee or
assignee of any Obligation covered by this Guaranty, and in the event any such
Obligation shall be transferred or assigned, every reference herein to Lessor
shall be construed to mean, as to such Obligation, the transferee or assignee
thereof. This Guaranty shall be binding upon each of the undersigned's
executors, administrators, heirs, successors and assigns.
5. This Guaranty shall continue in force for so long as Lessee shall be
obligated to Lessor, and thereafter until Lessor shall have actually received
written notice of the termination hereof from the undersigned, it being
contemplated that Lessee may borrow, lease, repay and subsequently borrow money
from or lease property from, or become obligated to, Lessor from time to time,
and the undersigned, not having given notice of the termination hereof as herein
provided for, shall be deemed to have permitted this Guaranty to remain in full
force and effect for the purpose of inducing Lessor to make further leases or
loans to Lessee; provided, however, no notice of termination of this Guaranty
shall affect in any manner the rights of Lessor arising under this Guaranty with
respect to the following: (a) any Obligation incurred by Lessee in connection
with the Master Lease identified above with a total equipment cost of no more
than the amount of the Total Equipment Cost set forth above, whether such
obligation is in the form of a lease or a promissory note; or (b) any Obligation
incurred by Lessee prior to receipt by Lessor of written notice of termination
or any Obligation incurred after receipt of such written notice pursuant to a
written agreement entered into by Lessor prior to receipt of such notice. The
undersigned expressly waive notice of the incurring by Lessee of any Obligation
to Lessor. The undersigned also waive presentment, demand of payment, protest,
notice of dishonor or nonpayment of or nonperformance of any Obligation.
6. The undersigned hereby waive any claims or rights which they might now
have or hereafter acquire against Lessee or any other person primarily or
contingently liable on any Obligation of Lessee, which claims or rights arise
from the existence or performance of the undersigned's obligations under this
Guaranty or any other guaranty or under any instrument or agreement with respect
to any leased property or any property constituting collateral or security for
this Guaranty or any other guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, or any
right to participate in any claim or remedy of Lessor or any other creditor
which the undersigned now has or hereafter acquires, whether such claim or right
arises in equity, under contract or statute, at common law, or otherwise.
7. Lessor's rights hereunder shall be reinstated and revived, and this
Guaranty shall be fully enforceable, with respect to any amount at any time paid
on account of the Obligations which thereafter shall be required to be restored
or returned by Lessor upon the bankruptcy, insolvency or reorganization of the
Lessee, the undersigned, or any other person, or as a result of any other fact
or circumstance, all as though such amount had not been paid.
8. The undersigned jointly and severally agree to pay to Lessor all costs
and expenses, including reasonable attorneys' fees, incurred by Lessor in the
enforcement or attempted enforcement of this Guaranty, whether or not suit is
filed in connection therewith, or in the exercise by Lessor of any right,
privilege, power or remedy conferred by this Guaranty.
9. The undersigned represent and warrant that they have relied exclusively
on their own independent investigation of Lessee, the leased property and the
collateral for their decision to
Page 2
guarantee Lessee's Obligations now existing or thereafter arising. The
undersigned agree that they have sufficient knowledge of the Lessee, the
leased property, and the collateral to make an informed decision about this
Guaranty, and that Lessor has no duty or obligatiOn to disclose any
information in its possession or control about Lessee, the leased property,
and the collateral to the undersigned. The undersigned warrant to Lessor that
they have adequate means to obtain from the Lessee on a continuing basis
information concerning the financial condition of the Lessee and that they
are not relying on Lessor to provide such information either now or in the
future.
10. As long as any indebtedness under any of the Obligations remains
unpaid or any credit is available to Lessee under any of the Obligations, the
undersigned agree to furnish to Lessor: (a) annual financial statements setting
forth the financial condition and results of operation of the undersigned
(financial statements shall include balance sheet, income statement, changes in
financial position and all notes thereto) within 120 days of the end of each
fiscal year of the undersigned; (b) quarterly financial statements setting forth
the financial condition and results of operation of the undersigned within 60
days of the end of each of the first three fiscal quarters of the undersigned;
and (c) such other financial information as Lessor may from time to time request
including, without limitation, financial reports filed by the undersigned with
federal or state regulatory agencies.
11. No postponement or delay on the part of Lessor in the enforcement of
any right hereunder shall constitute a waiver of such right. The failure of any
person or entity to sign this Guaranty shall not discharge the liability of any
of the undersigned.
12. GUARANTOR HEREBY EXPRESSLY WAIVES THE BENEFITS ESTABLISHED BY ARTICLES
2709, 2710 AND 2712 OF THE CIVIL CODE FOR THE STATE OF CHIHUAHUA. LIKEWISE,
GUARANTOR EXPRESSLY WAIVES THE BENEFITS ESTABLISHED IN ARTICLES 2738, 2739,
2740, 2742 AND 2743 OF THE CIVIL CODE FOR THE STATE OF CHIHUAHUA, AUTHORIZING
LESSOR WITHOUT NOTICE OR DEMAND AND WITHOUT LIABILITY TO THE TERMS OF PARAGRAPHS
1, 2, 3, 4, 5, 6, 7, AND 8 OF THIS GUARANTY.
13. Any and all amounts required to be paid by the undersigned hereunder
shall be paid in lawful money of the United States of America strictly in
accordance with the terms and provisions of the Obligations, without set-off or
counterclaim and without deduction for and free and clear of any and all taxes,
levies, imposts, duties, fees, charges, deductions, withholdings, restrictions
or conditions of any nature now or hereafter imposed, levied, collected,
withheld or assessed with respect to the Obligations or this Guaranty or the
proceeds to the holder hereof by the country identified below or any other
country or any political subdivision or taxing authority or other agency thereof
or therein other than the United States of America or any of its political
subdivisions ("Foreign Taxes"). If any Foreign Taxes are required to be deducted
or withheld from any amounts payable to Lessor under this Guaranty, such amount
payable shall be increased to yield to Lessor (after payment of all Foreign
Taxes) the amount specified to be paid hereunder, reduced by the amount of any
foreign tax credit actually received and used by Lessor under the income tax
laws of the United States resulting from the payment of such Foreign Taxes.
Whenever any Foreign Tax is paid by the undersigned on behalf of Lessor, as
promptly as possible thereafter the undersigned shall send Lessor an official
receipt showing payment thereof, together with such additional documentary
evidence as may be required from time to time by Lessor. The obligation of the
undersigned hereunder to make payments in lawful money of the United States of
America shall not be discharged or satisfied by any tender or recovery pursuant
to any judgment expressed in or converted into any currency other than United
States Dollars EXCEPT TO THE EXTENT that any such tender or recovery shall
comply with mandatory laws of the United Mexican States which provide for
Page 3
payment of obligations in the currency of the United Mexican States; provided,
that any such payment in currency of the United Mexican States shall be made at
the then current legal exchange rate in the United Mexican States if mandatory
laws of the United Mexican States require Lessor to accept such legal exchange
rate or, if permitted by the laws of the United Mexican States, at the then
current market exchange rate that results in the effective receipt by Lessor of
the full amount of United States Dollars expressed to be payable hereunder.
Undersigned's Country of Organization: United Mexican States
14. For purposes of this Guaranty and the resolution of disputes
hereunder, the parties irrevocably submit and consent to, and waive any
objection to, the jurisdiction and venue of the state or federal courts located
in Dallas County, Texas it being acknowledged and agreed that the subject matter
of the Lease is located in Dallas County, Texas. Venue for the enforcement of
any obligations contained herein shall lie in Dallas County, Texas and the
parties hereby waive the right to be sued elsewhere. The undersigned further
agree that final judgement against it in any such legal action, suit or
proceeding shall be conclusive and may be enforced in any other jurisdiction,
within or outside the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and amount of its liability.
15. This Guaranty contains the entire agreement of the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof. This Guaranty is not intended to replace
or supersede any other guaranty which the undersigned have entered into or may
enter into in the future. The undersigned may enter into additional guaranties
in the future which may or may not refer to the Master Lease identified above
and such guaranties are not intended to replace or supersede this Guaranty
unless specifically provided in that additional guaranty. The interpretation,
construction and validity of this guaranty shall be governed by the laws of the
State of Ohio in the United States of America.
[The next page is the signature page.]
Page 4
ALL PARTIES TO THIS GUARANTY, INCLUDING GUARANTOR AND LESSOR, WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS GUARANTY.
Guarantor:
STB DE MEXICO, S.A. DE C.V.
(Name of Guarantor)
By: /s/ [NAME ILLEGIBLE]
--------------------------------------
Title: Chief Operating Officer
-----------------------------------
Witness: Craig Kennington
---------------------------------
ACKNOWLEDGED BY:
STB SYSTEMS, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ [NAME ILLEGIBLE] By: /s/ [NAME ILLEGIBLE]
----------------------------- -----------------------------
Title: Chief Operating Officer Title: Funding Authority
-------------------------- --------------------------
Page 5
Renew, Purchase, or Return Addendum
(Fair Market Value or Stated Price)
Dated October 30, 1996
Master Lease Agreement Date: October 30, 1996
Lease Schedule Number 1000054536
Lessee Name: STB Systems, Inc.
Reference is made to the Master Lease Agreement identified above ("Master
Lease") and to the Lease identified above ("Lease"), which are by and between
Banc One Leasing Corporation ("Lessor") and the lessee identified above
("Lessee"). As used herein: "Lease" shall mean the Lease and the Master Lease,
but only to the extent that the Master Lease relates to the Lease; and
"Equipment" shall mean the equipment covered by the Lease. This Addendum
modifies the terms and conditions of the Lease. Unless otherwise defined herein,
capitalized terms defined in the Lease shall have the same meaning when used
herein. Solely for purposes of the Lease, Lessor and Lessee agree as follows:
1. Solely for purposes of the Lease and the Equipment, Lessor and Lessee
agree that on the Expiration Date (as defined below), Lessee SHALL either
purchase all, but not less than all, of the Equipment as provided in paragraph 2
below OR renew the Lease Term of the Lease as set forth in paragraph 4 below OR
return all, but not less than all, of the Equipment pursuant to paragraph 3
below. "Expiration Date" shall mean the expiration date of the initial Lease
Term as set forth in the Lease.
2. If Lessee elects to purchase the Equipment by giving Lessor written
notice of Lessee's intent to purchase the Equipment at least 30 days, but no
more than 90 days, prior to the Expiration Date, then on the Expiration Date
Lessee shall purchase all of the Equipment and shall pay to Lessor the Purchase
Price (as defined below). The "Purchase Price" shall be an amount equal to (a)
all rent, all Taxes (including, without limitation, all Taxes due in connection
with Lessor's receipt of the Purchase Price, but excluding income Taxes on
Lessor's gain on such sale) and all other amounts then due and payable by Lessee
under the Lease PLUS (b) the GREATER of the Fair Market Value (as defined in
Master Lease section 23(d) for purposes of Lessee's purchase option) of the
Equipment or the Minimum Value set forth below. If after sending the above
notice to Lessor, but prior to the Expiration Date, Lessee informs Lessor that
Lessee will not pay the Purchase Price, then Lessee shall automatically be
deemed to have elected to renew the Lease Term of the Equipment under
paragraph 4 below.
MINIMUM VALUE: 54.8% of the Lessor's Cost of the Equipment.
3. If Lessee elects to return the Equipment by giving Lessor written
notice of Lessee's intent to return the Equipment at least 90 days, but no more
than 270 days, prior to the Expiration Date, then on the Expiration Date Lessee
shall return the Equipment in compliance with paragraph
Page 1 of 4
(b) of Section 23 of the Master Lease and pay to Lessor a return and
remarketing fee not to exceed 34.5% of the Lessor's Cost of the Equipment;
provided, that Lessee acknowledges and agrees that the return and remarketing
fee shall be determined BY LESSOR in its sole and absolute discretion and
that Lessee shall have no right to contest or appeal Lessor's determination
of the return and remarketing fee. If after sending the above notice to
Lessor, but at least 60 days prior to the Expiration Date, Lessee informs
Lessor that Lessee will not pay the return and remarketing fee determined by
Lessor, then Lessee shall automatically be deemed to have elected to renew
the Lease Term of the Equipment under paragraph 4 below.
4. If Lessee elects (or is deemed to have elected) to renew the Lease
Term of the Equipment or if Lessee fails to give timely notice under paragraphs
2 or 3 above, then on the Expiration Date the Lease Term of the Lease shall be
renewed and extended for an additional term as set forth below ("First Renewal
Term"). All provisions of the Lease and the Master Lease to the extent that it
relates to the Lease shall remain in full force and effect and shall apply
during the First Renewal Term, except that during the First Renewal Term, Lessee
shall pay, in the same manner as provided in the Lease, rent as set forth below
in consecutive monthly payments commencing with the first day of the First
Renewal Term and on the same day of each month thereafter until the entire First
Renewal Term rent is paid in full.
FIRST RENEWAL TERM: 12 months
FIRST RENEWAL RENT: $83,892.88 per month (excluding Taxes)
Notwithstanding anything to the contrary in the Lease, Lessee acknowledges
and agrees that on the Expiration Date, Lessee shall NOT have the return or
purchase options set forth in section 23 of the Master Lease and Lessee shall
only have the options set forth above.
5. If the Lease Term of the Lease is renewed under paragraph 4 above and
if Lessee pays and performs all of its obligations under the Lease through to
the First Renewal Expiration Date (as defined below), then at the First Renewal
Expiration Date, Lessee SHALL either purchase all, but not less than all, of the
Equipment as provided in paragraph 6 below OR renew the Lease Term of the Lease
as set forth in paragraph 8 below OR return all, but not less than all, of the
Equipment pursuant to paragraph 7 below. "First Renewal Expiration Date" shall
mean the expiration date of the First Renewal Term.
6. If Lessee elects to purchase the Equipment by giving Lessor written
notice of Lessee's intent to purchase the Equipment at least 30 days, but no
more than 90 days, prior to the First Renewal Expiration Date, then on the First
Renewal Expiration Date Lessee shall purchase all of the Equipment and shall pay
to Lessor the First Renewal Purchase Price (as defined below). The "First
Renewal Purchase Price" shall be an amount equal to (a) all rent, all Taxes
(including, without limitation, all Taxes due in connection with Lessor's
receipt of the First Renewal Purchase Price, but excluding income Taxes on
Lessor's gain on such sale) and all other amounts then due and payable by Lessee
under the Lease PLUS (b) the GREATER of the Fair Market Value (as defined in
Master Lease section 23(d) for purposes of Lessee's purchase option) of the
Equipment or the Minimum Value set forth below. If after sending the above
notice to Lessor, but prior to the First Renewal Expiration Date, Lessee informs
Lessor that Lessee will not pay the First Renewal
Page 2 of 4
Purchase Price, then Lessee shall automatically be deemed to have elected to
renew the Lease Term of the Equipment under paragraph 8 below.
MINIMUM VALUE: 34.3% of the Lessor's Cost of the Equipment.
7. If Lessee elects to return the Equipment by giving Lessor written
notice of Lessee's intent to return the Equipment at least 90 days, but no more
than 270 days, prior to the First Renewal Expiration Date, then on the First
Renewal Expiration Date Lessee shall return the Equipment in compliance with
paragraph (b) of Section 23 of the Master Lease and pay to Lessor a return and
remarketing fee not to exceed 19.3% of the Lessor's Cost of the Equipment;
provided, that Lessee acknowledges and agrees that the return and remarketing
fee shall be determined BY LESSOR in its sole and absolute discretion and that
Lessee shall have no right to contest or appeal Lessor's determination of the
return and remarketing fee. If after sending the above notice to Lessor, but at
least 60 days prior to the First Renewal Expiration Date, Lessee informs Lessor
that Lessee will not pay the return and remarketing fee determined by Lessor,
then Lessee shall automatically be deemed to have elected to renew the Lease
Term of the Equipment under paragraph 8 below.
8. If Lessee elects (or is deemed to have elected) to renew the Lease
Term of the Equipment or if Lessee fails to give timely notice under paragraphs
6 or 7 above, then on the First Renewal Expiration Date the Lease Term of the
Lease shall be renewed and extended for an additional term as set forth below
("Second Renewal Term"). All provisions of the Lease and the Master Lease to the
extent that it relates to the Lease shall remain in full force and effect and
shall apply during the Second Renewal Term, except that during the Second
Renewal Term, Lessee shall pay, in the same manner as provided in the Lease,
rent as set forth below in consecutive monthly payments commencing with the
first day of the Second Renewal Term and on the same day of each month
thereafter until the entire Second Renewal Term rent is paid in full.
SECOND RENEWAL TERM: 12 months
SECOND RENEWAL RENT: $83,892.88 per month (excluding Taxes)
Notwithstanding anything to the contrary in the Lease, Lessee acknowledges and
agrees that on the First Renewal Expiration Date, Lessee shall not have the
return or purchase options set forth in section 23 of the Master Lease and
Lessee shall only have the options set forth above.
9. If the Lease Term of the Lease is renewed under paragraph 8 above and
if Lessee pays and performs all of its obligations under the Lease through to
the expiration of the Second Renewal Term, then at the expiration of the Second
Renewal Term: (a) Lessee shall have the return or purchase options as to the
Equipment set forth in section 23 of the Master Lease so long as Lessee complies
with the notice and other requirements of said section 23; and (b) Lessor
acknowledges that a return and remarketing fee such as is described in
paragraphs 3 or 7 of this Addendum shall not be payable by Lessee if Lessee
returns the Equipment in accordance with the terms of the Lease.
10. With respect to any sale of Equipment to Lessee under this Addendum,
such sale shall be on an "as-is, where-is" basis with all faults and without
recourse to Lessor and without any
Page 3 of 4
representation or warranty of any kind whatsoever by Lessor, express or
implied. Lessor expressly re-affirms its disclaimers as set forth in section
7 of the Master Lease.
11. This Addendum is hereby made a part of the Lease. Except as expressly
amended hereby, the Lease and the Master Lease remain in full force and effect.
Lessee:
STB SYSTEMS, INC.
By: /s/ [NAME ILLEGIBLE]
---------------------------------
Title: COO
------------------------------
Lessor:
BANC ONE LEASING CORPORATION
By: /s/ [NAME ILLEGIBLE]
---------------------------------
Title: Funding Authority
------------------------------
Page 4 of 4
LEASE
[LOGO] LEASE SCHEDULE NO. 1000054536
------------------
LESSOR: BANC ONE LEASING CORPORATION
LESSEE: STB SYSTEMS, INC.
-------------------------------------------------------------------------
1. GENERAL. Reference is made to the Master Lease Agreement dated as of
October 30, 1996, as amended from time to time ("Master Lease"), between the
above Lessee and Lessor. This Lease Schedule is signed and delivered under
the Master Lease. Unless otherwise defined herein, capitalized terms defined
in the Master Lease will have the same meaning when used in this Schedule.
2. LEASE. Lessor leases to Lessee, and Lessee leases from Lessor, all of the
property ("Equipment") described below:
QUANTITY DESCRIPTION (NEW UNLESS SPECIFIED AS USED) LESSOR'S COST
- -------- ------------------------------------------ -------------
"ALL PROPERTY DESCRIBED IN THE ATTACHED Equipment Cost 4,235,997.50
SCHEDULE A-1 AND INVOICES INDENTIFIED THEREIN," Documentation Fee 375.00
Sales Tax 0.00
TOTAL $4,236,372.50
-------------
3. LEASE TERM AND RENT. The Lease Term for the Equipment begins on the
earlier of the Acceptance Date or the Commencement Date and continues for the
number of months after the Commencement Date as stated in the Lease Term box
below. The Acceptance Date is the date that Lessor accepts this Schedule as
stated below Lessor's signature. The Commencement Date is the / / 1st / / 5th
day of the month in which the Acceptance Date occurs.
- ---------- ----------------------- ----------------------------------
LEASE TERM NUMBER OF RENT PAYMENTS RENT PAYMENTS (EXCLUDING TAXES)
1 ADVANCE PAYMENT AT $83,892.88
36 35 MONTHLY PAYMENTS AT $83,892.88
36 Months
- ---------- ----------------------- ----------------------------------
RENT DUE DATES: On the Commencement Date and on the same day of each Month
thereafter until paid in full.
Total Advance Payment of $83,892.88 to be applied as follows:
$ 0.00 Security Deposit $ 83,892.88 First and Last _____ Rent Payment(s)
- ------ -----------
$ 0.00 Set-up/Filing/ $ 0.00 Other (Specify)
Search Fees
Lessee shall pay to Lessor all amounts stated above on the due dates stated
above, except that the Total Advance Payment is due on the Commencement Date.
There shall be added to each rent payment all applicable Taxes as in effect
from time to time.
4. TITLE TO EQUIPMENT; QUIET POSSESSION. Lessee agrees that Lessor is the
lawful owner of the Equipment and that good and marketable title to the
Equipment shall remain with Lessor at all times. Lessee at its sole expense
will protect and defend Lessor's good and marketable title to the Equipment
against all claims and demands whatsoever except for Liens created directly
by Lessor. This Schedule is intended to be a lease transaction. Lessee shall
have no right, title or interest in any of the Equipment except the right to
peacefully and quietly hold and use the Equipment in accordance with the
terms of the Lease during the Lease Term unless and until a default shall
occur.
5. TAX REPRESENTATIONS. Lessee represents and agrees that: (a) Lessee does
not have, and the Lease will not create for Lessee, any equity or ownership
interest in the Equipment; (b) the Equipment is not now, and will not be,
"tax-exempt use property" as defined in Code Section 168; (c) the Equipment
has been placed in service on the Acceptance Date.
6. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a)
reaffirms all of the terms and conditions of the Master Lease and agrees that
the Master Lease remains in full force and effect; (b) agrees that the
Equipment is and will be used at all times solely for commercial purposes,
and not for personal, family or household purposes; and (c) incorporates all
of the terms and conditions of the Master Lease as if fully set forth in this
Schedule.
7. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i)
Lessor has not selected, manufactured, sold or supplied any of the Equipment,
(ii) Lessee has selected all of the Equipment and its suppliers, and (iii)
Lessee has received a copy of, and approved, the purchase orders or purchase
contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES
THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT;
(b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE
ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY
ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL
FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO
REVOKE ITS ACCEPTANCE OF THE EQUIPMENT.
8. MISCELLANEOUS:
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE, LESSEE
AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING
THE EQUIPMENT OR THIS SCHEDULE. THIS SCHEDULE IS EXPRESSLY SUBJECT TO THE
TERMS AND CONDITIONS ON THE REVERSE SIDE OF THIS SCHEDULE.
Accepted By: STB SYSTEMS, INC.
------------------------------------------
BANC ONE LEASING CORPORATION (Name of Lessee)
By: /s/ [NAME ILLEGIBLE] By: /s/ [NAME ILLEGIBLE]
------------------------------ --------------------------------------
Title: Funding Authority Title: COO
--------------------------- -----------------------------------
Acceptance Date: Witness Signature: /s/ CRAIG KENNINGTON
----------------- -----------------------
White: Lessor's Original Yellow: Duplicate Pink: Duplicate
ADDITIONAL TERMS AND CONDITIONS
The following terms and conditions are expressly made a part of and
incorporated in the Schedule on the front side hereof.
A. CONDITIONS. No lease of Equipment under this Schedule shall be
binding on Lessor, and Lessor shall have no obligation to purchase the
Equipment covered hereby, unless: (a) Lessor has received evidence of all
required insurance; (b) in Lessor's sole judgement, there has been no
material adverse change in the financial condition or business of Lessee or
any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule,
which must be satisfactory to Lessor, and Lessor has signed and accepted this
Schedule; (d) no change in the Code or any regulation thereunder, which in
Lessor's sole judgment would adversely affect the economics to Lessor of the
lease transaction, shall have occurred or shall appear to be imminent; (e)
Lessor has received, in form and substance satisfactory to Lessor, such other
documents and information as Lessor shall reasonably request; and (f) Lessee
has satisfied all other reasonable conditions established by Lessor.
B. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to
Lessor any additional documents deemed desirable by Lessor to effect the
terms of the Master Lease or this Schedule including, without limitation,
Uniform Commercial Code financing statements which Lessor is authorized to
file with the appropriate filing officers. Lessee hereby irrevocably appoints
Lessor as Lessee's attorney-in-fact with full power and authority in the
place of Lessee and in the name of Lessee to prepare, sign, amend, file or
record any Uniform Commercial Code financing statements or other documents
deemed desirable by Lessor to perfect, establish or give notice of Lessor's
interests in the Equipment or in any collateral as to which Lessee has
granted Lessor a security interest. The signing or filing of Uniform
Commercial Code financing statements and other recordings are undertaken as a
precaution only since the parties intend this Schedule to be a lease
transaction. Lessee shall pay upon Lessor's written request any actual
out-of-pocket costs and expenses paid or incurred by Lessor in connection
with the above terms of this section or the funding and closing of this
Schedule.
C. SECURITY DEPOSIT: As collateral for Lessee's obligations under the
Lease, Lessee hereby grants to Lessor a security interest in the sums
specified in this Schedule as a "Security Deposit". At its option, Lessor may
apply all or any part of said Security Deposit to cure any default of Lessee
under the Lease. If upon final termination of this Schedule, Lessee has
fulfilled all of the terms and conditions hereof, then Lessor shall pay to
Lessee upon Lessee's written request any remaining balance of the Security
Deposit for this Schedule, without interest.
D. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants
that: (a) Lessee is a corporation, partnership or proprietorship duly
organized, validly existing and in good standing under the laws of the state
of its organization and is qualified to do business and is in good standing
under the laws of each other state in which the Equipment is or will be
located; (b) Lessee has full power, authority and legal right to sign,
deliver and perform the Master Lease, this Schedule and all related documents
and such actions have been duly authorized by all necessary corporate,
partnership or proprietorship action; and (c) the Master Lease, this Schedule
and each related document has been duly signed and delivered by Lessee and
each such document constitutes a legal, valid and binding obligation of
Lessee enforceable in accordance with its terms.