EQUIPMENT LEASE TERMS AND CONDITIONS
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- These terms and conditions (the “Terms”) are the only terms which govern the lease of equipment (“Equipment”) by the Lessor to the Lessee. The accompanying quotation/confirmation of sale/invoice (each hereafter a “Quotation”; together with these Terms, the “Agreement”) comprise the entire agreement between the parties, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. This Agreement prevails over any of Lessee’s terms and conditions, proposals, purchaser orders or other similar writings, regardless of whether or when Lessee has submitted its order or such terms. Fulfillment of Lessee’s order does not constitute acceptance of any of Lessee’s terms and conditions and does not serve to modify or amend this Agreement.
- RENT. In consideration of Lessee’s right to possess and use the Equipment during the Term (as defined in Section 9), Lessee shall pay a monthly rental (the “Rent”) in the amount set forth on the accompanying Quotation, without any set-off, offset, abatement, or deduction whatsoever in U.S. dollars by wire transfer, check or credit card. Lessee shall pay interest on all late payments at the lesser of the rate of 1.5% per month and the highest rate permissible under applicable law, calculated daily and compounded monthly. Lessee shall reimburse Lessor for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees. Payment of any late charge does not excuse Lessee from any default under this Agreement.
If by the expiration of the Term, Lessee does not return the Equipment to Lessor in the condition and on the terms and conditions of Section 6, Lessee shall continue to comply with all the terms and conditions of this Agreement, including the obligation to pay the prorated daily Rent for each day from the expiration of the Term until the date on which Lessee returns such Equipment to Lessor in the manner required under Section 6 (“Holdover Rent”). Lessee shall not construe anything contained in this Section, including Lessee’s payment of Holdover Rent, as Lessor’s: (a) waiver of Lessee’s failure to perform any obligation under this Agreement; or (b) assent to any renewal of this Agreement.
- NO WARRANTIES. LESSEE ACKNOWLEDGES THAT LESSOR MAKES NO WARRANTY CONCERNING THE EQUIPMENT WHATSOEVER, INCLUDING ANY: (A) WARRANTY OF MERCHANTABILITY; (B) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; OR (C) WARRANTY AGAINST INTERFERENCE; OR (D) WARRANTY AGAINST INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET, OR OTHER PROPRIETARY RIGHTS OF A THIRD PARTY; WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE.
- TITLE AND RISK OF LOSS. Title to the Equipment remains with Lessor throughout the Term, and Lessee shall acquire no right, title, or interest in the Equipment. Lessee shall not pledge or encumber the Equipment in any way. Lessee shall bear all risk of loss, damage, destruction, theft, and condemnation to or of the Equipment from any cause whatsoever (“Loss”) until the Equipment has been returned to Lessor to the destination specified in Section 6. Lessee shall notify Lessor in writing within three (3) days of any such Loss.
- 4.1 Material Impairment. If Lessor determines in its sole discretion that the Loss has materially impaired the Equipment, Lessee shall pay, on Lessor’s demand within ten (10) days of the Loss, the following amounts (collectively, “Loss Payment”):
- all Rent and other amounts due prior to the “Loss Payment Date” with respect to such item of Equipment; plus
- the stipulated loss value of the item of Equipment set forth on the Quotation.
This Agreement terminates with respect to any materially impaired item of Equipment on receipt by Lessor of the corresponding Loss Payment. Upon such termination, Lessee shall dispose of or return such item of Equipment according to Lessor’s instructions.
- 4.2 Non-Material Impairment. If Lessor determines in its sole discretion that the Loss has not materially impaired the Equipment:
- this Agreement continues with respect to such item of Equipment as though no Loss had occurred; and
- Lessee shall at its expense and risk promptly repair or cause such Item of Equipment to be repaired to a condition acceptable to Lessor.
- PRECAUTIONARY UCC-1 FINANCING STATEMENT. Lessee authorizes Lessor to file precautionary Uniform Commercial Code (“UCC”) financing statements and other similar filings and recordings with respect to the Equipment. Lessee agrees not to file any corrective or termination statements or partial releases with respect to any UCCs or other similar filings or recordings filed by Lessor in connection with the Equipment.
- RETURN OF EQUIPMENT.
- 6.1 Obligation to Return Equipment. Lessee shall, at its risk and expense, no later than the expiration of the Term: (a) de-install, inspect, and properly pack the Equipment; and (b) return the Equipment, freight prepaid, to Lessor’s facility (as directed by Lessor) by delivering the Equipment on board such carrier as Lessor may specify.
- 6.2 Condition of Equipment Upon Return. Lessee shall cause the Equipment returned for any reason under this Agreement to: (a) be free and clear of all liens (other than liens of Lessor) and rights of third parties; (b) be in the same condition as when delivered to Lessee, ordinary wear and tear excepted; and (c) be in compliance with applicable law.
- 6.3 Return of Records. Upon the return of the Equipment under this Agreement, Lessee shall deliver or cause to be delivered to Lessor all records relating to the Equipment, including all maintenance records, logs, or data in Lessee’s possession or required to be maintained by law.
- INDEMNIFICATION. Lessee shall indemnify, defend, and hold harmless Lessor and its members, managers, officers, directors, shareholders, employees, agents, affiliates and all of their respective heirs, personal representatives, successors, and assigns (each an “Indemnified Party”) against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or, expenses of whatever kind, including reasonable attorneys’ fees, and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by any Indemnified Party, relating to/arising out of or resulting from any claim of a third party or Lessor arising out of or occurring in connection with the Equipment or Lessee’s negligence, willful misconduct, or breach of this Agreement. Lessee shall not enter into any settlement without Lessor’s or Indemnified Party’s prior written consent.
- 8.1 Property Insurance. Lessee, at its own expense, shall provide and maintain for each item of Equipment insurance against loss, theft, and damage (“Property Insurance”) in:
- an insured amount the greater of the stipulated loss value or full replacement value of such item of Equipment; and
- a form, and with companies, satisfactory to Lessor, including, without limitation, the insurer’s agreement to give Lessor thirty (30) days’ prior written notice before cancellation or material change thereof.
Lessee shall name Lessor (or shall cause Lessor to be named) as loss payee and additional insured on the Property Insurance.
- Insurance Certificates On or before the date of this Agreement, and at such other times as Lessor may request, Lessee shall provide Lessor with a certificate of insurance evidencing the maintenance of the Property Insurance. Should Lessee fail to provide a certificate within five (5) days of a request by Lessor, Lessor may charge Lessee a loss damage waiver premium equal to twenty percent (20%) of the [monthly][total] Rent payable hereunder.
- TERM AND TERMINATION. The term of this Agreement is set forth on the Quotation and shall last until the earlier of: (a) the expiration of the stated term; and (b) the termination of this Agreement, as provided hereunder (the “Term”).
In addition to any remedies that may be provided in this Agreement, Lessor may terminate this Agreement with immediate effect upon notice to Lessee, if Lessee: (a) fails to pay any amount when due under this Agreement and such failure continues for five (5) days after Lessee’s receipt of notice of nonpayment; (b) has not otherwise performed or complied with any of the terms of this Agreement, in whole or in part; (c) becomes insolvent, files a petition for bankruptcy, or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization, or assignment for the benefit of creditors; or (d) if Lessee sells, transfers, or disposes of all or substantially all of its assets or property of its business, or merges or consolidates with any other entity, unless Lessee is the surviving entity and has a net worth greater than or equal to its net worth immediately prior to the merger or consolidation.
If Lessee is in default of any of the terms and conditions of this Agreement, Lessor may, in its sole discretion, exercise one or more of the following remedies:
- declare this Agreement in default;
- take possession of, or render unusable, any item of Equipment wherever it may be located, without demand or notice, without any court order or other process of law, and without liability to Lessee for any damages occasioned by such action;
- require Lessee to deliver any item of Equipment at a location designated by Lessor; for each day that Lessee fails to return any item, Lessor may demand an amount equal to the Rent, prorated on the basis of a thirty-day month, in effect immediately prior to such default;
- proceed by court action to enforce performance by Lessee of this Agreement and/or to recover all damages and expenses incurred by Lessor by reason of default;
- sell any or all of the Equipment at public or private sale, with or without notice to Lessee or advertisement, or otherwise dispose of, hold, use, operate, lease to others, or keep idle such Equipment, and without any duty to account to Lessee for such action or inaction or for any proceeds with respect thereto, and apply the net proceeds thereof (after deducting all expenses (including legal fees and costs) incurred in connection therewith) to the amounts owed to Lessor under this Agreement; provided, however, that Lessee shall remain liable to Lessor for any deficiency that remains after any sale or lease of such Equipment; or
- exercise any other right or remedy available to Lessor at law or in equity.
- CONFIDENTIAL INFORMATION. All non-public, confidential, or proprietary information of Lessor, including, but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts, or rebates, disclosed by Lessor to Lessee, whether disclosed orally or disclosed or accessed in written, electronic, or other form or media, and whether or not marked, designated, or otherwise identified as “confidential,” in connection with this Agreement is confidential, solely for the use of performing this Agreement and may not be disclosed or copied unless authorized by Lessor in writing. Upon Lessor’s request, Lessee shall promptly return all documents and other materials received from Lessor. Lessor shall be entitled to injunctive relief for any violation of this Section. This Section shall not apply to information that is: (a) in the public domain; (b) known to Lessee at the time of disclosure; or (c) rightfully obtained by Lessee on a non-confidential basis from a third party.
- TAX LEASE.
- 11.1 Lessor Is Tax Owner. Lessor is entitled to all deductions, credits, and other tax benefits that are provided in the Internal Revenue Code to an owner of property (“Tax Benefits”).
- 11.2 Lessee Covenant to Maintain Tax Lease Status. Lessee shall not take or omit to take any action that results in the disqualification of the Equipment for, or recapture of, all or any portion of the Tax Benefits.
- LESSEE’S REPRESENTATIONS. Lessee represents to Lessor that the statements contained in this Section 12 are true and correct as of the date hereof.
- 12.1 Organization and Qualification of Lessee. Lessee is duly organized, validly existing, and in good standing under the laws of its state of organization, if any, and has full power and authority to own, operate, or lease the properties and assets now owned, operated, or leased by it and to carry on its business as currently conducted. Lessee is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the lease of each item of Equipment or the operation of the business as currently conducted makes such licensing or qualification necessary.
- 12.2 Authority of Lessee. Lessee has full power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Lessee of this Agreement, the performance by Lessee of its obligations hereunder and the consummation by Lessee of the transactions contemplated hereby have been duly authorized by all requisite action on the part of Lessee. This Agreement has been duly executed and delivered by Lessee, and this Agreement constitutes a legal, valid, and binding obligation of Lessee enforceable against Lessee in accordance with its terms.
- 12.3 No Conflicts. The execution, delivery, and performance by Lessee of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not:
- conflict with or result in a violation or breach of, or default under, any provision of the organizational documents of Lessee;
- conflict with or result in a violation or breach of any provision of any law;
- require the consent of, notice to, or other action by any person or, conflict with, result in a violation or breach of, or constitute a default hereunder; or
- result in the creation or imposition of any lien on any item of Equipment.
- 12.4 Consents. No consent, approval, permit, order, declaration, or filing with, or notice to, any governmental authority is required by or with respect to Lessee in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
- PERSONAL PROPERTY. Lessee shall not affix or attach any item of Equipment to real property or any improvements. The Parties intend that each item of Equipment remains at all times personal property and not a fixture under applicable law, even if the item of Equipment, or any part thereof, may be or becomes affixed or attached to real property or any improvements. Upon Lessor’s written request, Lessee shall obtain and provide to Lessor, from each real property landlord, mortgagee, or lienholder for each location where the Equipment is located, a waiver of any interest that it may have in the Equipment arising from its interest in the real property.
- RECORDS. Lessee, at its own expense, shall:
- maintain all Equipment-related records, logs, and other materials (“Records”) in a manner no less comprehensive or accurate than Lessee’s normal customary practices with respect to Lessee’s similar equipment and as required by law; and
- promptly furnish to Lessor such Records as may be required to enable Lessor to file any ownership or other reports required to be filed by Lessor with any governmental authority.
- APPLICATION OF INSURANCE PROCEEDS AND CONDEMNATION PAYMENTS.
- 15.1 Amounts Received By Lessor. If Lessor receives any proceeds as loss payee of the Property Insurance, or under any condemnation proceeding related to the Equipment, it shall:
- if received pursuant to a Loss that has materially impaired an item of Equipment under Section 1, credit such proceeds against Lessee’s obligations to make Loss Payments to Lessor under Section 4.1 or if no such amounts are then due and outstanding, remit such proceeds to Lessee; or
- if received pursuant to a Loss that has not materially impaired the Equipment under Section 2, remit the proceeds to Lessee.
If Lessee is in default, Lessor may hold any such proceeds as security for the obligations of Lessee under this Agreement and apply such amounts in its discretion against Lessee’s obligations under this Agreement.
- 15.2 Amounts Received By Lessee.
- If Lessee receives any proceeds under the Property Insurance, unless received with respect to a Loss that has not materially impaired the Equipment as set forth in Section 1, or under any condemnation proceeding related to the Equipment, it shall promptly forward such amounts to Lessor to be applied by Lessor under Section 15.1.
- If Lessee is in default, and it receives any proceeds under the Property Insurance (regardless of whether the Equipment is materially impaired) and/or Liability Insurance, it shall forward such amounts to Lessor as security for the obligations of Lessee under this Agreement to be applied by Lessor in its discretion against Lessee’s obligations under this Agreement.
- CHOICE OF LAW. This Agreement and all matters arising out of or relating to this Agreement are governed by, and construed in accordance with, the laws of the State of Ohio, without regard to the conflict of laws provisions of such State. Subject to Section 23, any legal suit, action, or proceeding arising out of or relating to this Agreement must be instituted in the federal courts of the United States of America or the courts of the State of Ohio, in each case located in the County of Mahoning, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding.
- LIMITATION OF LIABILITY. IN NO EVENT SHALL LESSOR BE RESPONSIBLE OR LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES, OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF ANY PROVISION OF THIS AGREEMENT, REGARDLESS OF: (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT LESSOR WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT, OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE. IN NO EVENT SHALL LESSOR’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE TOTAL OF THE AMOUNTS PAID TO LESSOR HEREUNDER.
- LIMITATIONS OF ACTIONS. Lessee may not file any action, claim or lawsuit that arises out of or relates in any way to the performance of repair services by Lessor hereunder (each such action or claim being hereinafter referred to as a “Claim”) after the earlier of: (a) one hundred eighty (180) days following the event, occurrence or omission giving rise to the Claim; and (b) the expiration of the applicable statute of limitations.
- FORCE MAJEURE. No Party shall be liable or responsible to the other Party, or be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations of Lessee to make payments to Lessor hereunder), when and to the extent such failure or delay is caused by or results from acts beyond the impacted party’s (“Impacted Party”) control, including, without limitation, the following force majeure events (“Force Majeure Event(s)”): (a) acts of God; (b) flood, fire, earthquake, epidemics, pandemics, or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order, law, or actions; (e) embargoes or blockades in effect on or after the date of this Agreement; (f) national or regional emergency; (g) strikes, labor stoppages or slowdowns, or other industrial disturbances; (h) telecommunication breakdowns, power outages or shortages, lack of warehouse or storage space, inadequate transportation services, supply chain disruptions or delays, or inability or delay in obtaining supplies of adequate or suitable materials; and (i) other events beyond the control of the Impacted Party.
The Impacted Party shall give notice within seven (7) days of the Force Majeure Event to the other Party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use commercially reasonable efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause.
- SECURITY INTEREST. The parties further intend and agree that, if this Agreement is recharacterized under applicable law as a secured financing or a lease intended for security, this Agreement shall be deemed: (i) a security agreement; and (ii) to grant Lessor by Lessee a lien on and first priority security interest in the Equipment and all proceeds thereof, to secure the payment of Lessee’s obligations under this Agreement. Lessor and Lessee each agree to execute, acknowledge, deliver, file, and record, or cause to be executed, acknowledged, delivered, filed, and recorded such further documents (including without limitation UCC financing statements), and to do all such things and acts, necessary to ensure that such security interest would be a perfected first priority security interest under applicable law.
- LESSEE’S COVENANTS.
- 21.1 LIENS. Lessee shall keep the Equipment free and clear of all Liens. Lessee shall effect the removal of any such Lien immediately upon written notice thereof from Lessor or otherwise becoming aware of the existence of the Lien.
For purposes of this Agreement, the term “Lien” means any mortgage, pledge, hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge, or other security interest, or any preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever having substantially the same economic effect as any of the foregoing.
- 21.2 SUBLEASES. Lessee shall not enter into any sublease of any Equipment without Lessor’s prior written consent, which consent may be withheld in Lessor’s sole discretion. No permitted sublease shall relieve Lessee of its obligations under this Agreement, and Lessee shall remain primarily liable under this Agreement for the performance of all of the terms hereof and thereof to the same extent as if such sublease had not occurred.
- 21.3 IDENTIFYING MARKS. No marking of any kind shall be placed on any Equipment by Lessee except with the prior written consent of Lessor. Any such marking placed on a unit of Equipment by Lessee shall be removed at Lessee’s expense on or before the expiration or earlier termination of this Agreement. Lessee shall, at Lessee’s expense and to Lessor’s satisfaction, place and maintain on each unit of Equipment any identifying marks required by Lessor.
- 21.4 INSPECTION. Lessor’s employees and agents shall have the right of access to Lessee’s premises to inspect the Equipment and Lessee’s Records on advance notice and during regular business hours. On Lessor’s request, Lessee shall cooperate with and assist Lessor in obtaining access to premises other than Lessee’s so that Lessor’s employees and agents may inspect the Equipment.
- LESSOR’S PERFORMANCE OF LESSEE’S OBLIGATIONS. If Lessee is in default, Lessor may, in its sole discretion, on ten (10) days prior written notice, make any payment or perform any obligation on behalf of Lessee or take any action that Lessor in Lessor’s sole discretion deems necessary to maintain and preserve any or all Equipment and Lessor’s interests therein. Lessor’s payment, performance of such obligation, or taking of such action shall not be a waiver by Lessor of any default or a release of Lessee by Lessor. Lessee shall pay immediately on demand to Lessor all sums so paid by Lessor and any expenses (including legal fees and costs) incurred by Lessor in connection with Lessor’s payment, performance of such obligation, or taking of such action.
- DISPUTE RESOLUTION.
a. Any and all disputes, claims, questions or disagreements arising from or relating in any way to this Agreement (each a “Claim”) which cannot be settled through direct discussions between the parties, will be resolved by mediation administered by the American Arbitration Association (“AAA”) under its Commercial Mediation Rules. Any such Claim that cannot be resolved by mediation will be submitted to arbitration administered by the AAA in accordance with its Commercial Arbitration Rules. All such mediations and arbitrations will be held in Mahoning County, Ohio.
Notwithstanding the foregoing, any party may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Also, any party, without waiving any remedy under this Agreement, may seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, prior to the appointment of an arbitrator (or pending the arbitrator’s determination of the merits of the controversy).
b. A single arbitrator shall determine the arbitration. The arbitrator shall be selected in accordance with the Commercial Arbitration Rules of the AAA, provided that the arbitrator ultimately selected must be a member a of the bar of the State of Ohio actively engaged in the practice of law for at least ten (10) years.
c. Consistent with the expedited nature of arbitration, each party involved in the dispute will: (i) upon the written request of the other party, promptly provide that party with copies of documents relevant to the issues raised by any Claim before the arbitrator; and (ii) be allowed to complete a single deposition of another party or a witness, as the case may be. Any dispute regarding discovery or the relevance or scope thereof, shall be determined by the arbitrator, which determination shall be conclusive. All discovery shall be completed within forty-five (45) days following the appointment of the arbitrator.
d. The arbitrator’s award shall: (i) be in writing; (ii) be signed by the arbitrator; (iii) include a statement regarding the reasons for the disposition of any Claims; and (iv) include specific findings of fact.
e. Except as may be required by law, neither party nor the arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of both parties.
f. Within thirty (30) days after receipt of any award (which shall not be binding if an appeal is taken), any party may notify the AAA of his or her intention to appeal said award(s) to a second arbitrator, selected in the same manner as the initial arbitrator. The appeal arbitrator shall be entitled to adopt the initial award as his own, modify the initial award or substitute his own award for the initial award. The appeal arbitrator shall not modify or replace the initial award except for errors of law or because of clear and convincing factual errors. The award of the appeal arbitrator shall be final and binding and judgment may be entered by a court having jurisdiction thereof.
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