EXHIBIT 10.25
Chase Equipment Leasing, Inc. Reference Number 00655200
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THIS MASTER LEASE PURCHASE AGREEMENT dated as of 5/4, 1999 (hereinafter referred
to as "Lease") by and between Chase Equipment Leasing, Inc., a New York
corporation, with a place of business located at One Chase Square, Rochester, NY
14643 (hereinafter referred to together with its assigns, if any, as "Lessor")
and G+G Retail, Inc., a corporation organized and existing under the laws of
the State of Delaware, with its mailing address and chief place of business at
520 Eighth Avenue, New York, NY 10018 (hereinafter referred to as "Lessee").
The Parties hereto for good and valuable consideration and intending to be
legally bound hereby agree as follows:
1. PROCEDURE FOR LEASING:
(a) SCHEDULES. Subject to the terms and conditions set forth herein,
Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor such
unit or units of equipment (the "Equipment" and individually sometimes "Item" or
"Item of Equipment") described in any Master Lease Schedule (a "Schedule") from
time to time executed by the parties pursuant hereto, and any and all such
Schedules are deemed a part hereof. Each Schedule incorporates by reference
this Lease and shall constitute, subject to Section 9 hereof, a separate lease.
Capitalized terms not otherwise defined herein have the meaning provided for in
any Schedule.
(b) CONDITIONS PRECEDENT. The obligation of Lessor to purchase Equipment
from the manufacturer or supplier thereof ("Supplier") and to lease the same to
Lessee under any Schedule is subject to receipt by Lessor prior to the
Commencement Date with respect to the Schedule of each of the following
documents in form and substance satisfactory to Lessor: (i) a Schedule relating
to the Equipment then being leased hereunder, (ii) a purchase order assignment,
(iii) a Certificate of Acceptance and Closing Certificate, (iv) a certificate of
insurance which complies with the requirements of Section 4(f) and the Schedule,
and (v) a bill of sale transferring title to each Item to Lessor and such other
documents and conditions as Lessor may reasonably require including Lessor's
determination that there has been no material adverse change in the financial
condition of Lessee or any Guarantor. Lessor hereby appoints Lessee its agent
for inspection and acceptance of each Item from the Supplier. Upon execution by
Lessee of the Certificate of Acceptance, each Item described therein will be
deemed to have been delivered to, and irrevocably accepted by Lessee for lease
hereunder.
2. TERM AND RENT:
The lease of and rent for Equipment will commence on the day specified in
the related Schedule as the Commencement Date, and will continue for the period
specified as the "term" therein as the same may be extended pursuant to the
terms hereof. Lessee promises to make each payment of rent during the term on
the due dates and in the amounts set forth in each Schedule without notice or
demand at Lessor's address set forth above or as otherwise directed by Lessor in
writing and no payment of rent will be refunded for any cause or reason
whatsoever. The parties hereto intend that the rents and other amounts payable
by Lessee hereunder will continue to be payable in all events unless the
obligation to pay same is terminated pursuant to the terms hereof. If any
payment hereunder falls due on a day on which Lessor is not open for business,
such payment shall be due and payable on the next preceding day on which Lessor
is open for business. To secure all obligations of Lessee under each Schedule,
Lessee hereby grants to Lessor a security interest in: (i) any security deposit
or advance rent paid by Lessee hereunder, each of which shall be in all cases
non-interest bearing; and (ii) all other funds, balances, accounts, proceeds of
collateral and/or other property of any kind of Lessee or in which Lessee has an
interest now or hereafter in the possession, custody, or control of Lessor or
The Chase Manhattan Bank and any of its direct or indirect affiliates and
subsidiaries, including without limitation Chase Securities, Inc..
3. LATE CHARGE:
If any rent or any other amount due hereunder from Lessee other than the
amounts due under this Section 3 is not paid within five (5) days after the due
date, Lessee agrees to pay a late charge equal to five percent (5%) on the
amount of such delinquent rent or other payment, but not exceeding the maximum
amount permissible under applicable law. The failure of Lessor to collect any
late charge will not constitute a waiver of Lessor's right with respect thereto.
Late charges will be due and payable on the due date for the next following
payment of rent.
4. LESSEE REPRESENTATIONS AND COVENANTS:
Lessee represents and warrants, and covenants and agrees, as follows and
each such representation, warranty and covenant shall be deemed made and renewed
as of the date hereof and as of the Commencement Date under each Schedule
without the necessity of any further act or instrument:
(a) GENERAL. (i) Lessee is duly organized and validly existing under
the laws of the state indicated at the outset; this Lease and each Schedule and
all instruments delivered in connection herewith and therewith have been duly
authorized by all necessary action, and duly executed and delivered and
constitute valid, legal and binding agreements, enforceable in accordance with
their terms except to the extent limited by applicable bankruptcy and insolvency
laws; and no such document nor Lessee's performance thereunder will conflict
with Lessee's organizational documents or with any indenture, contract or
agreement by which Lessee is bound or with any statute, judgment, decree, rule
or regulation binding upon Lessee; (ii) no consent or approval of any trustee or
holder of any indebtedness or obligation of Lessee, and no consent or approval
of any governmental authority, is necessary for Lessee's execution or
performance of this Lease; (iii) there is no litigation or other proceeding
pending, or to the best of the Lessee's knowledge, threatened against or
affecting Lessee which, if decided adversely to Lessee would adversely affect or
impair the title of Lessor to the Equipment or which, if decided adversely to
Lessee would materially adversely affect the business operations or financial
condition of Lessee; (iv) all balance sheets, statements of profit and loss and
other financial data that have delivered to Lessor with respect to Lessee are
complete and correct in all material respects, fairly present the financial
condition of the Lessee on the dates for which, and the results of its
operations for the periods for which, the same have been furnished and have been
prepared in accordance with generally accepted accounting principles
consistently applied; (v) there has been no material adverse change in the
condition of Lessee, financial or otherwise, since the date of the most recent
financial statements delivered to Lessor and, (vi) any reprogramming required to
permit the proper functioning in and following the year 2000, of (i) Lessee's
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which Lessee's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, has been completed. The cost to Lessee of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to Lessee
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a default or Event of Default hereunder
or a material adverse change in the condition of Lessee. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of Lessee and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Lease to be, sufficient to permit Lessee to conduct its business without
any material adverse change in the condition of Lessee.
(b) NO ABATEMENT. This is a net Lease and Lessee's promise to pay rent
and all other amounts hereunder is irrevocable and independent and not subject
to cancellation, termination, modification, repudiation, excuse or substitution
without the written consent of Lessor. Lessee agrees to pay all such amounts
when due by acceleration or otherwise without abatement, irrespective of any
claims, demands, set-offs, actions, suits, or proceedings that it may have or
assert against Lessor or any Supplier or manufacturer of Equipment. Lessor will
have no liability to Lessee upon the failure of any Supplier, manufacturer or
one or more others to perform any obligations at any time due to Lessor, Lessee
or any other person and, in all such events, Lessee waives any right in any
suit, action or proceeding to any exemplary, punitive or consequential damages
whatsoever.
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(c) LIENS AND ENCUMBRANCES. THE EQUIPMENT IS FREE AND CLEAR FROM ALL
CLAIMS, LIENS AND ENCUMBRANCES WHATSOEVER; LESSEE WILL DEFEND THE EQUIPMENT
AGAINST ALL LIENS AND WILL NOT SELL, ASSIGN, SUBLET, MORTGAGE, OR ALTER ANY OF
THE EQUIPMENT LEASED HEREUNDER OR ANY INTEREST IN THIS LEASE, NOR WILL LESSEE
REMOVE ANY OF THE EQUIPMENT FROM THE LOCATION SPECIFIED IN THE SCHEDULE WITHOUT
THE PRIOR WRITTEN CONSENT OF LESSOR, AND ANY ATTEMPT TO SO SELL, ASSIGN, SUBLET,
MORTGAGE, HYPOTHECATE, ALTER OR REMOVE WILL CONSTITUTE A DEFAULT HEREUNDER AND
SUCH SALE, ASSIGNMENT, SUBLEASE, MORTGAGE, OR HYPOTHECATION WILL BE VOID AND
WITHOUT EFFECT. In order to secure all obligations of Lessee hereunder, Lessee
assigns and grants to Lessor a security interest in all rights, powers and
privileges under any sublease of the Equipment hereafter authorized in writing
by Lessor.
(d) USE AND OPERATION. Lessee will at all times use the Equipment only in
compliance with applicable laws and consistent with the instructions supplied
and use intended for such Equipment by the Supplier and manufacturer thereof.
Lessee will not use the Equipment to carry, contain or produce directly or
indirectly any hazardous substances as defined under applicable federal, state
or local law or regulation. Lessee will not without the prior written consent of
Lessor affix or install any accessory, equipment or device on any Equipment
leased hereunder if such addition will impair the originally intended function
or use of such Equipment. All additions, repairs, parts, supplies, accessories,
equipment and devices furnished, attached or fixed to any Equipment will
thereupon without further act or instrument become the property of Lessor
(except such as may be removed without in any way affecting or impairing the
originally intended function, condition or use of such Item). Further, Lessee
will not, without the prior written consent of Lessor and subject to such
conditions as Lessor may impose for its protection, affix to or install any
Equipment in any other personal property or in real property.
(e) SERVICE AND MAINTENANCE. Lessee will at its sole expense at all times
maintain all Equipment in good operating order, repair, condition and appearance
and keep all Equipment protected from the elements, except during use in the
normally contemplated manner. At Lessor's request, Lessee will at its expense
affix in a prominent position on each Item of Equipment plates, tags or other
identifying labels showing ownership of the Equipment by Lessor. Lessor will at
all reasonable times have the right to inspect the Equipment and Lessee's
maintenance records related thereto. Lessee at its sole expense will make all
alterations and modifications with respect to the Equipment that may at any time
during the term of this Lease or any Schedule hereunder be required to comply
with any applicable law or any governmental rule or regulation.
(f) INSURANCE. Lessee hereby assumes all risks of damage, loss, theft, or
destruction, partial or complete, with respect to each Item of Equipment during
the term of the Lease and during any storage period until Lessee has returned or
disposed of the Equipment as provided for herein. Lessee will at its own expense
keep each Item of Equipment insured for an amount at least equal to the Lessor's
Cost of the Equipment as set forth in the Schedule against all risks with
extended coverage and insurance companies acceptable to Lessor with Lessor named
as loss payee. Lessee agrees to obtain and maintain at its expense with
Insurance companies acceptable to Lessor general public liability insurance
naming Lessor as an additional insured together with Lessee, as their interests
may appear, in no event less than One Million Dollars ($1,000,000) or such
greater amount, if any, as specified in the related Schedule against claims for
bodily injury, death or property damage arising out of the use, ownership,
possession, operation or condition of the Equipment. Each Insurer will agree, by
endorsement upon the policy or policies issued by it, or by independent
instruments furnished to Lessor, that Lessor will have the power to file claims
against the insurer under said policy, that it will give Lessor thirty (30) days
written notice before the policy or policies in question will be altered,
expired or canceled, and that no act or default of any person other than Lessor,
its agents, or those claiming under Lessor, will affect Lessor's right to
recover under such policy or policies in case of loss. Although any and all
obligations imposed on the insured shall be obligations solely of Lessee, Lessee
will deliver to Lessor the policies or evidence of insurance satisfactory to
Lessor prior to the Commencement Date and thirty (30) days prior to each
expiration date thereof for each Item of Equipment. The failure of Lessee to
secure or maintain such Insurance will constitute a default under this Lease. In
the event of such breach, Lessor may, but will not be obligated to, obtain such
insurance. In the event that Lessor obtains such insurance, an amount equal to
the cost of such insurance will be deemed supplemental rent to be paid forthwith
by Lessee. In the event that any policies insuring against liability risks
described above shall now or hereafter provide coverage on a "claims made"
basis, Lessee shall continue to maintain such policies in effect for a period of
not less than three years after the expiration of the Lease term of any
Schedules.
(g) DISPOSITION OF EQUIPMENT: Upon termination of any Schedule under the
Lease by expiration of the term hereof, except as provided for in Section 9,
Lessor will, upon satisfaction of all Lessee's obligations to Lessor with
respect to any particular Item of Equipment and provided Lessee is not otherwise
then in default hereunder or under any other Schedule, transfer title to such
Item to Lessee.
5. TRANSFER OF WARRANTIES:
To the extent permitted by law and contract, Lessor will pass through
without representation to Lessee the benefit of all warranties, if any, of the
Supplier of the Equipment and, so long as there is no default hereunder, Lessee
will have the right to, and will, directly avail itself of all warranties by the
Supplier with respect to the Equipment. Lessor will not take any action which
prejudices Lessee's right to, or under the terms of, any such warranty. If
subsequent to the Commencement Date Lessee shall determine that the Equipment is
unsatisfactory for any reason including any failure of the Equipment to conform
to the specifications set forth in any purchase order. Lessee shall make any
claim on account thereof solely against the Supplier and Lessee will give Lessor
notice of any such claim made by Lessee against any Supplier and any cash
settlement of any such claim will be payable solely to Lessor.
6. LOSS OR DAMAGE:
(a) Lessee hereby assumes and is solely responsible for the entire risk of
use and operation of the Equipment and for each and every accident or hazard
resulting therefrom and all losses and damages associated therewith howsoever
arising.
(b) In the event of total loss, destruction, theft, confiscation or damage
beyond repair (determined without reference to the remaining term with respect
thereto) to the Equipment or any Item (a "Casualty Occurrence"), Lessee will pay
to Lessor on the next due date for rent following the Casualty Occurrence or on
the last day of the term thereof, whichever first occurs, any unpaid rent due
with respect to such Equipment plus an amount determined by application of the
liquidated damage provision in the third paragraph of Section 9 hereof. Upon
payment of such amounts, and provided no default exists hereunder, Lessee will
be entitled to recover possession of such Item and title thereto will vest in
Lessee free and clear of the right and interest of Lessor.
(c) In the event of damage to any Item of Equipment which does not amount
to a Casualty Occurrence, Lessee will give prompt notice of such damage to
Lessor and at Lessee's sole cost and expense promptly repair such Item to its
previous condition which assumes Lessee has met all of its obligations required
for maintenance hereunder. Provided Lessee is not in breach or default of this
Lease, any proceeds of insurance received by Lessor with respect to any such
loss will be paid over by Lessor to Lessee to the extent necessary to reimburse
Lessee for costs incurred and paid by Lessee in repairing such damaged
Equipment, but only upon evidence satisfactory to Lessor that such repairs have
been accomplished.
7. FIRST PRIORITY LIEN:
Lessee represents and warrants to Lessor for each Schedule that upon the
filing of the financing statements delivered to Lessor on or prior to the
respective Commencement Date in the jurisdiction(s) where the Equipment is
located as indicated in the related Schedule, then Lessor shall have a first
prior perfected security interest in the Equipment free and clear of all other
liens and encumbrances except the interest of Lessee hereunder.
8. INDEMNIFICATION:
LESSEE ACKNOWLEDGES THAT IT ALONE SELECTS THE EQUIPMENT AND THE SUPPLIER(S)
THEREOF. LESSEE UNDERSTANDS AND AGREES THAT LESSOR MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO THE EQUIPMENT
INCLUDING THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR FITNESS FOR ANY
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PARTICULAR PURPOSE, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT AS IS. NO
DEFECT OR UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE OF THE OBLIGATION TO
PAY RENT OR OF ANY OTHER OBLIGATION UNDER THIS LEASE. Accordingly, Lessee agrees
to indemnify, save and keep harmless Lessor, its agents, employees, successors
and assigns from and against any and all losses, damages, expenses (including
legal expenses), penalties, injuries, claims, actions and suits of whatsoever
kind and nature, in contract or tort, howsoever arising from any cause
whatsoever including, but not limited to, Lessor's strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, purchase, financing,
acceptance or rejection of Equipment, the ownership of Equipment during the term
of the Lease, and the delivery, lease, possession, maintenance, uses, condition,
return or operation of Equipment (including without limitation, latent and other
defects, whether or not discoverable by Lessor or Lessee and any claim for
patent, trademark or copyright infringement); or (ii) the condition of Equipment
sold or disposed of after use by Lessee, any sublessee or employee of Lessee.
Lessee will, upon request, at its expense, defend any and all actions based on,
or arising out of, any of the foregoing. This indemnification shall survive the
expiration or cancellation of the Lease.
9. DEFAULT; REMEDIES:
Each of the following will constitute a default hereunder; (a) Lessee fails
to pay rent within five (5) days from and after the date such payment of rent is
due and payable or Lessee fails to pay any other amount when due under any
Schedule; (b) Lessee fails to maintain the insurance required hereunder or
breaches any other term, provision, obligation or covenant hereof (including
without limitation any Schedule) or commits any other act of default specified
in this Lease; (c) any representation or warranty of Lessee contained herein or
in any other document or instrument delivered in connection herewith or made
from time to time hereafter is false or misleading when made; (d) Lessee or any
guarantor, surety, endorser or pledgor of property given to secure Lessee's
obligations hereunder ("Guarantor") becomes insolvent, ceases to do business as
a going concern, or transfers or sells all or substantially all of its assets
without the prior written consent of Lessor; (e) the Equipment or any Item is
abused, illegally used, or misused; (f) the death, dissolution, merger,
consolidation or reorganization of Lessee or any Guarantor; (g) Lessee or any
Guarantor makes any assignment for the benefit of creditors, or if a petition in
bankruptcy, reorganization, insolvency, receivership or the like is filed with
respect to Lessee or any Guarantor or property of Lessee or any Guarantor is
attached or a receiver, trustee or liquidator is appointed for Lessee or any
Guarantor or any of Lessee's or Guarantor's property or whenever Lessor may deem
itself insecure hereunder; (h) the transfer of more than a 25% ownership
interest in Lessee or any Guarantor by shareholders, partners, members or
proprietors thereof in any year without Lessor's prior written consent, (i)
Lessee or any Guarantor (x) incurs any accumulated funding deficiency within the
meaning of the Employee Retirement Income Security Act of 1974, as amended from
time to time and the regulations thereunder, equal to 5% of Lessee's
consolidated tangible net worth (as defined by generally accepted accounting
principles), or (y) incurs any liability of comparable size to the pension
Benefit Guaranty Corporation, (j) Lessee or any material subsidiary or any
Guarantor fails to comply with the provisions of the Fair Labor Standards Act of
1938, as amended, (k) Lessee or any Guarantor fails to pay or perform or observe
any term, covenant, agreement or condition contained in, or there shall occur
any payment or other default under or as defined in, any other agreement
applicable to Lessee or any Guarantor or by which Lessee or any Guarantor is
bound (as used herein, an "Other Agreement") involving a liability, indebtedness
or performance obligation of Lessee or any Guarantor with potential liability to
Lessee or any Guarantor in an amount equal to or in excess of $50,000, which
shall not be remedied within the period of time (if any) within which such Other
Agreement permits such default to be remedied, regardless of whether such
default (i) is waived by any other party to such Other Agreement or (ii)
produces or results in the cancellation of such Other Agreement or the
acceleration of such liability, indebtedness or other obligation; (l)
attachment, distraint, levy, execution or final judgment for the payment of
money aggregating in excess of $50,000 will be outstanding against Lessee or its
property for more than sixty (60) days from the date of entry and will not have
been discharged in full or stayed or fully bonded; (m) Lessee or any Guarantor
shall suffer the loss of any material license or franchise when Lessor shall
reasonably conclude that such loss fairly impairs Lessee's or such Guarantor's
ability to perform its obligations required hereunder or with respect hereto; or
(n) Lessee or any Guarantor shall violate any financial covenant contained in
any agreement for borrowed money applicable to Lessee or Guarantor as of the
Commencement Date of any Schedule and all such financial covenants shall survive
the satisfaction of debt applicable thereto and shall be deemed incorporated
herein by reference and remain fully applicable to Lessee's obligations
hereunder.
Upon any such default, Lessor, at its option, may do any one or more of the
following: (1) declare this Lease and any or all Schedules in default upon
notice to Lessee, whereupon the entire amount of rent and all other amounts
remaining to be paid over the balance of the term of all Equipment then leased
thereunder, computed from the date of Lessee's default, will become immediately
due and payable and be accelerated; (2) proceed by appropriate court action or
actions to enforce Lessee's performance of this Lease and/or to recover damages
for the breach thereof; (3) cancel this Lease and any or all Schedules upon
notice to Lessee; (4) whether or not this Lease or any Schedules be so
cancelled, and without notice to Lessee, repossess the Equipment wherever found,
with or without legal process, and for this purpose Lessor and/or its agents may
enter upon any premises of or under control or jurisdiction of Lessee or any
agent of Lessee without liability for suit, action or other proceeding by Lessee
(any damages occasioned by such repossession being hereby expressly waived by
Lessee except for damages occasioned by gross negligence or willful misconduct)
and remove the Equipment therefrom. Lessor's remedies as provided herein are not
exclusive but are cumulative and in addition to all other remedies in Lessor's
favor at law, in equity or in bankruptcy. The receipt and acceptance by Lessor
of any rent or other payment after a default will not be deemed to be a waiver
of such default by Lessor. Lessor shall not, by any act, delay, omission, or
otherwise, be deemed to have waived any default or any of its rights or remedies
hereunder unless such waiver be in writing, signed by the Lessor, and then only
to the extent therein set forth. In the event that any court determines that any
provision in this Lease is invalid or unenforceable in whole or in part, such
determination will not prohibit Lessor from establishing its damages as a result
of any breach of this Lease in any action in which Lessor seeks to recover such
damages. Any repossession or resale of any Equipment will not bar an action for
damages for breach of this Lease, and the bringing of an action or the entry of
judgment against Lessee will not bar Lessor's right to repossess any or all
Equipment. Upon cancellation of any Schedule upon default, Lessee will, at its
sole cost and expense, cease using the Equipment for up to ninety (90) days
while maintaining the insurance required above, and promptly return the
Equipment to Lessor when directed to do so F.O.B. the destination specified by
Lessor, in the same condition as received, reasonable wear and tear and normal
depreciation excepted. Lessee shall pay on demand holdover rent equal to a full
monthly rent for each month or any day thereof during which Lessee fails to
return the Equipment when so directed by Lessor and this obligation is without
limitation to any consequential damages for which Lessee may be responsible as a
result of such failure to return the Equipment.
With respect to any Equipment returned to Lessor, or repossessed by Lessor
pursuant to provision (4) above, Lessor may hold or use such Equipment for any
purpose whatsoever or either sell same at private or public sale, for cash or
credit, or re-lease same for such term and upon such rental as will be solely
determined by Lessor. In the event the Lessor is able to sell or re-lease all or
any Equipment returned to Lessor then the proceeds of any sale or re-leasing of
such Equipment, after first deducting therefrom all costs and expenses of
repossession, storage, repairs, reconditioning, sale, re-leasing, attorneys'
fees and collection fees with respect to such Equipment, shall be deducted from
the damages for which Lessee is obligated hereunder. In the event of the sale or
releasing by Lessor of any such Equipment after default hereunder or in the
event of a Casualty Occurrence under Section 6 hereof, then Lessee will be
liable for, and Lessor may forthwith recover from Lessee as liquidated damages
for breach or termination of this Lease, and not as a penalty, an amount equal
to the sum of (X) the entire amount of rent which would have accrued for the
balance of the term for such Equipment computed from the date of Lessee's
default or, in the case of a Casualty Occurrence, computed as of the rent
payment date immediately preceding the date of the Casualty Occurrence
discounted in each case as provided for hereinafter, plus (Y) any final payment
due under the Schedule discounted as provided for hereinafter, less (Z) the
proceeds, if any, of any sale or re-leasing of such Equipment, after first
deducting therefrom all costs and expenses of repossession, storage, repairs,
reconditioning, sale, re-leasing, attorneys' fees and collection fees with
respect to such Equipment provided, however, the amount for which Lessee shall
be obligated as liquidated damages
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shall in no event be an amount less than 10% of Lessor's Cost. If Lessee fails
to deliver any Equipment to Lessor or Lessor is unable, for any reason, to
effect repossession of any Equipment, then with respect to such Equipment,
Lessee will be liable for, and Lessor may forthwith recover from Lessee as
liquidated damages for breach or termination of this Lease, and not as a
penalty, an amount equal to the sum of the amounts specified in items (X) and
(Y) above for such Equipment. Whether or not any Equipment is returned to, or
repossessed by Lessor, as aforesaid, Lessee will also be liable for, and Lessor
may forthwith recover from Lessee, all unpaid rent and other unpaid sums that
accrued prior to the date of Lessee's default. In addition to the foregoing,
Lessor may also recover from Lessee all costs and expenses, including without
limitation fees of collection agencies and reasonable attorneys' fees, including
the allocated costs and fees of Lessor's in-house legal counsel, incurred by
Lessor in exercising any of its rights or remedies hereunder. Since pursuant to
the foregoing Lessor may receive or recover payment of the amounts specified in
clause (1) of the preceding paragraph or the amounts specified in items (X) and
(Y) above earlier than Lessor would otherwise be entitled to receive or recover
same but for Lessee's default, such amounts will be discounted to their then
present value at the rate of six percent (6%) per annum, and there will be added
to such amounts, after such discount, interest at the rate specified in Section
12 hereof from the date of Lessee's default up to the date of the payment of
such amounts to Lessor. Lessee irrevocably consents to the in personam
jurisdiction of the federal and/or state courts located in the State of New York
over controversies arising from or relating to this Lease or any obligation with
respect thereto and waives the right to impose any counterclaim or offset of any
nature in any such litigation. Lessee irrevocably appoints each and every owner,
partner, member and/or officer of Lessee as its attorney upon whom may be served
by certified mail any process, notice or pleading in any action or proceeding
against it under this Lease or related thereto.
10. ASSIGNMENTS:
LESSOR MAY WITHOUT LESSEE'S CONSENT ASSIGN OR OTHERWISE TRANSFER OR GRANT A
SECURITY INTEREST IN ITS RIGHT AND INTEREST IN ANY ITEM OR SCHEDULE AND THE RENT
DUE OR TO BECOME DUE THEREUNDER AND WHEN SO ASSIGNED, TRANSFERRED OR ENCUMBERED,
EACH SCHEDULE WILL BE FREE OF ANY COUNTERCLAIM, SET-OFF, DEFENSE, OR CROSSCLAIM
BY LESSEE AS AGAINST LESSOR OR SUCH ASSIGNEE WHENEVER ARISING, BEFORE OR AFTER
SUCH SALE, ASSIGNMENT, TRANSFER OR SECURITY GRANT BUT NO SUCH ACTION WILL
INCREASE LESSEE'S OBLIGATIONS HEREUNDER, EXCEPT THAT UPON NOTICE TO LESSEE
THEREOF, LESSEE AGREES TO DIRECT ALL PAYMENTS HEREUNDER, IF REQUESTED, TO
LESSOR'S ASSIGNEE. Lessor may provide lease information on a confidential basis
to any prospective purchaser, assignee or participant.
11. PAYMENT OF TAXES:
Lessee agrees to pay promptly when due, and to Indemnify and hold Lessor
harmless from, all license, title and registration fees whatsoever, all levies,
imposts, duties, charges or withholdings whatsoever, and all sales, use,
personal property, franchise (however calculated), and other taxes whatsoever
(together with any penalties, fines or interest thereon) whether assessed,
levied or imposed by any governmental or taxing authority against or upon Lessor
or otherwise, with respect to any Equipment or the purchase, acquisition,
ownership, delivery, leasing, possession, use, operation, control, return or
other disposition thereof, or the rents, receipts or earnings arising therefrom,
or with respect to this Lease, excluding, however, (i) any such taxes or charges
to the extent they are included in Lessor's Cost, (ii) any federal taxes levied
on Lessor's net income, or (iii) state or local taxes levied on Lessor's net
income, as net income is determined under, and at rates which do not exceed
those originally imposed by the jurisdiction in which the Equipment is located
as specified in the related Schedule. In the event any such fees, levies,
imposts, duties, charges or taxes are paid by Lessor, or if Lessor be required
to collect or pay any thereof. Lessee will reimburse Lessor therefor (plus any
penalties, fines or interest thereon) promptly upon demand. Until Lessor
notifies Lessee to the contrary, Lessee will promptly before any penalty
attaches, prepare and file in Lessor's name or on Lessor's behalf all personal
property tax returns covering the Equipment and Lessee will pay the personal
property taxes levied or assessed thereon directly to the levying authority. If
Lessor timely notifies Lessee that Lessor will prepare and/or file any such
return, Lessee will, promptly upon being invoiced by Lessor, reimburse Lessor
for the full amount of such personal property taxes so paid by Lessor. If any
capital adequacy requirements are imposed upon Lessor or its parent which
require the maintenance of additional capital or impose additional expenses as a
result of this Lease, and the effect of such requirements is to reduce Lessor's
expected rate of return hereunder, Lessee shall pay to Lessor such amount or
amounts as may be necessary to compensate Lessor for such reduction. The
indemnification obligations of Lessee under this Section will continue in full
force and effect notwithstanding the expiration or other cancellation hereof.
Lessee will either provide Lessor a copy of all property and other tax returns
filed hereunder by Lessee in Lessor's name or on Lessor's behalf or provide to
Lessor an affidavit of a responsible corporate officer certifying that the
property taxes so identified therein have been reported and are current. The
amount which Lessee shall be required to pay Lessor with respect to any
obligation which is subject to indemnification under this Section 11 shall be an
amount sufficient to restore Lessor to the same position, after considering the
effect of the receipt of such indemnification on its United States federal
income taxes and state and city income taxes or franchise taxes based on net
income, that it would have been in had such indemnification not been required
hereunder.
12. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS:
In case of failure of Lessee to comply with any provision of this Lease or
any Schedule, Lessor will have the right, but will not be obligated, to effect
such compliance in whole or in part, and all money spent by and expenses of
Lessor will be paid by Lessee forthwith and will bear interest at the daily
equivalent of eighteen percent (18%) per annum from the date said obligation was
due. Lessor's action in effecting such compliance will not be a waiver of
Lessee's default. All such money spent by and expenses of Lessor and any other
obligation assumed or incurred by Lessor in effecting such compliance will
constitute additional rent payable to Lessor with the next rent payment.
13. NOTICES:
All notices required or permitted to be given hereunder will be in writing
and will be deemed given and received three (3) days after first deposit in the
United States mail if sent by registered or certified mail to the address of
Lessor or Lessee stated herein or in any Schedule or to such other place as
either party may in writing direct pursuant to this Section. Notice by hand
delivery shall be deemed given and received upon delivery. Notice by overnight
courier shall be deemed given and received on the date scheduled for delivery.
14. FINANCIAL INFORMATION AND REPORTING:
(a) Lessee shall annually, within ninety (90) days after the close of
Lessee's fiscal year, furnish to Lessor an audit report of financial statements
of Lessee (including a balance sheet as of the close of such year and statements
of income, changes in financial condition and shareholder's equity for such
year) prepared in accordance with generally accepted accounting principles and
certified by Lessee's independent public accountants. Lessee shall also provide
quarterly financial statements of Lessee similarly prepared for each of the
first three quarters of each fiscal year, which shall be certified (subject to
normal year-end adjustments) by Lessee's chief financial officer and furnished
to Lessor within forty-five (45) days following the end of the quarter.
(b) Lessee will furnish Lessor with any and all information regarding
Lessee's business, condition or operations, financial or otherwise, which Lessee
furnishes to any other creditor. This information shall be furnished to Lessor
at the same time it is furnished to such other creditor.
(c) or Lessee will immediately furnish Lessor with such further
information regarding Lessee's business, condition, property, assets or
operations, financial otherwise, as Lessor may from time to time reasonably
request, all prepared in form and detail reasonably satisfactory to Lessor.
(d) Lessee will at all times maintain true and complete records and books
of account including, without limiting the generality of the foregoing,
appropriate reserves for possible losses and liabilities, all in accordance with
generally accepted accounting principles consistently applied.
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(e) Lessee shall permit, and cause any subsidiary to permit,
representatives of Lessor to visit and inspect any of the properties of Lessee
or any Subsidiary, to examine its or their corporate or partnership books and
records, to make extracts or copies of such books and records, and to discuss
its or their affairs, finances and accounts with its or their officers or
partners, as applicable. The foregoing may be done at any time within regular
business hours.
(f) Lessee will promptly notify Lessor in writing of the commencement of
any litigation to which Lessee or any of its subsidiaries or affiliates may be a
party (except for litigation in which Lessee's (or the affiliate's) contingent
liability is fully covered by insurance) which, if decided adversely to Lessee
would adversely affect or impair the title of Lessor to the Equipment or which,
if decided adversely to Lessee would materially adversely affect the business
operations or financial condition of Lessee. In addition, Lessee will
immediately notify Lessor, in writing, of any judgment against Lessee if such
judgment would have the effect described in the preceding sentence.
15. ADDITIONAL DOCUMENTS:
Lessee agrees to execute or obtain and deliver to Lessor at Lessor's
request such additional documents as Lessor may reasonably deem necessary to
protect Lessor's interest in the Equipment and this Lease including, without
limitation, financing statements, and Lessee hereby authorizes Lessor to execute
in Lessee's name as Lessee's attorney-in-fact any financing statements and
amendments thereto necessary or appropriate to protect Lessor's interest
hereunder. Lessee will pay, or reimburse Lessor on demand, for any filing fees
or expenses incurred by Lessor in connection with any such additional documents.
Lessee will obtain, at Lessee's sole expense, from each owner, landlord,
mortgagee or other person having an encumbrance, lien or other interest on or in
the premises in which the Equipment is or will be located, all necessary
consents to the installation and use of the Equipment therein and the removal
thereof in accordance with the terms of this Lease, together with waivers of
claim with respect to the Equipment, and record the same when and where
necessary. Lessee hereby designates Lessor its attorney-in-fact and authorizes
and empowers Lessor to execute, endorse and complete in Lessee's name and on
Lessee's behalf all instruments representing the proceeds of any security or
insurance for the Lease or Equipment thereunder, all financing statements and
other documents including Schedules and Riders and to insert thereon all dates,
amounts and serial numbers as necessary or appropriate to provide to Lessor the
benefits anticipated by any Schedule.
16. MISCELLANEOUS:
The validity, construction and performance of this Lease and each Schedule
will in all respects be governed by the laws of the State of New York without
reference to conflict of law provisions. The Lease will not be binding on Lessor
until executed by an authorized officer of Lessor. LESSOR AND LESSEE WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING HEREFROM OR RELATED HERETO.
Any provision herein contained which may be illegal, unenforceable, or
inconsistent with applicable law or any governmental rule or regulation will be
deemed modified or altered to conform thereto, or otherwise omitted but shall in
no way impair the legality or enforceability of the remaining Lease provisions.
Lessee shall promptly pay (or reimburse, as Lessor may elect) all costs and
expenses including reasonable attorneys' fees, including the allocated costs and
fees of Lessor's in-house legal counsel, which Lessor has or may hereafter incur
in connection with the negotiation and preparation of this Lease and any
amendment, modification, consent or waiver hereunder. If more than one party
executes this Lease as Lessee, each such party shall be jointly and severally
bound by the terms and provisions of this Lease. Any person who signs as an
officer or agent for a corporation, partnership or other entity warrants that he
has authority from such corporation, partnership or other entity to enter into
this Lease on its behalf. Each Item of Equipment delivered pursuant to this
Lease to a subsidiary of Lessee or to any entity or person designated by Lessee,
whether at the request of Lessee or such subsidiary, entity or person shall be
Equipment for all purposes of this Lease, and Lessee shall be and remain
primarily liable for the obligations under this Lease with respect to such
Equipment. Lessor shall not be obligated to purchase and deliver any Item of
Equipment unless Lessor has executed a Schedule covering the Equipment.
17. ENTIRE AGREEMENT:
The Lease and any instrument referred to herein together with any
Schedule(s), Attachment(s) or Rider(s) signed by the parties or delivered in
connection herewith constitute the entire agreement of the parties with respect
to the subject matter hereof and will collectively constitute the Lease with
respect to an Item of Equipment and supersede all negotiations and prior written
or oral agreement of the parties with respect thereto. No agent or employee of
the Supplier is authorized to bind Lessor to the Lease, to waive or alter any
term or condition herein or add any provision hereto. No modification of the
Lease or waiver of any of its provisions or conditions will be valid unless in
writing and signed by Lessor and Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
date set forth above.
Chase Equipment Leasing, Inc. (Lessor) G+G Retail, Inc. (Lessee)
By: /s/ Janice Schawille By: /s/ Scott Galin
---------------------------- ----------------------------
Contract Administrator President and Chief
Operating Officer
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Master Lease Schedule
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None.
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