<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1998
REGISTRATION NO. 333-47669
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
BLUE RHINO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-----------
DELAWARE 5984 56-1870472
(STATE OR OTHER (PRIMARY (I.R.S.
JURISDICTION OF STANDARD EMPLOYER
INCORPORATION OR INDUSTRIAL IDENTIFICATION
ORGANIZATION) CLASSIFICATION NUMBER)
CODE NUMBER)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-----------
BILLY D. PRIM
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NORTH CAROLINA 27104
TELEPHONE (336) 659-6900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
SUSAN M. HERMANN LARRY A. BARDEN
PEDERSEN & HOUPT, P.C. SIDLEY & AUSTIN
161 N. CLARK STREET, SUITE 3100 ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60601 CHICAGO, ILLINOIS 60603
TELEPHONE (312) 641-6888 TELEPHONE (312) 853-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If the Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
-----------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be borne by the
Company in connection with the registration, issuance, and distribution of the
securities be registered hereby, other than underwriting discounts and
commissions. All amounts are estimates except the SEC registration fee, the
NASD filing fee, and the Nasdaq listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 12,824
NASD filing fee................................................. $ 4,847
Nasdaq listing fee.............................................. $ 69,375
Transfer agent and registrar's fee and expenses................. $ 25,000
Blue Sky fees and expenses...................................... $ 10,000
Printing and engraving expenses................................. $125,000
Legal fees and expenses......................................... $350,000
Accounting fees and expenses.................................... $125,000
Miscellaneous................................................... $ 27,954
--------
Total....................................................... $750,000
========
</TABLE>
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* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") authorizes
indemnification of directors, officers, employees and agents of the Company;
allows the advancement of costs of defending against litigation; and permits
companies incorporated in Delaware to purchase insurance on behalf of
directors, officers, employees and agents against liabilities whether or not
in the circumstances such companies would have the power to indemnify against
such liabilities under the provisions of the statute. The Company's Second
Amended and Restated Certificate of Incorporation ("Charter") provides that
the Company will indemnify its directors and officers to the fullest extent
permitted by law.
Under the provisions of the Company's Charter, any director or officer who,
in his or her capacity as such, is made or threatened to be made a party to
any suit or proceeding shall be indemnified if the Board of Directors
determines such director or officer acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The Company will
not however indemnify any director or officer where such director or officer:
(a) breaches his or her duty of loyalty to the Company or its stockholders;
(b) fails to act in good faith or engages in intentional misconduct or knowing
violation of law; (c) authorizes payment of an unlawful dividend or stock
repurchase or redemption; or (d) obtains an improper personal benefit. While
liability for monetary damages has been eliminated, equitable remedies such as
injunctive relief or rescission remain available. In addition, a director is
not relieved of his or her responsibilities under any other law, including the
federal securities laws.
Indemnification under the Company's Charter and Amended and Restated By-laws
("By-laws") includes payment by the Company of expenses in defending an
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by the indemnified party to
repay such advance if it is ultimately determined that such person is not
entitled to indemnification under the Charter, which undertaking may be
accepted without reference to the financial ability of such person that makes
such repayments. The Company is not responsible for the indemnification of any
person seeking indemnification in connection with a proceeding initiated by
such person unless the initiation was approved by the Board of Directors of
the Company. The Charter and the DGCL further provide that such
II-1
<PAGE>
indemnification is not exclusive of any other rights to which such individuals
may be entitled under the Charter, the Bylaws, any agreement, any vote of
stockholders or disinterested directors, or otherwise. The Company intends to
obtain directors and officers insurance covering its executive officers and
directors.
Insofar as indemnification by the Company for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions, the Company has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission"), such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In October 1995, the Company issued units (the "Units"), each comprised of a
10.5% Senior Discount Note due October 2000 with a face value of $1,364.93 per
Unit and a warrant to purchase approximately 40 shares of Common Stock at an
exercise price of approximately $4.59 per share for $1,000 per Unit (the "1995
Unit Offering"). The Company sold 12,575 Units representing a face value of
$17.2 million of Senior Discount Notes and warrants to purchase an aggregate
of 500,028 shares of Common Stock. The gross proceeds from the sale of the
Units were approximately $12.6 million. The discounted portion of the Senior
Discount Notes represent a yield of 10.5% compounded semi-annually from the
date of issuance until October 11, 1998. Thereafter, interest is payable semi-
annually at a rate of 10.5% per annum. The Senior Discount Notes are
redeemable by the Company in whole or part at any time at their face value
less unearned interest. The warrants may be exercised at any time before
October 2005. The Senior Discount Notes were issued without registration under
the Securities Act in reliance on Section 4(2) of the Securities Act. The
following persons and entities purchased the Units in the 1995 Unit Offering:
Michael Arrington, Richard Brenner, Dean Buntrock, Conant Family Partnership,
Cornelius & Lothian, L.P., Joseph Cusimano, Peter Desnoes, Doerge-Blue Rhino,
L.P., The Craig Duchossois Revocable Trust, The Richard L. Duchossois
Revocable Trust, Andrew J. Filipowski, Donald Flynn, Kevin F. Flynn June 1992
Non-Exempt Trust, Bryan J. Flynn June 1992 Non-Exempt Trust, Richard Forsythe
Trust, Douglass Gray, William Hulligan, The Kimberly Family Discretionary
Trust, David Meltzer, Peer Pedersen, Billy D. Prim, Charles Reeder,
Christopher Reyes, Jude Reyes, Ryan Holding Corporation, Howard Warren and
Arthur Watson.
On September 24, 1996, the Company issued a warrant to purchase 227,048
shares of its Common Stock at an exercise price of $6.61 per share to
Forsythe/Lunn Technology Partners, L.P. in connection with the execution of a
master lease agreement between the Company and Forsythe/McArthur & Associates,
Inc. The warrants may be exercised at any time before September 24, 2006.
These warrants were issued without registration under the Securities Act in
reliance on Section 4(2) of the Securities Act.
On April 30, 1997, the Company sold 151,227 shares of its Common Stock and
warrants to purchase an additional 113,420 shares of its Common Stock with an
exercise price of $6.61 per share to Platinum Propane Holding, L.L.C.
("Platinum Propane") for total consideration of $1,000,000 in cash. The
warrants may be exercised at any time prior to April 30, 2007. The shares and
warrants sold to Platinum Propane were issued without registration under the
Securities Act in reliance on Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder.
On January 1, 1998, the Company issued $3,250,000 of 10.5% Subordinated
Notes and warrants to purchase in the aggregate 81,915 shares of Common Stock
with an exercise price equal to the initial public offering price of the
Common Stock offered hereby (the "1998 Warrants") to Lennard Carlson, Craig J.
Duchossois, Andrew J. Filipowski, and James P. Liautaud, four stockholders of
the Company for total consideration of $3,250,000 in cash. The Subordinated
Promissory Notes bear interest at 10.5% per annum and are due on the earlier
of a qualified public offering of the Company's Common Stock or December 31,
2000. The warrants may be exercised at any time before December 31, 2008. The
Subordinated Promissory Notes and warrants purchased by the stockholders were
offered and sold without registration under the Securities Act in reliance on
Section 4(2) of the Securities Act and Rule 505 of Regulation D promulgated
thereunder.
II-2
<PAGE>
Since formation, the Company has granted options to its employees for
182,607 shares of Common Stock pursuant to its 1994 Stock Incentive Plan at a
weighted average exercise price of $6.03 per share, of which options to
purchase 0 shares have been exercised and options to purchase 24,559 shares
are currently exercisable. Under the proposed recapitalization in connection
with this offering, all outstanding options under the 1994 Stock Incentive
Plan will be vested upon the completion of the offering. The options were
issued without registration under the Securities Act in reliance on Section
4(2) and Rule 701 promulgated thereunder.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The exhibits to the Registration Statement are listed in the Exhibit Index
which appears elsewhere in this Registration Statement and is hereby
incorporated herein by reference.
All other schedules are omitted because of the absence of the condition
under which they are required or because the information is included in the
consolidated financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to provide to the Underwriters,
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as the Company may be permitted to indemnify directors, officers and
controlling persons of the Company for liabilities arising under the
Securities Act pursuant to the provisions described under Item 14 above or
otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted against the Company by such director, officer, or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 3 TO REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
WINSTON-SALEM, NORTH CAROLINA, ON MAY 14, 1998.
Blue Rhino Corporation
/s/ Billy D. Prim
By___________________________________
Billy D. Prim
President and Chairman of the
Board
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 3 HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON MAY 14, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Billy D. Prim President and Chairman of the Board
___________________________________________ (Principal Executive Officer)
Billy D. Prim
/s/ Mark Castaneda* Secretary and Chief Financial Officer
___________________________________________ (Principal Financial and Accounting
Mark Castaneda Officer)
/s/ Andrew J. Filipowski* Vice Chairman of the Board
___________________________________________
Andrew J. Filipowski
/s/ Craig J. Duchossois* Director
___________________________________________
Craig J. Duchossois
/s/ Steven D. Devick* Director
___________________________________________
Steven D. Devick
/s/ S.H. Fogleman III* Director
___________________________________________
S.H. Fogleman III
/s/ James P. Liautaud* Director
___________________________________________
James P. Liautaud
/s/ John H. Muehlstein* Director
___________________________________________
John H. Muehlstein
/s/ Robert S. Steel* Director
___________________________________________
Robert S. Steel
</TABLE>
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*Signed by Billy D. Prim pursuant to power of attorney.
II-5
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S> <C>
1.1 Underwriting Agreement+
3.1 Form of Second Amended and Restated Certificate of Incorpora-
tion of the Company+
3.2 Amended and Restated Bylaws of the Company+
4.1 Form of Certificate of Common Stock of the Company+
5.1 Legal Opinion of Pedersen & Houpt, P.C.
10.1(a) Loan Agreement, dated as of December 18, 1997, between the
Company and NationsBank, N.A.+
10.1(b) Security Agreement, dated as of November 26, 1997 between the
Company and NationsBank, N.A.+
10.2 Note Purchase Agreement, dated as of January 1, 1998, among
the Company and Craig J. Duchossois, Andrew Filipowski, James
Liautaud and Lennard Carlson+
10.3(a) Cylinder Display Rack Lease Agreement, dated as of September
16, 1996, between the Company and Forsythe McArthur Associ-
ates, Inc.+
10.3(b) Master Equipment Lease Agreement, dated as of September 24,
1996, between the Company and Forsythe McArthur Associates,
Inc.+
10.4(a) Asset Purchase Agreement, dated as of December 9, 1997, be-
tween the Company and Bison Propane Bottle Exchange, LLC+
10.4(b) First Amendment to the Asset Purchase Agreement, dated as of
December 10, 1997, between the Company and Bison Propane Bot-
tle Exchange, LLC+
10.5 Multi-Draw Convertible Secured Promissory Note, dated as of
February 12, 1998, by Bison Valve, L.L.C. to the Company+
10.6 Collateral Assignment of License Agreement, dated as of Febru-
ary 12, 1998, by Bison Valve, L.L.C. to the Company+
10.7(a) Form of Distribution Agreement of the Company and Its Distrib-
utors+
10.7(b) Form of Sublease of Personal Property between the Company and
Its Distributors+
10.8(a) Form of Security Agreement to Secure the Sale of Cylinders
between the Company and Its Distributors+
10.8(b) Form of Promissory Note Evidencing the Sale of Cylinders
between the Company and Its Distributors+
10.9 Series A Securities Purchase Agreement, dated as of December
1, 1994, among the Company and the Purchasers of the Series A
Convertible Participating Preferred Stock+
10.10 Unit Purchase Agreement of a 10.5% Senior Discount Note and a
Warrant to purchase Common Stock of the Company, dated as of
October 11, 1995, between the Company and Purchasers named
therein+
10.11 Securities Purchase Agreement, dated as of March 1, 1997, be-
tween the Company and Platinum Propane Holding, L.L.C.+
10.12 Director Option Plan of the Company+
10.13 Distributor Stock Option Plan of the Company+
10.14 1994 Stock Incentive Plan of the Company+
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S> <C>
10.15 Amended and Restated Registration Rights Agreement, dated as
of March 1, 1997, among the Company, Forsythe/Lunn Technology
Partners, L.L.C., Platinum Propane Holding, L.L.C., the Pur-
chasers of Units pursuant to the Unit Purchase Agreement dated
October 11, 1995 and the Purchasers of the Company's Series A
Convertible Participating Preferred Stock+
10.16 The Shareholders' Agreement, dated as of December 1, 1994,
among the Company and its Stockholders+
10.17 First Amendment to the Shareholders' Agreement, dated as of
October 11, 1995, among the Company and its Stockholders+
10.18 1998 Stock Incentive Plan of the Company+
10.19 Real Estate Lease between the Company and Platinum Services
Corporation dated as of January 1, 1996+
10.20(a) Master Lease dated as of February 1, 1996 between the Company
and Nelco, Ltd.
10.20(b) Lease Agreement dated July 30, 1996 between the Company and
Leasing Innovations,
Incorporated
10.20(c) Lease Agreement dated June 26, 1997 between the Company and
Green Tree Vendor Services Corporation
21.1 Subsidiaries of the Company+
23.1 Consent of Pedersen & Houpt, P.C.+
23.2 Consent of Coopers & Lybrand L.L.P.+
23.3 Consent of The Daniel Professional Group, Inc.+
23.4 Consent of Barbecue Industry Association+
24.1 Power of Attorney+
27.1 Financial Data Schedule
</TABLE>
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+Previously Filed.
II-7
<PAGE>
LEGAL OPINION OF PEDERSEN & HOUPT, P.C.
(Pedersen & Houpt, P.C. Letterhead)
May 14, 1998
Blue Rhino Corporation
104 Cambridge Plaza Drive
Winston Salem, North Carolina 27104
Gentlemen:
We have acted as counsel to Blue Rhino Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-1, Registration No. 333-47669 (as may
hereafter be amended, the "Registration Statement"), which has been filed by
the Company with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations thereunder the sale of up to 3,105,000
shares (the "Shares") of the Company's Common Stock, $.001 par value per share
("Common Stock"). The Shares will be offered and sold (the "Offering")
pursuant to an underwriting agreement (the "Underwriting Agreement") to be
entered into between the Company and Hambrecht & Quist, LLC, as the
representative of the underwriters (the "Underwriters"). We are rendering this
opinion as of the time the Registration Statement becomes effective in
accordance with Section 8(a) of the Securities Act.
Before rendering the opinions hereinafter set forth, we examined, among
other things:
1. Registration Statement;
2. The form of the Company's Second Amended and Restated Certificate
of Incorporation;
3. The Company's Amended and Restated Bylaws;
4. Resolutions of the Company's Board of Directors;
5. The proposed form of Underwriting Agreement; and
<PAGE>
May 14, 1998
Page 2
originals or photostatic or certified copies of all those corporate records of
the Company and of all those agreements, communications and other instruments,
certificates of public officials, certificates of corporate officials and such
other documents as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth. As to factual matters known to the Company,
we have relied without investigation, to the extent we deem such reliance
proper, upon certificates or representations made by the Company's duly
authorized representatives.
We are members of the Bar of the State of Illinois, and we express no
opinion with respect to laws other than the laws of the State of Illinois, the
General Corporation Law of the State of Delaware and federal laws of the
United States of America.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that when (i) the
Registration Statement becomes effective under the Securities Act, (ii) the
Second Amended and Restated Certificate of Incorporation of the Company has
been filed with the Secretary of State of the State of Delaware, (iii) the
final terms of the Underwriting Agreement and the Offering have been approved
by the Board of Directors (or a duly constituted committee thereof), (iv) the
Underwriting Agreement has been duly executed and delivered by each of the
parties thereto, and (v) the Shares have been issued and delivered in
accordance with the terms of the Underwriting Agreement (including the receipt
by the Company of the consideration for the Shares described therein), the
Shares will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion letter as an exhibit to
the Registration Statement and the references to us under the heading "Legal
Matters" in the prospectus that forms a part of the Registration Statement. We
also consent to the incorporation by reference of this consent into any
subsequent registration statement filed pursuant to Rule 462(b) under the
<PAGE>
May 14, 1998
Page 3
Securities Act in connection with the Offering. In giving this consent, we do
not hereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder.
/s/ Pedersen & Houpt, P.C.
<PAGE>
[LOGO]
MASTER LEASE
Master Lease Agreement ("Master Lease") No. 3021 effective as of February 1,
1996 between:
"Lessor" "Lessee"
-------- --------
NELCO, Ltd. Blue Rhino Corporation
-------------------------------------
720 Moorefield Park Drive 104 Cambridge Plaza
-------------------------------------
Richmond, Virginia 23236 Winston-Salem, NC 27104
-------------------------------------
-------------------------------------
IN CONSIDERATION of the mutual promises contained in this Master Lease
the parties agree as follows:
1. Property Leased; Title. Lessor agrees to lease to Lessee, and Lessee
agrees to lease from Lessor such equipment and features (collectively called
"Equipment" and individually called a "Leased Item") described in each
Supplementary Schedule executed from time to time pursuant to this Master Lease.
Each Supplementary Schedule shall be deemed to incorporate all of the terms and
conditions of this Master Lease, contain such additional terms as Lessor and
Lessee shall agree upon and constitute an agreement separate and distinct from
any other Supplementary Schedule. In the event of a conflict between
provisions of this Master Lease and a Supplementary Schedule, the provisions of
the Supplementary Schedule shall apply.
It is expressly understood that the Equipment is, and shall at all times
remain, personal property. Lessee shall have no right, title or interest in
the Equipment except as expressly provided in this Master Lease. If Lessee is
supplied with a label or marking showing the ownership of the Equipment, Lessee
agrees to attach such label in a prominent place on the Equipment. Upon request
of Lessor, Lessee shall provide a written waiver by any party having an interest
in the real property where the Equipment is or may be located waiving any claim
to the Equipment.
2. Term and Termination of Master Lease and Supplementary Schedules. The
term of this Master Lease shall commence on the date set forth above and shall
continue in effect so long as any Supplementary Schedule entered into pursuant
to this Master Lease remains in effect.
Each Supplementary Schedule shall set forth the term of the lease (the
"Initial Lease Term"), the rent for the Leased Items ("Basic Rent"), and any
other payment terms. Lessee's obligation to pay Basic Rent for leased Equipment
covered by a Supplementary Schedule shall begin on the Acceptance Date, as
defined on the Supplementary Schedule. If the Acceptance Date is not the first
day of a month, the Basic Rent due for the first partial month shall consist of
the regular periodic Basic Rent prorated on the basis of a 30-day month from and
including the Acceptance Date to and including the last day of such month, and
shall be payable on the first Basic Rent payment date. Basic Rent thereafter
shall be for the number of months and in the amount set forth on the
Supplementary Schedule. If the installation date of any Leased Item of Equipment
precedes the Acceptance Date, Lessee shall pay pro rata Basic Rent based on a
30-day month from and including the installation date to and excluding the
Acceptance Date, which amount shall be payable on the first Basic Rent payment
date. Lessee or Lessor may terminate the lease as to a Supplementary Schedule,
in whole or in part, to be effective only at the expiration of the Initial Lease
Term or any Renewal or Extension Term, as such terms are hereinafter defined, by
giving the other party three (3) months written notice before such expiration.
If three (3) months prior notice of termination is not given, the Initial Lease
Term, Renewal Term, or Extension Term as the case may be, shall automatically
extend for an additional period of three (3) months (an "Extension Term") on the
same terms provided during the Initial Lease Term (Initial Lease Term, Extension
Term and Renewal Term are collectively called "Lease Term"). No notice of
termination may be revoked without the prior written consent of the other party.
3. Rent, Payment, Late Payment Rate. This Master Lease and each
Supplementary Schedule constitute a net lease and Lessee agrees that its duty to
perform its obligations under this Master Lease, including without limitation,
the obligation to pay all Basic Rent and other sums payable ("Additional Rent"),
(Basic Rent and Additional Rent hereinafter collectively called "Rent"), and the
rights of Lessor and of any Assignee of Lessor, as such term is defined in
Section 18 in and to such performance and Rent are absolute and unconditional
and are not subject to any abatement, reduction setoff, defense, counterclaim or
recoupment due or alleged to be due, by reason of any past, present or future
claims which Lessee may have against Lessor, any Assignee, the manufacturer or
vendor of the Equipment or against any person for any reason whatsoever.
Whenever any payment of Rent is not made within ten (10) days of its due
date, Lessee shall pay interest on such amount from its due date at the rate of
one and one-half (1 1/2) percent per month or the maximum interest rate legally
permissible, whichever is less (the "Late Payment Rate").
4. Selection and Acceptance. Lessee has either (i) entered into a
contract with a manufacturer or supplier to purchase the Leased Items, in which
event the execution hereof by Lessee shall constitute an assignment by Lessee to
Lessor of Lessee's rights under such purchase contract, Lessee agreeing to
execute any other documents of assignment as may reasonably be required by such
manufacturer, supplier or by Lessor, or (ii) selected the Leased Items and
hereby requests Lessor to purchase the same from a manufacturer or supplier and
arrange for delivery at Lessee's expense, or (iii) selected the Leased Items
from used equipment available through the Lessor. Lessee has reviewed and
approved the terms of any purchase, licensing or maintenance agreement with the
manufacturer and/or vendor of the Equipment covering the Equipment. In no event
shall Lessor be responsible for delays of the manufacturer, supplier or
transporter. Lessee acknowledges, warrants
1
<PAGE>
and represents that: (i) it has made the selection of each Leased Item based on
its own judgement and expressly disclaims any reliance upon statements made by
Lessor, (ii) Lessee understands and agrees that neither the manufacturer, the
vendor, nor any salesman or other agent of the manufacturer or vendor is an
agent of Lessor, and that no representation as to the Equipment or any other
matter by the manufacturer, the vendor, or any salesman or other agent of the
manufacturer or the vendor, shall in any way affect Lessee's duty to pay Rent
and to perform its other obligations hereunder, and (iii) as of the Acceptance
Date as between Lessee and Lessor, Lessee has unconditionally accepted the
Leased Items. On each Acceptance Date Lessee shall execute and promptly deliver
to Lessor a Certificate of Acceptance with respect to each Leased Item
("Certificate of Acceptance") which shall be conclusive evidence of the
foregoing. If after ten (10) days of delivery of the Equipment, Lessee fails to
deliver either such Certificate of Acceptance or a written notification of any
defects in the Equipment, the Equipment shall be conclusively presumed to be
accepted by Lessee as of the delivery date, and such date shall be the
Acceptance Date. Lessee hereby authorizes Lessor to complete the Equipment
serial numbers and Acceptance Date on Lessee's behalf on any Supplementary
Schedule which is returned by Lessee without such information.
5. Warranties, Disclaimer of Warranties and Limitation of Damages. Lessor
warrants to Lessee that as long as Lessee is not in default under this Master
Lease and any Supplementary Schedule, Lessor or any Assignee shall not interfere
with Lessee's right of quiet enjoyment and use of the Equipment described on
each Supplementary Schedule. Lessor also warrants that the Equipment, if
supplied by the Lessor under Section 4 (iii), shall be eligible for the standard
maintenance agreement provided by its manufacturer. If it is determined that the
Equipment is not eligible for the manufacturer's standard maintenance agreement
at the time of installation, Lessor shall be liable only for those expenses
authorized by Lessor in advance and incurred by Lessee to render the Equipment
eligible.
LESSOR MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND RELATING
TO THE EQUIPMENT, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY
PURPOSE OR USE, OR THAT THE EQUIPMENT SHALL SATISFY OR CONFORM TO ANY LAW, RULE,
REGULATION, SPECIFICATION OF ANY CONTRACT OR PURCHASE ORDER RELATING THERETO;
AS TO LESSOR, LESSEE LEASES THE EQUIPMENT "AS IS".
Lessor shall have no liability to Lessee for any claim, loss or damage
caused or alleged to be caused directly, indirectly, incidentally or
consequentially by the Equipment, by any inadequacy thereof or deficiency or
defect therein, by any incident whatsoever in connection therewith, arising in
strict liability or negligence. Notwithstanding the foregoing, Lessor shall be
liable to Lessee for Lessor's negligence or willful misconduct.
6. Assignment of Manufacturer's Warranties. Lessor assigns any assignable
manufacturer's warranties to Lessee for the duration of the Lease Term. Lessee
shall take all reasonable action to enforce such warranties. Lessor, at the
sole expense of Lessee, shall provide reasonable assistance to Lessee in
enforcing such warranties.
7. Representations and Warranties of Lessee. Lessee represents and
warrants the following for the benefit of Lessor and any Assignee:
(a) Lessee is a legal entity, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and each
jurisdiction where the Equipment shall be located and has adequate corporate
power to enter into and perform this Master Lease and each Supplementary
Schedule;
(b) This Master Lease and each Supplementary Schedule have been duly
authorized, executed and delivered by Lessee and constitute a valid, legal and
binding agreement of Lessee, together enforceable in accordance with their
terms, subject to enforcement limitations imposed by state or federal laws
generally affecting the rights of creditors;
(c) The execution, delivery and the performance by Lessee of its
obligations under this Master Lease and each Supplementary Schedule shall not
violate any judgment, order, law or governmental regulation applicable to Lessee
or any provision of Lessee's articles of incorporation, by-laws or other
organizational documents or result in any breach of or constitute a default
under any instrument or agreement to which Lessee is a party or by which Lessee
or its assets may be bound or result in the creation of any lien, charge,
security interest or encumbrance upon the Equipment;
(d) To the best of Lessee's knowledge, there are no actions, suits or
proceedings pending before any court, administrative agency, arbitration
tribunal or governmental body which shall, if determined adversely to Lessee,
materially adversely affect its ability to perform its obligations under this
Master Lease, each Supplementary Schedule or any related agreement to which it
is a party;
(e) Lessee is not a tax exempt entity under the Internal Revenue Code of
1986, as amended ("the Code").
If requested, Lessee will provide for each Supplementary Schedule an
incumbency certificate or other document identifying the signatures and
establishing the authority of the signers of the lease documents.
8. Liens and Taxes. Lessee shall, at its expense, keep the Equipment free
and clear of, and indemnify and hold Lessor harmless from, all levies, liens and
encumbrances except for those created by Lessor or any Assignee. Lessee shall
timely file all tax returns and pay when due all federal, state and local
charges and taxes attributable to the Equipment, its use or possession (together
with any related interest or penalties arising from an act or omission of
Lessee) including but not limited to sales, use, excise, gross receipts and
property taxes, but excluding only any tax based on or measured solely by
Lessor's net income. Lessee shall make available to Lessor upon request
evidence of all tax filings and payments. All sums incurred or expended
by Lessor or Lessee pursuant to this Section and Section 9 shall be deemed
Additional Rent.
9. Installation, Maintenance and Repair. Lessee shall be responsible for
the expense of delivery, installation, repair and maintenance of the Equipment.
Lessee agrees to keep the Equipment in good repair, condition and working order
and to furnish all parts, mechanisms and devices which may be required in the
course of so doing. Lessee shall, at its sole expense, enter into and keep in
force a standard maintenance agreement with the manufacturer of the Equipment or
such other party as may be reasonably acceptable to Lessor and shall provide a
copy of such agreement upon the request of Lessor. Upon request, Lessee shall
provide to Lessor a letter from the manufacturer certifying the Equipment as
eligible for manufacturer's standard maintenance agreement no later than ten
(10) days after deinstallation of the Equipment. In the event the letter is not
provided, Lessor, at the sole expense of Lessee, may have the Equipment
stage-tested and certified by the manufacturer.
During Lessee's normal business hours, Lessee shall permit access to the
Equipment to install "no charge" engineering changes in order to keep the
Equipment at current engineering change levels. If Lessee has refused to obtain
or allow installation of engineering changes during the Lease Term, Lessor may,
at Lessee's sole expense, obtain and have such engineering changes installed
upon the return of the Equipment
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10. Equipment Inspection and Use. Lessor may inspect the Equipment,
Lessee's equipment log and maintenance records upon prior notice to Lessee
during normal business hours and in accordance with Lessee's security
procedures.
Lessee agrees that the Equipment shall be used by competent, qualified
personnel in a careful, proper manner and in conformity with the manufacturer's
specifications.
11. Risk of Loss, Damage or Destruction. Lessee assumes and shall bear the
entire risk of partial or complete loss, damage, theft, destruction,
condemnation, requisition or taking by eminent domain or other interruption or
termination of use of the Equipment from any cause, whether or not through any
fault of Lessee, from the date on which the Equipment is shipped until the
Equipment is returned to and received by Lessor (the "Possession Period") from
the Manufacturer, Supplier, or Lessor, as applicable.
If any Leased item is damaged and is capable of being repaired, Lessee
shall promptly notify Lessor in writing and within sixty (60) days of such
damage shall at its sole expense make any repairs necessary to return the
Leased item to its previous condition. Provided Lessee is not in default under
this Master Lease or any Supplementary Schedule and has paid in full for the
repairs (which repairs shall be deemed accessions to the Equipment) Lessee shall
be entitled to receive any insurance proceeds received by Lessor or any Assignee
in connection with such damage. If Lessee has not paid in full for the repairs,
any insurance proceeds shall be first applied to pay for such repairs.
In the event that any Leased item is taken or condemned by a governmental
authority, destroyed, damaged beyond repair, lost, or stolen ("Event of Loss"),
Lessee must promptly notify Lessor and Assignee in writing and Lessee shall
elect either to (i) pay to Lessor or Assignee, as the case may be, on the next
Basic Rent payment date following the Event of Loss, an amount equal to: (a) the
full replacement value of the Leased item measured as of the date of the Event
of Loss, plus (b) all Rent accrued on such Leased item up to the date of
payment, plus (c) all unpaid rent allocated to such item for the balance of the
Lease Term discounted at the Prime Rate as reported by the Wall Street Journal
on the Acceptance Date as defined in the Supplementary Schedule of such item
(together (a)(b)(c), "Casualty Value") and upon payment in full, Lessee's
obligation to pay Rent for the Leased item shall cease; or (ii) continue all
Rent payments under the applicable Supplementary Schedule, without interruption,
and replace the damaged Equipment with Equipment of identical model, manufacture
and condition ("Replacement Equipment") as soon as practicable after the
occurrence of the Event of Loss. Lessee shall cause the Replacement Equipment to
be delivered to a location acceptable to Lessor and shall convey title (lien
free) to the Replacement Equipment to Lessor whereupon the Replacement Equipment
shall become subject to all of the terms and conditions of this Master Lease and
the applicable Supplementary Schedule. Provided Lessee is not in default under
this Master Lease and any Supplementary Schedule and has paid in full the
Casualty Value or has paid in full for the Replacement Equipment, Lessee shall
be entitled to receive any insurance proceeds or other recovery received by
Lessor or any Assignee of Lessor in connection with such Event of Loss.
If Lessee elects to replace the Equipment, Lessee shall immediately
reimburse Lessor in an amount reasonably determined by Lessor to make Lessor
whole on an after tax basis for any loss, recapture or unavailability of any tax
credit and/or deduction.
12. Insurance. At all times during the Possession Period, Lessee shall, at
its sole expense, carry: (i) all-risk property damage insurance in an amount not
less than the Casualty Value for each Leased item and (ii) comprehensive general
liability insurance in an amount not less than one million dollars ($1,000,000).
Each such policy shall (i) name Lessor and any Assignee as additional insureds
and loss payees as their interests may appear; (ii) provide that such policy may
not be cancelled or altered without thirty (30) days prior notice to Lessor and
Assignee; and (iii) provide that the interests of Lessor and Assignee shall be
insured regardless of the breach or violation by Lessee of any warranties,
declarations or conditions contained in such policies. Lessee shall promptly
provide Lessor with original signed certificates of insurance. Upon Lessor's
written consent, Lessee may act as a self-insurer and shall provide a letter to
Lessor so stating.
13. Indemnity. Except for Lessor's negligence or willful misconduct, Lessee
shall indemnify and hold Lessor and Assignee harmless from and against any loss,
claims, costs, expenses, damages and liabilities, at law or in equity including
reasonable attorneys' fees, arising out of, connected with or resulting from
this Master Lease, each supplementary Schedule, or any Leased item including,
but not limited to, the selection, use, possession, leasing, operation, control,
maintenance, delivery or return of each Leased Item, and claims for Lessee's
infringement of any trademark, patent or copyright and claims for property
damage, personal injury or wrongful death arising in strict liability or
negligence. Lessee's obligations hereunder shall survive the expiration of this
Master Lease with respect to acts or events occurring or alleged to have
occurred before the return of any Leased Item to Lessor.
14. Default. The occurrence of any of the following events shall constitute
an event of default ("Event of Default") under this Master Lease and a
Supplementary Schedule:
(a) The nonpayment by Lessee of any Rent under a Supplementary Schedule
when due when such nonpayment continues for a period of ten (10) days.
(b) The failure by Lessee to perform or observe any other term, covenant,
or condition of this Master Lease or such Supplementary Schedule, which is not
cured within ten (10) days after notice to Lessee from Lessor or Assignee.
(c) Any affirmative act of insolvency by Lessee, or the filing by Lessee of
any petition or action under any bankruptcy, reorganization, insolvency,
arrangement, liquidation, dissolution, or moratorium law, or any other law or
laws for the relief of or relating to debtors.
(d) The filing of any involuntary petition against Lessee under any
bankruptcy, reorganization, insolvency, arrangement, liquidation or dissolution,
or any law for the relief of or relating to debtors which is not dismissed
within sixty (60) days thereafter, or the appointment of any receiver,
liquidator, or trustee to take possession of any substantial portion of the
properties of Lessee, unless the appointment is set aside or expires within
sixty (60) days from the date of said filing or appointment.
(e) The subjection of a substantial part of Lessee's property or any Leased
item covered by such Supplementary Schedule to any levy, seizure, assignment, or
sale for or by any creditor or governmental agency.
(f) The material untruth of any representation or warranty made by Lessee
in this Master Lease or in any Supplementary Schedule or in any document
furnished by Lessee to Lessor or Assignee in connection with this Master Lease
or any Supplementary Schedule or with respect to the acquisition or use of any
Leased Item covered by that Supplementary Schedule.
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15. Remedies. Upon the happening of any Event of Default, Lessee shall,
without demand, immediately pay to Lessor, as liquidated damages and not as a
penalty an amount equal to the Casualty Value of the Equipment covered by the
defaulted Supplementary Schedule. Upon payment of the entire amount of the
Casualty Value, Lessee may retain possession of the Equipment and use it under
all of the terms and conditions of the Lease until the expiration of the
Initial Lease Term without the payment of Basic Rent. Lessee shall, however,
remain liable for Additional Rent and for Rent which may become due under any
Renewal or Extension Term.
If Lessee fails to pay the entire Casualty Value immediately, Lessor may
terminate all of Lessee's rights to possession of the Equipment and without
notice to Lessee, enter upon Lessee's premises and take possession of the
Equipment and lease or sell (at public or private sale), the same, or any
portion thereof, in such manner and for such purpose as Lessor shall elect. The
proceeds of such lease or sale shall be applied by Lessor as follows: (i) first,
to pay all costs and expenses incurred by Lessor as a result of the default
including Attorney's fees of thirty percent (30%) of the Casualty Value; (ii)
second, to pay Lessor an amount equal to Casualty Value to the extent not
previously paid by Lessee; and (iii) third, to reimburse Lessee for any Casualty
Value to the extent previously paid. Any surplus remaining thereafter shall be
retained by Lessor. Lessee shall remain liable to Lessor until payment is made
in full of the foregoing amounts plus interest computed at the Late Payment
Rate.
No remedy referred to in this Section 15 is intended to be exclusive but each
shall be cumulative and Lessor shall be entitled to exercise any remedy
available under the Uniform Commercial Code and other remedies at law or in
equity. TO THE EXTENT PERMITTED BY LAW, LESSEE HEREBY WAIVES ALL RIGHTS AND
REMEDIES PROVIDED BY SECTION 508 THROUGH 522 OF TITLE 8.2A OF THE CODE OF
VIRGINIA, including, but not limited to, Lessee's right to cancel or repudiate
the lease, to recover Rent and security paid, to cover and recover damages, to
recover identified equipment, to obtain specific performance, to revoke
acceptance, to acquire a security interest in the Equipment, to hold and dispose
of the Equipment, to deduct damages from Rent due, and to recover incidental and
consequential damages.
16. Performance of Lessee's Obligations. Should Lessee fail to make any
payment or do any act required in this Master Lease or any Supplementary
Schedule, Lessor has the right, but not the obligation, to make or do the same
and to pay, purchase, contest or compromise any encumbrance, charge or lien
which in the judgment of Lessor affects the Equipment, and in exercising any
such rights, incur any liability and expend any reasonable amounts it deems
necessary. Any action by Lessor on behalf of Lessee pursuant to this Section
shall not be deemed to release Lessee from any obligation under this Master
Lease or any Supplementary Schedule. All sums incurred and expended by Lessor
pursuant to this Section shall be immediately payable as Additional Rent.
17. Deinstallation and Return of Equipment. Upon the expiration or earlier
termination of the Lease Term (the "Expiration Date"), Lessee shall, at its sole
expense, deinstall and return the Equipment to Lessor in good repair, condition
and working order, ordinary wear and tear resulting from proper use excepted, to
a location in the continental United States specified by Lessor. If Lessee keeps
the Equipment five (5) business days beyond the Expiration Date, Lessee shall
pay to Lessor as Additional Rent on a daily basis for each day from the
Expiration Date until the Equipment is returned to Lessor One Hundred Fifty
(150%) percent of the Daily Rent, as hereinafter defined, for the Leased Item.
"Daily Rent" is determined by dividing the monthly Basic Rent for the Leased
Item by thirty (30).
18. Assignment by Lessor. Lessee understands and agrees that Lessor or an
Assignee may, in one or more transactions, assign, pledge, mortgage, transfer,
sell or grant a security interest or otherwise dispose of (collectively an
"Assignment" and each party to whom a transfer is made, an "Assignee") all or
part of Lessor's interests in any Supplementary Schedule, (including its right
to all or any portion of Rent) this Master Lease and any one or more Leased
Items. Such Assignments shall be made subject to the rights of Lessee under this
Master Lease and the Supplementary Schedule. Lessee agrees: (i) to execute
promptly such acknowledgements, agreements, opinions of counsel and other
instruments as may be reasonably requested by Lessor or Assignee from time to
time in connection with such Assignment; and (ii) to comply fully with the terms
of any such Assignment.
In the event of an Assignment, Lessor or Assignee shall notify Lessee of such
Assignment and each Assignee shall then be entitled to all of the rights, powers
and privileges of Lessor hereunder or under the applicable Supplementary
Schedule to the extent these have been assigned. No Assignment shall relieve
Lessor of its obligations; no Assignee shall be required to perform Lessor's
obligations under this Master Lease or under a Supplementary Schedule except as
set forth herein, it being the intent of Lessor to assign the benefits but not
the obligations hereunder. Lessor and Lessee acknowledge and agree that no such
Assignment shall be deemed materially to impair the prospect of obtaining return
performance by, materially to change the duty of, or materially to increase the
burden of risk imposed on Lessee hereunder.
19. Assignment, Subleasing and Relocation by Lessee.
ASSIGNMENT: UPON THIRTY (30) DAYS PRIOR NOTICE TO LESSOR AND ASSIGNEE,
LESSEE MAY ASSIGN ITS RIGHTS, POWERS, PRIVILEGES AND OBLIGATIONS UNDER THIS
MASTER LEASE AND A SUPPLEMENTARY SCHEDULE PROVIDED (I) LESSOR SHALL HAVE
APPROVED THE ASSIGNEE IN ITS REASONABLE DISCRETION, (II) LESSEE SHALL COMPLY
WITH THE PROVISIONS OF THIS SECTION REGARDING RELOCATION OF THE EQUIPMENT, AND
(III) NO ASSIGNMENT SHALL RELIEVE LESSEE OF ITS OBLIGATIONS UNDER THIS MASTER
LEASE AND THE APPLICABLE SUPPLEMENTARY SCHEDULE.
SUBLEASING: PROVIDED LESSEE IS NOT IN DEFAULT UNDER THIS MASTER LEASE OR
ANY SUPPLEMENTARY SCHEDULE, LESSEE MAY NOTIFY LESSOR THAT IT DESIRES TO SUBLEASE
THE EQUIPMENT ON THAT SUPPLEMENTARY SCHEDULE. SUCH NOTICE SHALL BE GIVEN TO
LESSOR AT LEAST TEN (10) BUSINESS DAYS BEFORE THE PROPOSED SUBLEASE AND SHALL
SPECIFY THE NAME AND ADDRESS OF THE PROPOSED SUBLESSEE, LOCATION AND MOVEMENT
DATE FOR THE EQUIPMENT AND TERMS AND CONDITIONS OF THE PROSPECTIVE SUBLEASE.
UNLESS LESSEE IS LEASING TO AN AFFILIATE APPROVED BY LESSOR, LESSEE SHALL
SUBLEASE THE EQUIPMENT TO LESSOR IF LESSOR MATCHES OR EXCEEDS THE TERMS AND
CONDITIONS OF THE PROSPECTIVE SUBLEASE WITHIN FIVE (5) BUSINESS DAYS AFTER
LESSOR RECEIVES THE REQUIRED NOTICE. LESSEE MAY NOT SUBLEASE THE EQUIPMENT
UNLESS (I) SUCH NOTICE HAS BEEN GIVEN TO LESSOR, (II) LESSOR IN ITS SOLE
DISCRETION SHALL HAVE APPROVED THE CREDIT OF THE PROPOSED SUBLESSEE, AND (III)
LESSEE SHALL COMPLY WITH THE PROVISIONS OF THIS SECTION 19 REGARDING RELOCATION
OF THE EQUIPMENT. NO SUBLEASE SHALL DISCHARGE OR DIMINISH LESSEE'S OBLIGATIONS
UNDER THIS MASTER LEASE AND ANY SUPPLEMENTARY SCHEDULE AND SUBLESSEE'S RIGHTS
WITH RESPECT TO THE EQUIPMENT SHALL BE EXPRESSLY MADE SUBJECT AND SUBORDINATE TO
THE RIGHTS OF LESSOR AND ASSIGNEE.
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Relocation. Provided Lessee is not in default under this Master Lease or
any Supplementary Schedule and upon ten (10) business days prior notice to
Lessor, Lessee may relocate the Equipment within the continental United States
provided: (i) the activities of the entity using the Equipment are subject to
tax under the Code and the entity is not a tax exempt organization or a state,
federal or local government unit; (ii) upon Lessor's request, Lessee files or
cooperates in filing financing statements or other documents necessary to
continue in effect any security interests in the Equipment; (iii) upon Lessor's
request, Lessee shall provide proof of insurance for transportation and in the
new location of the Equipment; and (iv) Lessee promptly pays all costs,
including additional property or use taxes, resulting from relocation.
20. Upgrades. Provided Lessee is not in default under this Master Lease and
a Supplementary Schedule, Lessee shall notify Lessor that it desires to add
upgrades to the Equipment no less than forty-five (45) days before the desired
date of installation stating when and what upgrades Lessee intends to obtain.
Within ten (10) business days after Lessor receives that notice Lessor may offer
such upgrades (the "Offer") to Lessee. Lessee may accept this offer or seek
other bona fide offers from third parties, the credit of which shall have been
approved by Lessor in its sole discretion ("Third Party Offer"). Lessee shall
notify Lessor of any more favorable Third Party Offer. Lessee shall obtain the
upgrade from Lessor if Lessor at least matches the Third Party Offer within five
(5) business days after Lessor's receipt of Lessee's notice. If that Lessee
leases upgrades from Lessor, their lease shall be under a Supplementary Schedule
the terms of which, other than the initial Lease Term Acceptance Date and Rent,
shall be the same as those applicable to the Leased Items to which the upgrades
relate.
All upgrades must qualify for a manufacturer's maintenance agreement and be
maintained in accordance with Section 9 of this Master Lease. At the end of the
Lease Term, Lessee shall remove all upgrades which are readily removable without
causing material damage or impairment of the intended function or use of the
Equipment. Upgrades which are not so removable shall become the Lessor's
property (lien free) at the end of the Lease Term.
21. Renewal Option. Lessee may elect to renew the Initial Lease Term of a
Supplementary Schedule for a period not less than twelve (12) months (a "Renewal
Term"). (However, no Lease Term shall exceed seventy-two (72) months.) Lessee's
renewal option is subject to the following terms and conditions:
(a) Lessee must notify Lessor of its exercise of the option at least
three (3) months before the expiration of the Lease Term.
(b) All of the terms of the Supplementary Schedule other than the length
of the Renewal Term and the Rent shall remain the same. The Rent shall be the
Fair Rental Value, as hereinafter defined, of the Equipment as of commencement
of the Renewal Term.
"Fair Rental Value" is defined as the value upon which a willing Lessor
and a willing Lessee would agree, for the term involved, each respectively under
no compulsion to lease. Fair Rental Value as of the end of the Initial Lease
Term shall be determined by agreement of Lessor and Lessee or, if they cannot
agree, then by an independent appraiser selected by Lessor and satisfactory to
Lessee. The cost of such appraisal shall be paid equally by Lessor and Lessee.
(c) Upon notice, Lessor may substitute equipment of the same model and
type for the Equipment, at Lessor's expense and in its sole discretion.
22. Purchase Option. Provided Lessee is not in default under this Master
Lease and a Supplementary Schedule, Lessee may notify Lessor that it desires to
purchase all or part of the Equipment on that Supplementary Schedule. The notice
shall be given at least three (3) months before the expiration of a Lease Term.
Lessor agrees to sell to Lessee, at the end of the Lease Term and upon terms
and conditions as are acceptable to Lessor and Lessee, the Equipment or, at
Lessor's sole option, equipment of the same model, type and condition which
shall be installed at Lessor's expense at the same location as the Equipment.
The purchase price for such Equipment shall be its Fair Market Value, as
hereinafter defined. "Fair Market Value" is defined as that purchase price that
would be obtained in an arm's length transaction as of the end of the Lease Term
between informed and willing parties under no compulsion to buy or sell. If
Lessor and Lessee cannot agree upon the purchase price, such amount shall be
determined by an independent appraiser selected by Lessor and satisfactory to
Lessee. The cost of such appraisal shall be paid equally by Lessor and Lessee.
23. Financing Statements. Lessee agrees to execute UCC financing statements
and any other instruments necessary to perfect Lessor's or Assignee's interest
in this Master Lease, any Supplementary Schedule(s), any Leased Item and all
Rent due. Lessee agrees that Lessor is authorized to file financing statements
without the signature of Lessee and, where signature is required, Lessee
appoints Lessor its attorney-in-fact to, upon notice, execute such financing
statements. Lessor may file a copy of this Master Lease and appropriate
Supplementary Schedule(s) as a financing statement.
24. Financial Statements. Lessee agrees promptly to furnish to Lessor, upon
request, audited financial statements for the most recent period.
25. Suspension of Obligations of Lessor. Before delivery of any Leased
Item, Lessor's obligations shall be suspended to the extent that it is hindered
or prevented from complying because of labor disturbances, acts of God,
accidents, failure of the manufacturer or supplier to tender or deliver any
Leased Item, governmental regulations or interference, or any cause whatsoever
not within the sole and exclusive control of Lessor.
26. Effect of Waiver. No delay or omission to exercise any right or remedy
by Lessor or Lessee shall be a waiver of any such right or remedy, nor shall a
waiver of any single breach or default. Any waiver, permit, consent, or approval
on the part of Lessor, Lessee or their assigns, of any breach or default under
this Master Lease, and any Supplementary Schedule must be in writing.
27. Notices. Any notice under this Master Lease and Supplementary Schedule
must be in writing and shall be deemed received by a party on the day it is
delivered to that party at the address set forth on the Supplementary Schedule
or at any other address previously specified in writing "the Notice Address" or,
if sent by certified mail, on the fifth business day after the day on which
mailed to the Notice Address. If this Master Lease and any Supplementary
Schedule has been assigned by either Lessor or Lessee, notice shall also be
given to the assign(s).
28. Arbitration and Legal Action. Any controversy or claim arising out of
this Master Lease, including any breach except default by Lessee, or relating in
any other way to Lessor, must be settled by final and binding arbitration in the
County of Chesterfield, Virginia, in accordance with the rules, then applying,
of the American Arbitration Association, and final judgment upon the decision
rendered may be entered in any court of competent jurisdiction. The parties
waive their right to seek remedies in court, including the right to a jury
trial. As specifically agreed, however, Lessor reserves the right to seek legal
remedies in any court of competent jurisdiction in the instance of Lessee's
default. This Master Lease and each Supplementary Schedule shall be governed
by, any construed in accordance with, the laws of the Commonwealth of
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Virginia, without giving effect to the principles of conflicts of laws. The
parties specifically agree this Master Lease was made, and performance begun, at
Lessor's headquarters, whose address is listed on page one of this Master Lease.
Lessee voluntarily and affirmatively agrees the sole jurisdiction for any legal
action or arbitration pursuant to or regarding this Master Lease, or any related
dealings with Lessor, shall be in the state courts of the Commonwealth of
Virginia, with proper venue in either the City of Richmond or the County of
Chesterfield, Virginia. Any action against Lessor shall be commenced within one
year after the cause of action accrued.
29. Entire Agreement. Lessor and Lessee acknowledge that there are no
agreements or understandings, written or oral, between them with respect to the
Equipment, other than as set forth herein and in each Supplementary Schedule and
that this Master Lease and each Supplementary Schedule contain the entire
agreement between Lessor and Lessee. Neither this Master Lease nor any
Supplementary Schedule may be altered, modified, terminated, or discharged
except by a writing signed by the party against whom enforcement of such
alteration, modification, termination or discharge is sought.
30. Severability and Successors. Any provisions of this Master Lease and
any Supplementary Schedule prohibited by or unlawful or unenforceable under any
applicable law of any jurisdiction shall be, at the sole option of the Lessor,
ineffective as to such jurisdiction without invalidating the remaining
provisions of this Master Lease. Each Supplementary Schedule shall be binding
upon and inure to the benefit of Lessor, Lessee, their respective successors,
and assigns except as expressly provided for herein.
31. Additional Features. If the Equipment delivered pursuant to any
supplementary Schedule contains any additional features not originally requested
or ordered by Lessee, Lessee grants Lessor, at Lessor's option and additional
expense, the right to remove or deactivate them. Such removal or deactivation
shall be promptly performed by the manufacturer or another party acceptable to
Lessee upon the request of Lessor, at a time convenient to Lessee.
32. Miscellaneous Equipment. Lessor shall provide only necessary items (such
as cables, manuals, kickplates, and microfiche) as required to have the
Equipment accepted for the manufacturer's maintenance agreement. Additional
items (such as specific length cables) shall be provided at Lessee's expense.
33. Substitution. Before delivery, Lessor, with prior approval from the
Lessee which approval shall not be unreasonably withheld, may provide Leased
Items which shall meet or exceed the performance specifications of the Leased
Items described on the applicable Supplementary Schedule.
34. Headings. Section headings are for convenience only and shall not be
construed as part of this Master Lease or any supplementary Schedule.
35. Software. Lessee and Lessor acknowledge that the Equipment on a
Supplementary Schedule may include certain software ("Software") in which Lessor
and Lessee have no ownership or other proprietary rights. Where required by the
Software owner or manufacturer, Lessee shall enter into a license or other
agreement for the use of the Software. Any Software agreement shall be separate
and distinct from this Master Lease and any Supplementary Schedule, and Lessor
and Assignee shall not have any rights or obligations thereunder. In the event
the Basic Rent on a Supplementary Schedule includes an amount attributable to
the financing by Lessor of Lessee's fee for use of the Software, Lessee agrees
that such amounts shall be deemed Additional Rent and subject to Sections 3 and
4 hereunder.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Master Lease to be
executed as set forth below.
LESSOR: LESSEE:
NELCO, Ltd. Blue Rhino Corporation
--------------------------------------
By: /s/ Karen A. Layman By: /s/ Larry Brumfield
------------------------------- --------------------------------------
(Signature) (Signature)
Karen A. Layman Larry Brumfield
---------------------------------- --------------------------------------
(Name Printed or Typed) (Name Printed or Typed)
Title: Indirect Marketing Title: Vice President - Finance
Representative
Date: February 1, 1996 Date: February 6, 1996
6
<PAGE>
LEASING INNOVATIONS, INCORPORATED LEASE AGREEMENT NO. HGF081196
535 N. Hwy 101, Suite B
Solana Beach, CA 92075
(619)259-4794 1(800)532-7388
Lessee: Blue Rhino Corporation Vendor: National Datacomputer, Inc.
104 Cambridge Plaza Drive 900 Middlesex Turnpike, Bldg. 5
Winston-Salem, NC 27104 Billerica, MA 08121
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Lessee's Tax/I.D.#: 56-1149695
- ------------------------------------------------------------------------------------------------------------------------------------
Deliver to Address (if other than above)
- ------------------------------------------------------------------------------------------------------------------------------------
Quantity Description
See Attached Schedule A
- ------------------------------------------------------------------------------------------------------------------------------------
When Payable [X] Monthly Minimum Term Amount of Each Rental Payment [ ] Security Deposit $
[ ] Quarterly A B -------------------
Check One [ ] Other 30 Months $1,183.66 [X] Advance Payment $2,367.32
---------------------
plus applicable sales tax
- ------------------------------------------------------------------------------------------------------------------------------------
Additional provisions (If Any) First and Last Payment Due in Advance
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TERMS AND CONDITIONS - PLEASE READ CAREFULLY BEFORE SIGNING
1. LEASE Lessor agrees to lease to Lessee, and Lessee agrees to lease from
Lessor the equipment described above or on any attached Schedule(s), on the
terms and conditions set forth in this lease agreement.
2. WARRANTIES. LESSOR HAS NOT MADE AND SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE QUALITY OR CONDITION OF THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS FOR A PARTICULAR PURPOSE. Lessor will not be
liable for any loss or damage to Lessee or others arising from defects,
negligence, delays, failure to deliver, interference with any patent, trademark,
copyright or other intellectual property right, or nonperformance of the
equipment. No representation or warranty as to the equipment or any other matter
by the manufacturer, vendor or others shall be binding on lessor nor shall the
breach of such release Lessee from any of Lessee's obligations to Lessor. Lessor
assigns to Lessee all warranties of third parties concerning the subject matter
hereof without recourse against Lessor. Lessee confirms that: (a) They are a
corporation duly organized and validly existing and in good standing under the
laws of the State of North Carolina; (b)(i) The leasing of the Equipment from
Lessor by Lessee, the execution and delivery of the Lease, Rental Schedule,
Certificate of Delivery and Acceptance (in the case of a sale-leaseback, the
sale of the Equipment by Lessee to Lessor and the Bill of Sale) and other
related instruments and agreements and the compliance by Lessee with the terms
thereof, (ii) have been duly and legally authorized by appropriate corporate
action taken by Lessee, (iii) are not in contravention of, and will not result
in a breach of, any of the terms of Lessee's Certificate of Incorporation, its
By-laws, or of any provisions relating to any of it's Loan Agreement, Credit
Agreements, or indentures of Lessee, or any other contract, agreement or
instrument to which Lessee is a party or under which it is bound, and (iv) will
not violate any applicable state or federal laws. (c) The Lease, Rental
Schedule, Certificate of Delivery and Acceptance and/or Bill of Sale and other
related instruments and agreements with respect to the Equipment, when executed
by Lessee's duly authorized officers or designees and delivered to Lessor, will
constitute a valid and legally binding obligation of Lessee, enforceable in
accordance with the terms thereof. (d) Lessor's title to the Equipment is
absolute and Lessee's right, title and interest in and to the Equipment
described in any Rental Schedule, and the rentals thereof, will not be affected
or impaired by the terms of any Loan Agreement or Indenture, or any other
contract, agreement or instrument, to which Lessee is a party, or under which it
is bound. (e) There is not now pending against or affecting Lessee, nor to our
knowledge is there threatened, any action, suit or proceeding at law or in
equity or by or before any administrative agency which if decided adversely to
Lessee, would directly or indirectly affect or impair your title to the
Equipment, or would materially impair of affect Lessee's financial condition or
operation. (f) No authorization, approval or consent of any public body, agency,
commission or board, federal, state or local, is necessary or required, by
statute or otherwise, in connection with the execution of the Lease, Rental
Schedule, Certificate of Delivery and Acceptance and/or Bill of Sale and other
related instruments and agreements or for the assumption of the obligations of
Lessee thereunder.
- --------------------------------------------------------------------------------
GUARANTY
To induce Lessor to enter into the within lease, the undersigned jointly and
severally unconditionally guarantees to Lessor the prompt payment when due of
all of Lessee's obligations to Lessor under the lease. Lessor shall not be
required to proceed against Lessee or the equipment or enforce any other remedy
before proceeding against the undersigned. The undersigned agrees to pay all
attorney's fees and other expenses incurred by Lessor by reason of default by
the Lessee or the undersigned. The undersigned waives notice of acceptance
hereof and of all other notices or demands of any kind to which the undersigned
may be entitled. The undersigned consents to any extensions or modifications
granted to Lessee and the release and/or compromise of any obligations of Lessee
or any other obligors and guarantors without in any way releasing the
undersigned from its obligations hereunder. This guaranty shall bind the heirs,
administrators, representatives, successors and assigns of the undersigned, and
may be enforced by or for the benefit of any assignee or successor of Lessor.
The undersigned consents to the jurisdiction of any Federal or State Court,
located in San Diego County, California with respect to any legal action
commenced hereunder.
X X
- ------------------------------------- -------------------------------------
GUARANTOR SIGNATURE DATED GUARANTOR SIGNATURE DATED
Accepted By
LEASING INNOVATIONS, INCORPORATED BLUE RHINO CORPORATION
By Signature Illegible By /s/ Larry Brumfield V.P./CFO
---------------------------------- ----------------------------------
Authorized Signature Lessee's Signature Title
7/30/96 Treasurer /s/ Barbara C. Harper 7/30/96
- ------------------------------------- -------------------------------------
Date Title Witness's Signature and Date
<PAGE>
3. TERM AND RENT. This lease will commence on the first day of the month in
which Lessee confirms its acceptance of the equipment and will continue for the
minimum number of months (above). Lessee shall be deemed to have confirmed
acceptance of the equipment if, within five (5) business days after delivery of
the equipment, Lessee has not given Lessor written notice of any objection
thereto or if Lessee makes any rent payments. The rent specified in "B" (above).
Lessee will make all rental payments, in advance, on the date or dates specified
by Lessor in a notice or notices. This lease is a noncancellable lease and
cannot be canceled by Lessee during the minimum term hereof. This lease shall be
automatically renewed for an additional one month renewal term at the completion
of the minimum term or the renewal term. Unless otherwise specified, any Advance
Payment shall be applied first to the first rental payment and then to the
latest maturing rental payments. Lessor may apply all or any part of any
Security Deposit to cure any default of Lessee under this lease. If upon final
termination of this lease, Lessee has fulfilled all of the terms and conditions
hereof, then Lessor shall pay to Lessee any remaining balance of the Security
Deposit, without interest.
4. PURCHASE ORDERS AND EQUIPMENT ACCEPTANCE. Lessee agrees that (a) Lessor has
not selected, manufactured, sold or supplied any of the equipment, (b) Lessee
has selected all of the equipment and its suppliers, (c) Lessor is purchasing
the equipment solely in connection with this lease and (d) Lessee has received a
copy of, and approved, the purchase orders/contracts for the equipment. Lessor
hereby notified Lessee that Lessee may have rights under such purchase
orders/contracts and advises Lessee to contact such suppliers for a description
of any such rights. Lessee agrees that as of the acceptance date: (a) Lessee has
received and inspected the equipment, (b) the equipment is in good working order
and complies with the purchase orders/contracts, (c) Lessee irrevocably accepts
the equipment for purposes of this lease "as-is, where-is, will all faults", and
(d) Lessee unconditionally waives any right it may have to revoke its acceptance
of the equipment.
5. WAIVER OF RIGHTS. Lessee's obligation to pay all rent and other amounts
under this lease is ABSOLUTE AND UNCONDITIONAL UNDER ALL CIRCUMSTANCES
WHATSOEVER, and shall not be affected by any circumstances of any character
whatsoever, including without limitation any limitation, any setoff,
counterclaim, defense or reduction which Lessee may have against Lessor or
anyone else for any reason whatsoever.
6. OWNERSHIP OF EQUIPMENT. Lessor shall at all times retain title to the
equipment. Lessee, at its expense, will protect and defend Lessor's title to the
equipment and will keep it free and clear of any and all claims, liens, and
encumbrances. Lessee will obtain and maintain at its expense all required,
customary or appropriate licenses, titles, registrations, and permits reflecting
Lessor as owner.
7. CARE, USE AND LOCATION. Lessee will keep and maintain the equipment in good
operating condition, repair, and appearance, reasonable wear and tear excepted
and shall use the equipment in the regular course of its business. Lessee will
not modify the equipment unless in accordance with a recommendation by the
manufacturer, without the prior written consent of Lessor. The Equipment shall
always remain and be deemed personal property even though attached to realty.
Lessee shall keep the equipment at the location shown herein and shall not
remove the equipment without the prior written consent of Lessor. Lessor shall
have the right to enter Lessee's premises at reasonable times to inspect the
equipment.
8. TAXES. Lessee will pay directly, or to Lessor, all excise taxes, sales and
use taxes, personal property taxes, and charges which may be imposed by any
governmental entity during the term of this lease arising from the acquisition,
use, ownership or leasing of the equipment whether due before or after
termination of this lease. Property taxes due for the last year of the lease
will be paid for Lessee when the lease expires or terminates. Unless otherwise
agreed to in writing, Lessor shall file personal property tax returns with
respect to the equipment. With respect to personal property taxes, upon Lessor's
request, Lessee shall pay to Lessor, in advance and at the times requested by
Lessor the taxes which Lessor anticipates will be due during the year.
9. INSURANCE. Lessee shall, at its own expense, keep the equipment insured
against all risks of loss or damage from every cause whatsoever, for no less
than the full replacement value thereof and shall carry public liability,
personal injury, and property damage insurance covering the equipment and its
use. All such insurance shall be in form, amount and with insurers satisfactory
to Lessor and shall provide for at least ten (10) days written notice of
cancellation to Lessor. Such policies shall name Lessor as Loss Payee as its
interest may appear with respect to property damage coverage and as Additional
Insured with respect to public liability coverage. Lessee shall deliver to
Lessor satisfactory evidence of insurance coverage required hereunder. Should
Lessee not deliver to Lessor satisfactory evidence of insurance coverage as
required herein, Lessee shall pay to Lessor, in addition to the cost of
insurance which the Lessor may obtain (if any), a fee equal to ten dollars
($10.00) per month. Payment of such fee does not relieve Lessee from its
obligations to obtain such insurance. Lessor shall be under no duty to ascertain
the existence or to examine the insurance policies. Lessor may, but shall not be
obligated to, insure the equipment at the expense of Lessee. Lessee hereby
irrevocably appoints Lessor as Lessee's attorney-in-fact to make claim for,
receive payment of, and execute and endorse all documents, checks, or drafts
received in payment for loss or damage under any such insurance policies.
10. INDEMNITY. Lessee will indemnify, defend by counsel approved by Lessor, and
hold Lessor, its affiliates, their officers, agents and employees harmless from
and against all loss, liability and expense, including reasonable attorney's
fees (including costs of a successful defense) for claims for negligence, tort,
strict liability, bodily injury, including death, or property damage, or for any
alleged violation of rights of others, including contact, patent, trademark,
copyright or industrial property rights, or for any alleged violation of any
law, ordinance, rule, regulation or decree, arising from the purchase, delivery
installation, operation, ownership, maintenance, use, malfunction or
interruption of this lease.
11. LOSS OR DAMAGE. Lessee shall bear all risks of loss of and damage to the
equipment from any cause and the occurrence of such loss or damage shall not
relieve Lessee of any obligation hereunder. In the event of such loss or damage,
Lessee, at the option of Lessor, shall (a) replace the same in good repair,
condition and working order, or (b) replace the same with like equipment in good
repair, condition and working order.
12. FEES, COLLECTION EXPENSES, LATE CHARGES, AND ADVANCES. Lessee shall also
pay to Lessor with the first rental payment an administrative fee equal to: (a)
thirty dollars ($30.00) if the purchase price of the equipment is less that
$25,000.00, or (b) fifty dollars ($50.00) if the purchase price is $25,000.00
or greater. In addition, Lessee shall pay lessor a processing fee of $1.00 per
scheduled rental payment. If any rent or other amount payable hereunder is not
paid when due, then as compensation for the administration and enforcement of
Lessee's obligation to make timely payments, Lessee shall pay with respect to
each overdue payment on demand (i) any collection agency fees and expenses, plus
(ii) a late payment service fee of $10.00, which Lessee agrees is a reasonable
approximation of the internal costs that Lessor will incur as a result of
Lessee's delay in payment, plus (iii) interest at 18% per annum (but not to
exceed the highest rate permitted by law) on such overdue payment for the period
for which it is overdue. All advances made by Lessor to preserve said property
or to pay insurance premiums for insurance hereon (but not to exceed the highest
rate permitted by law) or to discharge and pay any taxes, liens or encumbrances
thereon shall be added to the unpaid balance of rentals due hereunder and shall
be repayable by Lessee to Lessor together with interest thereon at the highest
contract rate until paid. Lessee shall pay to Lessor a fee equal to fifteen
dollars ($15.00) for each check returned to Lessor unpaid, in addition to pay
late charge provided for herein for a delinquent payment.
13. ASSIGNMENT. LESSEE SHALL NOT, DIRECTLY OR INDIRECTLY (a) ASSIGN, SELL OR
OTHERWISE DISPOSE OF THIS LEASE OR ANY PART THEREOF, OR (b) SUBLEASE, LEND OR
TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ALLOW TO EXIST ANY LIEN OR OTHER
CLAIM TO THE EQUIPMENT OR ANY PART THEREOF, OR (c) CREATE, GRANT, ASSUME, OR
ALLOW TO EXIST ANY LIEN OR OTHER CLAIM TO THE EQUIPMENT OR ANY PART HEREOF.
Lessor and any assignee of Lessor, with or without notice to or consent of
Lessee, may sell, assign, transfer or grant a security interest in all or part
of Lessor's rights, obligations, title or interest, in the equipment, this lease
or the amounts payable under this lease to any entity (a "transferee") and in
such event the transferee shall have all of the rights, powers and remedies of
Lessor hereunder. Lessee shall not assert against any transferee and defense,
counterclaim or setoff which Lessee may have against Lessor. Lessee acknowledges
that any such transfer transaction will not materially increase or change its
obligations, burdens, duties or risks under this lease.
14. DEFAULT. Any of the following events or conditions shall constitute an
event of default hereunder: (a) Lessee fails to pay any rental or any other
payment hereunder when due; (b) Lessee fails to pay when due any indebtedness of
Lessee arising independently of this lease; (c) Lessee fails to perform any
other convenant herein and such failure continues for ten (10) days following
receipt of written notice from Lessor; (d) Lessee becomes insolvent or makes an
assignment for the benefit of creditors or ceases doing business as a going
concern; (e) a receiver, trustee, conservator, or liquidator of Lessee is
appointed with or without the application or consent of Lessee; (f) the filing
by or against Lessee of a petition under the Bankruptcy Code or any Amendment
thereto, or under any other insolvency law or laws providing for the relief of
Debtors; or (g) any representation or statement made or furnished to Lessor by
or on behalf of Lessee providing to have been false or misleading in any
material respect when made or furnished.
15. REMEDIES. If any event of default shall occur, Lessor may, at its own
option, exercise any one or more of the following remedies: (a) Lessee shall
pay upon demand by Lessor all rents and other monies then due, plus all rents
and other monies to become due, in the future discounted to present value at a
rate of 7% per annum, plus Lessor's originally anticipated residual value of the
equipment; (b) require Lessee to return the equipment to Lessor, and in the
event Lessee fails to do so, without demand or legal process, enter into the
premises where the equipment may be found and repossess the equipment without
any liability to Lessee; (c) use, hold, sell, lease, assign or otherwise dispose
of the equipment at public or private sale, with or without notice to Lessee,
without affecting the obligation of Lessee hereunder; (d) sue for and recover
all amounts due from Lessee; (e) terminate this lease; or (f) pursue any other
remedy available to Lessor at law or in equity. Lessee agrees to pay Lessor all
costs and expenses, including reasonable attorney's fees, incurred by Lessor in
exercising any of its rights and remedies. All remedies of Lessor hereunder are
cumulative, and be exercised concurrently or separately, and are in addition to
any other remedies provided for by law. No failure on the part of the Lessor to
exercise and no delay in exercising any right or remedy shall operate as a
waiver thereof. No waiver by Lessor of any default shall constitute a waiver by
Lessor or any additional or subsequent default.
16. OPTION TO PURCHASE. Lessor hereby grants to Lessee the option to purchase
all (not part) of the equipment at the expiration of the term of this lease for
its then fair market value, provided Lessee is not in default hereunder. This
option maybe exercise by notifying Lessor in writing not less than sixty (60)
days prior to the expiration of the term of this lease. If such purchase option
is exercised, Lessee will at the expiration of the term of this lease pay to
Lessor the then fair market value.
17. RETURN OF EQUIPMENT. Upon expiration of the lease term or other
termination, Lessee shall immediately return the equipment, at Lessee's expense,
in good repair and condition, ordinary wear and tear excepted, in a manner and
to a location designated by Lessor. Should Lessee not return the equipment at
the end of the lease term, Lessee shall continue to pay rent to Lessor in the
sum and on the due dates set out in this lease as a month to month lease term
until the equipment is returned to Lessor.
18. UCC FILINGS. Lessor and Lessee agree that a reproduction of this lease may
be filed as a financing statement and shall be sufficient as a financing
statement under the Uniform Commercial code. Lessee shall execute or obtain or
deliver to Lessor, upon Lessor's request, such other documents as Lessor deems
necessary or advisable for the protection or perfection of this lease and
Lessor's rights hereunder and shall pay all costs incident thereto. Lessee
authorizes Lessor to insert in this lease, and in any filings, the serial number
of the equipment, and to sign Lessee's name in any filings. At Lessor's option,
Lessor may not file a financing statement in connection with the lease, and
charge Lessee a non-filing fee of no more than ten dollars ($10.00).
19. ENTIRE AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL, COMPLETE, AND ENTIRE
AGREEMENT BETWEEN THE PARTIES. THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS OR
UNDERSTANDINGS AFFECTING THIS LEASE OR THE EQUIPMENT. NOTWITHSTANDING ANY PRIOR,
PRESENT OR FUTURE ORAL AGREEMENT OR COURSE OF DEALING, NO TERM OF THIS LEASE MAY
BE WAIVED, AMENDED OR CHANGED EXCEPT IN WRITING SIGNED BY BOTH PARTIES.
20. MISCELLANEOUS. All notices required under this lease shall be given to the
parties hereto in writing and delivered personally or by certified mail at the
address set forth herein or at such other address as such party may have
subsequently provided in writing. Time is of the essence of this lease. In
the event any provision hereof of shall be invalid or unenforceable, the
remaining provisions hereof shall remain in full force and effect. The
provisions of this lease shall be binding upon and shall inure to the benefit of
the permitted assigns, successors, heirs and personal representatives of Lessor
and Lessee. Lessor shall not be liable to Lessee for any indirect, consequential
or special damages for any reason whatever. If this lease is signed by more than
one Lessee, each of such Lessees shall be jointly and severally liable for
payment and performance of all of the Lessee's obligations under this lease.
21. JURISDICTION. This lease shall be binding when accepted in writing by the
Lessor in the State of California, and shall be deemed to have been made in San
Diego County, California. The interpretation, construction and validity of this
lease shall be governed by the laws of the State of California, where Lessor has
its principle place of business, and where payments are to be made by Lessee.
Lessee hereby voluntarily consents to the jurisdiction of any Federal or State
Court, located in San Diego County, California with respect to any legal action
commenced hereunder.
22. STATEMENT OF PURPOSE. Lessee hereby warrants and represent that the
equipment will be used for business purposes and not for personal, family or
household purposes, and Lessee acknowledges that Lessor has relied upon this
representation in entering into this lease.
<PAGE>
Lease No.: LEASE AGREEMENT
- --------------------------------------------------------------------------------
VENDOR/SUPPLIER OF EQUIPMENT
NATIONAL DATACOMPUTER INC
NAME
CONTACT
900 MIDDLESEX TURNPIKE BUILDING 5 BILLERICA MA 01821 508-663-7677
ADDRESS CITY STATE ZIP PHONE
NOTE: VENDOR IS NOT AN AGENT OR REPRESENTATIVE OF THE LESSOR, AND IS NOT
AUTHORIZED TO MODIFY ANY OF THE TERMS OF THE LEASE
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
SCHEDULE OF PAYMENTS PAYABLE AT SIGNING OF LEASE (check one):
Term: Number of payments: 36 @ $3,117.00 per month* [ ] Security Deposit (see paragraphs 6 and 15) $
*Except as otherwise indicated: [ ] QUARTERLY X First and Last 0 Total Payment: $3,117.00
[ ] OTHER
(NOTE: APPLICABLE TAXES AND INSURANCE MAY BE ADDED; [ ] Other:
PARAGRAPHS 10 AND 12)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
EQUIPMENT DESCRIPTION
Equipment Description Serial Numbers
- --------------------- ---------------------
TWENTY-FIVE TRUCK MOUNT SYSTEMS W/PERIPHERALS 3527-0001 8853-0000
--------- ---------
2,194.90 922.10
$1.00 PURCHASE OPTION
[ ] Check here if separate equipment list is attached.
- --------------------------------------------------------------------------------
EQUIPMENT LOCATION (IF OTHER THAN BELOW)
(Attach additional schedule if locations differ for each item of equipment.)
ADDRESS CITY STATE ZIP PHONE
- --------------------------------------------------------------------------------
ACCEPTANCE OF LEASED EQUIPMENT
As Lessee, you acknowledge that the equipment covered by this Lease has been
completely and satisfactorily delivered, and after full inspection is accepted
for all purposes of the Lease. Your acceptance shall be deemed effective and
irrevocable forty-eight (48) hours after delivery of the Equipment if you do not
notify us of nonacceptance, or on the date you sign the Certificate of
Acknowledgment and acceptance of Leased Equipment, whichever is earlier.
- --------------------------------------------------------------------------------
<TABLE>
TERMS AND CONDITIONS WHICH ARE PART OF THIS LEASE ARE PRINTED ON THE FOLLOWING PAGES.
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
ACCEPTED BY LESSOR: GREEN TREE ACCEPTED BY LESSEE:
Vendor Services Corporation BLUE RHINO CORPORATION
FULL LEGAL NAME OF LESSEE
By___________________________________________________________
AUTHORIZED SIGNATURE TITLE FEDERAL TAX I.D. # OR SOCIAL SECURITY #
104 CAMBRIDGE PLAZA DRIVE 910-659-6900 910-659-6750
Date________________________________ BILLING ADDRESS PHONE # FAX #
WINSTON-SALEM NC 27104
Green Tree Vendor Services Corporation CITY COUNTY STATE ZIP
3601 Minnesota Drive, Suite 960 Phone: (800) 781-5216 THE UNDERSIGNED HEREBY AGREES TO ALL OF THE TERMS
Bloomington, MN 55435 Fax: (800) 347-3761 AND CONDITIONS AS SET FORTH ON BOTH SIDES OF THIS
LEASE AGREEMENT (AND ANY SCHEDULE TO THIS LEASE),
95 Route 17 South Phone: (800) 526-4611 AND CERTIFIES THAT THE EQUIPMENT SHALL BE USED FOR
Paramus, NJ 07652 Fax: (800) 242-7252 BUSINESS PURPOSES ONLY.
BY: Kurt Gehsmann 6/26/97
-------------------------------------------------------
AUTHORIZED SIGNATURE OF LESSEE DATE
Kurt Gehsmann Controller
-------------------------------------------------------
PRINT NAME OF SIGNER TITLE
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1 of 5 Lessee's Initials________
<PAGE>
- --------------------------------------------------------------------------------
PERSONAL GUARANTY
I hereby acknowledge that I am receiving a benefit from this lease,
and I unconditionally guarantee the prompt payment in full of all obligations of
the Lessee under this Lease. I further acknowledge that this lease may be
amended from time to time by execution of lease schedules and that by signing
below I represent and acknowledge that a "continuing guaranty" is being given,
which shall be in full force and effect and apply to all such future schedules.
This guaranty shall remain and continue in full force and effect as to any
renewal, modification or extension of the lease and shall further apply to any
additional leases entered into between the lessor and the lessee from the date
of this guaranty forward, whether or not I have received notice of or consented
to such renewal, modification, extension or additional leases. I understand
that the lessor in entering into such renewals, modifications, extensions or
additional lease transactions, shall be relying upon my guarantee herein. I
also agree that you, the lessor may make other arrangements with the lessee,
such as releasing or compromising the lessee's obligations, and I will still be
responsible for those payments and other obligations. You do not have to notify
me if the Lessee fails to meet all of its obligations under the lease. If the
lessee fails to meet all of its obligations, I will immediately pay in
accordance with the default provisions of the Lease all sums due under the
original terms of the Lease, and I will perform all other obligations of the
Lessee under the Lease, and I agree that you do not have to proceed first
against the Lessee or exhaust other collateral before I am required to satisfy
my obligations under this guaranty. I will reimburse you for all the expenses
you incur in enforcing any of your rights against the Lessee or me, including
attorneys fees.
If this is a corporate or partnership guaranty, it is authorized by
the Board of Directors of the guaranteeing corporation, or by the partnership
agreement. THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MINNESOTA. I AGREE AND CONSENT TO THE JURISDICTION OF THE FEDERAL AND STATE
COURTS LOCATED IN HENNEPIN COUNTY, MINNESOTA, FOR THE DETERMINATION OF DISPUTES
BETWEEN US. I agree and consent that you may serve me by registered or
certified mail, which will be sufficient to obtain jurisdiction. No payment by
me under this guaranty shall entitle me, by subrogation or otherwise, to any
payment from the Lessee or out of the property or other assets of the Lessee. I
WAIVE TRIAL BY JURY IN ANY ACTION BETWEEN US.
X_________________________________ X___________________________________________
WITNESS SIGNATURE DATED PERSONAL GUARANTOR SIGNATURE, AN DATED
INDIVIDUAL (No Titles) N/A
X_________________________________ X___________________________________________
WITNESS SIGNATURE DATED PERSONAL GUARANTOR SIGNATURE, AN DATED
INDIVIDUAL (No Titles) N/A
- --------------------------------------------------------------------------------
Dear Lessee: We have written this Lease Agreement in plain language
because we want you to fully understand its terms. Please read your copy of
this Lease carefully and feel free to ask us any questions you may have about
it. We use the words YOU and YOUR to mean the Lessee indicated below. The
words WE, US, and OUR refer to the Lessor indicated below.
1. LEASE AGREEMENT: You agree to lease from us and we agree to lease to
you, the equipment listed above or on any schedule to this Lease. You
unconditionally promise to pay us the sum of all of the rental payments
indicated above or on any schedule. The amount of each rental payment shown
above or on any schedule is based on our estimated total cost of the equipment
including, if applicable, installation costs. The rental payment shall be
raised or lowered, in a proportionate manner, if the actual total cost of the
equipment is greater than or less than the estimate, and you authorize us to
adjust the rental payment by up to ten percent (10%) if it is necessary. You
authorize us to insert in this Lease any serial numbers and other identification
data about the equipment, as well as any other omitted factual matters.
2. UCC-ARTICLE 2A: You agree that this Lease is a "Finance Lease" under
Article 2A of the Uniform Commercial Code ("UCC"). You acknowledge that: (a)
we did not select, manufacture or supply the equipment, but at your request we
have purchased the equipment for lease to you; and (b) based on your own
judgment, you have selected the vendor or supplier of the equipment (indicated
above), and you have selected the particular equipment that you are leasing from
us. You agree that you have approved any purchase or supply contract between us
and the vendor before signing this Lease; or, if you have entered into a
purchase contract for the equipment, you agree to assign it to us effective when
we pay for the equipment. You may have rights under the supply or purchase
contracts, and you may contact the supplier for a description of those rights or
any warranties. To the extent permitted by applicable law, you waive any and
all rights and remedies conferred upon you under UCC Sections 2A-303 and 2A-508
through 522.
3. NO WARRANTIES: We are leasing the equipment to you "AS IS". WE MAKE
NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR ORDINARY USE IN
CONNECTION WITH THIS LEASE. YOU UNDERSTAND AND AGREE THAT WE ARE INDEPENDENT
FROM THE VENDOR OR SUPPLIER OF THE EQUIPMENT, AND THAT NEITHER THE VENDOR NOR
ANY OTHER PERSON IS OUR AGENT, NOR ARE THEY AUTHORIZED TO WAIVE OR CHANGE ANY
TERM OR CONDITION OF THIS LEASE. YOU AGREE THAT NO REPRESENTATION, GUARANTEE OR
WARRANTY BY THE VENDOR OR OTHER PERSON IS BINDING ON US. So long as you are not
in default under any of the terms of this Lease, we transfer to you any
warranties made to us, as the owner of the equipment, by the Vendor,
manufacturer or supplier. YOU AGREE THAT ANY BREACH BY THE VENDOR OR OTHER
PERSON WILL NOT RELIEVE OR EXCUSE YOUR OBLIGATIONS TO US. Regardless of cause,
you will not assert any claim whatsoever against us for loss of profits you
expected to make or any other direct, consequential, special or indirect
damages. If you have entered into a maintenance agreement for the equipment, and
the cost of the maintenance is included in your monthly payments, you
acknowledge that we are not responsible for any service, repairs, or maintenance
of the equipment, and that we are not a party to the maintenance agreement; if
you have a dispute regarding maintenance or service, you will nevertheless
continue to pay us all payments due under this Lease and any schedules to this
Lease.
4. NON-CANCELABLE LEASE: THIS LEASE CANNOT BE CANCELLED BY YOU FOR ANY
REASON.
Page 2 of 5 Lessee's Initials ______
<PAGE>
5. DELIVERY OF EQUIPMENT: You request that we arrange delivery to you at
your expense. If the equipment has not been delivered, installed, and accepted
by you within forty-five (45) days from the date that we ordered the equipment,
we may on ten (10) days written notice to you terminate the Lease and our
obligations to you.
6. TERM OF LEASE, ADMINISTRATIVE FEE: The Lease term will start on the
date that any equipment is delivered to you or your agent (the "Commencement
Date") and will continue until you have met all of your obligations under the
Lease. Advance rentals are not refundable if the Lease does not begin for any
reason. The payments of rent are payable periodically in advance as stated above
or on any schedule to this Lease. The first payment is due on the Commencement
Date. You will be notified in writing if we change your first payment date, and
we may charge you interim rent for any adjustment period. Thereafter, your
payments will be due on the same day of each month (or other period indicated
above). All payments will be made to us at our address on this Lease, or at the
address which we designate in writing. We will apply your payments to late
charges, taxes, fees and lease payments due and payable, at our discretion. YOUR
OBLIGATION TO PAY RENTALS TO US IS UNCONDITIONAL AND IS NOT SUBJECT TO ANY
REDUCTION, SET-OFF, DEFENSE, OR COUNTERCLAIM FOR ANY REASON WHATSOEVER. If you
paid a security deposit to us, it will be held by us to secure your performance
under this Lease, and will be applied or returned pursuant to paragraph 15. On
the Commencement Date of this Lease, you shall pay to us a one-time
administrative fee, not to exceed $250.
7. ASSIGNMENT: You may not sell, transfer, assign or sublease the
equipment without our prior written approval. We may sell, assign or transfer
this Lease and ownership of the equipment without notifying you; and you agree
that if we do, the new lessor will have the same rights and benefits that we now
have, and will not have to perform any of our obligations. You agree that the
rights of the new lessor will not be subject to any claims, defenses or setoffs
that you may have against us. However, any such assignment, sale, or transfer of
this Lease or the equipment will not relieve us of our obligations to you under
this Lease.
8. OWNERSHIP, RIGHTS, AND QUIET ENJOYMENT: Except with regard to any
computer software which may be covered by this Lease, you agree that we are the
owner of and have title to the equipment. If the Equipment includes computer
software, with respect to that software, you acknowledge and agree that (a) we
do not have, have not had, nor will in the future have any title to or ownership
in the software; and (b) you have executed or will execute a separate Software
License Agreement with the Licensor of the software, and we are not a party to
and shall have no responsibilities whatsoever in regards to that Software
License Agreement. You agree, at your expense, to protect and defend our title
or other rights to the equipment. Further, you agree that you will at all times
keep the equipment free from any legal process or lien whatsoever, and you shall
give us immediate notice if any legal process or lien is asserted or made
against the equipment. You shall have the right to quiet use and enjoyment of
the equipment for the term of this Lease, provided you are not in default.
9. CARE, USE AND LOCATION; LOSS OF EQUIPMENT: You are responsible for
installing and keeping the equipment in good working order and repair. You will
keep and use the equipment only at your address shown above, or on any attached
schedule, and you will only use it for business or commercial purposes and in
compliance with all applicable laws. You will not make any alterations to the
equipment without our prior written consent, nor will you permanently attach the
equipment to your real estate. At the end of the Lease term, you will return the
equipment to us at your expense. You are responsible for protecting the
equipment from damage, except for ordinary wear and tear, and from any other
kind of loss while you have the equipment or while it is being delivered to you.
In the event the equipment is lost or damaged, so long as you are not in default
under this Lease, then you shall have the option to: (a) repair or replace the
equipment, or (b) pay to us both the unpaid balance of the remaining rent under
the Lease and our residual interest in the equipment, present valued using a
discount rate of six (6%) percent per year (or other rate required by law).
10. TAXES AND FEES: You agree to pay when due all taxes, fines and
penalties relating to this Lease. You also agree that we may estimate the yearly
personal property taxes that will be due for the equipment, and you agree to pay
us the estimated taxes when we request payment. At our election, we may bill you
and you must pay us a monthly personal property tax fee of up to three hundred
and thirteen thousandths of one percent (0.313%) of the original equipment cost
to reimburse us for the taxes we are paying and for our costs for preparing,
reviewing and filing the returns. If we pay any taxes, fines or penalties for
you, you agree to reimburse us on demand, and your payment will be based on the
full amount of such taxes, without regard to any discounts we may obtain due to
early payment or otherwise. You also agree that we have the right to sign your
name to any document for the purpose of such filing, so long as the filing does
not interfere with your right to use the equipment.
11. INDEMNITY: We are not responsible for any injuries or losses to you or
any other person caused by the installation or use of the equipment. You agree
to reimburse us for and to defend us against any claims for such losses or
injuries, including those arising out of negligence, tort or strict liability
claims. This indemnity shall continue even after the term of this Lease has
expired.
12. INSURANCE: You agree that we have the right (but not the obligation)
to place, at your expense, property insurance against loss, theft, damage or
destruction of the equipment, for up to the full replacement value, unless you
provide us with written evidence of your own insurance coverage which is
satisfactory to us and which identifies us as the loss payee. You also agree to
provide and maintain public liability insurance naming us as an additional
insured. If we place insurance for you, you agree to pay the expenses for that
insurance in equal installments allocated to each rental payment (plus interest
on such amount at 1.5% per month, or the highest rate permitted by law); the
expenses shall include the full premium for the insurance and service fees which
we or our designee customarily charge for placing insurance. If any insurance
proceeds are paid, you shall apply the insurance proceeds toward your total
obligations under this Lease; or, if you are not in default under this Lease or
any other obligation to us, and we otherwise consent in writing, you shall have
the option to use the insurance proceeds to repair or replace the equipment. If
we place insurance for you, you shall cooperate with our insurance agent in
connection with the placement and the processing of any claims. Nothing in this
Lease shall create any insurance relationship of any type whatsoever between us
and any other person or party. You agree that we are not required to secure or
maintain in force any insurance, in any amounts or upon any specific terms and
conditions. We reserve the right to terminate any insurance coverage which we
may arrange, and we may allow any such insurance coverage to lapse without
having any liability to you. You hereby appoint us as your attorney-in-fact to
make claims for, receive payment of, and execute and endorse all documents,
checks, or drafts for loss or damage under any insurance policies.
13. DEFAULT AND REMEDIES: If you do not pay rent when due, or if you break
any of your promises under this Lease or under any other agreement with us, or
you become insolvent, assign your assets for the benefit of your creditors, or
enter (voluntarily or involuntarily) into a bankruptcy proceeding, you will be
in default. If your default is caused by your failure to make any payment when
due, we can require that you return the equipment to us and pay to us the
remaining balance of all of the rental payments due under this Lease, present
valued using a six (6%) percent per year discount rate. If you fail to return
the equipment to us, in addition we can also require that you pay to us our
residual interest in the equipment, present valued as noted above. You also
agree to pay us interest on all sums due us from the date of default until paid
at the rate of one and one-half (1-1/2%) percent per month, but only to the
extent permitted by law. If your default is caused by your
Page 3 of 5
<PAGE>
breaking any of your other promises under this Lease, we shall be entitled to
recover from you all damages caused by that default. We can also use any of the
remedies available to us under the Uniform Commercial Code or any other law. If
we refer this Lease to an attorney for enforcement or collection, you agree to
pay our reasonable attorney's fees of at least 20% of the remaining balance of
all the rental payments, plus our actual costs. If we have to take possession of
the equipment, you agree to pay the cost of repossession, storing, shipping,
repairing and selling the equipment. Although you agree that we are not
obligated to do so, if we decide to sell the equipment, and we are able to sell
the equipment for a price that exceeds the sum of (a) our cost of repossession
and sale of the equipment and (b) the residual value of the equipment, present
valued as calculated above, then we shall give you a credit for the amount of
such excess. You agree that we do not have to notify you that we are selling the
equipment.
14. OTHER RIGHTS: You agree that any delay or failure to enforce our rights
under this Lease (or under any schedule(s) to this Lease or any other
agreements) shall not prevent us from enforcing any rights at a later time. Both
parties intend this Lease to be a valid and legal document, and agree that if
any part is determined to be unenforceable, all other parts will remain in full
force and effect. If this document is found not to be a Lease, then you grant us
a security interest in the equipment. You also give us the right to immediately
file, at your expense, any Uniform Commercial Code ("UCC") financing statements
or related filings, as well as the right to sign your name to any such filings
that we make.
15. REDELIVERY OF EQUIPMENT; RENEWAL: You shall provide us with written
notice, by certified mail, sent not less than 90 days nor more than 150 days
prior to the expiration of the Lease term, of your intention either to exercise
any option to purchase the equipment (if we grant you such an option) or to
return the equipment to us at the end of the Lease term. For this notice to be
effective, you must not be in default of any of your obligations to us. If you
elect to return the equipment to us at the expiration of the original or any
renewal term of the Lease, you shall disconnect, properly package for shipping,
and return the equipment, to us, insured and freight prepaid by you in good
repair, condition and working order to a location designated by us. Upon your
purchase or return of the equipment, we may charge you a title transfer or lease
termination fee of up to $250.00 If we have not received written notice from you
of your intention to purchase or return the equipment, this Lease will
automatically renew for succeeding one-year periods, commencing at the
expiration of the original Lease term. If this Lease is renewed, the advance
payment of the last month's lease payment (as set forth on the reverse side)
shall apply to the last month of the renewal period, and shall not apply to the
last month of the initial term. Any security deposit held by us shall continue
to be held to secure your performance for the renewal period. If you
specifically request in writing, and provided you have fulfilled all of your
obligations to us (including, if you elect, the return of the equipment in good
repair, condition and working order), we will refund your security deposit to
you without interest within 90 days after the end of the original or renewed
lease term (or as otherwise required by applicable law), or at your direction we
may apply the security deposit toward your purchase of the equipment (if we
grant you a purchase option).
16. LATE CHARGE: If any part of a payment is not made you when due, you
agree to pay us a late charge of ten (10%) percent of each such late payment to
cover our additional internal collection overhead (to the extent permitted by
law). You agree to pay us the late charge not later than one month following the
date that the original payment was due.
17. ENTIRE AGREEMENT; CHANGES: This Lease contains the entire agreement
between you and us, and it may not be altered, amended, modified, terminated or
otherwise changed except in writing and signed both by you and us. A limiting
endorsement on a check or other form of payment will not be effective to modify
your obligations or any of the other terms and conditions of this Lease, and we
may apply any payments received without being bound by such limiting
endorsements.
18. COMPLIANCE; NOTICES: In the event you fail to comply with any part of
this Lease, we can, but we do not have to, take any action necessary to effect
your compliance upon ten (10) days prior written notice to you. If we are
required to pay any amount to obtain your compliance, the amount we pay plus all
of our expenses in causing your compliance, shall become additional rent and
shall be paid by you at the time of the next due rental payment. If any notices
are required under this Lease, they shall be sufficient if given personally or
mailed to the address set forth in this Lease by certified or registered mail,
postage prepaid. This Lease is for the benefit of and is binding upon you and
your personal representatives, successors and assigns.
19. CHOICE OF LAW; JURISDICTION: YOU AND WE AGREE THAT THIS LEASE SHALL BE
BINDING WHEN ACCEPTED IN WRITING BY US AT OUR OFFICES, AND SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF MINNESOTA. YOU AND WE EACH CONSENT TO THE JURISDICTION
OF THE FEDERAL AND STATE COURTS LOCATED IN HENNEPIN COUNTY, MINNESOTA, FOR THE
DETERMINATION OF ALL DISPUTES ARISING UNDER THIS LEASE. However, you agree that
we will have the right to commence any action in any court having the proper
jurisdiction for that action. You agree and consent that we may serve you by
registered or certified mail, which shall be sufficient to obtain jurisdiction.
YOU AND WE WAIVE TRIAL BY JURY IN ANY ACTION BETWEEN US.
20. REPRESENTATIONS AND COVENANTS OF LESSEE: You represent that all
financial and other information furnished to us was, at the time of delivery,
true and correct. During the term of the Lease, you shall provide us with such
interim or annual financial statements as we may request.
<PAGE>
[LOGO OF GREENTREE]
GREEN TREE Vendor Services Corporation
- --------------------------------------------------------------------------------
CERTIFICATE OF ACKNOWLEDGMENT AND
ACCEPTANCE OF LEASE EQUIPMENT
Lessee hereby acknowledges receipt of the equipment described in its Lease with
Lessor (the "Equipment") and accepts the Equipment after full inspection
thereof and to the best of his knowledge is satisfactory for all purposes of the
Lease only. Lessee acknowledges that Lessor has fully and satisfactorily
performed all covenants and conditions to be performed by Lessor.
6/1/97 BLUE RHINO CORPORATION
- ---------------------- LESSEE
DATE OF DELIVERY
6/27/97 By: /s/ Kurt Gehsmann
- ---------------------- ----------------------------------
DATE OF LEASE SIGNATURE
Controller
----------------------
TITLE
Kurt Gehsmann
----------------------
PRINT NAME OF SIGNER
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<PAGE>
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<PERIOD-END> JUL-31-1997 JAN-31-1998
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8,936 9,304
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