Exhibit 10.2

 

LASALLE NATIONAL LEASING CORPORATION

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MASTER LEASE AGREEMENT

 

THIS MASTER LEASE AGREEMENT (this “Lease”) is made as of the 16th day of April,
2003, by and between LASALLE NATIONAL LEASING CORPORATION, its successors and
assigns (“Lessor”), and PACER INTERNATIONAL, INC., its successors and permitted
assigns (“Lessee”).

 

The parties agree that Lessee shall lease from Lessor the property (the
“Equipment”) described in the Interim Equipment Schedules and Final Equipment
Schedule(s) to be executed pursuant hereto (collectively, the “Equipment
Schedule”), subject to the terms set forth herein, in the Riders attached hereto
and in the Equipment Schedule. Certain definitions and construction of certain
of the terms used herein are provided in Section 20 hereof. Each Equipment
Schedule shall incorporate by reference the terms and conditions of this Lease.
Each Equipment Schedule, incorporating by reference the terms and conditions of
this Lease, shall constitute a separate instrument of lease.

 

1. TERM. The term of lease (the “Term”) with respect to any item of the
Equipment shall consist of the Interim Term and Base Term (as such terms are
defined therein) set forth in the Equipment Schedule relating thereto together
with the Initial Renewal Term (if applicable), Second Renewal Term (as such
terms are defined in Rider No. 1 attached hereto) (if applicable), the
Build-Down Period (as such term is defined in Rider No. 2 attached hereto) (if
applicable), and the six (6) month period after the expiration of the Build-Down
Period (if applicable); provided, however, that this Lease shall be effective
from and after the date of execution hereof.

 

2. RENT. Lessee shall pay Lessor rent for the use of the Equipment in the
aggregate amounts specified in the Equipment Schedule, and all other amounts
payable pursuant to this Lease, without prior notice or demand (provided,
however, that Lessor shall endeavor to provide to Lessee an invoice
approximately twenty-five (25) days prior to the date such payments are due)
(such installments and other amounts, the “Rent”). Each Equipment Schedule
constitutes a non-cancelable net lease, and Lessee’s obligation to pay Rent, and
otherwise to perform its obligations under this Lease, each such Equipment
Schedule and all of the other documents and agreements entered into in
connection herewith (collectively, the “Lease Documents”), are and shall be
absolute and unconditional and shall not be affected by any right of setoff,
counterclaim, recoupment, deduction, defense or other right which Lessee may
have against Lessor, the manufacturer or vendor of the Equipment (the
“Suppliers”), or anyone else, for any reason whatsoever. Rent is payable as and
when specified in the Equipment Schedule by mailing the same to Lessor at its
address specified pursuant to this Lease, or by such other method as may from
time to time be directed by Lessor or its assignee in writing; and payments of
Rent shall be effective upon receipt. Time is of the essence. If any Rent is not
paid on the due date, Lessor may collect, and Lessee agrees to pay, a charge
(the “Late Charge”) calculated as the product of the late charge rate specified
in the Equipment Schedule (the “Late Charge Rate”) and the amount in arrears for
the period such amount remains unpaid after the original due date. Lessor
expressly acknowledges and agrees that nothing contained in this Section 2 shall
constitute a waiver by the Lessee of any of its rights under this Lease, the
Equipment Schedule or any of the other Lease Documents or of its right to assert
and sue upon any claims it may have against Lessor or any other Person in one or
more separate actions so long as such claims or actions in no way diminish or
discharge Lessee’s obligation to pay rent, and otherwise to perform its
obligations under the Lease Documents without any right of setoff, counterclaim,
recoupment, deduction, or defense.

 

3. REPRESENTATIONS AND WARRANTIES. (a) Representations and Warranties of Lessee.
Lessee represents and warrants that: (i) Lessee is a corporation duly organized
and validly existing in good standing under the laws of the State of Tennessee.
(ii) The execution, delivery and performance of this Lease, the Equipment
Schedule and all related instruments and documents: (A) have been duly
authorized by all necessary corporate action on the part of Lessee; (B) do not
require the approval of any stockholder, trustee or holder of any obligations of
Lessee except such as have been duly obtained; and (C) do not and will not
contravene any law, governmental rule,

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regulation or order now binding on Lessee, or the charter or by-laws of Lessee,
or contravene the provisions of, or constitute a default under, or result in the
creation of any lien or encumbrance upon the property of Lessee under, any
indenture, mortgage, contract or other agreement to which Lessee is a party or
by which it or its property is bound. (iii) This Lease, the Equipment Schedule
and all related instruments and documents, when entered into, will constitute
legal, valid and binding obligations of Lessee enforceable against Lessee in
accordance with the terms thereof, 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. (iv) There are
no actions, suits or proceedings pending to which Lessee is a party, and there
are no other actions, suits or proceedings threatened of which Lessee has
knowledge, before any court, arbitrator or administrative agency, which, either
individually or in the aggregate have a Material Adverse Effect. As used herein,
“Material Adverse Effect” shall mean (1) a materially adverse effect on the
business, condition (financial or otherwise), operations, performance or
properties of Lessee, or (2) a material impairment of the ability of Lessee to
perform its obligations under or to remain in compliance with the Lease
Documents. Further, to the best of its knowledge, Lessee is not in default under
any obligation for the payment of borrowed money, for the deferred purchase
price of property or for the payment of any rent under any lease agreement
which, either individually or in the aggregate, would have the same such effect.
(v) The financial statements of Lessee (copies of which have been furnished to
Lessor) have been prepared in accordance with generally accepted accounting
principles consistently applied (“GAAP”), and fairly present Lessee’s financial
condition and the results of its operations as of the date of and for the period
covered by such statements, and since the date of such statements there has been
no material adverse change in such conditions or operations. (vi) Lessee’s name,
jurisdiction of organization, Federal Employer Identification Number and
Organizational Number specified below the signature of Lessee are true and
correct, and the address stated below the signature of Lessee is the chief place
of business and chief executive office of Lessee.

 

(b) Representations and Warranties of Lessor: Lessor represents and warrants:
(i) Lessor is a corporation duly organized and validly existing in good standing
under the law of the State of Delaware. (ii) The execution, delivery and
performance of the Lease Documents: (A) have been duly authorized by all
necessary corporate action on the part Lessor: (B) do not require the approval
of any stockholder, trustee or holder of any obligations of Lessor except such
as had been duly obtained. (iii) This Lease, the Equipment Schedule and all
related instruments and documents, when entered into, will constitute legal,
valid and binding obligations of Lessor enforceable against Lessor in accordance
with the terms thereof, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting the
rights of creditors generally, and except that such enforceability may be
subject to the application of equitable principles in any proceeding, legal or
equitable.

 

4. CONDITIONS PRECEDENT. Lessor’s obligations under each Equipment Schedule,
including its obligation to purchase and lease any Equipment to be leased
thereunder, are conditioned upon satisfaction of the following conditions:

 

(a) Lessor having received the following, in form and substance satisfactory to
Lessor: (1) evidence as to due compliance with the insurance provisions hereof;
(2) UCC financing statements in respect of the Equipment; (3) a certificate of
Lessee’s Assistant Secretary certifying: (i) resolutions of Lessee’s Board of
Directors duly authorizing the leasing of the Equipment hereunder and the
execution, delivery and performance of the Lease Documents, and (ii) the
incumbency and signature of the officers of Lessee authorized to execute such
documents; (4) the only manually executed original of the Equipment Schedule and
all other Lease Documents; and (5) all purchase documents pertaining to the
Equipment (collectively, the “Supply Contract”).

 

(b) All representations and warranties provided in favor of Lessor in any of the
Lease Documents shall be true and correct on the effective date of such
Equipment Schedule with the same effect as though made as of such date (Lessee’s
execution and delivery of the Equipment Schedule shall constitute an
acknowledgment of the same).

 

(c) There shall be no Default or Event of Default under the Equipment Schedule
or any other Lease Documents. The Equipment shall have been delivered to and
accepted by Lessee, and shall be in the condition and repair required hereby;
and on the effective date of the Equipment Schedule, Lessor shall have received
good title to the Equipment to be leased thereunder, free and clear of any Lien
or encumbrance of any kind.

 

5. COVENANTS. Lessee covenants and agrees as follows: (a) Lessee will furnish
Lessor (1) within one hundred twenty (120) days after the end of each fiscal
year of Lessee, a balance sheet of Lessee as at the end of such

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year, and the related statement of income and statement of changes in financial
position of Lessee for such fiscal year, prepared in accordance with GAAP, all
in reasonable detail and certified by independent certified public accountants
of nationally recognized standing selected by Lessee (it being agreed that if
Lessee files a Form 10-K with the Securities and Exchange Commission, that
delivery of such Form 10-K shall be deemed to satisfy the requirements of this
Section 5(a)(1)); and (2) within sixty (60) days after the end of each quarter
of Lessee’s fiscal year, a balance sheet of Lessee as at the end of such
quarter, and the related statement of income and statement of changes in
financial position of Lessee for such quarter, prepared in accordance with GAAP
(it being agreed that if Lessee files a Form 10-Q with the Securities and
Exchange Commission, that delivery of such Form 10-Q shall be deemed to satisfy
the requirements of this Section 5(a)(2)). (b) Lessee will duly execute and
deliver to Lessor such further documents, instruments, assurances and other
records and take such further action as Lessor may from time to time reasonably
request and as may be required in order to effectively carry out the intent and
purpose of this Lease and to establish and protect the rights and remedies
created or intended to be created in favor of Lessor under the Lease Documents
(including, without limitation, such UCC financing statements as reasonably may
be required by Lessor in connection with any relocation of the Equipment in
accordance with the terms hereof, if any). (c) Lessee shall provide written
notice to Lessor: (1) not less than thirty (30) days prior to any contemplated
change in the name, the jurisdiction of organization, or address of the chief
executive office, of Lessee; (2) promptly upon the occurrence of any Event of
Default (as hereinafter defined) or event which, with the lapse of time or the
giving of notice, or both, would become an Event of Default (a “Default”); and
(3) promptly upon Lessee becoming aware of any alleged violation of applicable
law relating to the Equipment or this Lease.

 

6. DELIVERY; INSPECTION AND ACCEPTANCE BY LESSEE. Upon delivery, Lessee shall
inspect the Equipment and, to the extent the Equipment conforms to the condition
required by the applicable Supply Contract, accept the Equipment and shall
execute and deliver to Lessor an Interim Equipment Schedule containing a
complete description of the item of Equipment accepted; whereupon, as between
Lessor and Lessee, the same shall be deemed to have been finally accepted by
Lessee pursuant to this Lease. If Lessee shall, for reasonable cause, refuse to
accept delivery of any item of the Equipment, Lessor shall assign to Lessee all
rights under the Supply Contract and Lessee shall assume all obligations as
purchaser of such item of Equipment. Upon completion of delivery of the
Equipment to be leased hereunder, Lessee shall execute and deliver to Lessor one
or more Final Equipment Schedules which shall replace in their entirety the
Interim Equipment Schedules.

 

7. DISCLAIMER OF WARRANTIES. LESSOR IS NOT A SELLER, SUPPLIER OR MANUFACTURER
(AS SUCH TERMS ARE DEFINED OR USED, AS THE CASE MAY BE, IN THE UCC), OR DEALER,
NOR A SELLER’S OR A DEALER’S AGENT. THE EQUIPMENT IS LEASED HEREUNDER “AS IS”,
AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS LIABILITY FOR, AND LESSEE HEREBY
WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES,
REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT TO THE EQUIPMENT, EITHER
EXPRESS OR IMPLIED, ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING ANY OF THE
SAME RELATING TO OR ARISING IN OR UNDER (a) MERCHANTABILITY OR FITNESS FOR
PARTICULAR USE OR PURPOSE, (b) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE
OR TRADE, OR (c) TORT (WHETHER OR NOT ARISING FROM THE ACTUAL, IMPLIED OR
IMPUTED NEGLIGENCE OF LESSOR OR STRICT LIABILITY) OR THE UCC (INCLUDING ARTICLE
2A, AS HEREINAFTER DEFINED) OR OTHER APPLICABLE LAW WITH RESPECT TO THE
EQUIPMENT, INCLUDING ITS TITLE OR FREEDOM FROM LIENS, FREEDOM FROM TRADEMARK,
PATENT OR COPYRIGHT INFRINGEMENT, FREEDOM FROM LATENT DEFECTS (WHETHER OR NOT
DISCOVERABLE), CONDITION, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH
APPLICABLE LAW; it being agreed that all such risks, as between Lessor and
Lessee, are to be borne by Lessee; and Lessor’s agreement to enter into this
Lease and any Equipment Schedule is in reliance upon the freedom from and
complete negation of liability or responsibility for the matters waived and
disclaimed herein. Lessor is not responsible for any direct, indirect,
incidental or consequential damage to or losses resulting from the installation,
operation or use of the Equipment or any products manufactured thereby. All
assignable warranties made by the Supplier to Lessor are hereby assigned to
Lessee for and during the term of this Lease and Lessee agrees to resolve all
such claims directly with the Supplier. Lessor fully shall cooperate with Lessee
with respect to the resolution of such claims, in good faith and by appropriate
proceedings at Lessee’s expense. Any such claim shall not affect in any manner
the unconditional obligation of Lessee to make Rent payments hereunder.

 

8. USE AND MAINTENANCE. (a) Lessee shall: (1) have the unrestricted right to use
the Equipment in its operations and to place the Equipment in an interchange
program within the United States, Mexico and Canada;

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(2) use the Equipment (or cause the Equipment to be used) in the conduct of its
business, for the purpose for which the Equipment was designed, in a careful and
proper manner, and shall not permanently discontinue use of a substantial
portion of the Equipment; (3) operate, maintain, service and repair the
Equipment, and maintain (or shall cause the Equipment to be operated,
maintained, serviced and repaired, and shall cause to be maintained) all records
and other materials relating thereto, (i) in accordance and consistent with (A)
the requirements of all applicable insurance policies, (B) the Supply Contract,
so as to preserve all of Lessee’s and Lessor’s rights thereunder, including all
rights to any warranties, indemnities or other rights or remedies, (C) the
Institute of International Container Lessors (“IICL”) Standard 5, and in
compliance with all applicable laws, and (D) to no lesser standard than that
employed by Lessee for comparable equipment owned or leased by it; and (ii)
shall not discriminate against the Equipment with respect to scheduling of
maintenance, parts or service; and (4) not attach or incorporate the Equipment
to or in any other item of equipment in such a manner that the Equipment may be
deemed to have become an accession to or a part of such other item of equipment.
(b) Within a reasonable time, Lessee will replace any parts of the Equipment
which become worn out, lost, destroyed, damaged beyond repair or otherwise
permanently rendered unfit for use, by new or reconditioned replacement parts
which are free and clear of all liens, encumbrances or rights of others and have
a value, utility and remaining useful life at least equal to the parts replaced.
Any modification or addition to the Equipment which is required by law (a
“Required Modification”) shall be made by Lessee, at its expense. Lessee shall
be permitted at any time to request that Lessor finance any Required
Modification; provided that Lessor may, in its sole discretion, refuse such
financing request of Lessee; provided further, however, that Lessor’s refusal to
finance any Required Modification shall in no way excuse Lessee’s performance of
its obligations under this Lease. Title to all parts, improvements and additions
to the Equipment immediately shall vest in Lessor, without cost or expense to
Lessor or any further action by any other Person, and such parts, improvements
and additions shall be deemed incorporated in the Equipment and subject to the
terms of this Lease as if originally leased hereunder, if such parts are
required by law or are otherwise essential to the operation of the Equipment or
cannot be detached from the Equipment without materially interfering with the
operation of the Equipment or adversely affecting the value, utility and
remaining useful life which the Equipment would have had without the addition
thereof. Lessee shall not make any material alterations to the Equipment without
the prior written consent of Lessor. (c) Upon forty-eight (48) hours’ notice,
Lessee shall use its reasonable best efforts to afford Lessor access to the
premises where the Equipment is located for the purpose of inspecting such
Equipment and all applicable maintenance or other records at any reasonable time
during normal business hours, provided that such inspection shall be at the sole
risk of Lessor and shall be conducted in such a manner as to not disrupt the
normal operation of the Equipment; provided, however, if a Default or Event of
Default shall have occurred and then be continuing, no notice of any inspection
by Lessor shall be required. If any discrepancies are found as they pertain to
the general condition of the Equipment, Lessor will communicate these
discrepancies to Lessee in writing. Lessee shall then have thirty (30) days to
rectify these discrepancies at its sole expense. Lessee shall pay all expenses
of a re-inspection by Lessor’s appointed representative, if corrective measures
were required. (d) Lessee may cause the Equipment to be lettered with the names
or initials or other insignia customarily used by Lessee or any permitted
sublessee of equipment used by it of the same or similar type.

 

9. FEES AND TAXES. (a) To the extent permitted by law, Lessee shall file any
necessary report and return for, shall pay promptly when due, shall otherwise be
liable to reimburse Lessor (on an after-tax basis, taking into account all
relevant, current, and future tax costs and benefits) for, and agrees to
indemnify and hold Lessor harmless from: (1) all titling, filing, publication,
recordation, documentary stamp and other fees; and (2) taxes (other than taxes
calculated solely on the basis of net income), assessments and all other charges
or withholdings of any nature (together with any penalties, fines or interest
thereon); relating to the Equipment or this Lease or the delivery, acquisition,
ownership, use, operation, substitution, leasing or subleasing of the Equipment,
or upon the rentals payable hereunder, whether the same be assessed to Lessor or
Lessee, provided that Lessee shall not be required to pay, or to reimburse or
indemnify Lessor for, any of the following: (i) any tax imposed on or with
respect to or measured by the gross or net income, gross receipts, capital, net
worth or franchise of Lessor or the conduct of business by Lessor unless (A)
such tax is a sales, use, rental, goods and services or similar tax, or (B) such
tax is imposed by a jurisdiction outside the United States of America, or a
jurisdiction within the United States of America in which Lessor would not have
otherwise been subject to tax, as the result of the use, operation or presence
of any Equipment or any activity of Lessee, any permitted Sublessee or any other
permitted user of any Equipment in such jurisdiction; (ii) any tax imposed on or
with respect to any sale, assignment, transfer or other disposition by Lessor of
any interest in any Equipment or this Lease or any Equipment Schedule unless
caused by an Event of Loss with respect to such Equipment or by an exercise of
remedies after the occurrence of a Default, or unless made at the request of
Lessee; (iii) any tax imposed with respect to any Equipment for any period after
the expiration or earlier

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termination of this Lease with respect to such Equipment and the return of such
Equipment (if and as required by this Lease) to Lessor; (iv) any interest or
penalty resulting from 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
results from the failure by Lessee to perform its obligations under this Lease;
(v) any tax to the extent such tax would not have been incurred but for, or is
increased as a result of, (A) the gross negligence or willful misconduct of
Lessor, (B) any sale-leaseback, loan, assignment of receivables or other
transaction between Lessor and a third party with respect to any Equipment, this
Lease or any Equipment Schedule; and (vi) any United States federal withholding
tax. Upon request, Lessor shall furnish to Lessee all documentation and other
information reasonably necessary to file such reports and returns and to pay the
amount of such fees, taxes or other sums then due; provided, however, nothing
contained herein shall require that Lessor deliver copies of tax returns or
other information that it considers (in its sole discretion) confidential;
provided further, that to the extent such information which is not disclosed by
Lessor after request from Lessee is reasonably necessary to permit Lessee to
contest fees, taxes or other sums or to determine the amount of the fees, taxes
or other sums to be paid, if such information is not provided by Lessor to
Lessee, Lessee shall not be required to indemnify Lessor for the amount of such
fees, taxes or other sums.

 

(b) If any report, return or property listing, or any fee, tax or assessment for
which Lessee is required to indemnify Lessor pursuant to sub-part (a) hereof
(“Imposition”) is, by law, required to be filed by, assessed or billed to, or
paid by, Lessor, Lessee at its own expense will do all things required to be
done by Lessor (to the extent permitted by law) in connection therewith and is
hereby authorized by Lessor to act on behalf of Lessor in all respects,
including (but not limited to) the contest or protest, in good faith and by
appropriate proceedings, of the validity of any Imposition or of the amount
thereof, and Lessor agrees to notify Lessee promptly in writing of Lessor’s
receipt of any assessment, bill or other claim by any taxing authority for any
such Imposition, provided that (x) Lessor’s failure to provide such notice shall
not relieve Lessee of its obligations under this Section 11 unless such failure
precludes a contest of such Imposition, (y) Lessor will have the right to elect
(by giving Lessee written notice of such election together with Lessor’s notice
of receipt of such claim) to control any contest of such Imposition that may
result in any material unindemnified loss, cost or expense to Lessor, and (z)
Lessee shall not be permitted to contest any such claim unless the amount of the
Imposition that is the subject of such claim (plus the amount of all other
Impositions that may be asserted with respect to the Equipment in the same or
any other tax period) exceeds Ten Thousand Dollars ($10,000). Lessor agrees to
cooperate with Lessee in any such contest unless such cooperation would cause
any material unindemnified loss, cost or expense to Lessor, and Lessee agrees
promptly to indemnify Lessor for all reasonable expenses incurred by Lessor in
the course of such cooperation. An Imposition shall be paid, subject to refund
proceedings, if failure to pay would create a material danger of the sale,
forfeiture or loss of the Equipment or any interest therein. If Lessor obtains a
refund of any Imposition which has been paid (by Lessee, or by Lessor and for
which Lessor has been reimbursed by Lessee), Lessor shall promptly pay such
refund to Lessee, provided that Lessor shall not be required to pay such refund
to Lessee if a Default is continuing unless and until such Default ceases to
exist, provided further that the amount payable by Lessor under this sentence
shall not exceed the amount paid by Lessee with respect to such Imposition. To
the extent that any tax liability of Lessor for which Lessee is not required to
indemnify Lessor is reduced as a result of an Imposition which Lessee has paid
or for which Lessee has indemnified Lessor, Lessor shall pay to Lessee the
amount of such tax savings plus the amount of any additional tax savings
resulting from such payment, provided that (i) the amount payable by Lessor
under this sentence shall not exceed the amount paid by Lessee with respect to
such Imposition and (ii) Lessor shall not be required to make any such payment
if a Default has occurred and is continuing unless and until such Default ceases
to exist. Lessee shall indemnify Lessor for any refund or tax saving paid by
Lessor to Lessee which subsequently becomes disallowed or recaptured. Lessee
will cause all billings of such charges to Lessor to be made to Lessor in care
of Lessee (to the extent permitted by applicable law) and will, in preparing any
report or return required by law with respect to any Imposition (to the extent
permitted on such report or return), show the ownership of the Equipment in
Lessor, and shall send a copy of any such report or return to Lessor. If Lessee
fails to pay any such Impositions when due, except any Imposition being
contested in good faith and by appropriate proceedings as above provided for a
reasonable period of time, Lessor at its option may do so, in which event the
amount so paid (including any penalty or interest incurred as a result of
Lessee’s failure), plus interest thereon at the Late Charge Rate shall be paid
by Lessee to Lessor with the next periodic payment of rent. (c) As used herein,
the term “Lessor” shall mean and include Lessor and the consolidated Federal
taxpayer group of which Lessor is a member; Lessor shall cause each entity that
is directly or indirectly in control of, is controlled by, or is under common
control with, Lessor (an “Affiliate”) to comply with the obligations of “Lessor”
under this Section 9. At Lessee’s written request, Lessor’s calculation of an
indemnity payment under this Section 9 which is at least Fifty Thousand Dollars
($50,000) shall be submitted to a nationally recognized public accounting firm
selected by Lessor reasonably acceptable to Lessee to verify the accuracy of

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Lessor’s calculations. If Lessee pays an indemnity payment before completion of
such review, appropriate adjustments will be made after completion of the review
to take into account any redetermination of such indemnity made by the
accounting firm. Lessee shall pay the fees and expenses charged by the
accounting firm for such review unless such an accounting firm concludes that
the indemnity payment calculated by Lessor exceeds the indemnity payment
properly due by an amount exceeding 10% of the indemnity payment calculated by
Lessor.

 

10. INTENT, TITLE AND LIENS. (a) The parties intend and agree that the Equipment
shall remain personal property, and that Lessor’s title thereto not be impaired,
notwithstanding the manner in which it may be affixed to any real property. (b)
It is the express intention of the parties hereto that (1) each Equipment
Schedule, incorporating by reference the terms of this Lease, constitutes a true
“lease” and a “finance lease” as such terms are defined in the UCC Article
2A—Leases (“Article 2A”) and not a sale or retention of a security interest; and
(2) title to the Equipment shall at all times remain in Lessor, and Lessee shall
acquire no ownership, property, rights, equity, or interest other than a
leasehold interest, solely as Lessee subject to the terms and conditions hereof.
If, notwithstanding the express intent of the parties, a court of competent
jurisdiction determines that any Equipment Schedule is not a true lease, but is
rather a sale and extension of credit, a lease intended for security, a loan
secured by the Equipment specified in such Equipment Schedule, or other similar
arrangement, the parties agree that in such event: (i) (A) in order to secure
the prompt payment and performance as and when due of all of Lessee’s
obligations (both now existing and hereafter arising) hereunder and under each
such Equipment Schedule, Lessee shall be deemed to have granted, and it hereby
grants, to Lessor a first priority security interest in the following (whether
now existing or hereafter created): the Equipment leased pursuant to such
Equipment Schedule and all replacements, substitutions, accessions, and proceeds
(cash and non-cash), including the proceeds of all insurance policies, thereof,
and (B) Lessee agrees that with respect to the Equipment, in addition to all of
the other rights and remedies available to Lessor hereunder upon the occurrence
of an Event of Default, Lessor shall have all of the rights and remedies of a
first priority secured party under the Uniform Commercial Code, as the same may
be in effect in any applicable jurisdiction (“UCC”). For purposes of this
sub-part (b), this Lease, the Equipment Schedule, or a photocopy of either
thereof may be filed as a financing statement under the UCC. Lessee hereby
acknowledges and agrees that, to the extent that Lessor’s participation in any
purchase and lease of an item or items of Equipment pursuant to this Lease
constitutes a financing of Lessee’s acquisition of such item or items of
Equipment, Lessee’s repayment of the amounts of such financing shall apply on a
“first-in/first-out” basis so that portions of the amounts of such financing
used to purchase such item or items of Equipment shall be deemed repaid in the
chronological order of the use of such amounts to purchase the same. (c) Lessee
further agrees to maintain the Equipment free from all claims, liens,
attachments, rights of others and legal processes (“Liens”) of creditors of
Lessee or any other Persons, other than Liens for: (1) fees, taxes, levies,
duties or other governmental charges of any kind, Liens of mechanics,
materialmen, laborers, employees or suppliers and similar Liens arising by
operation of law incurred by Lessee in the ordinary course of business for sums
that are not yet delinquent or are being contested in good faith by negotiations
or by appropriate proceedings which suspend the collection thereof (provided,
however, that such proceedings do not involve any substantial danger (as
determined in Lessor’s sole reasonable discretion) of the sale, forfeiture or
loss of the Equipment or any interest therein); (2) Liens arising out of any
judgments or awards against Lessee with respect to which a stay of execution has
been obtained pending an appeal or proceeding for review; (3) Liens for taxes of
Lessor for which Lessee has no indemnification obligation pursuant to this
Lease; and (4) Liens created by or through Lessor (such Liens in clauses (1) and
(4) being hereinafter referred to as “Permitted Liens”). Lessee will defend, at
its own cost and expense, Lessor’s title to the Equipment from such claims,
Liens or legal processes (other than Permitted Liens). Lessee shall also notify
Lessor promptly upon receipt of notice of any Lien (other than Permitted Liens)
affecting the Equipment in whole or in part.

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11. LOSS, DESTRUCTION, REQUISITION, ETC.

 

(a) Lessee hereby assumes the risk of direct and consequential loss and damage
to the Equipment. Except as otherwise provided herein, no loss or damage to the
Equipment or any part thereof shall release or impair any obligations of Lessee
under this Lease. Lessee agrees that Lessor shall not incur any liability to
Lessee for any loss of business, loss of profits, expenses, or any other damages
resulting to Lessee by reason of any failure of or delay in delivery or any
delay caused by any non-performance, defective performance, or breakdown of the
Equipment, nor shall Lessor at any time be responsible for personal injury or
the loss or destruction of any other property resulting from the Equipment. In
the event of loss or damage to any Equipment which does not constitute an Event
of Loss (as hereinafter defined), Lessee shall, at its sole cost and expense,
promptly repair and restore such Equipment to the condition required by this
Lease. Provided that Lessee is not then in Default, upon receipt of evidence
reasonably satisfactory to Lessor of completion of such repairs, Lessor will
apply any insurance proceeds received by Lessor on account of such loss to the
cost of repairs.

 

(b) In the event that any Equipment (i) shall suffer destruction, damage,
contamination or wear which, in Lessee’s good faith opinion, makes repair
uneconomic or renders such Equipment unfit for commercial use, (ii) shall suffer
theft or disappearance, (iii) shall be permanently returned to the manufacturer
pursuant to any patent indemnity provisions, (iv) shall have title thereto taken
or appropriated by any governmental authority under the power of eminent domain
or otherwise, (v) shall be taken or requisitioned for use by any governmental
authority (other than the United States government or any agency or
instrumentality thereof) under the power of eminent domain or otherwise, (vi)
shall be taken or requisitioned for use by the United States government or any
agency or instrumentality thereof and such taking or requisition is continuing
on the last day of the term of this Lease or (vii) shall become obsolete or not
usable for the purposes for which it was placed in service (any such occurrence
being hereinafter called an “Event of Loss”), Lessee, in accordance with the
provisions hereof, shall promptly and fully inform Lessor of such Event of Loss.

 

(c) Upon the occurrence of an Event of Loss with respect to any Equipment,
Lessee shall within thirty (30) days thereafter notify Lessor of such Event of
Loss and of its election to perform one of the following options (it being
agreed that if Lessee shall not have given notice of said election within said
thirty (30) day period, or if providing Replacement Equipment (as hereinafter
defined) could cause adverse tax consequences to Lessor, Lessee shall be deemed
to have elected to perform the option set forth in the following paragraph
(ii)):

 

(i) as promptly as practicable, and in any event on or before the Business Day
(as hereinafter defined) next preceding the sixtieth (60th) day next following
the date of such notice, in replacement for such Equipment, Lessee shall convey
or cause to be conveyed to Lessor equipment (“Replacement Equipment”) to be
leased to Lessee hereunder, such Replacement Equipment to be free and clear of
all Liens (other than Permitted Liens), to be of a similar make and model to the
Equipment so replaced and to have a fair market value, utility and remaining
useful life at least equal to the Equipment so replaced (assuming such Equipment
was in the condition required to be maintained by the terms of this Lease);
provided that, if Lessee shall not perform its obligation to effect such
replacement under this paragraph (i) during the period of time provided herein,
then Lessee shall pay on the next succeeding date for the payment of rent to
Lessor the amounts specified in paragraph (ii) below; provided, further that, if
Lessee is diligently undertaking to convey such Replacement Equipment but is
unable to do so within the allotted time due to circumstances beyond its
control, then Lessee shall not be required to make the payments specified in
paragraph (ii) below so long as it (A) provides Lessor written notice within
forty-five (45) days of such notice of Event of Loss that Lessee will be unable
to convey Replacement Equipment within sixty (60) days of such notice of Event
of Loss, and (B) Lessee pays the Stipulated Loss Value of such Equipment having
suffered the Event of Loss as a deposit to Lessor, which deposit shall be
applied against the purchase of such Equipment, which amount shall be payable on
the ninetieth (90th) day following the date of such notice if no Replacement
Equipment has been delivered by such date; or

 

(ii) on the next succeeding date for the payment of rent that is at least sixty
(60) days after the date of notice of such Event of Loss or deemed Event of
Loss, Lessee shall pay or cause to be paid on such rent payment date to Lessor
(A) an amount equal to the Stipulated Loss Value of each such item of Equipment,
determined as of such rent payment date, (B) all rent payable on such date in
respect of such item of

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Equipment, and (C) all other sums then due and payable hereunder, it being
understood that until such Stipulated Loss Value is paid, there shall be no
abatement or reduction of rent.

 

(d) Upon the sale or replacement of any Equipment in compliance with this
Section 11 or upon the payment of all sums required to be paid pursuant hereto
in respect of any Equipment for which Lessee has elected to pay or is deemed to
have elected to pay the amounts specified above, the term of this Lease with
respect to such Equipment and the obligation to pay rent for such Equipment
accruing subsequent to the date of payment of the Stipulated Loss Value pursuant
to the terms hereof shall terminate; provided that Lessee shall be obligated to
pay all rent in respect of such Equipment which has accrued up to and including
the date of payment of the Stipulated Loss Value. Upon the payment of all sums
required to be paid pursuant hereto in respect of any Equipment, Lessor will
convey to Lessee or its designee all right, title and interest of Lessor in and
to such Equipment, “AS IS”, “WHERE IS”, without recourse or warranty other than
a warranty that whatever title to such Equipment was originally conveyed to
Lessor has been conveyed to Lessee, free and clear of any Liens created by or
through Lessor, and shall execute and deliver to Lessee or its designee such
bill(s) of sale and other documents and instruments as Lessee or its designee
reasonably may request to evidence such conveyance. As to each Equipment so
disposed of, Lessee or its designee shall be entitled to any amounts arising
from such disposition, plus any awards, insurance or other proceeds and damages
(including any Uniform Intermodal Interchange Association settlement or
settlement under any rail transportation service agreement paid upon an Event of
Loss) received by Lessee or Lessor by reason of such Event of Loss after having
paid the Stipulated Loss Value attributable thereto; provided, however, that,
with respect to any Event of Loss referred to in clauses (v) and (vi) of
sub-part (b) above, any excess of such condemnation awards over the amount of
the Stipulated Loss Value of such Equipment shall be paid to Lessee so long as
the result of such condemnation was not directly or proximately caused by
Lessee’s neglect, in which such case, any excess of such condemnation awards
over the amount of the Stipulated Loss Value of such Equipment shall be paid to
Lessor. At the time of or prior to any replacement of any Equipment, Lessee, at
its own cost and expense, will (A) furnish Lessor with a bill of sale and an
assignment of warranties with respect to the Replacement Equipment, (B) execute
and deliver to Lessor an amendment in form and substance acceptable to Lessor,
subjecting such Replacement Equipment to this Lease, and duly executed by
Lessee, to be delivered to Lessor for execution and, upon such execution and to
the extent required by Lessor, to be filed for recordation in the same manner as
provided for the original Lease, (C) furnish Lessor with copies of all filings
made that are necessary or appropriate to perfect and protect Lessor’s interests
in the Replacement Equipment, and (D) furnish Lessor with a certificate of a
qualified engineer (who may be the system chief mechanical officer of Lessee)
certifying that the Replacement Equipment has a fair market value, utility and
remaining useful life at least equal to the Equipment so replaced (assuming such
Equipment was in the condition required to be maintained by the terms of this
Lease) and setting forth a reasonable basis for such conclusion in reasonable
detail. For all purposes hereof, upon passage of title thereto to Lessor, the
Replacement Equipment shall be deemed part of the property leased hereunder and
the Replacement Equipment shall be deemed an item of the “Equipment” as defined.
Upon such passage of title, Lessor will transfer to Lessee, without recourse or
warranty other than a warranty that title to such Equipment has been conveyed to
Lessee, free and clear of any Liens created by or through Lessor, all Lessor’s
right, title and interest in and to the replaced Equipment.

 

(e) In the event that during the term of this Lease the use of any Equipment is
requisitioned or taken by any governmental authority under the power of eminent
domain or otherwise for a period which does not constitute an Event of Loss,
Lessee’s obligation to pay all installments of rent shall continue for the
duration of such requisitioning or taking. Lessee shall be entitled to receive
and retain for its own account all sums payable for any such period by such
governmental authority as compensation for requisition or taking of possession.
Any amount referred to herein which is payable to Lessee shall not be paid to
Lessee, or if it has previously been paid directly to Lessee, shall not be
retained by Lessee, if at the time of such payment a Default shall have occurred
and be continuing, but shall be paid to and held by Lessor as security for the
obligations of Lessee under this Lease, and at such time as there shall not be
continuing any such Default, such amount shall be paid to Lessee.

 

(f) As used in this Lease, “Stipulated Loss Value” shall mean as of any rent
payment date the product of the Total Cost of each item of Equipment (as
specified on the applicable Equipment Schedule) and the applicable percentage
factor for such rent payment date set forth on the Equipment Schedule of
Stipulated Loss Values attached to the Equipment Schedule. After payment of the
final payment of rent due under the term of this Lease, Stipulated Loss Value
shall be determined as of the date of termination of this Lease, after payment
of any rent due on such date, and the applicable percentage factor shall be the
last percentage factor set forth on the Equipment Schedule of Stipulated Loss
Values.

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12. INSURANCE. Lessee shall obtain and maintain during the Term all-risk
insurance coverage with respect to the Equipment insuring against, among other
things: casualty, including loss or damage due to fire and the risks normally
included in extended coverage, malicious mischief and vandalism, for not less
than the Stipulated Loss Value; and commercial liability, including both bodily
injury and property damage with a combined single limit per occurrence of not
less than the amount specified in the Equipment Schedule, having a deductible or
self-assumption of risk hereunder reasonably satisfactory to Lessor. All said
insurance shall be in form (including all endorsements required by Lessor) and
amount and with companies reasonably satisfactory to Lessor. All insurance for
loss or damage shall provide that losses, if any, shall be used to repair or
replace the Equipment as required under Section 11 hereof and Lessee shall
utilize its best efforts to have all checks relating to any such losses
delivered promptly to Lessor. Lessor shall be named as an additional insured
with respect to all such liability insurance. Lessee shall pay the premiums
therefor and deliver to Lessor evidence satisfactory to Lessor of such insurance
coverage. Lessee shall cause to be provided to Lessor, prior to the scheduled
expiration or lapse of such insurance coverage, evidence satisfactory to Lessor
of renewal or replacement coverage. Each insurer shall agree, by endorsement
upon the policy or policies issued by it or by independent instrument furnished
to Lessor, that (a) it will give Lessor thirty (30) days’ prior written notice
of the effective date of any cancellation of such policy; and (b) with respect
to property damage insurance as to the interest of any loss payee other than
Lessee shall not be invalidated by any actions, inactions, breach of warranty or
conditions or negligence of Lessee, Lessee’s agents or third party contractors
of Lessee with respect to such policy or policies. The proceeds of such
insurance payable as a result of loss of or damage to the Equipment shall be
applied as required by the provisions of Section 11 hereof.

 

13. REDELIVERY. Lessee shall provide written notice to Lessor not less than one
hundred eighty (180) days and not more than two hundred forty (240) days prior
to the expiration of the term of any Equipment Schedule (or of any renewal
thereof, if applicable) of Lessee’s intent to return the Equipment to Lessor
upon the expiration of the term of such Equipment Schedule. Upon the expiration
or earlier termination of the term of any Equipment Schedule (or of any renewal
thereof, if applicable), Lessee shall redeliver the Equipment in accordance with
Rider No. 2 attached hereto. Lessor may, in its sole discretion, cause the
Equipment to be inspected by an inspector selected by Lessor at least sixty (60)
days prior to the scheduled return or storage of the Equipment, and, if Lessor
causes such inspection, Lessor promptly shall provide Lessee with such
inspector’s written report identifying those repairs necessary to put the
Equipment in the condition required by this Lease. Lessee may complete such
repairs prior to the return or storage of the Equipment. If Lessee does not so
repair, Lessee agrees to pay the cost of such repairs and further agrees to pay
Lessor rent for the period of time reasonably necessary to accomplish such
repairs based on a daily pro-rated amount of the previously prevailing rent.
Lessor’s acceptance of such rent on account of such delay or repair does not
constitute a renewal of the term of this Lease or a waiver of Lessor’s right to
prompt return of such Equipment in proper condition.

 

14. INDEMNITY. (a) General. Lessee assumes and agrees to indemnify, defend and
keep harmless Lessor, and any assignee of Lessor’s rights, obligations, title or
interests under any Equipment Schedule, its Affiliates and their agents and
employees (“Indemnitees”), from and against any and all Claims (other than such
as may directly and proximately result from the gross negligence or willful
misconduct of such Indemnitees), by paying (on an after-tax basis taking into
account all relevant, current, and future costs and benefits) or otherwise
discharging same, when and as such Claims shall become due. Lessor shall give
Lessee prompt notice of any Claim hereby indemnified against, provided that
Lessor’s failure to provide such notice shall not preclude Lessee’s obligation
to indemnify for any Claim so long as such failure does not materially prejudice
Lessee. Lessee shall be entitled to control the defense thereof, so long as no
Default has occurred and is then continuing and so long as there is no conflict
of interest between Lessor and Lessee which, in Lessor’s reasonable judgment,
makes it inadvisable for Lessee to control the defense thereof. Lessor shall
have the right to retain separate counsel to represent it in connection with any
claim at its own expense, provided that if Lessor shall have retained such
counsel as a result of a conflict of interest which would preclude Lessee and
Lessor from being represented by the same counsel, the fees and expenses of such
counsel shall be indemnified by Lessee hereunder. Lessor agrees that it will
cooperate (at Lessee’s expense) with all reasonable requests of Lessee in the
defense of any action to which Lessor is entitled to indemnification and defense
hereunder. For the purposes of this Lease, the term “Claims” shall mean all
claims, allegations, harms, judgments, good faith settlements entered into,
suits, actions, debts, obligations, damages (whether incidental, consequential
or direct), demands (for compensation, indemnification, reimbursement or
otherwise), losses, penalties, fines, liabilities (including strict liability),
charges that Lessor has incurred or for which it is responsible, in the nature
of interest, Liens, and costs (including attorneys’ fees and disbursements and
any other legal or non-legal expenses of

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investigation or defense of any Claim, whether or not such Claim is ultimately
defeated or enforcing the rights, remedies or indemnities provided for
hereunder, or otherwise available at law or equity to Lessor), of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, by or against any Person, arising on account of (a) any Lease
Document, or (b) the Equipment, or any part thereof, including the ordering,
acquisition, delivery, installation or rejection of the Equipment, the
possession, maintenance, use, condition, ownership or operation of any
Equipment, and by whomsoever owned, used or operated, during the term of any
Equipment Schedule with respect to that Equipment, the existence of latent and
other defects (whether or not discoverable by Lessor or Lessee), any claim in
tort for negligence or strict liability, any claim for patent, trademark or
copyright infringement, and any Environmental Claim or Environmental Loss (as
such terms are hereinafter defined), or the loss, damage, destruction, removal,
return, surrender, sale or other disposition of the Equipment, or any item
thereof. Notwithstanding the foregoing, Lessee shall not have any obligation for
any Claim to the extent that such Claim results from (i) the willful misconduct
or gross negligence of the party or entity seeking indemnification, (ii) the
incorrectness or inaccuracy of any representation made by the party or entity
seeking indemnification hereunder, (iii) any taxes other than as provided in
Section 14(b) (taxes being the subject of a separate indemnity in Section
14(b)), (iv) any Claims attributable to a Lien created by or through Lessor, (v)
any Claims resulting from an assignment by Lessor pursuant to Section 18 (except
an assignment in connection with the exercise by Lessor of its remedies in
Section 16) following a Default or (vi) Claims arising in connection with any
Equipment after such Equipment have been returned by Lessee to Lessor in the
condition required by Section 13 following the expiration or early termination
of the term for such Equipment; provided, however, nothing contained herein
shall relieve Lessee of its obligation to indemnify the Indemnitees 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.

 

(b) Tax. (1) 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 defined below).

 

(2) If(A) by reason of (i) any act or failure to act of Lessee (including a
breach of any covenant of Lessee set forth herein), or (ii) the
misrepresentation of or breach by Lessee of any of the warranties and
representations set forth in subpart (b)(1) of this Section, Lessor in computing
its taxable income or liability for tax, shall lose, or shall not have, or shall
lose the right to claim or there shall be disallowed or recaptured for Federal
and/or state income tax purposes, in whole or in part, the benefit of MACRS
Deductions; or (B) Lessor shall become liable for additional tax as a result of
Lessee having replaced any Equipment pursuant to the terms of this Lease, or
having added an attachment or made an alteration to the Equipment, including
(without limitation) any such attachment or alteration which would increase the
productivity or capability of the Equipment so as to violate the provisions of
Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 (as it may hereafter be modified or
superseded); or (C) Lessor shall be entitled to claim a lesser credit for
foreign taxes against its Federal income tax liability for any taxable year than
that to which Lessor would have been entitled if each item of income, gain, loss
and deduction with respect to the Equipment had been treated as income from
sources within the United States pursuant to Section 861 of the Code;
hereinafter referred to as a “Loss”; then Lessee shall pay Lessor the Tax
Indemnification Payment as additional rent and Lessor shall revise the Equipment
Schedule(s) of Stipulated Loss Values to reflect the Loss. 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; “Lessor” shall be deemed to include the
consolidated Federal taxpayer group of which Lessor or any Assignee (as
applicable) is a member; and “Tax Indemnification Payment” shall mean such
amount as, after consideration of (i) all taxes required to be paid by Lessor in
respect of the receipt thereof under the laws of any governmental or taxing
authority in the United States, and (ii) the amount of any interest or penalty
which may be payable by Lessor in connection with the Loss, shall be required to
cause Lessor’s after-tax net return, calculated using the same assumptions used
by Lessor to calculate the rent specified for the affected Equipment on the date
of the Equipment Schedule in which such Equipment are listed except to the
extent that the Loss changes (or any prior Loss changed) any of those
assumptions (the “Net Return”) to be equal to, but no greater

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than, the Net Return computed consistently with current tax laws (and with the
assumption that Lessor is taxed at the highest marginal Federal and state tax
rates) as of the date of this Lease that would have been available to Lessor had
the Loss not occurred.

 

(3) Lessor shall be responsible for, and shall not be entitled to a Tax
Indemnification Payment by Lessee on account of, any Loss to the extent arising
as a result of the occurrence of any one or more of the following events: (a)
the failure of Lessor to timely and properly claim MACRS Deductions in the tax
return of Lessor unless in the reasonable opinion of Lessor’s tax counsel there
is no reasonable basis for such claim (a copy of which written opinion shall
have been received by Lessee at least thirty (30) days before the filing of the
return on which Lessor failed to claim such MACRS Deductions); or (b) the
failure of Lessor to have sufficient taxable income before application of the
MACRS Deductions to offset the full amount of such MACRS Deductions; or (c) any
event which by the terms of this Lease requires payment by Lessee of the
Stipulated Loss Value if such payment is thereafter actually made to Lessor; or
(d) a sale of any item of the Equipment or this Lease by Lessor unless in
connection with an exercise of remedies after the occurrence of a Default.

 

(4) Lessor promptly shall notify Lessee in writing of such Loss (provided that
Lessor’s failure to provide such notice shall not affect Lessee’s obligation to
indemnify Lessor unless such failure precludes a contest of such Loss) and
Lessee shall pay to Lessor the Tax Indemnification Payment within thirty (30)
days after the latest of the following dates: (i) the date on which Lessor gives
Lessee such notice of the occurrence of such Loss (which notice shall include a
description in reasonable detail of such Loss and the calculation of the Tax
Indemnification Payment requested by Lessor), (ii) the date on which Lessor
files its federal income tax return, or makes a payment of estimated tax, in
which such Loss is taken into account, and (iii) if Lessee has requested that
such Loss be contested pursuant to Section 14(b)(5), the date of the final
determination of such contest. For these purposes, a Loss shall occur upon the
earliest of: (A) the happening of any event (such as disposition or change in
use of any of the Equipment) which will cause such Loss, (B) the payment by
Lessor to the Internal Revenue Service or state taxing authority of the tax
increase (including an increase in estimated taxes) resulting from such Loss;
(C) the date on which the Loss is realized by Lessor; or (D) the adjustment of
the tax return of Lessor to reflect such Loss.

 

(5) If Lessor receives from the Internal Revenue Service a written notice of a
proposed adjustment or notice of deficiency which, if accepted by Lessor, would
result in a Loss (a “Tax Claim”), Lessor shall send a copy of such notice (or
the portion thereof relating to such Loss) to Lessee within thirty (30) days
after receiving such notice. Provided that no Default has occurred and is
continuing, if Lessee so requests in writing within thirty (30) days after
Lessee receives such written notice, accompanied by a written opinion of
independent tax counsel selected by Lessee and reasonably acceptable to Lessor
(“Tax Counsel”) to the effect that there is a reasonable basis (within the
meaning of ABA Formal Opinion 85-352) for contesting such Tax Claim, and
discussing the authority in support of such opinion, Lessor shall in good faith
contest such Tax Claim in appropriate administrative and/or judicial proceedings
so long as the amount of such Tax Claim, together with any similar Tax Claim
that may be made with respect to the Equipment, is greater than One Hundred
Thousand Dollars ($100,000) and Lessee acknowledges in writing its obligation to
indemnify for such Loss unless the final determination of the contest
demonstrates that Lessee is not required by this Section 14(b) to indemnify
Lessor for such Loss (including all available appeals requested by Lessee in
writing, and, in the case of an appeal of an adverse court decision, accompanied
by a written opinion of Tax Counsel to the effect that there is a meritorious
basis for appeal, but provided that Lessor shall not be required to seek Supreme
Court review of an adverse decision). Lessor shall control all aspects of the
contest, considering in good faith any suggestions made by Lessee. Lessee shall
pay all reasonable professional fees and other reasonable out-of-pocket expenses
incurred by Lessor to contest such Tax Claim. Lessor may refuse to conduct a
contest otherwise required under this Section 14(b)(5), or may settle any Tax
Claim that Lessee has requested Lessor to contest without the prior written
consent of Lessee, provided that in such event Lessee shall be relieved of its
obligation under this Section 14(b) to pay Lessor any Tax Indemnification
Payment for any Loss that was the subject of such Tax Claim or for any related
Loss in any other taxable year to the extent that such settlement materially
adversely affects a contest of such related Loss.

 

(6) To the extent Lessor obtains a refund of any tax, penalty, addition to tax
and/or interest for which Lessee has indemnified Lessor, Lessor shall pay to
Lessee the amount of such refund plus the amount of any interest received by
Lessor with respect to such refund, plus the amount of any Lessor tax saving
resulting from such payment, provided that (i) the amount payable by Lessor
under this Section 14(b)(6) (excluding the amount thereof, if any, representing
interest received by Lessor with respect to such refund) shall not exceed the
amount paid by Lessee

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with respect to such Loss, and (ii) Lessor shall not be required to pay such
refund if a Default is continuing unless and until such Default ceases to exist.

 

(7) To the extent that the income tax liability of Lessor with respect to any
taxable year is reduced as a result of a Loss for which Lessee paid a Tax
Indemnification Payment to Lessor, Lessor shall pay to Lessee the amount of such
tax saving plus the amount of any additional Lessor tax saving resulting from
such payment, provided that (i) the amount payable by Lessor under this Section
14(b)(7) shall not exceed the amount paid by Lessee with respect to such Loss,
and (ii) Lessor shall not be required to make any such payment if a Default has
occurred and is continuing unless and until such Default ceases to exist. Lessee
shall indemnify Lessor for any refund or tax saving paid by Lessor to Lessee
which subsequently becomes disallowed or recaptured.

 

(8) Lessor shall cause each of its Affiliates to comply with the obligations of
“Lessor” under this Section 14.

 

(9) At Lessee’s written request, Lessor’s calculation of a Tax Indemnification
Payment which is at least Fifty Thousand Dollars ($50,000) shall be submitted to
a nationally recognized public accounting firm selected by Lessor and reasonably
acceptable to Lessee to verify the accuracy of Lessor’s calculations. If Lessee
pays a Tax Indemnification Payment before completion of such review, appropriate
adjustments will be made after completion of the review to take into account any
redetermination of such Tax Indemnification Payment by the accounting firm.
Lessee shall pay the fees and expenses charged by the accounting firm for such
review unless such accounting firm concludes that the Tax Indemnification
Payment calculated by the Lessor exceeds the Tax Indemnification Payment
properly due by an amount exceeding ten (10) percent of the Tax Indemnification
Payment calculated by Lessor.

 

(c) The obligations of Lessee and Lessor under this Section, which accrue during
the term of this Lease, shall survive the expiration or termination of this
Lease.

 

15. DEFAULT. (a) Lessee shall be deemed to be in default hereunder and under an
Equipment Schedule upon the occurrence of any of the following (each, an “Event
of Default”): (1) Lessee shall fail to make any payment of Rent hereunder or
under an Equipment Schedule as and when due and such failure shall continue
unremedied for a period of five (5) days after written notice thereof to Lessee
by Lessor; or (2) Lessee shall fail to obtain and maintain the insurance
required herein; or (3) Lessee shall fail to perform or observe any other
covenant, condition or agreement to be performed or observed by it under any
Lease Document (other than any covenant or agreement in Section 14(b)(i) of this
Lease, it being agreed that the Tax Indemnification Payment shall be Lessor’s
sole remedy for any failure to perform or observe any such covenant or agreement
of this Lease) and such failure shall continue unremedied for a period of thirty
(30) days after written notice thereof to Lessee by Lessor (unless such failure
is not curable within such thirty (30) days, and Lessee is diligently pursuing a
cure, in which case Lessee shall have ninety (90) days to effect such cure); or
(4) Lessee shall (i) not pay its debts generally as they become due; or (ii)
take action for the purpose of invoking the protection of any bankruptcy or
insolvency law, or any such law is invoked against or with respect to Lessee or
its property, and any such petition filed against Lessee is not dismissed within
ninety (90) days; or (5) Lessee shall make or permit any unauthorized Lien
(other than a Permitted Lien) against, or assignment or transfer of, this Lease,
an Equipment Schedule, the Equipment, or any interest therein; or (6) any
certificate, statement, representation, warranty or audit contained herein
(except in respect of Section 14(b)(i) of this Lease, it being agreed that the
Tax Indemnification Payment shall be Lessor’s sole remedy in connection with any
such certificate, statement, representation, warranty or audit) or heretofore or
hereafter furnished with respect hereto by or on behalf of Lessee proving to
have been false in any material respect at the time as of which the facts
therein set forth were stated or certified, or having omitted any material
contingent or unliquidated liability or claim against Lessee; or (7) Lessee
shall be in default under any (i) loan, lease, guaranty, installment sale or
other financing agreement or financing contract, of which Lessor, or any of its
Affiliates, is a party or beneficiary, involving amounts owed in the aggregate
in excess of Ten Million Dollars ($10,000,000), or (ii) material obligation for
the payment of borrowed money, for the deferred purchase price of property or
any payment under any lease agreement, involving amounts owed in the aggregate
in excess of Ten Million Dollars ($10,000,000), and such default shall have been
declared and not yet cured; or (8) Lessee shall have terminated its corporate
existence, consolidated with, merged into, or conveyed or leased substantially
all of its assets as an entirety to any Person (such actions under this Section
15(a)(8) being referred to as an “Event”), unless immediately prior to such
Event: (A) such Person executes and delivers to Lessor an agreement satisfactory
in form and substance to Lessor, in its reasonable discretion, containing such
Person’s effective assumption, and its agreement to pay, perform, comply with
and otherwise be liable for, in due and punctual manner,

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all of Lessee’s obligations having previously arisen, or thereafter arising,
under any Lease Document; and (B)(1) such Person or the new entity has a Net
Worth equal to or greater than Lessee’s Net Worth as of December 31, 2002, as
published in Lessee’s 10-K as filed with the Securities and Exchange Commission
and has a credit rating from Standard & Poor’s Ratings Group, a Division of
McGraw-Hill, Inc. (“Standard & Poor’s”) equal to or better than BB-; or (2) such
Person or the new entity has a Net Worth of at least Twenty-five Million Dollars
($25,000,000) greater than Lessee’s Net Worth as of December 31, 2002, as
published in Lessee’s 10-K as filed with the Securities and Exchange Commission;
or (9) Lessee is no longer subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, or no longer registered under
Section 12 of the Securities Act of 1933, as amended, unless immediately
thereafter Lessee has a Net Worth equal to or greater than Lessee’s Net Worth as
of December 31, 2002, as published in Lessee’s 10-K as filed with the Securities
and Exchange Commission and has a credit rating from Standard & Poor’s equal to
or better than BB-, or a Net Worth of at least Twenty-five Million Dollars
($25,000,000.00) greater than Lessee’s Net Worth as of December 31, 2002, as
published in Lessee’s 10-K as filed with the Securities and Exchange Commission;
or (10) the occurrence of a default or an anticipatory repudiation under any
guaranty executed in connection herewith. Accounting terms used herein
(including the term “Net Worth”) shall be as defined, and all calculations shall
be made, in accordance with GAAP.

 

(b) The occurrence of an Event of Default with respect to any Equipment Schedule
shall, at the sole discretion of Lessor, constitute an Event of Default with
respect to any or all Equipment Schedules to which it is then a party.
Notwithstanding anything to the contrary set forth herein, Lessor may exercise
all rights and remedies hereunder independently with respect to each Equipment
Schedule.

 

16. REMEDIES. Upon the occurrence of any Event of Default, Lessor may, at its
option, without election of remedies, declare this Lease and any Equipment
Schedule to be in default. At any time after cancellation of an Equipment
Schedule or after declaration by Lessor that such Equipment Schedule is in
default, Lessor may, in addition to any other remedies provided herein or by
applicable law, exercise one or more of the following remedies as Lessor in its
sole discretion shall elect:

 

(a) Require Lessee to assemble any or all of the Equipment at a location in
accordance with Rider 2; and/or to return promptly, at Lessee’s expense, any or
all of the Equipment to Lessor at the location, in the condition and otherwise
in accordance with all of the terms of Section 13 hereof; and/or take possession
of and render unusable by Lessee any or all of the Equipment, wherever it may be
located, without any court order or other process of law and without liability
for any damages occasioned by such taking of possession (other than to premises)
not attributable to the gross negligence or willful misconduct of Lessor or its
agents (any such taking of possession shall constitute an automatic cancellation
of the Equipment Schedule pertaining thereto, as it applies to those items taken
without further notice, and such taking of possession shall not prohibit Lessor
from exercising its other remedies hereunder).

 

(b) Sell, re-lease or otherwise dispose of any or all of the Equipment, whether
or not in Lessor’s possession, in a commercially reasonable manner at public or
private sale with notice to Lessee (the parties agreeing that ten (10) days’
prior written notice shall constitute adequate notice of such sale), with the
right of Lessor to purchase and apply the net proceeds of such disposition,
after deducting all costs incurred by Lessor in connection with such Event of
Default and all costs of such sale, re-lease or other disposition (including but
not limited to costs of transportation, possession, storage, refurbishing,
advertising and brokers’ fees), to the obligations of Lessee pursuant to this
sub-part (b), with Lessee remaining liable for any deficiency and with any
excess being retained by Lessor; or retain any or all of the Equipment in full
or partial satisfaction, as the case may be, with Lessee remaining liable for
any deficiency; and recover from Lessee damages, not as a penalty, but herein
liquidated for all purposes as follows:

 

(1) if Lessor elects to dispose of the Equipment under an Equipment Schedule
pursuant to a lease which is substantially similar to this Lease and such
Equipment Schedule: an amount equal to the sum of (A) any accrued and unpaid
Rent and other sums then due under this Lease and such Equipment Schedule as of
the date of commencement (the “Commencement Date”) of the term of the new lease,
and (B) (i) the present value as of the Commencement Date of the total Rent for
the then remaining term of such Equipment Schedule, minus (ii) the present value
as of the Commencement Date of the Rent under the new lease applicable to that
period of the new lease term which is comparable to the then remaining term of
such Equipment Schedule, and (C) any incidental damages allowed under Article
2A, less expenses saved by Lessor in consequence of the Event of Default
(“Incidental Damages”); or

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(2) if Lessor elects to retain the Equipment or to dispose of the Equipment
under an Equipment Schedule by sale, by re-lease (pursuant to a lease which is
not substantially similar to this Lease and such Equipment Schedule), or
otherwise: an amount equal to the sum of (A) any accrued and unpaid Rent and
other sums then due as of the date Lessor repossesses the Equipment or such
earlier date as Lessee tenders possession of the Equipment to Lessor, (B) (i)
the present value as of the date determined under clause (A) of the total Rent
for the then remaining term of such Equipment Schedule, minus (ii) the present
value, as of that certain date which may be determined by taking a reasonable
opportunity to repossess and remarket the Equipment, of the “market rent” (as
computed pursuant to Article 2A) at the place where the Equipment was located on
that date, computed for the same lease term, and (C) any Incidental Damages
(provided, however, that if the measure of damages provided is inadequate to put
Lessor in as good a position as performance would have, the damages shall be the
present value of the profit, including reasonable overhead, Lessor would have
made from full performance by Lessee, together with any Incidental Damages
allowed under Article 2A, due allowance for costs reasonably incurred and due
credit for payments or proceeds of disposition);

 

(c) In lieu of the damages specified in sub-part (b), with respect to each
applicable Equipment Schedule, Lessor may recover from Lessee, as liquidated
damages for loss of a bargain and not as a penalty, an amount calculated as the
sum of (1) the Stipulated Loss Value of the Equipment (as determined as of the
next date on which a payment is or would have been due after the declaration of
an Event of Default), together with all other sums due hereunder through the
date of such payment with respect to such Equipment; plus (2) the amount of all
commercially reasonable cost and expenses incurred by Lessor in connection with
repossession, recovery, storage, repair, sale, release or other disposition of
the Equipment, including reasonable attorneys’ fees and costs incurred in
connection therewith or otherwise resulting from Lessee’s Default; provided,
however, if Lessor has repossessed and disposed of the Equipment, Lessor shall
apply the Net Proceeds of such disposition to reimburse Lessee for an amount up
to, but in no event exceeding, that portion of the Stipulated Loss Value that
Lessee has paid to Lessor pursuant to this subpart (iii); as used herein, “Net
Proceeds” shall mean (a), in the case of a disposition by sale, the gross
selling price actually received, or (b), in the case of a disposition by lease,
the present value of the rent actually due during that period of the new lease
term which is comparable to the then remaining term of this Lease in respect of
the applicable Equipment Schedule, or, if shorter, the new lease term plus the
present value of Lessor’s estimated residual interest in the Equipment at the
end of the applicable Lease term of such Equipment Schedule, in each case less
(A) amounts which (if not paid) would constitute a lien on the Equipment for
which Lessee is responsible for under this Lease, and (B) applicable sales,
transfer, use or comparable taxes paid by Lessor. For purposes of the definition
of Net Proceeds, the new lease payments shall be discounted at a rate equal to
the rate implicit in the rent due during the term of this Lease in which the
Event of Default occurs.

 

If Lessor exercises its remedy pursuant to sub-part (c), upon payment in full by
Lessee of the amounts required to be paid by Lessee pursuant to such sub-part
(c) and the amounts for which Lessee is liable pursuant to the last paragraph of
this Section, Lessor shall deliver to Lessee a bill of sale transferring and
assigning to Lessee without recourse or warranty, except that Lessor shall
warrant that it is conveying such title to the Equipment as was received by it,
free and clear of all liens arising from any acts of Lessor, all of Lessor’s
right, title and interest in and to the Equipment. Lessor shall not be required
to make and may specifically disclaim any representation or warranty as to the
condition of the Equipment or any other matters.

 

(d) Cancel such Equipment Schedule as to any or all of the Equipment.

 

(e) Proceed by appropriate court action, either at law or in equity (including
an action for specific performance), to enforce performance by Lessee or to
recover damages associated with such Event of Default; or exercise any other
right or remedy available to Lessor at law or in equity.

 

With respect to any exercise by Lessor of its right to recover and/or dispose of
any Equipment or other collateral securing Lessee’s obligations under any
Equipment Schedule (if applicable), Lessee acknowledges and agrees as follows:
(i) Lessor shall have no obligation, subject to the requirements of commercial
reasonableness, to clean up or otherwise prepare the Equipment or any other
collateral for disposition, and (ii) Lessor may comply with the requirements of
any applicable law in connection with any disposition of the Equipment or other
collateral, and any actions taken in connection therewith shall not be deemed to
have adversely affected the commercial reasonableness of any disposition of such
Equipment and/or other collateral. Lessee acknowledges that if Lessor

--------------------------------------------------------------------------------

purchases any of the Equipment or other collateral upon sale pursuant to the
exercise of its remedies hereunder, Lessor may pay for the same by crediting
some or all of Lessee’s obligations hereunder or under any Equipment Schedule.

 

All amounts to be present valued shall be discounted at a rate equal to the
discount rate of the Federal Reserve Bank of Richmond in effect on the
applicable date. Unless otherwise provided above, a cancellation of any
Equipment Schedule shall occur only upon written notice by Lessor to Lessee and
only with respect to such items of the Equipment as Lessor specifically elects
to cancel in such notice. Except as to such items of the Equipment with respect
to which there is a cancellation, this Lease and the Equipment Schedules not so
cancelled shall remain in full force and effect and Lessee shall be and remain
liable for the full performance of all its obligations hereunder and thereunder.
Lessee shall be liable for all reasonable legal fees and other expenses incurred
by reason of any Default or Event of Default or the exercise of Lessor’s rights
or remedies, including all expenses incurred in connection with the return of
any Equipment in accordance with the terms of Section 13 hereof and this Section
or in placing such Equipment in the condition required by said Sections, and all
other pre-judgment and post-judgment enforcement related actions taken by
Lessor, and/or any actions taken by Lessor in any bankruptcy case involving
Lessee, the Equipment or any other collateral. Lessee shall also be liable for
Late Charges which shall accrue and be payable with respect to all amounts
becoming due pursuant to this Section from and after the due date therefor until
payment of the full amount thereof is made. No right or remedy referred to in
this Section is intended to be exclusive, but each shall be cumulative and shall
be in addition to any other remedy referred to above or otherwise available at
law or in equity, and may be exercised concurrently or separately from time to
time. The failure of Lessor to exercise the rights granted hereunder upon any
Event of Default by Lessee shall not constitute a waiver of any such right upon
the continuation or reoccurrence of any such Event of Default. In no event shall
the execution of an Equipment Schedule constitute a waiver by Lessor of any
pre-existing Event of Default in the performance of the terms and conditions
hereof.

 

17. LESSOR’S RIGHT TO PERFORM. If Lessee fails to make any payment required to
be made by it hereunder or fails to perform or comply with any of its other
agreements contained herein and such failure can be cured with the payment of
money, Lessor may itself make such payment or perform or comply with such
agreement, but shall not be obligated hereunder to do so, and the amount of such
payment and of the reasonable expenses of Lessor incurred in connection with
such payment or the performance of or compliance with such agreement, as the
case may be, together with interest thereon at the Late Charge Rate, to the
extent permitted by applicable law, shall be payable by Lessee to Lessor on
demand.

 

18. ASSIGNMENT.

 

(a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (WHICH SHALL NOT UNREASONABLY BE
WITHHELD), LESSEE WILL NOT ASSIGN, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR ITS LEASEHOLD INTEREST, SUBLET THE EQUIPMENT OR
OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE, ITS EMPLOYEES AND AGENTS, OTHER
THAN IN THE NORMAL COURSE OF LESSEE’S BUSINESS AND OPERATIONS; PROVIDED,
HOWEVER, THAT SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING: (1) LESSEE MAY ASSIGN OR TRANSFER ALL OF ITS RIGHTS OR OBLIGATIONS
HEREUNDER OR ITS LEASEHOLD INTEREST IN CONNECTION WITH A MERGER OR CONSOLIDATION
OF LESSEE WITH, OR ANY TRANSFER OF SUBSTANTIALLY ALL OF THE ASSETS OF THE
STACKTRAIN DIVISION OF LESSEE TO, AN ENTITY IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 15(a)(8)(A) and (B) HEREOF; AND (2) LESSEE SHALL HAVE THE RIGHT TO PUT
THE EQUIPMENT IN THE POSSESSION OF ANY REPUTABLE REPAIR FACILITY FOR THE PURPOSE
OF ANY REPAIRS, MODIFICATIONS, CHANGES OR ALTERATIONS PERMITTED UNDER THIS
LEASE, SUCH WORK TO BE PERFORMED ON THE TERMS CONFERRING NO MORE THAN A
CONTRACTUAL RIGHT AGAINST LESSEE AND NO RIGHT AGAINST THE EQUIPMENT. No
assignment or sublease, whether authorized in this Section or in violation of
the terms hereof, shall relieve Lessee of its obligations hereunder and Lessee
shall remain primarily liable hereunder. Lessee will not, without the prior
written consent of Lessor, sublease or otherwise in any manner deliver, transfer
or relinquish possession of any Equipment.

 

(b) Lessor may assign any or all of its rights, obligations, title and interest
hereunder, or the right to enter into any Equipment Schedule or may resell
(through syndication, assignment, participation or placements) an interest in

--------------------------------------------------------------------------------

any or all of the Equipment, this Lease or any Equipment Schedule; provided,
however, that no such assignment or resale by Lessor may materially increase the
burdens or risks placed on Lessee under the Lease. Notwithstanding any
assignment by Lessor, Lessee shall be entitled to continue to make payments to
LaSalle National Leasing Corporation (“LaSalle”), as agent for any and all
assignees of LaSalle, and Lessee shall not be required to provide notices to any
parties other than to LaSalle, as agent for any and all assignees. Each
Equipment Schedule, incorporating by reference the terms and conditions of this
Lease, constitutes a separate instrument of lease, and the “Lessor” named
therein or its assignee shall have all rights as “Lessor” thereunder separately
exercisable by such named Lessor or assignee as the case may be, exclusively and
independently of Lessor or any assignee with respect to other Equipment
Schedules executed pursuant hereto. Lessee agrees to confirm in writing receipt
of any notice of assignment, syndication, participation or placement, as
reasonably may be requested by Lessor or any such assignee or participant
(collectively, the “Assignee”). Without waiving any rights Lessee may have
against Lessor, Lessee hereby waives and agrees not to assert against any such
Assignee any defense, setoff, recoupment, claim or counterclaim which Lessee has
or may at any time hereafter have against Lessor or any Person other than such
Assignee, for any reason whatsoever. Lessee will provide reasonable assistance
to Lessor in whatever manner necessary but at Lessor’s expense in order to
permit Lessor to complete any resale, syndication, assignment, participation or
placement of the transaction contemplated by this Lease. Lessee agrees that any
such assignment shall not materially change Lessee’s duties or obligations under
this Lease or any Equipment Schedule, or materially increase Lessee’s risks or
burdens. Upon such assignment and except as may otherwise by provided herein,
all references in this Lease to Lessor shall include such Assignee.

 

(c) Subject always to the foregoing, this Lease inures to the benefit of, and is
binding upon, the successors and assigns of the parties hereto.

 

19. MISCELLANEOUS. (a) This Lease, the Riders attached hereto, each Equipment
Schedule, any commitment letter between Lessor and Lessee in connection with the
transactions contemplated by this Lease, and the Equipment Purchase Order
Assignment and Novation dated as of the date hereof between Lessor and Lessee,
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and shall not be rescinded, amended or modified in any
manner except by a document in writing executed by both parties. (b) Any
provision of this Lease which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. (c)
The representations, warranties and covenants of Lessee herein shall be deemed
to be continuing and to survive the execution and delivery of this Lease, each
Equipment Schedule and any other Lease Documents. Each execution by Lessee of an
Equipment Schedule shall be deemed a reaffirmation and warranty that there shall
have been no material adverse change in the business or financial condition of
Lessee from the date of execution hereof. With respect to each Equipment
Schedule, the obligations of Lessee under Sections 9, 13 and 14 hereof, together
with any of Lessee’s obligations under the other provisions of this Lease (as
incorporated therein) which have accrued but not been fully satisfied, performed
or complied with prior to the cancellation or expiration of such Equipment
Schedule, shall survive the cancellation or expiration thereof to the extent
necessary for the full and complete performance of such obligations. The
obligations of Lessor under Sections 9 and 14 hereof, which have accrued but not
been fully satisfied, performed or complied with prior to the cancellation or
expiration of such Equipment Schedule, shall survive the cancellation or
expiration thereof to the extent necessary for the full and complete performance
of such obligations. (d) Lessor represents and covenants to Lessee that Lessor
has full authority to enter into this Lease and any other Lease Documents to
which it may become a party, and so long as no Default or Event of Default
occurs with respect to an Equipment Schedule, neither Lessor nor any Person
claiming by or through Lessor shall interfere with Lessee’s right to peaceably
and quietly possess and use the Equipment during the term thereof, subject to
the terms and provisions hereof. Lessor further agrees to enforce Lessee’s or
any permitted sublessee’s right of quiet enjoyment as provided for herein
against Liens (as defined in Section 10(c) hereof) of third parties created by
or through Lessor. (e) Expenses incurred by Lessor in connection with (1) the
initial filing or recording of real property waivers (if applicable) and UCC
statements, and (2) lien search reports and copies of filings on or about the
date of the Equipment Schedule with respect to Lessee and/or the Equipment,
shall be for the account of Lessee and shall be payable by Lessee upon demand.
(f) If Lessor is required by the terms hereof to pay to or for the benefit of
Lessee any amount received as a refund of an Imposition or as insurance
proceeds, and a Default or Event of Default has then occurred and is continuing,
Lessor shall not be required to pay such amount unless and until any such
Default or Event of Default shall have been waived by Lessor. In addition, if
Lessor is required by the terms hereof to cooperate with Lessee in connection
with certain matters, such cooperation shall not be required if an Event of
Default has then occurred and is continuing. (g) Lessee irrevocably authorizes
Lessor to file any UCC statements,

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and Lessee irrevocably appoints Lessor as Lessee’s attorney-in-fact (which power
shall be deemed coupled with an interest) to execute, endorse and deliver any
UCC statements and any documents and checks or drafts relating to or received in
payment for any loss or damage under the policies of insurance required by the
provisions of Section 11 hereof, but only to the extent that the same relates to
the Equipment. (h) LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY
WAY PERTAINING TO THIS LEASE. LESSEE AUTHORIZES LESSOR TO FILE THIS PROVISION
WITH THE CLERK OR JUDGE OF ANY COURT HEARING ANY SUCH CLAIM. THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY LESSEE AND LESSEE HEREBY
ACKNOWLEDGES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR
NULLIFY ITS EFFECT. LESSEE AND LESSOR FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED IN THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. (i) All notices
(excluding billings and communications in the ordinary course of business)
hereunder shall be in writing, personally delivered, delivered by overnight
courier service, sent by facsimile transmission (with confirmation of receipt),
or sent by certified mail, return receipt requested, addressed to the other
party at its respective address stated below the signature of such party or at
such other address as such party shall from time to time designate in writing to
the other party; and shall be effective upon receipt. (j) This Lease and all of
the other Lease Documents shall not be effective unless and until accepted by
execution by an officer of Lessor. (k) All warranties, representations,
indemnities and covenants made by any party hereto, herein or in any certificate
or other instrument delivered by any such party or on the behalf of any such
party under this Lease shall be considered to have been relied upon by each
other party hereto and shall survive the consummation of the transactions
contemplated regardless of any investigation made by any such party or on behalf
of any such party. (l) If any payment is to be made hereunder or any action is
to be taken hereunder on any date that is not a Business Day, such payment or
action otherwise required to be made or taken on such date shall be made or
taken on the next succeeding Business Day. (m) THIS LEASE AND ALL OF THE OTHER
LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER, SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The
parties agree that any action or proceeding arising out of or relating to this
Lease may be commenced in any state or Federal court in the State of New York,
and agree that a summons and complaint commencing an action or proceeding in any
such court shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address hereinbelow set
forth, or as it may provide in writing from time to time, or as otherwise
provided under the laws of the State of New York. (n) This Lease and all of the
other Lease Documents may be executed in any number of counterparts and by
different parties hereto or thereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together consist of but one and the same instrument; provided, however,
that to the extent that this Lease and/or the Equipment Schedule would
constitute chattel paper, as such term is defined in the Uniform Commercial Code
as in effect in any applicable jurisdiction, no security interest herein or
therein may be created through the transfer or possession of this Lease in and
of itself without the transfer or possession of the original of such Equipment
Schedule and incorporating this Lease by reference; and no security interest in
this Lease and an Equipment Schedule may be created by the transfer or
possession of any counterpart of such Equipment Schedule other than the original
thereof, which shall be identified as the document marked “Original” and all
other counterparts shall be marked “Duplicate”.

 

20. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in
this Lease or in any of the Equipment Schedules have the following meanings: (1)
“applicable law” or “law”: any law, rule, regulation, ordinance, order, code,
common law, interpretation, judgment, directive, decree, treaty, injunction,
writ, determination, award, permit or similar norm or decision of any
governmental authority; (2) “Business Day”: any day, other than a Saturday,
Sunday, or legal holiday for commercial banks under the laws of the State of New
York; (3) “UCC”: the Uniform Commercial Code as in effect in the State of New
York or in any other applicable jurisdiction; and any reference to an article or
section thereof shall mean the corresponding article or section (however termed)
of any such other applicable version of the Uniform Commercial Code; (4)
“governmental authority”: any Federal, state, county, municipal, regional or
other governmental authority, agency, board, body, instrumentality or court, in
each case, whether domestic or foreign where the Equipment is operated; and (5)
“Person”: any individual,

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corporation, partnership, joint venture, or other legal entity or a governmental
authority, whether employed, hired, affiliated, owned, contracted with, or
otherwise related or unrelated to Lessee or Lessor. (b) The following terms when
used herein or in any of the Equipment Schedules shall be construed as follows:
“herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Lease or such
other Lease Document in which such term appears (and not merely in, of, under,
etc. the section or provision where the reference occurs); “including”:
containing, embracing or involving all of the enumerated items, but not limited
to such items unless such term is followed by the words “and limited to,” or
similar words; and “or”: at least one, but not necessarily only one, of the
alternatives enumerated. Any defined term used in the singular preceded by “any”
indicates any number of the members of the relevant class. Any Lease Document or
other agreement or instrument referred to herein means such agreement or
instrument as supplemented and amended from time to time. Any reference to
Lessor or Lessee shall include their permitted successors and assigns. Any
reference to a law shall also mean such law as amended, superseded or replaced
from time to time. Unless otherwise expressly provided herein to the contrary,
all actions that Lessee takes or is required to take under any Lease Document
shall be taken at Lessee’s sole cost and expense, and all such costs and
expenses shall constitute Claims and be covered by Section 14 hereof. To the
extent Lessor is required to give its consent or approval with respect to any
matter, the reasonableness of Lessor’s withholding of such consent shall be
determined based on the then existing circumstances; provided, that Lessor’s
withholding of its consent shall be deemed reasonable for all purposes if (i)
the taking of the action that is the subject of such request, might result (in
Lessor’s discretion), in (A) an impairment of Lessor’s rights, title or
interests hereunder or under any Equipment Schedule or other Lease Document, or
to the Equipment, or (B) expose Lessor to any Claims, or (ii) to the extent
Lessee fails to provide promptly to Lessor any filings, certificates, opinions
or indemnities specified by Lessor to Lessee in writing.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement
to be duly executed, under seal, as of the day and year first above set forth.

 

LASALLE NATIONAL LEASING CORPORATION
Lessor      

PACER INTERNATIONAL, INC.

Lessee

                 

By:                                                                     [SEAL]

     

By:                                                                     [SEAL]

Name:                                     
                                        

     

Name:                                     
                                        

Title:                                     
                                          

     

Title:                                     
                                          

One West Pennsylvania Avenue

     

1340 Treat Boulevard

Suite 1000

     

Suite 200

Towson, Maryland 21204

     

Walnut Creek, California 94596

Facsimile: (410) 769-9313

     

Facsimile: 925-979-4215

           

Federal Employer Identification No.:

           

Jurisdiction of Organization: Tennessee

           

Organizational No.: 0022491