Chase Equipment Leasing, Inc. Reference Number____________
THIS MASTER LEASE AGREEMENT dated as of ___________, 1998 (hereinafter referred
to as "Lease") by and between Chase Equipment Leasing, Inc., a New York
corporation, with a place of business located at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, XX
00000 (hereinafter referred to together with its assigns, if any, as "Lessor")
and 24/7 Media, Inc., a corporation organized and existing under the laws of the
State of Delaware with its mailing address and chief place of business at 0000
Xxxxxxxx, Xxx Xxxx, XX 00000 (hereinafter referred to as "Lessee").
The Parties hereto for good and valuable consideration and intending to be
legally bound hereby agree as follows:
1. PROCEDURE FOR LEASING:
(a) SCHEDULES. Subject to the terms and conditions set forth herein,
Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor such
unit or units of equipment (the "Equipment" and individually sometimes "Item" or
"Item of Equipment") described in any Master Lease Schedule (a "Schedule") from
time to time executed by the parties pursuant hereto, and any and all such
Schedules are deemed a part hereof. Each Schedule incorporates by reference
this Lease and shall constitute, subject to Section 9 hereof, a separate lease.
Capitalized terms not otherwise defined herein have the meaning provided for in
any Schedule.
(b) CONDITIONS PRECEDENT. The obligation of Lessor to purchase Equipment
from the manufacturer or supplier thereof ("Supplier") and to lease the same to
Lessee under any Schedule is subject to receipt by Lessor prior to the
Commencement Date with respect to the Schedule of each of the following
documents in form and substance satisfactory to Lessor: (i) a Schedule relating
to the Equipment then being leased hereunder, (ii) a purchase order assignment,
(iii) a Certificate of Acceptance and Closing Certificate, (iv) a certificate of
insurance which complies with the requirements of Section 4(f) and the Schedule,
and (v) a xxxx of sale transferring title to each Item to Lessor and such other
documents and conditions as Lessor may reasonably require including Lessor's
determination that there has been no material adverse change in the financial
condition of Lessee or any Guarantor. Lessor hereby appoints Lessee its agent
for inspection and acceptance of each Item from the Supplier. Upon execution by
Lessee of the Certificate of Acceptance, each Item described therein will be
deemed to have been delivered to, and irrevocably accepted by Lessee for lease
hereunder.
(c) UCC 2A FINANCE LEASE. The parties hereto intend that each Schedule
constitute a "finance lease" under Article 2A of the Uniform Commercial Code as
in effect in New York and Lessee hereby waives the provisions of UCC Sections 2A
401 through 403 inclusive and Section 508, and acknowledge that under no
circumstances shall any Schedule be subject to repudiation by Lessee. Lessee
waives any right to suspend performance of its obligations under any Schedule.
This is not a consumer lease and the promises of Lessee in each Schedule are
irrevocable.
2. TERM AND RENT:
The lease of and rent for Equipment will commence on the day specified in
the related Schedule as the Commencement Date, and will continue for the period
specified as the "term" therein as the same may be extended pursuant to the
terms hereof. Lessee promises to make each payment of rent during the term on
the due dates and in the amounts set forth in each Schedule without notice or
demand at Lessor's address set forth above or as otherwise directed by Lessor in
writing and no payment of rent will be refunded for any cause or reason
whatsoever. The parties hereto intend that the rents and other amounts payable
by Lessee hereunder will continue to be payable in all events unless the
obligation to pay same is terminated pursuant to the terms hereof. If any
payment hereunder falls due on a day on which Lessor is not open for business,
such payment shall be due and payable on the next preceding day on which Lessor
is open for business. To secure all obligations of Lessee under each Schedule,
Lessee hereby grants to Lessor a security interest in: (i) any security deposit
or advance rent paid by Lessee hereunder, each of which shall be in all cases
non-interest bearing; and (ii) all other funds, balances, accounts, proceeds of
collateral and/or other property of any kind of Lessee or in which Lessee has an
interest now or hereafter in the possession, custody, or control of Lessor or
The Chase Manhattan Bank and any of its direct or indirect affiliates and
subsidiaries, including without limitation Chase Securities, Inc..
3. LATE CHARGE:
If any rent or any other amount due hereunder from Lessee other than the
amounts due under this Section 3 is not paid within five (5) days after the due
date, Lessee agrees to pay a late charge equal to five percent (5%) on the
amount of such delinquent rent or other payment, but not exceeding the maximum
amount permissible under applicable law. The failure of Lessor to collect any
late charge will not constitute a waiver of Lessor's right with respect thereto.
Late charges Will be due and payable on the due date for the next following
payment of rent.
4. LESSEE REPRESENTATIONS AND COVENANTS:
Lessee represents and warrants, and covenants and agrees, as follows and
each such representation, warranty and covenant shall be deemed made and renewed
as of the date hereof and as of the Commencement Date under each Schedule
without the necessity of any further act or instrument:
(a) GENERAL. (i) Lessee is duly organized and validly existing under the
laws of the state indicated at the outset; this Lease and each Schedule and all
instruments delivered in connection herewith and therewith have been duly
authorized by all necessary action, and duly executed and delivered and
constitute valid, legal and binding agreements, enforceable in accordance with
their terms except to the extent limited by applicable bankruptcy and insolvency
laws; and no such document nor Lessee's performance thereunder will conflict
with Lessee's organizational documents or with any indenture, contract or
agreement by which Lessee is bound or with any statute, judgment, decree, rule
or regulation binding upon Lessee; (ii) no consent or approval of any trustee or
holder of any indebtedness or obligation of Lessee, and no consent or approval
of any governmental authority, is necessary for Lessee's execution or
performance of this Lease; (iii) them is no litigation or other proceeding
pending, or to the best of the Lessee's knowledge, threatened against or
affecting Lessee which, if decided adversely to Lessee, would adversely affect
or impair the title of Lessor to the Equipment or which, if decided adversely to
Lessee would materially adversely affect the business operations or financial
condition of Lessee; (iv) all balance sheets, statements of profit and loss and
other financial data that have been delivered to Lessor with respect to Lessee
are complete and correct in all material respects, fairly present the financial
condition of the Lessee on the dates for which, and the results of its
operations for the periods for which, the same have been furnished and have been
prepared in accordance with generally accepted accounting principles
consistently applied; and (v) there has been no material adverse change in the
condition of Lessee, financial or otherwise, since the date of the most recent
financial statements delivered to Lessor.
(b) NO ABATEMENT. This is a net Lease and Lessee's promise to pay rent and
all other amounts hereunder is irrevocable and independent and not subject to
cancellation, termination, modification, repudiation, excuse or substitution
without the written consent of Lessor. Lessee agrees to pay all such amounts
when due by acceleration or otherwise without abatement, irrespective of any
claims, demands, set-offs, actions, suits, or proceedings that it may have or
assert against Lessor or any Supplier or manufacturer of Equipment. Lessor will
have no liability to Lessee upon the failure of any Supplier, manufacturer or
one or more others to perform any obligations at any time due to Lessor, Lessee
or any other person and, in all such events, Lessee waives any right in any
suit, action or proceeding to any exemplary, punitive or consequential damages
whatsoever.
(c) LIENS AND ENCUMBRANCES. THE EQUIPMENT IS FREE AND CLEAR FROM ALL
CLAIMS, LIENS AND ENCUMBRANCES WHATSOEVER; LESSEE WILL DEFEND THE EQUIPMENT
AGAINST ALL LIENS AND WILL NOT ASSIGN, SUBLET, MORTGAGE, OR ALTER ANY OF THE
EQUIPMENT LEASED HEREUNDER OR ANY INTEREST IN THIS LEASE, NOR WILL LESSEE REMOVE
ANY OF THE EQUIPMENT FROM THE LOCATION SPECIFIED IN THE SCHEDULE WITHOUT THE
PRIOR WRITTEN CONSENT OF LESSOR, AND ANY ATTEMPT TO SO ASSIGN, SUBLET, MORTGAGE,
HYPOTHECATE, ALTER OR REMOVE WILL CONSTITUTE A DEFAULT HEREUNDER AND SUCH
ASSIGNMENT, SUBLEASE, MORTGAGE, OR HYPOTHECATION WILL BE VOID AND WITHOUT
EFFECT. In order to secure all obligations of Lessee hereunder, Lessee assigns
and grants to Lessor a security interest in all rights, powers and privileges
under any sublease of the Equipment hereafter authorized in writing by Lessor.
(d) USE AND OPERATION. Lessee will at all times use the Equipment only in
compliance with applicable laws and consistent with the instructions supplied
and use intended for such Equipment by the Supplier and manufacturer thereof.
Lessee will not use the Equipment to carry, contain or produce directly or
indirectly any hazardous substances as defined under applicable federal, state
or local law or regulation. Lessee will not without the prior written consent of
Lessor affix or instill any accessory, equipment or device on any Equipment
leased hereunder if such addition will impair the originally intended function
or use of such Equipment. All additions, repairs, parts, supplies, accessories,
equipment and devices furnished, attached or fixed to any Equipment will
thereupon without further act or instrument become the property of Lessor
(except such as may be removed without in any way affecting or impairing the
originally intended function, condition or use of such Item). Further, Lessee
will not, without the prior written consent of Lessor and subject to such
conditions as Lessor may impose for its protection, affix to or install any
Equipment in any other personal property or in real property.
(e) SERVICE AND MAINTENANCE. Lessee will at its sole expense at all times
maintain all Equipment in good operating order, repair, condition and appearance
and keep all Equipment protected from the elements, except during use in the
normally contemplated manner. At Lessor's request, Lessee will at its expense
affix in a prominent position on each Item of Equipment plates, tags or other
identifying labels showing ownership of the Equipment by Lessor. Lessor will at
all reasonable times have the right to inspect the Equipment and Lessee's
maintenance records related thereto. Lessee at its sole expense will make all
alterations and modifications with respect to the Equipment that may at any time
during the term of this Lease or any Schedule hereunder be required to comply
with any applicable law or any governmental rule or regulation.
(f) INSURANCE. Lessee hereby assumes all risks of damage, loss, theft, or
destruction, partial or complete, with respect to each Item of Equipment during
the term of the Lease and during any storage period until Lessee has returned or
disposed of the Equipment as provided for herein. Lessee will at its own expense
keep each Item of Equipment insured for an amount at least equal to the
Stipulated Loss Value of the Equipment as set forth in the Schedule against all
risks with extended coverage and insurance companies acceptable to Lessor with
Lessor named as loss payee. Lessee agrees to obtain and maintain at its expense
with insurance companies acceptable to Lessor general public liability insurance
naming Lessor as an additional insured together with Lessee, as their interests
may appear, in no event less than One Million Dollars ($1,000,000) or such
greater amount, if any, as specified in the related Schedule against claims for
bodily injury, death or property damage arising out of the use, ownership,
possession, operation or condition of the Equipment. Each insurer will agree, by
endorsement upon the policy or policies issued by it, or by independent
instruments furnished to Lessor, that Lessor will have the power to file claims
against the insurer under said policy, that it will give Lessor thirty (30) days
written notice before the policy or policies in question will be altered,
expired or canceled, and that no act or default of any person other than Lessor,
its agents, or those claiming under Lessor, will affect Lessor's right to
recover under such policy or policies in case of loss. Although any and all
obligations imposed on the insured shall be obligations solely of Lessee, Lessee
will deliver to Lessor the policies or evidence of insurance satisfactory to
Lessor prior to the Commencement Date and thirty (30) days prior to each
expiration date thereof for each Item of Equipment. The failure of Lessee to
secure or maintain such insurance will constitute a default under this Lease. In
the event of such breach, Lessor may, but will not be obligated to, obtain such
insurance. In the event that Lessor obtains such insurance, an amount equal to
the cost of such insurance will be deemed supplemental rent to be paid forthwith
by Lessee. In the event that any policies insuring against liability risks
described above shall now or hereafter provide coverage on a "claims made"
basis, Lessee shall continue to maintain such policies in effect for a period
of not less than three years after the expiration of the Lease term of any
Schedules.
(g) RETURN OF EQUIPMENT. Upon cancellation or expiration of any Schedule
upon default or otherwise, Lessee will, at its sole cost and expense, cease
using the Equipment, store the Equipment for up to ninety (90) days while
maintaining the insurance required above, and promptly return the Equipment to
Lessor when directed to do so F.O.B. the destination specified by Lessor, in the
same condition as received, reasonable wear and tear and normal depreciation
excepted. Lessee shall pay on demand holdover rent equal to a full monthly rent
for each mouth or any day thereof during which Lessee fails to return the
Equipment when so directed by Lessor and this obligation is without limitation
to any consequential damages for which Lessee may be responsible as a result of
such failure to return the Equipment. Subject to the prior exercise of any
option otherwise provided, Lessee agrees to deliver notice to Lessor at least 90
days prior to the last day of the term confirming to Lessor the intent of Lessee
to return the Equipment and Lessee shall pay rent for a full 90 day notice
period notwithstanding any delay in the delivery of such notice under any
Schedule.
5. TRANSFER OF WARRANTIES:
To the extent permitted by law and contract, Lessor will pass through
without representation to Lessee the benefit of all warranties, if any, of the
Supplier of the Equipment and, so long as there is no default hereunder, Lessee
will have the right to, and will, directly avail itself of all warranties by the
Supplier with respect to the Equipment. Lessor will not take any action which
prejudices Lessee's right to, or under the terms of, any such warranty. If
subsequent to the Commencement Date Lessee shall determine that the Equipment is
unsatisfactory for any reason including any failure of the Equipment to conform
to the specifications set forth in any purchase order, Lessee shall make any
claim on account thereof solely against the Supplier and Lessee will give Lessor
notice of any such claim made by Lessee against any Supplier and any cash
settlement of any such claim will be payable solely to Lessor.
6. LOSS OR DAMAGE:
(a) Lessee hereby assumes and is solely responsible for the entire risk of
use and operation of the Equipment and for each and every accident or hazard
resulting therefrom and all losses and damages associated therewith howsoever
arising.
(b) In the event of total loss, destruction, theft, confiscation or damage
beyond repair (determined without reference to the remaining term with respect
thereto) to the Equipment or any Item (a "Casualty Occurrence"), Lessee will pay
to Lessor on the next due date for rent following the Casualty Occurrence or on
the last day of the term thereof, whichever first occurs, any unpaid rent due
with respect to such Equipment plus the Stipulated Loss Value as provided for in
the related Schedule. Upon payment of the Stipulated Loss Value, Lessor will be
entitled to recover possession of such Item and Lessee an behalf of Lessor will
dispose of such Item and account to Lessor for the proceeds. So long as no
default exists hereunder, upon the payment of the Stipulated Loss Value for any
Item of Equipment and all other amounts then due under this Section 6(b) or
otherwise, this Lease and Lessee's obligation to pay rent shall terminate as to
such Item of Equipment and title thereto shall be transferred to Lessee or
otherwise as Lessee may direct, provided however that to the extent Lessee shall
recover an amount in excess of the Stipulated Loss Value from the further sale
or lease of any such Item of Equipment, Lessee shall pay over such excess to
Lessor.
(c) In the event of damage to any Item of Equipment which does not amount
to a Casualty Occurrence, Lessee will give prompt notice of such damage to
Lessor and at Lessee's sole cost and expense promptly repair such Item to its
previous condition which assumes Lessee has met all of its obligations required
for maintenance hereunder. Provided Lessee is not in breach or default of this
Lease, any proceeds of insurance received by Lessor with respect to any such
loss will be paid over by Lessor to Lessee to the extent necessary to reimburse
Lessee for costs incurred and paid by Lessee in repairing such damaged
Equipment, but only upon evidence satisfactory to Lessor that such repairs have
been accomplished.
7. TAX TREATMENT:
(a) Unless otherwise provided for in the related Schedule, it is agreed by
the parties that they are entering into each Schedule with the assumption that
Lessor and the consolidated group of which Lessor is a member (all references to
Lessor in this Section include such consolidated group) will be treated for
federal
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income tax purposes (and, to the extent allowable, for state and local tax
purposes) as the owner of all Equipment leased thereunder and will have a
federal income tax rate of 35% (plus any applicable state and local tax rate)
during the term hereof. The indemnities and assumptions of liability provided
for in this Section 7 and all Of Lessor's rights and privileges herein will
continue in full force and effect notwithstanding the expiration or cancellation
of the Lease.
(b) Lessee acknowledges and agrees that each Schedule is executed by
Lessor based upon the following representations and warranties of Lessee: (i)
each item has been placed in service on the Commencement Date, (ii) Lessor will
not under the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (the "Code"), be required to include in its gross income,
for federal income tax purposes, any amount with respect to any improvement,
modification or addition made by Lessee to any Item; (iii) Lessor is entitled to
accelerated cost recovery deductions ("Recovery Deductions) for Lessor's Cost of
each Item over the number of years indicated on the related Schedule by using
the 200% declining balance method switching to the straight line method when
most beneficial to maximize Lessor's after tax rate of return and the half year
convention, unless otherwise required by operation of Code Section
168(d)(3)(A), (iv) no Item is limited use property within the meaning of Rev.
Proc. 76-30; and (v) for federal income tax purposes, all amounts included in
Lessor's gross income with respect to each Item will be treated as derived from
or allocable to sources within the United States,
(c) If by reason of (1) the inaccuracy in law or in fact of any of the
assumptions or representations or warranties set forth in Subsections (a) or (b)
of this Section, or (2) the inaccuracy of any statement or any letter or
document furnished to Lessor by or on behalf of Lessee in connection with the
transactions contemplated under the Lease, or (3) any act, failure to act or
omission of or by Lessee, or (4) any change in the Code occurring after the
Commencement Date, Lessor will (i) lose, will not have the right to claim or if
there will be disallowed with respect to Lessor all or any portion of the
Recovery Deduction as to any Item, or (ii) be required to include in its gross
income any amount in respect to any alteration, modification or addition to, any
Item, other than an alteration, modification or addition which is permitted
without adverse tax consequences to Lessor under Rev. Procs. 75-21, 76-30 or
79-48, or (iii) stiffer a decrease in Lessor's net after rate of return over the
then remaining portion of the term of the Lease (any such occurrence referred to
hereinafter as "Loss"), then at Lessor's option either (X) the rent will, on and
after the next succeeding date for the payment thereof upon notice to Lessee by
Lessor that a Loss has occurred, and describing the amount as to which Lessor
intends to claim indemnification and the reason for such adjustment in
reasonable detail, be increased by such amount, which will cause Lessor's net
after tax rate of return over the then remaining portion of the term of the
Lease (taking into account the tax effect from deferred utilization of tax basis
resulting from changes in the method of calculating Recovery Deductions) to
equal the net after tax rate of return that would have been available if such
Loss had not occurred, or (Y) in lieu of a rent increase, Lessee shall pay to
Lessor on such next succeeding date for the payment of rent such sum as will
cause Lessor's net after tax rate of return over the term of the Lease in
respect of the Equipment to equal the net return that would have been available
if such Loss had not occurred. If such Loss occurs after the expiration or
cancellation of the Lease, Lessor will notify Lessee of such Loss and Lessee
will, within sixty (60) days after such notice, pay to Lessor such sum as
required by the preceding clause (Y). Lessee will forthwith pay on demand to
Lessor an amount on an after-tax basis which will be equal to the amount of any
interest and/or penalties which may be assessed by the United States or any
state against Lessor as a result of the Loss. For purposes of this Section, a
Loss will occur upon the earliest of (1) the happening of any event which may
cause such Loss, (2) the payment by Lessor to the Internal Revenue Service of
the tax increase resulting from such Loss, or (3) the adjustment of Lessor's tax
return to reflect such Loss. Lessor will not be entitled to any payment under
this Section on account of any Loss due solely to one or more of the following:
(i) the failure of Lessor to have sufficient taxable income to benefit from the
Recovery Deduction; (ii) disposition of the Equipment by Lessor prior to a
default which has occurred and is continuing hereunder; or (iii) Lessor's
failure to properly claim the Recovery Deduction. In the event Lessee becomes
obligated under the terms hereof to make an indemnification payment, the
Stipulated Loss Values for any affected Schedule shall be revised as may be
necessary in the reasonable opinion of the Lessor so that the amount payable by
Lessee shall be sufficient to yield to Lessor the same net after tax rate of
return that would have been available to Lessor upon payment of such amount had
the Loss giving rise to the indemnity payment not occurred but taking into
account any indemnity payment made in respect of a Loss and the assumptions made
by Lessor in originally establishing the affected Stipulated Loss Values. The
revised Stipulated Loss Values shall be applicable to any payment of such amount
coming due after such earlier Loss shall have occurred which required the
adjustment hereunder.
8. INDEMNIFICATION:
LESSEE ACKNOWLEDGES THAT IT ALONE SELECTS THE EQUIPMENT AND THE SUPPLIER(S)
THEREOF. LESSEE UNDERSTANDS AND AGREES THAT LESSOR MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO THE EQUIPMENT
INCLUDING THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT AS IS. NO
DEFECT OR UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE OF THE OBLIGATION TO
PAY RENT OR OF ANY OTHER OBLIGATION UNDER THIS LEASE. Accordingly, Lessee agrees
to indemnify, save and keep harmless Lessor, its agents, employees, successors
and assigns from and against any and all losses, damages, expenses (including
legal expenses), penalties, injuries, claims, actions and suits of whatsoever
kind and nature, in contract or tort, howsoever arising from any cause
whatsoever including, but not limited to, Lessor's strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, purchase, financing,
acceptance or rejection of Equipment, the ownership of Equipment during the term
of the Lease, and the delivery, lease, possession, maintenance, uses, condition,
return or operation of Equipment (including without limitation, latent and other
defects, whether or not discoverable by Lessor or Lessee and any claim for
patent, trademark or copyright infringement); or (ii) the condition of Equipment
sold or disposed of after use by Lessee, any sublessee or employee of Lessee.
Lessee will, upon request, at its expense, defend any and all actions based on,
or arising out of, any of the foregoing. This indemnification shall survive the
expiration or cancellation of the Lease.
9. DEFAULT; REMEDIES:
Each of the following will constitute a default hereunder: (a) Lessee fails
to pay rent within five (5) days from and after the date such payment of rent is
due and payable or Lessee fails to pay any other amount when due under any
Schedule; (b) Lessee fails to maintain the insurance required hereunder or
breaches any other term, provision, obligation or covenant hereof (including
without limitation any Schedule) or commits any other act of default specified
in this Lease; (c) any representation or warranty of Lessee contained herein or
in any other document or instrument delivered in connection herewith or made
from time to time hereafter is false or misleading when made; (d) Lessee or any
guarantor, surety, endorser or pledgor of property given to secure Lessee's
obligations hereunder ("Guarantor") becomes insolvent, ceases to do business as
a going concern, or transfers or sells all or substantially all of its assets
without the prior written consent of Lessor; (e) the Equipment or any Item is
abused, illegally used, or misused; (f) the death, dissolution, merger,
consolidation or reorganization of Lessee or any Guarantor; (g) Lessee or any
Guarantor makes any assignment for the benefit of creditors, or if a petition in
bankruptcy, reorganization, insolvency, receivership or the like is filed with
respect to Lessee or any Guarantor or property of Lessee or any Guarantor is
attached or a receiver, trustee or liquidator is appointed for Lessee or any
Guarantor or any of Lessee's or Guarantor's property or whenever Lessor may deem
itself insecure hereunder; (h) the transfer of more than a 25% ownership
interest in Lessee or any Guarantor by shareholders, partners, members or
proprietors thereof in any year without Lessor's prior written consent, (i)
Lessee or any Guarantor (x) incurs any accumulated funding deficiency within the
meaning of the Employee Retirement Income Security Act of 1974, as amended from
time to time and the regulations thereunder, equal to 5% of Lessee's
consolidated tangible net worth (as defined by generally accepted accounting
principles), or (y) incurs any liability of comparable size to the pension
Benefit Guaranty Corporation, (j) Lessee or any material subsidiary or any
Guarantor fails to comply with the provisions of the Fair Labor Standards Act of
1938, as amended, (k) Lessee or any Guarantor fails to pay or perform or observe
any term, covenant, agreement or condition contained in, or there shall occur
any payment or other default under or as defined in, any other agreement
applicable to Lessee or any Guarantor or by which Lessee or any Guarantor is
bound (as used herein, an "Other Agreement") involving a liability, indebtedness
or performance obligation of Lessee or any Guarantor with a potential liability
to Lessee or any Guarantor in an amount equal to or in excess of $50,000, which
shall not be remedied within the period of time (if any) within which such Other
Agreement permits such default to be remedied, regardless of whether such
default (i) is waived by any other party to such Other Agreement or (ii)
produces or results in the cancellation of such Other Agreement or the
acceleration of such liability, indebtedness or other obligation;
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(l) attachment, distraint, levy, execution or final judgment for the payment of
money aggregating in excess of $50,000 will be outstanding against Lessee or its
property for more than sixty (60) days from the date of entry and will not have
been discharged in full or stayed or fully bonded; (m) Lessee or any Guarantor
shall suffer the loss of any material license or franchise when Lessor shall
reasonably conclude that such loss fairly impairs Lessee's or such Guarantor's
ability to perform its obligations required hereunder or with respect hereto; or
(n) Lessee or any Guarantor shall violate any financial covenant contained in
any agreement for borrowed money applicable to Lessee or Guarantor as of the
Commencement Date of any Schedule and all such financial covenants shall survive
the satisfaction of debt applicable thereto and shall be deemed incorporated
herein by reference and remain fully applicable to Lessee's obligations
hereunder.
Upon any such default, Lessor, at its option, may do any one or more of the
following: (1) declare this Lease and any or all Schedules in default upon
notice to Lessee, whereupon Lessee shall be liable for and Lessor may forthwith
recover from Lessee as liquidated damages for breach of this Lease and not as a
penalty an amount equal to the sum of (X) all accrued and unpaid rent through
the date of such declaration of default, plus (Y) an amount equal to the
Stipulated Loss Value for the Equipment as of the due date for the installment
of rent immediately preceding the declaration of default; (2) proceed by
appropriate court action or actions to enforce Lessee's performance of this
Lease and/or to recover damages for the breach thereof; (3) cancel this Lease
and any or all Schedules upon notice to Lessee; (4) whether or not this Lease or
any Schedules be so cancelled, and without notice to Lessee, repossess the
Equipment wherever found, with or without legal process, and for this purpose
Lessor and/or its agents may enter upon any premises of or under control or
jurisdiction of Lessee or any agent of Lessee without liability for suit, action
or other proceeding by Lessee (any damages occasioned by such repossession being
hereby expressly waived by Lessee except for damages occasioned by gross
negligence or willful misconduct) and remove the Equipment therefrom. Lessor's
remedies as provided herein are not exclusive but are cumulative and in addition
to all other remedies in Lessor's favor at law, in equity or in bankruptcy. The
receipt and acceptance by Lessor of any rent or other payment after a default
will not be deemed to be a waiver of such default by Lessor. Lessor shall not,
by any act, delay, omission, or otherwise, be deemed to have waived any default
or any of its rights or remedies hereunder unless such waiver be in writing,
signed by the Lessor, and then only to the extent therein set forth. In the
event that any court determines that any provision in this Lease is invalid or
unenforceable in whole or in part, such determination will not prohibit Lessor
from establishing its damages as a result of any breach of this Lease in any
action in which Lessor seeks to recover such damages. Any repossession or resale
of any Equipment will not bar an action for damages for breach of this Lease,
and the bringing of an action or the entry of judgment against Lessee will cot
bar Lessor's right to repossess any or all Equipment.
With respect to any Equipment returned to Lessor, or repossessed by Lessor
pursuant to provision (4) above, Lessor may hold or use such Equipment for any
purpose whatsoever or either sell same at private or public sale, for cash or
credit, or re-lease same for such term and upon such rental as will be solely
determined by Lessor. In the event that Lessor is able to sell or re-lease all
or any Equipment returned to Lessor then the proceeds of any sale or re-leasing
of such Equipment, after first deducting therefrom all costs and expenses of
repossession, storage, repairs, reconditioning, sale, re-leasing, attorneys'
fees and collection fees with respect to such Equipment, shall be deducted from
the liquidated damages for which Lessee is obligated hereunder. In addition to
the foregoing, Lessor may also recover from Lessee all costs and expenses,
including without limitation fees of collection agencies and reasonable
attorneys' fees, including the allocated costs and fees of Lessor's in-house
legal counsel, incurred by Lessor in exercising any of its rights or remedies
hereunder. Lessee irrevocably consents to the in personam jurisdiction of the
federal and/or state courts located in the State of New York over controversies
arising from or relating to this Lease or any obligation with respect thereto
and waives the right to impose any counterclaim or offset of any nature in any
such litigation. Lessee irrevocably appoints each and every owner, partner,
member and/or officer of Lessee as its attorney upon whom may be served by
certified mail any process, notice or pleading in any action or proceeding
against it under this Lease or related thereto.
10. ASSIGNMENTS:
LESSOR MAY WITHOUT LESSEE'S CONSENT SELL, ASSIGN OR OTHERWISE TRANSFER OR
GRANT A SECURITY INTEREST IN ITS RIGHT, TITLE AND INTEREST IN ANY ITEM OR
SCHEDULE AND THE RENT DUE OR TO BECOME DUE THEREUNDER AND WHEN SO SOLD,
ASSIGNED, TRANSFERRED OR ENCUMBERED, EACH SCHEDULE WILL BE FREE OF ANY
COUNTERCLAIM, SET-OFF, DEFENSE, OR CROSSCLAIM BY LESSEE AS AGAINST LESSOR OR
SUCH ASSIGNEE WHENEVER ARISING, BEFORE OR AFTER SUCH SALE, ASSIGNMENT, TRANSFER
OR SECURITY GRANT BUT NO SUCH ACTION WILL INCREASE LESSEE'S OBLIGATIONS
HEREUNDER, EXCEPT THAT UPON NOTICE TO LESSEE THEREOF, LESSEE, AGREES TO DIRECT
ALL PAYMENTS HEREUNDER, IF REQUESTED, TO LESSOR'S ASSIGNEE. Lessor may provide
lease information on a confidential basis to any prospective purchaser, assignee
or participant
11. PAYMENT OF TAXES:
Lessee agrees to pay promptly when due, and to indemnify and hold Lessor
harmless from all license, title and registration fees whatsoever, all
levies, imposts, duties, charges or withholdings whatsoever, and all
sales, use, personal property, franchise (howsoever calculated), and other
taxes whatsoever (together with any penalties, fines or interest thereon)
whether assessed, levied or imposed by any governmental or taxing
authority against or upon Lessor or otherwise, with respect to any
Equipment or the purchase, acquisition, ownership, delivery, leasing,
possession, use, operation, control, return or other disposition thereof,
or the rents, receipts or earnings arising therefrom, or with respect to
this Lease, excluding, however, (i) any such taxes or charges to the
extent they are included in Lessor's Cost, (ii) any federal taxes levied
on Lessor's net income, or (iii) state or local taxes levied on Lessor's
net income, as net income is determined under, and at rates which do not
exceed those originally imposed by the jurisdiction in which the Equipment
is located as specified in the related Schedule. In the event any such
fees, levies, imposts, duties, charges or taxes are paid by Lessor, or if
Lessor be required to collect or pay any thereof, Lessee will reimburse
Lessor therefor (plus any penalties, fines or interest thereon) promptly
upon demand. Until Lessor notifies Lessee to the contrary, Lessee will
promptly before any penalty attaches, prepare and file in Lessor's name or
on Lessor's behalf all personal property tax returns covering the
Equipment and Lessee will pay the personal property taxes levied or
assessed thereon directly to the levying authority. If Lessor timely
notifies Lessee that Lessor will prepare and/or file any such return,
Lessee will, promptly upon being invoiced by Lessor, reimburse Lessor for
the full amount of such personal property taxes so paid by Lessor. If any
capital adequacy requirements are imposed upon Lessor or its parent which
require the maintenance of additional capital or impose additional
expenses as a result of this Lease, and the effect of such requirements is
to reduce Lessor's expected rate of return hereunder, Lessee shall pay to
Lessor such amount or amounts as may be necessary to compensate Lessor for
such reduction. The indemnification obligations of Lessee under this
Section will continue in full force and effect notwithstanding the
expiration or other cancellation hereof. Lessee will either provide Lessor
a copy of all property and other tax returns filed hereunder by Lessee in
Lessor's name or on Lessor's behalf or provide to Lessor an affidavit of a
responsible corporate officer certifying that the property taxes so
identified therein have been reported and are current. The amount which
Lessee shall be required to pay to Lessor with respect to any obligation
which is subject to indemnification under this Section 11 shall be an
amount sufficient to restore Lessor to the same position, after
considering the effect of the receipt of such indemnification on its
United States federal income taxes and state and city income taxes or
franchise taxes based on net income, that it would have been in had such
indemnification not been required hereunder.
4
12. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS:
In case of failure of Lessee to comply with any provision of this Lease or
any Schedule, Lessor will have the right, but will not be obligated, to effect
such compliance in whole or in part, and all money spent by and expenses of
Lessor will be paid by Lessee forthwith and will bear interest at the daily
equivalent of eighteen percent (18%) per annum from the date said obligation was
due. Lessor's action in effecting such compliance will not be a waiver of
Lessee's default. All such money spent by and expenses of Lessor and any other
obligation assumed or incurred by Lessor in effecting such compliance will
constitute additional rent payable to Lessor with the next rent payment.
13. NOTICES:
All notices required or permitted to be given hereunder will be in writing
and will be deemed given and received three (3) days after first deposit in the
United States mail if sent by registered or certified mail to the address of
Lessor or Lessee stated herein or in any Schedule or to such other place as
either party may in writing direct pursuant to this Section. Notice by hand
delivery shall be deemed given and received upon delivery. Notice by overnight
courier shall be deemed given and received on the date scheduled for delivery.
14. FINANCIAL INFORMATION AND REPORTING:
(a) Lessee shall annually, within ninety (90) days after the close of
Lessee's fiscal year furnish to Lessor an audit report of financial statements
of Lessee (including a balance sheet as of the close of such year and statements
of income, changes in financial condition and shareholder's equity for such
year) prepared in accordance with generally accepted accounting principles and
certified by Lessee's independent public accountants. Lessee shall also provide
quarterly financial statements of Lessee similarly prepared for each of the
first three quarters of each fiscal year, which shall be certified (subject to
normal year-end adjustments) by Lessee's chief financial officer and furnished
to Lessor within forty-five (45) days following the end of the quarter.
(b) Lessee will furnish Lessor with any and all information regarding
Lessee's business, condition or operations, financial or otherwise, which Lessee
furnishes to any other creditor. This information shall be furnished to Lessor
at the same time it's furnished to such other creditor.
(c) Lessee will immediately furnish Lessor with such further information
regarding Lessee's business, condition, property, assets or operations,
financial otherwise, as Lessor may from time to time reasonably request, all
prepared in form and detail reasonably satisfactory to Lessor.
(d) Lessee will at all times maintain true and complete records and
books of account including, without limiting the generality of the foregoing,
appropriate reserves for possible losses and liabilities, all in accordance
with generally accepted accounting principles consistently applied.
(e) Lessee shall permit, and cause any subsidiary to permit,
representatives of Lessor to visit and inspect any of the properties of Lessee
or any Subsidiary, to examine its or their corporate or partnership books and
records, to make extracts or copies of such books and records, and to discuss
its or their affairs, finances and accounts with its or their officers or
partners, as applicable. The foregoing may be done at any time within regular
business hours.
(f) Lessee will promptly notify Lessor in writing of the commencement of
any litigation to which Lessee or any of its subsidiaries or affiliates may be a
party (except for litigation in which Lessee's (or the affiliate's) contingent
liability is fully covered by insurance) which, if decided adversely to Lessee
would adversely affect or impair the title of Lessor to the Equipment or which,
if decided adversely to Lessee would materially adversely affect the business
operations or financial condition of Lessee. In addition, Lessee will
immediately notify Lessor, in writing, of any judgment against Lessee if such
judgment would have the effect described in the preceding sentence.
15. ADDITIONAL DOCUMENTS:
Lessee agrees to execute or obtain and deliver to Lessor at Lessor's
request such additional documents as Lessor may reasonably deem necessary to
protect Lessor's interest in the Equipment and this Lease including, without
limitation, financing statements, and Lessee hereby authorizes Lessor to execute
in Lessee's name as Lessee's attorney-in-fact any financing statements and
amendments thereto necessary or appropriate to protect Lessor's interest
hereunder. Lessee will pay, or reimburse Lessor on demand, for any filing fees
or expenses incurred by Lessor in connection with any such additional documents,
Neither execution of financing statements nor the filing of the same will be
construed as evidence of indebtedness by Lessee. Lessee will obtain, at Lessee's
sole expense, from each owner, landlord, mortgagee or other person having an
encumbrance, lien or other interest on or in the premises in which the Equipment
is or will be located, all necessary consents to the installation and use of the
Equipment therein and the removal thereof in accordance with the terms of this
Lease, together with waivers of claim with respect to the Equipment, and record
the same when and where necessary. Lessee hereby designates Lessor its
attorney-in-fact and authorizes and empowers Lessor to execute, endorse and
complete in Lessee's name and on Lessee's behalf all instruments representing
the proceeds of any security or insurance for the Lease or Equipment thereunder,
all financing statements and other documents including Schedules and Riders and
to insert thereon all dates, amounts and serial numbers as necessary or
appropriate to provide to Lessor the benefits anticipated by any Schedule.
16. MISCELLANEOUS:
The validity, construction and performance of this Lease and each Schedule
will in all respects be governed by the laws of the State of New York without
reference to conflict of law provisions. The Lease will not be binding on Lessor
until executed by an authorized officer of Lessor. LESSOR AND LESSEE WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING HEREFROM OR RELATED HERETO.
Any provision herein contained which may be illegal, unenforceable, or
inconsistent with applicable law or any governmental rule or regulation will be
deemed modified or altered to conform thereto, or otherwise omitted but shall in
no way impair the legality or enforceability of the remaining Lease provisions.
Nothing herein contained will convey to Lessee any right, title or interest in
and to any Item leased hereunder except as a lessee. Lessee shall promptly pay
(or reimburse, as Lessor may elect) all costs and expenses including reasonable
attorneys' fees, including the allocated costs and fees of Lessor's in-house
legal counsel, which Lessor has or may hereafter incur in connection with the
negotiation and preparation of this Lease and any amendment, modification,
consent or waiver hereunder. If more than one party executes this Lease as
Lessee, each such party shall be jointly and severally bound by the terms and
provisions of this Lease. Any person who signs as an officer or agent for a
corporation, partnership or other entity warrants that he has authority from
such corporation, partnership or other entity to enter into this Lease on its
behalf. Each Item of Equipment delivered pursuant to this Lease to a subsidiary
of Lessee or to any entity or person designated by Lessee, whether at the
request of Lessee or such subsidiary, entity or person shall be Equipment for
all purposes of this Lease, and Lessee shall be and remain primarily liable for
the obligations under this Lease with respect to such Equipment. Lessor shall
not be obligated to purchase and deliver any Item of Equipment unless Lessor has
executed a Schedule covering the Equipment.
17. ENTIRE AGREEMENT:
This Lease and any instrument referred to herein together with any
Schedule(s), Attachment(s) or Rider(s) signed by the parties or delivered in
connection herewith constitute the entire agreement of the parties with respect
to the subject matter hereof and will collectively constitute the Lease with
respect to an Item of Equipment and supersede all negotiations and prior written
or oral agreement of the parties with respect thereto. No agent or employee of
the Supplier is authorized to bind Lessor to the Lease, to waive or alter any
term or condition herein or add any provision hereto, No modification of the
Lease or waiver of any of its provisions or conditions will be valid unless in
writing and signed by Lessor and Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
date set forth above.
Chase Equipment Leasing, Inc. (Lessor)
By: /s/ Xxxxxx X. Xxxxxxxxxx, Contract Administrator
-------------------------------------------------
(Signature) (Title)
247/Media, Inc. (Lessee)
By: /s/ C. Xxxxxx Xxxxx, EVP & CFO
-------------------------------------------------
(Signature) (Title)
5
Chase Equipment Leasing, Inc. Rider to Lease
Rider Number 1 to
Master Lease Agreement dated ________________, 199_
(as indicated above, hereinafter the "Lease")
Chase Equipment Leasing, Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
This Rider is incorporated by reference into the above referenced Lease as if
set forth at length and Lessee and Lessor confirm all the terms and provisions
thereof except as specifically set forth herein to the contrary.
Capitalized terms used herein shall have the meaning attributable to them in the
Lease.
1. Section 2, TERM AND RENT: The last sentence of this section is rewritten
in its entirety as follows:
"To secure all obligations of Lessee under each Schedule, Lessee hereby
grants to Lessor a security interest in any security deposit or advance
rent paid by Lessee hereunder, each of which shall be in all cases
non-interest bearing."
2. Section 9. DEFAULT; REMEDIES:
In the first paragraph, subsection (h) change 25% to 51%.
Insert a new paragraph at the end of the second paragraph to read as
follows: "Notwithstanding anything to the contrary in the preceding
paragraph, in no event shall Lessee be deemed in default under (b), (i),
(j), (m) or (n) unless and until it shall have received ten days' notice
to cure any claimed default as specified, delivered in writing by (i)
overnight courier or (ii) confirmed receipt of fax to Lessee. The ten day
period shall commence from the date of the delivery of the notice of
default.
3. Section 14. FINANCIAL INFORMATION AND REPORTING:
Subsection (b), in the first sentence after "furnishes to" delete the word
"any" and insert "and shares with". In that same sentence, change the last
word "creditor" to "creditors".
In subsection (e), at the end of the second sentence, insert, "upon
reasonable notice to Lessee".
Except as expressly modified hereby, all terms and provisions of the Lease shall
remain in hill force and effect. the parties hereto have caused their duly
authorized officers to execute this Rider on the dates set forth below and,
unless otherwise specifically provided herein, this Rider shall operate to amend
the Lease only as it is incorporated by reference into Schedules executed on or
after the dates set forth below and not otherwise.
Chase Equipment Leasing, Inc. 24/7 Media, Inc.
(Lessor) (Lessee)
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ C. Xxxxxx Xxxxx
------------------------------ ----------------------------
RIDER TO LEASE (LSB-AMND.DOC) 12/97
(Use this form to amend either Master Agreement, Items 1
or 11, or to amend the Synthetic Lease, Item 15.)
Title: Contract Administrator Title: EVP&CFO
Dated: 12/28/98 Dated: 12/28/98
