MASTER EQUIPMENT LEASE AGREEMENTEquipment Lease Agreement |
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Search Equipment Lease Agreement by:
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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1. |
LEASE OF EQUIPMENT |
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.
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2. |
TERM AND RENT |
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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POSSESSION AND QUIET ENJOYMENT; PERSONAL PROPERTY |
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. |
DISCLAIMER OF WARRANTIES |
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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REPRESENTATIONS, WARRANTIES AND COVENANTS |
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.
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6. |
INDEMNITY |
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. |
TAXES AND OTHER CHARGES |
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 Ma






