Master Lease Agreement - Banc One Leasing Corp. and STB Systems Inc.
LEASE SCHEDULE NO. 1000063259 dated as of October 31, 1997 LEASE
(New Equipment)
Master Lease Agreement dated 10/30/96
Lessor: Banc One Leasing Corporation
Lessee: STB Systems, Inc.
1. GENERAL. This Lease Schedule is signed and delivered under the master Lease
Agreement identified above, as amended from time to time ("Master Lease),
between lessee and Lessor. Capitalized terms defined in the Master Lease will
have the same meanings when used in this Schedule.
2. LEASE; EQUIPMENT DESCRIPTION. Lessor leases to Lessee, and Lessee leases from
Lessor, all of the property ("Equipment") described in Schedule A-1 attached
hereto (and Lessee represents that all Equipment is new unless specifically
identified as used) on Schedule A-1.
3. LESSORS COST OF EQUIPMENT.
Equipment Cost to Lessor. $3,201,726.26
Set-Up/Filing Fee: $375.00
Miscellaneous: $0.00
Sales Tax: $0.00
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Lessors Cost (total): $3,202,101.26
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4. LEASE TERM. The Lease Term of this Schedule shall be sixty (60) months and
shall commence on November 1, 1997 ("Commencement Date").
5. RENT/FEES. There shall be added to each rent or other payment described below
all applicable Taxes as in effect from time to time.
(a) As rent for the Equipment during the Lease Term, Lessee
shall pay to Lessor monthly rent with each such periodic rent payment
being in the amount of $60,775.02. The first rent payment in the Lease
Term shall be paid in arrears and all subsequent rent payments shall be
paid on the same day of each month thereafter.
(b) Lessee shall pay Lessor a Set-Up/Filing Fee of $375.00 which
has been included in the above Lessor's Cost of the Equipment.
(c) Security Deposit: $zero on the Acceptance Date, Lessee shall
pay Lessor said Security Deposit which shall be held in accordance with
paragraph 11 below.
6. RENT ADJUSTMENT. Within 15 days after each scheduled Rent Payment Date in the
Lease Term, Lessor shall calculate the Payment Adjustment for such Rent Payment
Date (the "Adjustment Date"). With the next scheduled Rent Payment in the Lease
Term (or within 15
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days after the last scheduled Rent Payment in the Lease Term) (a) If on the
Adjustment Date the Adjusted Rate is greater than the Initial Rate, then Lessee
shall pay to Lessor the Payment Adjustment, or (b) If on the Adjustment Date the
Adjusted Rate is less than the Initial Rate, then Lessor shall pay to Lessee the
Payment Adjustment (which amount may be credited by Lessee toward the Rent
Payment then due). For the purposes of this paragraph, the following terms shall
have the following meanings:
(a) "Adjustment Date" shall mean the scheduled Rent Payment Date in the
Lease Term for which the Payment Adjustment is being calculated.
(b) "Adjusted Rate" shall mean LIBOR plus 250 basis points as of the
Adjustment Date.
(c) "Contract Receivable" shall mean the remaining principal outstanding
just prior to application of the Rent Payment due on the Adjustment Date, as
shown on. the books and records of the Lessor.
(d) "Initial Rate" shall mean 8.1250%.
(e) "LIBOR" shall mean the one month rate of Interest at which deposits
in U.S. dollars are offered to major banks in the London interbank market as
published in the Wall Street Journal on the Adjustment Date.
(f) "Payment Adjustment" shall mean the Rate Differential multiplied by
the Contract Receivable.
(g) "Rate Differential" shall mean the absolute value of the difference
between the Initial Rate and the Adjusted Rate.
7. TITLE TO EQUIPMENT; QUIET POSSESSION. Lessee agrees that Lessor is the lawful
owner of the Equipment and that good and marketable title to the Equipment shall
remain with Lessor at all times, Lessee at its sole expense will protect and
defend Lessor's good and marketable title to the Equipment against all claims
and demands whatsoever except for Liens created directly by Lessor. Lessee shall
have no right, title or interest in any of the Equipment except the right to
peacefully and quietly hold and use the Equipment in accordance with the terms
of the Lease during the Lease Term unless and until an event of default shall
occur.
8. LESSEES ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all
of the terms and conditions of the Master Lease and agrees that the Master Lease
remains in full force and effect; (b) agrees that the Equipment is and will be
used at all times solely for commercial purposes, and not for personal, family
or household purposes; and (c) incorporates all of the terms and conditions of
the Master Lease as if fully set forth in this Schedule.
9. CONDITIONS. No lease of Equipment under this Schedule shall be binding on
Lessor, and Lessor shall have no obligation to purchase the Equipment covered
hereby, unless: (a) Lessor has received evidence of all required Insurance, (b)
in Lessor's sole judgment, there has been no material adverse change in the
financial condition or business of Lessee or any guarantor, (c) Lessee has
signed and delivered to Lessor this Schedule, which must be
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satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no
change in the Code or any regulation thereunder, which in Lessors sole judgment
would adversely affect the economics to Lessor of the lease transaction, shall
have occurred or shall appear to be imminent; (e) Lessor has received, in form
and substance satisfactory to Lessor, such other documents and information as
Lessor shall reasonably request (including, without limitation, Political Risk
Insurance described below in this Schedule); (f) STB de Mexico, S.A. de C. V.
shall execute and deliver to Lessor a guaranty which must be satisfactory in
form and substance to Lessor (such satisfaction to be evidenced by Lessor's
signature thereon) and (g) Lessee has satisfied all other reasonable conditions
established by Lessor. Notwithstanding anything to the contrary above in this
paragraph, if Lessor executes and delivers the Schedule to Lessee and if Lessor
pays all of the suppliers of the Equipment the full Lessor's Cost of the
Equipment (the date as of which both of said events shall have occurred may be
called the "Funding Date"), then except as otherwise specified in writing by
Lessor to Lessee before said Funding Date, all conditions to the Schedule being
binding on Lessor will be deemed satisfied.
10. OTHER DOCUMENTS: EXPENSES. Lessee agrees to sign and deliver to Lessor any
additional documents deemed desirable by Lessor to effect the terms of the
Master Lease or the Schedule including, without limitation, Uniform Commercial
Code financing statements which Lessor is authorized to file with the
appropriate filing officers. Lessee hereby irrevocably appoints Lessor as
Lessee's attorney-in-fact with full power and authority in the place of Lessee
and in the name of Lessee to prepare, sign, amend, file or record any Uniform
Commercial Code financing statement., or other documents deemed desirable by
Lessor to perfect, establish or give notice of Lessor's interests in the
Equipment or in any collateral as to which Lessee has granted Lessor a security
interest. Lessee shall pay upon Lessor's written request any actual
out-of-pocket costs and expenses paid or incurred by Lessor in connection with
the above terms of this section or the funding and closing of this Schedule.
11. SECURITY DEPOSIT. As collateral for Lessee's obligations under the Lease,
Lessee hereby grants to Lessor a security interest in the sums specified in this
Schedule as a "Security Deposit". At its option, Lessor may apply all or any
part of said Security Deposit to cure any default of Lessee under the Lease. If
upon final termination of this Schedule, Lessee has fulfilled all of the terms
and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written
request any remaining balance of the Security Deposit for this Schedule, without
interest.
12. REPRESENTATIONS AND WARRANTIES. Lessee represents and warrants that: (a)
Lessee is a corporation duly organized, validly existing and in good standing
under the laws of the state of its organization; (b) Lessee has full power,
authority and legal right to sign, deliver and perform the Master Lease, this
Schedule and all related documents and such actions have been duly authorized by
all necessary corporate action; and (c) the Master Lease, this Schedule and each
related document has been duly signed and delivered by Lessee and each such
document constitutes a legal, valid and binding obligation of Lessee enforceable
in accordance with its terms, except to the extent enforcement is limited by
State and Federal laws regarding bankruptcy, insolvency or debt reorganization
or other similar laws of general application or the application of principles of
equity.
13. SUBLEASE. Notwithstanding anything to the contrary in the Master Lease, with
respect to this Schedule, Lessor consents to the sublease or bailment of the
Equipment described in this
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Schedule by Lessee as sublessor or bailor to STB do Mexico, S.A. de C. V. as
sublessee or bailee pursuant to the terms and conditions of a Gratuitous
Bailment Agreement and to the location of the Equipment covered by the Schedule
in the City of Ciudad Juarez, State of Chihuahua, Mexico; provided, that the
Gratuitous Bailment Agreement must be satisfactory in form and substance to
Lessor (such satisfaction to be evidenced by Lessor's signature thereon).
14. POLITICAL RISK INSURANCE. As used herein, "Political Risk Insurance" shall
mean a policy of Insurance Issued by National Union Fire Insurance Company of
Pittsburgh, PA ("Insurance Company") which Insures Lessee and Lessor (or
Lessor's assignee) against risks of expropriation or deprivation of the
Equipment by the government of the United Mexican States ("Political Loss") as
set forth in such policy of Insurance, Lessee acknowledges that it has reviewed
a copy of the Political Risk Insurance policy.
(a) With respect to this Schedule, Lessee shall be required to carry
Political Risk Insurance as an additional requirement under Section 8 of the
Master Lease and Lessee shall pay the premiums for the Political Risk Insurance
that Lessor requires hereunder.
(b) If a Political Loss occurs, such event shall be deemed a Casualty
Loss under Section of the Master Lease; provided, that (1) Lessee agrees to
continue to pay rent and perform its other obligations under this Schedule and
the Master Lease until the earlier of the date that the Insurance Company pays
the amounts due under the Political Risk Insurance or the date that Lessor has
exhausted its rights and remedies under the Political Risk Insurance, (2) Lessor
agrees that it will pursue with reasonable diligence its rights against the
Insurance Company under the Political Risk Insurance; and (3) notwithstanding
anything to the contrary in Section 9 of the Master Lease as it relates to this
Schedule, within thirty (30) days of the earlier of the date that the Insurance
Company pays the amounts due under the Political Risk Insurance or the date that
Lessor has exhausted its rights and remedies under the Political Risk Insurance,
Lessee shall pay to Lessor the Stipulated Loss Value of the Equipment affected
by the Political Loss less the aggregate of the amount that the Insurance
Company has paid to Lessor under the Political Risk Insurance and the amount
that the United Mexican States has paid to Lessor as a result of the Political
Loss plus the reasonable expenses incurred by Lessor to collect such amounts
from the Insurance Company and the United Mexican States.
15. CANCELLATION OPTION. So long as no event of default has occurred and
continues under the Master Lease or any Schedule thereto and so long as Lessee
gives Lessor written notice of its election under this paragraph at least 90
days, but no more than 180 days, prior to the Cancellation Date (as defined
below), Lessee may, subject the provisions of this paragraph, elect to cancel
this Schedule and return all of the Equipment. Lessee may not cancel the
Schedule under the terms of this paragraph unless and until all of the following
conditions have been satisfied in full on or before the Cancellation Date:
(a) Lessee shall pay to Lessor on the applicable Cancellation Date a
return and remarketing fee equal to the Cancellation Value (as defined below),
AND
(b) Lessee shall return all, but not less than all, of the Equipment to
Lessor on the Cancellation Date in full compliance with subsection 23(b) of the
Master Lease and with all other return and maintenance requirements of this
Schedule.
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"Cancellation Value" means the total of the following: (i) all rent, Taxes and
all other amounts then due and payable by Lessee under this Schedule and Master
Lease to the extent it relates to this Schedule, (ii) an amount equal to
Fifty-six percent (56%) of the Lessor's Cost of the Equipment stated above in
this Schedule; and (iii) sales and other Taxes due in connection with Lessor's
receipt of the above amounts. "Cancellation Date" means the scheduled rent
payment date in the 24th month of the Lease Term.
16. AMENDMENT OF PURCHASE OPTION AND RETURN OPTION.
(a) Solely for purposes of this Schedule and its Equipment, Lessor and
Lessee agree that if Lessee elects to exercise its option to purchase the
Equipment at the end of the Lease Term (which option is described in Section
23(c) of the Master Lease), then, notwithstanding anything to the contrary in
this Schedule or the Master Lease, the provisions of Section 23(d) of the Master
Lease for determining Fair Market Value for purposes of this purchase option
shall not apply and the purchase price of the Equipment at the end of the Lease
Term shall be equal to the Fixed Price stated below plus all Taxes (excluding
income taxes on Lessor's gains on such sale), costs and expenses incurred or
paid by Lessor in connection with such sale plus all accrued and unpaid amounts
then due and payable with respect to the Equipment or this Schedule.
Fixed Price, ten percent (10%) of the above Lessor's Cost of the
Equipment
(b) Solely for purposes of this Schedule and its Equipment, Lessor and
Lessee agree that if Lessee elects to exercise its option to return the
Equipment at the end of the Lease Term (Which option is described in Section
23(b) of the Master Lease), then Lessee shall return the Equipment in full
compliance with Section 23(b) of the Master Lease and with all other return and
maintenance requirements of this Schedule and them shall be a rent adjustment as
provided below in the subparagraph (b). The scheduled expiration date of the
Lease Term specified in this Schedule will be referred to as the "Termination
Date".
(1) If the Actual Sale Proceeds as determined pursuant to
subparagraph (c) of this paragraph are less than the
Fixed Price, then (A) Lessor shall retain the Actual
Sale Proceeds and (B) Lessee shall pay to Lessor the
difference between the Fixed Price and such Actual Sale
Proceeds on the Termination Date, provided that the
amount of said deficiency payable by Lessee to Lessor
shall not exceed nine percent (9%) of the above Lessor's
Cost of the Equipment; or
(2) If the Actual Sale Proceeds as determined pursuant to
subparagraph (c) of this paragraph equal or exceed the
Fixed Price, then Lessor shall retain the entire Actual
Sale Proceeds,
(3) In all events, Lessee shall pay all Taxes (excluding
income taxes on Lessors gains on such sale), costs and
expenses incurred or paid by Lessor in connection with
any such sale plus all accrued and unpaid amounts due
and payable with respect to the Equipment or this
Schedule up to the date of any such sale.
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(4) If for any reason whatsoever Lessee fails to return the
Equipment in full compliance with Section 23(b) of the
Master Lease and with all other return and maintenance
requirements of this Schedule on or before the
Termination Date, then Lessee shall be deemed to have
elected to purchase Equipment pursuant to subparagraph
(a) of this paragraph.
Unless otherwise expressly agreed by Lessor in writing, during the 90-day period
prior to the Termination Date, Lessee shall, and Lessor may, solicit offers to
purchase the Equipment from prospective purchasers. Neither Lessee nor third
parties affiliated with the Lessee may bid to purchase the Equipment. Lessor may
bid to purchase the Equipment.
(c) If one or more such offers to purchase the Equipment are received
under subparagraph (b) of this paragraph, then the Equipment shall be sold by
Lessor to the highest bidder within ten (10) days after the Termination Date and
the Actual Sale Proceeds shall equal the purchase price actually received by
Lessor after deducting all reasonable selling expenses. If no such offers to
purchase the Equipment are received or if the Equipment is not sold for any
reason, then the Actual Sale Proceeds shall be deemed to be zero and Lessee
shall pay the Fixed Price to Lessor pursuant to clause (1) of subparagraph (b)
of this paragraph plus all accrued and unpaid amounts due and payable with
respect to the Equipment or this Schedule up to the date of any such payment. If
Lessor subsequently sells the Equipment, then the purchase price actually
received by Lessor, after deducting all reasonable selling expenses, shall be
distributed as follows: first, to Lessor in an amount equal to the Fixed Price
less the payment made by Lessee pursuant to clause (1) of subparagraph (b) of
this paragraph; second, to Lessee, to the extent of its payment to Lessee
pursuant to clause (1) of subparagraph (b) of this paragraph; and lastly, the
remainder to Lessor.
(d) Lessor shall, upon receipt of the purchase price of the Equipment
under this paragraph, convey title to the Equipment to the purchaser by a bill
of sale, which transfer shall be "AS IS, WHERE IS", with all faults, without
recourse to Lessor and without any representation or warranty of any kind
whatsoever by Lessor, express or implied.
17. TAX BENEFIT. Solely for purposes of this Schedule and its Equipment, it is
the intention of the parties that Lessor shall not be entitled to such
deductions, credits and other tax benefits as are provided by federal, state,
and local income tax law to an owner of the Equipment and Section 10 of the
Master Lease is deleted, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE MASTER
LEASE OR THIS SCHEDULE, LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES OF THIS
SCHEDULE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
18. GOVERNING DOCUMENT. In the event of any conflict between the terms of the
Master Lease and the terms of this Schedule as each is amended by its addenda,
the terms of this Schedule shall control.
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19. SAVINGS CLAUSES.
(a) If any court or other judicial authority determines that this
Schedule is a loan transaction or a conditional sale transaction, then Lessor
and Lessee agree: (1) that the original principal amount financed pursuant to
this Schedule is the Lessor's Cost set forth in paragraph 3 of this Schedule;
and (2) that Lessee shall pay said principal amount, together with interest at
the Initial Rate set forth in paragraph 6 of this Schedule (subject to
adjustment as set forth in paragraph 6 of this Schedule), by paying all rentals
and other amounts due under the Schedule plus the Fixed Price set forth in
paragraph 16 of this Schedule.
(b) If any court or other judicial authority determines that this
Schedule is a loan transaction or a conditional sale transaction, then as
collateral security for payment and performance of all Secured Obligations
(defined below) and to induce Lessor to extend credit from time to time to
Lessee (under the Master Lease or otherwise), Lessee hereby grants to Lessor a
first priority security interest in all of Lessee's right, title and interest in
the Equipment, whether now existing or hereafter acquired, and in all Proceeds
(defined below), and Lessee, at its sole expense, will protect and defend
Lessor's first priority security interest in the Equipment against all claims
and demands whatsoever. Lessee agrees that Lessor shall have all rights of a
secured party under the applicable Uniform Commercial Code, "Secured
Obligations" means (1) all payments and other obligations of Lessee under or in
connection with this Schedule 6, and (2) all payments and other obligations of
Lessee (whether now existing or hereafter Incurred) under or in connection with
the Master Lease and all present and future Lease Schedules thereto, and (3) all
other leases, Indebtedness, liabilities and/or obligations of any kind (whether
now existing or hereafter Incurred, absolute or contingent, direct or indirect)
of Lessee to Lessor or to any affiliate of either Lessor or BANC ONE
CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment
including, without limitation, proceeds of insurance, Indemnities and/or
warranties.
20. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor
has not selected, manufactured, sold or supplied any of the Equipment, (ii)
Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has
received a copy of, and approved, the purchase orders or purchase contracts for
the Equipment. AS BETWEEN LESSEE AND LESSOR LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED, INSPECTED AND APPROVED ALL 01 THE EQUIPMENT; (b) ALL EQUIPMENT IS IN
GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL
APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR
PURPOSES OF THE LEASE "AS-IS WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF
THE EQUIPMENT.
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES
THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE
EQUIPMENT OR THIS SCHEDULE.
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Banc One Leasing Corporation STB Systems,
(Lessor) (Lessee)
By: /s/ Anthony Park By: /s/Randy Eisenbach
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Title: Funding Authority Title: COO
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Lessor's Acceptance Date: October 31, 1997
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