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FOURTH DIVISION
June 24, 2004

PRESIDING JUSTICE QUINN delivered the opinion of the court:

Defendant, Enterasys Networks, Inc. (Enterasys), formerlyknown as Cabletron Systems, Inc. (Cabletron), a Delawarecorporation, appeals from circuit court orders granting summaryjudgment and a petition for entry of a damage award in favor ofplaintiff, Fleet Business Credit, LLC (Fleet), a Delaware limitedliability company. On appeal, Enterasys asserts that section 4.4(b)of a "Referral and Remarketing Agreement" (Remarketing Agreement)that was executed by the parties on March 31, 2000 (as amended onMarch 2, 2001), is an unenforceable penalty clause and not arecourse provision, as found by the court. For the followingreasons, we affirm.

Enterasys manufactures and distributes telecommunications andnetworking equipment. Fleet provides business-related financing tocustomers of manufacturers like Enterasys. Enterasys sought tostimulate the sales of its products by making retail financingprograms available to its customers. Consequently, on March 31,2000, Enterasys and Fleet entered into the Remarketing Agreement,whereby Fleet agreed to purchase products from Enterasys which thenwould be leased simultaneously to Enterasys' customers. TheRemarketing Agreement sets forth the terms and obligationsapplicable to all Fleet financing of Enterasys' manufactured ordistributed products and requires that Enterasys and Fleet enterinto a "Transaction Supplement" each time that Fleet providesfinancing to a particular Enterasys customer. Under the provisionsestablished by the Remarketing Agreement, the TransactionSupplement, among other things, would identify the customer andproducts subject to the financing, specify the discount rateapplicable to the financing and set forth any recourse provisions,warranties and covenants related to the particular financing.

While negotiating and entering into the Remarketing Agreement,Fleet and Enterasys anticipated that Fleet-financed products mightbe returned on occasion. Because of Enterasys' quality salesstaff, distribution network and product knowledge necessary toremarket any returned equipment to new customers, Fleet insisted onEnterasys' commitment to provide remarketing services. As aresult, the Remarketing Agreement included provisions relating toEnterasys' obligations to remarket returned products. Enterasysagreed to: (1) perform "Off-Lease" duties, including takingpossession of the Off-Lease products, refurbishing such productsand undertaking, on a best efforts basis, to re-lease, rent, leaseor sell the products without discriminating against such productsin favor of any products owned, managed or remarketed by Enterasys;(2) provide monthly remarketing reports; (3) inform Fleet ofprospective lessees, users or purchasers and provide proposeddocumentation and credit information for Fleet's written approval;(4) deliver promptly to Fleet all documents related to theremarketing of any product; and (5) remit immediately all proceedsof any remarketing, net of sales, use, property, excise, ad valoremor similar taxes to Fleet.

The Remarketing Agreement also addressed concerns raised byEnterasys' plans, announced contemporaneously to the negotiation ofthe Remarketing Agreement, to change its corporate structure. According to a February 2000 Enterasys press release, Enterasys,which then conducted business as Cabletron, stated that it plannedto form four operating affiliate companies, namely, RiverstoneNetworks, Inc. (Riverstone), Enterasys Networks, Inc. (Enterasys-sub), Aprisma Management Technologies, Inc. (Aprisma), and GlobalNetwork Technology Services (Global Network), and had begun areorganization process under which it planned to sell parts of itsbusiness. The press release noted that "the eventual goal is tohave four separate, publicly traded companies."

Mark Sullivan, the Fleet vice-president who negotiated theRemarketing Agreement with Enterasys, testified by deposition thathe expressed concern to Enterasys representatives regarding theproposed reorganization of Enterasys' corporate structure, stating,"[I] [d]on't know what you guys are going to do here as far as howthese companies are going to look, but we're credit-approving aconsolidated entity, and our agreement is going to make sure thatwhen you do whatever you do, we're going to have the same creditsupport that we're approving now."

Joseph Cardona, the Fleet credit officer who reviewed theEnterasys transaction, also noted his concern about the potentialeffect of the corporate changes contemplated by Enterasys. Bydeposition, Cardona testified regarding Enterasys' obligation tomake Fleet financially whole to the extent of the percentage ofagreed-upon recourse. Cardona stated:

"[Fleet's] concern here was that -- and it's outlined inone of [Enterasys'] approvals -- was that an entity otherthan [Enterasys], as it existed at the time, would be ina better position to remarket the equipment as well. Forexample, Enterasys was in a better position because ***that was the equipment they were manufacturing,remarketing, selling to their customers. *** So in theevent that Enterasys would change its standing and not beCabletron or be a separate entity, we want to make surethat we had the best party to support the [RemarketingAgreement]."

As a result of Fleet's concerns, the Remarketing Agreementprovided that Enterasys would not: (1) cease to support productscomparable to the equipment that was the subject of financingcontracts between Fleet and Enterasys' customers; (2) sell,transfer or convey a substantial part of its assets; or (3) effector be party to any merger or consolidation. Further, section4.3(d) of the Remarketing Agreement states:

"In the event that [Enterasys] creates subsidiaries andeither continues to own their stock or allows suchsubsidiaries to issue their shares to other investors andno longer be subsidiaries, [Enterasys] covenants thateach subsidiary shall execute in favor of [Fleet] aguaranty or an assumption of [Enterasys'] obligationsunder this Agreement and each Transaction Summary,satisfactory in form and content to [Fleet]."

Significantly, in reliance upon Enterasys' remarketingcommitments and other representations, and their importance toFleet's participation in the Enterasys financing program, Fleetalso obtained Enterasys' agreement to purchase all "RetailContracts" entered into by Fleet with Enterasys' customers ifEnterasys breached its representations, warranties or covenants. Section 4.4(b) of the Remarketing Agreement, entitled, "CovenantBreach," provides:

"If [Enterasys] is in breach of any representation,warranty or covenant in this Agreement (other thanrepresentation, warranty or covenant contained in Section4.2 or in 4.3(d)) or in any Transaction Supplement, andsuch breach is not cured within thirty days after[Fleet's] notification of such breach, or if [Enterasys]is in breach of any covenant set forth in Section 4.3(d)of this Agreement, [Enterasys] will immediately upondemand by [Fleet] purchase all Retail Contracts enteredinto by [Fleet] pursuant to this Agreement for theiraggregate Unpaid Balances."

Section 1.5 of the Remarketing Agreement states that "'RetailContracts' shall mean any and all writings evidencing orreflecting: (a) [Fleet's] financing of the retail sale of Productsby [Enterasys] to Customers, including leases with nominal purchaseoptions, or (b) [Fleet's] leasing of Products to Customers." TheRemarketing Agreement defines an unpaid balance with respect to aRetail Contract as:

"(i) all past due rental payments and other amounts,including late charges, owing on the Retail Contract,plus interest on same from the date the payment was dueuntil it is paid, calculated at the Discount Rateapplicable to such Retail Contract, (ii) the presentvalue of the remaining scheduled payments on such RetailContract, calculated by using the Discount Rateapplicable to such Retail Contract, (iii) the presentvalue of the Assumed Residual Value, if any, for theProduct subject to such Retail Contract, calculated byusing the Discount Rate applicable to such RetailContract, less any amounts received by [Fleet] as rentafter the initial term of such Retail Contract, plus (iv)interest accrued on the Assumed Residual Value, if any,relating to the Product subject to such Retail Contractfrom and after the time of the expiration of the initialterm of such Retail Contract at a rate equal to theDiscount Rate, plus (v) any reasonable out-of-pocketexpenses, including without limitation legal fees,incurred by [Fleet] in connection with its financing ofthe Product subject to the Retail Contract or incurred by[Fleet] or paid to Aida in connection with the recovery,storage, testing, maintenance, cleaning, reconditioning,refurbishment or other remarketing and dispositionservices for such product."

Therefore, under the express language of the Remarketing Agreement,if Enterasys did not provide the remarketing services contractedfor, or violated the protections crafted in response to Enterasys'announced corporate reorganization plans, Enterasys, upon demand byFleet, was required to purchase from Fleet the remaining balancesfrom the financing contracts that Fleet had executed withEnterasys' customers.

Beginning in March 2000 and continuing through September 2000,pursuant to the terms of the Remarketing Agreement, Fleet enteredinto four separate lease contracts with Enterasys' customer, VittsNetworks, Inc. (Vitts), in which Fleet financed approximately$13,900,000 worth of products (Vitts Retail Contracts). Theequipment leased by Vitts consisted primarily of materialsmanufactured by Enterasys, although it also included various partsthat Enterasys had obtained from companies known as Net-to-Net andWalker & Associates. In addition to its entry into the VittsRetail Contracts, Fleet simultaneously executed four relatedTransaction Supplements with Enterasys. Under the financingstructure set forth in the Vitts Retail Contracts and the relatedTransaction Supplements and, as contemplated in the RemarketingAgreement, Fleet purchased from Enterasys the equipment asdelineated in the Transaction Supplements and then leased it toVitts.

Fleet recognized that the market for used Enterasys equipmentwas weak, that Enterasys' older systems necessitated heavydiscounting for new Enterasys equipment and that Enterasys wasdesperate for market share. As articulated in the risk analysisform Fleet completed contemporaneously to the execution of theRemarketing Agreement, Fleet negotiated for and received what italleges are two primary forms of credit protection from Enterasysas part of the Vitts financing, namely: (1) a 75% recourse paymentfrom Enterasys upon a Vitts payment default; and (2) Enterasys'remarketing of any equipment returned by Vitts. Sullivan testifiedthat the combination of the 75% recourse payment and Enterasys'remarketing gave Fleet 100% credit protection, stating:

"[G]enerally the way we viewed it was that we thoughtwith the proper remarketing, there was plenty of value inthe equipment should Vitts blow up quickly. [W]eunderstand there was less collateral value out at thelater part of the transaction. Our big concern was thefirst year of the transaction. If Vitts is not able toraise that capital and Vitts goes away, we had *** the 75percent recourse from [Enterasys], and we thought we werewell covered with our 25 percent residual position ***with proper remarketing in proper channels."

According to Sullivan, Fleet believed that, through the RemarketingAgreement, Enterasys' reselling of any Vitts-returned equipmentthrough Enterasys' existing distribution channels for the leasedequipment, which consisted of switches and modems, gave Fleet'scollateral the value necessary to provide the 25% credit protectionessential to Fleet's risk analysis.

Prior to executing the Remarketing Agreement, the recordshows, Enterasys also was aware of the essential role itsremarketing would play in protecting Fleet from a loss in the eventof a Vitts default. Sullivan testified that he had conversationswith Enterasys representatives to assure him that Enterasysunderstood the importance of the remarketing responsibilitiesEnterasys was committing to perform under the RemarketingAgreement. When Sullivan expressed concern to Enterasys'representatives regarding whether they were capable of remarketingthe equipment to be leased to Vitts, according to Sullivan, therepresentatives responded, "[s]ure, we do it all the time." TheRemarketing Agreement, however, provided that Enterasys made nowarranties or representations as to the results of its remarketingefforts.

On February 7, 2001, Vitts declared bankruptcy and defaultedunder the Vitts Retail Contracts. Vitts' default triggeredEnterasys' recourse obligations under the recourse provision setforth in the Transaction Supplements. On March 13, 2001, Enterasysfully satisfied its recourse obligation under the TransactionSupplements by wire transferring 75% of the unpaid purchase price,totaling $10,440,000, to Fleet.

Vitts' bankruptcy also triggered Enterasys' remarketingobligations under the Remarketing Agreement with Fleet. Accordingto Enterasys' representatives, on or about April 16, 2001,Enterasys began to take possession of products Fleet had leased toVitts, making subsequent retrievals of products from Vitts in May,June, August and September 2001. As a result of these retrievals,Vitts claims to have returned to Enterasys, and Enterasysacknowledged receipt of, products with an initial purchase price ofapproximately $11 million.

Stuart Schwartz, Fleet First vice-president, stated byaffidavit that, in June 2001, Robert Barber, Enterasys senior vice-president of business development, informed Fleet that Enterasyscould dispose of the retrieved equipment for approximately $9million. Schwartz testified by deposition that the $9 millionestimate was revised in August 2001 to $4,500,000 by Barber andEnterasys' general counsel, Gerald Haines, after Enterasys hadreceived and inspected five shipments of equipment from Vitts. Haines stated by affidavit that, "[a]s the equipment was returnedand inspected by [Enterasys], it became apparent that virtuallynone of this equipment was in its original packaging and virtuallyall of the equipment had been used, handled and stored poorly, andthus could not be remarketed for any substantial value withoutextensive refurbishing by Enterasys at Fleet's expense." Accordingto Barber's affidavit, in June, July and August 2001, the resalevalue of the entire amount of equipment actually returned by Vittstotaled no more than $500,000. Barber also stated that he nevertold Schwartz that the returned equipment had an estimated value of$9 million.

Haines' affidavit further stated that on July 23, 2001, hereceived a letter from Schwartz questioning whether Enterasys-subhad been "spun-off" from Enterasys and became a separate company. Haines responded to Schwartz that Enterasys-sub had not been spun-off, but instead merged into Enterasys and assumed all ofEnterasys' obligations under the Remarketing Agreement and that,therefore, "Fleet and [Enterasys] were better off through thismerger."

Pertinent to the instant case, Fleet claims that Enterasysbreached its obligations under the Remarketing Agreement, therebytriggering the covenant breach provisions in section 4.4(b).

First, Fleet alleges that Enterasys breached the RemarketingAgreement with respect to its covenant not to sell, transfer orconvey substantial amounts of its assets, nor effect or be a partyto a merger or consolidation. Schwartz stated in his affidavitthat, on February 16, 2001, Riverstone undertook an initial publicoffering of its equity securities, which reduced Enterasys'ownership of Riverstone's common equity from 100% to 87%. On July16, 2001, Enterasys disposed of Global Network in a sale to aprivate buyout firm associated with a group of Global Networkmanagers. According to subsequent Enterasys public disclosures, onAugust 6, 2001, Enterasys distributed its Riverstone stock toEnterasys shareholders. On that same date, Enterasys announcedthat it had merged with Enterasys-sub. The announcement alsodisclosed that Enterasys had become the surviving corporation andchanged its name from "Cabletron Systems, Inc.," to "EnterasysNetworks, Inc." Aprisma remained a wholly owned subsidiary of thismerged entity.

Second, Fleet claims that Enterasys failed to obtain Fleet'sapproval prior to reselling certain products to Riverstone and toremit immediately the proceeds of that sale. According to theRemarketing Agreement, prior to any proposed remarketing, Enterasyswas required to provide Fleet with the name of the prospectivepurchaser, a copy of the proposed lease, renewal, extension orcontract for the sale and sufficient credit information withrespect to each proposed purchaser for Fleet "to make an informedjudgment" as to the purchaser's creditworthiness. After the saleis completed, the Remarketing Agreement obligates Enterasyspromptly to provide to Fleet "the executed contract for the sale ofthe Product and all other documents effecting or evidencing suchsale." According to Fleet, Enterasys breached the RemarketingAgreement by entering into a secretive, heavily discounted andunapproved sale with Riverstone for approximately $248,594. Fleetnotes it is unclear whether the sale to Riverstone was a sale forthe purpose of remarketing or whether Riverstone sold the partsformerly leased to Vitts for an amount greater than what was paidto Enterasys, and that the proceeds received by Riverstone are whatshould have been paid to Fleet. Fleet also claims that Enterasysnever provided Fleet with a purchase order for the Riverstone saleor sought prior written approval of this transaction. Nodocumentation evidencing the sale or demonstrating Riverstone'screditworthiness was presented to Fleet. Finally, Fleet claimsthat Enterasys failed to report the proceeds of the sale to Fleetuntil October 5, 2001, which was two weeks after the expiration ofthe 30-day cure period as provided in the Remarketing Agreement.

Third, Fleet maintains that Enterasys failed to providemonthly remarketing reports detailing the products retrieved fromVitts and the remarketing-related information Enterasys contractedto provide. On May 21, 2001, Schwartz addressed a letter to Barberrequesting that Enterasys provide a report on the status of therecovery and sale of the equipment leased to Vitts, includingEnterasys' marketing plans to dispose of the Equipment and anassessment as to the amount of proceeds likely to be received. Enterasys failed to respond to Schwartz's request, whereafterSchwartz sent Haines a July 26, 2001, letter stating, "[t]he[remarketing] report is due monthly and long overdue. [Fleet] hasapproximately $3,500,000 at stake. Given the lack of anyremarketing proceeds to date I must demand that the report forJune, 2001 be furnished immediately and that future reports bedelivered when due." An August 7, 2001, electronic mail fromSchwartz to Barber noted Fleet's request "to get the reportsrequired by the [Remarketing Agreement] ASAP," includinginventories, receipts, purchase orders, shipping documents,remarketing plans, sales and refurbishment documents and anaccounting for all proceeds.

Fleet claims that Enterasys failed to submit the necessaryinformation as required and, instead, provided information in afragmentary and conflicting manner that only raised additionalconcerns regarding Enterasys' stewardship of the Fleet-ownedequipment retrieved from Vitts. Enterasys sent Fleet a listing ofreturned equipment that conflicted with both the amounts Vittsclaimed to have returned to Enterasys and an inventory Fleet hadconducted of the retrieved products stored at Enterasys'facilities. Fleet asserts that Enterasys could not account for$3,500,000 of products it had retrieved from Vitts, contrary toEnterasys' own records. According to Fleet, Enterasys refused toreconcile the $3,500,000 difference between the value of productsthat Vitts claims to have returned to Enterasys and the value ofproducts counted in the August 2001 physical inspection by Fleet'srepresentative.

Finally, pursuant to the March 2, 2001, amendment to theRemarketing Agreement, the parties agreed:

"Without nullifying any of the foregoing, [Enterasys]agrees to deliver to [Fleet] by June 30, 2001 guaranties,in form and substance satisfactory to [Fleet] under the[Remarketing] Agreement and each of the Vitts TransactionSupplements executed by [Riverstone, Enterasys-sub,Global Network and Aprisma]."

Fleet claims that Enterasys failed to provide Fleet with writtenguaranties by June 30, 2001, or any time thereafter.

On August 20, 2001, Fleet provided notice of certain Enterasysdefaults under the Remarketing Agreement. As previously noted,section 4.4(b) of the Remarketing Agreement allowed Enterasys tocure a covenant breach within 30 days after Fleet's notification ofsuch breach. Fleet claims that Enterasys never cured any of thedefaults set forth in the August 20 notice.

On September 26, 2001, pursuant to section 4.4(b) of theRemarketing Agreement, Fleet demanded that Enterasys purchase theVitts Retail Contracts for an amount totaling $3,754,513.18, plusa per diem interest payment of $972 from October 1, 2001, untilpayment, which was the amount equal to Fleet's aggregate "UnpaidBalances" on such contracts, less a credit for the recourse paymentmade by Enterasys in March 2001. Enterasys refused the demand onOctober 1, 2001, but remitted to Fleet $247,847.50, whichpurportedly represented the remarketing proceeds of its sale ofproducts to Riverstone as previously noted.

On October 10, 2001, Fleet filed a breach of contract actionagainst Enterasys in the circuit court, alleging that Enterasysviolated the Remarketing Agreement because it failed to: (1)provide monthly remarketing reports; (2) obtain Fleet's approval ofthe sale of equipment to Riverstone; and (3) submit writtenguaranties. In addition, Fleet alleged that Enterasys breached theRemarketing Agreement based on Enterasys' merger with Enterasys-sub. Due to the above breaches, Fleet alleged that Enterasystriggered the purchase obligation under section 4.4(b) of theRemarketing Agreement and sought damages in the amount of$3,506,665.68, the amount equal to the unpaid balances on the VittsRetail Contracts, plus interest and Fleet's out-of-pocket expensesrelated to its efforts to enforce its rights under the RemarketingAgreement.

Fleet moved for summary judgment on December 3, 2001. Inresponse, Enterasys denied that it had breached the RemarketingAgreement and further argued that, even if it had breached theRemarketing Agreement in the manner Fleet alleged, section 4.4(b)was an unenforceable penalty provision under Illinois law. Enterasys characterized the amount of damages sought by Fleet asliquidated damages.

On June 20, 2002, the circuit court granted summary judgmentin favor of Fleet on the issue of liability, reserving for a futuredetermination the question of Fleet's damages under the RemarketingAgreement. The court ordered the parties to submit furtherbriefing on the issue of whether section 4.4(b) of the RemarketingAgreement was an unenforceable liquidated damages clause.

On October 9, 2002, the circuit court heard argument onFleet's petition for entry of a damage award. Enterasys arguedthat section 4.4(b) of the Remarketing Agreement was anunenforceable penalty provision because: (1) the parties did notagree in advance that section 4.4(b) was the appropriate measure ofdamages for any breach of the Remarketing Agreement; (2) section4.4(b) was not a reasonable forecast of actual damages resultingfrom a breach of the Remarketing Agreement; and (3) the actualdamages, if any, sustained by Fleet as a result of the allegedbreaches are capable of estimation. The court characterized theRemarketing Agreement as follows:

"As I see it, Enterasys basically says, 'Look, wegot the deal. We've got the product. We need somebodyfor finances because we don't have the capital.' That'sbasically what the transaction is about.

The money people, which is Fleet, says, 'Look, we'llfinance you, but we have to be protected.' So whatthey're looking for in the underlying deal is for you totake back anything that goes bad."

The circuit court granted Fleet's petition for entry of adamage award, finding, "I don't think [section 4.4(b) is] punitivebecause the nature of the obligation is more in recourse and makingwhole, which [by] definition can't be punitive." In a December 2,2002, final judgment order, the court awarded Fleet $3,506,665.68,which represented the unpaid balances under the Vitts RetailContracts, plus prejudgment interest from October 1, 2001, totaling$265,421.94, attorney fees in the amount of $84,214.42 and$9,014.08 in out-of-pocket costs. The court also granted in partand denied in part Enterasys' motion for reconsideration, modifyingits October 9, 2002, order to provide a reduction of the judgmentamount in the event Fleet obtained any additional payments relatedto the Vitts Retail Contracts. Enterasys appeals the court's June20, 2002, October 9, 2002, and December 2, 2002, orders.

To determine Enterasys' appeal, we must review whether section4.4(b) of the Remarketing Agreement is: (1) ambiguous; (2) aliquidated damages provision; and (3) an unenforceable penaltyprovision.⁽¹⁾

Summary judgment properly is granted where the pleadings,depositions, admissions on file and affidavits show that there isno genuine issue of material fact and that the moving party isentitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West2002); Anderson v. Alberto-Culver USA, Inc., 317 Ill. App. 3d 1104,1110, 740 N.E.2d 819 (2000). The movant's right to judgment mustbe clear and free from doubt; any evidence supporting the motionmust be strictly construed against the movant and liberallyconstrued favoring the respondent. Curtis v. Jaskey, 326 Ill. App.3d 90, 92-93, 759 N.E.2d 962 (2001); Kleinwort Benson NorthAmerica, Inc. v. Quantum Financial Services, Inc., 285 Ill. App. 3d201, 208-09, 673 N.E.2d 369 (1996). An appeal from summaryjudgment is reviewed de novo. Anderson, 317 Ill. App. 3d at 1110;Zoeller v. Augustine, 271 Ill. App. 3d 370, 374, 648 N.E.2d 939(1995).

Enterasys initially asserts that the circuit court'sconstruction of section 4.4(b) is inconsistent with the plainlanguage of the Remarketing Agreement. According to Enterasys, thecourt ignored or misread provisions in the Remarketing Agreementwhich unambiguously stated that recourse terms, if any, would be atthe discretion of Enterasys and would be contained in the separateTransaction Supplements executed in conjunction with the grant ofretail financing to a particular customer such as Vitts. Enterasyspoints to section 1.7 of the Remarketing Agreement, which provides:

"'Transaction Supplement' shall mean a supplement to thisAgreement prepared in connection with each extension ofRetail Financing by [Fleet] which identifies the Customerand Product(s) subject to the Retail Financing, theDiscount Rate applicable to such Retail Financing, anyapplicable recourse provisions with respect to suchRetail Financing, and any additional warranties orcovenants applicable to such Retail Financing."

Enterasys also notes that the provisions from section 3.3 ofthe Remarketing Agreement support its argument that the contractingparties agreed the full extent of Enterasys' recourse obligationswould be contained in the Transaction Supplements. Section 3.3 ofthe Remarketing Agreement states:

"From time to time [Enterasys] may, but shall not beobligated to, agree to provide credit support to [Fleet]with respect to a particular Retail Financingtransaction. The extent and manner of recourse shall beset forth in the Transaction Supplement applicable toeach Retail Financing."

Enterasys argues that interpreting section 4.4(b) as providing forrecourse renders meaningless the language of sections 1.7 and 3.3,which limit recourse obligations to the Transaction Supplements. Enterasys maintains that it fully complied with its recourseobligations under the Transaction Supplements by paying Fleet 75%of the purchase price on the Vitts Retail Contracts.

Fleet responds that Enterasys, at no point in its argument,asserts an ambiguity that would have entitled the circuit court tolook beyond the plain language of the Remarketing Agreement todetermine the parties' intent when including section 4.4(b). Fleetargues that the explicit terms of section 4.4(b) demonstrate theparties' clear intent to agree from the outset on Enterasys' exactobligations in the event of its breach of the RemarketingAgreement. According to Fleet, given the normal and logicalmeaning of the language expressed in section 4.4(b), the courtcorrectly found that the face of the contract set forth theparties' intent to create a remedy for Enterasys' breach.

A contract does not exist in a vacuum; its terms must beunderstood in light of the commercial context within which it wasdrawn. Archer-Daniels-Midland Co. v. Illinois Commerce Comm'n, 184Ill. 2d 391, 400, 704 N.E.2d 387 (1998); Kellner v. Bartman, 250Ill. App. 3d 1030, 1036, 620 N.E.2d 607 (1993). A contractconstrued as a matter of law by the circuit court may be construedindependently by a reviewing court, unrestrained by the circuitcourt's judgment. Lewis X. Cohen Insurance Trust v. Stern, 297Ill. App. 3d 220, 232, 696 N.E.2d 743 (1998); Zale Construction Co.v. Hoffman, 145 Ill. App. 3d 235, 240, 494 N.E.2d 830 (1986). Theprincipal objective in construing a contract is to determine andgive effect to the intention of the parties at the time theyentered into the contract. Schweihs v. Davis, Friedman, Zavett,Kane & MacRae, 344 Ill. App. 3d 493, 500, 800 N.E.2d 448 (2003);Zale, 145 Ill. App. 3d at 241; Ancraft Products Co. v. UniversalOil Products Co., 100 Ill. App. 3d 694, 697, 427 N.E.2d 585 (1981). To determine the intent of the parties, the court must look to theinstrument itself, its purposes and the surrounding circumstancesof its execution and performance.

When a dispute exists between the parties as to the meaning ofa contract provision, the threshold issue is whether the contractis ambiguous. Installco, Inc. v. Whiting Corp., 336 Ill. App. 3d776, 783, 784 N.E.2d 312 (2002). Contractual language is ambiguouswhen it is "'susceptible to more than one meaning [citation] or isobscure in meaning through indefiniteness of expression.'" ShieldsPork Plus, Inc. v. Swiss Valley Ag. Service, 329 Ill. App. 3d 305,310, 767 N.E.2d 945 (2002), quoting Wald v. Chicago ShippersAss'n., 175 Ill. App. 3d 607, 617, 529 N.E.2d 1138 (1988). Anambiguity is not created by the mere fact that, as here, theparties do not agree upon an interpretation. Groshek v. Frainey,274 Ill. App. 3d 566, 569, 654 N.E.2d 467 (1995); Zale, 145 Ill.App. 3d at 241; Harlem-Irving Realty, Inc. v. Alesi, 99 Ill. App.3d 932, 936, 425 N.E.2d 1354 (1981). Illinois courts follow the"four corners" rule when interpreting contracts, which requires:

"'An agreement, when reduced to writing, must be presumedto speak the intention of the parties who signed it. Itspeaks for itself, and the intention with which it wasexecuted must be determined from the language used. Itis not to be changed by extrinsic evidence.'" AirSafety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 457,462, 706 N.E.2d 882 (1999), quoting Western Illinois OilCo. v. Thompson, 26 Ill. 2d 287, 291, 186 N.E.2d 285(1962).

A court may consider extrinsic evidence provisionally, however, forthe limited purpose of determining whether an ambiguity exists. Air Safety, 185 Ill. 2d at 463; Economy Preferred Insurance Co. v.Jersey County Construction, Inc., 246 Ill. App. 3d 387, 390, 615N.E.2d 1290 (1993). Whether the contract is ambiguous is an issueof law. Installco, 336 Ill. App. 3d at 783; Ancraft, 100 Ill. App.3d at 697.

Considering Enterasys' assertion that the application ofsection 4.4(b) in this case would render meaningless sections 1.7and 3.3 of the Remarketing Agreement, section 264 of Contracts,American Jurisprudence Second, provides:

"Construing contemporaneous instruments together meanssimply that if there are any provisions in one instrumentlimiting, explaining, or otherwise affecting theprovisions of another, they will be given effect ***. This does not mean that the provisions of one instrumentare imported bodily into another; *** they may beintended to be separate instruments and to provide forentirely different things." 17A Am. Jur. 2d Contracts