EX. 10.4
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement") is made as of the 29th day of
December, 1997, between GENERAL ELECTRIC CAPITAL CORPORATION, with an office at
4 North Park Drive, Suite 500, Hunt Valley, Maryland 21030 (hereinafter called,
together with its successors and assigns, if any, "Lessor"), and WESTERN BEEF,
INC., a Delaware corporation with its mailing address and chief place of
business at 47-05 Metropolitan Avenue, Ridgewood, NY 11385 (hereinafter called
"Lessee").
WITNESSETH:
1. LEASING:
(a) This Agreement shall be effective from and after the date of execution
hereof. Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("Equipment") described in Annex A to any schedule hereto ("Schedule"). Terms
defined or specified in a Schedule and not otherwise defined herein shall have
the meanings ascribed to them in such Schedule.
(b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or prior to
the earlier of the Lease Commencement Date or Last Delivery Date therefor, of
each of the following documents in form and substance satisfactory to Lessor:
(i) a Schedule relating to the Equipment then to be leased hereunder, (ii) a
Bill of Sale, in the form of Annex B to the applicable Schedule, in favor of
Lessor, (iii) evidence of insurance which complies with the requirements of
Section 6, and (iv) such other documents as Lessor may reasonably request.
Simultaneously with the execution of the Bill of Sale, Lessee shall also
execute a Certificate of Acceptance, in the form of Annex C to the applicable
Schedule, covering all of the Equipment described in the Bill of Sale.
Upon execution by Lessee of any Certificate of Acceptance, the Equipment
described thereon shall be deemed to have been delivered to, and irrevocably
accepted by, Lessee for lease hereunder.
(c) LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY
ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT
MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED
HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY MATERIALS OR WORKMANSHIP,
MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY, PATENT,
TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All such risks, as between Lessor
and Lessee, are to be borne by Lessee. Without limiting the foregoing, Lessor
shall have no responsibility or liability to Lessee or any other person with
respect to any of the following (i) any liability, loss or damage caused or
alleged to be caused directly or indirectly by any Equipment, any inadequacy
thereof, any deficiency or defect (latent or otherwise) therein, or any other
circumstance in connection therewith; (ii) the use, operation or performance of
any Equipment or any risks relating thereto; (iii) any interruption of service,
loss of business or anticipated profits or consequential damages; or (iv) the
delivery, operation, servicing, maintenance, repair, improvement or replacement
of any Equipment. If, and so long as, no Default (as hereinafter defined) exists
under this Agreement, Lessee shall be, and hereby is, authorized during the Term
(as hereinafter defined) to assert and enforce, at Lessee's sole cost and
expense, from time to time, in the name of and for the account of Lessor and/or
Lessee, as their interests may appear, whatever claims and rights Lessor may
have against any Supplier of the Equipment.
2. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder (the "Rent") and Lessee's right to use the
Equipment shall commence on the date of execution by Lessee of the Certificate
of Acceptance for such Equipment (the
"Lease Commencement Date"). The term of this Agreement (the "Term") shall be the
period specified in the applicable Schedule. If any Term is extended or renewed,
the word "Term" shall be deemed to refer to all extended or renewed terms, and
all provisions of this Agreement shall apply during any extended or renewed
terms, except as otherwise may be specifically provided in writing.
(b) Rent shall be paid to Lessor electronic funds transfer in the manner
prescribed by Lessor, or by such other method as Lessor may direct in writing;
and shall be effective upon receipt. Payments of Rent shall be in the amount set
forth in, and due in accordance with, the provisions of the applicable Schedule.
In no event shall any Rent payments be refunded to Lessee. If Rent is not paid
within ten (10) days of its due date, Lessee agrees to pay a late charge of
Three Cents ($0.03) per dollar on, and in addition to, the amount of such Rent
but not exceeding the lawful maximum, if any.
(c) This Agreement is a net lease. Lessee's obligation to pay Rent and
other amounts due hereunder shall be absolute and unconditional. Lessee shall
not be entitled to any abatement or reductions of, or set-offs against, said
Rent or other amounts, including, without limitation, those arising or allegedly
arising out of claims (present or future, alleged or actual, and including
claims arising out of strict liability in tort or negligence of Lessor) of
Lessee against Lessor under this Agreement or otherwise. This Agreement shall
not terminate and the obligations of Lessee shall not be affected by reason of
any defect in or damage to, or loss of possession, use or destruction of, any
Equipment from whatsoever cause. It is the intention of the parties that Rents
and other amounts due hereunder shall continue to be payable in all events in
the manner and at the times set forth herein unless the obligation to do so
shall have been terminated pursuant to the express terms hereof.
3. TAXES:
Lessee shall have no liability for taxes imposed by the United States of America
or any State or political subdivision thereof which are on or measured by the
net income of Lessor. Lessee shall report (to the extent that it is legally
permissible) and pay promptly all other taxes, fees and assessments due,
imposed, assessed or levied against any Equipment (or the purchase, ownership,
delivery, leasing, possession, use, or operation thereof), this Agreement (or
any rentals or receipts hereunder), any Schedule, Lessor or Lessee by any
foreign, Federal, state or local government or taxing authority during or
related to the term of this Agreement, including, without limitation, all
license and registration fees, and all sales, use, personal property, excise,
gross receipts and franchise taxes (but excluding those imposed in lieu of
income taxes), stamp or other taxes, imposts, duties and charges, together with
any penalties, fines or interest thereon (all hereinafter called "Taxes").
Lessee shall (i) reimburse Lessor on an after-tax basis upon receipt of written
request for reimbursement for any Taxes charged to or assessed against Lessor,
(ii) on request of Lessor, submit to Lessor written evidence of Lessee's payment
of Taxes, (iii) on all reports or returns show the ownership of the Equipment
by Lessee, and (iv) send a copy thereof to Lessor. Lessee's obligations under
this Section 3 shall survive the expiration of termination of this Agreement.
4. DELIVERY, USE AND OPERATION:
(a) The parties acknowledge that this is a sale/leaseback transaction and
the Equipment is in Lessee's possession as of the Lease Commencement Date.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable Federal,
state, and local laws and regulations, and any applicable insurance policies,
and Lessee shall not discontinue use of the Equipment.
(c) Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor.
5. MAINTENANCE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and
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tear excepted. Lessee shall, if at any time reasonably requested by Lessor,
affix in a prominent position on each unit of Equipment plates, tags or other
identifying labels showing the interest therein of Lessor.
(b) Lessee will not, without the prior consent of Lessor, affix or install
any accessory, equipment or device on any Equipment if such addition will impair
the value, originally intended function or use of such Equipment. All additions,
repairs, parts, supplies, accessories, equipment, and devices furnished,
attached or affixed to any Equipment which are not readily removable shall be
made only in compliance with applicable law, shall be free and clear of all
liens, encumbrances or rights of others, and shall become the property of
Lessor. Lessee will not, without the prior written consent of Lessor and subject
to such conditions as Lessor may impose for its protection, affix or install any
Equipment to (unless readily removable) or in any other personal or real
property.
(c) Any alterations or modifications to the Equipment that may, at any
time during the term of this Agreement, be required to comply with any
applicable law, rule or regulation shall be made at the expense of Lessee.
6. INSURANCE:
Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts as specified in Paragraph D of the Equipment Schedule and against such
hazards as Lessor may require, including, but not limited to, insurance for
damage to or loss of such Equipment and liability coverage for personal
injuries, death or property damage, with Lessor named as additional insured and
with a loss payable clause in favor of Lessor, as its interest may appear,
irrespective of any breach of warranty or other act or omission of Lessee. All
such policies shall be with companies, and on terms, satisfactory to Lessor.
Lessee agrees to deliver to Lessor evidence of insurance satisfactory to Lessor.
No insurance shall be subject to any co-insurance clause. Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to make proof of loss and claim for
insurance, and to make adjustments with insurers and to receive payment of and
execute or endorse all documents, checks or drafts in connection with payments
made as a result of such insurance policies. Any reasonable expense of Lessor in
adjusting or collecting insurance shall be borne by Lessee. Lessee will not make
adjustments with insurers except (i) with respect to claims for damage to any
unit of Equipment where the repair costs do not exceed ten (10%) of such unit's
fair market value, or (ii) with Lessors written consent. Said policies shall
provide that the insurance may not be altered or cancelled by the insurer until
after thirty (30) days written notice to Lessor. Lessor may, at its option,
apply proceeds of insurance, in whole or in part, to (i) repair or replace
Equipment or any portion thereof, or (ii) satisfy any obligation of Lessee to
Lessor hereunder.
7. LOSS OR DAMAGE:
(a) Lessee hereby assumes and shall bear the entire risk of any loss,
theft, damage to, or destruction of, any unit of Equipment from any cause
whatsoever from the time the Equipment is shipped to Lessee.
(b) Lessee shall promptly and fully notify Lessor in writing if any unit
of Equipment shall be or become worn out, lost, stolen, destroyed, irreparably
damaged in the reasonable determination of Lessee, or permanently rendered unfit
for use from any cause whatsoever (such occurrences being hereinafter called
"Casualty Occurrences"). On the Rental Payment Date next succeeding a Casualty
Occurrence (the "Payment Date"), Lessee shall pay Lessor the sum of (x) the
Stipulated Loss Value of such unit calculated in accordance with Annex D as of
the Rent Payment Date next preceding such Casualty Occurrence ("Calculation
Date"); and (y) all rental and other amounts which are due hereunder as of the
Payment Date. Upon payment of all sums due hereunder, the term of this lease as
to such unit shall terminate and transfer title, to such units, to Lessee.
8. REPORTS:
(a) Lessee will notify Lessor in writing, within ten (10) days after any
tax or other lien shall attach to any Equipment, of the full particulars thereof
and of the location of such Equipment on the date of such notification.
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(b) Lessee will deliver to Lessor, within ninety (90) days of the close of
each fiscal year of Lessee, Lessee's balance sheet and profit and loss
statement, prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied, certified by a recognized firm of certified
public accountants, together, if applicable, with Lessee's Form 10K filed with
the Securities and Exchange Commission ("SEC"). Lessee will, if applicable,
deliver to Lessor quarterly, within ninety (90) days of the close of each fiscal
quarter of Lessee, in reasonable detail, copies of Lessee's quarterly financial
report certified by the chief financial officer of Lessee, together with
Lessee's Form 10Q filed with the SEC.
(c) Lessee will permit Lessor to inspect any Equipment during normal
business hours upon reasonable notice.
(d) Lessee will keep the Equipment at the Equipment Location (specified in
the applicable Schedule) within the Continental United States and will promptly
notify Lessor of any relocation of Equipment. Upon the written request of
Lessor, Lessee will notify Lessor forthwith in writing of the location of any
Equipment as of the date of such notification.
(e) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost or damaged (where the estimated repair costs would exceed ten
percent (10%) of its then fair market value), or is otherwise involved in an
accident causing personal injury or property damage.
(f) Within thirty (30) days after any request by Lessor, Lessee will
furnish a certificate of an authorized officer of Lessee stating that he has
reviewed the activities of Lessee and that, to the best of his knowledge, there
exists no Default or event which, with the giving of notice or the lapse of time
(or both), would become such a Default.
9. END OF LEASE OPTIONS:
Upon the expiration of the Term of each Schedule, Lessee shall return, or
purchase, or extend or renew the Term with respect to, all (but not less than
all) of the Equipment leased under all Schedules executed hereunder upon the
following terms and conditions. The end of lease option selected by Lessee with
respect to the first Schedule to be executed under this Agreement shall be
applicable with respect to all Schedules executed under this Agreement.
(a) Renewal. So long as Lessee shall not have exercised its option to
return the Equipment or its purchase option pursuant to this Section, Lessee
shall have the option, upon the expiration of the Basic Term of the first
Schedule to be executed under this Agreement, and/or the first two (2) Renewal
Terms of the first Schedule to be executed under this Agreement, to renew the
Agreement with respect to all, but not less than all, of the Equipment leased
under all Schedules executed hereunder for an additional term of twelve (12)
months (each, a "Renewal Term"). Including all Renewal Terms, the maximum term
of each Schedule shall be six (6) years (the Basic Term plus three (3) Renewal
Terms) (the "Maximum Lease Term").
(b) Purchase. So long as Lessee shall not have exercised its extension
option or its option to renew this Agreement or its option to return the
Equipment pursuant to this Section, Lessee shall have the option, upon the
expiration of the Term of each Schedule, to purchase all (but not less than all)
of the Equipment described on all Schedules executed hereunder upon the
following terms and conditions: If Lessee desires to exercise this option with
respect to the Equipment, Lessee shall pay to Lessor on the last day of the Term
with respect to each individual Schedule (the "Termination Date"), in addition
to the scheduled Rent (if any) then due on such date and all other sums then due
hereunder, in cash the purchase price for the Equipment so purchased, determined
as hereinafter provided. The purchase price of the Equipment shall be an amount
equal to the Fixed Purchase Price of such Equipment (as specified on the
Schedule), plus the Make Whole Amount, if any, plus all taxes and charges upon
sale and all other reasonable and documented expenses incurred by Lessor in
connection with such sale, including, without limitation, any such expenses
incurred based on a notice from Lessee to Lessor that Lessee intended to return
any such items of Equipment. Upon satisfaction of the conditions specified in
this Paragraph, Lessor will transfer, on an AS IS, WHERE IS BASIS, without
recourse or warranty, express or
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implied, of any kind whatsoever ("AS IS BASIS"), all of Lessors interest in and
to the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of such Equipment
and other matters (except that Lessor shall warrant that it has conveyed
whatever interest it received in the Equipment free and clear of any lien or
encumbrance created by Lessor). Lessor shall execute and deliver to Lessee such
Uniform Commercial Code Statements of Termination as reasonably may be required
in order to terminate any interest of Lessor in and to the Equipment. For
purposes of this Section 9, "Make Whole Amount" shall mean that amount equal to
the excess, if any, of (i) the aggregate present value as of the Termination
Date of the sum of (A) the remaining scheduled Rent payments during the Maximum
Lease Term, plus (B) the full amount of the Fixed Purchase Price that but for
exercise of the option contained in this Section 9 would have been payable on
the last Rent Payment Date during the Maximum Lease Term, discounted to the date
of payment at the Reinvestment Rate, over (ii) the aggregate present value as of
the Termination Date of the sum of (A) the remaining scheduled Rent payments
during the Maximum Lease Term, plus (B) the full amount of the Fixed Purchase
Price that but for exercise of the option contained in this Section 9 would have
been payable on the last Rent Payment Date during the Maximum Lease Term,
discounted to the date of payment at the Assumed Interest Rate (specified in the
applicable Schedule); provided, however, that if the Reinvestment Rate is equal
to or higher than the Assumed Interest Rate, the Make Whole Amount shall be
zero. As used herein, "Reinvestment Rate" shall mean the sum of (i) the
Applicable Treasury Yield plus (ii) fifty (50) basis points. As used herein,
"Applicable Treasury Yield" at any time shall mean the yield to maturity of
United States Treasury Notes with a maturity equal to the average life of the
remaining Maximum Lease Term as published in The Wall Street Journal three (3)
Business Days prior to the Termination Date. If no maturity exactly corresponds
to such remaining Maximum Lease Term, the Applicable Treasury Yield shall be
interpolated on a straight-line basis, utilizing the yields for the two
maturities which most closely correspond to the requisite maturity.
(c) Return. Unless Lessee shall have exercised its extension option or its
purchase option pursuant to this Section, upon the expiration of the Term of
each Schedule, Lessee shall return all (but not less than all) of the Equipment
described on all Schedules executed hereunder, to Lessor upon the following
terms and conditions: Lessee shall (i) pay to Lessor on the last day of the Term
with respect to each individual Schedule, in addition to the scheduled Rent then
due on such date and all other sums then due hereunder, a terminal rental
adjustment amount equal to the Fixed Purchase Price of such Equipment, plus the
Make Whole Amount, if any, and (ii) return the Equipment to Lessor in accordance
with the provisions of Annex F attached hereto. Thereafter, upon return of all
of the Equipment described on all Schedules executed hereunder, Lessor and
Lessee shall arrange for the commercially reasonable sale, scrap or other
disposition of the Equipment. Upon satisfaction of the conditions specified in
this Paragraph, Lessor will transfer, on an AS IS BASIS, all of Lessors interest
in and to the Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as the condition of such
Equipment and other matters (except that Lessor shall warrant that it has
conveyed whatever interest it received in the Equipment free and clear of any
liens or encumbrances created by Lessor). Lessor shall execute and deliver to
Lessee such Uniform Commercial Code Statements of Termination as reasonably may
be required in order to terminate any interest of Lessor in and to the
Equipment. Upon the sale, scrap or other disposition of the Equipment the net
sales proceeds with respect to the Equipment sold will be paid to, and held and
applied by, Lessor as follows: Lessor shall promptly thereafter pay to Lessee an
amount equal to the Residual Risk Amount (as specified in the Schedule) of the
Equipment (less all reasonable costs, expenses and fees, including storage,
reasonable and necessary maintenance and other remarketing fees incurred in
connection with the sale, scrap, or disposition of such Equipment) plus all net
proceeds, if any, of such sale in excess of the Residual Risk Amount of the
Equipment and applicable taxes, if any. Lessor shall be obligated to pay to
Lessee the residual risk amount regardless of the amount of net sales proceeds.
(d) Extension. So long as Lessee shall not have exercised its option to
return the Equipment or its purchase option pursuant to this Section, and
provided that Lessee shall have exercised its option to renew this Agreement
pursuant to this Section with respect to all available Renewal Terms, Lessee
shall have the option, upon the expiration of all available Renewal Terms, to
extend the Agreement with respect to all, but not less than all, of the
Equipment for an additional term of twelve (12) months (the "Extension Term") at
a monthly rental to be paid in arrears on the same day of each month on which
the prior Renewal Term Rent installment was paid, and calculated as the product
of (i) the Capitalized Lessor's
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Cost, times (ii) a lease rate factor calculated by Lessor, which when so
multiplied times the Capitalized Lessor's Cost, will result in a product that is
equal to the amount necessary to fully repay to Lessor any unpaid balance of the
Capitalized Lessors Cost (determined as of the date on which the last available
Renewal Term expired), together with interest thereon at a rate per annum equal
to three hundred (300) basis points over the then current yield to maturity of
U.S. Treasury Notes having a one year maturity, in twelve (12) equal monthly
installments. At the end of the Extension Term, provided that Lessee is not then
in Default under this Agreement, Lessee shall purchase all, and not less than
all, of such Equipment for $1.00 cash, together with all Rent and other sums
then due on such date, plus all taxes and charges upon transfer and all other
reasonable and documented expenses incurred by Lessor in connection with such
transfer. Upon satisfaction of the conditions specified in this Paragraph,
Lessor will transfer, on an AS IS BASIS, all of Lessors interest in and to the
Equipment. Lessor shall not be required to make and may specifically disclaim
any representation or warranty as to the condition of the Equipment and any
other matters (except that Lessor shall warrant that it has conveyed whatever
interest it received in the Equipment free and clear of any lien or encumbrance
created by Lessor).
(e) Notice of Election. Lessee shall give Lessor written notice of its
election of the options specified in this Section not less than one hundred
twenty (120) days nor more than three hundred sixty-five (365) days before the
expiration of the Basic Term or any Renewal Term of the first Schedule to be
executed under this Agreement. Such election shall be effective with respect to
all Equipment described on all Schedules executed hereunder. If Lessee fails
timely to provide such notice, without further action Lessee automatically shall
be deemed to have elected (1) to renew the Term of this Agreement pursuant to
Paragraph (a) of this Section if a Renewal Term is then available hereunder, or
(2) to purchase the Equipment pursuant to Paragraph (a) of this Section if a
Renewal Term is not then available hereunder.
10. DEFAULT; REMEDIES:
(a) Lessor may in writing declare this Agreement in default ("Default")
if: (1) Lessee breaches its obligation to pay Rent or any other sum when due and
fails to cure the breach within ten (10) days; (2) Lessee breaches any of its
insurance obligations under Section 6 hereof; (3) Lessee breaches any of its
other obligations hereunder and fails to cure that breach within thirty (30)
days after written notice thereof; (4) any representation or warranty made by
Lessee in connection with this Agreement shall be false or misleading in any
material respect; (5) Lessee becomes insolvent or ceases to do business as a
going concern; (6) a petition is filed by or against Lessee under any bankruptcy
or insolvency laws and, if filed against Lessee, shall not be dismissed within
ninety (90) days; (7) Lessee shall have terminated its corporate existence,
consolidated with, merged into, or conveyed or leased substantially all of its
assets as an entirety to any person (such actions being referred to as an
"Event"), unless not less than sixty (60) days prior to such Event: (x) such
person is organized and existing under the laws of the United States or any
state, and executes and delivers to Lessor an agreement containing an effective
assumption by such person of the due and punctual performance of this Agreement;
and (y) Lessor is reasonably satisfied as to the creditworthiness of such
person; (8) there occurs a default under any guaranty executed in connection
with this Agreement; or (9) Lessee shall be in default under any other agreement
between Lessor and Lessee; or (10) Lessee shall be in default under any other
material obligation for borrowed money, for the deferred purchase price of
property or any lease agreement. Such declaration shall apply to all Schedules
except as specifically excepted by Lessor.
(b) After Default, Lessee shall, without further demand, forthwith pay to
Lessor (i) as liquidated damages for loss of a bargain and not as a penalty, the
Stipulated Loss Value of the Equipment (calculated in accordance with Annex D as
of the Rent Payment Date next preceding the declaration of default), and (ii)
all Rents and other sums then due hereunder. If Lessee fails to pay the amounts
specified in the preceding sentence, then, at the request of Lessor, Lessee
shall comply with the provisions of Section 10(a) hereof. Lessee hereby
authorizes Lessor to enter, with or without legal process, any premises where
any Equipment is located and take possession thereof. Lessor may, but shall not
be required to, sell Equipment at private or public sale, in bulk or in parcels,
with or without notice, and without having the Equipment present at the place of
sale; or Lessor may, but shall not be required to, lease, otherwise dispose of
or keep idle all or part of the Equipment; and Lessor may use Lessee's premises
for any or all of the foregoing without liability for rent, costs, damages or
otherwise. The proceeds of sale, lease or other disposition, if any, shall be
applied in the following order of priorities:
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(1) to pay all of Lessors costs, charges and expenses incurred in taking,
removing, holding, repairing and selling, leasing or otherwise disposing of
Equipment; then, (2) to the extent not previously paid by Lessee, to pay Lessor
all sums due from Lessee hereunder; then (3) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (4) any surplus shall be
paid to Lessee. Lessee shall pay any deficiency in clauses (1) and (2)
forthwith.
(c) In addition to the foregoing rights, Lessor may terminate the lease as
to any or all of the Equipment.
(d) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. If
permitted by law, Lessee shall pay reasonable attorney's fees actually incurred
by Lessor in enforcing the provisions of this Lease and any ancillary documents.
Waiver of any default shall not be a waiver of any other or subsequent default.
(e) Any default under the terms of this or any other agreement between
Lessor and Lessee may be declared by Lessor a default under this and any such
other agreement.
11. ASSIGNMENT:
(a) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT
OR THE INTEREST OF LESSEE HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
EXCEPT IN A TRANSACTION SATISFYING THE REQUIREMENTS OF SECTION 10(a)(7).
(b) Lessor may, without the consent of Lessee, assign this Agreement or
any Schedule, or the right to enter into any Schedule. Lessee agrees that it
will pay all Rent and other amounts payable under each Schedule to the Lessor
named therein; provided, however, if Lessee receives written notice of an
assignment from Lessor, Lessee will pay all Rent and other amounts payable under
any assigned Schedule to such assignee or as instructed by Lessor. Each
Schedule, incorporating by reference the terms and conditions of this Agreement,
constitutes a separate instrument of lease, and the Lessor named therein or its
assignee shall have all rights as "Lessor" thereunder separately exercisable by
such named Lessor or assignee as the case may be, exclusively and independently
of Lessor or any assignee with respect to other Schedules executed pursuant
hereto. Without limiting the generality of the foregoing, the grant of security
interest in Section 13(b) hereof shall, as it relates to the Equipment leased
under each Schedule (and to the proceeds and other collateral referred to in
Section 13(b) hereof), be deemed to have been granted solely to the Lessor named
therein, or to its assignee, as applicable and such Equipment (and other related
collateral) shall not be deemed to collateralize Lessee's obligations under any
of the Schedules to which such named Lessor or assignee, as the case may be, is
not a party. Lessee further agrees to confirm in writing receipt of a notice of
assignment as reasonably may be requested by assignee. Lessee hereby waives and
agrees not to assert against any such assignee any defense, set-off, recoupment
claim or counterclaim which Lessee has or may at any time have against Lessor or
any other person for any reason whatsoever.
(c) Subject always to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
12. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor, its
agents, employees, successors and assigns, from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature, in contract or tort, and including, but
not limited to, Lessor's strict liability in tort, arising out of (i) the
selection, manufacture, purchase, acceptance or rejection of Equipment, the
ownership of Equipment during the Term, and the delivery, lease, possession,
maintenance, uses, condition, return or operation of the Equipment (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for
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patent, trademark or copyright infringement or environmental damage), or (ii)
the condition of Equipment sold or disposed of after use by Lessee, any
sublessee or employees of Lessee. Lessee shall, upon request, defend any actions
based on, or arising out of, any of the foregoing.
(b) All of Lessors rights, privileges and indemnities contained in this
Section shall survive the expiration or other termination of this Agreement and
the rights, privileges and indemnities contained herein are expressly made for
the benefit of, and shall be enforceable by Lessor, its successors and assigns.
13. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY INTEREST; USURY SAVINGS:
(a) For income tax purposes, Lessor will treat Lessee as the owner of the
Equipment. Accordingly, Lessor agrees (i) to treat Lessee as the owner of the
Equipment on its federal income tax return, (ii) not to take actions or
positions inconsistent with such treatment on or with respect to its federal
income tax return, and not claim any tax benefits available to an owner of the
Equipment on or with respect to its federal income tax return. The foregoing
undertakings by Lessor shall not be violated by Lessor's taking a tax position
through inadvertence so long as such inadvertent tax position is reversed by
Lessor promptly upon its discovery. Subject to the foregoing, Lessor shall in no
event be liable to Lessee if Lessee fails to secure any of the tax benefits
available to the owner of the Equipment.
(b) In order to secure the prompt payment of the Rent and all of the other
amounts from time to time outstanding under and with respect to the Schedules,
and the performance and observance by Lessee of all the agreements, covenants
and provisions thereof (including, without limitation, all of the agreements,
covenants and provisions of the Lease that are incorporated therein), Lessee
hereby grants to Lessor a first priority security interest in the Equipment
leased under the Schedules, together with all additions, attachments,
accessions, accessories and accessions thereto whether or not furnished by the
supplier of the Equipment and any and all substitutions, replacements or
exchanges therefor, in each such case in which Lessee shall from time to time
acquire an interest, and any and all insurance and/or other proceeds (but
without power of sale) of the property in and against which a security interest
is granted hereunder.
(c) It is the intention of the parties hereto to comply with any
applicable usury laws to the extent that any Schedule is determined to be
subject to such laws; accordingly, it is agreed that, notwithstanding any
provision to the contrary in any Schedule or the Lease, in no event shall any
Schedule require the payment or permit the collection of interest in excess of
the maximum amount permitted by applicable law. If any such excess interest is
contracted for, charged or received under any Schedule or the Lease, or in the
event that all of the principal balance shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received
under any Schedule or the Lease shall exceed the maximum amount of interest
permitted by applicable law, then in such event (1) the provisions of this
paragraph shall govern and control, (2) neither Lessee nor any other person or
entity now or hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of the maximum
amount of Interest permitted by applicable law, (3) any such excess which may
have been collected shall be either applied as a credit against the then unpaid
principal balance or refunded to Lessee, at the option of the Lessor, and (4)
the effective rate of interest shall be automatically reduced to the maximum
lawful contract rate allowed under applicable law as now or hereafter construed
by the courts having jurisdiction thereof. It is further agreed that without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received under any Schedule or the Lease which are made for the
purpose of determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the indebtedness evidenced hereby, all interest at any time
contracted for, charged or received from Lessee or otherwise by Lessor in
connection with such indebtedness; provided, however, that if any applicable
state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for Lessor to receive a greater
interest per annum rate than is presently allowed, the Lessee agrees that, on
the effective date of such amendment or preemption, as the case may be, the
lawful maximum hereunder shall be increased to the maximum interest per annum
rate allowed by the amended state law or the law of the United States of America
(but not in excess of the interest rate contemplated hereunder).
14. REPRESENTATIONS AND WARRANTIES OF LESSEE:
8
Lessee hereby represents and warrants to Lessor that on the date hereof and on
the date of execution of each Schedule:
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Agreement and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies therein provided may be limited under applicable bankruptcy and
insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's articles of incorporation, charter or by-laws; or (ii)
result in any breach of, constitute a default under or result in the creation of
any lien, charge, security interest or other encumbrance upon any Equipment
pursuant to any indenture, mortgage, deed of trust, bank loan or credit
agreement or other instrument (other than this Agreement) to which Lessee is a
party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which will have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each financial statement delivered to Lessor has been prepared in
accordance with GAAP, and since the date of the most recent such financial
statement, there has been no material adverse change.
(h) Lessee is duly incorporated and will be at all times validly existing
and in good standing under the laws of the state of its incorporation (specified
in the first sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business
purposes.
15. CHOICE OF LAW; JURISDICTION:
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties agree that any action
or proceeding arising out of or relating to this Agreement may be commenced in
the United States District Court for the Southern District of New York.
16. MISCELLANEOUS:
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS LEASE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
9
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE
AND LESSOR. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
(b) Any cancellation or termination by Lessor, pursuant to the provision
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(c) All Equipment shall at all times remain personal property of Lessee
regardless of the degree of its annexation to any real property and shall not by
reason of any installation in, or affixation to, real or personal property
become a part thereof.
(d) Time is of the essence of this Agreement. Lessor's failure at any time
to require strict performance by Lessee of any of the provisions hereof shall
not waive or diminish Lessor's right thereafter to demand strict compliance
therewith.
(e) Lessee agrees, upon Lessor's request, to execute any instrument
necessary or expedient for filing, recording or perfecting the interest of
Lessor.
(f) All notices required to be given hereunder shall be in writing,
personally delivered, delivered by overnight courier service, or sent by
certified mail, return receipt requested, addressed to the other party at its
respective address stated above or at such other address as such party shall
from time to time designate in writing to the other party; and shall be
effective from the date of receipt.
(g) This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(h) The representations, warranties and covenants of Lessee herein shall
be deemed to survive the dosing hereunder. Lessors obligations to acquire and
lease specific items of Equipment shall be conditioned upon Lessee providing to
Lessor such information with respect to Lessee's financial condition as Lessor
may require, and Lessor being satisfied that there shall have been no material
adverse change in the business or financial condition of Lessee from the date of
execution hereof. The obligations of Lessee under Sections 3, 9(c), 12 and 16(l)
hereof which accrue during the term of this Agreement and obligations which by
their express terms survive the termination of this Agreement, shall survive the
termination of this Agreement.
(i) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated, to effect
such compliance, in whole or in part; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance (together
with interest thereon at the rate specified in Paragraph (j) of this Section)
shall constitute additional Rent due to Lessor within five (5) days after the
date Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(j) Any Rent or other amount not paid to Lessor when due after default
hereunder shall bear interest, both before and after any judgment or termination
hereof, at the lesser of fifteen percent (15%)
10
per annum or the maximum rate allowed by law.
(k) Any provisions in this Agreement and any Schedule which are in
conflict with any statute, law or applicable rule shall be deemed omitted,
modified or altered to conform thereto.
(l) Lessee agrees to pay on demand all reasonable costs and expenses
incurred by Lessor in connection with the preparation, execution, delivery,
filing, recording, and administration of any of the Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for Lessor, and all costs and expenses, if any, in connection with the
enforcement of any of the Documents. In addition, Lessee shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of any of the Documents and
the other documents to be delivered under the Documents, and agrees to save
Lessor harmless from and against any and all liabilities with respect to or
resulting from any delay attributed to Lessee in paying or failing to pay such
taxes and fees.
17. CHATTEL PAPER: To the extent that any Schedule would constitute chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest therein may be created through
the transfer or possession of this Agreement in and of itself without the
transfer or possession of the original of a Schedule executed pursuant to this
Agreement and incorporating this Agreement by reference; and no security,
interest in this Agreement and a Schedule may be created by the transfer or
possession of any counterpart of the Schedule other than the original thereof,
which shall be identified as the document marked "Original" and all other
counterparts shall be marked "Duplicate".
REMAINDER OF PAGE INTENTIONALLY BLANK
11
IN WITNESS WHEREOF, Lessee and Lessor have caused this Master Lease Agreement to
be executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
12
EQUIPMENT SCHEDULE
SCHEDULE NO G-1
DATED THIS 29TH DAY OF DECEMBER, 1997
TO MASTER LEASE AGREEMTN DATED AS OF DECEMBER 29, 1997
Lessor & Mailing Address: Lessee & Mailing Address:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF INC.
4 North Park Drive 47-05 Metropolitan Avenue
Suite 500 Ridgewood, NY 11385
Hunt Valley, Maryland 21030
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement said Agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement
constitutes a separate instrument of lease.
A. Equipment
Pursuant to the terms of the Lease Lessor, agrees to acquire and lease to lessee
the Equipment on Annex A attached hereto and made a part hereof.
B. Financial Terms
1. Capitalized Lessor's Cost: $753,380.83
2. Daily Lease Rate Factor: .050273633%
3. Basic Term: Thirty-Six months
4. Basic Term Commencement Date: January 1, 1998
5. Renewal Term: Three twelve(12) month terms.
6. Maximum Lease Term: Seventy-two months
7. Last Delivery Date: December 31, 1997
8. Stipulated Loss Values: See Annex D
9. Assumed Interest Rate: 7.50% (which will be determined three (3)
Business Days before the date of execution of the Certificate of
Acceptance).
10. Equipment Location: Various - See Attachment to Annex A.
11. Lessee Federal Tax ID No.:
12. Supplier: Various - See Attachment to Annex A.
13. Lessee agrees and acknowledges that the Capitalized Lessor's Cost of
the Equipment as stated on the Schedule is equal to the fair market value
of the Equipment on the date hereof.
C. Term and Rent
1. Interim Rent. For the period from and including the Lease Commencement
date to the Basic Term Commencement Date ("Interim Period"), Lessee shall
pay as rent ("Interim Rent") for each unit of Equipment the product of the
Daily Lease Rate Factor times the Capitalized Lessor's Cost of such unit
times the number of days in the Interim Period. Interim Rent shall be due
on December 31, 1997 (the "Interim Rent Payment Date").
2. Basic Term Rent. Commencing on January 1, 1998, and on the same day of
each month thereafter (each a "Rent Payment Date") during the Basic Term,
Lessee shall pay as Rent ("Basic Term Rent") the product of the Basic Term
Lease Rate Factor time the Capitalized Lessor" Cost of all Equipment on
this Schedule. Said Rent consists of principal and interest components as
provided in the Amortization Schedule attached hereto.
3. If the Interim Rent Payment Date or any rent Payment Date is not a
Business Day, the Rent otherwise due on such date shall be payable on the
immediately preceding business Day. As used herein, "Business Day" shall
mean any day other than Saturday, Sunday, and any day on which banking
institutions located in the States of Connecticut, Maryland or New York
are authorized by law or other governmental action to close.
D. Insurance
1. Public Liability: $1,000,000.00 total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment.
E. Fixed Purchase Price and Residual Risk Amount
End of Month Fixed Purchase Price Residual Risk Amount
- - ------------ -------------------- --------------------
36 64.467082% 12.639606%
48 50.736256% 7.016677%
60 35.943408% 5.522397%
72 20.000000% 3.912113%
expressed as a percent of the Capitalized lessor's Cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement or
Equipment until executed on behalf of lessor and Lessee by authorized
representative of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
Attest:
By:_________________________________
Name:_______________________________
Title:______________________________
2
(FISCAL AGENT)
NOTICE AND ACKNOWLEDGMENT OF ASSIGNMENT
Reference is hereby made to that certain Master Lease Agreement dated as
of December 29, 1997 (the "Lease"), between General Electric Capital Corporation
("Lessor") and Western Beef, Inc. ("Lessee").
Lessor hereby gives Lessee notice, and Lessee hereby acknowledges receipt
of notice, that Lessor has assigned to THE FIFTH THIRD LEASING COMPANY
("Assignee"), whose offices are at 38 Fountain Square, Fifth Third Center, 5th
Floor, Cincinnati, OH 45263, all right, title, interest and obligations of
Lessor in Schedules to the Lease and, to the extent incorporated therein by
reference, the Lease, The Fifth Third Leasing Company will act as Lessor for all
intents and purposes. Pursuant to such assignment, it is contemplated that
Assignee will acquire and lease to Lessee certain equipment (the "Equipment") to
be described on Equipment Schedule No. G-l executed pursuant to the Lease by
Assignee and Lessee (collectively the "Assigned Schedules"). From and after the
date of this Notice, all payments of rent and other sums now or hereafter
becoming due pursuant to the Assigned Schedules or with respect to the equipment
described on the Assigned Schedules (the "Equipment") shall be paid directly to
Lessor as Fiscal Agent of Assignee, unless and until Assignee notified Lessee of
the termination of the fiscal agency (whereupon Lessee shall make payment as
directed in Assignee's invoices).
In recognition of Assignee's reliance upon this Notice and Acknowledgment
of Assignment, Lessee certifies, confirms and agrees as follows:
1. The Lease and the Equipment Schedule have been duly authorized,
executed and delivered by Lessee; constitute the legal, valid and
binding obligation of Lessee, enforceable against Lessee in
accordance with the terms thereof; are in full force and effect on
the date of execution of this notice by such party; are free from
all defenses, set-offs and counterclaims; and no default or event
which, with the passage of time or the giving of notice, or both,
would constitute a default under the Lease has occurred.
2. There are no modifications, amendments or supplements to the Lease
which relate to the Assigned Schedule; and any future modification,
termination, amendment or
supplement to the Lease which relates to the Assigned Schedule, or
settlement of amounts due thereunder which relates to the Assigned
Schedule, shall be ineffective without Assignee's prior written
consent.
3. There has been no prepayment of rent or other sums payable under the
Assigned Schedule and no casualty has occurred with respect to the
Equipment.
4. Lessee acknowledges and agrees that (i) Assignee shall be the owner
of the Equipment and Lessor shall have no interest or authority of
any nature regarding the Equipment or the Assigned Schedule, (ii) If
Assignee notifies Lessee of the termination of Lessor's fiscal
agency, Lessee will deal exclusively with respect to the Assigned
Schedule with Assignee, and Lessee will deliver all payments and
copies of all notices and other communications given or made by
Lessee to Assignee at the address listed above, (iii) so far as
enforcement of the Assigned Schedule is concerned, notwithstanding
the existence of other schedules or supplements thereto, the
Assigned Schedule is separate and severable and Assignee may take
enforcement action independently of other lessors, equipment owners
or financing parties having an interest in the Lease and other
equipment schedules not included in the Assigned Schedule, and (iv)
Lessee will execute such other instruments and take such actions as
Assignee reasonably may require to further confirm the vesting of
rights under the Lease in Assignee and Assignee's ownership of the
Equipment.
5. Lessee has not received notice of a prior sale, transfer,
assignment, hypothecation or pledge of the Assigned Schedule or the
rents reserved thereunder.
6. Lessee will keep the Lease, the Assigned Schedule and the Equipment
free and clear of all liens and encumbrances (other than the
interest of Lessor, Assignee or parties claiming by, through or
under them).
7. All representations and duties of Lessor intended to induce Lessee
to enter into the Lease, whether required by the Lease or otherwise,
have been fulfilled.
8. Lessee has executed one (1) original each of the Lease and the
Equipment Schedule (which were delivered to Lessor), and currently
has no original of either in its possession.
9. All representations and warranties of the Lessee in the Lease are
true and correct.
10. The documents described on the attached Schedule A are all the
documents executed or delivered to or by Assignor and Lessee in
connection with the Assigned Schedule and the Equipment, and such
documents constitute the entire agreement of the parties with
respect to the Assigned Schedule and the Equipment.
Accepted and agreed to on this. ____ day of December, 1997.
GENERAL ELECTRIC CAPITAL Western Beef, Inc.
CORPORATION Lessee
Lessor
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
THE FIFTH THIRD LEASING COMPANY
Assignee
By: _________________________________
Name: _______________________________
Title: ______________________________
(FISCAL AGENT)
NOTICE AND ACKNOWLEDGMENT OF ASSIGNMENT
Reference is hereby made to that certain Master Lease Agreement dated as
of December 29, 1997 (the "Lease"), between General Electric Capital Corporation
("Lessor") and Western Beef, Inc. ("Lessee").
Lessor hereby gives Lessee notice, and Lessee hereby acknowledges receipt
of notice, that Lessor has assigned to THE FIFTH THIRD LEASING COMPANY
("Assignee"), whose offices are at 38 Fountain Square, Fifth Third Center, 5th
Floor, Cincinnati, OH 45263, all right, title, interest and obligations of
Lessor in Schedules to the Lease and, to the extent incorporated therein by
reference, the Lease, The Fifth Third Leasing Company will act as Lessor for all
intents and purposes. Pursuant to such assignment, it is contemplated that
Assignee will acquire and lease to Lessee certain equipment (the "Equipment") to
be described on Equipment Schedule No. F-1 executed pursuant to the Lease by
Assignee and Lessee (collectively the "Assigned Schedules"). From and after the
date of this Notice, all payments of rent and other sums now or hereafter
becoming due pursuant to the Assigned Schedules or with respect to the equipment
described on the Assigned Schedules (the "Equipment") shall be paid directly to
Lessor as Fiscal Agent of Assignee, unless and until Assignee notified Lessee of
the termination of the fiscal agency (whereupon Lessee shall make payment as
directed in Assignee's invoices).
In recognition of Assignee's reliance upon this Notice and Acknowledgment
of Assignment, Lessee certifies, confirms and agrees as follows:
1. The Lease and the Equipment Schedule have been duly authorized,
executed and delivered by Lessee; constitute the legal, valid and
binding obligation of Lessee, enforceable against Lessee in
accordance with the terms thereof; are in full force and effect on
the date of execution of this notice by such party; are free from
all defenses, set-offs and counterclaims; and no default or event
which, with the passage of time or the giving of notice, or both,
would constitute a default under the Lease has occurred.
2. There are no modifications, amendments or supplements to the Lease
which relate to the Assigned Schedule; and any future modification,
termination, amendment or
supplement to the Lease which relates to the Assigned Schedule, or
settlement of amounts due thereunder which relates to the Assigned
Schedule, shall be ineffective without Assignee's prior written
consent.
3. There has been no prepayment of rent or other sums payable under the
Assigned Schedule and no casualty has occurred with respect to the
Equipment.
4. Lessee acknowledges and agrees that (i) Assignee shall be the owner
of the Equipment and Lessor shall have no interest or authority of
any nature regarding the Equipment or the Assigned Schedule, (ii) If
Assignee notifies Lessee of the termination of Lessor's fiscal
agency, Lessee will deal exclusively with respect to the Assigned
Schedule with Assignee, and Lessee will deliver all payments and
copies of all notices and other communications given or made by
Lessee to Assignee at the address listed above, (iii) so far as
enforcement of the Assigned Schedule is concerned, notwithstanding
the existence of other schedules or supplements thereto, the
Assigned Schedule is separate and severable and Assignee may take
enforcement action independently of other lessors, equipment owners
or financing parties having an interest in the Lease and other
equipment schedules not included in the Assigned Schedule, and (iv)
Lessee will execute such other instruments and take such actions as
Assignee reasonably may require to further confirm the vesting of
rights under the Lease in Assignee and Assignee's ownership of the
Equipment.
5. Lessee has not received notice of a prior sale, transfer,
assignment, hypothecation or pledge of the Assigned Schedule or the
rents reserved thereunder.
6. Lessee will keep the Lease, the Assigned Schedule and the Equipment
free and clear of all liens and encumbrances (other than the
interest of Lessor, Assignee or parties claiming by, through or
under them).
7. All representations and duties of Lessor intended to induce Lessee
to enter into the Lease, whether required by the Lease or otherwise,
have been fulfilled.
8. Lessee has executed one (1) original each of the Lease and the
Equipment Schedule (which were delivered to Lessor), and currently
has no original of either in its possession.
9. All representations and warranties of the Lessee in the Lease are
true and correct.
10. The documents described on the attached Schedule A are all the
documents executed or delivered to or by Assignor and Lessee in
connection with the Assigned Schedule and the Equipment, and such
documents constitute the entire agreement of the parties with
respect to the Assigned Schedule and the Equipment.
Accepted and agreed to on this ____ day of December, 1997.
GENERAL ELECTRIC CAPITAL Western Beef, Inc.
CORPORATION Lessee
Lessor
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
THE FIFTH THIRD LEASING COMPANY
Assignee
By: _________________________________
Name: _______________________________
Title: ______________________________
EQUIPMENT SCHEDULE
SCHEDULE NO. F-1
DATED THIS 29th DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29. 1997
Lessor & Mailing Address: Lessee & Mailing Address:
THE FIFTH THIRD LEASING COMPANY WESTERN BEEF, INC.
38 Fountain Square 47-05 Metropolitan Avenue
Fifth Third Center, 5th Floor Ridgewood, NY 11385
Cincinnati, OH 45263
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement,
constitutes a separate instrument of lease.
A. Equipment.
Pursuant to the terms of the Lease, Lessor agrees to acquire and lease to Lessee
the Equipment listed on Annex A attached hereto and made a part hereof.
B. Financial Terms.
1. Capitalized Lessor's Cost: $1,478,183.15
2. Daily Lease Rate Factor: .050273633%
3. Basic Term: Thirty-six (36) months
4. Basic Term Commencement Date: January 1, 1998.
5. Renewal Term: Three twelve (12) month terms.
6. Maximum Lease Term: Seventy-two months.
7. Last Delivery Date: December 31, 1997.
8. Stipulated Loss Values: See Annex D.
9. Assumed Interest Rate: 7.50% (which will be determined three (3) Business
Days before the date of execution of the Certificate of Acceptance).
10. Equipment Location: Various - See Attachment to Annex A.
11. Lessee Federal Tax ID No.:________________________________________________
12. Supplier: Various - See Attachment to Annex A.
13. Lessee agrees and acknowledges that the Capitalized Lessors Cost of the
Equipment as stated on the Schedule is equal to the fair market value of
the Equipment on the date hereof.
C. Term and Rent.
1. Interim Rent. For the period from and including the Lease Commencement
Date to the Basic Term Commencement Date ("Interim Period"), Lessee shall pay as
rent ("Interim Rent") for each unit of Equipment, the product of the Daily Lease
Rate Factor times the Capitalized Lessor's Cost of such unit times the number of
days in the Interim Period. Interim Rent shall be due on December 31, 1997 (the
"Interim Rent Payment Date").
2. Basic Term Rent. Commencing on January 1, 1998, and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic Term,
Lessee shall pay as Rent ("Basic Term Rent") the product of the Basic Term Lease
Rate Factor times the Capitalized Lessor's Cost of all Equipment on this
Schedule. Said Rent consists of principal and interest components as provided in
the Amortization Schedule attached hereto.
3. If the Interim Rent Payment Date or any Rent Payment Date is not a
Business Day, the Rent otherwise due on such date shall be payable on the
immediately preceding Business Day. As used herein, "Business Day" shall mean
any day other than Saturday, Sunday, and any day on which banking institutions
located in the States of Connecticut, Maryland or New York are authorized by law
or other governmental action to close.
D. Insurance.
1. Public Liability: $1,000,000.00, total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment.
E. Fixed Purchase Price and Residual Risk Amount
End of Month Fixed Purchase Price Residual Risk Amount
- - ------------ -------------------- --------------------
36 64.467282% 12.639606%
48 50.738256% 7.016677%
60 35.943409% 5.522397%
72 20.000000% 3.912113%
expressed as a percent of the Capitalized Lessor's Cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement or
Equipment until executed on behalf of Lessor and Lessee by authorized
representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
THE FIFTH THIRD LEASING COMPANY WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
Attest:
By: _________________________________
Name: _______________________________
Title: ______________________________
2
ANNEX A
TO
SCHEDULE NO. F-1
DATED THIS 29th DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29,1997
DESCRIPTION OF EQUIPMENT
Manufacturer Serial Numbers Type and Model Number of Units Cost per Unit
of Equipment
================================================================================
See Attachment to Annex A
Initials: PC JR
------ ---------
Lessor Lessee
Attachment to Annex A
Lessee: Western Beet, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 01): 47-05 Metropolitan Avenue
Ridgewood, NY 11385
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------
ADMIRAL AIR CONDITIONING, INC. air conditioning system 4/2/97 65,500.00
ALARMINGLY AFFORDABLE, INC. PA system 22001 16,610.96
BULLDOG GRAPHICS Furnish & install sign 970517 27,197.81
DARBY TENT CO., INC. Fiesta Frame tent, canopy 111561 14,500.00
DEVALTRONIX 2-Multiline Display High Intensity REO LEOs 1845 52,773.00
M. FRIED STORE FIXTURES Store fixtures more fully descr. on inv. 3359 117,126.50
K & D ENTERPRISES Adamatic Roll/Bread Divider, SN:221088159 280 20,500.00
ON-SITE ENERGY COMPANY Onan Model 60 ENA gas fueled generator 19,945.06
JOHN TARA INC. Supply and install custom made canopy 200 44,000.00
JOHN TARA INC. Supply and install custom made canopy 199 5,400.00
TECHNIBUILT Shevling more fully described on invoice 43802 17,158.99
UNARCO 500-shopping carts 564892 50,709.71
VHB REFRIGERATION & EQUIP. 601 Deck produce 96-375 19,229.53
VHB REFRIGERATION & EQUIP. Condensing unit racks 96-396 98,909.11
VHB REFRIGERATION & EQUIP. Condensers 96-410 65,312.64
VHB REFRIGERATION & EQUIP. 32' OIP Island Produce 96-411 33,825.96
VHB REFRIGERATION & EQUIP. 31 doors 96-485 39,600.02
VHB REFRIGERATION & EQUIP. 32' 5-deck frozen meat case, model 05Z 97-019 20,246.00
------------
TOTAL $ 728,545.29
============
INITIAL PC JR
--------
Page 1
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 19): 12-03 East New York Avenue
Brooklyn, NY 11212
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------
ADMIRAL AIR CONDITIONING INC. air conditioning system 6356 37,640.00
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3390 40,172.87
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3524 7,388.60
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3525 4,160.59
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3526 1,058.72
KYSOR/WARREN Refrigerated cases 62803 47,509.84
KYSOR/WARREN Refrigerated cases 70285 5,981.90
ON-SITE ENERGY Onan Model 60 ENA gas fueled generator 17,211.75
WT WINTER ASSOC. Auto wrapper and accessories 16058 40,258.29
WT WINTER ASSOC. Step-saver equipment more fully descr. on inv. 10798 22,202.00
------------
TOTAL $ 223,584.56
============
INITIAL PC JR
--------
Page 2
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 9) _____________________________
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------------
CBS WHITCOM Newbridge 3624 Channel Bank & access. Purch. agree 25,180.00
GATES/ARROW DISTRIBUTIONS 2-AST Bravo Computers & access.- See inv. for SN 6133088 4,629.50
GATES/ARROW DISTRIBUTIONS 2-76H0945 - See invoice for S/N 5632489 2,117.15
GATES/ARROW DISTRIBUTIONS 2-AST Systems - See inv. for S/N 5634084 6,335.00
ON SITE ENERGY CO. Onan Model 60 ENA gas fueled generator 17,211.75
-----------
TOTALS $ 55,473.40
===========
INITIAL PC JR
--------
Page 3
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 45): 322 Nassau Road
Roosevelt, NY 11575
SUPPLIER Equipment Description INV.# AMOUNT
- - -----------------------------------------------------------------------------------------------------------------------
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA396725 55,857.00
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA409129 9,149.78
ACCU-SAFE Safe 6031 3,221.00
ADVANCE ENERGY TECH. Retrofix Cooler Combo 7235 44,389.00
ALARMINGLY AFFORDABLE Complete supermarket installation per invoice 20256 31,922.93
ALLTEC PRODUCTS Cold pressure washer 97537 5,493.38
CROWN EQUIPMENT PW 3000 Series Walkie Pallet Trucks 26042 15,190.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2864 38,699.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2941 1,380.19
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2957 4,120.59
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2962 1,550.44
GLOBE-MONTE METROPOLITAN Hickory 7G Rotisserie, S/N: 07907 19504 5,279.35
GLOBE-MONTE METROPOLITAN Henny Penny #500 Fryer, SIN: GBO26IF 19506 6,836.59
MID SOUTH DATA SYSTEMS Computers as more fully described on invoice 22330A 129,738.17
SIEGMEISTER SALES 8 - New machines more fully desc. on quote and del. ticket 30425 27,531.00
TREIF USA PUMA CE 700 Power Cutter 1274 21,260.00
WT WINTER ASSOCIATES Combo station, master step saver 11962 39,718.98
WT WINTER ASSOCIATES Auto wrapping weigh & accessories 12068 29,242.50
--------------
TOTAL $ 470,579.90
==============
TOTAL CAPITALIZED LESSOR'S COST $ 1,478,183.15
INITIAL PC JR
--------
Page 4
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 45): 322 Nassau Road
Roosevelt, NY 11575
SUPPLIER Equipment Description INV.# AMOUNT
- - -----------------------------------------------------------------------------------------------------------------------
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA396725 55,857.00
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA409129 9,149.78
ACCU-SAFE Safe 6031 3,221.00
ADVANCE ENERGY TECH. Retrofix Cooler Combo 7235 44,389.00
ALARMINGLY AFFORDABLE Complete supermarket installation per invoice 20256 31,922.93
ALLTEC PRODUCTS Cold pressure washer 97537 5,493.38
CROWN EQUIPMENT PW 3000 Series Walkie Pallet Trucks 26042 15,190.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2864 38,699.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2941 1,380.19
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2957 4,120.59
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2962 1,550.44
GLOBE-MONTE METROPOLITAN Hickory 7G Rotisserie, S/N: 07907 19504 5,279.35
GLOBE-MONTE METROPOLITAN Henny Penny #500 Fryer, SIN: GBO26IF 19506 6,836.59
MID SOUTH DATA SYSTEMS Computers as more fully described on invoice 22330A 129,738.17
SIEGMEISTER SALES 8 - New machines more fully desc. on quote and del. ticket 30425 27,531.00
TREIF USA PUMA CE 700 Power Cutter 1274 21,260.00
WT WINTER ASSOCIATES Combo station, master step saver 11962 39,718.98
WT WINTER ASSOCIATES Auto wrapping weigh & accessories 12068 29,242.50
--------------
TOTAL $ 470,579.90
==============
TOTAL CAPITALIZED LESSOR'S COST $ 1,478,183.15
INITIAL
--------
Page 4
ANNEX B
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: Western Beef, Inc. ("Seller"), for and in
consideration of the sum of One Dollar ($1) and other good and valuable
consideration, provided by THE FIFTH THIRD LEASING COMPANY ("Buyer"), with
offices at 38 Fountain Square, Fifth Third Center, Fifth Floor, Cincinnati, OH
45263, the receipt of which is hereby acknowledged, does hereby sell, assign,
transfer, set over and convey to Buyer the equipment (`the Equipment") leased
under Schedule No. F-1 dated as of December 29, 1997, between Seller and Buyer,
executed pursuant to the Master Lease Agreement dated December 29,1997, between
Seller and Buyer, a copy of which is attached hereto and made a part hereof.
Buyer and Seller agree and acknowledge that ;the sale and conveyance
contemplated hereby is solely for the purpose of granting to Buyer a security
interest in the Equipment and Seller shall retain legal title to such Equipment.
All Equipment in which an interest is conveyed hereby shall remain in the
possession of Seller pursuant to the Lease.
Buyer is purchasing the Equipment described above in reliance upon its personal
inspection and knowledge of the Equipment and in an "AS-IS, WHERE-IS",
condition.
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE EXCEPT
THAT (1) SELLER HAS GOOD TITLE TO THE EQUIPMENT, FREE AND CLEAR OF ALL LIENS,
CLAIMS AND ENCUMBRANCES, (2) BUYER WILL ACQUIRE ITS INTEREST IN THE EQUIPMENT
FREE FROM ALL LIENS, CLAIMS AND ENCUMBRANCES, AND (3) SELLER HAS THE RIGHT TO
SELL AND CONVEY THE EQUIPMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SELLER MAKES NO WARRANTIES WITH RESPECT TO THE QUALITY, CONBTENT, CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE EXUIPMENT AND NO
WARRANTIES AGAINST PATENT INFRINGEMENT OR THE LIKE.
IN WITNESS WHEREOF, Buyer and Seller have executed this Bill of Sale this 30th
day of December, 1997.
BUYER: SELLER:
THE FIFTH THIRD LEASING COMPANY, WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------