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EXHIBIT 10.26
MASTER LEASE AGREEMENT
This Master Lease Agreement (the "Lease") dated March 11, 1998 is
between Xxxxxx Xxxxx, an individual, with offices at 000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx XX 00000-0000, (the "Lessor"), and Alloy Designs, Inc., a Delaware
Corporation at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (the "Lessee"). The
parties hereto agree as follows:
1. LEASE. This Lease establishes the general terms and conditions
by which Lessor may lease to Lessee the Equipment (the "Equipment") listed on
each Equipment Schedule executed periodically pursuant to this Lease. Each such
Equipment Schedule shall incorporate by reference the terms of this Lease, and
shall be a separate Lease agreement as to the Equipment listed thereon for all
purposes, including default. If the provisions of an Equipment Schedule conflict
with the provisions of this Lease, the provisions of such Equipment Schedule
shall prevail. lessor shall not be obligated to fund more than $250,000 for the
Equipment, to fund after June 30, 1998, or to fund after any material adverse
change in lessee's condition.
2. TERM. All Equipment shall have an Initial Lease Term of 30
full calendar months plus any partial first calendar month.
3. RENT. Lessee agrees to pay Lessor rent monthly in advance for
the full Initial Lease Term in the amount shown on the Equipment Schedule,
beginning the date the Lessor pays for the Equipment, and pro-rated for any
partial first calendar month. Lessor shall not be required to invoice Lessee for
monthly rental payments. lessee will reimburse Lessor for any transportation
expenses incurred by Lessor for delivery of the Equipment to Lessee. If all or
any part of a payment is late, Lessor may charge Lessee a late fee of 10% of the
amount that is late.
4. SECURITY DEPOSIT. To secure Lessee's obligations to Lessor,
Lessee will pay a security deposit equal to 4% of the Equipment's cost with the
first rental payment for each schedule of Equipment. The deposit shall be
returned to lessee only if Lessee elects to purchase all of the Equipment at the
end of the initial lease term, or to extend the Lease through month 35, provided
all other obligations of Lessee to Lessor have been satisfied. If Lessee elects
to deliver all of the Equipment to the Lessor as each Schedule is completed,
Lessor shall retain the deposit as compensation for administrative and
remarketing expenses.
5. DELIVERY. Lessee agrees that Lessor is not responsible for
delivery or Installation of the Equipment. Lessee will not have any claim
against Lessor if the manufacturer or supplier (collectively called "Vendor" in
this lease) delays in delivery or Installation.
6. SELECTION AND PURCHASE OF EQUIPMENT. Lessee understands and
agrees that:
(A) Lessor DID NOT SELECT, MANUFACTURE, SUPPLY OR INSPECT
THE EQUIPMENT AND HAS NO EXPERTISE REGARDING THE
EQUIPMENT.
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(B) Lessee SELECTED THE VENDOR AND THE EQUIPMENT BASED ON
Lessee's OWN JUDGEMENT.
(C) Lessor is BUYING THE EQUIPMENT AT Lessee's REQUEST
ONLY FOR THE PURPOSE OF LEASING IT TO Lessee.
7. LESSEE UNDERSTANDS AND AGREES THAT:
(A) THE LEASE CANNOT BE CANCELLED BY lessee AT ANY TIME
FOR ANY REASON except as noted in Section 22.
(B) Lessee's DUTY TO MAKE THE PAYMENTS IS UNCONDITIONAL
DESPITE EQUIPMENT FAILURE, DAMAGE, LOSS OR ANY OTHER
PROBLEM.
(C) Lessor IS LEASING THE EQUIPMENT TO LESSEE "AS IS" AND
Lessor HAS MADE NO REPRESENTATION, GUARANTEE OF
WARRANTY, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE) REGARDING THE EQUIPMENT. Lessor
DISCLAIMS ALL SUCH WARRANTIES OR GUARANTEES OF ANY
KIND. Lessor agrees to transfer to Lessee all
warranties IF ANY made by the Vendor to Lessor.
(D) Lessor WILL NOT BE LIABLE FOR ANY LOSS OR INJURY TO
Lessee OR ANY OTHER PERSON OR PROPERTY (including
lost profits and consequential, incidental or special
damages) CAUSED BY THE EQUIPMENT OR ITS FAILURE TO
OPERATE.
(E) lessee WAIVES ANY RIGHTS WHICH WOULD ALLOW LESSEE TO:
(1) cancel or repudiate the Lease; (2) reject or
revoke acceptance of the Equipment; (3) grant a
security interest in the Equipment; (4) seek specific
performance against Lessor.
(F) Lessee UNDERSTANDS THAT Lessor AND THE VENDOR ARE TWO
SEPARATE AND INDEPENDENT COMPANIES, AND THAT NEITHER
THE VENDOR NOR ANY OTHER PERSON IS Lessor's AGENT.
Lessee AGREES THAT NO REPRESENTATION, GUARANTEE OR
WARRANTY BY THE VENDOR OR OTHER PERSON IS BINDING ON
Lessor, AND NO BREACH BY THE VENDOR OR OTHER PERSON
WILL EXCUSE Lessee's OBLIGATIONS TO Lessor.
(G) IF THE EQUIPMENT DOES NOT WORK AS REPRESENTED BY THE
VENDOR, OR IF THE VENDOR OR ANY OTHER PERSON FAILS TO
PROVIDE ANDY SERVICE, OR IF THE EQUIPMENT IS
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UNSATISFACTORY FOR ANY OTHER REASON, Lessee WILL MAKE
ANY SUCH CLAIM SOLELY AGAINST THE VENDOR OR OTHER
PERSON AND WILL MAKE NO CLAIM AGAINST Lessor.
8. REPAIRS AND SERVICE. Lessee understands that Lessor is not
responsible for repairs or service to the Equipment. Lessee will keep the
Equipment in good condition and will service the Equipment as and when needed,
ordinary wear and tear excepted. All replacement parts and additions will become
Lessor's property.
9. USE. Lessee CERTIFIES THAT THE EQUIPMENT WILL BE USED SOLELY
FOR BUSINESS OR COMMERCIAL PURPOSES. Lessee will not make any alterations to the
Equipment and will keep it in the possession of Lessee or Lessee's agent,
OneSoft Corporation located at 0000 Xxxxxx Xxxxx Xxxxxxxx, Xxxxx 000, _______
VA, Fairfax County at all times, except that Lessee may relocate the Equipment
to other US locations with 30 days prior written notice to Lessor. Lessee's
agent will execute a waiver acceptable to Lessor permitting Lessor to take
possession of the Equipment in the event of default hereunder.
10. LOSS; DAMAGE; INSURANCE. Lessee agrees to assume the risk of
loss of the Equipment until it is delivered to Lessor. Lessee will keep the
Equipment insured against all risks of loss in an amount not less than the
replacement cost, and will list Lessor as the loss payee and additional Insured.
The replacement cost shall be at least an amount equal to the remaining payments
and 20% residual value discounted at 6% per annum. Lessee will also carry public
liability Insurance listing Lessor as additional insured. Lessee agrees to
provide Lessor with satisfactory written evidence of all such Insurance. Lessee
AGREES THAT IF Lessee FAILS TO OBTAIN SUCH INSURANCE, Lessor MAY (BUT IS NOT
OBLIGATED TO) OBTAIN IT AND CHARGE Lessee A FEE at the rate of 0.25% per month
of Lessor's original cost of the Equipment until Lessee provides adequate proof
of insurance; however, Lessee agrees Lessee has no right to any insurance
benefits from Lessor, Lessee is still liable for all losses, and such risk
charge is not a substitute for the insurance requirements under this Lease.
Lessee HEREBY GIVES Lessor POWER OF ATTORNEY TO APPLY FOR INSURANCE BENEFITS AND
TO ENDORSE CHECKS RECEIVED IN PAYMENT if Lessee fails to perform its obligations
hereunder.
11. TAXES AND OTHER FEES. Lessee agrees this is a "net" Lease and
agrees to pay Lessor upon demand for all taxes (including sales, use, personal
property, customs, duty, and other taxes) and other fees of any kind which may
be charged regarding the leasing, use or ownership of the Equipment. Lessee will
pay any personal property taxes directly to the appropriate jurisdictions.
12. INDEMNITY. Lessee agrees to defend Lessor against and
indemnify (reimburse) Lessor for all claims, liabilities, costs and legal fees
arising out of Lessee's leasing, use or possession of the Equipment pursuant to
this Lease, including claims for property damage or injury to persons. This
promise will continue after the end of the Lease Term. Excluded from the
foregoing indemnity are any claims caused by Lessor's negligence.
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13. TITLE. Lessee understands that Lessor will have sole title to
the Equipment during the entire Lease Term, and Lessee agrees this is a "true
Lease" and not one intended as security for purpose of Section 1-201 (37) of the
Uniform Commercial Code. Lessee HEREBY GIVES Lessor POWER OF ATTORNEY TO SIGN
AND FILE FINANCING STATEMENTS, AND Lessee AGREES TO PAY Lessor's FILING FEES. If
this Lease is ever determined to be other than a true Lease, Lessee hereby
grants to Lessor a security interest in the Equipment and agrees that the
financing statements will create a perfected security interest in Lessor's
favor. The Equipment is considered personal property, and Lessee will not permit
it to become a fixture to real estate. Lessee will not allow any liens or
encumbrances to be placed on the Equipment.
14. DEFAULT. Lessee agrees that Lessor may declare Lessee in
default if Lessee
(a) fails to make any payment for a period of 10
days after the due date;
(b) does not comply with any other term of this
Lease or any other agreement Lessee has with
Lessor within 10 days following written
notice;
(c) any action is brought against Lessee causing
the Equipment to be taken or encumbered;
(d) becomes insolvent, makes or consents to an
assignment for the benefit of creditors,
files or has filed against Lessee a
bankruptcy, sells all or substantially all
of Lessee's assets, makes or consents to the
appointment of a receiver of trustee, or
goes out of business. If any of these
defaults occurs, Lessee agrees that Lessor
may take one or both of the following
actions, in addition to other actions
available under law:
(A) Lessor may terminate the Lease and or xxx for:
(1) past due rent and all future rent to become
due during the unexpired term,
(2) the residual value placed on the Equipment
by Lessor at the commencement of the Lease
(20% of its cost),
(3) all late fees and any other charges due and
to become due, and
(4) the costs listed in Section 15 below; AND
(B) Enter the Equipment site and repossess the Equipment
or xxx for a repossession court order. Following
repossession:
(1) All of Lessee's rights to the Equipment will
end;
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(2) Lessor may remarket the Equipment without
advance notice to Lessee; and
(3) Lessor may also xxx for the amounts listed
in Section "A" above without first
remarketing the Equipment. Lessee agrees
that Lessor is not required to repossess and
remarket the Equipment, and Lessee waives
any rights under any law that provide
otherwise.
15. RECOVERY COSTS. Lessee agrees to pay all of Lessor's actual
and reasonable costs after a default, including: attorney's fees; costs of suit;
Lessor's internal collection overhead; Lessor's internal repossession and
remarketing overhead if an internal repossession is made or attempted; and all
other reasonable out-of-pocket costs.
16. END OF LEASE. At least 90 days before the end of the Initial
Term, Lessee will elect a, b or c below.
(a) Purchase not less than all the Equipment at
its then Fair Market Value which will be not
less than 10% or more than 20% of its
initial cost, plus any taxes applicable at
the time of purchase. The purchase price
shall be paid by Lessee to Lessor at least
ten (10) days before the expiration of the
Initial Term. If, on or before a date which
is sixty (60) days prior to the expiration
of the Initial Term, Lessor and Lessee are
unable to agree upon a determination of the
Fair Market Value of the Equipment, the Fair
Market Value shall be conclusively
established not less than thirty (30) days
prior to the expiration of the initial Term
by an independent appraiser acceptable to
both Lessee and Lessor. The cost of such
appraiser shall be equally shared by Lessee
and Lessor within ten (10) days after
receipt of an invoice therefor; or
(b) Extend the Lease of all Equipment on all
Schedules for 5 months after the end of the
initial term at the same rent with title
passing to Lessee via delivery of a Xxxx of
Sale and release of Lessor's liens; or
(c) deliver not less than all the Equipment to
Lessor in good order and repair, ordinary
wear and tear excepted, to a United States
location specified by Lessor prior to the
end of the initial Lease term.
17. ASSIGNMENT; SUBLEASE. No assignment or sublease to any entity,
is permitted without the advance written consent of Lessor, not to be
unreasonable withheld. Lessee's obligations hereunder shall remain in full force
and effect in the event of any assignment or sublease.
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18. PLACE FOR SUIT. Lessee agrees that:
(1) THIS LEASE WILL BE GOVERNED BY THE LAWS OF
Delaware;
(2) Lessee WAIVES TRIAL BY JURY AND CONSENTS TO
PERSONAL JURISDICTION IN STATE AND FEDERAL
COURTS IN Delaware;
(3) ANY LEGAL PAPERS FOR ANY LAW SUIT WILL BE
PROPERLY SERVED IF MAILED BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, WITH DELIVERY TO
EITHER Lessee OR Lessee's REGISTERED AGENT;
and
(4) ANY SUIT ARISING OUT OF THIS LEASE,
REGARDLESS OF WHO FILES THE SUIT, MUST BE
BROUGHT ONLY IN THE STATE OR FEDERAL COURTS
IN Delaware, AND NOT ELSEWHERE, UNLESS
Lessor AGREES IN WRITING OR ELECTS
OTHERWISE.
19. LESSEE'S REPRESENTATIONS. Lessee represents to Lessor that
(1) Lessee has complete power and is properly
authorized to enter into this Lease;
(2) The Lease is legal, valid, binding on
Lessee, and enforceable against Lessee in
accordance with its terms;
(3) all information supplied by Lessee or
Lessee's agents to Lessor, including all
financial information, is true, correct and
complete.
20. STOCK WARRANT. Lessor will receive a warrant to purchase
10,000 shares of Lessee's common stock at $3 per share per a separate agreement
of even date.
21. FACILITY FEE. Upon execution of this Lease, Lessee will pay
Lessor a Facility Fee of $2,500.00. Half shall be retained by Lessor for
Lessor's expenses incurred in closing this transaction; the remainder shall be
refunded to Lessee as a rental credit against the first rental payment for each
Schedule at the rate of $.50 for each $100 funded on the Schedule, with any
balance retained by Lessor if the entire line is not funded.
22. PREPAYMENT. Lessee may prepay all outstanding Schedules at the
same time for an amount equal to the remaining payments and 20% residual value
discounted at 6% per annum.
23. NOTICES. During the entire term of this lease, Lessee shall
provide Lessor with the same periodic financial reports Lessee provides to its
investors. Any notice or other communication to be provided under this Lease, or
by operation of law, shall be in writing and shall be mailed to the Lessor
and/or Lessor at the addresses listed on the front page of this Lease.
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LESSOR: Xxxxxx Xxxxx
by _____________________________________ date: ___________________________
LESSEE: Alloy Designs, Inc.
by _____________________________________
its ____________________________________ date: ___________________________
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EQUIPMENT SCHEDULE NO. ___ ("EQUIPMENT SCHEDULE") TO MASTER LEASE AGREEMENT
DATED March 10, 1998 ("LEASE") BETWEEN Xxxxxx Xxxxx ("LESSOR") AND Alloy
Designs, Inc. ("LESSEE")
(THERE WILL BE ONE EQUIPMENT SCHEDULE PER FUNDING AND LOCATION)
1. EQUIPMENT: Attach list showing Vendor name, address, manufacturer,
model number, price and serial numbers.
2. EQUIPMENT LOCATION: _______________________(enter complete location).
3. RENTAL COMMENCEMENT DATE shall be the date Lessor pays for the
Equipment.
4. INITIAL TERM: 30 full calendar months plus any partial first calendar
month.
5. MONTHLY RENTAL: 2% of Equipment Cost for months 1-12; 4% of Equipment
Cost for months 13-30.
6. SECURITY DEPOSIT: 4% of cost.
7. END OF LEASE:
(a) Purchase not less than all Equipment for a purchase price
equal to the Fair Market Value thereof as of the end of the Initial Term, but
not less than 10% or more than 20% of its initial cost, plus any taxes
applicable at the time of purchase. The purchase price shall be paid by Lessee
to Lessor at least ten days before the expiration of the Initial Term; or
(b) Extend the Lease for 5 months at 4% per month and take title;
or
(c) Deliver not less than all the Equipment to Lessor in good
order and repair.
8. LEASE AGREEMENT: All of the terms, covenants and conditions set forth
in the Lease are incorporated herein by reference as if the same had been set
forth herein in full.
LESSOR: Xxxxxx Xxxxx LESSEE: Alloy Designs, Inc.
By: _____________________________ By: ________________________________
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