Master Equipment Lease & Security Agreement

EXHIBIT 10.47


================================================================================


MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT


Dated as of November 15, 1996


between


MAIL-WELL I CORPORATION
as the Lessee or Debtor


and


PARIBAS PROPERTIES, INC.
as the Lessor or Secured Party.


================================================================================


This Master Equipment Lease and Security Agreement has been executed in several counterparts. To the extent, if any, that this Master Equipment Lease and Security Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no lien on this Master Equipment Lease and Security Agreement may be created through the transfer or possession of any counterpart other than the original counterpart containing the receipt therefor executed by Lessor on or following the signature page hereof.


TABLE OF CONTENTS
-----------------


Page
---- ARTICLE I
DEFINITIONS................................................................ 2
1.1 Definitions; Interpretation............................................2


ARTICLE II
MASTER LEASE................................................................2
2.1 Acceptance and Lease of Equipment......................................2
2.2 Acceptance Procedure...................................................2
2.3 Lease Term.............................................................2
2.4 Disclaimer of Warranties...............................................2
2.5 Title; Ownership of Equipment; Subordination...........................3
2.6 Appointment of the Agent...............................................4


ARTICLE III
PAYMENT OF RENT.............................................................5
3.1 Rent...................................................................5
3.2 Net Rent...............................................................6
3.3 Supplemental Rent......................................................6
3.4 Method of Payment......................................................6


ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT...........................................7
4.1 Quiet Enjoyment........................................................7
4.2 Right to Inspect.......................................................7


ARTICLE V
ABSOLUTE OBLIGATIONS........................................................7
5.1 Unconditional Net Lease................................................7
5.2 No Termination or Abatement............................................8


ARTICLE VI
SUBLEASES...................................................................8
6.1 Subletting.............................................................8
6.2 Assignment of Subleases and Business Interruption Insurance to Lessor..9


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ARTICLE VII
LESSEE ACKNOWLEDGMENTS................................................... 9
7.1 Condition of the Equipment.......................................... 9
7.2 Risk of Loss........................................................10


ARTICLE VIII
POSSESSION AND USE OF THE EQUIPMENT, ETC.................................10
8.1 Use of the Equipment................................................10
8.2 Compliance with Requirements of Law, Equipment Insurance Legal
Requirements and Insurance Requirements.............................11
8.3 Assignment by Lessee................................................11
8.4 Permitted Users.....................................................11
8.5 Location of Equipment...............................................11


ARTICLE IX
MAINTENANCE AND REPAIR; RETURN...........................................11
9.1 Maintenance and Repair; Return......................................11
9.2 Return of the Equipment.............................................12


ARTICLE X
MODIFICATIONS, ETC.......................................................13
10.1 Modifications, Substitutions and Replacements.......................13
ARTICLE XI
PROTECTION OF TITLE BY LESSEE............................................14
11.1 Prohibition on Liens................................................14


ARTICLE XII
PERMITTED CONTESTS.......................................................14
12.1 Permitted Contests in Respect of Applicable Law.

(a) ..................................................14


ARTICLE XIII
INSURANCE................................................................15
13.1 Public Liability and Workers Compensation Insurance.................15
13.2 Hazard and Other Insurance..........................................16
13.3 Insurance Coverage..................................................16


ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS.........................17


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14.1 Casualty and Condemnation..........................................17
14.2 Environmental Matters..............................................18
14.3 Notice of Environmental Matters....................................19


ARTICLE XV
TERMINATION OF LEASE.....................................................19
15.1 Partial Termination upon Certain Events............................19
15.2 Partial Termination Procedures.....................................20


ARTICLE XVI
EVENTS OF DEFAULT........................................................20
16.1 Lease Events of Default............................................20
16.2 Remedies...........................................................21
16.3 Waiver of Certain Rights...........................................25
16.4 Security Interest and Foreclosure..................................25


ARTICLE XVII
LESSOR'S RIGHT TO CURE...................................................26
17.1 The Lessor's Right to Cure the Lessee's Lease Defaults.............26


ARTICLE XVIII
PURCHASE PROVISIONS......................................................27
18.1 Option to Purchase all of the Equipment............................27
18.2 Expiration Date Purchase Obligation................................27
18.3 Acceleration of Purchase Obligation................................27


ARTICLE XIX
INDEMNITIES..............................................................28
19.1 General Indemnity..................................................28
19.2 Impositions........................................................29


ARTICLE XX
REMARKETING OPTION.......................................................30
20.1 Option to Remarket.................................................30
20.2 Certain Obligations Continue.......................................32


ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR REMARKETING...........................33


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21.1 Provisions Relating to the Exercise of Purchase Option or
Obligation and Conveyance Upon Remarketing and Conveyance Upon
Certain Other Events...............................................33


ARTICLE XXII
ESTOPPEL CERTIFICATES....................................................34
22.1 Estoppel Certificates..............................................34


ARTICLE XXIII
ACCEPTANCE OF SURRENDER..................................................35
23.1 Acceptance of Surrender............................................35


ARTICLE XXIV
NO MERGER OF TITLE.......................................................35
24.1 No Merger of Title.................................................35


ARTICLE XXV
INTENT OF THE PARTIES....................................................35
25.1 Ownership of the Equipment.........................................35


ARTICLE XXVI
MISCELLANEOUS............................................................36
26.1 Survival; Severability; Etc........................................36
26.2 Amendments and Modifications.......................................36
26.3 No Waiver..........................................................36
26.4 Notices............................................................36
26.5 Successors and Assigns.............................................36
26.6 Headings and Table of Contents.....................................36
26.7 Counterparts.......................................................36
26.8 GOVERNING LAW......................................................36
26.9 Limitations on Recourse............................................37
26.10 Original Lease.....................................................37


List of Exhibits: - ---------------- EXHIBIT "A" Description of the Equipment EXHIBIT "B" Insurance Coverage Requirements and Allocation of
Equipment Balance to Each Item of the Equipment


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MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT


THIS MASTER EQUIPMENT LEASE AND SECURITY AGREEMENT (this "Master Lease"),
------------ dated as of November 15, 1996, between PARIBAS PROPERTIES, INC., a Delaware corporation, having its principal office at 1200 Smith Street, Suite 3100, Houston, Texas 77002, as the Lessor and as Secured Party, and MAIL-WELL I CORPORATION, a Delaware corporation, having a principal office at 23 Inverness Way East, Englewood, CO 80112, Attn: Mr. Paul Reilly, as Lessee and as Debtor.


W I T N E S S E T H:
-------------------


Recitals
--------


A. Pursuant to that certain Participation Agreement dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the "Participation Agreement"), entered into by and among the Lessee, the various - ------------------------ Subsidiaries of the Lessee as are or may from time to time become parties thereto as Subsidiary Guarantors (the "Subsidiary Guarantors"), Lessor, the
--------------------- financial institution or institutions (the "Equity Lenders") who are parties
-------------- thereto as Equity Lenders, the financial institutions (the "Financing Lenders")
----------------- who are parties thereto as Financing Lenders, and Banque Paribas, Houston Agency, as agent (in such capacity, the "Agent") for the Financing Lenders and
----- the Equity Lenders (collectively referred to as the "Lender" or "Lenders," as
------ ------- the case may be), have agreed to finance the Lessor's acquisition of the Equipment (as hereinafter defined).


B. On the Effective Date, the Lessor will purchase certain envelope and commercial printing equipment from the Lessee (all such items of equipment being called the "Equipment"). Each item of the Equipment is more particularly
--------- described on the Equipment Schedule attached hereto as Exhibit "A" and made a
----------- part hereof for all purposes (the "Equipment Schedule").
------------------


C. The Lessor desires to lease to the Lessee, and the Lessee desires to lease from the Lessor, the Equipment.


Agreement
---------


NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE I
DEFINITIONS


1.1 Definitions; Interpretation. Capitalized terms used but not otherwise
--------------------------- defined in this Master Lease have the respective meanings specified in Appendix
-------- A to this Master Lease; and the rules of interpretation set forth in Appendix A - - ---------- to this Master Lease shall apply to this Master Lease.


ARTICLE II
MASTER LEASE


2.1 Acceptance and Lease of Equipment. The Lessor hereby leases to the
--------------------------------- Lessee for the Lease Term (as hereinafter defined), the Equipment, and the Lessee hereby leases from the Lessor for the Lease Term, the Lessor's interest in the Equipment, together with any accessories, replacements and substitutions therefor which may be made by the Lessee pursuant to the terms of this Master Lease. The Lessee shall have the right from time to time to release items of the Equipment and to substitute items of other equipment strictly in accordance with the provisions of Section 6.3 of the Participation Agreement. Each such
----------- substitution shall be subject to the approval of the Agent, which approval may be withheld in its sole discretion.


2.2 Acceptance Procedure. The Lessee hereby irrevocably accepts all of
-------------------- the Equipment for all purposes of this Master Lease and the other Operative Documents on the terms set forth therein and herein, and agrees that all of the Equipment shall be deemed to be included in the leasehold estate of this Master Lease and shall be subject to the terms and conditions of this Master Lease as of the Effective Date.


2.3 Lease Term. The term of this Master Lease shall commence on the date
---------- hereof and shall expire on the Expiration Date (the "Lease Term"), unless the
---------- Lease Term is earlier terminated in accordance with the provisions of this Master Lease or the Operative Documents.


2.4 DISCLAIMER OF WARRANTIES.
------------------------


(a) THE LESSOR LEASES THE EQUIPMENT TO THE LESSEE "AS-IS", "WHERE-
IS", WITH ALL FAULTS, AND IN WHATEVER CONDITION IT MAY BE. THE LESSEE
ACKNOWLEDGES THAT THE LESSOR IS NOT A SELLER (AS SUCH TERM IS DEFINED IN
ANY APPLICABLE UNIFORM COMMERCIAL CODE), NOR A SELLER'S AGENT, AND THE
LESSOR DOES NOT MAKE AND HAS NOT MADE, AND IT SHALL NOT BE DEEMED TO MAKE
OR HAVE MADE, ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO (1) THE DESIGN, OPERATION OR CONDITION OF, OR THE QUALITY OF THE
MATERIAL, EQUIPMENT OR


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WORKMANSHIP IN, THE EQUIPMENT, (2) THE MERCHANTABILITY OR FITNESS OF THE
-------------------------------------
EQUIPMENT FOR ANY PARTICULAR PURPOSE, (3) THE TITLE TO THE EQUIPMENT OR ANY
-------------------------------------
COMPONENT THEREOF, (4) COMPLIANCE WITH SPECIFICATIONS OR APPLICABLE LAW,
(5) THE ABSENCE OF LATENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE),
(6) THE ABSENCE OF INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, (7)
THE ABSENCE OF ANY OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR (8)
ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF THE EQUIPMENT, EITHER UPON DELIVERY THEREOF TO LESSEE OR OTHERWISE,
IT BEING AGREED THAT ALL RISKS, IF ANY, AS BETWEEN THE LESSOR AND THE
LESSEE, ARE TO BE BORNE BY THE LESSEE.


(b) THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY TO THE
LESSEE OR ANY OTHER PERSON WITH RESPECT TO ANY OF THE FOLLOWING (I) ANY
LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR
INDIRECTLY BY ANY EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR
DEFECT THEREIN, OR ANY MATERIALS (INCLUDING, WITHOUT LIMITATION, ANY
SUBSTANCES DEEMED TO BE HAZARDOUS UNDER APPLICABLE LAW) AT ANY TIME
CONTAINED THEREIN OR REMOVED OR ESCAPING THEREFROM, OR BY ANY OTHER
CIRCUMSTANCES IN CONNECTION THEREWITH; (II) THE USE, OPERATION OR
PERFORMANCE OF ANY EQUIPMENT OR ANY RISKS RELATING THERETO; (III) ANY
INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR
CONSEQUENTIAL DAMAGES; OR (IV) THE DELIVERY, OPERATION, SERVICING,
MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF ANY OF THE EQUIPMENT.
THE LESSEE ACKNOWLEDGES THAT THE EQUIPMENT IS IN ALL THE FOREGOING RESPECTS
SATISFACTORY TO THE LESSEE, AND THE LESSEE WILL NOT ASSERT ANY CLAIM OF ANY
NATURE WHATSOEVER AGAINST THE LESSOR BASED ON ANY OF THE FOREGOING MATTERS
IN THIS SECTION 2.4. SUBJECT TO THE LESSOR'S RIGHT TO DO SO, THE LESSOR
-----------
HEREBY ASSIGNS WITHOUT RECOURSE TO THE LESSEE FOR THE TERM OF THIS MASTER
LEASE ANY WARRANTY WHICH HAS BEEN EXTENDED TO THE LESSOR BY THE
MANUFACTURER OR VENDOR OF THE EQUIPMENT. ANY AMOUNTS RECEIVED BY THE
LESSEE AS PAYMENT UNDER ANY SUCH WARRANTY SHALL BE APPLIED TO RESTORE THE
EQUIPMENT TO THE CONDITION REQUIRED BY THIS MASTER LEASE, WITH THE BALANCE
OF SUCH AMOUNT, IF ANY, TO BE PAID OVER TO THE AGENT AND (TO THE EXTENT THE
AGENT RECEIVES SUCH AMOUNTS IN GOOD COLLECTED FUNDS) APPLIED AS RENT. THE
LESSEE SHALL NOT TAKE ANY ACTION OR FAIL TO TAKE ANY ACTION, THE EFFECT OF
WHICH WOULD BE TO INVALIDATE ANY SUCH WARRANTY.


2.5 Title; Ownership of Equipment; Subordination.
--------------------------------------------


(a) The Equipment is leased to the Lessee without any representation or warranty, express or implied by the Lessor, and is subject to the existing state of title and all applicable requirements of law and Property legal requirements. The Lessee shall in no event have any


3


recourse against the Lessor for any defect in or exception to title to any of the Equipment. The parties acknowledge their express intent that this Master Lease constitutes an operating lease for financial accounting purposes only; and for bankruptcy and federal, state and other tax purposes, the transaction contemplated hereby is a financing arrangement and that the Lessee is treated as the owner of the Equipment. This Master Lease is not intended to be subject to the provisions of Article 2A of the Uniform Commercial Code. The Lessee hereby waives any and all rights and remedies provided to a lessee in Article 2A and any other rights or remedies now or hereafter provided to or conferred upon it by statute or otherwise which may limit or modify any of the Lessor's rights and remedies under this Master Lease; provided, however, that such waiver shall not
-------- ------- preclude the Lessee from asserting any claim of the Lessee against the Lessor in a separate cause of action. Without limitation of the rights and remedies provided by the Operative Documents and by applicable law, and in addition to those rights and remedies, the Lessor shall have all rights and remedies of a "secured party" under Article 9 of the Uniform Commercial Code.


(b) This Master Lease and all rights and interests of the Lessor and the Lessee hereunder are subject and subordinate to the security interests and provisions of the Lessor First Security Agreement and the Lessor Second Security Agreement.


2.6 Appointment of the Agent. The Lessor hereby irrevocably designates
------------------------ and appoints the Agent as the agent for the Lessor (but for the benefit of the Lenders) pursuant to the collateral assignment being made under the Assignment of Lease and Rent, to take such action on its behalf under the provisions of this Master Lease and the other Operative Documents and to exercise such powers and perform such duties as are expressly granted to and reserved by the Lessor thereunder, together with such other powers as are reasonably incidental thereto. The provisions of Article X of the Loan Agreement, with respect to the Agent for the Lenders thereunder, are hereby fully incorporated by reference and shall be applicable to the rights, duties and responsibilities of the Agent as the agent for the Lessor (but for the benefit of the Lenders), including without limitation the provisions giving to the Required Participants the right to remove the Agent and, upon any removal or resignation of the Agent, to appoint a Successor Agent. Without limitation of the foregoing, all amounts of whatever kind payable to the Lessor under or with respect to this Master Lease shall be paid to, and collected by, the Agent as agent for the Lessor (but for the benefit of the Lenders). Notwithstanding any provision to the contrary elsewhere in this Master Lease, the Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Operative Document, or any fiduciary relationship as to the Lessor, the Lessee or any other party to the Operative Documents, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Master Lease or any other Operative Document. Unless expressly provided herein to the contrary, all rights, remedies, powers and privileges of the Lessor hereunder shall be exercised by the Agent upon the written direction of the Required Equity Lenders.


4


ARTICLE III
PAYMENT OF RENT


3.1 Rent.
----


(a) During the Lease Term, the Lessee shall pay Basic Rent on each
Payment Date, on the date required under Section 20.1(k) hereof in
---------------
connection with the Lessee's exercise of the Remarketing Option, and on any
date on which this Master Lease shall terminate with respect to any or all
of the Equipment.


(b) Subject to the terms of the Operative Documents, Basic Rent shall
be due and payable in lawful money of the United States and shall be paid
on the due date therefor directly to the Agent for the pro rata account of
the Lenders entitled to receive such payment in immediately available funds
by wire transfer to the account of the Agent specified on Schedule IV to
-----------
the Participation Agreement under the heading "Wire Transfer Instructions
for Obligors."


(c) All Rent and other amounts payable hereunder shall be paid
without notice or demand by Lessee directly to the Agent and such amounts
shall be disbursed by the Agent in accordance with the Operative Documents.
Lessee's obligation to pay Rent shall be absolute and unconditional and not
subject to any abatement, reduction, set-off, defense, counterclaim or
recoupment (collectively "Abatements") for any reason whatsoever, including
----------
without limitation, Abatements due to any present or future claims of
Lessee against Lessor under this Master Lease or otherwise, or against any
manufacturer or vendor of any of the Equipment.


(d) Neither the Lessee's inability or failure to take or maintain
possession of all or any portion of any Equipment when delivered by the
Lessor, whether or not attributable to any act or omission of the Lessee or
any act or omission of the Lessor, or for any other reason whatsoever,
shall delay or otherwise affect the Lessee's obligation to pay Rent for
such Equipment in accordance with the terms of this Master Lease.


(e) If a court shall finally determine that Lessor has received any
payments under this Master Lease which are determined to be interest and
which result in interest charges to Lessee in excess of the highest
permitted by applicable law, such payments shall be subject to, and applied
in accordance with, the provisions of Section 13.2 of the Participation
------------
Agreement.


(f) All amounts payable by the Lessee under this Master Lease which
constitute interest under Applicable Laws shall be expressly subject to the
controlling provisions of Section 13.2 of the Participation Agreement


5


3.2 Net Rent. All Rent shall be paid absolutely net to the Lessor, so
-------- ---------- --- that this Master Lease shall yield to the Lessor the full amount thereof, without set-off, prior notice, demand, deduction or reduction. The Lessee accordingly covenants and agrees to pay, as they become due and payable and before they become delinquent, all Impositions, costs, expenses, fees, liabilities, deductions and other charges whatsoever with respect to the Equipment and the ownership, leasing, operation, maintenance, repair, and use thereof, including without limitation the costs, charges and assessments hereinafter set forth in this Master Lease and any obligations which the Lessor may now or hereafter suffer or incur with respect to the Equipment, of whatever kind or character whatsoever.


3.3 Supplemental Rent. The Lessee shall pay to the Lessor or the Person
----------------- entitled thereto any and all Supplemental Rent promptly as the same shall become due and payable, and if the Lessee fails to pay any Supplemental Rent, the Lessor shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Basic Rent. The Lessee shall pay to the Lessor, as Supplemental Rent, among other things, on demand, to the extent permitted by applicable Requirements of Law, interest at the applicable Default Rate on any installment of Basic Rent not paid when due for ...