Exhibit 10.2
MASTER EQUIPMENT LEASE
AGREEMENT
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LESSOR:
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Relational,
LLC
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ADDRESS:
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3701 Algonquin
Road, Suite 600
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Rolling
Meadows, IL 60008
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Tel: (847) 818-1700
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LESSEE:
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ITC^DeltaCom, Inc., a Delaware Corporation and
DeltaCom, Inc., an Alabama Corporation, as Co-Lessees, Jointly and
Severally
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DATE: October
23, 2006
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ADDRESS:
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7037 Old
Madison Pike
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Huntsville, AL
35806
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Lessee agrees to lease from Lessor
the Equipment described in each related Schedule which is executed
pursuant hereto. Each Schedule together with this Master Equipment
Lease Agreement ( “Master Lease” ) will
constitute a separate lease for the Equipment subject thereto. In
the event of any conflict between the Master Lease and any
Schedule, the terms of the Schedule will control.
SECTION 1.
DEFINITIONS.
“ Affiliate
” means Lessee’s parent, or an entity in which Lessee
or its parent own a controlling interest including, without
limitation, all present affiliates of Lessee listed in Exhibit A
hereto, if applicable.
“ Base Rent
” means the periodic basic rent due as set forth on a
Schedule, or, where lease rate factors are shown on a Schedule, the
periodic basic rent due will be the product of the Equipment cost
and the applicable lease rate factor.
“ Base Term
” means the full
number of consecutive calendar months set forth on the Schedule
commencing on the Base Term Date (except that all references herein
to month(s) or monthly will be deemed to mean quarter(s) or
quarterly if the Schedule specifies that Base Rent is paid
quarterly).
“ Base Term Date
” means the first
day of the first full calendar month following the Date of
Acceptance for all Units of Equipment to be leased under a
Schedule.
“ Casualty Value
” will be determined for each Unit of Equipment by
multiplying the percentage stated opposite the month of the Base
Term by the Equipment cost as stated in the applicable Certificate
of Acceptance, interpolating values if necessary, as set forth in
the Casualty Value table included with each Schedule.
“Certificate of
Acceptance ” means an executed certificate signed by an
authorized signatory of Lessee confirming the Date of
Acceptance.
“ Date of
Acceptance ” means the date of acceptance of a Unit
of Equipment by Lessee or such other date if specified on the
Schedule.
“ Equipment
” means the property and other Soft Costs described on a
Schedule, including without limitation, replacements, additions,
attachments, wiring, software, and accessories incorporated
therein.
“ Event of
Default ” means the occurrence of an event described
in Section 10 hereof.
“ Event of Loss
” means the irreparable loss, damage, destruction, or theft
to a Unit of Equipment or other event which renders a Unit of
Equipment unfit or unavailable for use for any reason.
“ Guarantor
” means a parent company, affiliate or other entity or person
who has furnished a guaranty of Lessee’s obligations under
the Master Lease.
“ Impositions
” means all taxes, fees, expenses and similar charges,
including fees associated with the recycling of the Equipment, or
other environmental or similar provisions issued by a governmental
entity, which are assessed, imposed, incurred, or payable from the
sale, staging, delivery, return, or disposal of the Equipment,
excepting only taxes measured solely by the net income of Lessor or
any franchise tax upon Lessor measured by Lessor’s capital,
capital stock or net worth.
“ Lessor’s
Assignee ” means an entity to whom Lessor has
assigned or sold its right, title or interest in the Equipment, the
Master Lease or a Schedule.
“ Manufacturer
” means the original equipment manufacturer or other vendor
of the Equipment.
“ Overdue Rate
” means the lesser of one and one-half percent
(1.5%) per month or the maximum rate permitted by
law.
“ Schedule
” means an equipment schedule which incorporates all of the
terms and conditions of this Master Lease.
“ Soft Costs
” means non-tangible equipment costs, including without
limitation, finance costs, freight, Impositions, in-transit
insurance, installation, deinstallation, maintenance, and software
license fees.
“ UCC ”
means the Uniform Commercial Code as adopted in the state referred
to in Section 15(D).
“ Unit ”
means an individual item of Equipment.
SECTION 2. QUIET ENJOYMENT;
ASSIGNMENT OF WARRANTIES; AFFILIATE USE. Provided that no Event of Default has occurred
and is continuing, Lessee will enjoy quiet possession and use of
the Equipment without interference by Lessor or Lessor’s
Assignee. To the extent assignable, Lessor hereby assigns to Lessee
all warranty rights which Lessor may have received from the
Manufacturer of the Equipment, and Lessor will reasonably cooperate
with Lessee in the enforcement of such warranties by Lessee. Any
Affiliate may enter into a Schedule hereto, and the above-named
Lessee will be jointly and severally responsible with the Affiliate
for the obligations thereunder. Such Affiliate will be considered
an additional Lessee for the purposes of such Schedule.
SECTION 3. TERM.
On the Date of Acceptance, Lessee
will be bound to its obligations for each Unit of Equipment. Each
Schedule will continue through the Base Term and thereafter until
terminated by either party upon at least ninety (90) days
prior written notice to the other party, which notice may not be
withdrawn without the consent of the other party. Lessor may from
time to time order Equipment directly from the Manufacturer on
behalf of Lessee. In such event, if the Manufacturer requires
payment earlier than Lessee’s execution and delivery of the
required lease documentation, including, without limitation, the
Schedule and Certificate of Acceptance, Lessor will submit such
payment to the Manufacturer provided that Lessee agrees to pay
interest on such payment at the Overdue Rate prorated on a per diem
basis from the date Lessor is required to advance payment until the
Date of Acceptance or other applicable date upon which Base Rent
will first become due. If all required lease documentation is not
executed by Lessee and delivered to Lessor within twenty-one
(21) days after the earlier of the delivery of the Equipment
or the advancement of funds by Lessor or such later date as the
parties may agree in writing, Lessee will promptly upon request
repay Lessor any amounts advanced by Lessor to the Manufacturer,
together with the accrued per diem interest from the date of
payment by Lessor until the date of Lessee’s repayment, and
the Schedule will be canceled.
SECTION 4. RENT;
TAXES. The Base Rent for
the Equipment will commence on the Base Term Date and will be due
and payable without notice or demand at Lessor’s address set
forth above, or such other
address as Lessor may designate in writing, and
on the same day of each month until the Equipment is returned or
purchased by Lessee as provided herein. In addition to Base Rent,
Lessee will pay one-thirtieth (1/30) of the Base Rent (or
one-ninetieth (1/90) of the Base Rent if paid quarterly) as
additional pro rata rent from the Date of Acceptance until the Base
Term Date payable on the Base Term Date. Lessor will report and
remit to the appropriate taxing authority, and Lessee agrees to
reimburse Lessor for, all Impositions. If Lessor pays any
Impositions, Lessee will reimburse Lessor upon receipt of
Lessor’s invoice for any such payment and any expenses
incurred in the preparation and filing of any tax returns relating
to such Impositions. Lessee’s obligation to pay all amounts
due and to become due under any Schedule will be absolute and
unconditional and will not be subject to any abatement, reduction,
defense, counterclaim, set-off, or recoupment, including without
limitation, any present or future claim against Lessor,
Manufacturer, or any other person or entity for any cause
whatsoever. In furtherance of the foregoing, Lessee agrees that
each Schedule constitutes a “finance lease” solely for
the purposes of Article 2A of the UCC, and waives any other law,
present or future, which permits Lessee to suspend or reduce
payment. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE
HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A
LESSEE BY SECTIONS 2A-401 AND 2A-402, AND SECTIONS 2A-508 THROUGH
2A-522 OF THE UCC, PROVIDED HOWEVER, THAT THE FOREGOING WAIVER WILL
IN NO EVENT IMPAIR OR DIMINISH ANY RIGHT OR REMEDY OTHERWISE
CONFERRED UPON LESSEE HEREUNDER. Lessee hereby reserves, and
Lessor will remain fully responsible for, all available money
damages consistent herewith arising from a default of
Lessor’s obligations hereunder, which Lessee will pursue in
an independent action brought within two (2) years after the
cause of action first accrued. Any payment of Base Rent or other
amount due under a Schedule which is not paid when due will accrue
interest at the Overdue Rate.
SECTION 5. USE.
Lessee will not, without the prior
written consent of Lessor: (i) use the Equipment contrary to
applicable law or regulation; (ii) remove a Unit from the
location designated on the Schedule except if such Unit primarily
functions as portable, provided such Unit will not be removed from
the continental United States; or (iii) permit any alteration,
addition to, or lien or claim upon the Equipment other than the
Manufacturer’s approved engineering changes, which Lessee
will permit the prompt installation thereof. Lessee will, at its
expense, maintain the Equipment under a standard maintenance
contract with the Manufacturer (or other entity authorized by
Lessor) and in good working order and appearance in accordance with
the Manufacturer’s specifications and anticipated use of the
Equipment. Upon request, Lessee will grant Lessor, Lessor’s
Assignee or their agents, access to the Equipment and all records
relating to the use and maintenance thereof, during normal business
hours and subject to Lessee’s reasonable security
requirements. In the event Lessee purchases any Unit, Lessor will
assign to Lessee any rights it may have in the software contained
therein, except that such transaction will not be construed as a
sale of such software; conversely, if Units are returned to Lessor,
Lessee will so assign to, or replace for Lessor, any rights in any
unexpired warranty, maintenance or software. Lessee will pay all
costs related to delivery of the Equipment to and from Lessee. Soft
Costs will be included in the Base Rent at the request of Lessee if
such Soft Costs are included in the purchase price from the
Manufacturer.
SECTION 6. LOSS;
INSURANCE. Effective upon
delivery and continuing until the Equipment is returned or
purchased, Lessee assumes the risk and will be responsible for any
Event of Loss with respect to any Unit of the Equipment. Lessee
will provide Lessor with written notice of the occurrence of an
Event of Loss within fifteen (15) days following such
occurrence. The Schedule will continue in full force and effect
without abatement of Base Rent and Lessee will ascertain from the
Manufacturer whether such Unit can be repaired, and if so, cause
such Unit to be promptly repaired. If the Event of Loss involves
loss beyond repair or confiscation by governmental activity, Lessee
will promptly pay to Lessor the Casualty Value attributable to such
Unit, including all other amounts then due and payable by Lessee to
Lessor pertaining to such Unit (including, without limitation,
unbilled property taxes, if any) whereupon Lessee’s
obligation to pay further Base Rent for such Unit will cease.
Lessee will, at its sole expense, cause the Equipment to be insured
against all risks of loss or damage for not less than the Casualty
Value, and will carry comprehensive general liability insurance in
amounts of not less than $1,000,000.00 per occurrence, covering the
Lessee, the Equipment and its use. After the date of shipment of
the Equipment, Lessee will cause Lessor to be promptly provided
with a certificate of insurance, in a form reasonably acceptable to
Lessor. All policies for such insurance will name Lessor and
Lessor’s Assignee as loss payees and additional insureds as
their interest may appear, and will provide Lessor with not less
than thirty (30) days prior written notice of cancellation or
material alteration. The proceeds of such insurance will be applied
to the replacement or repair of the Equipment, or to payment of the
Casualty Value, as the case may be. Lessee hereby appoints Lessor
as Lessee’s attorney-in-fact to make claims for, receive
payments of, and execute and endorse all documents, checks or
drafts for, loss or damage under any such insurance
coverage.
SECTION 7. RETURN.
The Equipment will be deemed to have
been returned when Lessee will have (i) given the advance
written notice specified in Section 3 hereof,
(ii) deinstalled, inspected and properly packed each Unit in
accordance with the Manufacturer’s recommendations and any
return instructions generally furnished by Lessor, and
(iii) delivered all Units to Lessor together with all
documentation, accessories and peripherals, in the same good
operating condition, repair and appearance as when accepted,
ordinary wear and tear excepted, and certified eligible for the
Manufacturer’s maintenance. Lessee will return each Unit at
such location as Lessor will designate within the continental U.S.
or Ontario, Canada. In the case of Equipment returned to Ontario,
Canada, Lessor will be responsible for all cross-border
charges.
SECTION 8. TITLE.
Title to the Equipment will remain
in, and a security interest therein is hereby granted to, Lessor or
Lessor’s Assignee exclusively. All accessions, substitutions,
replacement parts and additions (including, without limitation, all
feature additions or model changes, as those terms are defined by
the Manufacturer) which are incorporated in or affixed to the
Equipment will be the personal property of Lessor. Title to any
software attached to the Equipment will remain with the applicable
licensor(s). Lessee will not acquire any rights to any such
software except to the extent Lessee acquires the right to use the
software as an end-user. It is Lessee’s responsibility to
obtain any required license from the licensor. Lessee will
immediately notify Lessor of any pending or threatened claim of,
and at Lessee’s expense prot