MASTER LEASE AGREEMENT
between
ICG Equipment, Inc.
a Colorado corporation,
and
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-----------------------
Master Lease No.____
Dated _____________
TABLE OF CONTENTS
Paragraph
Number Page
1. Definitions............................................................1
2. Nature of Master Lease Agreement.......................................3
3. Lease..................................................................3
4. Commencement of Lease..................................................3
5. Acceptance of Equipment................................................3
6. Payment of Rent........................................................4
7. Possession and Use.....................................................4
8. Title and Fixtures.....................................................5
9. Financing Statements...................................................5
10. Liens and Other Interests..............................................6
11. Location...............................................................6
12. Maintenance and Repairs................................................6
13. Alterations, Additions and Accessions..................................7
14. Manufacturers' Liabilities.............................................8
15. Manufacturers' Warranties..............................................8
16. Inspections and Labeling...............................................8
17. Term...................................................................8
18. Return of Equipment....................................................9
19. Net Lease..............................................................9
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20. Equipment Loss........................................................10
22. Insurance.............................................................11
22. Lessor's Warranties...................................................12
23. Lessee's Warranties...................................................13
24. Disclaimers...........................................................13
25. Indemnities...........................................................14
26. Events of Default.....................................................14
27. Remedies..............................................................15
28. Lessor's Right To Cure................................................16
29. Interest and Costs....................................................16
30. Mitigation............................................................16
31. Liquidation of Damages................................................17
32. Assignments, Subleases, and Encumbrances..............................17
33. Provisions Which Apply To Sale And Leaseback Transactions.............19
34. Amendments............................................................19
35. Termination...........................................................19
36. Applicable Law, Venue, and Jurisdiction...............................20
37. Severability..........................................................20
38. General Provisions....................................................20
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MASTER LEASE AGREEMENT
This Master Lease Agreement is entered into between ICG Equipment, Inc., a
Colorado corporation (the "Lessor") and the corporation (the "Lessee") named and
executing as Lessee on the signature page hereof.
1. Definitions. The following terms will have the following meanings wherever
they appear in this Master Lease Agreement.
1.1 "Appraisal" will mean a determination of the Fair Market Value of an
item of Equipment conducted by an appraiser selected by the Purchaser
and reasonably acceptable to Seller.
1.2 "Affiliate" will mean, with respect to any person or entity, any
person or entity which controls, is controlled by or is under common
control with that person or entity or, with respect to the Lessor, any
person or entity in which the Lessor has at least twenty five (25%)
voting interest.
1.3 "Basic Rent" will mean the regular periodic rent due under each Lease.
1.4 "Basic Rent Period" will mean the period for which Basic Rent is
periodically paid as set out in the Lease.
1.5 "Delivery and Acceptance Certificate" will mean a document in the form
attached to this Master Lease Agreement reflecting the date upon which
an item or items of Equipment has/have been accepted by a Lessee.
1.6 "Equipment" will mean all telecommunications switches and other
equipment, software, licenses, and other property used by Lessor or
its Affiliates, which is selected by Lessor to be leased pursuant to a
Lease as set forth in the Equipment Schedule(s) attached thereto.
1.7 "Equipment Schedule" will mean a schedule attached to a Purchase
Agreement, which schedule lists the Equipment being acquired.
1.8 "Event of Default" will mean an Event of Default under Paragraph 26
below.
1.9 "Event of Loss" will mean an Event of Loss under Paragraph 20.1 below.
1.10 "Fair Market Value" will mean the fair market value of an item of
Equipment as determined by an Appraisal.
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1.11 "Interim Rent" will mean the rent payable under each Lease during the
Interim Rent Period.
1.12 "Interim Rent Period" will mean the period from the Lease Commencement
Date to the first day of the Basic Rent Period next following the
Lease Commencement Date.
1.13 "Initial Purchase Price" will mean the amount paid by Purchaser to
Seller for purchase of the Equipment, in accordance with the Purchase
Agreement for such Equipment.
1.14 "Lease" will mean the document or documents subjecting Equipment to an
equipment lease which incorporate(s) the terms of this Master Lease
Agreement by reference.
1.15 "Lease Commencement Date" will mean, with respect to each item of
Equipment, the date upon which such Equipment becomes subject to a
Lease in accordance with Paragraph 4 below.
1.16 "Lessee" will mean the party signing each Lease as Lessee.
1.17."Lessor" will mean ICG Equipment, Inc., a Colorado corporation, whose
principal business headquarters are located at 161 Inverness Drive
West, Englewood, Colorado 80112.
1.18 "Licensed Product" will mean any item of software which is operated by
a Lessee under a license from an owner of such software having a
proprietary interest, for intellectual property purposes, in such
software.
1.19 "Master Lease Agreement" will mean this Master Lease Agreement.
1.20 "Purchase Agreement" will mean an agreement pursuant to which
Equipment is acquired by Lessor (as "Purchaser" therein) for lease to
Lessee.
1.21 "Purchase Price" will mean the Initial Purchase Price set forth in an
Equipment Schedule, to be paid by Lessor for each item of the
Equipment, as may be adjusted to Fair Market Value in accordance with
an Appraisal.
1.22 "Schedule of Termination Values" will mean the Schedule of Termination
Values, if any, attached to a Lease.
1.23 "Secured Party" will mean any party to which Lessor grants a security
interest in a Lease or Equipment, or to whom ownership of the
Equipment is conveyed subject to the terms of this Lease.
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1.24 "Stipulated Loss Value" will mean the Stipulated Loss Value for an
item of Equipment, calculated in accordance with the Schedule of
Stipulated Loss Value attached to the Lease.
1.25 "Term" will have the meaning set forth in Paragraph 17 of this Master
Lease Agreement.
1.26 "Termination Value" will mean the value of an item of Equipment
calculated in accordance with the Schedule of Termination Values
attached to a Lease. If no Schedule of Termination Values for any item
of Equipment is attached to a Lease, the Termination Values for such
Equipment will be equal to the Stipulated Loss Value of such Equipment
2. Nature of Master Lease Agreement. This Master Lease Agreement sets forth
the general provisions governing each Lease between Lessor and Lessee which
incorporates this Master Lease Agreement by reference. Notwithstanding the
incorporation of this Master Lease Agreement by reference, each Lease is
intended to be a separate Lease. This Master Lease Agreement is to be given
meaning with respect to each Lease independently of each other Lease.
3. Lease. Lessor leases the Equipment to Lessee and Lessee leases the
Equipment from Lessor subject to the terms and conditions of the Lease.
4. Commencement of Lease.
4.1 Lessor will be the holder of the lessor's interest in the Lease, at
the time of execution of each Lease, and Lessor will have the
unrestricted right to lease the Equipment covered by that Lease for
the entire Term of the Lease. The Term of the Lease of each item of
Equipment will commence on the Lease Commencement Date specified in
the Lease incorporating that item of Equipment or, if no date is
specified, on the date specified in the Delivery and Acceptance
Certificate for such Equipment.
4.2 Lessee hereby irrevocably appoints Lessor its attorney-in-fact (with
full power of substitution) to insert in any document the actual
costs, serial numbers, and further descriptions of any Equipment
subjected to a Lease.
5. Acceptance of Equipment. Lessee will inspect and test each item of
Equipment upon its delivery to Lessee and confirm its acceptance of the
Equipment by execution of a Delivery and Acceptance Certificate for such
Equipment. Upon execution of a Delivery and Acceptance Certificate by
Lessee, as between Lessor and Lessee, the Equipment described in such
Delivery and Acceptance Certificate will be deemed accepted by Lessee as
conforming to its description, free from defects and fit for the use
intended by Lessee; provided however that nothing in this paragraph or
otherwise is intended or will be construed as waiver of Lessee's rights to
enforce any representation or warranty expressed or implied with respect to
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the Equipment, given by the manufacturer or any party other than Lessor,
without affecting the obligations of Lessee to Lessor under this Lease.
6. Payment of Rent.
6.1 Basic Rent will commence on the Lease Commencement Date and continue
until the expiration of the Term. Basic Rent will be prorated on a per
diem basis for the Interim Rent Period and paid on the Lease
Commencement Date as Interim Rent.
6.2 If a Purchase Agreement for any Equipment provides to Purchaser an
option to determine Fair Market Value pursuant to an Appraisal,
Purchaser will exercise such option within ninety (90) days after the
Lease Commencement Date, and any rent adjustment resulting from such
Appraisal will be set forth in a substitute Lease for such Equipment
executed by the undersigned parties within thirty (30) days after
completion of such Appraisal.
6.3 Lessee will pay Lessor, or its assigns, Basic Rent, together with all
use taxes thereon, in advance, without notice or demand, on the first
day of each Basic Rent Period during the Term (except for any initial,
prorated payment, which will be paid on the Lease Commencement Date),
in full and under all circumstances, without any defense, offset, or
counterclaim. All such rent and taxes will be paid at the address of
Lessor or such other place as Lessor may direct Lessee in writing.
6.4 Lessee will pay to Lessor, monthly, on or before the fifth (5th) day
of each calendar month, a Lease service fee equal to (a) the average
daily balance during the preceding month of capital expenditures made
by Lessor with respect to the acquisition and installation of any item
intended to become Equipment, but which has not become Equipment,
under any Lease, multiplied by (b) one-twelfth (1/12th) of the sum of
four percent (4%) and the prime rate of interest specified in the
Western Edition of the Wall Street Journal or any successor
publication on the last day of such preceding month; provided that any
Lease service fee for any part month will be prorated on a per diem
basis, and provided further that any Lease service fee paid with
respect to any item not delivered as Equipment under a Lease to
Lessee, in accordance with the terms of the purchase order related to
such item, will be refunded by Lessor to Lessee, together with
interest at the same rate specified herein, upon written demand by
Lessee to Lessor.
6.5 No deposit, advance payment of rent, or other payment of any kind by
Lessee will bear interest or require segregation from the general
funds of Lessor.
7. Possession and Use.
7.1 So long as no Event of Default has occurred (but not thereafter),
Lessee will be entitled to, and will maintain, possession of the
Equipment, subject to the provisions of the Lease, from the Lease
Commencement Date until the expiration of the Term.
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7.2 Lessee will use the Equipment only for its intended use and purpose,
will allow only competent and qualified personnel to use or operate
the Equipment. Lessee will use and operate the Equipment:
(a) only in accordance with the instructions, requirements, and
recommendations of the manufacturers and vendors of the
Equipment;
(b) so as not to impair or void any warranties pertaining to the
Equipment;
(c) so as not to violate any requirement, limitation, or prohibition
of any maintenance agreement or insurance policy pertaining to
the Equipment;
(d) in accordance with all laws, ordinances, rules, regulations, and
requirements of every governmental authority having jurisdiction;
and
(e) in accordance with the customary practices of Lessee and the
standards of the industry in which Lessee uses the Equipment.
7.3 Lessee will pay all costs, expenses, fees, taxes, and charges of every
nature pertaining to the possession, use, and operation of the
Equipment.
8. Title and Fixtures.
8.1 Lessee will not acquire, or be deemed to have acquired, any right,
title, or interest in the Equipment (including any equitable interest
or interest in proceeds) by virtue of the Lease. After termination of
the Term, except as provided in the Lease, Lessee will not have any
right to regain possession of the Equipment or any right of redemption
with respect to the Equipment or the Lease.
8.2 Any item of Equipment subject to titling or registration laws will be
titled and registered to Lessor by Lessee, at Lessee's expense. Lessee
will provide Lessor with all titles, registrations, and other
documents pertaining thereto, as requested by Lessor.
8.3 Notwithstanding the location of any item of the Equipment on, or of
the attachment of any item of the Equipment to, any real property,
each item of the Equipment will be personal property and not a fixture
with respect to such real property. Upon the request of Lessor or any
Secured Party, Lessee will obtain for and deliver to such requesting
party real estate waivers, in the form and from whomsoever requested
by Lessor or Secured Party.
9. Financing Statements.
9.1 Lessee will promptly sign and deliver all financing statements,
notices, and other documents requested by Lessor or any Secured
Party(ies), disclosing, evidencing, or effectuating Lessor's ownership
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of, and Secured Party's security interest in, or other encumbrance on,
the Equipment and the Lease. Lessee will reimburse Lessor and each
Secured Party for all filing and recording costs related thereto.
9.2 Lessee hereby irrevocably appoints Lessor its attorney-in-fact (with
full power of substitution) to sign, file, and record, for and in the
name of Lessee, any financing statements concerning the Equipment and
the Lease and assignments of, and continuation statements for, such
financing statements, at the sole cost of Lessee.
10. Liens and Other Interests. Lessee will keep the Equipment free and clear of
all ownership interests adverse to Lessor and all levies, liens, security
interests, encumbrances, and restrictions of every nature whatsoever and of
all claims thereof, except for those granted by Lessor or arising under the
Lease.
11. Location. Lessee will cause the Equipment to be delivered to, and remain
at, the equipment location specified in the Lease, until its return to
Lessor. Provided, if Lessee gives at least ten (10) days' prior written
notice thereof to Lessor and Secured Party and first files and records, as
is appropriate, all financing statements, real estate waivers, and other
documents prudent or necessary to disclose and protect Lessor's ownership
interest in the Equipment and any Secured Party's security interests in and
other encumbrances on the Equipment then, Lessee may move the Equipment to
any new location in the United States.
12. Maintenance and Repairs.
12.1 At its own cost, Lessee will keep, maintain, repair, and replace the
Equipment:
(a) so that, at all times, the Equipment is in good and efficient
working order, condition, repair, and appearance, and is
maintained, repaired and replaced in accordance with the
instructions, requirements, and recommendations of the
manufacturers and vendors of the Equipment;
(b) so as not to impair or void any warranties pertaining to the
Equipment;
(c) so as not to violate any requirement, limitation, or prohibition
of any maintenance agreement or insurance policy pertaining to
the Equipment;
(d) in accordance with all laws, ordinances, rules, regulations, and
requirements of every governmental authority having jurisdiction
over the Equipment; and
(e) in accordance with the customary standards of Lessee and the
industry in which Lessee uses the Equipment.
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12.2 Lessee will keep and maintain current all instructions, warranty
books, written maintenance records, manuals, logs, and other similar
items pertaining to the Equipment, as required by, or originally
supplied by, the manufacturer or vendor, by any maintenance agreement,
any insurance policy, or any governmental authority; and such items
will be deemed to be a part of the Equipment.
12.3 Lessee agrees to pay any costs necessary for the manufacturer to bring
the Equipment to then current release, revision and engineering change
levels, and to recertify the Equipment as eligible for the
manufacturer's maintenance at the expiration of the Term. The Term
will continue upon the same terms and conditions until recertification
has been obtained.
13. Alterations, Additions and Accessions.
13.1 Except as provided in this Paragraph and Paragraph 12.3 above, Lessee
will not make any alterations, additions or accessions to the
Equipment. Upon prior written notice to Lessor, at Lessee's cost and
risk, Lessee may replace items of Equipment and reconfigure and
install attachments on the Equipment, provided that such replacement,
reconfiguration and installation will not reduce the value of the
Equipment or adversely impact its ability to function for the purpose
for which it is intended.
13.2 If any parts of the Equipment are removed during a reconfiguration or
attachment, Lessor may require Lessee to provide additional security,
satisfactory to Lessor, in order to ensure performance of Lessee's
obligations set forth in this Paragraph 13.
13.3 Notwithstanding the foregoing, if any reconfiguration or attachment
adversely affects Lessor's tax benefits relating to the Equipment, is
not capable of being removed without causing material damage to the
Equipment, or at the time of the reconfiguration or attachment, the
manufacturer does not offer, on a reasonably commercial basis, a means
for the removal of the additional items, then such reconfiguration or
attachment may not be made without the prior written consent of
Lessor, which may be withheld in the sole discretion of Lessor.
13.4 Subject to the provisions of Paragraph 18 hereof, no parts installed
on Equipment in the course of reconfiguration or attachment will be
accessions to the Equipment unless such parts are left on the
Equipment at the end of the Term.
13.5 Any parts installed on Equipment in the course of reconfiguration or
attachment not removed from the Equipment at the end of the Term will
become accessions, and Lessee warrants that the same thereupon will be
the property of Lessor, free and clear of all liens, security
interests, encumbrances, and ownership interests of others. At the
request of Lessor, at or after the end of the Term, Lessee will
execute a warranty bill of sale conveying to Lessor title to any such
part.
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14. Manufacturers' Liabilities. Lessee acknowledges that Lessor is not the
manufacturer or supplier of the Equipment and is not a dealer in equipment
of any kind, that the Equipment is of a type, style, size, design,
capacity, manufacture, and cost selected solely by Lessee, and that the
vendor from whom Lessor is to purchase the Equipment was selected solely by
Lessee.
15. Manufacturers' Warranties. So long as no Event of Default (hereinafter
defined) has occurred, but not otherwise, Lessee will be the
nonexclusive agent of Lessor to prosecute, at the sole cost and risk
of Lessee, all claims or actions with respect to any warranties
concerning the Equipment made to Lessor by the manufacturers or
vendors of the Equipment. To the extent assignable, Lessee hereby
assigns to Lessor all warranties now or hereafter made to Lessee by
any manufacturer or vendor of the Equipment or any vendor under any
maintenance agreement; provided, such warranties will be held jointly
and may be enforced by either Lessor or Lessee. Lessee will diligently
enforce all such warranties.
16. Inspections and Labeling.
16.1 Upon the request of Lessor or Secured Party, Lessee will provide
reasonable access during normal business hours to the Equipment and
its related log and maintenance records for the purpose of Lessor or
Secured Party (or their respective representatives) inspecting and
testing the Equipment.
16.2 Upon the request of Lessor or Secured Party, Lessee will cause each
item of the Equipment to be and remain visibly marked with labels
supplied by Lessor or Secured Party, reflecting Lessor as the owner of
the Equipment and Secured Party as the holder of a security interest
in, or other encumbrance on, the Equipment. Lessee will not permit or
suffer any other such labels on the Equipment.
17. Term.
17.1 The Term of each Lease will commence on the Lease Commencement Date
set forth therein and continue for the Term specified in the Lease. If
Lessee fails to return the Equipment as is provided in the Lease,
Lessor will have the option to extend the Term, on a Basic Rent Period
to Basic Rent Period basis, without the requirement of notice to
Lessee, through the end of the Basic Rent Period in which the
Equipment is returned to Lessor as required by the Lease.
17.2 At the end of each Lease Term, provided that Lessee gives to Lessor at
least one hundred twenty (120) days' prior written notice, Lessee will
have the option to extend the Term of such Lease on the same terms and
conditions set forth in such Lease, except that the Basic Rent will be
adjusted to the market rent for each item of Equipment then subject to
the Lease. Market rent for purposes of this Paragraph will mean the
Basic Rent agreed to by Lessor and Lessee within thirty (30) days
after the date of giving of such notice, provided that if no such
agreement is reached, the Basic Rent will be the rent determined to be
market rent by an appraiser experienced in appraising equipment
similar to the Equipment, appointed by Lessor. Such appraisal will be
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at Lessee's expense. No extension of the Term will be for a period of
less than one (1) or greater than three (3) years, and Lessee will be
entitled to no more than three (3) Lease extensions, unless otherwise
agreed in writing by both parties.
18. Return of Equipment.
18.1 Prior to return of the Equipment at the end of the Term of each Lease,
Lessee will, at its expense, configure the Equipment to the most
current upgrade of such Equipment in use in Lessee's business system
and otherwise in its original configuration in accordance with the
manufacturer's specifications and in the same operating order, repair
and appearance as on the Lease Commencement Date and as required to be
maintained and repaired in accordance with the Lease. If any parts are
removed from the Equipment during the reconfiguration or attachment,
restoration will include, at Lessee's option, the installation of
either the original removed parts or parts which in Lessor's
determination are of equivalent kind and value. Alternatively, with
Lessor's prior written consent, which will not be unreasonably
withheld, but subject to the foregoing, Lessee may return the
Equipment with any reconfiguration or attachment.
18.2 At the end of the Term of each Lease, Lessee will appropriately
de-install, cause to be audited by the manufacturer and pack the
Equipment in accordance with the manufacturer's specifications for
shipping to Lessor by a common carrier, will load the Equipment upon
such carrier for delivery to be unloaded at any location within the
continental United States as designated by Lessor, will prepay all
costs, expenses, fees, and taxes associated with the foregoing, and
will cause the Equipment (including all warranty books and instruction
manuals originally supplied by the manufacturer or vendor and all
maintenance records) to be delivered to such location within twenty
(20) days following designation of the place of delivery by Lessor.
Provided that, if and to the extent requested by Lessor, Lessee will
delay such delivery of the Equipment for up to sixty (60) days; and,
during such period of delay, Lessee will suitably store the Equipment
at the location specified in the Lease or such other location to which
the Equipment may have been moved in accordance with the Lease at
Lessee's sole cost and risk.
19. Net Lease.
19.1 Each Lease will constitute a net lease. Lessee's obligation to pay
rent and all other amounts due under each Lease is absolute and
unconditional and is not subject to any abatement, reduction, set-off,
defense, counterclaim, interruption, deferment or recoupment for any
reason whatsoever.
19.2 Lessee will pay or cause to be paid all taxes, fees, assessments,
levies and other charges pertaining to the Equipment (including, but
not by way of limitation, the ownership, location, or leasing of the
Equipment), any transfers thereof pursuant to the Lease, and any
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amounts payable pursuant to the Lease (except for income, franchise
and other taxes measured by the net income of Lessor) together with
any related interest or penalties. Lessee will prepare and file the
declarations and returns for all such taxes, assessments, and levies.
Lessee will deliver copies of such declarations and returns to Lessor
and (except as provided in Paragraph 19.3 herein) will pay all such
taxes, assessments, and levies, at least thirty (30) days before the
due date(s) thereof.
19.3 Lessor will file all personal property tax returns for the Equipment
and pay all property taxes due. Lessee will reimburse Lessor for
property taxes within thirty (30) days of receipt of an invoice
therefor.
20. Equipment Loss.
20.1 Until the Equipment has been received and accepted by Lessor after the
Term of the Lease, all risks of loss with respect to the Equipment
will be borne by Lessee, including, but not by way of limitation, any
loss, damage, destruction, theft, taking under the right of eminent
domain, seizure, or confiscation of the Equipment, or any part or use
thereof or interest therein. The occurrence of any event constituting
such a loss ("Event of Loss") will not relieve Lessee of its
liabilities and obligations under the Lease or delay the time for the
payment or performance thereof, including, but not by way of
limitation, the timely payment of rent, except as is specifically
provided for herein.
20.2 Without limiting the provisions of Paragraph 20.1, it is the intention
of the parties that, as between Lessor and Lessee, risk of loss of,
and the obligation to insure, maintain, repair and replace, in
accordance with the terms of this Master Lease Agreement, any item of
Equipment possessed or delivered to Lessee prior to the Lease
Commencement Date, become the obligation of Lessee upon possession,
ownership or delivery of such item of Equipment to Lessee.
Notwithstanding whether a Delivery and Acceptance Certificate has been
executed by Lessee or delivered to Lessor.
20.3 Upon the occurrence of any Event of Loss, at the sole cost of Lessee,
Lessee will either, as is appropriate:
(a) repair the Equipment within thirty (30) days after the occurrence
of such Event of Loss, so that the Equipment is in good and
efficient working order, condition, repair, and appearance and is
available to Lessee for use under the Lease; or
(b) replace the Equipment within thirty (30) days after the
occurrence of such Event of Loss, with equipment of a like kind
and quality, of at least equal value, and in good and efficient
working order, condition, repair, and appearance, and convey the
replacement to Lessor with general warranties of title and free
and clear of all liens, security interests, and encumbrances,
except for the Lease and those of any Secured Party and of all
ownership interests of others. The foregoing notwithstanding,
Lessee will promptly pay Lessor all rent and other amounts due as
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of the date of such payment and the Stipulated Loss Value (as is
established by the Lease) for each item of the Equipment as to
which such Event of Loss occurred whenever (i) it is not
economically feasible to repair or replace such Equipment, as
determined in the reasonable discretion of Lessor, and Lessee has
not fully completed such repairs or made such replacement (as
described above) prior to Lessor making such determination, (ii)
Lessee has not fully repaired or replaced the Equipment (as
described above) within sixty (60) days after the occurrence of
such Event of Loss and Lessor notifies Lessee of its election to
receive such payment, or (iii) the proceeds payable to Lessor or
any Secured Party under insurance maintained by Lessee pursuant
to Paragraph 21.1(a) herein insuring against such risk of loss to
such Equipment are less than the amount of such Stipulated Loss
Value, unless (a) the proceeds payable to Lessor or the Secured
Party(ies) under such insurance are not less than 80% of the
amount of such Stipulated Loss Value; (b) Lessee notifies Lessor
of its election to make such repair or replacement; and (c)
Lessee deposits with Lessor or the Secured Party(ies) as
instructed by Lessor, moneys sufficient, in Lessor's judgement,
to complete such repair or replacement, in which event Lessee may
instead make such repair or replacement at its sole cost and
expense, not later than sixty (60) days after delivery to Lessor
of the aforementioned notice.
20.4 If and when payment of the Stipulated Loss Value and all other
amounts to be paid therewith pursuant to the foregoing paragraph
is received by Lessor and/or the Secured Party(ies), the Term of
the Lease will end with respect to each item of Equipment for
which such Stipulated Loss Value and other amounts were paid, but
not with respect to the balance of the Equipment (if any); the
Basic Rent payable under the Lease will be reduced in proportion
to the rentals ascribed to the Equipment as to which Stipulated
Loss Value has been paid, or if there is no ascribed rental, in
proportion to the Purchase Price; and Lessor will assign to
Lessee all of its rights, titles, and interests in such items of
the Equipment, free and clear of all liens, security interests,
and encumbrances arising by or through Lessor, except for taxes,
assessments, and levies payable by Lessee pursuant to the Lease.
21. Insurance.
21.1 Until the Equipment has been received and accepted by Lessor after the
Term, Lessee will obtain and maintain, at its own cost, the following:
(a) Insurance against the loss, theft, damage, or destruction of the
Equipment, in an amount not less than the greater of the full
replacement value thereof or the Stipulated Loss Value and with
Lessor being named the sole loss payee thereunder and, as
requested by Lessor, with any Secured Party being named as the
mortgagee under a "standard" mortgagee clause; and,
(b) Public liability insurance with respect to the use or operation
of the Equipment, in an amount at least equal to $10,000,000 or
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such greater amount specified by Lessor or a Secured Party, and
with Lessor, Lessee, and the appropriate Secured Party(ies), if
any, being named co-insureds thereunder.
21.2 All such insurance will be with companies, in a form, and with
coverage as are satisfactory to Lessor and the appropriate Secured
Party(ies), if any.
21.3 On or before the Lease Commencement Date, thereafter on or prior to
each renewal or replacement of the insurance required hereby, but not
less often than annually, and otherwise if requested by Lessor or any
Secured Party, Lessee will deliver to Lessor and the requesting
Secured Party certificates by the carriers issuing such insurance
certifying as to the coverages provided by such insurance and agreeing
that such insurance will not be terminated, canceled for any reason
without giving Lessor and the requesting Secured Party at least thirty
(30) days' prior written notice. Upon the request of Lessor or the
requesting Secured Party, Lessee will provide it with the originals of
the policies for such insurance for inspection and copying.
21.4 From the net proceeds (if any) of the insurance maintained by Lessee
pursuant to Paragraph 21.1(a) herein that are received by Lessor or
any Secured Party with respect to an item of Equipment, Lessor or
Secured Party (as is applicable) will reimburse Lessee for its
reasonable, documented, out-of-pocket costs to repair or replace such
item of Equipment pursuant to Paragraph 20, to the extent that such
repairs or replacements were necessitated by the occurrence of the
risk of loss for which such proceeds were paid; provided, no such
reimbursement will be payable if a Stipulated Loss Value is paid or
payable with respect to such item of Equipment and such loss. Lessee
may offset the payment of the Stipulated Loss Value pursuant to
Paragraph 20 herein against the net proceeds received by Lessor or
Secured Party under insurance maintained by Lessee pursuant to
Paragraph 21.1(a) insuring against the event giving rise to the
payment of the Stipulated Loss Value. Net proceeds means the gross
proceeds paid less all reasonable costs of collection, including court
costs and attorney fees.
22. Lessor's Warranties. LESSOR DOES NOT, AND WILL NOT, MAKE ANY WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, BUT NOT BY WAY
OF LIMITATION, THE TITLE; CONDITION; QUALITY; DESIGN; CONFORMITY OF THE
EQUIPMENT TO THE PURCHASE ORDER, ANY PLANS OR SPECIFICATIONS, OR ANY
GOVERNMENTAL REQUIREMENT OR REGULATION; CAPACITY; VALUE; MERCHANTABILITY;
FITNESS FOR ANY PARTICULAR USE OR PURPOSE; FREEDOM FROM PATENT, TRADEMARK,
OR COPYRIGHT INFRINGEMENT; OR OTHER MATTERS CONCERNING THE EQUIPMENT,
EXCEPT FOR WARRANTIES AGAINST ENCUMBRANCES SPECIFICALLY PROVIDED FOR HEREIN
(IF AT ALL) TO BE MADE BY LESSOR. LESSOR MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, AND ASSUMES NO LIABILITY, WITH RESPECT TO THE TREATMENT BY LESSEE
OF THE LEASE, THE EQUIPMENT, THE RENT, OR OTHER MATTERS FOR ACCOUNTING,
FINANCIAL STATEMENT, OR TAX PURPOSES.
12
23. Lessee's Warranties. Lessee hereby represents and warrants to Lessor and
each Secured Party, as of at the time of signing this Master Lease
Agreement and each Lease, as follows:
23.1 Lessee is a corporation, is dully organized, validly existing, and in
good standing under the laws of the state of its organization, and is
duly qualified as a foreign corporation to do business in, and is in
good standing under the laws of, each jurisdiction where, because of
the nature of its activities or property, such qualification is
required.
23.2 The signing and delivering of this Master Lease Agreement and each
Lease and the performance of Lessee's obligations under each Lease are
within Lessee's powers, have been duly authorized by all necessary
corporate action, and do not and will not (a) require the consent or
approval or other action by, notice to, or filing with any person,
body, or governmental authority, (b) contravene any provision of
Lessee's articles or certificate of incorporation, bylaws, or
corporate resolutions, (c) violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award binding on
Lessee or its property or applicable to this Master Lease Agreement,
the Lease, or the Equipment, (d) violate, or constitute a default
under, any indenture, agreement, document, or instrument to which
Lessee is a party or by which it or its property is bound, or (e)
result in, or require the creation of, any imposition, mortgage, deed
of trust, pledge, lien, security interest, or other charge or
encumbrance of any nature upon, or with respect to, any property of
Lessee.
23.3 This Master Lease Agreement is and, when signed and delivered, each
Lease and each Delivery and Acceptance Certificate will be, legal,
valid, and the binding obligations of, and enforceable against,
Lessee, in accordance with their respective provisions.
23.4 All certificates (including, but not by way of limitation, the
Delivery and Acceptance Certificate), statements (including, but not
by way of limitation, financial statements), and information provided
to Lessor or any Secured Party by Lessee in connection with this
Master Lease Agreement or any Lease are true and accurate and do not
contain any untrue statement, or fail to contain any statement of a
material fact necessary to make the statements contained herein or
therein not misleading. There is no fact known to Lessee that could
materially and adversely affect the financial condition of Lessee,
which Lessee has not disclosed to Lessor in writing.
23.5 The Equipment will be used for commercial or business purposes only.
24. Disclaimers. Lessor and Secured Party will not be liable, and Lessee will
not seek to hold Lessor or Secured Party liable (a) for any liability,
loss, damage, cost, or expense arising out of, or pertaining to (i) the
Equipment, its selection, its failure to be delivered or delivered timely,
or its handling, erection, installation, use, operation, maintenance,
repair, rebuilding, replacement, or storage, (ii) the unsuitability or
unserviceability of, or any defect in, the Equipment, or (iii) the
interruption of service or loss of use of the Equipment, (b) any loss of
business or profits, or (c) any incidental, exemplary, consequential,
13
punitive or other damages of any nature whatsoever or howsoever caused,
notwithstanding that such liability or claim thereof is based on any
alleged breach of contract, breach of warranty, misrepresentation,
negligence, strict liability in tort, or other theory.
25. Indemnities. Lessee hereby assumes the liability for, and agrees to
indemnify, defend, and hold harmless Lessor, Secured Party, and their
respective shareholders, directors, officers, agents, employees,
successors, and assigns and their respective properties from and against,
any and all liabilities, losses, damages, penalties, claims, suits, costs,
and expenses of every nature whatsoever, including, but not by way of
limitation, court costs and attorney fees, (whether also indemnified
against by any other person) arising out of, or pertaining to, (a) this
Master Lease Agreement, (b) any Lease, (c) any act by Lessee as the agent
of Lessor, or (d) the actual or alleged manufacture, sale, purchase,
ownership, transportation, delivery, lease, possession, storage, use,
operation, design, condition, maintenance, repair, alteration, addition to,
improvement, return, or disposition of the Equipment by Lessor, Secured
Party, their respective successors or assigns, or Lessee, including, but
not by way of limitation, any claim alleging latent and other defects,
whether discovered or discoverable by Lessor, Secured Party, their
respective successors and assigns, or Lessee, any claim for patent,
trademark, or copyright infringement, and any claim arising out of strict
liability in tort. Lessee will promptly give Lessor and Secured Party
notice of any matter hereby indemnified against upon learning thereof.
Lessor and Secured Party reserve the right to defend, at Lessee's expense,
any claims brought against Lessor or Secured Party, with counsel of their
respective choices and at the expense of Lessee.
26. Events of Default. Each of the following described events or circumstances
will constitute an event of default ("Event of Default"):
26.1 Lessee's failure to pay when due any rent or other amount payable
under the Lease, if such failure remains unremedied for fifteen (15)
days after written notice by Lessor to Lessee;
26.2 Any warranty, representation, or certificate made by Lessee to Lessor
or Secured Party in connection with any Lease is incorrect in any
material respect when made or subsequently becomes incorrect in any
material respect;
26.3 Lessee's failure to perform or observe any provision of the Lease to
be performed or observed by Lessee, if such failure remains unremedied
for thirty (30) days after written notice by Lessor to Lessee;
26.4 Unless the prior written consent of Lessor is obtained, the transfer
of a substantial portion of Lessee's assets not in the ordinary course
of its business, including in connection with a dissolution,
liquidation, reorganization, merger, or consolidation of Lessee,
provided that the consent of Lessor will not be required in connection
with a reorganization, merger or consolidation of Lessee with an
Affiliate of Lessee;
14
26.5 The dissolution, liquidation, or termination of the existence of
Lessee or unless the prior written consent of Lessor is obtained, the
transfer of over twenty five (25%) of the beneficial ownership or
voting interests of Lessee within any twelve (12) calendar month
period;
26.6 The execution or levying upon any of Lessee's rights, titles, or
interests under the Lease or in or to all or any portion of the
Equipment; and,
26.7 The appointment of a trustee or receiver for Lessee or for any
guarantor, for a substantial part of the property of either of them,
or for all or any portion of the Equipment; the making of any
assignment for the benefit of creditors, whether voluntary or
involuntary, by Lessee or any guarantor; or the filing of any petition
by or against Lessee or any guarantor, as the debtor, under the U.S.
Bankruptcy Code or any other federal, state, or other laws providing a
debtor relief with respect to its creditors.
27. Remedies. At any time after an Event of Default, Lessor may exercise (but
is not obligated to exercise) any one or more of the following remedies, in
whole or in part and separately, consecutively, or concurrently:
27.1 Lessor may terminate the Term of any Lease, by giving Lessee written
notice thereof, but such termination will not release, discharge,
diminish, or stay the time for performance of any of Lessee's
liabilities and obligations under the Lease;
27.2 Lessor may notify Lessee to deliver or to store and then deliver the
Equipment pursuant to the paragraph herein entitled "Return Of
Equipment," and Lessee will do so;
27.3 Lessor may enter upon the real property on which the Equipment is
located (without the payment of rent) and may take possession of the
Equipment or remove the Equipment, without demand or notice, without
any court order or other process of law, and without any liability to
Lessee or any other person for any damages occasioned thereby;
27.4 without regard to the exercise of any other right or remedy by Lessor
(including the termination of the Term), Lessor may collect from
Lessee, and Lessee will pay Lessor upon demand, all rent and other
amounts due pursuant to the Lease at the time that such payment is
made in full (including those that would be due upon the giving or
expiration of notice or the making of demand), together with the
present value (calculated using a six percent [6%] per annum discount
rate) of (a) all rent and other amounts (exclusive of indemnity
payments, which will remain payable in full) payable, but not yet due,
under the Lease and (b) the fair market value of the Equipment, as it
would be at the expiration of the Term (without further extensions),
supposing that the Equipment was maintained, repaired, and replaced in
accordance with the Lease, as is estimated by an independent appraiser
selected by Lessor and paid by Lessee;
15
27.5 Without regard as to whether the Term has been terminated or the
availability or exercise of any other right or remedy by Lessor under
the Lease, Lessor may enforce specifically the performance by Lessee
of all of the liabilities and obligations of Lessee under the Lease;
and,
27.6 Lessor may pursue any other remedies at law or in equity; and, each of
the remedies provided for herein or available at law or in equity is
separate and distinct and not cumulative in nature.
28. Lessor's Right To Cure. Without notice to, or demand upon, Lessee, Lessor
will have the right (but not the duty) to cure or attempt to cure any Event
of Default, at any time and in the name of Lessee or Lessor. All costs
incurred by Lessor with respect to such cure or attempt to cure will be
payable to Lessor by Lessee upon demand.
29. Interest and Costs. Upon demand, Lessee will pay Lessor interest at the
rate of fifteen percent (15%), or the maximum amount permitted by law if a
lesser amount is mandated by law, on all rent and other amounts payable by
Lessee pursuant to the Lease that are not paid when due, accrued from the
due date to the date of receipt of payment by Lessor. Upon demand, Lessee
will pay to Lessor all reasonable costs and expenses (including attorneys'
fees) incurred by Lessor with respect to the collection or enforcement of
any liability or obligation of Lessee under the Lease.
30. Mitigation.
30.1 Upon repossession of the Equipment pursuant to the terms of Paragraph
27.3, Lessor will use its best efforts in accordance with its normal
business procedures (and without obligation to give any priority to
such Equipment) to mitigate Lessor's damages as described below.
30.2 EXCEPT AS SET FORTH IN THIS SECTION, LESSEE HEREBY WAIVES ANY RIGHTS
NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY REQUIRE
LESSOR TO MITIGATE ITS DAMAGES OR MODIFY ANY OF LESSOR'S RIGHTS OR
REMEDIES STATED HEREIN.
30.3 Lessor may sell, lease or otherwise dispose of all or any part of the
Equipment at a public or private sale for cash or credit with the
privilege of purchasing the Equipment. The proceeds from any sale,
lease or other disposition of the Equipment are defined as either:
(a) if sold or otherwise disposed of, the cash proceeds less the fair
market value of the Equipment at the expiration of the initial
Term less any costs incurred by Lessor in repossession, sale,
lease or other disposition of the Equipment, including but not
16
limited to costs of suit and other enforcement of Lessor's rights
under the Lease, including but not limited to reasonable
attorneys' fees in connection therewith; or
(b) if leased, the present value (discounted at three percent [3%]
above the prime rate of interest specified in the Western Edition
of the Wall Street Journal or any successor publication at the
time of the mitigation) of the rentals for a term not to exceed
the initial Term, less any costs incurred by Lessor in
repossession, sale, lease or other disposition of the Equipment,
including but not limited to costs of suit and other enforcement
of Lessor's rights under the Lease, including but not limited to
reasonable attorneys' fees in connection therewith
30.4 Any proceeds from any sale, lease or other disposition of the
Equipment will be applied against liquidated damages and any other
sums due to Lessor from Lessee. However, Lessee is liable to Lessor
for, and Lessor may recover, the amount by which such proceeds are
less than the liquidated damages and other sums due to Lessor, from
Lessee.
31. Liquidation of Damages. Lessor and Lessee agree:
31.1 that, upon and as a result of the occurrence of an Event of Default,
Lessor will suffer actual damages with respect to its acquisition and
financing of its acquisition and holding of the Equipment and its loss
of profits on the unpaid rent payable, but not due, under the Lease;
31.2 that the amount of such actual damages would be difficult to determine
and is reasonably estimated to be equal to the amount payable under
Paragraph 27.4;
31.3 that they intend to agree upon such estimated amount as damages in
liquidation of such actual damages;
31.4 that such liquidated damages are not in the nature of a penalty and do
not constitute a forfeiture; and
31.5 that Lessor will not ultimately recover from Lessee an amount more or
less than such liquidated damages with respect to such actual damages,
notwithstanding anything to the contrary in the Lease.
32. Assignments, Subleases, and Encumbrances.
32.1 Lessor may assign, mortgage, grant security interests, collaterally
assign rents, or otherwise transfer or encumber any right, title, or
interest in this Master Lease Agreement, any Lease and/or the
Equipment (subject to Lessee's rights under the Lease), without
restriction or notice to Lessee. If the Lease or the rent thereunder
are assigned to any person, whether outright or as security, or any
other such transfer or encumbrance is made, and if Lessee is given
17
notice thereof, Lessee, promptly upon the request of Lessor, will sign
and deliver to Lessor, Secured Party or any transferee of either
designated in such request, a writing in form and content satisfactory
to Lessor that provides, among other things, (a) that Lessee
acknowledges the receipt of notice of such assignment, transfer, or
encumbrance, (b) that Lessee will pay the rent and other amounts
payable to whomsoever is designated in such notice, under all
circumstances and without defense, offset, or counterclaim, (c) that
Lessee does not have any claims or actions pending or threatened
against Lessor, (d) that Lessor is not in default under any agreement
of any nature whatsoever between Lessor and Lessee, including, but not
by way of limitation, the Lease, (e) that any such assignee,
transferee, grantee, or beneficiary may rely on such writing as of its
date, and (f) that, upon the request of Lessor or any such assignee,
transferee, grantee, or beneficiary, Lessee will either confirm or
deny with specificity the foregoing.
32.2 Only one copy of each Lease will be originally signed by Lessor and
Lessee, and Lessor will be entitled to the possession of such
originally signed copy. All other copies of each Lease will be clearly
marked as being copies. Only the originally signed copy of the Lease
will constitute the Lease and will be, and be deemed to be, chattel
paper under the Uniform Commercial Code. All copies of the Lease that
are not originally signed will be for informational and evidentiary
purposes only.
32.3 (a) Lessee may assign its rights or obligations hereunder upon the
reasonable consent of Lessor and any Secured Party to any Affiliate of
Lessee. Such assignment will be subject to any reasonable
documentation requested by Lessor to evidence the assignment.
(b) Upon prior written notice to Lessor and any Secured Party, Lessee
may relocate Equipment to any locations within the continental
United States, provided the Equipment will not be used by an
entity exempt from federal income tax and all additional costs
(including any administrative fees, additional taxes and
insurance coverage) are reconciled and promptly paid by Lessee.
(c) Lessee may sublease the Equipment upon the reasonable consent of
Lessor and any Secured Party. Such consent to sublease will be
granted only if (i) Lessee meets the relocation requirements set
out in Paragraph 32.3(b) above, (ii) the sublease is expressly
subject and subordinate to the terms of the Lease, (iii) Lessee
assigns its rights in the sublease to Lessor and any Secured
Party as additional collateral and security, (iv) Lessee's
obligation to maintain and insure the Equipment is not altered,
(v) all financing statements required to continue Lessor's
interest in the Equipment and any Secured Party's prior perfected
security interest are filed, and (vi) the sublease is not to a
leasing entity affiliated with the manufacturer of the Equipment
described in the Lease.
(d) Lessor acknowledges Lessee's right to sublease for a term which
extends beyond the expiration of the initial Term. If Lessee
subleases the Equipment for a term extending beyond the
expiration of such initial Term, Lessee will remain obligated
18
upon the expiration of the initial Term to return such Equipment,
or, at Lessor's sole discretion to (i) return equipment which, in
Lessor's sole discretion, is equivalent to the Equipment or (ii)
negotiate a mutually acceptable Lease extension or purchase. If
the parties cannot mutually agree upon the terms of an extension
or purchase, the Term will extend at the option of Lessor upon
the original terms and conditions until terminated by notice from
Lessor to Lessee.
(e) No relocation, assignment or sublease will relieve Lessee from
primary liability for any of its obligations under the Lease.
33 Provisions Which Apply To Sale And Leaseback Transactions. If the vendor of
the Equipment is Lessee, the transaction will be deemed a sale and
leaseback transaction and the following will apply:
33.1 All Equipment will be transferred by Lessee to Lessor, together with
all warranties and guaranties applicable to such Equipment, by bill of
sale with full warranties of title, free and clear of all liens,
security interests, encumbrances, rights and interests of third
parties.
33.2 Lessee's execution of the Delivery and Acceptance Certificate for such
Equipment will be conclusively deemed to be Lessee's acknowledgement
of receipt in full of all monetary consideration for the Equipment.
33.3 Lessee will deliver to Lessor, in form and content satisfactory to
Lessor prior to transfer of title to the Equipment to Lessor,
financing statement searches, financing statements, real estate
waivers, opinions of Lessee's counsel and other documents and
instruments requested by Lessor to perfect Lessor's ownership interest
in the Equipment. If requested by Lessor, Lessee will label the
Equipment as belonging to Lessor and will otherwise comply with all
state law requirements to perfect transfer of ownership of the
Equipment to Lessor.
33.4 Lessee represents to Lessor that at the time of transfer of title to
the Equipment to Lessor that Lessee was not insolvent or was not
rendered insolvent by such transfer, as defined in any applicable
fraudulent transfer statute, and that the transfer of the Equipment to
Lessor, the retention of possession and ownership of the Equipment by
Lessee and the transactions contemplated by any Lease into which this
Master Lease Agreement is incorporated did not and do not violate the
provisions of the Uniform Fraudulent Transfers Act or any other
applicable law pertaining to the fraudulent transfer or retention of
possession and ownership of property.
34. Amendments. This Master Lease Agreement may not be amended independently of
any Lease into which this Master Lease Agreement is incorporated, except by
a writing signed by Lessor and Lessee. As incorporated in a Lease, this
Master Lease Agreement may not be amended, except by such Lease or a
writing signed by Lessor and Lessee; and, then, such amendment will amend
this Master Lease Agreement only for the purposes of such Lease and for no
other purposes whatsoever, including with respect to any other Lease. No
Lease may be amended, except by a writing signed by Lessor and Lessee.
19
35. Termination. This Master Lease Agreement may be terminated at any time by
either Lessor or Lessee giving the other written notice of its termination.
The termination of this Master Lease Agreement will operate prospectively
only and will not terminate or otherwise affect any Lease in effect at the
time of termination of this Master Lease Agreement. No Lease may be
rescinded, terminated or canceled, except as is expressly provided for
therein.
36. Applicable Law, Venue, and Jurisdiction. This Master Lease Agreement and
the Lease will be governed by, and construed in accordance with, the laws
of the State of Colorado. Lessee agrees that any civil action or other
legal proceeding pertaining to, or arising out of, this Master Lease
Agreement or the Lease may be maintained in any court within the State of
Colorado or in any of the U.S. District Courts located in the State of
Colorado. Lessee irrevocably consents to, and submits itself to, the
jurisdiction of each such court for such purposes and agrees to be bound by
any order or judgment of any such court. The foregoing will not limit the
right of Lessor or any Secured Party to bring any such civil action or
other proceeding against Lessee elsewhere in any court having jurisdiction.
37. Severability. If any provision of this Master Lease Agreement or any Lease,
or the application thereof to any person or circumstance, is invalid, the
remainder of this Master Lease Agreement or such Lease, as is applicable,
or the application of this Master Lease Agreement or such Lease, as is
applicable, to any person or circumstance, other than that to which it is
invalid, will not be affected.
38. General Provisions.
38.1 Lessor and Lessee are the lessor and the lessee, respectively, with
respect to the Equipment and the Lease. They are not joint venturers,
partners, employed by one and the other, or, except as is specifically
provided for herein, agents of one and the other.
38.2 All notices, requests, consents, and other communications provided
under or in connection with any Lease will be in writing and will be
deemed to have been sufficiently given or served when physically
delivered (including by telex or telecopier) or, if sooner, when
deposited for mailing with the appropriate postal authorities, by
certified mail with a return receipt requested and with postage
prepaid, and addressed to Lessor or Lessee, as is applicable, at its
"Address for Notices" set forth in the Lease or at such other address
as to which the other is given at least thirty (30) days prior written
notice pursuant hereto.
38.3 This Master Lease Agreement contains the entire understanding and
agreement between Lessor and Lessee and supersedes all prior
representations, warranties, understandings, and agreements, if any,
between Lessor and Lessee, pertaining to the subject matter of this
Master Lease Agreement. Each Lease, with the schedules, exhibits and
attachments attached thereto and this Master Lease Agreement
incorporated therein by reference, contains the entire understanding
and agreement between Lessor and Lessee and supersedes all prior
representations, warranties, understandings, and agreements, if any,
20
between Lessor and Lessee, pertaining to the subject matter of the
Lease. The headings to the paragraphs in this Master Lease Agreement
are for the convenience of the reader only and do not modify or
reflect upon any provision.
38.4 Lessee will promptly provide Lessor with such opinions of Lessee's
counsel, financing statements, and other documents and instruments
with respect to the transactions contemplated by this Master Lease
Agreement and the Lease as Lessor may request.
38.5 Lessee will promptly provide Lessor with such corporate resolutions,
secretary's certificates of incumbency and with respect to corporate
resolutions, opinions of Lessee's counsel, financing statements, and
other documents and instruments with respect to the transactions
contemplated by this Master Lease Agreement and the Lease and with
periodic and annual consolidated financial statements of ICG Holdings,
Inc., as and to the extent reasonably requested by Lessor.
38.6
(a) If any part of any Equipment is supplied from Lessee's inventory
and contains any features not specified in the Lease, Lessor
grants Lessee the right to remove any such part, provided that
such removal, in the reasonable determination of Lessor, does not
affect the functioning of such Equipment for the purpose for
which it was designed or intended to be used during the Term,
does not adversely affect the value of the remaining Equipment
and does not impair the rights or remedies of Lessor hereunder or
under a Lease. Any such removal will be performed by the
manufacturer or another party acceptable to Lessor, upon the
request of Lessee, at a time convenient to Lessee, provided that
Lessor will not unreasonably delay the removal of such part.
(b) Lessee shall obtain no title to any proprietary interest of any
third party in any Licensed Product, which will at all times
remain the property of the owner of such Licensed Product. If a
license from the owner is required, it will be Lessee's
responsibility to obtain any required license before using the
Licensed Product, which license will be assignable without the
payment of a royalty to all owners of the Equipment which
requires a Licensed Product, including but not limited to Lessor,
any Secured Party, and any person or entity to which title to the
Licensed Product is conveyed by Lessor or any Secured Party.
Lessee agrees to treat all Licensed Products as confidential
information of the owner, to observe all copyright restrictions,
and to refrain from reproducing, selling or otherwise infringing
or permitting the infringement of any intellectual property
rights with respect to the Licensed Products.
38.7 Except as is otherwise provided for in this Master Lease Agreement or
in a Lease, each Lease will be binding upon, and enure to the benefit
of, Lessor, Lessee, and their respective successors and assigns.
21
Dated as of _____________________.
LESSOR: ICG EQUIPMENT, INC.
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
---------------------------------------
LESSEE:
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
---------------------------------------
GUARANTY
Lessee is a direct or indirect subsidiary of ICG Holdings, Inc.
("Holdings"). Lessor has required, as a condition to entering into the above
Master Lease Agreement and each Lease, that Holdings guaranty the obligations of
Lessee to Lessor under the Master Lease Agreement and each Lease.
Holdings hereby guaranties all of the obligations of Lessee to Lessor under
the Master Lease Agreement and each Lease.
Holdings' guaranty hereunder is irrevocable and unconditional and is
intended to obligate Holdings as a primary obligor and not merely as a surety
for the performance by Lessee of such obligations under the Master Lease
Agreement and each Lease for so long as Lessee is an obligor with respect
thereto.
Holdings represents to Lessor that Holdings has the corporate power,
authority and legal right to execute and deliver this Guaranty and perform its
obligations under this Guaranty.
ICG HOLDINGS, INC.
By: /s/Don Teague
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Its: Executive Vice President
-------------------------------------