Exhibit 10.22
MASTER LEASE AGREEMENT
NUMBER 125
LESSOR: THIRD STREET SERVICES, INC.
(Herein called "Lessor")
ADDRESS: 1646 N. California Blvd., Suite 510, Walnut Creek, CA
94596
LESSEE: HMT TECHNOLOGY CORPORATION
(Herein called "Lessee")
ADDRESS: 1055 Page Avenue Fremont, CA 94538
1. LEASE. Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor, subject to the terms of the Lease
Agreement (the "Agreement") the personal property (together with all
attachments, replacements, parts, substitutions, additions, repairs,
and accessories at any time incorporated therein and/or affixed,
thereto, herein called "Equipment") described in the Rental Schedule,
and all addenda, attachments, schedules, exhibits and riders as they
relate to the Rental Schedule.
2. TERM AND RENT. The term of this lease and obligation to pay
rent hereunder for each item of Equipment shall commence upon
acceptance by Lessee and execution of a Delivery and Acceptance
Certificate on behalf of Lessee and Lessor ("Lease Commencement
Date(s)"), and shall continue at the amount and for a period designated
on the Rental Schedule unless sooner terminated pursuant to the
provisions hereof. All rent and other amounts due hereunder shall be
payable unconditionally, without any deduction, counterclaim, set-off,
further notice or demand, and together with all other payments due.
Any nonpayment of rent or other amounts due hereunder shall result in
the obligation of Lessee promptly to pay also an amount equal to twelve
percent (12%) per annum (or the maximum per annum rate of interest
permitted by law, whichever is less) of the overdue rent or other
amounts for the period of time during which they are overdue.
3. WARRANTIES. Lessee acknowledges that it has made the selection
of each item of Equipment based upon its own judgment and expressly
disclaims any reliance upon statements made by Lessor, as evidenced by
Lessee's execution of a Certificate of Delivery and Acceptance. LESSOR
MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE WITH RESPECT TO THE
EQUIPMENT AND HEREBY DISCLAIMS THE SAME. However, so long as no Event
of Default has occurred and is continuing, and to the extent permitted
by the Equipment manufacturer, Lessor shall furnish to Lessee such
warranties as are normally furnished by manufacturer to Lessor and make
any assignment to Lessee required to transfer the rights herein to
Lessee.
4. TITLE:IDENTIFICATION:PERSONAL PROPERTY. Title to Equipment
shall at all times remain in Lessor, and Lessee, at its own cost and
expense, shall protect and defend the title of Lessor. The Equipment
shall remain personal property irrespective of its use or manner of
attachment to realty, and Lessee agrees to take such action at its
expense as may be necessary to prevent any third party from acquiring
any interest in the Equipment as a result of its attachment to realty.
If requested by Lessor or required by federal, state or local law,
Lessee shall, at Lessee's expense, affix or attach to the Equipment and
maintain a sign or other form of notice to disclose Lessor's ownership
of the Equipment.
Lessee agrees not to sell, assign, sublet, pledge, hypothecate, or
otherwise encumber or suffer a lien upon or against any interest in
this Agreement or the Equipment or to remove or relocate the Equipment
without Lessor's prior written consent.
5. TAXES:INDEMNITY. Lessee agrees to comply with all laws,
regulations and orders relating to the Agreement and to promptly pay
when due, all license fees, title registration fees, assessments and
sales, use, property, excise and other taxes whatsoever now or
hereafter imposed by any governmental body or agency upon the
Equipment, or the use thereof whether upon the Lessor or otherwise,
exclusive, however, of any taxes based on the net income of Lessor, and
to assume the risk of liability arising from or pertaining to the
possession, operation or use of such Equipment. Any fees, taxes or
other lawful charges paid by Lessor upon failure of Lessee to make such
payments, shall at Lessor's option become immediately due from Lessee
to Lessor. Lessee does hereby agree to indemnify, hold safe and
harmless from and covenants to defend Lessor against any and all
claims, costs, expenses, damages and liabilities, arising from or
pertaining to the purchase, ownership and title to, the Equipment, use,
possession, maintenance, condition, operation (such indemnity expressly
includes any claim arising from the strict liability in tort) or
transportation or storage, or any damage, loss, destruction, removal or
disposition of such Equipment. The indemnities contained in this
Paragraph shall survive the term of this Agreement.
6. USE, MAINTENANCE AND REPAIR. Lessee may possess and use the
Equipment in accordance with this Agreement, provided that any such use
is in conformity with all applicable laws, any insurance policies, and
any warranties of the manufacturer with respect to the Equipment.
Lessee shall not use the Equipment for any purpose other than that for
which it was designed. Lessor shall have the right, upon reasonable
prior notice to the Lessee and during the Lessee's regular business
hours, to inspect the Equipment at the premises of the Lessee or
wherever the Equipment may be located. Lessee shall promptly notify
Lessor of all details arising out of any change in location of the
Equipment, any alleged encumbrances thereon or any accident allegedly
resulting from the use or operation thereof.
Lessee, at all times and at its own expense, will cause the
Equipment to be maintained in good operating order and repair, and in
the same condition and appearance as when first accepted by Lessee,
ordinary wear and tear from the normal and proper use thereof alone
excepted. Without the prior written consent of Lessor, Lessee shall
make no repair, alteration or attachment with respect to any item of
Equipment which interferes with the normal and satisfactory operation
or maintenance thereof, or creates a safety hazard, . All additions,
attachments, accessories and repairs at any time made or placed upon
the Equipment shall become part of the Equipment and shall be the
property of Lessor except such as may be removed without in any way
affecting or impairing the originally intended function or use of such
Equipment. If any such addition, attachment or accessory is removed,
Lessee agrees, at its own expense, to restore the Equipment to its
original condition and configuration, ordinary wear and tear excepted,
as when first accepted using only manufacturer's approved replacement
parts.
7. LOSS, DAMAGE OR DESTRUCTION OF EQUIPMENT. Lessee shall bear
all risks of damage to, or loss or destruction of, any Equipment during
the lease term and until such Equipment has been returned to Lessor.
Except as otherwise herein expressly provided, no such damage to, or
loss or destruction of, any Equipment, shall impair any obligation of
Lessee to Lessor, under this Lease, including, without limitation, the
obligation to pay rent. If any Equipment becomes lost, stolen,
destroyed or irreparably damaged from any cause whatsoever, or if any
item of Equipment or Lessor's title thereto shall be subject to any
condemnation or seizure (all referred to as a "Casualty Occurrence"),
Lessee shall promptly give written notice to, and shall, within thirty
(30) days after such Casualty Occurrence, pay Lessor an amount equal to
the sum of (i) the accrued rent payable for such item from the date of
such Casualty Occurrence up to and including the date of such payment,
plus (ii) the "Stipulated Loss Value" as set forth in Schedule A or
any subsequent schedules which may hereafter be made a part thereof.
Notwithstanding the foregoing, provided that no event of default has
occurred and is continuing, Lessee may, in lieu of paying the
Stipulated Loss Value as provided in (ii) above, replace such affected
Equipment with property reasonably acceptable to Lessor of like kind,
equal fair market value, utility, economic useful life, in good repair,
condition and working order; which property shall thereupon be subject
to this Agreement. Upon such payment or replacement, this Lease shall
terminate with respect to the affected Equipment or part thereof so
paid for or replaced and Lessee thereupon shall become entitled
thereto.
Any insurance proceeds received as the result of a Casualty
Occurrence shall be applied first in reduction of any then unpaid
obligation of Lessee to Lessor hereunder and secondly, in reduction of
Lessee's obligation in accordance with section (ii) above to pay the
"Stipulated Loss Value" for such item, or, to the reimbursement of
Lessee for its costs of repairs, or replacement or payment of such
"Stipulated Loss Value." The balance of the insurance proceeds, if any,
shall be paid to Lessee, if Lessee is not then in default hereunder.
8. REQUIRED INSURANCE. Lessee shall obtain and maintain for the
entire term and until the Equipment is returned to Lessor, at its own
expense, property, damage and liability insurance and insurance against
loss or damage to the Equipment, including, without limitation, loss by
fire, theft, collision and such other risks of loss as are customarily
insured against on the type of Equipment leased hereunder and by
businesses in which Lessee is engaged, in such amounts in such form and
with such insurers as shall be in conformance with standard industry
practice. The amount of insurance against loss or damage to the
Equipment shall not be less than the Stipulated Loss Value of the
Equipment. Each policy will name Lessor as an additional insured and
loss payee thereof as its interests may appear, shall contain a clause
requiring the insurer to give Lessor at least thirty (30) days prior
written notice of any material alteration in the terms of such policy
or of the cancellation thereof . Lessee shall furnish to Lessor a
certificate of insurance or other evidence satisfactory to Lessor that
such insurance coverage is in effect, provided, however, that Lessor
shall be under no duty either to ascertain the existence of or to
examine such insurance policy or to advise Lessee in the event such
insurance coverage shall not comply with the requirements hereof.
9. ANNUAL REPORT. Lessee shall, as soon as practicable, deliver
to Lessor Lessee's annual report of financial condition, prepared in
accordance with generally accepted accounting principles, in a manner
consistently applied. Lessee represents and warrants that each such
statement shall fully and fairly present the true financial condition
of Lessee.
10. FURTHER ASSURANCES. Lessee, at its sole expense, will promptly
execute and deliver to Lessor and file, register or record such further
documents, (including but not limited to financing statement(s), and
take such further action (such as obtaining Landlord or Mortgagee's
Waiver and Consent), as Lessor may reasonably request in order to more
effectively carry out the intent and purpose of this Lease.
Lessor agrees, if applicable, to make such election, and to duly
execute, file or deliver to Lessee documents necessary to effectuate
such elections from time to time during the term of this Lease to
transfer to Lessee the benefit of any investment credit that may be, or
may become available under the Internal Revenue Code with respect to
the Equipment.
11. EVENTS OF DEFAULT. An event of default shall hereunder occur
if Lessee (i) fails to pay any installment of rent or other payment
required hereunder when due and such failure continues for a period of
five (5) days after written notice is sent from Lessor; or (ii) fails
to perform or observe any other covenant, condition or agreement
hereunder or breaches any representation or provision contained herein
or in any other document furnished Lessor in connection herewith, and
such failure or breach shall continue unremedied for a period of
thirty (30) days after written notice is sent from Lessor; or (iii)
shall commit an act of bankruptcy or become insolvent or bankrupt or
make an assignment for the benefit of creditors or consent to the
appointment of a Trustee or Receiver or either shall be appointed for
Lessee or for a substantial part of its property without its consent,
or bankruptcy, reorganization or insolvency proceedings shall be
instituted by or against Lessee and any such act or appointment shall
not be vacated, discharged or dismissed in a period of sixty (60)
days; or (iv) shall be in default under any bankruptcy reorganization
or insolvency proceedings or shall be in default under any other
agreement at any time executed with Lessor.
12. REMEDIES OF LESSOR. Upon the occurrence of any event of
default and at any time thereafter as Lessor may, at its option, do any
one or more of the following: (1) declare this Agreement in default
upon notice to Lessee, whereupon, the entire amount of rent remaining
to be paid over the balance of the lease term of all Equipment from the
date of default, together with all other charges, shall become
immediately due and payable; (2) exercise any right or remedy available
to Lessor under the Uniform Commercial Code or any other applicable
law; proceed by appropriate actions at law or in equity to enforce
performance by Lessee of the covenants and terms of this Agreement
and/or recover damages for the breach thereof; (3) terminate this
Agreement upon notice to Lessee; and demand that Lessee return all
Equipment to Lessor; (4) whether or not this Lease be so terminated,
and without notice to Lessee, subject to all requirements of applicable
law enter the premises where the Equipment is located without liability
of any nature and repossess the Equipment wherever found, with or
without legal process. Repossession by Lessor shall not constitute a
termination of this Agreement.
Lessee shall be liable for all reasonable legal and collection
fees, costs and expenses arising from an event of default and the
exercise of Lessor's remedies hereunder, including cost of
repossession, storage, repairs, reconditioning, re-leasing with respect
to such Equipment.
With respect to any Equipment returned to Lessor, or repossessed by
Lessor if Lessor has not terminated this Lease, Lessor shall either
sell same at a private or public, cash or credit sale, or re-lease same
for such term and upon such rental as shall be solely determined by
Lessor. Whether or not the Equipment is repossessed or leased or sold,
Lessor may forthwith recover from Lessee as liquidated damages for
breach of this Lease, and not as a penalty, an amount equal to, at
Lessor's option, (i) (X) the entire amount of rent and all other
charges due under this Agreement or incurred under the provisions of
this paragraph which would have accrued for the balance of the lease
term of such Equipment, computed from the date of Lessee's default, or
(Y) the sum of (a) accrued and unpaid rent as of the date of Lessee's
default plus (b) the Stipulated Loss Value applicable to such Equipment
as of the date of Lessee's default, less (ii) the proceeds of any sale
or re-leasing of such Equipment, if applicable. The amount described
in either subclause (i) X, or resulting from a re-lease of the
Equipment as described in subclause (ii) hereof, shall be discounted to
their then present value at the rate of six percent (6%) per annum. In
addition, there shall be added to such amounts, after such discount,
interest at twelve percent (12%) from the date of Lessee's default up
to the date of the payment of such amounts to Lessor.
In the event that any court of competent jurisdiction determines
that any provision of this Paragraph is invalid or unenforceable in
whole or in part, such determination shall not prohibit Lessor from
establishing its damages sustained as a result of any breach of this
Agreement in any action or proceedings in which Lessor seeks to recover
such damages. Any repossession or resale of any Equipment shall not
bar an action for damages for breach of this Agreement, as hereinbefore
provided, and the bringing of an action or the entry of judgment
against Lessee shall not bar Lessor's right to repossess any or all
Equipment.
The remedies herein provided in favor of Lessor, shall not be
deemed to be exclusive, but shall be cumulative and shall be in
addition to all other remedies in Lessor's favor existing in law, in
equity, or in bankruptcy.
13. RETURN OF EQUIPMENT. Upon the expiration or earlier
termination of any Schedule, unless Lessee shall have duly exercised
any renewal or purchase option with respect thereto, or following the
occurrence of any Event of Default by Lessee under this Lease, Lessee
will, at its expense, have the Equipment deinstalled, properly packed,
insured and delivered to such location or locations within the
continental United States (limited to one location per termination or
expiration) as may be designated by Lessor in writing. Upon
deinstallation, the original manufacturer shall certify in writing at
Lessee's expense that the Equipment is eligible for the manufacturer's
maintenance contract and up to the then current engineering and
revision levels, not including upgrades as may be available. The
Equipment shall be returned in the same condition as when first
accepted by Lessee, complete, (including all cables, manuals,
diagnostics, and items originally supplied), ordinary wear and tear
from the normal and proper use thereof alone excepted.
14. ASSIGNMENT BY LESSOR. Lessee acknowledges that Lessor may sell
and/or assign its interest in the Equipment and/or this Lease. LESSEE
AGREES THAT UPON NOTICE OF SUCH ASSIGNMENT IT SHALL PAY DIRECTLY TO
LESSOR'S ASSIGNEE WITHOUT ABATEMENT, DEDUCTION OR SETOFF ALL AMOUNTS
WHICH BECOME DUE HEREUNDER AND FURTHER COVENANTS AND AGREES THAT IT
WILL NOT ASSERT AGAINST LESSOR'S ASSIGNEE ANY DEFENSE OR COUNTERCLAIM
OR SETOFF ON ACCOUNT OF BREACH OF WARRANTY OR OTHERWISE IN ANY ACTION
FOR RENT OR FOR POSSESSION BROUGHT BY LESSOR'S ASSIGNEE. Upon the
assignment of the Lease, Lessor's assignee shall have and be entitled
to exercise any and all discretions, rights and remedies of Lessor
hereunder and all references herein to Lessor shall include Lessor's
assignee except that said assignee shall not be chargeable with any
obligation or liabilities of Lessor hereunder or with respect thereof.
15. TAX INDEMNITY. Lessee acknowledges the Rental Amount provided
for in any Schedule is computed on the assumption that: (a) Lessor and
the consolidated Federal taxpayer group of which it is a member [all
references to Lessor in this Section include such consolidated Federal
taxpayer group] shall be treated for United States corporation income
tax purposes [and to the extent allowable for state and local tax
purposes] as the owner of the Equipment and will be entitled to
depreciation deductions based on Lessor's total cost of the Equipment
under: (i) appropriate Sections of the Internal Revenue Code of 1986,
as amended [the "Code"], in amounts equal to the most accelerated
method, shortest recovery period and appropriate convention allowed for
the regular tax system; and (ii) accelerated cost recovery (5 year
MACRS) deductions for state and local income tax purposes in effect at
the time such Schedule is entered into [such deductions being referred
to hereinafter as the "Tax Benefits"]; and (b) all amounts includible
in the gross income of Lessor with respect to the Equipment will be
treated as derived from or allocable to sources within the United
States.
Lessee represents and warrants to Lessor that (i) Lessor shall be
entitled to take the Tax Benefits and that it has not, and will not, at
any time during the term of the Lease, take any action or omit to take
any action [whether or not the same is permitted in the Lease] which
will result in the loss or delay by Lessor of all or any part of the
Tax Benefits except where such loss or delay is the result of an action
or omission on behalf of Lessor and (ii) all amounts includible in the
gross income of Lessor with respect to the Equipment and all deductions
or credits allowable to Lessor with respect to the Equipment will be
treated as derived from or allocable to sources within the United
States. If as a result of any act, omission or misrepresentation of
Lessee, Tax Benefits are lost, disallowed, eliminated, reduced,
recaptured, compromised, delayed or otherwise made unavailable to
Lessor (any of the foregoing being hereafter called a "Loss"), Lessee
shall promptly pay to Lessor on demand, as additional rent, an
indemnity payment, in the form of a one-time lump sum amount in cash,
or at Lessor's option, as an adjustment to the remaining rent payments,
which is equal to that which provides Lessor with the same net after-
tax yield Lessor originally anticipated realizing from the transaction
contemplated by the Lease prior to the Loss, computed on the same
assumptions, bases and methodology, including tax rates, as were
originally used by Lessor in calculating rent, and taking into account
any present and future federal and state tax benefits expected to be
available to Lessor as a result of such Loss, provided that if the
computations are submitted to Accountants (as provided below), no
payment shall be due until the Accountants make a final determination
of what they believe to be the correct computations.
Lessee shall not be liable for indemnification respecting a Loss or
a Foreign Loss occurring solely as a result of: (A) Lessor being
subject to the application of the mid-quarter convention of Section
168(d)(3) of the Code, (B) Lessor failing to claim in a timely or
proper manner the Tax Benefits (unless Lessor determines that there is
no reasonable basis to claim such Tax Benefits) or Lessor making any
election to claim the Tax Benefits in a manner less rapid than
contemplated by the definition thereof, (C) Lessor failing to have
sufficient taxable income to utilize the Tax Benefits, (D) Lessor being
subject to the "alternative minimum tax" of Section 55 of the Code, (E)
a voluntary transfer or other voluntary disposition by Lessor of any
interest in any Equipment or this Lease, or any involuntary transfer
resulting from the bankruptcy of Lessor, when no event of default
exists, (F) a Casualty Occurrence whereby Lessee takes the actions
required by Section 7 above, (G) any change in the Code (or comparable
state income tax code), the regulations promulgated thereunder, or any
judicial decision interpreting the Code (or comparable state income tax
code) or such regulations, passed or issued after the date of this
Lease; [or (H) the election by Lessee to terminate this Lease early
pursuant to the Addendum to the Rental Schedule]
In the event of a breach of the representation and warranty stated
in (ii) above, if any item of income credit or deduction with respect
to the Equipment shall not be treated as derived from, or allowable to,
sources within the United States for a given taxable year (any such
event hereinafter referred to as "Foreign Loss") then Lessee shall pay
to Lessor as an indemnity, such amount as, after deduction of all taxes
required to be paid by Lessor in respect of the receipt of such amounts
under the laws of any Federal, state or local government or taxing
authority of the United States, shall equal the sum of: (I) the excess
of (x) the foreign tax credits which Lessor would have been entitled to
for such year had no such Foreign Loss occurred over (y) the foreign
tax credits to which Lessor was limited as a result of such Foreign
Loss and (II) the amount of any interest, penalties or additions to tax
payable as a result of such Foreign Loss. The amount payable to Lessor
shall be paid no later than 15 days after receipt of a written demand
therefor from Lessor accompanied by a written statement describing in
reasonable detail such Foreign Loss and computation of the amount so
payable. The results of all computations required under this Section
15, together with a statement describing in reasonable detail the
manner in which such computations were made, shall be delivered to
Lessee in writing. If Lessee so requests within 30 days after receipt
of such computations, any determination shall be reviewed by an
independent national accounting firm mutually acceptable to Lessee and
Lessor (the "Accountants"), who shall be asked to verify, after
consulting with Lessee and Lessor whether Lessor's computations are
correct, and to report its conclusions to both Lessee and Lessor. The
Lessor and Lessee hereby agree to provide the Accountants, subject to
the execution of a satisfactory confidentiality agreement, with all
information and materials as shall be reasonably necessary or desirable
in connection herewith. The fees of the Accountants in verifying an
adjustment pursuant to this Section shall be paid by Lessee, unless
such verification discloses an error adverse to Lessee of an amount
greater than 10%, in which case such fees shall be paid by Lessor. Any
information provided to the Accountants by any person shall be and
remain the exclusive property of such person and shall be deemed by the
parties to be (and the Accountants will confirm in writing that they
will treat such information as) the private, proprietary and
confidential property of such person, and no person other than such
person and the Accountants shall be entitled thereto, and all such
materials shall be returned to such person. The Accountants shall be
requested to make their determination within 30 days. In the event the
Accountants shall determine that such computations are incorrect, then
the Accountants shall determine what they believe to be the correct
computations. The computations of the Accountants shall be final,
binding and conclusive upon Lessee and Lessor and Lessee shall not have
any right to inspect the books, records, tax returns or other documents
of or relating to Lessor to verify such computations or for any other
purpose. The Lessee and Lessor hereby agree that the Accountants' sole
responsibility shall be to verify the amount of any payment pursuant to
Section 15 hereof and that matters of interpretation of this Lease are
not within the scope of the Accountants' responsibilities. The
provisions of this Section shall survive the expiration or earlier
termination of this Lease for any reason.
16. CONTEST RIGHTS LANGUAGE.
(i) Lessor agrees promptly to notify Lessee of any written
claim against Lessor by the Internal Revenue Service or any state tax
agency ("State Tax Agency") that Lessor is not entitled to all or any
portion of the Tax Benefits, or that any item of income, credit or
deduction with respect to the Equipment shall not be treated as derived
from, or allowable to, sources within the United States for a given
taxable year (a "Claim"), for which there is a required indemnity (but
Lessor's failure to notify Lessee shall not impair Lessor's right to
indemnification except to the extent that Lessee's right to contest
such claim has been adversely affected). The Lessor agrees that if (i)
in the opinion of independent tax counsel of recognized standing
selected and paid for by Lessee and reasonably acceptable to Lessor
("Tax Counsel"), there is a reasonable basis to contest the Claim; (ii)
Lessee shall have agreed in writing to indemnify Lessor with respect to
such contest; and (iii) no event of default shall have occurred and be
continuing, Lessor shall, upon request and at the expense of Lessee,
cooperate with Lessee in good faith in order to contest such Claim (and
shall, upon the request and at the expense of Lessee), subsequently
appeal any adverse determination provided that Tax Counsel issues an
opinion concurred in by tax counsel for Lessor that the appeal will be
successful in the appropriate administrative and legal forums selected
by Lessor in its sole discretion (provided that Lessor shall consider
in good faith such request as Lessee shall make concerning the
appropriate forum in which to proceed). During the course of any such
contest, Lessee shall have the right to participate in the conduct
thereof, to the extent that such participation by Lessee does not
materially interfere with Lessor's control of such contest. The Lessor
agrees that it will not settle or otherwise compromise a contested
Claim for which Lessee would be required to make an indemnity payment
pursuant to the provisions of this Section without Lessee's prior
written consent except where Lessor agrees in writing to forego such
indemnity payment.
The Lessor further agrees that the failure of Lessor to timely
contest a Claim against Lessor in the manner and as required by this
Section shall relieve Lessee of its obligations to Lessor as provided
in this Section to the extent such failure precludes effective conduct
of such contest.
(ii) If Lessor contests a Claim prior to making payment, then any
indemnity payable pursuant to this Section need not be paid by Lessee
while such action is pending, provided that Lessee shall pay the
reasonable out-of-pocket costs and attorneys fees relating to such
action when and as the same shall become payable. In such case, if the
Final Determination (as hereinafter defined) shall be adverse to
Lessor, the amount of the indemnity payable hereunder shall be computed
as of the date of such Final Determination and Lessee shall make
payment thereof as provided in this Section within ten (10) days after
the date of the Final Determination.
(iii) If Lessor makes a payment of tax and then contests such
Claim by suing for a refund, the amount of such payment shall be
advanced by Lessee to Lessor on an interest-free basis on or before ten
(10) days after the date of such payment; provided, however, that in no
event will the amount of the advanced exceed the indemnifiable amount
under this Section. If Lessor sues for a refund after making payment
and if the Final Determination shall be in favor of Lessor, Lessor
shall pay to Lessee an amount equal to the lump sum theretofore paid by
Lessee to Lessor (or a proportionate part thereof if the Final
Determination is partly adverse to Lessor) on or before ten (10) days
after the receipt of the refund that results from such Final
Determination, together with interest thereon paid by the United States
Government or State Tax Agency. If Lessor sues for a refund after
making payment and if the Final Determination shall be adverse to
Lessor, the amount of the indemnity payable under this Section shall be
computed as of the date of the Final Determination and Lessee shall
make payment thereof as provided herein within ten (10) days after the
date of the Final Determination, after giving effect to such advance.
(iv) "Final Determination" means a final decision by the Internal
Revenue Service or State Tax Agency (after exhaustion of all
administrative procedures) or a court of competent jurisdiction, in
either case, after all allowable appeals or other actions requested by
Lessee in accordance with this Lease have been exhausted or taken by
either party to the action.
(v) Notwithstanding anything to the contrary contained herein,
Lessor may at any time decline to take any further action with respect
to a proposed adjustment, provided however, that if Lessee has properly
requested such action pursuant to this Section, Lessor shall notify
Lessee that Lessor waives its right to any payment by Lessee that would
otherwise be payable pursuant to this Section with respect to the Loss
or Foreign Loss at issue.
(vi) The contest rights procedures described in the foregoing
paragraphs are in addition to the dispute resolution mechanism
described above with respect to the Accountants' determination.
17. REPRESENTATION AND WARRANTIES OF LESSEE. Lessee hereby
represents, warrants and covenants that, with respect to this Agreement
and any related documents: (a) the execution, delivery and performance
thereof by Lessee have been duly authorized by all necessary corporate
or organizational action; (b) the individual executing such documents
is duly authorized to do so; and (c) the Agreement and any related
documents constitute legal, valid and binding agreements of Lessee
enforceable in accordance with their respective terms.
18. NON-CANCELLABLE LEASE, LESSEE'S OBLIGATIONS UNCONDITIONAL.
This lease cannot be cancelled or terminated except as expressly
provided herein.
19. MISCELLANEOUS. This Agreement may not be amended except in
writing executed by Lessor and Lessee, and shall be binding upon and
inure to the benefit of the parties hereto, their permitted successors
and assigns. Any provision of this Agreement which is 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. The captions
of this Agreement are for convenience only and shall not define or
limit any of the terms hereof. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of
California.
______ Lessee Initial
20. INTENT; TITLE. Notwithstanding the express intent of the
parties, should a court of competent jurisdiction determine that this
Agreement is not a true lease, but rather one intended as security,
then solely in that event and for the expressly limited purposes
thereof, Lessee shall be deemed to have hereby granted Lessor a
security interest in the Lease, the Equipment, and all accessions
thereto, substitutions and replacements therefor, and proceeds
(including insurance proceeds) thereof to secure the prompt payment and
performance as and when due of all obligations and indebtedness of
Lessee to Lessor, now existing or hereafter created;
Except for permitted liens, Lessee further agrees to maintain the
Equipment free from all claims, liens, and legal processes of creditors
of Lessee and will defend, at its own expense, Lessor's title to the
Equipment from such claims, liens or legal processes. Except for
permitted liens, Lessee shall also notify Lessor immediately upon
receipt of any lien, attachment or judicial proceeding affecting the
Equipment in whole or in part. For purposes hereof, "permitted liens"
means mechanics' or materialmen's liens incurred in the ordinary course
of business for sums not overdue.
This Agreement consisting of the foregoing, correctly sets forth
the entire agreement between Lessor and Lessee with respect to the use,
possession and lease of the Equipment. No agreements or understandings
concerning the foregoing shall be binding on either of the parties
hereto unless specifically set forth in this Agreement. The term
"Lessee", as used herein shall mean and include any and all Lessees who
sign hereunder, each of whom shall be jointly and severally bound
thereby. THIS AGREEMENT WILL NOT BE BINDING ON LESSOR UNTIL ACCEPTED
BELOW.
Executed the 9th day of June , 19 98 .
By execution hereof, the signer hereby certifies that he has read this
Agreement, and that he is duly authorized to execute this lease on
behalf of Lessee.
LESSEE: HMT
TECHNOLOGY CORPORATION
By:
Peter Norris
Chief Financial
Officer
Accepted at WALNUT CREEK, CA LESSOR: THIRD STREET
SERVICES, INC.
Date: June 9, 1998 By:
Jeffrey M. Sturm Authorized Signature and Title
President
MASTER LEASE AGREEMENT
Page 12 of 8
June 9, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
RE: Master Lease Agreement dated June 9, 1998 between Third Street
Services, Inc. ("Lessor") as lessor and HMT Technology Corporation
("Lessee") as lessee, and Rental Schedule No. 1-ICX (together,
including all amendments, modifications, riders, exhibits and
attachments, the "Lease"), and the equipment ("Equipment") subject
to the Lease.
Gentlemen:
1. Notice is hereby given that, (a) pursuant to a Without Recourse
Lease Assignment (the "Assignment") between Lessor and ICX Corporation
("Assignee"), the Lease has been assigned and (b) pursuant to a Bill of
Sale, the Equipment has been sold by Lessor to Assignee. Pursuant to
the Assignment, Lessor has collaterally assigned, transferred and set
over unto Assignee:
a. all sums due under the Lease or any extension thereof,
including, without limitation, rentals, interest, late charges,
payments, taxes, income, revenues, issues, profits, insurance proceeds,
awards and proceeds in respect of any taking, casualty, salvage, damage
or termination, and all other amounts, of every kind and nature, now or
hereafter payable to or receivable by the Lessor in respect of the
Equipment or the Lease (collectively "Payments");
b. all claims, rights, privileges, options, elections, powers and
remedies, now existing or hereafter arising, of Lessor under or pursuant
to any provision of the Lease; and
c. all other rights of Lessor to give, make, enter into or receive
any agreement, amendment, notice, consent, demand, waiver or approval
with, to or from Lessee under or in respect of the Lease or any of the
Equipment, to accept surrender of any of the Equipment, or to terminate
or cancel the Lease;
in each case together with full power and authority, in the name of
Lessor or Assignee, to enforce, collect, receive and receipt for any or
all of the foregoing.
2. In connection with the Assignment, Lessor and Assignee hereby
irrevocably direct you to remit to Assignee all Payments required to be
made pursuant to the Lease beginning with the first payment date
following receipt of this notice and continuing thereafter through and
including the payment due May 10, 2003 .
All payments should be mailed directly to Assignee at 3 Summit Park
Drive, Suite 200, Cleveland, OH 44131 (or to such other address or
party as Assignee may otherwise direct). Any notices and other
communications should also be given or sent to Assignee at the
foregoing address or in the event of registered or certified mail or
overnight delivery sent to 3 Summit Park Drive, Suite 200, Cleveland,
OH 44131 .
3. This letter will also serve to confirm the following
representations: (a) that your obligation to pay the Payments to
Assignee as set forth in the Lease shall be unconditional and that you
will make the Payments (i) without any right of setoff, defense or
counterclaim subject only to any action by Assignee which materially and
adversely affects your physical possession or use of the Equipment at a
time when you are not in default under the Lease, and (ii) regardless of
whether or not you shall have received an appropriate invoice with
respect thereto and (iii) notwithstanding any rights, claims, or causes
of action which you may have, or may hereafter acquire under the Lease,
as a result of any defect in the Equipment or otherwise; (b) that the
Lease is in full force and effect; (c) that all items of Equipment have
been delivered and installed at the location set forth in the relevant
Rental Schedule under the Lease and have been found to be in good
working order and are accepted by you under the Lease; (d) that the
Assignee shall enjoy all of the Lessor's rights and privileges under the
Lease but shall not be chargeable with any obligations or liabilities
under the Lease; (e) that a copy of any notice which you are required to
give to Lessor under the Lease shall be sent to Assignee; (f) that
without Assignee's prior, express written consent you will not (i) sell,
encumber, surrender, abandon, or (except to the extent permitted by the
Lease) relocate or sublease any of the Equipment, or (ii) subordinate,
encumber, amend, modify, terminate, cancel or assign the Lease; (g) that
any such consent of Assignee, except as expressly otherwise provided by
the terms of the Lease, may be given or withheld in Assignee's
reasonable discretion; (h) that all rights of Lessor under the Lease (i)
to give, make, enter into or receive any agreement, amendment, notice,
consent, demand, waiver or approval with, to or from Lessee under or in
respect of the Lease or any of the Equipment, or (ii) to accept
surrender of any of the Equipment shall be exercised by Assignee; and
(i) except as aforesaid, any act of Lessor or Lessee which contravenes
the provisions of this paragraph 3 shall be void as against Assignee and
if committed by Lessee shall constitute an Event of Default under the
Lease.
4. You also represent, agree and acknowledge that: (a) the remaining
term of the Lease is sixty (60) months commencing on June 10, 1998; (b)
the Monthly Rental is $22,463.24 and is due and payable in advance on
the tenth day of each month during the remaining term; (c) no Event of
Default under the Lease and no event which, but for the passage of time
or the giving of notice or both, would be an Event of Default under the
Lease exists on the part of Lessee or (to the best of your knowledge) on
the part of Lessor in the performance of their respective obligations
under the Lease; (d) there has been no material adverse change in your
financial condition since the date of your last certified financial
statements furnished to Lessor; and (e) you will furnish Assignee with
such financial information as it may reasonable request, including,
within 90 days after the close of your fiscal year, your annual audited
financial statements, and within 60 days after the end of each of the
first three quarters of your fiscal year, your quarterly financial
statements, similarly prepared but not necessarily audited, and signed
by your chief financial officer.
5. Pursuant to Section 8 of the Lease, we hereby request that you
promptly arrange to (a) add Assignee as an additional insured under each
liability insurance policy required under the Lease, (b) name Assignee
as loss payee under each insurance policy covering the Equipment
required by Lease, and (c) furnish to Assignee evidence of such
insurance coverage not later than thirty days from the date hereof.
6. The assignment in the Assignment shall not be deemed to relieve
Lessor of any obligations under the Lease.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Title: Peter Norris, CFO
Acknowledged and Agreed:
ICX CORPORATION
By:
Title:
RENTAL SCHEDULE TO
MASTER LEASE AGREEMENT
RENTAL SCHEDULE NO. 1-ICX to Master Lease Agreement No. 125
dated June 9 , 19 98 , (the "Lease") by and between the
undersigned, the terms and conditions of which are hereby incorporated
herein by reference. Lessee hereby (a) authorizes Lessor to order for
lease to Lessee the equipment described herein (the "Equipment") and to
insert hereon the Lease Commencement Date and the partial first period's
rent (if any) for such Equipment upon Lessee's acceptance of same for
lease, (b) agrees to lease such Equipment from Lessor Effective the
Lease Commencement Date thereof and for the lease term specified below,
and (c) agrees to pay Lessor the rent, in the amounts and at the time
specified below, for each item of Equipment. All of the terms used
herein which are defined in the Lease shall have the same meaning as so
defined.
SERIAL ACQUISTION
QUANTITY DESCRIPTION NUMBER COST
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 1-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
TOTAL COST $ 1,256,262.90
This Rental Schedule is for a term of 60 months (plus -0-
days partial first period term) and the Lease Commencement Date is June
10, 19 98 . The partial first period rent of $ -0- is payable
together with $ 22,463.24 (plus applicable sales/use tax)
regular monthly rent on the 10th day of June , 1998 followed
by equal payment of regular rent on the 10th day of each month
thereafter until a total rent of $ 1,347,794.40 has
been paid.
LOCATION OF EQUIPMENT: 1220 Page Avenue, Fremont, CA 94538
The "Acquisition Cost" means an amount equal to the sum of (i) the
purchase price of each item of Equipment paid by Lessor, plus (ii) any
excise, sales and use tax on or with respect thereto, plus (iii) any
costs, expenses, and fees paid or incurred by Lessor in obtaining and
delivering such item of Equipment to Lessee and any expenses of
installation of such item of Equipment paid for by Lessor.
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
Lessor Lessee
By
By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President
Its CFO
(title)
(title)
Date June 9, 1998 Date June 9, 1998
DELIVERY AND ACCEPTANCE CERTIFICATE
RENTAL SCHEDULE NO. 1-ICX
PURSUANT TO MASTER LEASE AGREEMENT NO. 125 , dated as of June 9, 1998
(the "Lease") by and between THIRD STREET SERVICES, INC.
("Lessor") and
HMT
TECHNOLOGY CORPORATION
("Lessee").
The undersigned, being the duly authorized representative of the Lessor
and the Lessee hereby CERTIFIES that the following units of equipment
(the "Equipment") referred to in the Lease between Lessor and the
Lessee.
QUANTITY DESCRIPTION SERIAL NUMBER
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 1-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
have been duly delivered to the Lessor in good order and duly inspected
and accepted by the undersigned as of the date hereof on behalf of the
Lessor, and have thereby been duly delivered by the Lessor to the Lessee
and have been duly accepted and inspected by the undersigned on said
date on behalf of the Lessee as conforming in all respects with the
requirements and provisions of the Lease.
HMT TECHNOLOGY CORPORATION
By:
Its: Peter Norris, CFO
Date: June 9, 1998
ADDENDUM TO RENTAL SCHEDULE NO. 1-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Addendum shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. EARLY TERMINATION OPTION: As long as no event of default exists
or will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to terminate this Rental Schedule on:
a) June 9, 2001 (the "First Early Termination Date") by paying
Lessor an amount equal to $376,878.87 (30% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the First Early Termination Date and return the Equipment to
Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits; or
b) June 9, 2002 (the "Second Early Termination Date") by paying
Lessor an amount equal to $226,127.32 (18% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the Second Early Termination Date and return the Equipment
to Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits.
2. EARLY PURCHASE OPTION: As long as no event of default exists or
will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to purchase all, but not less than all, of the Equipment under this
Rental Schedule on October 9, 2002 (the "Early Purchase Date") by
paying Lessor an amount equal to ($376,878.87) (30% of the Acquisition
Cost of the Equipment) plus all other amounts then due and payable under
the Rental Schedule as of the Early Purchase Date. Such Early Purchase
Option purchase amount includes consideration to Lessor for Lessee's
recapture of the tax benefits.
3. END OF TERM OPTIONS
A. PURCHASE OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
purchase all, but not less than all, of the Equipment for the then "Fair
Market Value" (as hereinafter defined) plus all other amounts then due
and payable under the Rental Schedule; or
B. RENEWAL OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
renew the Rental Schedule term for an additional twelve (12) months
("Renewal Term") at a Lease Rate Factor of 0.9337% of the Acquisition
Cost ($11,729.73 per month) with the first such rental payment being due
and payable by Lessee on June 10, 2003, and then to return all but not
less than all of the Equipment to Lessor at the expiration of the
Renewal Term as specified in Paragraph C, or
C. RETURN OPTION: Lessee will at its sole risk and expense
immediately return all but not less than all of the Equipment to Lessor
crated and packaged to Lessor's specification, to a place designated by
Lessor within the continental United States, and otherwise in accordance
with the return provisions of the Rental Schedule and in the condition
required by the Rental Schedule.
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee on the basis of, and shall be equal in amount
to, the value one would obtain in an arm's-length transaction between an
informed and willing buyer-user and an informed and willing retail
seller under no compulsion to sell. It shall be assumed that the
Equipment is in the condition in which it is required to be returned
under the Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President Its CFO
(title)
(title)
Date June 9, 1998 Date June 9, 1998
AMENDMENT NO. 1 TO
ADDENDUM TO RENTAL SCHEDULE NO. 5-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Amendment shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. Replace Section D. FAIR MARKET VALUE with the following:
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee and approved by Lessor or, if
applicable, its Assignee, which will not be unreasonably withheld,
on the basis of, and shall be equal in amount to, the value one
would obtain in an arm's-length transaction between an informed and
willing buyer-user and an informed and willing retail seller under
no compulsion to sell. It shall be assumed that the Equipment is
in the condition in which it is required to be returned under the
Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President Its CFO
(title)
(title)
Date June 24, 1998 Date June 24, 1998
EXHIBIT B
TO: Insurance Company or Agent
Name: J&H Marsh & McLennan, Inc. Contact: Christina Marcon
Address: One California Street Phone: 415-743-8321
San Francisco, CA 94111 Fax: 415-743-8055
We have leased from Third Street Services, Inc. under that certain
Lease Agreement No. 125 dated June 9, 1998, Rental Schedule No.
1-ICX , specific equipment described on Exhibit A, a copy of which is
attached hereto. Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of ICX CORPORATION .
2. Issue a written endorsement naming ICX CORPORATION as
Additional Insured and Loss Payee, and provide them with a
thirty (30) day written notice of material change of coverage,
cancellation or non-renewal.
3. Insurance must include coverage as indicated below:
(X) Bodily Injury and Property Damage Insurance with limits of no
less than $ 1,252,643.00 .
(X) Physical Damage (all risk) as agreed in the lease, in the
amount of $ 1,252,643.00 .
(X) Coverage for the contractual liability assumed in Paragraph
8 of the lease.
( ) Other:
______________________________________________________________
__
4. Loss, if any, under this endorsement shall be payable solely
to ICX CORPORATION or its assigns.
5. The policy must contain the following endorsement:
The insurance under this policy shall be primary insurance,
and the company insurer shall be liable under this policy for
the full amount of the loss up to and including the total
limits of liability herein without right of contribution from
any other insurance effected by ICX CORPORATION under any
policy with any insurance company covering a loss covered
under this policy.
Forward evidence of coverage to: ICX
CORPORATION
3 Summit Park Drive, Suite 200
Cleveland, OH 44131
Attn: Mr. J. T. Lovins
LESSEE: HMT TECHNOLOGY CORPORATION
Signed:
Insured/Lessee
Its: Peter Norris CFO
CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, , do hereby
certify that I am the duly elected, qualified and acting Assistant
Secretary of HMT Technology Corporation , a Delaware Corporation;
that the persons whose names, titles and signatures appear below are
duly elected (or appointed), qualified and acting officers of said
Corporation and hold on the date of this Certificate the offices set
opposite their respective names; that the signatures appearing opposite
their respective names are the genuine signatures of such officers; that
each of such officers is duly authorized for and on behalf of said
Corporation to execute and deliver any Lease document between said
Corporation and said Third Street Services, Inc., and that execution of
such documents, and instruments in connection therewith for and on
behalf of said Corporation is not prohibited by or in any manner
restricted by the terms of said Corporation's Certificate of
Incorporation, its by-laws, or of any loan agreement, indenture or
contract to which said Corporation is a party or under which it is
bound. I do further certify that the foregoing authority shall remain in
full force and effect, and said Third Street Services, Inc. shall be
entitled to rely upon same, until written notice of the modification,
rescission or revocation of same, in whole or in part, has been
delivered to said Third Street Services, Inc., but no such modification,
rescission or revocation shall, in any event, be effective with respect
to any documents executed or actions taken in reliance upon the
foregoing authority prior to the delivery to said Third Street Services,
Inc. of said written notice of said modification, rescission or
revocation.
NAME AND TITLE OF OFFICER SIGNATURE OF OFFICER
Peter Norris, Chief Financial Officer
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
said Corporation this 9th day of June , 1998.
By
Title Assistant Secretary
125-1-ICX
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: THAT HMT TECHNOLOGY CORPORATION
located at 1055 Page Avenue, Fremont, CA 94538 in consideration of
the sum of One Million Two Hundred Fifty-six Thousand Two Hundred
Sixty-two and 90/100 Dollars ($1,256,262.90) and other good and valuable
consideration, the receipt of which is hereby acknowledged, does hereby
sell, assign, transfer and convey to Third Street Services, Inc., a
California corporation, with offices at 1646 N. California Blvd., Suite
510, Walnut Creek, CA 94596, the following described personal property:
EQUIPMENT DESCRIBED IN RENTAL SCHEDULE
NO. 1-ICX TO MASTER LEASE AGREEMENT NO. 125
DATED JUNE 9, 1998 ATTACHED HERETO AND
MADE A PART HEREOF.
to have and to hold all and singular the said personal property to Third
Street Services, Inc., its successors and assigns, for its own use
forever.
The undersigned hereby covenants that the undersigned is the lawful
owner of the said personal property; that it is free from all
encumbrances; that the undersigned has the right to sell the same as
aforesaid; and that the undersigned will warrant and defend the same
against any and all claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
document this 9th day of June, 1998.
HMT TECHNOLOGY CORPORATION
BY:
ITS: Peter Norris, CFO
(Typed name of signer and
title)
INVOICE
FROM: THIRD STREET SERVICES, INC. DATE: June 9, 1998
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
TO: HMT TECHNOLOGY CORPORATION
1055 Page Avenue
Fremont, CA 94538
Pursuant to Master Lease No. 125 dated June 9, 1998 between THIRD
STREET SERVICES, INC. (Lessor) and HMT TECHNOLOGY CORPORATION (Lessee),
Rental Schedule
No. 1-ICX, the following amount is due and payable as the first month's
rental payment:
Rental Schedule No. 1-ICX
1st Payment of 60 $24,463.24
TO BE DEDUCTED FROM FUNDING
PLEASE REMIT TO: ICX CORPORATION.
Attn: J. T. Lovins
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
_______ Lessee Initial
Equipment and other property under Rental Schedule 1-ICX leased or to be
leased pursuant to that certain Master Lease Agreement No. 125 (the
"Lease") between HMT TECHNOLOGY CORPORTION, as Lessee, and THIRD STREET
SERVICES, INC., as Lessor, dated June 9, 1998 including, but not
limited to, the property described in Exhibit A to the Rental Schedule
attached hereto and made a part hereof and all modification and
attachments thereto and replacements thereof and substitutions therefore
in whole or in part, and all proceeds thereof.
EQUIPMENT LOCATION: 1220 Page Avenue, Fremont, CA 94538+
SEE EXHIBIT "A" ATTACHED HERETO
June 9, 1998
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 1-ICX dated June 9, 1998
Gentlemen:
Pursuant to Master Lease Agreement No. 125, Rental Schedule No. 1-ICX
please be advised that the equipment is located at 1220 Page Avenue,
Fremont, CA 94538. The "Ship To" address shown on Phase Metric invoice
nos. 15087A and 15087B is a warehouse where all equipment is shipped to
HMT before being installed.
Very truly yours,
Jeffrey M. Sturm
President
Agreed to this 9th day of June 1998
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 9, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen:
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 1-ICX dated June 9, 1998
This is to verify that funding of this leasing transaction is contingent
upon the following:
1) HMT providing originals of Phase Metrics invoices included in this
funding - Invoice #15087A, and #15087B.
2) Receipt of final document comments from ICX's legal department and
agreement thereto by all parties.
Sincerely,
TSS FINANCIAL
Jeffrey M. Sturm
President
Agreed and Accepted by Agreed and Accepted by
HMT TECHNOLOGY CORPORATION ICX CORPORATION
Peter Norris, Chief Financial Officer
June 9, 1998
Mr. J. T. Lovins
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Dear Mr. Lovins:
RE: Master Lease Agreement No. 125 dated June 9 , 1998 between Third
Street Services, Inc. ("Lessor") as lessor and HMT Technology
Corporation ("Lessee") as lessee, and Rental Schedule No. 1-ICX
(together, including all amendments, modifications, riders,
exhibits and attachments, the "Lease"), and the equipment
("Equipment") subject to the Lease.
This is to verify that the full equipment cost of this Schedule
($1,256,262.90) less the rental due June 10, 1998 ($22,463.24) will be
remitted directly to HMT Technology Corporation. Total due HMT is
$1,233,799.66. Should funding actually occur on a different day, HMT
will credited per diem interest of $101.20 per day ($1,256,262.90 x
.0290 / 360).
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 9, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 1-ICX dated June 9, 1998
This is to confirm that the date of first functional use for the
equipment described on the above-referenced Rental Schedule was March
11, 1998.
Per the terms of Paragraph 5 of the Master Lease Agreement, HMT
Corporation acknowledges and agrees that it indemnifies and holds
harmless Third Street Services, Inc. or any Assignee thereof from any
taxes, penalties or interest resulting from its sale, lease, or use of
the Equipment.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
MEMO TO: Matt Perreault DATE: June 10, 1998
HMT Technology Corporation
FROM: Sharon Martinez
SUBJECT: ICX Closing - Master Lease No. 125, Rental Schedule No. 1-ICX
I am forwarding executed copies of your documents for the current
closing with ICX. You may be receiving a "due diligence" call on this
transaction from ICX.
To summarize the closing:
Scheduled funding date: June 10, 1998
Should funding actually occur on a
different day,
HMT will credited per diem interest
of $101.20 per day
($1,256,262.90 x .0290 / 360).
Equipment Cost: $1,256,262.90
Net to HMT June 10
Equipment Cost $1,256,262.90
Less First Month's Rent __(22,463.24)
Net to HMT June 10 $1,233,799.66
Next Payment due ICX July 10, 1998
Remit to address: ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Lease end options: Early Termination Option at month 36
or 48 OR
Early Purchase Option at month 52 OR
Purchase at FMV OR
Renew for 12 months OR
Return
with 90 days' written notice prior to
lease end
Please do not hesitate to call with any questions you might have.
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 9, 1998
Page 3
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 9, 1998
Page 5
_______ Lessee Initial
_______ Lessor Initial
June 16, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
RE: Master Lease Agreement dated June 9, 1998 between Third Street
Services, Inc. ("Lessor") as lessor and HMT Technology Corporation
("Lessee") as lessee, and Rental Schedule No. 2-ICX (together,
including all amendments, modifications, riders, exhibits and
attachments, the "Lease"), and the equipment ("Equipment") subject
to the Lease.
Gentlemen:
1. Notice is hereby given that, (a) pursuant to a Without Recourse
Lease Assignment (the "Assignment") between Lessor and ICX Corporation
("Assignee"), the Lease has been assigned and (b) pursuant to a Bill of
Sale, the Equipment has been sold by Lessor to Assignee. Pursuant to
the Assignment, Lessor has collaterally assigned, transferred and set
over unto Assignee:
a. all sums due under the Lease or any extension thereof,
including, without limitation, rentals, interest, late charges,
payments, taxes, income, revenues, issues, profits, insurance proceeds,
awards and proceeds in respect of any taking, casualty, salvage, damage
or termination, and all other amounts, of every kind and nature, now or
hereafter payable to or receivable by the Lessor in respect of the
Equipment or the Lease (collectively "Payments");
b. all claims, rights, privileges, options, elections, powers and
remedies, now existing or hereafter arising, of Lessor under or pursuant
to any provision of the Lease; and
c. all other rights of Lessor to give, make, enter into or receive
any agreement, amendment, notice, consent, demand, waiver or approval
with, to or from Lessee under or in respect of the Lease or any of the
Equipment, to accept surrender of any of the Equipment, or to terminate
or cancel the Lease;
in each case together with full power and authority, in the name of
Lessor or Assignee, to enforce, collect, receive and receipt for any or
all of the foregoing.
2. In connection with the Assignment, Lessor and Assignee hereby
irrevocably direct you to remit to Assignee all Payments required to be
made pursuant to the Lease beginning with the first payment date
following receipt of this notice and continuing thereafter through and
including the payment due May 16, 2003 .
All payments should be mailed directly to Assignee at 3 Summit Park
Drive, Suite 200, Cleveland, OH 44131 (or to such other address or
party as Assignee may otherwise direct). Any notices and other
communications should also be given or sent to Assignee at the
foregoing address or in the event of registered or certified mail or
overnight delivery sent to 3 Summit Park Drive, Suite 200, Cleveland,
OH 44131 .
3. This letter will also serve to confirm the following
representations: (a) that your obligation to pay the Payments to
Assignee as set forth in the Lease shall be unconditional and that you
will make the Payments (i) without any right of setoff, defense or
counterclaim subject only to any action by Assignee which materially and
adversely affects your physical possession or use of the Equipment at a
time when you are not in default under the Lease, and (ii) regardless of
whether or not you shall have received an appropriate invoice with
respect thereto and (iii) notwithstanding any rights, claims, or causes
of action which you may have, or may hereafter acquire under the Lease,
as a result of any defect in the Equipment or otherwise; (b) that the
Lease is in full force and effect; (c) that all items of Equipment have
been delivered and installed at the location set forth in the relevant
Rental Schedule under the Lease and have been found to be in good
working order and are accepted by you under the Lease; (d) that the
Assignee shall enjoy all of the Lessor's rights and privileges under the
Lease but shall not be chargeable with any obligations or liabilities
under the Lease; (e) that a copy of any notice which you are required to
give to Lessor under the Lease shall be sent to Assignee; (f) that
without Assignee's prior, express written consent you will not (i) sell,
encumber, surrender, abandon, or (except to the extent permitted by the
Lease) relocate or sublease any of the Equipment, or (ii) subordinate,
encumber, amend, modify, terminate, cancel or assign the Lease; (g) that
any such consent of Assignee, except as expressly otherwise provided by
the terms of the Lease, may be given or withheld in Assignee's
reasonable discretion; (h) that all rights of Lessor under the Lease (i)
to give, make, enter into or receive any agreement, amendment, notice,
consent, demand, waiver or approval with, to or from Lessee under or in
respect of the Lease or any of the Equipment, or (ii) to accept
surrender of any of the Equipment shall be exercised by Assignee; and
(i) except as aforesaid, any act of Lessor or Lessee which contravenes
the provisions of this paragraph 3 shall be void as against Assignee and
if committed by Lessee shall constitute an Event of Default under the
Lease.
4. You also represent, agree and acknowledge that: (a) the remaining
term of the Lease is sixty (60) months commencing on June 16, 1998; (b)
the Monthly Rental is $20,958.77 and is due and payable in advance on
the sixteenth day of each month during the remaining term; (c) no
Event of Default under the Lease and no event which, but for the passage
of time or the giving of notice or both, would be an Event of Default
under the Lease exists on the part of Lessee or (to the best of your
knowledge) on the part of Lessor in the performance of their respective
obligations under the Lease; (d) there has been no material adverse
change in your financial condition since the date of your last certified
financial statements furnished to Lessor; and (e) you will furnish
Assignee with such financial information as it may reasonable request,
including, within 90 days after the close of your fiscal year, your
annual audited financial statements, and within 60 days after the end of
each of the first three quarters of your fiscal year, your quarterly
financial statements, similarly prepared but not necessarily audited,
and signed by your chief financial officer.
5. Pursuant to Section 8 of the Lease, we hereby request that you
promptly arrange to (a) add Assignee as an additional insured under each
liability insurance policy required under the Lease, (b) name Assignee
as loss payee under each insurance policy covering the Equipment
required by Lease, and (c) furnish to Assignee evidence of such
insurance coverage not later than thirty days from the date hereof.
6. The assignment in the Assignment shall not be deemed to relieve
Lessor of any obligations under the Lease.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Title: Peter Norris, CFO
Acknowledged and Agreed:
ICX CORPORATION
By:
Title:
RENTAL SCHEDULE TO
MASTER LEASE AGREEMENT
RENTAL SCHEDULE NO. 2-ICX to Master Lease Agreement No. 125
dated June 9 , 19 98 , (the "Lease") by and between the
undersigned, the terms and conditions of which are hereby incorporated
herein by reference. Lessee hereby (a) authorizes Lessor to order for
lease to Lessee the equipment described herein (the "Equipment") and to
insert hereon the Lease Commencement Date and the partial first period's
rent (if any) for such Equipment upon Lessee's acceptance of same for
lease, (b) agrees to lease such Equipment from Lessor Effective the
Lease Commencement Date thereof and for the lease term specified below,
and (c) agrees to pay Lessor the rent, in the amounts and at the time
specified below, for each item of Equipment. All of the terms used
herein which are defined in the Lease shall have the same meaning as so
defined.
SERIAL ACQUISTION
QUANTITY DESCRIPTION NUMBER COST
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 2-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
TOTAL COST $ 1,172,125.20
This Rental Schedule is for a term of 60 months (plus -0-
days partial first period term) and the Lease Commencement Date is June
16, 19 98 . The partial first period rent of $ -0- is payable
together with $ 20,958.77 (plus applicable sales/use tax)
regular monthly rent on the 16th day of June , 1998 followed
by equal payment of regular rent on the 16th day of each month
thereafter until a total rent of $ 1,257,526.20 has
been paid.
LOCATION OF EQUIPMENT: 1220 Page Avenue, Fremont, CA 94538
The "Acquisition Cost" means an amount equal to the sum of (i) the
purchase price of each item of Equipment paid by Lessor, plus (ii) any
excise, sales and use tax on or with respect thereto, plus (iii) any
costs, expenses, and fees paid or incurred by Lessor in obtaining and
delivering such item of Equipment to Lessee and any expenses of
installation of such item of Equipment paid for by Lessor.
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
(LESSOR) (LESSEE)
By
By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President
Its CFO
(title)
(title)
Date June 16, 1998 Date June 16, 1998
DELIVERY AND ACCEPTANCE CERTIFICATE
RENTAL SCHEDULE NO. 2-ICX
PURSUANT TO MASTER LEASE AGREEMENT NO. 125 , dated as of June 9, 1998
(the "Lease") by and between THIRD STREET SERVICES, INC.
("Lessor") and
HMT TECHNOLOGY CORPORATION
("Lessee").
The undersigned, being the duly authorized representative of the Lessor
and the Lessee hereby CERTIFIES that the following units of equipment
(the "Equipment") referred to in the Lease between Lessor and the
Lessee.
QUANTITY DESCRIPTION SERIAL NUMBER
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 2-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
have been duly delivered to the Lessor in good order and duly inspected
and accepted by the undersigned as of the date hereof on behalf of the
Lessor, and have thereby been duly delivered by the Lessor to the Lessee
and have been duly accepted and inspected by the undersigned on said
date on behalf of the Lessee as conforming in all respects with the
requirements and provisions of the Lease.
HMT TECHNOLOGY CORPORATION
By:
Its: Peter Norris, CFO
Date: June 16, 1998
ADDENDUM TO RENTAL SCHEDULE NO. 2-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Addendum shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. EARLY TERMINATION OPTION: As long as no event of default exists
or will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to terminate this Rental Schedule on:
a) June 15, 2001 (the "First Early Termination Date") by paying
Lessor an amount equal to $351,637.56 (30% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the First Early Termination Date and return the Equipment to
Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits; or
b) June 15, 2002 (the "Second Early Termination Date") by paying
Lessor an amount equal to $210,982.54 (18% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the Second Early Termination Date and return the Equipment
to Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits.
2. EARLY PURCHASE OPTION: As long as no event of default exists or
will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to purchase all, but not less than all, of the Equipment under this
Rental Schedule on October 15, 2002 (the "Early Purchase Date") by
paying Lessor an amount equal to ($351,637.56) (30% of the Acquisition
Cost of the Equipment) plus all other amounts then due and payable under
the Rental Schedule as of the Early Purchase Date. Such Early Purchase
Option purchase amount includes consideration to Lessor for Lessee's
recapture of the tax benefits.
3. END OF TERM OPTIONS
A. PURCHASE OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
purchase all, but not less than all, of the Equipment for the then "Fair
Market Value" (as hereinafter defined) plus all other amounts then due
and payable under the Rental Schedule; or
B. RENEWAL OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
renew the Rental Schedule term for an additional twelve (12) months
("Renewal Term") at a Lease Rate Factor of 0.9337% of the Acquisition
Cost ($10,944.13 per month) with the first such rental payment being due
and payable by Lessee on June 16, 2003, and then to return all but not
less than all of the Equipment to Lessor at the expiration of the
Renewal Term as specified in Paragraph C, or
C. RETURN OPTION: Lessee will at its sole risk and expense
immediately return all but not less than all of the Equipment to Lessor
crated and packaged to Lessor's specification, to a place designated by
Lessor within the continental United States, and otherwise in accordance
with the return provisions of the Rental Schedule and in the condition
required by the Rental Schedule.
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee on the basis of, and shall be equal in amount
to, the value one would obtain in an arm's-length transaction between an
informed and willing buyer-user and an informed and willing retail
seller under no compulsion to sell. It shall be assumed that the
Equipment is in the condition in which it is required to be returned
under the Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President Its CFO
(title)
(title)
Date June 16, 1998 Date June 16, 1998
EXHIBIT B
TO: Insurance Company or Agent
Name: J&H Marsh & McLennan, Inc. Contact: Christina Marcon
Address: One California Street Phone: 415-743-8321
San Francisco, CA 94111 Fax: 415-743-8055
We have leased from Third Street Services, Inc. under that certain
Lease Agreement No. 125 dated June 9, 1998, Rental Schedule No.
2-ICX , specific equipment described on Exhibit A, a copy of which is
attached hereto. Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of ICX CORPORATION .
2. Issue a written endorsement naming ICX CORPORATION as
Additional Insured and Loss Payee, and provide them with a
thirty (30) day written notice of material change of coverage,
cancellation or non-renewal.
3. Insurance must include coverage as indicated below:
(X) Bodily Injury and Property Damage Insurance with limits of no
less than $ 1,168,748.00 .
(X) Physical Damage (all risk) as agreed in the lease, in the
amount of $ 1,168,748.00 .
(X) Coverage for the contractual liability assumed in Paragraph
8 of the lease.
( ) Other:
______________________________________________________________
__
4. Loss, if any, under this endorsement shall be payable solely
to ICX CORPORATION or its assigns.
5. The policy must contain the following endorsement:
The insurance under this policy shall be primary insurance,
and the company insurer shall be liable under this policy for
the full amount of the loss up to and including the total
limits of liability herein without right of contribution from
any other insurance effected by ICX CORPORATION under any
policy with any insurance company covering a loss covered
under this policy.
Forward evidence of coverage to: ICX
CORPORATION
3 Summit Park Drive, Suite 200
Cleveland, OH 44131
Attn: Mr. J. T. Lovins
LESSEE: HMT TECHNOLOGY CORPORATION
Signed:
Insured/Lessee
Its: Peter Norris CFO
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: THAT HMT TECHNOLOGY CORPORATION
located at 1055 Page Avenue, Fremont, CA 94538 in consideration of
the sum of One Million One Hundred Seventy-two Thousand One Hundred
Twenty-five and 20/100 Dollars ($1,172,125.20) and other good and
valuable consideration, the receipt of which is hereby acknowledged,
does hereby sell, assign, transfer and convey to Third Street Services,
Inc., a California corporation, with offices at 1646 N. California
Blvd., Suite 510, Walnut Creek, CA 94596, the following described
personal property:
EQUIPMENT DESCRIBED IN RENTAL SCHEDULE
NO. 2-ICX TO MASTER LEASE AGREEMENT NO. 125
DATED JUNE 9, 1998 ATTACHED HERETO AND
MADE A PART HEREOF.
to have and to hold all and singular the said personal property to Third
Street Services, Inc., its successors and assigns, for its own use
forever.
The undersigned hereby covenants that the undersigned is the lawful
owner of the said personal property; that it is free from all
encumbrances; that the undersigned has the right to sell the same as
aforesaid; and that the undersigned will warrant and defend the same
against any and all claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
document this 16th day of June, 1998.
HMT TECHNOLOGY CORPORATION
BY:
ITS: Peter Norris, CFO
(Typed name of signer and
title)
INVOICE
FROM: THIRD STREET SERVICES, INC. DATE: June 16, 1998
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
TO: HMT TECHNOLOGY CORPORATION
1055 Page Avenue
Fremont, CA 94538
Pursuant to Master Lease No. 125 dated June 9, 1998 between THIRD
STREET SERVICES, INC. (Lessor) and HMT TECHNOLOGY CORPORATION (Lessee),
Rental Schedule No. 2-ICX, the following amount is due and payable as
the first month's rental payment:
Rental Schedule No. 2-ICX
1st Payment of 60 $20,958.77
TO BE DEDUCTED FROM FUNDING
PLEASE REMIT TO: ICX CORPORATION.
Attn: J. T. Lovins
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
_______ Lessee Initial
Equipment and other property under Rental Schedule 2-ICX leased or to be
leased pursuant to that certain Master Lease Agreement No. 125 (the
"Lease") between HMT TECHNOLOGY CORPORTION, as Lessee, and THIRD STREET
SERVICES, INC., as Lessor, dated June 9, 1998 including, but not
limited to, the property described in Exhibit A to the Rental Schedule
attached hereto and made a part hereof and all modification and
attachments thereto and replacements thereof and substitutions therefore
in whole or in part, and all proceeds thereof.
EQUIPMENT LOCATION: 1220 Page Avenue, Fremont, CA 94538
SEE EXHIBIT "A" ATTACHED HERETO
June 16, 1998
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 2-ICX dated June 16, 1998
Gentlemen:
Pursuant to Master Lease Agreement No. 125, Rental Schedule No. 2-ICX
please be advised that the equipment is located at 1220 Page Avenue,
Fremont, CA 94538. The "Ship To" address shown on Phase Metric invoice
nos. 15807 and 15812 is a warehouse where equipment is shipped to HMT
before being installed.
Very truly yours,
Jeffrey M. Sturm
President
Agreed to this 16th day of June 1998
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 16, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen:
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 2-ICX dated June 16, 1998
This is to verify that funding of this leasing transaction is contingent
upon the following:
1) Credit approval
2) Final document approval from ICX's legal department and agreement
thereto by all parties.
Sincerely,
TSS FINANCIAL
Jeffrey M. Sturm
President
Agreed and Accepted by Agreed and Accepted by
HMT TECHNOLOGY CORPORATION ICX CORPORATION
Peter Norris, Chief Financial Officer
June 16, 1998
Mr. J. T. Lovins
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Dear Mr. Lovins:
RE: Master Lease Agreement No. 125 dated June 9 , 1998 between Third
Street Services, Inc. ("Lessor") as lessor and HMT Technology
Corporation ("Lessee") as lessee, and Rental Schedule No. 2-ICX
(together, including all amendments, modifications, riders,
exhibits and attachments, the "Lease"), and the equipment
("Equipment") subject to the Lease.
This is to verify that the full equipment cost of this Schedule
($1,172,125.20) less the rental due June 16, 1998 ($20,958.77), plus
seven (7) days per diem interest ($660.94) will be remitted directly to
HMT Technology Corporation. Total due HMT on June 23, 1998 is
$1,151,827.37. Should funding actually occur on a different day, HMT
will be debited or credited per diem interest of $94.42 per day
($1,172,125.20 x .0290 / 360), accordingly.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
MEMO TO: Matt Perreault DATE: June 16, 1998
HMT Technology Corporation
FROM: Sharon Martinez
SUBJECT: ICX Closing - Master Lease No. 125, Rental Schedule No. 2-ICX
I am forwarding executed copies of your documents for the current
closing with ICX.
To summarize the closing:
Scheduled funding date: June 23, 1998
Should funding actually occur on a
different day,
HMT will be debited or credited per
diem interest
of $94.42 per day ( $1,172,125.20 x
.0290 / 360),
accordingly.
Equipment Cost: $1,172,125.20
Reimbursement due HMT $1,172,125.20
Plus per diem interest - 7 days 660.94
Less First Month's Rent __(20,958.77)
Net to HMT June 23 $1,151,827.37
Next Payment due ICX July 16, 1998
Remit to address: ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Lease end options: Early Termination Option at month 36
or 48 OR
Early Purchase Option at month 52 OR
Purchase at FMV OR
Renew for 12 months OR
Return
with 90 days' written notice prior to
lease end
Please do not hesitate to call with any questions you might have.
March 23, 1998
Ms. Joanne Du Vall
Alburger, Basso, De Groszo
960 Fulton
Sacramento, CA 95825
Dear Joanne,
TSS administers a lease line of credit for Level One Communications.
Our current closing for them is with ICX Corporation.
Could you please have an insurance certificate prepared, referencing our
Master Lease Agreement No. 125, Rental Schedule No. 2-ICX on the face of
the certificate. Please fax a copy to our Walnut Creek office at
510/933-6977, and mail the original to ICX. We are scheduled to fund on
the 27th of March. so your immediate response will be greatly
appreciated.
Thanks for your help. If you have any questions, please do not hesitate
to call.
Sincerely,
Sharon M. Martinez
Enclosures
SMM:mrf
TO BE PREPARED ON PHASE METRICS LETTERHEAD
June 11, 1998
Third Street Services, Inc.
1646 N. California Blvd.
Suite 510
Walnut Creek, CA 94596
RE: HMT Technology
Sankyo Media Certification Workcell
Robot S/N: F009750217
Tester S/N's: MG1260, MG1261, MG1262, MG1263,
MG1264, MG1265, MG1266, MG1267
This is to verify that HMT has paid Phase Metrics in full for this
equipment as follows:
Phase Metrics Invoice # 15804 $ 599,712.00
15805 182,412.40
15807 96,600.00
15812 29,382.50
Down Payment * 348,156.00
* The down payment was made against Purchase Order # 81905 at the time
the P.O. was placed with Phase Metrics.
Phase Metrics considers the equipment described to be paid in full at
$1,256,262.90
Sincerely,
Wendy Tseng
General Accounting Manager
June 16, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 2-ICX dated June 16, 1998
This is to confirm that the date of first functional use for the
equipment described on the above-referenced Rental Schedule was March
18, 1998.
Per the terms of Paragraph 5 of the Master Lease Agreement, HMT
Corporation acknowledges and agrees that it indemnifies and holds
harmless Third Street Services, Inc. or any Assignee thereof from any
taxes, penalties or interest resulting from its sale, lease, or use of
the Equipment.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 16, 1998
Page 4
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 16, 1998
Page 5
_______ Lessee Initial
_______ Lessor Initial
June 22, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
RE: Master Lease Agreement dated June 9, 1998 between Third Street
Services, Inc. ("Lessor") as lessor and HMT Technology Corporation
("Lessee") as lessee, and Rental Schedule No. 3-ICX (together,
including all amendments, modifications, riders, exhibits and
attachments, the "Lease"), and the equipment ("Equipment") subject
to the Lease.
Gentlemen:
1. Notice is hereby given that, (a) pursuant to a Without Recourse
Lease Assignment (the "Assignment") between Lessor and ICX Corporation
("Assignee"), the Lease has been assigned and (b) pursuant to a Bill of
Sale, the Equipment has been sold by Lessor to Assignee. Pursuant to
the Assignment, Lessor has collaterally assigned, transferred and set
over unto Assignee:
a. all sums due under the Lease or any extension thereof,
including, without limitation, rentals, interest, late charges,
payments, taxes, income, revenues, issues, profits, insurance proceeds,
awards and proceeds in respect of any taking, casualty, salvage, damage
or termination, and all other amounts, of every kind and nature, now or
hereafter payable to or receivable by the Lessor in respect of the
Equipment or the Lease (collectively "Payments");
b. all claims, rights, privileges, options, elections, powers and
remedies, now existing or hereafter arising, of Lessor under or pursuant
to any provision of the Lease; and
c. all other rights of Lessor to give, make, enter into or receive
any agreement, amendment, notice, consent, demand, waiver or approval
with, to or from Lessee under or in respect of the Lease or any of the
Equipment, to accept surrender of any of the Equipment, or to terminate
or cancel the Lease;
in each case together with full power and authority, in the name of
Lessor or Assignee, to enforce, collect, receive and receipt for any or
all of the foregoing.
2. In connection with the Assignment, Lessor and Assignee hereby
irrevocably direct you to remit to Assignee all Payments required to be
made pursuant to the Lease beginning with the first payment date
following receipt of this notice and continuing thereafter through and
including the payment due May 22, 2003 .
All payments should be mailed directly to Assignee at 3 Summit Park
Drive, Suite 200, Cleveland, OH 44131 (or to such other address or
party as Assignee may otherwise direct). Any notices and other
communications should also be given or sent to Assignee at the
foregoing address or in the event of registered or certified mail or
overnight delivery sent to 3 Summit Park Drive, Suite 200, Cleveland,
OH 44131 .
3. This letter will also serve to confirm the following
representations: (a) that your obligation to pay the Payments to
Assignee as set forth in the Lease shall be unconditional and that you
will make the Payments (i) without any right of setoff, defense or
counterclaim subject only to any action by Assignee which materially and
adversely affects your physical possession or use of the Equipment at a
time when you are not in default under the Lease, and (ii) regardless of
whether or not you shall have received an appropriate invoice with
respect thereto and (iii) notwithstanding any rights, claims, or causes
of action which you may have, or may hereafter acquire under the Lease,
as a result of any defect in the Equipment or otherwise; (b) that the
Lease is in full force and effect; (c) that all items of Equipment have
been delivered and installed at the location set forth in the relevant
Rental Schedule under the Lease and have been found to be in good
working order and are accepted by you under the Lease; (d) that the
Assignee shall enjoy all of the Lessor's rights and privileges under the
Lease but shall not be chargeable with any obligations or liabilities
under the Lease; (e) that a copy of any notice which you are required to
give to Lessor under the Lease shall be sent to Assignee; (f) that
without Assignee's prior, express written consent you will not (i) sell,
encumber, surrender, abandon, or (except to the extent permitted by the
Lease) relocate or sublease any of the Equipment, or (ii) subordinate,
encumber, amend, modify, terminate, cancel or assign the Lease; (g) that
any such consent of Assignee, except as expressly otherwise provided by
the terms of the Lease, may be given or withheld in Assignee's
reasonable discretion; (h) that all rights of Lessor under the Lease (i)
to give, make, enter into or receive any agreement, amendment, notice,
consent, demand, waiver or approval with, to or from Lessee under or in
respect of the Lease or any of the Equipment, or (ii) to accept
surrender of any of the Equipment shall be exercised by Assignee; and
(i) except as aforesaid, any act of Lessor or Lessee which contravenes
the provisions of this paragraph 3 shall be void as against Assignee and
if committed by Lessee shall constitute an Event of Default under the
Lease.
4. You also represent, agree and acknowledge that: (a) the remaining
term of the Lease is sixty (60) months commencing on June 22, 1998; (b)
the Monthly Rental is $22,463.24 and is due and payable in advance on
the twenty-second day of each month during the remaining term; (c) no
Event of Default under the Lease and no event which, but for the passage
of time or the giving of notice or both, would be an Event of Default
under the Lease exists on the part of Lessee or (to the best of your
knowledge) on the part of Lessor in the performance of their respective
obligations under the Lease; (d) there has been no material adverse
change in your financial condition since the date of your last certified
financial statements furnished to Lessor; and (e) you will furnish
Assignee with such financial information as it may reasonable request,
including, within 90 days after the close of your fiscal year, your
annual audited financial statements, and within 60 days after the end of
each of the first three quarters of your fiscal year, your quarterly
financial statements, similarly prepared but not necessarily audited,
and signed by your chief financial officer.
5. Pursuant to Section 8 of the Lease, we hereby request that you
promptly arrange to (a) add Assignee as an additional insured under each
liability insurance policy required under the Lease, (b) name Assignee
as loss payee under each insurance policy covering the Equipment
required by Lease, and (c) furnish to Assignee evidence of such
insurance coverage not later than thirty days from the date hereof.
6. The assignment in the Assignment shall not be deemed to relieve
Lessor of any obligations under the Lease.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Title: Peter Norris, CFO
Acknowledged and Agreed:
ICX CORPORATION
By:
Title:
RENTAL SCHEDULE TO
MASTER LEASE AGREEMENT
RENTAL SCHEDULE NO. 3-ICX to Master Lease Agreement No. 125
dated June 9 , 19 98 , (the "Lease") by and between the
undersigned, the terms and conditions of which are hereby incorporated
herein by reference. Lessee hereby (a) authorizes Lessor to order for
lease to Lessee the equipment described herein (the "Equipment") and to
insert hereon the Lease Commencement Date and the partial first period's
rent (if any) for such Equipment upon Lessee's acceptance of same for
lease, (b) agrees to lease such Equipment from Lessor Effective the
Lease Commencement Date thereof and for the lease term specified below,
and (c) agrees to pay Lessor the rent, in the amounts and at the time
specified below, for each item of Equipment. All of the terms used
herein which are defined in the Lease shall have the same meaning as so
defined.
SERIAL ACQUISTION
QUANTITY DESCRIPTION NUMBER COST
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 3-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
TOTAL COST $ 1,256,262.90
This Rental Schedule is for a term of 60 months (plus -0-
days partial first period term) and the Lease Commencement Date is June
22, 19 98 . The partial first period rent of $ -0- is payable
together with $ 22,463.24 (plus applicable sales/use tax)
regular monthly rent on the 22nd day of June , 1998 followed
by equal payment of regular rent on the 22nd day of each month
thereafter until a total rent of $ 1,347,794.40 has
been paid.
LOCATION OF EQUIPMENT: 1220 Page Avenue, Fremont, CA 94538
The "Acquisition Cost" means an amount equal to the sum of (i) the
purchase price of each item of Equipment paid by Lessor, plus (ii) any
excise, sales and use tax on or with respect thereto, plus (iii) any
costs, expenses, and fees paid or incurred by Lessor in obtaining and
delivering such item of Equipment to Lessee and any expenses of
installation of such item of Equipment paid for by Lessor.
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
(LESSOR) (LESSEE)
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President
Its CFO
(title)
(title)
Date June 22, 1998 Date June 22, 1998
DELIVERY AND ACCEPTANCE CERTIFICATE
RENTAL SCHEDULE NO. 3-ICX
PURSUANT TO MASTER LEASE AGREEMENT NO. 125 , dated as of June 9
, 1998
(the "Lease") by and between THIRD STREET SERVICES, INC.
("Lessor") and
HMT
TECHNOLOGY CORPORATION
("Lessee").
The undersigned, being the duly authorized representative of the Lessor
and the Lessee hereby CERTIFIES that the following units of equipment
(the "Equipment") referred to in the Lease between Lessor and the
Lessee.
QUANTITY DESCRIPTION SERIAL NUMBER
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 3-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
have been duly delivered to the Lessor in good order and duly inspected
and accepted by the undersigned as of the date hereof on behalf of the
Lessor, and have thereby been duly delivered by the Lessor to the Lessee
and have been duly accepted and inspected by the undersigned on said
date on behalf of the Lessee as conforming in all respects with the
requirements and provisions of the Lease.
HMT TECHNOLOGY CORPORATION
By:
Its: Peter Norris, CFO
Date: June 22, 1998
ADDENDUM TO RENTAL SCHEDULE NO. 3-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Addendum shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. EARLY TERMINATION OPTION: As long as no event of default exists
or will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to terminate this Rental Schedule on:
a) June 21, 2001 (the "First Early Termination Date") by paying
Lessor an amount equal to $376,878.87 (30% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the First Early Termination Date and return the Equipment to
Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits; or
b) June 21, 2002 (the "Second Early Termination Date") by paying
Lessor an amount equal to $226,127.32 (18% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the Second Early Termination Date and return the Equipment
to Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits.
2. EARLY PURCHASE OPTION: As long as no event of default exists or
will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to purchase all, but not less than all, of the Equipment under this
Rental Schedule on October 21, 2002 (the "Early Purchase Date") by
paying Lessor an amount equal to ($376,878.87) (30% of the Acquisition
Cost of the Equipment) plus all other amounts then due and payable under
the Rental Schedule as of the Early Purchase Date. Such Early Purchase
Option purchase amount includes consideration to Lessor for Lessee's
recapture of the tax benefits.
3. END OF TERM OPTIONS
A. PURCHASE OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
purchase all, but not less than all, of the Equipment for the then "Fair
Market Value" (as hereinafter defined) plus all other amounts then due
and payable under the Rental Schedule; or
B. RENEWAL OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
renew the Rental Schedule term for an additional twelve (12) months
("Renewal Term") at a Lease Rate Factor of 0.9337% of the Acquisition
Cost ($11,729.73 per month) with the first such rental payment being due
and payable by Lessee on June 22, 2003, and then to return all but not
less than all of the Equipment to Lessor at the expiration of the
Renewal Term as specified in Paragraph C, or
C. RETURN OPTION: Lessee will at its sole risk and expense
immediately return all but not less than all of the Equipment to Lessor
crated and packaged to Lessor's specification, to a place designated by
Lessor within the continental United States, and otherwise in accordance
with the return provisions of the Rental Schedule and in the condition
required by the Rental Schedule.
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee on the basis of, and shall be equal in amount
to, the value one would obtain in an arm's-length transaction between an
informed and willing buyer-user and an informed and willing retail
seller under no compulsion to sell. It shall be assumed that the
Equipment is in the condition in which it is required to be returned
under the Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President Its CFO
(title) (title)
Date June 22, 1998 Date June 22, 1998
EXHIBIT B
TO: Insurance Company or Agent
Name: J&H Marsh & McLennan, Inc. Contact: Christina Marcon
Address: One California Street Phone: 415-743-8321
San Francisco, CA 94111 Fax: 415-743-8055
We have leased from Third Street Services, Inc. under that certain
Lease Agreement No. 125 dated June 9, 1998, Rental Schedule No.
1-ICX , specific equipment described on Exhibit A, a copy of which is
attached hereto. Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of ICX CORPORATION .
2. Issue a written endorsement naming ICX CORPORATION as
Additional Insured and Loss Payee, and provide them with a
thirty (30) day written notice of material change of coverage,
cancellation or non-renewal.
3. Insurance must include coverage as indicated below:
(X) Bodily Injury and Property Damage Insurance with limits of no
less than $ 1,252,643.00 .
(X) Physical Damage (all risk) as agreed in the lease, in the
amount of $ 1,252,643.00 .
(X) Coverage for the contractual liability assumed in Paragraph
8 of the lease.
( ) Other:
______________________________________________________________
__
4. Loss, if any, under this endorsement shall be payable solely
to ICX CORPORATION or its assigns.
5. The policy must contain the following endorsement:
The insurance under this policy shall be primary insurance,
and the company insurer shall be liable under this policy for
the full amount of the loss up to and including the total
limits of liability herein without right of contribution from
any other insurance effected by ICX CORPORATION under any
policy with any insurance company covering a loss covered
under this policy.
Forward evidence of coverage to: ICX
CORPORATION
3 Summit Park Drive, Suite 200
Cleveland, OH 44131
Attn: Mr. J. T. Lovins
LESSEE: HMT TECHNOLOGY CORPORATION
Signed:
Insured/Lessee
Its: Peter Norris CFO
CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, , do hereby
certify that I am the duly elected, qualified and acting Assistant
Secretary of HMT Technology Corporation , a Delaware Corporation;
that the persons whose names, titles and signatures appear below are
duly elected (or appointed), qualified and acting officers of said
Corporation and hold on the date of this Certificate the offices set
opposite their respective names; that the signatures appearing opposite
their respective names are the genuine signatures of such officers; that
each of such officers is duly authorized for and on behalf of said
Corporation to execute and deliver any Lease document between said
Corporation and said Third Street Services, Inc., and that execution of
such documents, and instruments in connection therewith for and on
behalf of said Corporation is not prohibited by or in any manner
restricted by the terms of said Corporation's Certificate of
Incorporation, its by-laws, or of any loan agreement, indenture or
contract to which said Corporation is a party or under which it is
bound. I do further certify that the foregoing authority shall remain in
full force and effect, and said Third Street Services, Inc. shall be
entitled to rely upon same, until written notice of the modification,
rescission or revocation of same, in whole or in part, has been
delivered to said Third Street Services, Inc., but no such modification,
rescission or revocation shall, in any event, be effective with respect
to any documents executed or actions taken in reliance upon the
foregoing authority prior to the delivery to said Third Street Services,
Inc. of said written notice of said modification, rescission or
revocation.
NAME AND TITLE OF OFFICER SIGNATURE OF OFFICER
Peter Norris, Chief Financial Officer
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
said Corporation this 9th day of June , 1998.
By
Title Assistant Secretary
125-1-ICX
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: THAT HMT TECHNOLOGY CORPORATION
located at 1055 Page Avenue, Fremont, CA 94538 in consideration of
the sum of One Million Two Hundred Fifty-six Thousand Two Hundred
Sixty-two and 90/100 Dollars ($1,256,262.90) and other good and valuable
consideration, the receipt of which is hereby acknowledged, does hereby
sell, assign, transfer and convey to Third Street Services, Inc., a
California corporation, with offices at 1646 N. California Blvd., Suite
510, Walnut Creek, CA 94596, the following described personal property:
EQUIPMENT DESCRIBED IN RENTAL SCHEDULE
NO. 3-ICX TO MASTER LEASE AGREEMENT NO. 125
DATED JUNE 9, 1998 ATTACHED HERETO AND
MADE A PART HEREOF.
to have and to hold all and singular the said personal property to Third
Street Services, Inc., its successors and assigns, for its own use
forever.
The undersigned hereby covenants that the undersigned is the lawful
owner of the said personal property; that it is free from all
encumbrances; that the undersigned has the right to sell the same as
aforesaid; and that the undersigned will warrant and defend the same
against any and all claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
document this 22nd day of June, 1998.
HMT TECHNOLOGY CORPORATION
BY:
ITS: Peter Norris, CFO
(Typed name of signer and
title)
INVOICE
FROM: THIRD STREET SERVICES, INC. DATE: June 22, 1998
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
TO: HMT TECHNOLOGY CORPORATION
1055 Page Avenue
Fremont, CA 94538
Pursuant to Master Lease No. 125 dated June 9, 1998 between THIRD
STREET SERVICES, INC. (Lessor) and HMT TECHNOLOGY CORPORATION (Lessee),
Rental Schedule
No. 3-ICX, the following amount is due and payable as the first month's
rental payment:
Rental Schedule No. 3-ICX
1st Payment of 60 $22,463.24
TO BE DEDUCTED FROM FUNDING
PLEASE REMIT TO: ICX CORPORATION.
Attn: J. T. Lovins
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
_______ Lessee Initial
Equipment and other property under Rental Schedule 1-ICX leased or to be
leased pursuant to that certain Master Lease Agreement No. 125 (the
"Lease") between HMT TECHNOLOGY CORPORTION, as Lessee, and THIRD STREET
SERVICES, INC., as Lessor, dated June 9, 1998 including, but not
limited to, the property described in Exhibit A to the Rental Schedule
attached hereto and made a part hereof and all modification and
attachments thereto and replacements thereof and substitutions therefore
in whole or in part, and all proceeds thereof.
EQUIPMENT LOCATION: 1220 Page Avenue, Fremont, CA 94538+
SEE EXHIBIT "A" ATTACHED HERETO
June 22, 1998
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 3-ICX dated June 22, 1998
Gentlemen:
Pursuant to Master Lease Agreement No. 125, Rental Schedule No. 3-ICX
please be advised that the equipment is located at 1220 Page Avenue,
Fremont, CA 94538. The "Ship To" address shown on Phase Metric invoice
nos. 15842 and 15852 is a warehouse where all equipment is shipped to
HMT before being installed.
Very truly yours,
Jeffrey M. Sturm
President
Agreed to this 22nd day of June 1998
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 22, 1998
Mr. J. T. Lovins
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Dear Mr. Lovins:
RE: Master Lease Agreement No. 125 dated June 9 , 1998 between Third
Street Services, Inc. ("Lessor") as lessor and HMT Technology
Corporation ("Lessee") as lessee, and Rental Schedule No. 3-ICX
(together, including all amendments, modifications, riders,
exhibits and attachments, the "Lease"), and the equipment
("Equipment") subject to the Lease.
This is to verify that the full equipment cost of this Schedule
($1,256,262.90) less the rental due June 22, 1998 ($22,463.24) plus per
diem interest (303.60) will be remitted directly to HMT Technology
Corporation. Assuming funding on June 25, 1998, the total due HMT is
$1,234,103.26. Should funding actually occur on a different day, HMT
will be credited per diem interest of $101.20 per day ($1,256,262.90 x
.0290 / 360).
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 22, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 3-ICX dated June 22, 1998
This is to confirm that the date of first functional use for the
equipment described on the above-referenced Rental Schedule was March
24, 1998.
Per the terms of Paragraph 5 of the Master Lease Agreement, HMT
Corporation acknowledges and agrees that it indemnifies and holds
harmless Third Street Services, Inc. or any Assignee thereof from any
taxes, penalties or interest resulting from its sale, lease, or use of
the Equipment.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
MEMO TO: Matt Perreault DATE: June 22,
1998
HMT Technology Corporation
FROM: Sharon Martinez
SUBJECT: ICX Closing - Master Lease No. 125, Rental Schedule No. 3-ICX
I am forwarding executed copies of your documents for the current
closing with ICX. You may be receiving a "due diligence" call on this
transaction from ICX.
To summarize the closing:
Scheduled funding date: June 25, 1998
Should funding actually occur on a
different day,
HMT will be credited per diem
interest of $101.20 per day
($1,256,262.90 x .0290 / 360).
Equipment Cost: $1,256,262.90
Net to HMT June 25
Equipment Cost $1,256,262.90
Less First Month's Rent (22,463.24)
Plus Per Diem (3 Days) 303.60
Net to HMT June 25 $1,234,103.26
Next Payment due ICX July 22, 1998
Remit to address: ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Lease end options: Early Termination Option at month 36
or 48 OR
Early Purchase Option at month 52 OR
Purchase at FMV OR
Renew for 12 months OR
Return
with 90 days' written notice prior to
lease end
Please do not hesitate to call with any questions you might have.
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 22, 1998
Page 4
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 22, 1998
Page 5
_______ Lessee Initial
_______ Lessor Initial
June 25, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
RE: Master Lease Agreement dated June 9, 1998 between Third Street
Services, Inc. ("Lessor") as lessor and HMT Technology Corporation
("Lessee") as lessee, and Rental Schedule No. 4-ICX (together,
including all amendments, modifications, riders, exhibits and
attachments, the "Lease"), and the equipment ("Equipment") subject
to the Lease.
Gentlemen:
1. Notice is hereby given that, (a) pursuant to a Without Recourse
Lease Assignment (the "Assignment") between Lessor and ICX Corporation
("Assignee"), the Lease has been assigned and (b) pursuant to a Bill of
Sale, the Equipment has been sold by Lessor to Assignee. Pursuant to
the Assignment, Lessor has collaterally assigned, transferred and set
over unto Assignee:
a. all sums due under the Lease or any extension thereof,
including, without limitation, rentals, interest, late charges,
payments, taxes, income, revenues, issues, profits, insurance proceeds,
awards and proceeds in respect of any taking, casualty, salvage, damage
or termination, and all other amounts, of every kind and nature, now or
hereafter payable to or receivable by the Lessor in respect of the
Equipment or the Lease (collectively "Payments");
b. all claims, rights, privileges, options, elections, powers and
remedies, now existing or hereafter arising, of Lessor under or pursuant
to any provision of the Lease; and
c. all other rights of Lessor to give, make, enter into or receive
any agreement, amendment, notice, consent, demand, waiver or approval
with, to or from Lessee under or in respect of the Lease or any of the
Equipment, to accept surrender of any of the Equipment, or to terminate
or cancel the Lease;
in each case together with full power and authority, in the name of
Lessor or Assignee, to enforce, collect, receive and receipt for any or
all of the foregoing.
2. In connection with the Assignment, Lessor and Assignee hereby
irrevocably direct you to remit to Assignee all Payments required to be
made pursuant to the Lease beginning with the first payment date
following receipt of this notice and continuing thereafter through and
including the payment due May 25, 2003 .
All payments should be mailed directly to Assignee at 3 Summit Park
Drive, Suite 200, Cleveland, OH 44131 (or to such other address or
party as Assignee may otherwise direct). Any notices and other
communications should also be given or sent to Assignee at the
foregoing address or in the event of registered or certified mail or
overnight delivery sent to 3 Summit Park Drive, Suite 200, Cleveland,
OH 44131 .
3. This letter will also serve to confirm the following
representations: (a) that your obligation to pay the Payments to
Assignee as set forth in the Lease shall be unconditional and that you
will make the Payments (i) without any right of setoff, defense or
counterclaim subject only to any action by Assignee which materially and
adversely affects your physical possession or use of the Equipment at a
time when you are not in default under the Lease, and (ii) regardless of
whether or not you shall have received an appropriate invoice with
respect thereto and (iii) notwithstanding any rights, claims, or causes
of action which you may have, or may hereafter acquire under the Lease,
as a result of any defect in the Equipment or otherwise; (b) that the
Lease is in full force and effect; (c) that all items of Equipment have
been delivered and installed at the location set forth in the relevant
Rental Schedule under the Lease and have been found to be in good
working order and are accepted by you under the Lease; (d) that the
Assignee shall enjoy all of the Lessor's rights and privileges under the
Lease but shall not be chargeable with any obligations or liabilities
under the Lease; (e) that a copy of any notice which you are required to
give to Lessor under the Lease shall be sent to Assignee; (f) that
without Assignee's prior, express written consent you will not (i) sell,
encumber, surrender, abandon, or (except to the extent permitted by the
Lease) relocate or sublease any of the Equipment, or (ii) subordinate,
encumber, amend, modify, terminate, cancel or assign the Lease; (g) that
any such consent of Assignee, except as expressly otherwise provided by
the terms of the Lease, may be given or withheld in Assignee's
reasonable discretion; (h) that all rights of Lessor under the Lease (i)
to give, make, enter into or receive any agreement, amendment, notice,
consent, demand, waiver or approval with, to or from Lessee under or in
respect of the Lease or any of the Equipment, or (ii) to accept
surrender of any of the Equipment shall be exercised by Assignee; and
(i) except as aforesaid, any act of Lessor or Lessee which contravenes
the provisions of this paragraph 3 shall be void as against Assignee and
if committed by Lessee shall constitute an Event of Default under the
Lease.
4. You also represent, agree and acknowledge that: (a) the remaining
term of the Lease is sixty (60) months commencing on June 25, 1998; (b)
the Monthly Rental is $112,316.18 and is due and payable in advance on
the twenty-fifth day of each month during the remaining term; (c) no
Event of Default under the Lease and no event which, but for the passage
of time or the giving of notice or both, would be an Event of Default
under the Lease exists on the part of Lessee or (to the best of your
knowledge) on the part of Lessor in the performance of their respective
obligations under the Lease; (d) there has been no material adverse
change in your financial condition since the date of your last certified
financial statements furnished to Lessor; and (e) you will furnish
Assignee with such financial information as it may reasonable request,
including, within 90 days after the close of your fiscal year, your
annual audited financial statements, and within 60 days after the end of
each of the first three quarters of your fiscal year, your quarterly
financial statements, similarly prepared but not necessarily audited,
and signed by your chief financial officer.
5. Pursuant to Section 8 of the Lease, we hereby request that you
promptly arrange to (a) add Assignee as an additional insured under each
liability insurance policy required under the Lease, (b) name Assignee
as loss payee under each insurance policy covering the Equipment
required by Lease, and (c) furnish to Assignee evidence of such
insurance coverage not later than thirty days from the date hereof.
6. The assignment in the Assignment shall not be deemed to relieve
Lessor of any obligations under the Lease.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Title: Peter Norris, CFO
Acknowledged and Agreed:
ICX CORPORATION
By:
Title:
RENTAL SCHEDULE TO
MASTER LEASE AGREEMENT
RENTAL SCHEDULE NO. 4-ICX to Master Lease Agreement No. 125
dated June 9 , 19 98 , (the "Lease") by and between the
undersigned, the terms and conditions of which are hereby incorporated
herein by reference. Lessee hereby (a) authorizes Lessor to order for
lease to Lessee the equipment described herein (the "Equipment") and to
insert hereon the Lease Commencement Date and the partial first period's
rent (if any) for such Equipment upon Lessee's acceptance of same for
lease, (b) agrees to lease such Equipment from Lessor Effective the
Lease Commencement Date thereof and for the lease term specified below,
and (c) agrees to pay Lessor the rent, in the amounts and at the time
specified below, for each item of Equipment. All of the terms used
herein which are defined in the Lease shall have the same meaning as so
defined.
SERIAL ACQUISTION
QUANTITY DESCRIPTION NUMBER COST
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 4-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
TOTAL COST $ 6,281,314.50
This Rental Schedule is for a term of 60 months (plus -0-
days partial first period term) and the Lease Commencement Date is June
25, 19 98 . The partial first period rent of $ -0- is payable
together with $ 112,316.18 (plus applicable sales/use tax) regular
monthly rent on the 25th day of June , 1998 followed by equal
payment of regular rent on the 25th day of each month thereafter
until a total rent of $6,738,970.80 has been paid.
LOCATION OF EQUIPMENT: 1220 Page Avenue, Fremont, CA 94538
The "Acquisition Cost" means an amount equal to the sum of (i) the
purchase price of each item of Equipment paid by Lessor, plus (ii) any
excise, sales and use tax on or with respect thereto, plus (iii) any
costs, expenses, and fees paid or incurred by Lessor in obtaining and
delivering such item of Equipment to Lessee and any expenses of
installation of such item of Equipment paid for by Lessor.
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
(LESSOR) (LESSEE)
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President
Its CFO
(title)
(title)
Date June 25, 1998 Date June 25, 1998
DELIVERY AND ACCEPTANCE CERTIFICATE
RENTAL SCHEDULE NO. 4-ICX
PURSUANT TO MASTER LEASE AGREEMENT NO. 125 , dated as of June 9, 1998
(the "Lease") by and between THIRD STREET SERVICES, INC.
("Lessor") and
HMT TECHNOLOGY CORPORATION
("Lessee").
The undersigned, being the duly authorized representative of the Lessor
and the Lessee hereby CERTIFIES that the following units of equipment
(the "Equipment") referred to in the Lease between Lessor and the
Lessee.
QUANTITY DESCRIPTION SERIAL NUMBER
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 4-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
have been duly delivered to the Lessor in good order and duly inspected
and accepted by the undersigned as of the date hereof on behalf of the
Lessor, and have thereby been duly delivered by the Lessor to the Lessee
and have been duly accepted and inspected by the undersigned on said
date on behalf of the Lessee as conforming in all respects with the
requirements and provisions of the Lease.
HMT TECHNOLOGY CORPORATION
By:
Its: Peter Norris, CFO
Date: June 25, 1998
ADDENDUM TO RENTAL SCHEDULE NO. 4-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Addendum shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. EARLY TERMINATION OPTION: As long as no event of default exists
or will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to terminate this Rental Schedule on:
a) June 24, 2001 (the "First Early Termination Date") by paying
Lessor an amount equal to $1,884,394.35 (30% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the First Early Termination Date and return the Equipment to
Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits; or
b) June 24, 2002 (the "Second Early Termination Date") by paying
Lessor an amount equal to $1,130,636.61 (18% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the Second Early Termination Date and return the Equipment
to Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits.
2. EARLY PURCHASE OPTION: As long as no event of default exists or
will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to purchase all, but not less than all, of the Equipment under this
Rental Schedule on October 24, 2002 (the "Early Purchase Date") by
paying Lessor an amount equal to $1,884,394.35 (30% of the Acquisition
Cost of the Equipment) plus all other amounts then due and payable under
the Rental Schedule as of the Early Purchase Date. Such Early Purchase
Option purchase amount includes consideration to Lessor for Lessee's
recapture of the tax benefits.
3. END OF TERM OPTIONS
A. PURCHASE OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
purchase all, but not less than all, of the Equipment for the then "Fair
Market Value" (as hereinafter defined) plus all other amounts then due
and payable under the Rental Schedule; or
B. RENEWAL OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
renew the Rental Schedule term for an additional twelve (12) months
("Renewal Term") at a Lease Rate Factor of 0.9337% of the Acquisition
Cost ($58,648.63 per month) with the first such rental payment being due
and payable by Lessee on June 25, 2003, and then to return all but not
less than all of the Equipment to Lessor at the expiration of the
Renewal Term as specified in Paragraph C, or
C. RETURN OPTION: Lessee will at its sole risk and expense
immediately return all but not less than all of the Equipment to Lessor
crated and packaged to Lessor's specification, to a place designated by
Lessor within the continental United States, and otherwise in accordance
with the return provisions of the Rental Schedule and in the condition
required by the Rental Schedule.
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee on the basis of, and shall be equal in amount
to, the value one would obtain in an arm's-length transaction between an
informed and willing buyer-user and an informed and willing retail
seller under no compulsion to sell. It shall be assumed that the
Equipment is in the condition in which it is required to be returned
under the Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
Jeffrey M. Sturm (authorized signature) Peter Norris (authorized signature)
Its President Its CFO
(title)
(title)
Date June 25, 1998 Date June 25, 1998
EXHIBIT B
TO: Insurance Company or Agent
Name: J&H Marsh & McLennan, Inc. Contact: Christina Marcon
Address: One California Street Phone: 415-743-8321
San Francisco, CA 94111 Fax: 415-743-8055
We have leased from Third Street Services, Inc. under that certain
Lease Agreement No. 125 dated June 9, 1998, Rental Schedule No.
1-ICX , specific equipment described on Exhibit A, a copy of which is
attached hereto. Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of ICX CORPORATION .
2. Issue a written endorsement naming ICX CORPORATION as
Additional Insured and Loss Payee, and provide them with a
thirty (30) day written notice of material change of coverage,
cancellation or non-renewal.
3. Insurance must include coverage as indicated below:
(X) Bodily Injury and Property Damage Insurance with limits of no
less than $ 1,252,643.00 .
(X) Physical Damage (all risk) as agreed in the lease, in the
amount of $ 1,252,643.00 .
(X) Coverage for the contractual liability assumed in Paragraph
8 of the lease.
( ) Other:
______________________________________________________________
4. Loss, if any, under this endorsement shall be payable solely
to ICX CORPORATION or its assigns.
5. The policy must contain the following endorsement:
The insurance under this policy shall be primary insurance,
and the company insurer shall be liable under this policy for
the full amount of the loss up to and including the total
limits of liability herein without right of contribution from
any other insurance effected by ICX CORPORATION under any
policy with any insurance company covering a loss covered
under this policy.
Forward evidence of coverage to: ICX
CORPORATION
3 Summit Park Drive, Suite 200
Cleveland, OH 44131
Attn: Mr. J. T. Lovins
LESSEE: HMT TECHNOLOGY CORPORATION
Signed:
Insured/Lessee
Its: Peter Norris CFO
CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, , do hereby
certify that I am the duly elected, qualified and acting Assistant
Secretary of HMT Technology Corporation , a Delaware Corporation;
that the persons whose names, titles and signatures appear below are
duly elected (or appointed), qualified and acting officers of said
Corporation and hold on the date of this Certificate the offices set
opposite their respective names; that the signatures appearing opposite
their respective names are the genuine signatures of such officers; that
each of such officers is duly authorized for and on behalf of said
Corporation to execute and deliver any Lease document between said
Corporation and said Third Street Services, Inc., and that execution of
such documents, and instruments in connection therewith for and on
behalf of said Corporation is not prohibited by or in any manner
restricted by the terms of said Corporation's Certificate of
Incorporation, its by-laws, or of any loan agreement, indenture or
contract to which said Corporation is a party or under which it is
bound. I do further certify that the foregoing authority shall remain in
full force and effect, and said Third Street Services, Inc. shall be
entitled to rely upon same, until written notice of the modification,
rescission or revocation of same, in whole or in part, has been
delivered to said Third Street Services, Inc., but no such modification,
rescission or revocation shall, in any event, be effective with respect
to any documents executed or actions taken in reliance upon the
foregoing authority prior to the delivery to said Third Street Services,
Inc. of said written notice of said modification, rescission or
revocation.
NAME AND TITLE OF OFFICER SIGNATURE OF OFFICER
Peter Norris, Chief Financial Officer
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
said Corporation this 9th day of June , 1998.
By
Title Assistant Secretary
125-1-ICX
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: THAT HMT TECHNOLOGY CORPORATION
located at 1055 Page Avenue, Fremont, CA 94538 in consideration of
the sum of Six Million Two Hundred Eighty-One Thousand Three Hundred
Fourteen and 50/100 Dollars ($6,281,314.50) and other good and valuable
consideration, the receipt of which is hereby acknowledged, does hereby
sell, assign, transfer and convey to Third Street Services, Inc., a
California corporation, with offices at 1646 N. California Blvd., Suite
510, Walnut Creek, CA 94596, the following described personal property:
EQUIPMENT DESCRIBED IN RENTAL SCHEDULE
NO. 4-ICX TO MASTER LEASE AGREEMENT NO. 125
DATED JUNE 9, 1998 ATTACHED HERETO AND
MADE A PART HEREOF.
to have and to hold all and singular the said personal property to Third
Street Services, Inc., its successors and assigns, for its own use
forever.
The undersigned hereby covenants that the undersigned is the lawful
owner of the said personal property; that it is free from all
encumbrances; that the undersigned has the right to sell the same as
aforesaid; and that the undersigned will warrant and defend the same
against any and all claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
document this 25th day of June, 1998.
HMT TECHNOLOGY CORPORATION
BY:
ITS: Peter Norris, CFO
(Typed name of signer and
title)
INVOICE
FROM: THIRD STREET SERVICES, INC. DATE: June 25, 1998
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
TO: HMT TECHNOLOGY CORPORATION
1055 Page Avenue
Fremont, CA 94538
Pursuant to Master Lease No. 125 dated June 9, 1998 between THIRD
STREET SERVICES, INC. (Lessor) and HMT TECHNOLOGY CORPORATION (Lessee),
Rental Schedule
No. 4-ICX, the following amount is due and payable as the first month's
rental payment:
Rental Schedule No. 4-ICX
1st Payment of 60 $112,316.18
TO BE DEDUCTED FROM FUNDING
PLEASE REMIT TO: ICX CORPORATION.
Attn: J. T. Lovins
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
_______ Lessee Initial
Equipment and other property under Rental Schedule 5-ICX leased or to be
leased pursuant to that certain Master Lease Agreement No. 125 (the
"Lease") between HMT TECHNOLOGY CORPORTION, as Lessee, and THIRD STREET
SERVICES, INC., as Lessor, dated June 9, 1998 including, but not
limited to, the property described in Exhibit A to the Rental Schedule
attached hereto and made a part hereof and all modification and
attachments thereto and replacements thereof and substitutions therefore
in whole or in part, and all proceeds thereof.
EQUIPMENT LOCATION: 1220 Page Avenue, Fremont, CA 94538
SEE EXHIBIT "A" ATTACHED HERETO
June 25, 1998
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 4-ICX dated June 25, 1998
Gentlemen:
Pursuant to Master Lease Agreement No. 125, Rental Schedule No. 5-ICX
please be advised that the equipment is located at 1220 Page Avenue,
Fremont, CA 94538. The "Ship To" address shown on Phase Metric
invoices in this transaction is a warehouse where all equipment is
shipped to HMT before being installed.
Very truly yours,
Jeffrey M. Sturm
President
Agreed to this 25th day of June 1998
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 25, 1998
Mr. J. T. Lovins
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Dear Mr. Lovins:
RE: Master Lease Agreement No. 125 dated June 9 , 1998 between Third
Street Services, Inc. ("Lessor") as lessor and HMT Technology
Corporation ("Lessee") as lessee, and Rental Schedule No. 4-ICX
(together, including all amendments, modifications, riders,
exhibits and attachments, the "Lease"), and the equipment
("Equipment") subject to the Lease.
This is to verify that the full equipment cost of this Schedule
($6,281,314.50) less the rental due June 25, 1998 ($112,316.18) will be
remitted directly to HMT Technology Corporation. Assuming funding on
June 25, 1998, the total due HMT is $6,168,998.32. Should funding
actually occur on a different day, HMT will be credited per diem
interest of $505.99 per day ($6,281,314.50 x .0290 / 360).
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
June 25, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 4-ICX dated June 25, 1998
This is to confirm the date of first functional use for the equipment
described on the above-referenced Rental Schedule as follows:
Serial Numbers First Functional
Use
MG1268, MG1269, MG1270, MG1271
MG1272, MG1273, MG1274, MG1275, F0097500222 01/Apr/98
MG1276, MG1277, MG1278, MG1279
MG1280, MG1281, MG1282, MG1283, F009750218 07Apr/98
MG1284, MG1288, MG1289, MG1291,
MG1294, MG1296, MG1297, MG1298, F009750219 16/Apr/98
MG1285, MG1290, MG1292, MG1293,
MG1295, MG1299, MG1300, MG1301, F0099740209 21/Apr/98
MG1166, MG1188, MG1221, MG1222,
MG1225, MG1227, MG1229, MG1233, F009740197 29/Apr/98
HMT Technology Corporation
Page 2
June 25, 1998
Per the terms of Paragraph 5 of the Master Lease Agreement, HMT
Corporation acknowledges and agrees that it indemnifies and holds
harmless Third Street Services, Inc. or any Assignee thereof from any
taxes, penalties or interest resulting from its sale, lease, or use of
the Equipment.
Very truly yours,
THIRD STREET SERVICES, INC.
Jeffrey M. Sturm
President
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: CFO
MEMO TO: Matt Perreault DATE: June 25,
1998
HMT Technology Corporation
FROM: Sharon Martinez
SUBJECT: ICX Closing - Master Lease No. 125, Rental Schedule No. 4-ICX
I am forwarding executed copies of your documents for the current
closing with ICX. You may be receiving a "due diligence" call on this
transaction from ICX.
To summarize the closing:
Scheduled funding date: June 25, 1998
Should funding actually occur on a
different day,
HMT will be credited per diem
interest of $505.99 per day
($6,281,314.50 x .0290 / 360).
Equipment Cost: $6,281,314.50
Net to HMT June 25
Equipment Cost $6,281,314.50
Less First Month's Rent (112,316.18)
Net to HMT June 25 $6,168,998.32
Next Payment due ICX July 25, 1998
Remit to address: ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Lease end options: Early Termination Option at month 36
or 48 OR
Early Purchase Option at month 52 OR
Purchase at FMV OR
Renew for 12 months OR
Return
with 90 days' written notice prior to
lease end
Please do not hesitate to call with any questions you might have.
(TO BE PREPARED ON PHASE METRICS LETTERHEAD)
DATE
Third Street Services, Inc.
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
Gentlemen:
RE: HMT Technology Corporation
This is to correct a serial number shown on our Invoice Nos. 15090A and
15090B. The serial number shown as MG1231 should, in fact, be MG1233.
Sincerely,
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 25, 1998
Page 4
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 25, 1998
Page 5
_______ Lessee Initial
_______ Lessor Initial
June 25, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
RE: Master Lease Agreement dated June 9, 1998 between Third Street
Services, Inc. ("Lessor") as lessor and HMT Technology Corporation
("Lessee") as lessee, and Rental Schedule No. 5-ICX (together,
including all amendments, modifications, riders, exhibits and
attachments, the "Lease"), and the equipment ("Equipment") subject
to the Lease.
Gentlemen:
1. Notice is hereby given that, (a) pursuant to a Without Recourse
Lease Assignment (the "Assignment") between Lessor and ICX Corporation
("Assignee"), the Lease has been assigned and (b) pursuant to a Bill of
Sale, the Equipment has been sold by Lessor to Assignee. Pursuant to
the Assignment, Lessor has collaterally assigned, transferred and set
over unto Assignee:
a. all sums due under the Lease or any extension thereof,
including, without limitation, rentals, interest, late charges,
payments, taxes, income, revenues, issues, profits, insurance proceeds,
awards and proceeds in respect of any taking, casualty, salvage, damage
or termination, and all other amounts, of every kind and nature, now or
hereafter payable to or receivable by the Lessor in respect of the
Equipment or the Lease (collectively "Payments");
b. all claims, rights, privileges, options, elections, powers and
remedies, now existing or hereafter arising, of Lessor under or pursuant
to any provision of the Lease; and
c. all other rights of Lessor to give, make, enter into or receive
any agreement, amendment, notice, consent, demand, waiver or approval
with, to or from Lessee under or in respect of the Lease or any of the
Equipment, to accept surrender of any of the Equipment, or to terminate
or cancel the Lease;
in each case together with full power and authority, in the name of
Lessor or Assignee, to enforce, collect, receive and receipt for any or
all of the foregoing.
2. In connection with the Assignment, Lessor and Assignee hereby
irrevocably direct you to remit to Assignee all Payments required to be
made pursuant to the Lease beginning with the first payment date
following receipt of this notice and continuing thereafter through and
including the payment due May 25, 2003 .
All payments should be mailed directly to Assignee at 3 Summit Park
Drive, Suite 200, Cleveland, OH 44131 (or to such other address or
party as Assignee may otherwise direct). Any notices and other
communications should also be given or sent to Assignee at the
foregoing address or in the event of registered or certified mail or
overnight delivery sent to 3 Summit Park Drive, Suite 200, Cleveland,
OH 44131 .
3. This letter will also serve to confirm the following
representations: (a) that your obligation to pay the Payments to
Assignee as set forth in the Lease shall be unconditional and that you
will make the Payments (i) without any right of setoff, defense or
counterclaim subject only to any action by Assignee which materially and
adversely affects your physical possession or use of the Equipment at a
time when you are not in default under the Lease, and (ii) regardless of
whether or not you shall have received an appropriate invoice with
respect thereto and (iii) notwithstanding any rights, claims, or causes
of action which you may have, or may hereafter acquire under the Lease,
as a result of any defect in the Equipment or otherwise; (b) that the
Lease is in full force and effect; (c) that all items of Equipment have
been delivered and installed at the location set forth in the relevant
Rental Schedule under the Lease and have been found to be in good
working order and are accepted by you under the Lease; (d) that the
Assignee shall enjoy all of the Lessor's rights and privileges under the
Lease but shall not be chargeable with any obligations or liabilities
under the Lease; (e) that a copy of any notice which you are required to
give to Lessor under the Lease shall be sent to Assignee; (f) that
without Assignee's prior, express written consent you will not (i) sell,
encumber, surrender, abandon, or (except to the extent permitted by the
Lease) relocate or sublease any of the Equipment, or (ii) subordinate,
encumber, amend, modify, terminate, cancel or assign the Lease; (g) that
any such consent of Assignee, except as expressly otherwise provided by
the terms of the Lease, may be given or withheld in Assignee's
reasonable discretion; (h) that all rights of Lessor under the Lease (i)
to give, make, enter into or receive any agreement, amendment, notice,
consent, demand, waiver or approval with, to or from Lessee under or in
respect of the Lease or any of the Equipment, or (ii) to accept
surrender of any of the Equipment shall be exercised by Assignee; and
(i) except as aforesaid, any act of Lessor or Lessee which contravenes
the provisions of this paragraph 3 shall be void as against Assignee and
if committed by Lessee shall constitute an Event of Default under the
Lease.
4. You also represent, agree and acknowledge that: (a) the remaining
term of the Lease is sixty (60) months commencing on June 25, 1998; (b)
the Monthly Rental is $67,389.71 and is due and payable in advance on
the twenty-fifth day of each month during the remaining term; (c) no
Event of Default under the Lease and no event which, but for the passage
of time or the giving of notice or both, would be an Event of Default
under the Lease exists on the part of Lessee or (to the best of your
knowledge) on the part of Lessor in the performance of their respective
obligations under the Lease; (d) there has been no material adverse
change in your financial condition since the date of your last certified
financial statements furnished to Lessor; and (e) you will furnish
Assignee with such financial information as it may reasonable request,
including, within 90 days after the close of your fiscal year, your
annual audited financial statements, and within 60 days after the end of
each of the first three quarters of your fiscal year, your quarterly
financial statements, similarly prepared but not necessarily audited,
and signed by your chief financial officer.
5. Pursuant to Section 8 of the Lease, we hereby request that you
promptly arrange to (a) add Assignee as an additional insured under each
liability insurance policy required under the Lease, (b) name Assignee
as loss payee under each insurance policy covering the Equipment
required by Lease, and (c) furnish to Assignee evidence of such
insurance coverage not later than thirty days from the date hereof.
6. The assignment in the Assignment shall not be deemed to relieve
Lessor of any obligations under the Lease.
Very truly yours,
THIRD STREET SERVICES, INC.
M. Renee Murray
Senior Vice President Operations
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Title: Peter Norris, Chief Financial Officer
Acknowledged and Agreed:
ICX CORPORATION
By:
Title:
RENTAL SCHEDULE TO
MASTER LEASE AGREEMENT
RENTAL SCHEDULE NO. 5-ICX to Master Lease Agreement No. 125
dated June 9 , 19 98 , (the "Lease") by and between the
undersigned, the terms and conditions of which are hereby incorporated
herein by reference. Lessee hereby (a) authorizes Lessor to order for
lease to Lessee the equipment described herein (the "Equipment") and to
insert hereon the Lease Commencement Date and the partial first period's
rent (if any) for such Equipment upon Lessee's acceptance of same for
lease, (b) agrees to lease such Equipment from Lessor Effective the
Lease Commencement Date thereof and for the lease term specified below,
and (c) agrees to pay Lessor the rent, in the amounts and at the time
specified below, for each item of Equipment. All of the terms used
herein which are defined in the Lease shall have the same meaning as so
defined.
SERIAL ACQUISTION
QUANTITY DESCRIPTION NUMBER COST
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 5-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
TOTAL COST $ 3,768,788.70
This Rental Schedule is for a term of 60 months (plus -0-
days partial first period term) and the Lease Commencement Date is June
25, 19 98 . The partial first period rent of $ -0- is payable
together with $ 67,389.71 (plus applicable sales/use tax)
regular monthly rent on the 25th day of June , 1998 followed
by equal payment of regular rent on the 25th day of each month
thereafter until a total rent of $ 4,043,382.60 has been
paid.
LOCATION OF EQUIPMENT: 1220 Page Avenue, Fremont, CA 94538
The "Acquisition Cost" means an amount equal to the sum of (i) the
purchase price of each item of Equipment paid by Lessor, plus (ii) any
excise, sales and use tax on or with respect thereto, plus (iii) any
costs, expenses, and fees paid or incurred by Lessor in obtaining and
delivering such item of Equipment to Lessee and any expenses of
installation of such item of Equipment paid for by Lessor.
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
(LESSOR) (LESSEE)
By By
M. Renee Murray (authorized signature) Peter Norris (authorized signature)
Its Senior Vice President Operations Its Chief Financial Officer
(title) (title)
Date June 25, 1998 Date June 25, 1998
DELIVERY AND ACCEPTANCE CERTIFICATE
RENTAL SCHEDULE NO. 5-ICX
PURSUANT TO MASTER LEASE AGREEMENT NO. 125 , dated as of June 9, 1998
(the "Lease") by and between THIRD STREET SERVICES, INC.
("Lessor") and
HMT TECHNOLOGY CORPORATION
("Lessee").
The undersigned, being the duly authorized representative of the Lessor
and the Lessee hereby CERTIFIES that the following units of equipment
(the "Equipment") referred to in the Lease between Lessor and the
Lessee.
QUANTITY DESCRIPTION SERIAL NUMBER
EQUIPMENT DESCRIBED ON EXHIBIT "A"
TO RENTAL SCHEDULE NO. 5-ICX ATTACHED
HERETO AND MADE A PART HEREOF.
have been duly delivered to the Lessor in good order and duly inspected
and accepted by the undersigned as of the date hereof on behalf of the
Lessor, and have thereby been duly delivered by the Lessor to the Lessee
and have been duly accepted and inspected by the undersigned on said
date on behalf of the Lessee as conforming in all respects with the
requirements and provisions of the Lease.
HMT TECHNOLOGY CORPORATION
By:
Its: Peter Norris, Chief
Financial Officer
Date: June 25, 1998
ADDENDUM TO RENTAL SCHEDULE NO. 5-ICX (the "Rental Schedule")
TO MASTER LEASE AGREEMENT NO. 125 (the "Lease") BETWEEN
THIRD STREET SERVICES, INC. (LESSOR) AND
HMT TECHNOLOGY CORPORATION (LESSEE)
WHEREAS, Lessor and Lessee have entered into the Rental Schedule; and
WHEREAS, Lessor and Lessee desire to amend certain provisions of the
Rental Schedule as hereinafter provided; and
WHEREAS, the Addendum shall be deemed to have been entered into
contemporaneously with and integrated into the terms and conditions of
the Rental Schedule;
NOW THEREFORE, for good and valuable consideration, Lessor and Lessee
hereby agree as follows:
1. EARLY TERMINATION OPTION: As long as no event of default exists
or will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to terminate this Rental Schedule on:
a) June 24, 2001 (the "First Early Termination Date") by paying
Lessor an amount equal to $1,130,636.61 (30% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the First Early Termination Date and return the Equipment to
Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits; or
b) June 24, 2002 (the "Second Early Termination Date") by paying
Lessor an amount equal to $678,381.97 (18% of the Acquisition Cost of
the Equipment) plus all other amounts then due and payable under the
Lease as of the Second Early Termination Date and return the Equipment
to Lessor. Such Early Termination Option purchase amount includes
consideration to Lessor for Lessee's recapture of the tax benefits.
2. EARLY PURCHASE OPTION: As long as no event of default exists or
will exist given the passage of time or the giving of notice or both,
Lessee will, with ninety (90) days prior written notice, have the option
to purchase all, but not less than all, of the Equipment under this
Rental Schedule on October 24, 2002 (the "Early Purchase Date") by
paying Lessor an amount equal to $1,130,636.61 (30% of the Acquisition
Cost of the Equipment) plus all other amounts then due and payable under
the Rental Schedule as of the Early Purchase Date. Such Early Purchase
Option purchase amount includes consideration to Lessor for Lessee's
recapture of the tax benefits.
3. END OF TERM OPTIONS
A. PURCHASE OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
purchase all, but not less than all, of the Equipment for the then "Fair
Market Value" (as hereinafter defined) plus all other amounts then due
and payable under the Rental Schedule; or
B. RENEWAL OPTION: As long as no event of default exists or will
exist given the passage of time or the giving of notice or both, Lessee
will, with ninety (90) days prior written notice, have the option at the
expiration of the lease term as specified on the Rental Schedule, to
renew the Rental Schedule term for an additional twelve (12) months
("Renewal Term") at a Lease Rate Factor of 0.9337% of the Acquisition
Cost ($35,189.18 per month) with the first such rental payment being due
and payable by Lessee on June 25, 2003, and then to return all but not
less than all of the Equipment to Lessor at the expiration of the
Renewal Term as specified in Paragraph C, or
C. RETURN OPTION: Lessee will at its sole risk and expense
immediately return all but not less than all of the Equipment to Lessor
crated and packaged to Lessor's specification, to a place designated by
Lessor within the continental United States, and otherwise in accordance
with the return provisions of the Rental Schedule and in the condition
required by the Rental Schedule.
D. FAIR MARKET VALUE: Fair Market Value shall be determined by an
appraiser chosen by Lessee on the basis of, and shall be equal in amount
to, the value one would obtain in an arm's-length transaction between an
informed and willing buyer-user and an informed and willing retail
seller under no compulsion to sell. It shall be assumed that the
Equipment is in the condition in which it is required to be returned
under the Rental Schedule. The fees and expenses of all such appraisals
shall be paid by Lessee.
Except as set out herein, Lessor and Lessee hereby agree that the terms
and conditions of the Rental Schedule shall remain in full force and
effect as entered into by the parties on or prior to the date hereof.
AGREED TO BY:
THIRD STREET SERVICES, INC. HMT TECHNOLOGY CORPORATION
By By
M. Renee Murray (authorized signature) Peter Norris (authorized signature)
Its Senior Vice President Operations Its Chief Financial Officer
(title) (title)
Date June 25, 1998 Date June 25, 1998
EXHIBIT B
TO: Insurance Company or Agent
Name: J&H Marsh & McLennan, Inc. Contact: Christina Marcon
Address: One California Street Phone: 415-743-8321
San Francisco, CA 94111 Fax: 415-743-8055
We have leased from Third Street Services, Inc. under that certain
Lease Agreement No. 125 dated June 9, 1998, Rental Schedule No. 3-
ICX through and including Rental Schedule No. 5-ICX, specific equipment
described on Exhibit A, a copy of which is attached hereto.
Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of ICX CORPORATION .
2. Issue a written endorsement naming ICX CORPORATION as
Additional Insured and Loss Payee, and provide them with a
thirty (30) day written notice of material change of coverage,
cancellation or non-renewal.
3. Insurance must include coverage as indicated below:
(X) Bodily Injury and Property Damage Insurance with limits of no
less than $ 11,273,793.00 .
Rental Schedule No. 3-ICX = $1,252,644.00
Rental Schedule No. 4-ICX = $6,263,218.00
Rental Schedule No. 5-ICX = $3,757,930.82
(X) Physical Damage (all risk) as agreed in the lease, in the
amount of $ 11,273,793.00 .
Rental Schedule No. 3-ICX = $1,252,644.00
Rental Schedule No. 4-ICX = $6,263,218.00
Rental Schedule No. 5-ICX = $3,757,930.82
(X) Coverage for the contractual liability assumed in Paragraph
8 of the lease.
( ) Other:
______________________________________________________________
__
4. Loss, if any, under this endorsement shall be payable solely
to ICX CORPORATION or its assigns.
5. The policy must contain the following endorsement:
The insurance under this policy shall be primary insurance,
and the company insurer shall be liable under this policy for
the full amount of the loss up to and including the total
limits of liability herein without right of contribution from
any other insurance effected by ICX CORPORATION under any
policy with any insurance company covering a loss covered
under this policy.
Forward evidence of coverage to: ICX
CORPORATION
3 Summit Park Drive, Suite 200
Cleveland, OH 44131
Attn: Mr. J. T. Lovins
LESSEE: HMT TECHNOLOGY CORPORATION
Signed:
Insured/Lessee
Its: Peter Norris Chief Financial
Officer
ASSIGNMENT OF INVOICE
Reference is made to that certain Master Equipment Lease Agreement
No. 125 dated June 9, 1998, Rental Schedule No. 5-ICX, by and between
HMT TECHNOLOGY CORPORATION ("Lessee") and THIRD STREET SERVICES, INC.
("Lessor") pursuant to which it was agreed that Lessor would purchase
certain equipment which Lessee ordered from VENDORS LISTED BELOW
("Vendor") and Lessee would lease such equipment from Lessor. Pursuant
thereto, Lessee hereby assigns and conveys to Lessor all of its rights,
title and interest in and under the referenced Vendor invoices as
follows:
AMOUNT
VENDOR INVOICE NO. INVOICE DATE DUE
VENDOR
Phase Metrics 16000A, 16000B 30/Dec/97 908,106.90
Phase Metrics 16516, 16512 15/May/98 908,106.90
16412, 16428 08/May/98
Phase Metrics 16559, 16561 21/May/98 908,106.90
16583, 16598 22/May/98
attached hereto and in the equipment identified therein ("Equipment").
Lessee represents and warrants that Lessee has the right to assign said
Invoices, and that Lessor's acceptance of such assignment and payment of
the purchase price shall vest title to the Equipment in Lessor free from
any claims and encumbrances.
Lessee has executed this document as of this 25th day of June ,
1998.
HMT TECHNOLOGY CORPORATION
("Lessee")
By:
Peter Norris
Its: Chief Financial Officer
CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, , do hereby
certify that I am the duly elected, qualified and acting Assistant
Secretary of HMT Technology Corporation , a Delaware Corporation;
that the persons whose names, titles and signatures appear below are
duly elected (or appointed), qualified and acting officers of said
Corporation and hold on the date of this Certificate the offices set
opposite their respective names; that the signatures appearing opposite
their respective names are the genuine signatures of such officers; that
each of such officers is duly authorized for and on behalf of said
Corporation to execute and deliver any Lease document between said
Corporation and said Third Street Services, Inc., and that execution of
such documents, and instruments in connection therewith for and on
behalf of said Corporation is not prohibited by or in any manner
restricted by the terms of said Corporation's Certificate of
Incorporation, its by-laws, or of any loan agreement, indenture or
contract to which said Corporation is a party or under which it is
bound. I do further certify that the foregoing authority shall remain in
full force and effect, and said Third Street Services, Inc. shall be
entitled to rely upon same, until written notice of the modification,
rescission or revocation of same, in whole or in part, has been
delivered to said Third Street Services, Inc., but no such modification,
rescission or revocation shall, in any event, be effective with respect
to any documents executed or actions taken in reliance upon the
foregoing authority prior to the delivery to said Third Street Services,
Inc. of said written notice of said modification, rescission or
revocation.
NAME AND TITLE OF OFFICER SIGNATURE OF OFFICER
Peter Norris, Chief Financial Officer
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
said Corporation this 9th day of June , 1998.
By
Title Assistant Secretary
125-5-ICX
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: THAT HMT TECHNOLOGY CORPORATION
located at 1055 Page Avenue, Fremont, CA 94538 in consideration of
the sum of Three Million Seven Hundred Sixty-eight Thousand Seven
Hundred Eighty-eight and 70/100 Dollars ($3,768,788.70) and other good
and valuable consideration, the receipt of which is hereby acknowledged,
does hereby sell, assign, transfer and convey to Third Street Services,
Inc., a California corporation, with offices at 1646 N. California
Blvd., Suite 510, Walnut Creek, CA 94596, the following described
personal property:
EQUIPMENT DESCRIBED IN RENTAL SCHEDULE
NO. 5-ICX TO MASTER LEASE AGREEMENT NO. 125
DATED JUNE 9, 1998 ATTACHED HERETO AND
MADE A PART HEREOF.
to have and to hold all and singular the said personal property to Third
Street Services, Inc., its successors and assigns, for its own use
forever.
The undersigned hereby covenants that the undersigned is the lawful
owner of the said personal property; that it is free from all
encumbrances; that the undersigned has the right to sell the same as
aforesaid; and that the undersigned will warrant and defend the same
against any and all claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
document this 25th day of June, 1998.
HMT TECHNOLOGY CORPORATION
BY:
ITS: Peter Norris, Chief Financial
Officer
(Typed name of signer and
title)
INVOICE
FROM: THIRD STREET SERVICES, INC. DATE: June 25, 1998
1646 North California Boulevard
Suite 510
Walnut Creek, CA 94596
TO: HMT TECHNOLOGY CORPORATION
1055 Page Avenue
Fremont, CA 94538
Pursuant to Master Lease No. 125 dated June 9, 1998 between THIRD
STREET SERVICES, INC. (Lessor) and HMT TECHNOLOGY CORPORATION (Lessee),
Rental Schedule
No. 5-ICX, the following amount is due and payable as the first month's
rental payment:
Rental Schedule No. 5-ICX
1st Payment of 60 $67,389.71
TO BE DEDUCTED FROM FUNDING
PLEASE REMIT TO: ICX CORPORATION.
Attn: J. T. Lovins
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
_______ Lessee Initial
Equipment and other property under Rental Schedule 5-ICX leased or to be
leased pursuant to that certain Master Lease Agreement No. 125 (the
"Lease") between HMT TECHNOLOGY CORPORTION, as Lessee, and THIRD STREET
SERVICES, INC., as Lessor, dated June 9, 1998 including, but not
limited to, the property described in Exhibit A to the Rental Schedule
attached hereto and made a part hereof and all modification and
attachments thereto and replacements thereof and substitutions therefore
in whole or in part, and all proceeds thereof.
EQUIPMENT LOCATION: 1220 Page Avenue, Fremont, CA 94538
SEE EXHIBIT "A" ATTACHED HERETO
June 25, 1998
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 5-ICX dated June 25, 1998
Gentlemen:
Pursuant to Master Lease Agreement No. 125, Rental Schedule No. 5-ICX
please be advised that the equipment is located at 1220 Page Avenue,
Fremont, CA 94538. The "Ship To" address shown on Phase Metric invoice
nos. 16000A, 16000B, 16412, 16428, 16583 and16598 is a warehouse where
all equipment is shipped to HMT before being installed.
Very truly yours,
M. Renee Murray
Senior Vice President Operations
Agreed to this 25th day of June 1998
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: Chief Financial Officer
June 25, 1998
Mr. J. T. Lovins
ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Dear Mr. Lovins:
RE: Master Lease Agreement No. 125 dated June 9 , 1998 between Third
Street Services, Inc. ("Lessor") as lessor and HMT Technology
Corporation ("Lessee") as lessee, and Rental Schedule No. 5-ICX
(together, including all amendments, modifications, riders,
exhibits and attachments, the "Lease"), and the equipment
("Equipment") subject to the Lease.
This is to verify that the full equipment cost of this Schedule
($3,768,788.70) less the outstanding vendor payments ($2,724,320.70),
less the rental due June25, 1998 ($67,389.71) will be remitted directly
to HMT Technology Corporation. Total due HMT is $977,078.29. ICX
Corporation will pay Phase Metrics $2,724,320.70, which represents the
final seventy percent (70%) due on the machines in this Schedule.
Very truly yours,
THIRD STREET SERVICES, INC.
M. Renee Murray
Senior Vice President Operations
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: Chief Financial Officer
June 25, 1998
HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Gentlemen
RE: Master Lease Agreement No. 125 dated June 9, 1998
Rental Schedule No. 5-ICX dated June 25, 1998
This is to confirm that the date of first functional use for the
equipment described on Phase Metrics Invoice Nos. 16000A and 16000B was
May 5, 1998.
Per the terms of Paragraph 5 of the Master Lease Agreement, HMT
Corporation acknowledges and agrees that it indemnifies and holds
harmless Third Street Services, Inc. or any Assignee thereof from any
taxes, penalties or interest resulting from its sale, lease, or use of
the Equipment.
Very truly yours,
THIRD STREET SERVICES, INC.
M. Renee Murray
Senior Vice President Operations
Acknowledged and Agreed:
HMT TECHNOLOGY CORPORATION
By:
Peter Norris
Title: Chief Financial Officer
MEMO TO: Matt Perreault DATE: June 25, 1998
HMT Technology Corporation
FROM: Sharon Martinez
SUBJECT: ICX Closing - Master Lease No. 125, Rental Schedule No. 5- ICX
I am forwarding executed copies of your documents for the current
closing with ICX. You may be receiving a "due diligence" call on this
transaction from ICX.
To summarize the closing:
Scheduled funding date: June 25, 1998
Equipment Cost: $3,768,788.70
Net to HMT June 25
Reimbursement due HMT
For Vendor Payments $1,044,468.00
Less First Month's Rent __(67,389.71)
Net to HMT June 25 $977,078.29
ICX to pay Phase Metrics
70% due this Schedule $2,724,320.70
Next Payment due ICX July 25, 1998
Remit to address: ICX Corporation
3 Summit Park Drive
Suite 200
Cleveland, OH 44131
Lease end options: Early Termination Option at month 36
or 48 OR
Early Purchase Option at month 52 OR
Purchase at FMV OR
Renew for 12 months OR
Return
with 90 days' written notice prior to
lease end
Please do not hesitate to call with any questions you might have.
March 23, 1998
Ms. Joanne Du Vall
Alburger, Basso, De Groszo
960 Fulton
Sacramento, CA 95825
Dear Joanne,
TSS administers a lease line of credit for Level One Communications.
Our current closing for them is with ICX Corporation.
Could you please have an insurance certificate prepared, referencing our
Master Lease Agreement No. 125, Rental Schedule No. 5-ICX on the face of
the certificate. Please fax a copy to our Walnut Creek office at
510/933-6977, and mail the original to ICX. We are scheduled to fund on
the 27th of March. so your immediate response will be greatly
appreciated.
Thanks for your help. If you have any questions, please do not hesitate
to call.
Sincerely,
Sharon M. Martinez
Enclosures
SMM:mrf
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 25, 1998
Page 4
_______ Lessee Initial
_______ Lessor Initial
HMT Technology Corporation
June 25, 1998
Page 5
_______ Lessee Initial
_______ Lessor Initial