Exhibit 10.50
MASTER EQUIPMENT LEASE AGREEMENT No. 32426
LESSOR: FLEET CAPITAL CORPORATION LESSEE: Boston Communications Group, Inc.
a Rhode Island corporation a Massachussets Corporation
Cellular Express, Inc.
a Massachussets Corporation
BCG Securities Corp.
a Massachussets Corporation
Address: 50 Kennedy Plaza Address: 100 Sylvan Road
Providence, Rhode Island Woburn, Massachusetts 01801
02903-2305
1. LEASE OF EQUIPMENT
Subject to the terms and conditions set forth herein (the "Master Lease")
and in any Lease Schedule incorporating the terms of this Master Lease (each, a
"Lease Schedule"), Lessor agrees to lease to Lessee, and Lessee agrees to lease
from Lessor, the items and units of personal property described in each such
Lease Schedule, together with all replacements, parts, additions, accessories
and substitutions therefor (collectively, the "Equipment"). As used in this
Lease, the term "Item of Equipment" shall mean each functionally integrated and
separately marketable group or unit of Equipment subject to this Lease. Each
Lease Schedule shall constitute a separate, distinct and independent lease of
Equipment and contractual obligation of Lessee. References to "the Lease," "this
Lease" or "any Lease" shall mean and refer to any Lease Schedule which
incorporates the terms of this Master Lease, together with all exhibits,
addenda, schedules, certificates, riders and other documents and instruments
executed and delivered in connection with such Lease Schedule or this Master
Lease, all as the same may be amended or modified from time to time. The
Equipment is to be delivered and installed at the location specified or referred
to in the applicable Lease Schedule. The Equipment shall be deemed to have been
accepted by Lessee for all purposes under this Lease upon Lessor's receipt of an
Acceptance Certificate with respect to such Equipment, executed by Lessee after
receipt of all other documentation required by Lessor with respect to such
Equipment. Lessor shall not be liable or responsible for any failure or delay in
the delivery of the Equipment to Lessee for whatever reason. As used in this
Lease, "Acquisition Cost" shall mean (a) with respect to all Equipment subject
to a Lease Schedule, the amount set forth as the Acquisition Cost in the Lease
Schedule and the Acceptance Certificate applicable to such Equipment; and (b)
with respect to any item of Equipment, the total amount of all vendor or seller
invoices (including Lessee invoices, if any) for such item of Equipment,
together with all acquisition fees and costs of delivery, installation, testing
and related services, accessories, supplies or attachments procured or financed
by Lessor from vendors or suppliers thereof (including items provided by Lessee)
relating or allocable to such item of Equipment ("Related Expenses"). As used in
this Lease with respect to any Equipment, the terms "Acceptance Date," "Rental
Payment(s)," "Rental Payment Date(s)," "Rental Payment Numbers," "Rental Payment
Commencement Date," "Lease Term" and "Lease Term Commencement Date" shall have
the meanings and values assigned to them in the Lease Schedule and the
Acceptance Certificate applicable to such Equipment.
2. TERM AND RENT
The Lease Term for any Equipment shall be as specified in the applicable
Lease Schedule. Rental Payments shall be in the amounts and shall be due and
payable as set forth in the applicable Lease Schedule. Lessee shall, in
addition, pay interim rent to Lessor on a pro-rata, per-diem basis from the
Acceptance Date to the Lease Term Commencement Date set forth in the applicable
Acceptance Certificate, payable on such Lease Term Commencement Date. If any
rent or other amount payable hereunder shall not be paid within 10 days of the
date when due, Lessee shall pay as an administrative and late charge an amount
equal to 5% of the amount of any such overdue payment. in addition, Lessee shall
pay overdue interest on any delinquent payment or other amounts due under the
Lease (by reason of acceleration or otherwise) from 30 days after the due date
until paid at the rate of 1 1/2% per month or the maximum amount permitted by
applicable law, whichever is lower. All payments to be made to Lessor shall be
made to Lessor in immediately available funds at the address shown above, or at
such other place as Lessor shall specify in writing. THIS IS A NOW CANCELABLE,
NON-TERMINABLE LEASE OF EQUIPMENT FOR THE ENTIRE LEASE TERM PROVIDED IN EACH
LEASE SCHEDULE HERETO.
3. POSSESSION; PERSONAL PROPERTY
No right, title or interest in the Equipment shall pass to Lessee other
than the right to maintain possession and use of the Equipment for the Lease
Term (provided no Event of Default has occurred) free from interference by any
person claiming by, through, or under Lessor. The Equipment shall always remain
personal property even though the Equipment may hereafter become attached or
affixed to real property. Lessee agrees to give and record such notices and to
take such other action at its own expense as may be necessary to prevent any
third party (other than an assignee of Lessor) from acquiring or having the
right under any circumstances to acquire any interest in the Equipment or this
Lease.
4. DISCLAIMER OF WARRANTIES
LESSOR IS NOT THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, NOR THE AGENT
THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY OF THE
EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS DESIGN OR CONDITION, ITS
CAPACITY OR DURABILITY, THE QUALITY OF THE MATERIAL OR WORKMANSHIP IN THE
MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT, OR THE CONFORMITY OF THE EQUIPMENT TO
THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER RELATING THERETO, OR
PATENT INFRINGEMENTS, AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSOR IS
NOT RESPONSIBLE FOR ANY REPAIRS OR SERVICE TO THE EQUIPMENT, DEFECTS THEREIN OR
FAILURES IN THE OPERATION THEREOF. Lessee has made the selection of each item of
Equipment and the manufacturer and/or supplier thereof based on its own judgment
and expressly disclaims any reliance upon any statements or representations made
by Lessor. For so long as no Event of Default (or event or condition which, with
the passage of time or giving of notice, or both, would become such an Event of
Default) has occurred and is continuing, Lessee shall be the beneficiary of, and
shall be entitled to, all rights under any applicable manufacturer's or vendor's
warranties with respect to the Equipment, to the extent permitted by law.
If the Equipment is not delivered, is not properly installed, does not
operate as warranted, becomes obsolete, or is unsatisfactory for any reason
whatsoever, Lessee shall make all claims on account thereof solely against the
manufacturer or supplier and not against Lessor, and Lessee shall nevertheless
pay all rentals and other sums payable hereunder. Lessee acknowledges that
neither the manufacturer or supplier of the Equipment, nor any sales
representative or agent thereof, is an agent of Lessor, and no agreement or
representation as to the Equipment or any other matter by any such sales
representative or agent of the manufacturer or supplier shall in any way affect
Lessee's obligations hereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
Lessee represents and warrants to and covenants with Lessor that:
(a) Lessee has the form of business organization indicated above and is
duly organized and existing in good standing under the laws of the state listed
in the caption of this Master Lease and is duly qualified to do business
wherever necessary to carry on its present business and operations and to own
its property; (b) this Lease has been duly authorized by all necessary action on
the part of Lessee consistent with its form of organization, does not require
any further shareholder or partner approval, does not require the approval of,
or the giving notice to, any federal, state, local or foreign governmental
authority and does not contravene any law binding on Lessee or contravene any
certificate or articles of incorporation or bylaws or partnership certificate or
agreement, or any agreement, indenture, or other instrument to which Lessee is a
party or by which it may be bound; (c) this Lease has been duly executed and
delivered by authorized officers or partners of Lessee and constitutes a legal,
valid and binding obligation of Lessee enforceable in accordance with its terms;
(d) Lessee has not and will not, directly or indirectly, create, incur or permit
to exist any lien, encumbrance, mortgage, pledge, attachment or security
interest on or with respect to the Equipment or this Lease (except those of
persons claiming by, through or under Lessor); (e) the Equipment will be used
solely in the conduct of Lessee's business and will remain in the location shown
on the applicable Lease Schedule unless Lessor otherwise agrees in writing and
Lessee has completed all notifications I filings, recordings and other actions
in such new location as Lessor may reasonably request to protect Lessor's
interest in the Equipment; (f) there are no pending or threatened actions or
proceedings before any court or administrative agency which materially adversely
affect Lessee's financial condition or operations, and all credit, financial and
other information provided by Lessee or at Lessee's direction is, and all such
information hereafter furnished will be, true, correct and complete in all
material respects; and (g) Lessor has not selected, manufactured or supplied the
Equipment to Lessee and has acquired any Equipment subject hereto solely in
connection with this Lease and Lessee has received and approved the terms of any
purchase order or agreement with respect to the Equipment.
6. INDEMNITY
Lessee assumes the risk of liability for, and hereby agrees to indemnify
and hold safe and harmless, and covenants to defend, Lessor, its employees,
servants and agents from and against: (a) any and all liabilities, losses,
damages, claims and expenses (including legal expenses of every kind and nature)
arising out of the manufacture, purchase, shipment and delivery of the Equipment
to Lessee, acceptance or rejection, ownership, titling, registration, leasing,
possession, operation, use, return or other disposition of the Equipment,
including, without limitation, any liabilities that may arise from patent or
latent defects in the Equipment (whether or not discoverable by Lessee), any
claims based on absolute tort liability or warranty and any claims based on
patent, trademark or copyright infringement; (b) any and all loss or damage of
or to the Equipment; and (c) any obligation or liability to the manufacturer or
any supplier of the Equipment arising under any purchase orders issued by or
assigned to Lessor.
7. TAXES AND OTHER CHARGES
Lessee agrees to comply with all laws, regulations and governmental orders
related to this Lease and to the Equipment ancl its use or possession, and to
pay when due, and to defend and indemnify Lessor against liability for all
license fees, assessments, and sales, use, property, excise, privilege and other
taxes (including any related interest or penalties) or other charges or fees now
or hereafter imposed by any governmental body or agency upon any Equipment, or
with respect to the manufacturing, ordering, shipment, purchase, ownership,
delivery, installation, leasing, operation, possession, use, return, or other
disposition thereof or the rentals hereunder (other than taxes on or measured
solely by the net income of Lessor). Any fees, taxes or other lawful charges
paid by Lessor upon failure of Lessee to make such payments shall at Lessor' s
option become immediately due from Lessee to Lessor.
If any Lease Schedule is denominated as a "True Lease Schedule," then,
with respect to the Equipment set forth on such True Lease Schedule, Lessee
hereby covenants and agrees that Lessor shall be entitled to the following tax
benefits (the "Tax Benefits"), Lessor will be entitled to cost recovery
deductions under Section 168 of the Internal Revenue Code of 1986, as amended
(the "Code"), using a 200% declining balance method of depreciation switching to
the straight line method for the first taxable year for which such method will
yield larger depreciation deductions, and assuming a half-year convention and
zero salvage value, for the applicable recovery period for such Equipment as set
forth in the True Lease Schedule with respect to such Equipment. Lessee further
acknowledges and agrees that Lessor has entered into such True Lease Schedule on
the assumption that Lessor will be taxed throughout the Lease Term of the True
Lease Schedule at Lessor's federal corporate income tax rate existing on the
date of such Lease Schedule (the "Assumed Tax Rate"). If, for any reason
whatsoever, there shall be a loss, disallowance, recapture or delay in claiming
all or any portion of the Tax Benefits with respect to the Equipment, or there
shall be included in Lessor's gross income for Federal, state or local income
tax purposes any amount on account of any addition, modification or improvement
to or in respect of any of the Equipment made or paid for by Lessee, or if there
shall be a change in the Assumed Tax Rate (any loss, disallowance, recapture,
delay, inclusion or change being herein called a "Tax Loss"), then thirty (30)
days after written notice to Lessee by Lessor that a Tax Loss has occurred,
Lessee shall pay Lessor a lump sum amount which, after deduction of all taxes
required to be paid by Lessor with respect to the receipt of such amount, will
provide Lessor with an amount necessary to maintain Lessor's after-tax economic
yield and overall net after-tax cash flows at least at the same level that would
have been available if such Tax Loss had not occurred, plus any interest,
penalties or additions to tax which may be imposed in connection with such Tax
Loss. In lieu of paying such Tax Loss in a lump sum, Lessor may require, or upon
Lessee's request, may agree, in Lessor's sole discretion, that such Tax Loss
shall be paid in equal periodic payments over the applicable remaining Lease
Term with respect to such Equipment with each Rental Payment due and payable
with respect to such Equipment. A Tax Loss shall conclusively be deemed to have
occurred if either (a) a deficiency shall have been proposed by the Internal
Revenue Service or other taxing authority having jurisdiction, or (b) tax
counsel for Lessor has rendered an opinion to Lessor that such Tax Loss has so
occurred. The foregoing indemnities and covenants set forth in Sections 6 and 7
of this Master Lease shall continue in full force and effect and shall survive
the expiration or earlier termination of the Lease.
8. DEFAULT
Lessee shall be in default of this Lease upon the occurrence of any one or
more of the following events (each an "Event of Default"):
(a) Lessee shall fail to make any payment, of rent or otherwise, under any
Lease within 10 days of the date when due; or (b) Lessee shall fail to obtain or
maintain any of the insurance required under any Lease; or (c) Lessee shall fail
to perform or observe any covenant, condition or agreement under any Lease, and
such failure continued for 10 days after notice thereof to Lessee; or (d) Lessee
shall default in the payment or performance of any indebtedness or obligation to
Lessor or any affiliated person, firm or entity controlling, controlled by or
under common control with Lessor, under any loan, note, security agreement,
lease, guaranty, title retention or conditional sales agreement or any other
instrument or agreement evidencing such indebtedness with Lessor or such other
affiliated person, firm or entity affiliated with Lessor; or (e) any
representation or warranty made by Lessee herein or in any certificate,
agreement, statement or document hereto or hereafter furnished to Lessor in
connection herewith, including without limitation, any financial information
disclosed to Lessor, shall prove to be false or incorrect in any material
respect; or (f) death or judicial declaration of incompetence of Lessee, if an
individual; the commencement of any bankruptcy, insolvency, arrangement,
reorganization, receivership, liquidation or other similar proceeding by or
against Lessee or any of its properties or businesses, or the appointment of a
trustee, receiver, liquidator or custodian for Lessee or any of its properties
of business, or if Lessee suffers the entry of an order for relief under Title
11 of the United States Code; or the making by Lessee of a general assignment or
deed of trust for the benefit of creditors, or (g) Lessee shall default in any
payment or other obligation to any third party and any applicable grace or cure
period with respect thereto has expired; or (h) Lessee shall terminate its
existence by merger, consolidation, sale of substantially all of its assets or
otherwise; or (i) if Lessee is a privately held corporation, and more than 50%
of Lessee's voting capital stock, or effective control of Lessee's voting
capital stock, issued and outstanding from time to time, is not retained by the
holders of such stock on the date of this Lease; or (j) if Lessee is a publicly
held corporation, there shall be a change in the ownership of Lessee's stock
such that Lessee is no longer subject to the reporting requirements of the
Securities Exchange Act of 1934, or no longer has a class of equity securities
registered under Section 12 of the Securities Act of 1933; or (k) Lessor shall
determine, in its sole discretion and in good faith, that there has been a
material adverse change in the financial condition of the Lessee since the date
of this Lease, or that Lessee's ability to make any payment hereunder promptly
when due or otherwise comply with the terms of this Lease or any other agreement
between Lessor and Lessee is impaired; or (1) any event or condition set forth
in subsections (b) through (k) of this Section 8 shall occur with respect to any
guarantor or other person responsible, in whole or in part, for payment or
performance of this Lease; or (m) any event or condition set forth in
subsections (d) through (j) shall occur with respect to any affiliated person,
firm or entity controlling, controlled by or under common control with Lessee.
Lessee shall promptly notify Lessor of
the occurrence of any Event of Default or the occurrence or existence of any
event or condition which, upon the giving of notice of lapse of time, or both,
may become an Event of Default.
9. REMEDIES; MANDATORY PREPAYMENT.
Upon the occurrence of any Event of Default, Lessor may, at its sole
option and discretion, exercise one or more of the following remedies with
respect to any or all of the Equipment: (a) cause Lessee to promptly return, at
Lessee's expense, any or all Equipment to such location as Lessor may designate
in accordance with the terms of Section 18 of this Master Lease, or Lessor, at
its option, may enter upon the premises where the Equipment is located and take
immediate possession of and remove the same by summary proceedings or otherwise,
all without liability to Lessor for or by reason of damage to property or such
entry or taking possession except for Lessor's gross negligence or willful
misconduct; (b) sell any or all Equipment at public or private sale or otherwise
dispose of, hold, use, operate, lease to others or keep idle the Equipment, all
as Lessor in its sole discretion may determine and all free and clear of any
rights of Lessee; (c) remedy such default, including making repairs or
modifications to the Equipment, for the account and expense of Lessee, and
Lessee agrees to reimburse Lessor for all of Lessor's costs and expenses; (d) by
written notice to Lessee, terminate the Lease with respect to any or all Lease
Schedules and the Equipment subject thereto, as such notice shall specify, and,
with respect to such terminated Lease Schedules and Equipment, declare
immediately due and payable and recov?r from Lessee, as liquidated damages for
loss of Lessor's bargain and not as a penalty, an amount equal to the Stipulated
Loss Value, calculated as of the next following Rental Payment Date; (e) apply
any deposit or other cash collateral or sale or remarketing proceeds of the
Equipment at any tim6 to reduce any amounts due to Lessor, and (f) exercise any
other right or remedy which may be available to Lessor under applicable law, or
proceed by appropriate court action to enforce the terms hereof or to recover
damages for the breach hereof, including reasonable attorneys' fees and court
costs. Notice of Lessor's intention to accelerate, notice of acceleration,
notice of nonpayment, presentment, protest, notice of dishonor, or any other
notice whatsoever are hereby waived by Lessee and any endorser, guarantor,
surety or other party liable in any capacity for any of the Lessee's obligations
under or in respect of the Lease. No remedy referred to in this Section 9 shall
be exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lessor at law or in equity.
The exercise or pursuit by Lessor of any one or more of such remedies
shall not preclude the simultaneous or later exercise or pursuit by Lessor of
any or all such other remedies, and all remedies hereunder shall survive
termination of this Lease. At any sale of the Equipment pursuant to this Section
9, Lessor may bid for the Equipment. Notice required, if any, of any sale or
other disposition hereunder by Lessor shall be satisfied by the mailing of such
notice to Lessee at least seven (7) days prior to such sale or other
disposition. In the event Lessor takes possession and disposes of the Equipment,
the proceeds of any such disposition shall be applied in the following order:
(1) to all of Lessor's costs, charges and expenses incurred in taking, removing,
holding, repairing and selling or leasing the Equipment; (2) to the extent not
previously paid by Lessee, to pay Lessor for any damages then remaining unpaid
hereunder; (3) to reimburse Lessee for any sums previously paid by Lessee as
damages hereunder; and (4) the balance, if any, shall be retained by Lessor. A
termination shall occur only upon written notice by Lessor and only with respect
to such Equipment as Lessor shall specify in such notice. Termination under this
Section 9 shall not affect Lessee's duty to perform Lessee's obligations
hereunder to Lessor in full. Lessee agrees to reimburse Lessor on demand for any
and all costs and expenses incurred by Lessor in enforcing its rights and
remedies hereunder following the occurrence of an Event of Default, including,
without limitation, reasonable attorney's fees, and the costs of repossession,
storage, insuring, reletting, selling and disposing of any and all Equipment.
The term "Stipulated Loss Value" with respect to any item of Equipment
shall mean the Stipulated Loss Value as set forth in any Schedule of Stipulated
Loss Values attached to and made a part of the applicable Lease Schedule. If
there is no such Schedule of Stipulated Loss Values, then the Stipulated Loss
Value with respect to any item of Equipment on any Rental Payment Date during
the Lease Term shall be an amount equal to the sum of: (a) all Rental Payments
and other amounts then due and owing to Lessor under the Lease, together with
all accrued interest and late charges thereon calculated through and including
the date of payment; plus (b) the net present value of: (i) all Rental Payments
then remaining unpaid for the Lease Term, plus (ii) the amount of any purchase
obligation with respect to such item of Equipment or, if there is no such
obligation, then the fair market value of such item of Equipment at the end of
the Lease Term, as estimated by Lessor in its sole discretion (accounting for
the amount of any unpaid Related Expenses for such item of Equipment and, with
respect to any such item of Equipment that has been attached to or installed on
or in any other property leased or owned by Lessee, such value shall be
determined on an installed basis, in place and in use), all discounted to net
present value at a discount rate equal to the 1 -year Treasury Constant Maturity
rate as published in the Selected Interest Rates table of the Federal Reserve
statistical release H. 15(519) for the week ending immediately prior to the
original Acceptance Date for such Equipment.
Lessee is or may become indebted under or in respect of one or more
leases, loans, notes, credit agreements, reimbursement agreements, security
agreements, title retention or conditional sales agreements, or other documents,
instruments or agreements, whether now existing or hereafter arising, evidencing
Lessee's obligations for the payment of borrowed money or other financial
accommodations ("Obligations") owing to FCC, or to one or more affiliated
persons, firms or entities controlling, controlled by or under common control
with Lessor ("Affiliates"). If Lessee pays or prepays all or substantially all
of its Obligations owing to any Affiliate, whether or not such payment or
prepayment is voluntarily or involuntarily made by Lessee before or after any
default or acceleration of such Obligations, then Lessee shall pay, at Lessor's
option and immediately upon notice from Lessor, all or any part of Lessee's
Obligations owing to Lessor, including but not limited to Lessee's payment of
Stipulated Loss Value for all or any Lease Schedules as set forth in such notice
from Lessor.
10. ADDITIONAL SECURITY
For so long as any obligations of Lessee shall remain outstanding under
any Lease, Lessee hereby grants to Lessor a security interest in all of Lessee's
rights in and to Equipment subject to such Lease from time to time, to secure
the prompt payment and performance when due (by reason of acceleration or
otherwise) of each and every indebtedness, obligation or liability of Lessee, or
any affiliated person, firm, or entity controlling, controlled by, or under
common control with Lessee, owing to Lessor, whether now existing or hereafter
arising, including but not limited to all of such obligations under or in
respect of any Lease. The extent to which Lessor shall have a purchase money
security interest in any item of Equipment under a Lease which is deemed to
create a security interest under Section 1-201(37) of the Uniform Commercial
Code shall be determined by reference to the Acquisition Cost of such item
financed by Lessor. In order more fully to secure its rental payments and all
other obligations to Lessor hereunder, Lessee hereby grants to Lessor a security
interest in any deposit of Lessee to Lessor under Section 3(d) of any Lease
Schedule hereto. Such security deposit shall not bear interest, may be
commingled with other funds of Lessor and shall be immediately restored by
Lessee if applied under Section 9. Upon expiration of the term of this Lease and
satisfaction of all of Lessee's obligations, the security deposit shall be
returned to Lessee. The term "Lessor" as used in this Section 10 shall include
any affiliated person, firm or entity controlling, controlled by or under common
control with Lessor.
11. NOTICES
Any notices or demands required or permitted to be given under this Lease
shall be given in writing and by regular mail and shall become effective when
deposited in the United States mail with postage prepaid to Lessor to the
attention of Customer Accounts, and to Lessee at the address set forth above, or
to such other address as the party to receive notice hereafter designates by
such written notice.
12. USE; MAINTENANCE; INSPECTION; LOSS AND DAMAGE
During the Lease Term for each item of Equipment, Lessee shall, unless
Lessor shall otherwise consent in writing: (a) permit each item of Equipment to
be used only within the continental United States by qualified personnel solely
for business purposes and the purpose for which it was designed and shall, at
its sole expense, service, repair, overhaul and maintain each item of Equipment
in the same condition as when received, ordinary wear and tear excepted, in good
operating order, consistent with prudent industry practice (but, in no event
less than the same extent to which Lessee maintains other similar equipment in
the prudent management of its assets and properties) and in compliance with all
applicable laws, ordinances, regulations, and conditions of all insurance
policies required to be maintained by Lessee under the Lease and all manuals,
orders, recommendations, instructions and other written requirements as to the
repair and maintenance of such item of Equipment issued at any time by the
vendor and/or manufacturer thereof; (W maintain conspicuously on any Equipment
such labels, plates, decals or other markings as Lessor may reasonably require,
stating that Lessor is owner of such Equipment; (c) furnish to Lessor such
information concerning the condition, location, use and operation of the
Equipment as Lessor may request; (d) permit any person designated by Lessor to
visit and inspect any Equipment and any records maintained in connection
therewith, provided, however, that the failure of Lessor to inspect the
Equipment or to inform Lessee of any noncompliance
shall not relieve Lessee of any of its obligations hereunder; (e) if any
Equipment does not comply with the requirements of this Lease, Lessee shall,
within 30 days of written notice from Lessor, bring such Equipment into
compliance; (f) not use any Equipment, nor allow the same to be used, for any
unlawful purpose, nor in connection with any property or material that would
subject the Lessor to any liability under any state or federal statute or
regulation pertaining to the production, transport, storage, disposal or
discharge of hazardous or toxic waste or materials; and (g) make no additions,
alterations, modifications or improvements (collectively, "Improvements") to any
item of Equipment that are not readily removable without causing material damage
to such item of Equipment or which will cause the value, utility or useful life
of such item of Equipment to materially decline. If any such Improvement is made
and cannot be removed without causing material damage or decline in value,
utility or useful life (a "NonSeverable Improvement"), then Lessee warrants that
such Non-Severable Improvement shall immediately become Lessor's property upon
being installed and shall be free and clear of all liens and encumbrances and
shall become Equipment subject to all of the terms and conditions of the Lease.
All such Improvements that are not Non-Severable Improvements shall be removed
by Lessee prior to the return of the item of Equipment hereunder or such
Improvements shall also become the
sole and absolute property of Lessor without any further payment by Lessor to
Lessee and shall be free and clear of all liens and encumbrances whatsoever.
Lessee shall repair all damage to any item of Equipment caused by the removal of
any Improvement so as to restore such item of Equipment to the same condition
which existed prior to its installation and as required by this Lease.
Lessee hereby assumes all risk of loss, damage or destruction for whatever
reason to the Equipment from and after the earlier of the date (i) on which the
Equipment is ordered or (ii) Lessor pays the purchase price of the Equipment,
and continuing until the Equipment has been returned to, and accepted by, Lessor
in the condition required by Section 18 hereof upon the expiration of the Lease
Term. If during the Lease Term all or any portion of an item of Equipment shall
become lost, stolen, destroyed, damaged beyond repair or rendered permanently
unfit for use for any reason, or in the event of any condemnation, confiscation,
theft or seizure or requisition of title to or use of such item, Lessee shall
immediately pay to Lessor an amount equal to the Stipulated Loss Value of such
item of Equipment. as of the next following Rental Payment Date.
13. INSURANCE
Lessee shall procure and maintain insurance in such amounts and upon such
terms and with such companies as Lessor may approve, during the entire Lease
Term and until the Equipment has been returned to, and accepted by, Lessor in
the condition required by Section 18 hereof, at Lessee's expense, provided that
in no event shall such insurance be less than the following coverages and
amounts: (a) Worker's Compensation and Employer's Liability Insurance, in the
full statutory amounts provided by law; (b) Comprehensive General Liability
Insurance including product/completed operations and contractual liability
coverage, with minimum limits of $1,000,000 each occurrence, and Combined Single
Limit Body Injury and Property Damage, $1,000,000 aggregate, where applicable;
and (c) All Risk Physical Damage Insurance, including earthquake and flood, on
each item of Equipment, in an amount not less than the greater of the Stipulated
Loss Value of the Equipment or (if availablel its full replacement value. Lessor
will be included as an additional insured and loss payee as its interest may
appear. Such policies shall be endorsed to provide that the coverage afforded to
Lessor shall not be rescinded, impaired or invalidated by any act or neglect of
Lessee. Lessee agrees to waive Lessee's right and its insurance carrier's rights
of subrogation against Lessor for any and all loss or damage.
In addition to the foregoing minimum insurance coverage, Lessee shall
procure and maintain such other insurance coverage as Lessor may require from
time to time during the Lease Term. All policies shall be endorsed or contain a
clause requiring the insurer to furnish Lessor with at least 30 days' prior
written notice of any material change, cancellation or non-renewal of coverage.
Upon execution of this Lease, Lessee shall furnish Lessor with a certificate of
insurance or other evidence satisfactory to Lessor that such insurance coverage
is in effect, provided, however, that Lessor shall be under no duty either to
ascertain the existence of or to examine such insurance coverage or to advise
Lessee in the event such insurance coverage should not comply with the
requirements hereof. In case of failure of Lessee to procure or maintain
insurance, Lessor may at its option obtain such insurance, the cost of which
will be paid by the Lessee as additional rentals. Lessee hereby irrevocably
appoints Lessor as Lessee's attorney-in-fact to file, settle or adjust, and
receive payment of claims under any such insurance policy and to endorse
Lessee's name on any checks, drafts or other instruments on payment of such
claims. Lessee further agrees to give Lessor prompt notice of any damage to or
loss of, the Equipment, or any part thereof.
14. LIMITATION OF LIABILITY
Lessor shall have no liability in connection with or arising out of the
ownership, leasing, furnishing, performance or use of the Equipment or any
special, indirect, incidental or consequential damages of any character,
including, without limitation, loss of use of production facilities or
equipment, loss of profits, property damage or lost production, whether suffered
by Lessee or any third party.
15. FURTHER ASSURANCES
Lessee shall promptly execute and deliver to Lessor such further documents
and take such further action as Lessor may require in order to more effectively
carry out the intent and purpose of this Lease. Lessee shall provide to Lessor,
within 120 days after the close of each of Lessee's fiscal years, and, upon
Lessor's request, within 45 days of the end of each quarter of Lessee's fiscal
year, a copy of its financial statements prepared in accordance with generally
accepted accounting principles and, in the case of annual financial statements,
audited by independent certified public accountants, and in the case of
quarterly financial statements certified by Lessee's chief financial officer.
Lessee shall execute and deliver to Lessor upon Lessor's request any and all
schedules, forms and other reports and information as Lessor may deem necessary
or appropriate to respond to requirements or regulations imposed by any
governmental authorities. Lessee shall execute and deliver to Lessor upon
Lessor's request such further and additional documents, instruments and
assurances as Lessor deems necessary (a) to acknowledge and confirm, for the
benefit of Lessor or any assignee or transferee of any of Lessor's rights, title
and interests hereunder (an "Assignee"), all of the terms and conditions of all
or any part of this Lease and Lessor's or Assignee's rights with respect
thereto, and Lessee's compliance with all of the terms and provisions hereof and
(b) to preserve, protect and perfect Lessor's or Assignee's right, title or
interest hereunder and in any Equipment, including, without limitation, such UCC
financing statements or amendments, corporate resolutions, certificates of
compliance, notices of assignment or transfers of interests, and restatements
and reaffirmations of Lessee's obligations and its representations and
warranties with respect thereto as of the dates requested by Lessor from time to
time. In furtherance thereof, Lessor may file or record this Lease or a
memorandum or a photocopy hereof (which for the purposes hereof shall be
effective as a financing statement) so as to give notice to third parties, and
Lessee hereby appoints Lessor as its attorney-in-fact to execute, sign, file and
record UCC financing statements and other lien recordation documents with
respect to the Equipment where Lessee fails or refuses to do so after Lessor's
written request, and Lessee agrees to r)ay or reimburse Lessor for anv filing,
recording or stamp fees or taxes arising from any such filings.
16. ASSIGNMENT
This Lease and all rights of Lessor hereunder shall be assignable by
Lessor absolutely or as security, without notice to Lessee, subject to the
rights of Lessee hereunder for the use and possession of the Equipment for so
long as no Event of Default has occurred and is continuing hereunder. Any such
assignment shall not relieve Lessor of its obligations hereunder unless
specifically assumed by the assignee, and Lessee agrees it shall not assert any
defense, rights of set-off or counterclaim against any assignee to which Lessor
shall have assigned its rights and interests hereunder, nor hold or attempt to
hold such assignee liable for any of Lessor's obligations hereunder. No such
assignment shall materially increase Lessee's obligations hereunder. LESSEE
SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS LEASE
OR ENTER INTO ANY SUBLEASE WITH RESPECT TO ANY OF THE EQUIPMENT WITHOUT THE
EXPRESS PRIOR WRITTEN CONSENT OF LESSOR.
17. LESSEE'S OBLIGATION UNCONDITIONAL
This Lease is a net lease and Lessee hereby agrees that it shall not be
entitled to any abatement of rents or of any other amounts payable hereunder by
Lessee, and that its obligation to pay all rent and any other amounts owing
hereunder shall be absolute and unconditional under all circumstances,
including, without limitation, the following circumstances: (i) any claim by
Lessee to any right of set-off, counterclaim, recoupment, defense or other right
which Lessee may have against Lessor, any seller or manufacturer of any
Equipment or anyone else for any reason whatsoever; 00 the existence of any
liens, encumbrances or rights of others whatsoever with respect to any
Equipment, whether or not resulting from claims against Lessor not related to
the ownership of such Equipment; or (iii) any other event or circumstances
whatsoever. Each Rent Payment or other amount paid by Lessee hereunder shall be
final and Lessee will not seek to recover all or any part of such payment from
Lessor for any reason whatsoever.