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Exhibit 10.28
MELA IV
(01/99)
MASTER EQUIPMENT LEASE AGREEMENT
DATED JUNE 24, 2004
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LESSEE:
WESTERN DIGITAL TECHNOLOGIES, INC.
LESSOR: CIT
TECHNOLOGIES CORPORATION,
d/b/a CIT SYSTEMS LEASING
STREET ADDRESS: 20511 Lake Forest Drive
ADDRESS: 2285 Franklin
Road
Bloomfield Hills, MI
48302
CITY/STATE/ZIP: Lake Forest, CA 92630
LEASE
NUMBER:
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1.
AGREEMENT.
Lessor agrees to lease to Lessee and Lessee agrees to
lease from Lessor the equipment (Equipment)
described in any schedule (Schedule)
that incorporates this Master Equipment
Lease Agreement (Agreement) by
reference. A Schedule shall incorporate
this Agreement by reference by listing
the above-referenced Lease Number thereon.
Such lease shall be governed by the
terms and conditions of this Agreement, as
well as by the terms and conditions
set forth in the applicable Schedule. Each
Schedule shall constitute an
agreement separate and distinct from this
Agreement and any other Schedule. In
the event of a conflict between the
provisions of this Agreement and a Schedule,
the provisions of the Schedule shall
govern.
2.
ASSIGNMENT
OF PURCHASE DOCUMENTS. Lessee shall execute and deliver
to Lessor a writing acceptable to Lessor
whereby Lessor is assigned all of
Lessee's rights and interest in and to: (a)
the Equipment described in the
applicable Schedule and (b) any purchase
order, contract or other documents
(collectively, Purchase Documents) relating
thereto that Lessee has entered into
with the Seller (as specified in the
applicable Schedule). If Seller is not an
affiliate of Lessor, Lessee shall deliver
to Lessor a writing acceptable to
Lessor whereby Seller acknowledges, and
provides any required consent to, such
assignment. If Lessee has not entered into
any Purchase Document for the
Equipment with Seller, Lessee authorizes
Lessor to act as Lessee's agent to
issue a purchase order to Seller for the
Equipment and for associated matters,
and such purchase order shall be subject to
this Section 2 and all references in
this Agreement to Purchase Documents shall
include such purchase order. By
executing the applicable Schedule, Lessee
represents and warrants that Lessee
either (y) has reviewed, approved and
received a copy of the applicable Purchase
Documents or (z) has been informed by
Lessor (i) of the identity of the Seller,
(ii) that Lessee may have rights under the
Purchase Documents and (iii) that
Lessee may contact Seller for a description
of such rights. The foregoing
information shall not be applicable if the
Equipment specified in the Schedule
is not new equipment being purchased by
Lessor for lease to Lessee.
3.
DELIVERY;
ACCEPTANCE. Lessee shall cause the Equipment to be
delivered, at Lessee's expense, to Lessee
at the Equipment Location (as
specified in the applicable Schedule) and
Lessee shall accept the Equipment upon
the later of (a) the installation, at
Lessee's expense, of the Equipment or (b)
the satisfaction of the acceptance
criteria, if any, specified in the applicable
Purchase Documents. In any event, Lessee
shall evidence its acceptance of the
Equipment and commencement of the lease
with respect thereto by executing and
delivering to Lessor a commencement
certificate (Commencement Certificate) in a
form acceptable to Lessor within five (5)
business days after delivery. By
executing and delivering a Commencement
Certificate to Lessor, (x) Lessee
represents and warrants that it has
selected the Equipment and Seller specified
on the applicable Schedule and (y) Lessee
has irrevocably accepted such
Equipment under lease. Lessee shall
reimburse Lessor for any late payment,
interest on late payment or any other
similar fee or charge imposed by Seller as
the result of Lessee's failure to timely
furnish to Lessor all pertinent lease
documentation.
4.
PURCHASE
OF EQUIPMENT. Provided that no Event of Default (as defined
in Section 18) exists, and no event has
occurred and is continuing that with
notice or the lapse of time or both would
constitute an Event of Default, Lessor
shall be obligated to purchase the
Equipment from Seller and to lease the
Equipment to Lessee if (and only if) Lessor
receives on or before the Latest
Commencement Date (as specified in the
applicable Schedule) the related
Commencement Certificate and Schedule (both
executed by Lessee), and such other
documents or assurances as Lessor may
reasonably request. The foregoing
information shall not be applicable if the
Equipment specified in the Schedule
is not new equipment being purchased by
Lessor for lease to Lessee.
5.
TERM. The
initial term of each Schedule (Initial Term) shall begin
on the date specified as the Commencement
Date on the Commencement Certificate
with respect to such Schedule and shall
continue for the period specified in
such Schedule. Any renewal term of a
Schedule (Renewal Term) shall begin on the
expiration of, as applicable, the Initial
Term or any preceding Renewal Term
(collectively, Term).
6.
RENT; LATE
CHARGES. Lessee shall pay Lessor the first Rental Payment
(as specified in the applicable Schedule)
for the Equipment on or before the
Commencement Date of the applicable
Schedule, and shall pay Lessor the remaining
periodic Rental Payments on or before the
periodic payment dates specified in
the applicable Schedule or, if periodic
payment dates are not specified, on or
before the corresponding day of each
subsequent period during the Initial Term
of the applicable Schedule, regardless of
whether Lessee has received notice
that such Rental Payments are due.
Additionally, if pursuant to this Agreement
or the applicable Schedule the Term is
extended or a renewal option exercised,
Lessee shall also pay all Rental Payments
required with respect thereto. All
Rental Payments will be sent to Lessor's
above-referenced address, or to such
other address as specified by Lessor in
writing. Lessee agrees to pay Lessor
interest at the rate of 1-1/2% per month
(or such lesser rate as is the maximum
rate allowable under applicable law) on any
Rental Payment (or other amount due
hereunder) that is not paid within 10 days
of its due date.
7.
INSURANCE.
At its own expense, Lessee shall provide and maintain the
following insurance: (a) insurance against
the loss or theft of or damage to the
Equipment for the greater of the Stipulated
Loss Value (computed as described in
the applicable Schedule) or full
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replacement value thereof, naming Lessor as
a loss payee; and (b) public
liability and third party property damage
insurance, naming Lessor as an
additional insured. Such insurance shall be
in a form, amount and with companies
reasonably satisfactory to Lessor, shall
contain the insurer's agreement to give
Lessor 30 days' prior written notice before
cancellation or material change
thereof, and shall be payable to Lessor
pursuant to Section 7(a) above,
regardless of any act, omission or breach
by Lessee. Lessee shall deliver to
Lessor the certificates of such insurance
on or before the Commencement Date of
the applicable Schedule, and at such other
times as Lessor may reasonably
request. If no Event of Default exists, and
no event has occurred and is
continuing that with notice or the lapse of
time or both would constitute an
Event of Default, the proceeds of any
insurance required under clause (a) hereof
that have been paid to Lessor shall be
applied against Lessee's obligations to
Lessor under Section 12 hereof.
8.
TAXES.
Lessee shall reimburse Lessor for (or pay directly, but only
if instructed by Lessor) all taxes, fees,
and assessments that may be imposed by
any taxing authority on the Equipment, on
its purchase, ownership, delivery,
possession, operation, rental, return to
Lessor or its purchase by Lessee
(collectively, Taxes); provided, however,
that Lessee shall not be liable for
any such Taxes (whether imposed by the
United States of America or by any other
domestic or foreign taxing authority)
imposed on or measured by Lessor's net
income or tax preference items. Lessee's
obligation includes, but is not limited
to, the obligation to pay all license and
registration fees and all sales, use,
personal property and other taxes and
governmental charges, together with any
penalties, fines and interest thereon, that
may be imposed during the Term of
the applicable Schedule. Lessee is liable
for these Taxes whether they are
imposed upon Lessor, Lessee, the Equipment,
this Agreement or the applicable
Schedule. If Lessee is required by law or
administrative practice to make any
report or return with respect to such
Taxes, Lessee shall promptly advise Lessor
thereof in writing and shall cooperate with
Lessor to ensure that such reports
are properly filed and accurately reflect
Lessor's interest in the Equipment.
Lessor has no obligation to contest any
such Taxes, however Lessee may do so
provided that: (a) Lessee does so in its
own name and at its own expense; (b)
the contest does not and will not result in
any lien attaching to any Equipment
or otherwise jeopardize Lessor's right to
any Equipment; and (c) Lessee
indemnifies Lessor for all expenses
(including legal fees and costs),
liabilities and losses that Lessor incurs
as a result of any such contest.
9.
REPAIRS;
USE; LOCATION; LABELS. Lessee shall: (a) at its own
expense, keep the Equipment in good repair,
condition and working order and
maintained in accordance with the
manufacturer's recommended engineering and
maintenance standards; (b) use the
Equipment lawfully and exclusively in
connection with its business operations and
for the purpose for which the
Equipment was designed and intended; and
(c) without Lessor's prior written
consent, not move the Equipment from the
Equipment Location. If Lessor supplies
Lessee with labels stating that the
Equipment is owned by Lessor, Lessee shall
affix such labels to the Equipment pursuant
to Lessor's instructions.
10.
MAINTENANCE;
INSPECTION; ALTERATIONS. At its own expense, Lessee
shall: (a) [in Lessee's reasonable
discretion,] enter into and maintain a
maintenance agreement for the Equipment
with the manufacturer or other party
acceptable to Lessor; (b) maintain the
Equipment in the same condition as when
delivered, subject only to ordinary wear
and tear, and in good operating order
and appearance; (c) make all alterations or
additions to the Equipment that may
be required or supplied by the Seller, the
manufacturer or which is otherwise
legally necessary; and (d) make no other
alterations or additions to the
Equipment (except for alterations or
additions that will not impair the value or
performance of the Equipment and that are
readily removable without damage to
the Equipment). Any modifications,
alterations or additions that Lessee makes to
the Equipment (except as permitted by
Section 10(d) above) shall become Lessor's
property and shall also be deemed to be
Equipment. Upon request, Lessor, or any
party designated by Lessor, shall have the
right to inspect the Equipment and
Lessee's applicable maintenance agreement
and records at any reasonable time.
11.
PERSONAL
PROPERTY; LIENS AND ENCUMBRANCES; TITLE. The Equipment
shall at all times remain personal
property, notwithstanding that the Equipment,
or any part thereof, may be (or becomes)
affixed or attached to real property or
any improvements thereon. Except for the
interest of Lessor, Lessee shall keep
the Equipment free and clear of all levies,
liens and encumbrances of any nature
whatsoever. Except as expressly set forth
in this Agreement, the Equipment shall
at all times remain the property of Lessor
and Lessee shall have no right, title
or interest therein.
12.
RISK OF LOSS. As
between Lessor and Lessee, Lessee shall bear the
entire risk of loss, theft, destruction or
damage to the Equipment from any
cause whatsoever or requisition of the
Equipment by any governmental entity or
the taking of title to the Equipment by
eminent domain or otherwise
(collectively, Loss). Lessee shall advise
Lessor in writing within 10 days of
any such Loss. Except as provided below, no
such Loss shall relieve Lessee of
the obligation to pay Lessor Rental
Payments and all other amounts owed
hereunder. In the event of any such Loss,
Lessor, at its option, may: (a) if the
Loss has not materially impaired the
Equipment (in Lessor's reasonable
judgment), require Lessee, upon Lessor's
demand, to place the Equipment in good
condition and repair reasonably
satisfactory to Lessor; or (b) if the Loss has
materially impaired the Equipment (in
Lessor's reasonable judgment), require
Lessee, upon Lessor's demand, to pay Lessor
its anticipated return (Lessor's
Return), which shall consist of the
following amounts: (i) the Rental Payments
(and other amounts) then due and owing
under the applicable Schedule; plus (ii)
the Stipulated Loss Value (computed as
described in the applicable Schedule) of
the Equipment; plus (iii) all other amounts
that become due and owing under the
applicable Schedule, but only to the extent
such amounts are not included in the
moneys paid to Lessor pursuant to clauses
(i) and (ii) above. Upon Lessor's full
receipt of such Lessor's Return: (y) the
applicable Schedule shall terminate,
and except as provided in Section 24,
Lessee shall be relieved of all
obligations under the applicable Schedule;
and (z) Lessor shall transfer all of
its interest in the Equipment to Lessee "AS
IS, WHERE IS," and without any
warranty, express or implied from Lessor,
other than the absence of any liens or
claims by, through, or under Lessor.
Notwithstanding clause (b) hereof, Lessee
may, at its option, continue Rental
Payments under the applicable Schedule,
without interruption, and replace the
damaged Equipment with Equipment of
identical model, manufacturer, and
condition (Replacement Equipment) (in which
case Lessee shall cause the Replacement
Equipment to be delivered to a location
acceptable to Lessor and shall convey title
(lien free) to the Lessor whereupon
the Replacement Equipment shall be subject
to all of the terms and conditions of
this Agreement and the applicable
Schedule).
13.
NON-CANCELABLE
NET LEASE. ALL LEASES HEREUNDER SHALL BE
NON-CANCELABLE NET LEASES, AND LESSEE
AGREES THAT IT HAS AN UNCONDITIONAL
OBLIGATION TO PAY ALL RENTAL PAYMENTS AND
OTHER AMOUNTS WHEN DUE. LESSEE IS NOT
ENTITLED TO ABATE OR REDUCE RENTAL PAYMENTS
OR ANY OTHER AMOUNTS DUE, OR TO SET
OFF ANY
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CHARGES AGAINST THOSE AMOUNTS. LESSEE IS
NOT ENTITLED TO RECOUPMENTS,
CROSS-CLAIMS, COUNTERCLAIMS OR ANY OTHER
DEFENSES TO ANY RENTAL PAYMENTS OR
OTHER AMOUNTS DUE HEREUNDER, WHETHER THOSE
DEFENSES ARISE OUT OF CLAIMS BY
LESSEE AGAINST LESSOR, SELLER, THIS
AGREEMENT, ANY SCHEDULE OR OTHERWISE.
NEITHER DEFECTS IN EQUIPMENT, DAMAGE TO IT,
NOR ITS LOSS, DESTRUCTION OR LATE
DELIVERY SHALL TERMINATE THIS AGREEMENT OR
ANY SCHEDULE, OR AFFECT LESSEE'S
OBLIGATIONS HEREUNDER. UNLESS LESSEE'S
OBLIGATION TO PAY RENTAL PAYMENTS AND
OTHER AMOUNTS HAS BEEN TERMINATED PURSUANT
TO THE EXPRESS TERMS OF THIS
AGREEMENT, ALL RENTAL PAYMENTS AND OTHER
AMOUNTS SHALL CONTINUE TO BE DUE AND
PAYABLE HEREUNDER.
14. LESSOR DISCLAIMERS;
LIMITATION OF REMEDIES. IT IS SPECIFICALLY
UNDERSTOOD AND AGREED THAT: (A) LESSOR
SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR PROMISE MADE BY
SELLER, NEITHER SELLER NOR LESSOR
SHALL ACT AS, OR BE DEEMED TO BE, AN AGENT
OF THE OTHER, AND LESSOR SHALL NOT BE
BOUND BY, OR LIABLE FOR, ANY REPRESENTATION
OR PROMISE MADE BY SELLER (EVEN IF
LESSOR IS AFFILIATED WITH SELLER); (B)
LESSOR SHALL NOT BE LIABLE FOR ANY
FAILURE OF ANY EQUIPMENT OR ANY DELAY IN
ITS DELIVERY OR INSTALLATION; (C)
LESSOR SHAL
