Exhibit 10.39
[GRAPHIC APPEARS HERE]
MASTER EQUIPMENT LEASE AGREEMENT No.
36151
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LESSOR:
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FLEET
CAPITAL CORPORATION
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LESSEE:
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PACER
INTERNATIONAL, INC.
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a Rhode Island corporation
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a Tennessee Corporation
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Address:
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One Financial Plaza
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Address:
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2300 Clayton Road, #1200
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Providence, Rhode Island 02903-2448
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Concord, CA 94520
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Subject to the terms and conditions
set forth herein (the “ Master Lease ”) and in
any Lease Schedule incorporating the terms of this Master Lease
(each, a “ Lease Schedule ”), Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the items
and units of personal property, fixtures and other property
described in each such Lease Schedule, together with all
replacements, parts, additions, accessories and substitutions
therefor (collectively, the “ Equipment ”). As
used in this Lease, the term “ item of Equipment
” shall mean each functionally integrated and separately
marketable group or unit of Equipment subject to this Lease. Each
Lease Schedule shall constitute a separate, distinct and
independent lease of Equipment and contractual obligation of
Lessee. References to “ the Lease ,” “
this Lease ,” “ any Lease ,”
“ hereof ” or “ hereunder ”
shall mean and refer to any Lease Schedule which incorporates the
terms of this Master Lease, together with all exhibits, addenda,
schedules (except other Lease Schedules), certificates, riders and
other documents and instruments executed and delivered in
connection with such Lease Schedule or this Master Lease, all as
the same may be amended or modified from time to time. The
Equipment is to be delivered at the location specified or referred
to in the applicable Lease Schedule. The Equipment shall be deemed
to have been accepted by Lessee for all purposes under this Lease
as of the Acceptance Date upon Lessor’s acceptance and
execution of an Acceptance Certificate with respect to such
Equipment, executed by Lessee after receipt of all other
documentation required by Lessor with respect to such Equipment.
Lessor shall not be liable or responsible for any failure or delay
in the delivery of the Equipment to Lessee for whatever reason. As
used in this Lease, “ Acquisition Cost ” shall
mean (a) with respect to all Equipment subject to a Lease Schedule,
the amount set forth as the Acquisition Cost in the Lease Schedule
and the Acceptance Certificate applicable to such Equipment; and
(b) with respect to any item of Equipment, the total amount of all
vendor or seller invoices (including Lessee invoices, if any) for
such item of Equipment, together with all acquisition fees and
costs of delivery, installation, testing and related services,
accessories, supplies or attachments procured or financed by Lessor
from vendors or suppliers thereof (including items provided by
Lessee) relating or allocable to such item of Equipment (“
Related Expenses ”). As used in this Lease with
respect to any Equipment, the terms “ Acceptance Date
,” “ Rental Payment(s) ,” “
Rental Payment Date(s) ,” “ Rental Payment
Numbers ,” “ Rental Payment Commencement
Date ,” “ Lease Term ”, “
Lease Term Commencement Date “ and “Renewal
Term”: shall have the meanings and values assigned to them in
the Lease Schedule, the Acceptance Certificate and any Riders
applicable to such Equipment.
The Lease Term for any Equipment
shall be as specified in the applicable Lease Schedule. Rental
Payments shall be in the amounts and shall be due and payable as
set forth in the applicable Lease Schedule. Lessee shall, in
addition, pay interim interest to Lessor on a pro-rata, per-diem
basis from the date of the payment of the Acquisition Cost of the
Equipment to the Lease Term Commencement Date set forth in the
applicable Acceptance Certificate, payable on such Lease Term
Commencement Date. If any rent or other amount payable hereunder
shall not be paid within 10 days of the date when due, Lessee shall
pay as an administrative and late charge an amount equal to 5% of
the amount of any such overdue payment. All payments to be made to
Lessor shall be made to Lessor in immediately available funds at
the address shown above or at such other place, as Lessor shall
specify in writing. THIS IS A NON-CANCELABLE, NON-TERMINABLE LEASE
OF EQUIPMENT FOR THE ENTIRE LEASE TERM PROVIDED IN EACH LEASE
SCHEDULE HERETO.
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3.
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POSSESSION
AND QUIET ENJOYMENT; PERSONAL PROPERTY
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No right, title or interest in the
Equipment shall pass to Lessee other than the right to maintain
possession and use of the Equipment for the Lease Term (provided no
Event of Default has occurred) free from interference by any person
lawfully claiming by, through, or under Lessor. The Equipment shall
always remain personal property even though the Equipment may
hereafter become attached or affixed to real property. Lessee
agrees to give and record such notices and to take such other
action at its own expense as may be necessary to prevent any third
party (other than anyone claiming by, through or under Lessor,
including but not limited to an assignee of Lessor) from acquiring
or having the right under any circumstances to acquire any interest
in the Equipment, this Lease or any additional collateral given in
connection with the Lease.
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4.
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DISCLAIMER
OF WARRANTIES
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LESSOR IS NOT THE MANUFACTURER OR
SUPPLIER OF THE EQUIPMENT, NOR THE AGENT THEREOF, AND MAKES NO
EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY MATTER
WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY OF
THE EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS DESIGN OR
CONDITION, ITS CAPACITY OR DURABILITY, THE QUALITY OF THE MATERIAL
OR WORKMANSHIP IN THE MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT, OR
THE CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND
SPECIFICATIONS OF ANY PURCHASE ORDER RELATING THERETO, OR PATENT
INFRINGEMENTS, AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY.
LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS OR SERVICE TO THE
EQUIPMENT, DEFECTS THEREIN OR FAILURES IN THE OPERATION THEREOF.
Lessee has made the selection of each item of Equipment and the
manufacturer and/or supplier thereof based on its own judgment and
expressly disclaims any reliance upon any statements or
representations made by Lessor. For so long as no Event of Default
has occurred and is continuing, Lessee shall be the beneficiary of,
and shall be entitled to, all rights under any applicable
manufacturer’s or vendor’s warranties with respect to
the Equipment, to the extent permitted by law. Lessor shall
cooperate with Lessee with respect to the resolution of any claims
by Lessee under such warranties, in good faith and by appropriate
proceedings at Lessee’s expense.
If the Equipment is not delivered,
is not properly installed, does not operate as warranted, becomes
obsolete, or is unsatisfactory for any reason whatsoever, Lessee
shall make all claims on account thereof solely against the
manufacturer or supplier and not against Lessor, and Lessee shall
nevertheless pay all rentals and other sums payable hereunder.
Lessee acknowledges that neither the manufacturer or supplier of
the Equipment, nor any sales representative or agent thereof, is an
agent of Lessor, and no agreement or representation as to the
Equipment or any other matter by any such sales representative or
agent of the manufacturer or supplier shall in any way affect
Lessee’s obligations hereunder.
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5.
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REPRESENTATIONS, WARRANTIES AND
COVENANTS
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Lessee represents and warrants to
and covenants with Lessor that:
(a) Lessee has the form of business
organization indicated above, Lessee’s chief executive office
and address for purpose of notices hereunder is as listed above,
and Lessee is duly organized and existing in good standing under
the laws of the state listed in the caption of this Master Lease
and is duly qualified to do business wherever necessary to carry on
its present business and operations and to own its property, and
Lessee shall provide written notice to Lessor not less than thirty
(30) days prior to any contemplated change in Lessee’s name,
its form, its state of organization, its organizational
identification number issued by its state of organization or its
chief executive office or notice address; (b) this Lease has been
duly authorized by all necessary action on the part of Lessee
consistent with its form of organization, does not require any
further shareholder, member, manager or partner approval, does not
require the approval of, or the giving notice to, any federal,
state, local or foreign governmental authority and
does not contravene any law binding on Lessee,
any provision of its certificate or articles of incorporation or
by-laws, or certificate or articles of organization or operating
agreement, or partnership certificate or agreement or any other
agreement among the shareholders, members or partners of Lessee, or
any agreement, indenture, or other instrument to which Lessee is a
party or by which it may be bound; (c) this Lease has been duly
executed and delivered by authorized officers, members, managers or
partners of Lessee and constitutes a legal, valid and binding
obligation of Lessee enforceable in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the
rights of creditors generally, and except as such enforceability
may be subject to the application of equitable principles, legal or
equitable; (d) Lessee has not and will not, directly or indirectly,
create, incur or permit to exist any lien, encumbrance, mortgage,
pledge, attachment or security interest on or with respect to the
Equipment or this Lease (except for tax or repairmen’s liens
for amounts not yet due and payable or being contested in good
faith, as long as there is no material risk of forfeiture with
respect to said liens, and except those of persons claiming by,
through or under Lessor [collectively, the “Permitted
Liens”]); (e) the Equipment will be used solely in the
conduct of Lessee’s business, and not for personal, family or
household use; (f) there are no pending or threatened actions or
proceedings before any court or administrative agency which
materially adversely affect Lessee’s financial condition or
operations, and all credit, financial and other information
provided by Lessee or at Lessee’s direction is, and all such
information hereafter furnished will be, true, correct and complete
in all material respects; (g) Lessor has not selected, manufactured
or supplied the Equipment to Lessee and has acquired any Equipment
subject hereto solely in connection with this Lease and Lessee has
received and approved the terms of any purchase order or agreement
with respect to the Equipment; and, (h) Lessee shall provide
written notice to Lessor promptly upon Lessee becoming aware of any
alleged violation of applicable law relating to the Equipment or
this Lease, which has, or is likely to have, a material adverse
affect on Lessee’s ability to discharge its obligations under
this Lease or the value or utility of the Equipment.
Lessee assumes the risk of liability
for, and hereby agrees to indemnify and hold safe and harmless, and
covenants to defend, Lessor, its employees, servants and agents
from and against: (a) any and all liabilities, losses, damages,
claims and expenses (including legal expenses of every kind and
nature) arising out of the manufacture, purchase, shipment and
delivery of the Equipment to Lessee, acceptance or rejection,
ownership, titling, registration, leasing, possession, operation,
use, return or other disposition of the Equipment, including,
without limitation, any liabilities that may arise from patent or
latent defects in the Equipment (whether or not discoverable by
Lessee), any claims based on absolute tort liability or warranty
and any claims based on patent, trademark or copyright
infringement; (b) any and all loss or damage of or to the
Equipment; and (c) any obligation or liability to the manufacturer
or any supplier of the Equipment arising under any purchase orders
issued by or assigned to Lessor, except, following Lessee’s
acceptance of the Equipment and Lessor’s receipt of all
required Lease documentation and satisfaction of all conditions
precedent therefor, payment of the Acquisition Cost thereof.
Notwithstanding the foregoing, Lessee shall not be required to
indemnify any person or entity for any of the claims set forth
above (collectively, the “Claims”) to the extent that
such Claims arise from (i) the gross negligence or willful
misconduct of such person or entity; (ii) any taxes, fees and other
governmental charges (it being acknowledged and agreed that
Lessee’s obligations with respect to taxes, fees and other
governmental charges are set forth in Section 7 of this Lease) or
to any penalty or other liability arising from a “prohibited
transaction” described in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”); (iii) any Claims attributable to any liens,
encumbrances, mortgages, pledges, attachments or security interests
on or with respect to the Equipment or this Lease created by,
through or under Lessor; (iv) any claims, other than a Claim set
forth above, resulting from an assignment by Lessor pursuant to
Section 16 of this Lease (except an assignment in connection with
the exercise by Lessor of its remedies under Section 9 of this
Lease upon the occurrence of an Event of Default) or (v) any Claims
arising in connection with any Equipment after such Equipment has
been returned by Lessee to Lessor in the condition required by
Section 18 following the expiration or earlier termination of the
Lease Term for such Equipment; provided, however, nothing contained
herein shall relieve Lessee of its obligation to indemnify a person
or entity entitled to an indemnity for Claims which relate to or
arise out of facts or conditions giving rise to any Claim which
occurred or were in existence prior to such return. The foregoing
indemnities and covenants set forth in this Section 6 shall
continue in full force and effect and shall survive the expiration
or earlier termination of the Lease.
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7.
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TAXES AND
OTHER CHARGES
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Lessee represents, warrants and
covenants that: (a) Lessee (i) shall use the Equipment, or cause
the Equipment to be used, either (x) within the United States or
(y) “in the transportation of property to and from the United
States” within the meaning of Section 168(g)(4)(E) of the
Internal Revenue Code of 1986, as amended from time to time (the
“Code”), and (ii) shall maintain records to demonstrate
that the Equipment is used in accordance with subclause (i) during
each calendar year during the term of this Lease (which records
shall be made available to Lessor as and when reasonably requested
by Lessor); and (b) the Equipment is, and will be used by Lessee so
as to remain, property eligible for the MACRS Deductions. As used
herein, “MACRS Deductions” shall mean the deductions
under Section 167 of the Code, determined in accordance with the
modified Accelerated Cost Recovery System with respect to the Total
Cost of any item of the Equipment using the accelerated method set
forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on
the date of this Lease for property assigned to the 5-year class of
property and taking into account the special depreciation allowance
and basis adjustment under Section 168(k)(1) of the
Code.
Lessee agrees to comply with all
laws, regulations and governmental orders related to this Lease and
to the Equipment and its use or possession, and to pay when due,
and to defend and indemnify Lessor against liability for all
license fees, assessments, and sales, use, property, excise,
privilege and other taxes (including any related interest or
penalties) or other charges or fees now or hereafter imposed by any
governmental body or agency (“ Taxes ”) upon any
Equipment, or with respect to the manufacturing, ordering,
shipment, purchase, ownership, delivery, installation, leasing,
operation, possession, use, return, or other disposition thereof or
the rentals hereunder (other than Excluded Taxes [as defined
below]). Any fees, taxes or other lawful charges paid by Lessor
upon failure of Lessee to make such payments shall at
Lessor’s option become immediately due from Lessee to Lessor.
“Excluded Taxes” means any of the following
Taxes: (i) any Tax on or measured by the net income of Lessor; (ii)
any Tax in the nature of a franchise tax or Tax on or with respect
to the transaction of business by Lessor imposed by any taxing
authority in a jurisdiction in which Lessor has its place of
organization or a place of business; (iii) any Tax imposed on or
with respect to any sale, assignment, transfer or other disposition
by Lessor of any interest in the Equipment or any Lease unless
caused by an event of loss described in the last sentence of
Section 12 or by Lessor’s exercise of remedies upon an Event
of Default; (iv) any fine, penalty, interest or addition to Tax
resulting from (A) the failure of Lessor to file any tax return or
other tax document, or to pay any tax, in a timely and proper
manner unless such failure is caused by the failure of Lessee to
perform its obligations under the Lease or (B) the failure of
Lessor to comply with its obligations under Sections 6011, 6111 or
6112 of the Code (as defined below) and the regulations thereunder
or under any corresponding state law; (v) any Tax to the extent
incurred or increased as a result of the gross negligence or
willful misconduct of Lessor or any transaction between Lessor (or
any Affiliate of Lessor [as defined below]), and a third party for
financing Lessor’s investment in the Equipment; (vi) in the
case of a Lessor that acquires its interest in the Equipment after
the Acceptance Date thereof, Taxes to the extent exceeding the
Taxes for which Lessee would have been required to indemnify the
original Lessor if the original Lessor continued to be the Lessor;
(vii) any United States federal or state withholding Tax that
applies to any rent or other amount payable under the Lease due to
the status of Lessor (or any individual or entity that owns
directly or indirectly an interest in Lessor) as other than a
“United States person”, as defined in Section
7701(a)(30) of the Code; (viii) any Tax arising from any event, or
imposed with respect to any period occurring, after termination of
the Lease and Lessee’s return of the Equipment in accordance
with the terms of this Lease (except in the event of Lessor
exercising its remedies under Section 9 of this Lease upon the
occurrence of an Event of Default); and (ix) any Tax arising from a
“prohibited transaction” described in Section 406 of
ERISA or Section 4975 of the Code. If Lessor receives written
notice from any taxing authority (a “ Tax Claim
”) asserting against Lessor liability for a Tax for which
Lessee may be required to indemnify Lessor pursuant to this
paragraph, Lessor shall promptly provide written notice thereof to
Lessee. Provided that no Event of
Default has occurred and is continuing, upon
Lessee’s written request (received not more than 30 days
following Lessee’s receipt of Lessor’s written notice)
and concurrent written agreement to pay for all costs and expenses
of conducting the requested contest, then Lessor shall contest such
Tax Claim in such forum as Lessor shall select, considering in good
faith such request as Lessee may make concerning the most
appropriate forum in which to proceed.
If any Lease Schedule is denominated
as a “True Lease Schedule,” then, with respect to the
Equipment set forth on such True Lease Schedule, Lessee and Lessor
anticipate that Lessor shall be entitled to the following tax
benefits (the “ Tax Benefits ”): Lessor will be
entitled to cost recovery deductions under Section 168 of the
Internal Revenue Code of 1986, as amended (the “ Code
”), using a 200% declining balance method of depreciation
switching to the straight line method for the first taxable year
for which such method will yield larger depreciation deductions,
and assuming a half-year convention and zero salvage value, for the
applicable recovery period for such Equipment as set forth in the
True Lease Schedule with respect to such Equipment, taking into
account the special depreciation allowance and basis adjustment
under Section 168(k)(1) of the Code. With respect to Equipment set
forth on any such True Lease Schedule, Lessee agrees that: Lessee
will not claim that Lessee is the owner of the Equipment subject
thereto or that Lessee is otherwise entitled to all or any of the
Tax Benefits; Lessee will not take any action inconsistent with
Lessor’s anticipated Tax Benefits; and the Equipment will not
constitute “public utility property” or
“tax-exempt use property” within the meaning of
Sections 168(i)(10) or 168(h) of the Code. If, as the result of any
act, omission and/or misrepresentation of Lessee, there shall be a
loss, disallowance, recapture or delay in claiming all or any
portion of the Tax Benefits with respect to the Equipment, or there
shall be included in Lessor’s gross income for Federal, state
or local income tax purposes any amount on account of any addition,
modification or improvement to or in respect of any of the
Equipment made or paid for by Lessee (any such loss, disallowance,
recapture, delay or inclusion being herein called a “ Tax
Loss ”), Lessee shall reimburse Lessor for such Tax Loss
in the manner provided for in this Section 7. Lessee shall not have
any liability to Lessor for indemnification hereunder for any Tax
Loss with respect to a Lease resulting from one or more of the
following: (i) any voluntary transfer or other disposition by
Lessor of any of its interests in the Lease or the Equipment; (ii)
Lessor’s failure to claim or follow the proper procedure in
claiming any Tax Benefit in a proper and timely manner; (iii)
Lessor’s failure to have sufficient income to utilize any Tax
Benefit; (iv) any involuntary disposition of the Equipment
resulting from (A) any bankruptcy or insolvency of the Lessor (or
any Affiliate of Lessor) or (B) Lessee’s exercise of an
option to purchase the Equipment; (v) any event requiring Lessee to
pay an amount determined by reference to the Stipulated Loss Value
(as defined below); (vi) the application of Section 168(d)(3) of
the Code; and, (vii) the failure of Lessor to comply with its
notification and contest obligations set forth in the following
paragraph of this Section 7 of this Lease.
Subject to Lessee’s contest
rights hereunder, a Tax Loss shall be deemed to have occurred if
either (a) a deficiency shall have been proposed or a claim has
been made that a Tax Loss has so occurred by the Internal Revenue
Service or other taxing authority having jurisdiction, or (b)
independent tax counsel (“ Tax Counsel ”)
selected by Lessor and acceptable to Lessee (which acceptance shall
not be unreasonably withheld or delayed by Lessee) has rendered an
opinion to Lessor to the effect that there is no reasonable basis
for claiming that such Tax Loss has not occurred. Lessor shall
promptly provide written notice to Lessee that a Tax Loss has
occurred. Provided that no Event of Default has occurred and is
continuing (unless Lessee provides collateral in form and amount
reasonably satisfactory to Lessor to secure Lessee’s
obligations under Section 7 of this Lease with respect to the
contested Tax), upon Lessee’s written request (received not
more than 30 days after Lessee’s receipt of Lessor’s
written notice to Lessee of the occurrence of such Tax Loss) and
concurrent written agreement to pay Lessor for any liability
associated with such Tax Loss in accordance with the provisions
hereof and to pay for all costs and expenses as and when the same
shall become due related to the contest of all or any portion of
any such Tax Loss (a “ Contested Matter ”), and
if in the opinion of Tax Counsel a reasonable basis for the contest
of such Contested Matter exists, then Lessor shall pursue the
contest of such Contested Matter in such forum as Lessor shall
select, considering in good faith such request as Lessee may make
concerning the most appropriate forum in which to proceed. Lessor
shall not be obligated to take any such legal or other appropriate
action with respect to a Contested Matter if Lessor notifies Lessee
in writing at any time that Lessor waives its right to any
indemnity payment from Lessee hereunder with respect to such
Contested Matter. The action to be taken may, in Lessor’s
sole discretion, be commenced prior to making payment of any tax,
interest and/or penalty attributable to such Contested Matter (a
“ Tax Payment ”) or after making such Tax
Payment and then seeking a refund and, if the Tax that is the
subject of such Contested Matter is a recurring item, Lessor shall
waive its rights to indemnification for such Tax with respect to
any other reporting period to the extent that failure to contest
such Tax effectively precludes a contest of such Tax. If Lessor
takes such action prior to making such Tax Payment, the indemnity
amounts payable under this Section 7 with respect to the Contested
Matter need not be paid by Lessee while such action is pending,
provided that Lessee shall pay the costs and expenses relating to
such action as and when the same shall become due. In such case, if
the Final Determination (hereinafter defined) of a Contested Matter
shall be adverse to Lessor, the indemnity amounts payable under
this Section 7 with respect to a Contested Matter shall be computed
by Lessor as of the date of such Final Determination, Lessor shall
notify Lessee in writing of such computation, and Lessee shall make
the indemnity payments required in accordance with this Section 7.
If Lessor determines to make such Tax Payment prior to pursuing a
Contested Matter and to then seek a refund, Lessee will advance to
Lessor, as an interest-free loan or loans, and without any
additional net-after-tax cost to Lessor, amounts equal to the
amount of such Tax Payment attributable to such Contested Matter.
If Lessor seeks a refund after making such Tax Payment, and if the
Final Determination shall be in favor of Lessor, (i) no further
payments shall be due hereunder in respect of such Contested Matter
(or an appropriat