EXHIBIT 10.26
Chase Equipment Leasing, Inc. Addendum
To Master Lease Purchase Agreement dated 5/4/99
(as indicated above, hereinafter the "Lease")
Chase Equipment Leasing, Inc.
One Chase Square
Rochester, NY 14643
This Addendum is incorporated by reference into the above referenced Lease as if
set forth at length and Lessee and Lessor confirm all the terms and provisions
thereof except as specifically set forth herein to the contrary. The Lease shall
be amended as follows:
1. Section 2. TERM AND RENT: Delete part (ii) in its entirety.
2. Section 4. LESSEE REPRESENTATIONS AND COVENANTS:
Part (c) LIENS AND ENCUMBRANCES, is rewritten in its entirety as follows:
THE EQUIPMENT IS FREE AND CLEAR FROM ALL CLAIMS, LIENS AND ENCUMBRANCES
WHATSOEVER ON THE PART OF LESSEE (I.E. OTHER THAN AS A RESULT OF LESSOR'S
ACTIONS OR IN FAVOR OF LESSOR); LESSEE WILL DEFEND THE EQUIPMENT AGAINST ALL
LIENS (OTHER THAT LIENS IMPOSED BY REASON OF LESSOR'S ACTIONS) AND WILL NOT
SELL, ASSIGN, SUBLET, MORTGAGE, OR ALTER ANY OF THE EQUIPMENT LEASED
HEREUNDER OR ANY INTEREST IN THIS LEASE, AND ANY ATTEMPT TO SO SELL, ASSIGN,
SUBLET, MORTGAGE, HYPOTHECATE OR ALTER WILL CONSTITUTE A DEFAULT HEREUNDER
AND SUCH SALE, ASSIGNMENT, SUBLEASE, MORTGAGE OR HYPOTHECATION WILL BE VOID
AND WITHOUT EFFECT. FURTHERMORE, LESSEE MAY, FROM TIME TO TIME, REMOVE ANY
OF THE EQUIPMENT FROM THE LOCATION SPECIFIED IN THE SCHEDULE WITHOUT THE
PRIOR WRITTEN CONSENT OF LESSOR PROVIDED, HOWEVER, IN NO EVENT SHALL MORE
THAT FIFTEEN PERCENT (15%) OF THE AGGREGATE VALUE OF THE EQUIPMENT BE
LOCATED IN PUERTO RICO AT ANY ONE TIME. 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.
Part (d) USE AND OPERATION. The last sentence, beginning with "Further,
Lessee will not," and ending with "in real property," is deleted in its
entirety.
3. Section 6. LOSS OR DAMAGE:
Part (c) At the beginning of the first sentence, after "In the event of",
insert the word "material". In the same sentence, replace "Item of
Equipment" with material Item or Items of Equipment.
4. Section 8. INDEMNIFICATION: At the end of the fourth sentence, insert the
word "reasonable" before "losses". In the same sentence, in the parenthesis,
insert the word "reasonable" before "legal expenses".
5. Section 9. DEFAULT; REMEDIES:
In the first paragraph, part (a), change five (5) days to fifteen (15)
days.
In part (c), after the word "misleading", insert "in any material respect".
In part (e), delete "or any item" and substitute "or any material portion of
the Equipment".
Part (f) is rewritten in its entirety as follows: Lessee or any Guarantor shall
liquidate, dissolve, reorganize, merge into or with, or consolidate with any
other person, or purchase or otherwise acquire all or substantially all of the
assets of any other person or of any division thereof (each such liquidation,
dissolution, merger, consolidation, or acquisition being herein called a "
"Transaction") unless:(a) the surviving or acquiring person (the "Surviving
Corporation") is the Lessee and, if the Surviving Corporation is not the Lessee,
then the Surviving Corporation (x) is a corporation organized and existing under
the laws of the United States of America or any state thereof, substantially all
of the assets of which are located in the United States of America and (y)
expressly assumes, by an instrument in writing satisfactory to the Lessor, in
its reasonable determination, the obligations of the Lessee under this
Agreement; (b) none of the assets of the Lessee (other than assets, which may
not include any of the Equipment, representing the consideration delivered for
any person acquired by the Surviving Corporation in such Transaction) are
transferred to a person other than the Surviving Corporation; (c) no default has
occurred hereunder and is continuing or would result therefrom; and (d) in
Lessor's reasonable but exclusive discretion, there has been no material adverse
change in financial condition of the Surviving Corporation as compared to the
financial condition of the Lessee prior to the Transaction;
In part (g), at the end of the sentence, after the word "property", insert "(and
in the case where such filing is involuntary, the resulting proceeding shall not
have been dismissed within sixty (60) days)" and delete in its entirety the
phrase "or whenever Lessor may deem itself insecure hereunder".
Part (h) is rewritten in its entirety as follows: the transfer of more than
25% ownership interest in Lessee or any Guarantor by Shareholders, partners,
members or proprietors thereof in any year without Lessor's written consent;
provided, however, this subsection shall not apply to (x) such a transfer to any
existing shareholder, partner, member or proprietor or affiliate thereof or to
an immediate family member of such person or (y) a completed distribution in a
"public offering" (as that term is defined in the federal and applicable state
securities laws) of the securities issued by Lessee or any Guarantor and any
public trading of such securities subsequent to such public offering;
At the end of part (i), after "as amended" add "and such failure results in a
material adverse affect on the condition of Lessee or any material subsidiary or
any Guarantor, financial or otherwise"
In Part (k), in the second line, after "any other agreement", insert "with
respect to indebtedness for borrowed money". Also, in this part, change $50,000
to $500,000.
In part (j), change $50,000 to $500,000.
Part (n) is rewritten in its entirety as follows: Lessee or any Guarantor
shall violate any financial covenant contained in any agreement for borrowed
money in excess of $500,000, applicable to Lessee or Guarantor as of the
Commencement Date of any Schedule [and such default is not waived by any other
party to such agreement:] and all such financial covenants contained in any
agreement with The Chase Manhattan Bank 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.
In the second paragraph, part (4), after the word "cancelled", replace "and
without notice to Lessee" with "provided such claimed default is not remedied
within the specified cure period set forth herein, and with
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prior notice to Lessee".
Insert a new paragraph at the end of the second paragraph to read as
follows: "Notwithstanding anything to the contrary in the preceding
paragraph, in no event shall Lessee be deemed in default under (b), (i),
(j), (m), or (n) unless and until it shall have received fifteen days'
notice to cure any claimed default as specified, delivered in writing by
(i) overnight courier or (ii) confirmed receipt of fax to Lessee. The
fifteen day period shall commence from the date of the delivery of the
notice of default.
In the third paragraph, the second to the last sentence, after the word
"counterclaim", insert "(other than any compulsory counterclaim)". The last
sentence beginning with "Lessee irrevocably appoints" and ending with
"under this Lease or related thereto" is deleted in its entirety.
6. Section 14. FINANCIAL INFORMATION AND REPORTING:
Part (b) is rewritten in its entirety as follows: Lessee will furnish
Lessor with any and all information regarding Lessee's business, condition
or operations, financial or otherwise as Lessor may reasonably request from
time to time. Lessee will also furnish to Lessor any public filings Lessor
may submit in the process of becoming, or as, a public company.
Part (e), in the last sentence, after "at any time", insert "upon
reasonable notice".
7. Section 16. MISCELLANEOUS: In the sixth (6th) line, insert "reasonable"
between "all" and "costs". At the end of this section, insert a new
paragraph as follows: "Notwithstanding anything to the contrary herein, in
any litigation involving a dispute hereunder, the successful party shall be
entitled to reimbursement of its reasonable costs and attorneys fees
incurred in connection with such litigation".
Except as expressly modified hereby, all terms and provisions of the Lease shall
remain in full force and effect. The parties hereto have caused their duly
authorized officers to execute this Rider on the dates set forth below and,
unless otherwise specifically provided herein, this Rider shall operate to amend
the Lease only as it is incorporated by reference into Schedules
executed on or after the dates set forth below and not otherwise.
Chase Equipment Leasing, Inc. G+G Retail, Inc.
(Lessor) (Lessee)
By: /s/ Janice Schawille By: /s/ Scott Galin
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Title: Contract Admin. Title: President and Chief
------------------- Operating Officer
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Dated: 5/6/99 Dated: 5/4/99
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