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EXHIBIT 10.17
DUPLICATE
INSIGHT INVESTMENTS, CORP
MASTER LEASE #6269
MASTER LEASE NO. 6269, DATED NOVEMBER 17, 1997, BY AND BETWEEN INSIGHT
INVESTMENTS, CORP., A CALIFORNIA CORPORATION ("LESSOR"), 000 XXXXX XXXXX XXXXX,
XXXXX 000, XXXXXX, XXXXXXXXXX 00000 AND VERIO INC., A DELAWARE CORPORATION
("LESSEE"), 0000 X. XXXXXXXX XXX., XXXXXXXXX, XX 00000.
FOR AND IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES SET FORTH HEREIN
AND THE PAYMENT OF RENT AS PROVIDED HEREIN, LESSOR AND LESSEE AGREE AS FOLLOWS:
1. LEASE OF EQUIPMENT. Lessor leases to Lessee, and Lessee leases from Lessor,
all of the personal property, together with all replacements, parts and repairs
incorporated therein (collectively, the "Equipment"; and individually, an
"Item") described in each Equipment Schedule ("Schedule") executed and
delivered from time to time pursuant to this Master Lease.
2. SCHEDULES. Each Schedule shall incorporate the terms and conditions of this
Master Lease and such other terms and conditions as Lessor and Lessee shall
agree upon. Each Schedule is a separate and independent lease and contractual
obligation. In the event of a conflict between the provisions of the Master
Lease and those of any Schedule, the provisions of the Schedule shall control.
The term "Lease" shall mean an individual Schedule which incorporates the terms
and conditions of this Master Lease. The Lease shall be effective upon
execution by Lessee and subsequent acceptance by Lessor at its principal place
of business.
3. LEASE TERM. The term of lease ("Lease Term") for each Item shall begin on
its Acceptance Date and continue after the Commencement Date for that number of
months specified in the Schedule as the "Initial Lease Term", and thereafter
until terminated by either party upon not less than ninety (90) days prior
notice (which notice shall apply to all the Equipment and may not be revoked
without the consent of the other party). The term "Commencement Date" means the
first day of the month immediately following the month during which the
Acceptance Date occurs for the Item to be last installed or delivered, as
applicable.
4. ACCEPTANCE. The Acceptance Date for each Item shall be the earliest of (i)
the date the manufacturer, or other party acceptable to Lessor, installs the
Item and certifies that Item to be in good working order, or (ii) if Lessee has
caused a delay in the installation of an Item, then the fifth day after the Item
is delivered to the location specified in the Schedule, or (iii) if Lessee is
to install the Item, the fifth day after delivery; or (iv) if the Item does not
require installation, the third day after the day the Item is delivered to
Lessee. If the Equipment is already installed at the Lessee's location, the
Acceptance Date shall be the date on which the Lessor pays for the Equipment.
On each Acceptance Date, Lessee shall execute and deliver to Lessor a
Certificate of Acceptance.
5. RENT.
(a) "Rent" as used herein shall mean and include all of the following:
(1) INTERIM RENT. Lessee's interim rental obligation for each Item shall
commence on its Acceptance Date and continue through the day immediately
preceding the Commencement Date ("Interim Rent"). Interim Rent for each Item
shall be one-thirtieth (1/30) of the Monthly Rent for that Item, with Interim
Rent for all Items being due and payable on the Commencement Date. If the
Acceptance Date for all the Equipment is the first day of a calendar month,
there shall be no Interim Rent.
(2) MONTHLY RENT. Lessee shall pay Lessor Monthly Rent for the Equipment in the
amount set forth in the Schedule. Monthly Rent shall begin to accrue on the
Commencement Date and shall be due and payable by Lessee in advance on the
Commencement Date and on the first day of each month thereafter during the
Lease Term.
(3) ADDITIONAL RENT. Lessee shall also owe to Lessor, as additional rent
("Additional Rent") any and all charges, expenses, indemnities and other sums
which become due by Lessee to Lessor under the terms of this Lease. Any such
Additional Rent shall be paid to Lessor within thirty (30) days after the date
that Lessor gives notice to Lessee that such Additional Rent is due, unless a
longer or shorter period is otherwise specified herein.
(b) LATE CHARGE. If Lessee fails to pay to Lessor within ten (10) days after
the due date thereof (and without regard as to whether Lessor has given Lessee
notice of such failure or whether an Event of Default has occurred) any Rent
due hereunder, then Lessee shall also owe to Lessor Late Charges on such
delinquent payment from the due date until paid at the lower of two percent
(2%) per month or the maximum rate permitted by applicable law.
(c) METHOD OF PAYMENT. All payment of Rent, Late Charges or other amounts
required to be paid by Lessee shall be paid to Lessor by check or wire transfer
so as to constitute immediately available funds at the address of Lessor set
forth above or at such other place as Lessor shall designate in writing, or, if
to an Assignee of Lessor, at such place as such Assignee shall designate in
writing.
6. USE AND LOCATION.
(a) USE. Lessee shall use the Equipment in a careful and proper manner in
conformance with all manufacturer's specifications and shall comply with all
federal, state, municipal and other laws, ordinances and regulations in any way
relating to the possession, use or maintenance of the Equipment, and in
compliance with all requirements of the insurance policies required to be
maintained by Lessee pursuant to Section 12 herein.
(b) LOCATION. Each Item will at all times be and remain in Lessee's sole
possession and control at the place of installation/location shown in the
Schedule. The Equipment, may be moved to another location of Lessee within the
continental contiguous United States on written notification to Lessor. Lessor
may require Lessee to execute such documents, including, but not limited to,
Uniform Commercial Code ("UCC") financing statements, as Lessor may
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reasonably require to provide notice, perfect, or maintain the notification or
perfection of, Lessor's or Assignee's interest in such Equipment. Any
relocation of the Equipment pursuant to this Section and all UCC financing
statement filing fees shall be at the sole expense of Lessee.
7. MAINTENANCE AND REPAIR. Lessee hereby assumes the sole duty to maintain the
Equipment and shall not look to Lessor or any Assignee for such maintenance. At
its own expense, Lessee shall maintain and keep the Equipment in good repair,
condition and working order and shall furnish any and all parts, mechanisms,
devices and labor required therefor, and shall enter into and maintain during
the Lease Term a maintenance agreement with the Equipment manufacturer or other
party acceptable to Lessor. Lessee shall furnish a copy of such agreement to
Lessor upon Lessor's request.
8. QUIET ENJOYMENT. Lessor hereby warrants and represents and covenants that so
long as no Event of Default has occurred, Lessee shall and may quietly have,
hold and enjoy the Equipment in accordance with the terms and conditions of the
Lease, free from disturbance by Lessor or anyone claiming by or through Lessor.
9. LESSOR'S RIGHT TO INSPECT. Lessor shall at all times during business hours,
and subject to Lessee's reasonable security requirements, have the right to
enter upon the premises where an Item may be located for the purpose of
inspecting such Item.
10. EQUIPMENT IMPROVEMENTS.
(a) Lessee may, with the prior consent of Lessor and subject to compliance with
this Section 10, affix or install any accessory, feature or device to the
Equipment and make any improvement, upgrade, modification, alteration or
addition to the Equipment (each of the foregoing being an "Improvement"). The
affixing or installation of the Improvement must not adversely affect the
Equipment manufacturer's warranties or maintenance agreement, or require that
substantial original parts of the Equipment be removed; nor can it impair the
originally intended function, value or use of the Equipment. Title to each
Improvement shall, without further action, upon the affixing or installing of
such Improvement, vest solely in Lessor. Upon the expiration or earlier
termination of this Lease, Lessee may remove and retain any readily detachable
Improvement provided that: (i) no Event of Default has occurred; (ii) by such
removal the Equipment is not rendered any less useful or valuable to Lessor
than if such Improvement had not been made and later removed, and (iii) the
Equipment is returned in compliance with Section 13 herein. Upon Lessee's
permitted removal of a detachable Improvement and compliance with this Section
10, title shall thereupon revert to Lessee free and clear of any claims of
Lessor whatsoever.
(b) Lessee shall notify Lessor not less than sixty (60) days prior to the
anticipated Acceptance Date of the type of Improvement Lessee desires to
obtain. Lessor may, within fifteen (15) days after receipt of such notice,
offer to lease or sell the Improvement to Lessee upon mutually agreeable terms
and conditions. If Lessee leases the Improvement from Lessor, such Improvement
shall be on a separate Schedule with an Initial Lease Term co-terminus with
that of the Equipment. (c) Nothing in this section 10 shall preclude or limit
Lessee's ability to maintain and support the Equipment or require Lessee's
prior consent to such normal and customary maintenance.
11. LOSS AND DAMAGES; STIPULATED LOSS VALUE.
(a) LESSEE'S ASSUMPTION OF RISK. Lessee hereby assumes and shall bear the
entire risk of loss, damage, theft or destruction to the Equipment from any
cause whatsoever, or governmental taking. No loss, damage, theft or destruction
to the Equipment, or any part thereof, or governmental taking shall affect any
obligation of Lessee under this Lease, which shall continue in full force and
effect notwithstanding any such loss or damage. Lessee's assumption of risk of
loss shall commence when the Equipment or Item is placed in transit to Lessee
and shall continue until Lessor has received and accepted the surrendered
Equipment pursuant to Section 13.
(b) NOTICE OF LOSS OR DAMAGE. Lessee shall promptly notify Lessor of the loss,
damage, destruction, theft or governmental taking of any Item.
(c) DUTY TO REPAIR. Unless such Item is lost, stolen, damaged beyond repair or
there is a governmental taking ("Casualty Loss"), Lessee shall promptly repair
and restore such Item to the same condition, working order and appearance as of
the Acceptance Date.
(d) CASUALTY LOSS; PAYMENT OF STIPULATED LOSS VALUE. If the Equipment or any
Item is a Casualty Loss, then Lessee, at Lessee's option:
(1) shall pay Lessor in cash the Stipulated Loss Value (as per Attachment A to
this Master Lease) for such Equipment or Item calculated as of the next Monthly
Rent payment date, which amount shall be due and payable not later than thirty
(30) days after the date of the occurrence of the Casualty Loss. Upon payment
of the Stipulated Loss Value, and provided that no Event of Default (as
hereinafter defined) has occurred:
(i) Lessee's obligation to pay Rent for all remaining Items shall
remain in full force and effect and shall terminate only with respect to such
Casualty Loss Item.
(ii) Lessee shall become entitled to such Item, as-is, where-is,
without warranty, express or implied, with respect to any matter whatsoever;
OR,
(2) shall continue all payments under the Lease without interruption as if no
such loss had occurred, and shall request that Lessor, within thirty (30) days
after the date of the occurrence of the Casualty Loss, replace the Casualty
Loss Item with a "Replacement Item". Lessee shall pay all costs of such
Replacement Item. Unless otherwise mutually agreed, the Replacement Item shall
be of the same manufacture, model and type and of at least equal capacity,
function and value as the Casualty Loss Item.
(e) INSURANCE PROCEEDS. Lessee's obligation to repair or pay Stipulated Loss
Value shall not be contingent upon receipt of any insurance proceeds.
12. INSURANCE. Lessee shall at its expense keep each Item insured from every
cause whatever for not less than the Stipulated Loss Value thereof, and shall
carry public liability and property damage insurance of $2,500,000 or more. All
such insurance shall be with companies reasonably acceptable to Lessor, and
shall name Lessor and any Assignee as additional insureds and, as to the
all-risk insurance, loss payees as their interests may appear. Such insurance
policies shall provide that they may not be invalidated against Lessor or any
Assignee by reason of any violation of a condition or breach of warranty of the
policies or the application therefor by Lessee and that Lessor shall be given
written notice thirty (30) days prior to any alteration or cancellation of such
policies. The proceeds of such insurance, if Lessee is not in default
hereunder, shall be applied to reimburse Lessee for Stipulated Loss Value to
the extent previously paid by Lessee; or shall be paid to Lessor or Assignee to
the extent of Stipulated Loss Value not previously paid by Lessee; or shall be
applied to repair the Equipment or to reimburse Lessee for repairs for which
Lessee previously paid. If Lessee is in default hereunder, then such insurance
proceeds shall be paid to Lessor or Assignee to be applied to the satisfaction
of Lessee's obligations under the Lease.
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13. DELIVERY AND SURRENDER.
Lessee hereby assumes all cost and expense of the transportation, rigging,
drayage, unpacking and in-transit insurance to Lessee's premises and
installation of the Equipment. Upon the expiration of the Lease Term, or sooner
termination of this Lease with respect to any Item, Lessee shall (unless Lessee
had paid Lessor the Stipulated Loss Value of such Item pursuant to Section 11)
return at its expense, including but not limited to the expenses of
deinstallation, packing, transportation and in-transit insurance, the Item to a
location designated by Lessor in the same repair, condition, appearance and
working order as of the Acceptance Date, ordinary wear and tear from proper use
alone excepted, and certified as acceptable by the Equipment manufacturer for
the standard manufacturer's maintenance agreement.
14. TAX BENEFITS. Lessee acknowledges that Lessor or other owner of the
Equipment shall be entitled to claim for federal tax purposes (i) deductions on
Lessor's cost of the Equipment for each of its tax years during the Lease Term
under any method of depreciation or other cost recovery formula permitted by
the Internal Revenue Code of 1986, as amended (the "Code"); (ii) interest
deductions as permitted by the Code on the aggregate interest paid to any
Assignee; and (iii) investment tax credit, or similar credit, as may be
available as of the Acceptance Date to the owner of the Equipment (all the
foregoing being hereafter referred to as the "Tax Benefits"). Lessee agrees to
take no action inconsistent with the foregoing or which would result in the
loss, disallowance, recapture or unavailability of the Tax Benefits to Lessor
or other owner of the Equipment. Lessee hereby indemnifies Lessor or other
owner of the Equipment from and against (a) any loss, disallowance,
unavailability or recapture of any Tax Benefit resulting from any action or
failure to act of Lessee, plus (b) all interest, penalties, costs (including
legal fees) or additions to tax resulting from such loss, disallowance,
unavailability or recapture.
15. TAXES. In addition to the Rent as provided in Section 5, Lessee shall be
responsible for the payment of all taxes (exclusive of taxes based on Lessor's
net income), fees, charges, licenses and assessments whatsoever, however
designated, whether based on the Rent or levied, assessed or imposed upon the
Equipment or upon or in respect of the manufacture, purchase, delivery,
ownership, leasing, use or return of the Equipment, now or hereafter levied,
assessed or imposed during the Lease Term by a federal, state or local taxing
jurisdiction, regardless of when and by whom payable, and Lessee shall timely
prepare, file and pay all applicable tax returns.
16. LESSOR'S PAYMENT. If Lessee fails to procure or maintain insurance or to
pay fees, assessments, charges, taxes or expenses, all as herein required,
Lessor shall have the right, but not the obligation, to pay the premiums for
such insurance and such fees, assessments, charges, taxes and expenses. In such
event, the cost thereof shall be Additional Rent payable to Lessor with the
next installment of Rent, plus interest, taxes and penalties, if any, imposed
by the charging entity, and the Late Charge from the date of such payment by
Lessor until receipt by Lessor of reimbursement from Lessee.
17. DISCLAIMER OF WARRANTIES.
(a) The following acknowledgments by Lessee are integral to this Lease and are
made to induce Lessor to enter into and perform under this Lease:
(1) EACH ITEM IS, AS OF ITS ACCEPTANCE DATE, OF A SIZE, DESIGN, TYPE AND
MANUFACTURE SELECTED BY LESSEE AND, AS BETWEEN LESSOR AND LESSEE, LESSEE HAS
UNCONDITIONALLY ACCEPTED SUCH ITEM.
(2) SINCE LESSOR IS NOT THE MANUFACTURER OF THE EQUIPMENT OR AGENT OF THE
MANUFACTURER, LESSEE ACCEPTS THE EQUIPMENT FROM LESSOR "AS IS".
(3) LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE
CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTLY OR
CONSEQUENTIALLY BY THE EQUIPMENT, BY ANY INADEQUACY THEREOF OR DEFECT THEREIN,
OR BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING IN STRICT
LIABILITY, NEGLIGENCE OR OTHERWISE, OR IN ANY WAY RELATING TO OR ARISING OUT OF
THE LEASE, WHETHER OR NOT KNOWN OR DISCLOSED TO LESSOR.
(4) APART FROM ITS WARRANTY UNDER SECTION 8, LESSOR MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF ANY KIND, INCLUDING THOSE OF MERCHANTABILITY, DURABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE, OR RELATING TO PATENT INFRINGEMENT OR
THE LIKE WITH RESPECT TO THE EQUIPMENT AND EXPRESSLY DISCLAIMS THE SAME.
(5) IT IS AGREED AND UNDERSTOOD THAT LESSOR SHALL HAVE NO OBLIGATION TO
INSTALL, TEST, ADJUST, REPAIR OR SERVICE THE EQUIPMENT.
(b) Lessor warrants that Lessor has the right to lease the Equipment to Lessee
under the terms of this Lease. Lessor assigns to Lessee all rights Lessor may
have against the supplier or manufacturer of the Equipment to enable Lessee to
obtain the benefit of and enforce in Lessee's own name and at Lessee's sole
expense such rights and benefits. Such assignment to remain in effect so long
as Lessee is not in default.
18. INDEMNIFICATION. Except for the gross negligence of Lessor, Lessee hereby
assumes liability for and indemnifies, protects, saves and keeps harmless
Lessor and its Assignees from and against any and all liabilities, losses,
damages, penalties, claims, actions, suits, costs and expenses, including
attorney's fees and other legal expenses, imposed on, incurred by, or asserted
against Lessor or its Assignees (whether or not also indemnified against by any
other person) in any way relating to or arising out of the manufacture,
purchase, ownership, delivery, lease, possession, use, operation, condition,
return or other disposition of the Equipment by Lessor or Lessee, including
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee, any claim for patent, trademark or copyright infringement, or
any claim arising out of strict liability. Lessee agrees to give Lessor, and
Lessor agrees to give Lessee, prompt written notice of any claim or liability
hereby indemnified against. The indemnities and assumptions of liability set
forth in this Section 18 do not guarantee a residual value of the Equipment;
nor shall they be construed to limit or restrict Lessee's right to prosecute
any claim, action or suit against the manufacturer of the Equipment.
19. EVENTS OF DEFAULT; REMEDIES.
(a) EVENTS OF DEFAULT. Occurrence of any of the following events or conditions
shall constitute an Event of Default hereunder:
(1) Lessee's failure to pay, when due, any Rent, and such failure continues for
a period of ten (10) days after notice that such Rent is overdue; or
(2) Except as expressly permitted in the Lease, Lessee attempts to remove,
sell, encumber, assign or sublease or fails to insure the Equipment, or fails
(within five (5) days after notice of such failure) to deliver any document
required of Lessee under the Lease; or
(3) Failure of Lessee to perform, within thirty (30) days after Lessor gives
Lessee notice of such failure (or, with respect to performance which cannot be
completed in such time, failure to commence such performance within such time
and to pursue such performance diligently thereafter) any other obligation,
term or condition of this Lease; or
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(4) A writ, order of attachment, execution or other legal process is levied on
or charged against any Item and not released or satisfied within ten (10) days
after Lessee is notified thereof; or
(5) The filing by or against Lessee of a petition under any federal or state
bankruptcy or insolvency law or law providing for the relief of debtors, the
making by Lessee of any general assignment for the benefit of creditors, the
appointment of a receiver or trustee for Lessee or for any of Lessee's assets,
or any formal or informal proceeding for the dissolution, liquidation,
settlement of claims against, or winding up of the affairs of Lessee, any of
which remains undismissed for forty-five (45) days; or the making by Lessee of a
transfer of all or a material portion of Lessee's assets or inventory not in the
ordinary course of business, or the admission by Lessee of inability to pay
debts as they become due; or
(6) The occurrence of any event described in Subsection 19(a)(5) with respect
to any guarantor or any other party liable for payment or performance of this
Lease; or
(7) If any certificate, statement, representation, warranty or financial
information previously or hereafter furnished by or on behalf of Lessee or any
guarantor or other party liable for payment or performance of the Lease proves
to have been false or misleading in any material respect as of the time made or
furnished to Lessor, or to have been afterward breached; and Lessor sustains
actual damage as a consequence thereof; or
(8) The giving to Lessee of three (3) notices pursuant to one or more of
Subsections 19(a)(1), (2) or (3) within any consecutive twelve (12) month
period, notwithstanding Lessee's cure of the defaults within the notice periods
applicable.
(b) REMEDIES. Upon the occurrence of an Event of Default:
(1) Lessee hereby authorizes Lessor without notice or process of law to enter
any premises where the Equipment is located and take possession of and remove
the Equipment; and
(2) Lessee shall forthwith and without demand pay to Lessor as liquidated
damages for loss of a bargain and not as a penalty an amount equal to the
Stipulated Loss Value for the Equipment computed as of the date of the Monthly
Rent payment last received by Lessor, plus all previously due but unpaid Rent
and all legal and other expenses incurred by Lessor in enforcing its remedies
hereunder; and
(3) Lessor may upon notice to Lessee effective immediately terminate the Lease,
but such termination shall not affect Lessor's right to enforce the remedies
granted to Lessor in this Subsection 19(b); and
(4) Lessor may pursue any other remedy available at law or in equity.
(5) Lessor may in a commercially reasonable manner sell the Equipment at public
or private sale, without notice or may lease, otherwise dispose of all or keep
idle all or part of the Equipment; subject, however, to Lessor's obligation to
mitigate damages. The proceeds of any such sale, lease or other disposition, if
any, of the Equipment shall be applied as follows: FIRST, to Lessor's costs and
expenses incurred in taking, removing, holding, repairing and selling, leasing
or otherwise disposing of the Equipment including legal fees and costs; SECOND,
to pay to Lessor the Stipulated Loss Value to the extent not previously paid by
Lessee and all previously due but unpaid Rent; THIRD, to reimburse to Lessee
the Stipulated Loss Value to the extent previously paid by Lessee pursuant to
Subsection 19(b)(2); and FOURTH, any surplus to Lessor.
Notwithstanding repossession or any other action which Lessor may take, Lessee
shall be and remain liable for the full performance of all its obligations
under this Lease. No right or remedy of Lessor herein granted is exclusive of
any other right or remedy herein or by law or equity provided or permitted; but
each shall be cumulative of every other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise, and may
be enforced concurrently or from time to time, and in any order.
(c) LESSOR'S EXPENSES. Lessee shall pay Lessor all reasonably documented costs
and expenses, including attorneys fees, incurred by Lessor in exercising any of
its rights or remedies hereunder or enforcing any of the terms, conditions, or
provisions hereof.
20. ASSIGNMENT.
(a) BY LESSEE. LESSEE SHALL KEEP THE LEASE AND THE EQUIPMENT FREE AND CLEAR OF
ALL LIENS AND ENCUMBRANCES OF WHATSOEVER KIND (EXCEPT THOSE CREATED BY OR
THROUGH LESSOR) AND LESSEE SHALL NOT ASSIGN, TRANSFER, SUBLEASE OR IN ANY WAY
TRANSFER OR DISPOSE OF ITS INTERESTS OR OBLIGATIONS UNDER THE LEASE OR IN THE
EQUIPMENT OTHER THAN TO AN ACQUIRER OF ALL, OR SUBSTANTIALLY ALL, OF LESSEE'S
ASSETS WHO AGREES TO BE BOUND BY THE TERM OF THE LEASE WITHOUT LESSOR'S PRIOR
WRITTEN CONSENT. NO ASSIGNMENT, TRANSFER, SUBLEASE OR OTHER DISPOSITION BY
LESSEE SHALL IN ANY MANNER WHATSOEVER RELIEVE LESSEE OF ANY OBLIGATION
HEREUNDER, AND LESSEE SHALL REMAIN PRIMARILY LIABLE TO PAY RENT AND PERFORM ALL
ITS OBLIGATIONS HEREUNDER.
(b) BY LESSOR. All rights of Lessor hereunder or to the Equipment may be sold,
assigned, pledged, mortgaged or otherwise transferred, either in whole or in
part, without notice to Lessee but always, however, subject to the rights of
Lessee under this Lease. If Lessor sells the Equipment or assigns this Lease or
the Rent due or to become due hereunder or any other interest herein, whether
as security for any of its indebtedness or otherwise, no breach or default by
Lessor hereunder or pursuant to any other agreement between Lessor and Lessee,
should there be one, shall excuse performance by Lessee of any provision
hereof. No such vendee or assignee (each an "Assignee") shall be obligated to
perform any duty, covenant or condition required to be performed by Lessor
under the terms of this Lease; except that Lessor covenants with Lessee not to
transfer any interest in the Lease or the Equipment to any Assignee unless such
Assignee agrees in writing not to disturb Lessee's quiet enjoyment of the
Equipment while no Event of Default has occurred. Lessee acknowledges that any
such sale, assignment or grant of security interest shall not materially change
Lessee's obligations under this Lease nor materially increase the burdens
imposed upon Lessee. Lessee agrees and acknowledges that any such Assignee
shall rely on and be entitled to the benefit of the provisions of this Lease.
Lessee agrees to acknowledge any such assignment within five (5) days of
receipt of written request to do so in the form requested by Lessor. LESSEE'S
OBLIGATION TO PAY RENT IS ABSOLUTE AND UNCONDITIONAL AND LESSEE SHALL NOT
ASSERT AGAINST ANY ASSIGNEE ANY DEFENSE, COUNTERCLAIM OR SETOFF THAT THE LESSEE
MAY HAVE AGAINST THE LESSOR OR ANY OTHER PARTY, AND LESSEE ACKNOWLEDGES THAT
ANY ASSIGNEE IS RELYING ON THE FOREGOING. NOTHING HEREIN SHALL PREVENT LESSEE
FROM ASSERTING ANY DEFENSE OR CLAIM DIRECTLY AGAINST LESSOR FOR ACTUAL DAMAGES.
21. OWNERSHIP. Lessee shall have no right, title or interest in the Equipment
except as expressly set forth in the Lease, which interest is a leasehold
interest. Lessor and Lessee agree, and Lessee represents for the benefit of
Lessor and its Assignees, that the Lease is intended to be a "finance lease"
and not a "lease intended as security" as those terms are used in Article 2A of
the UCC. Lessor may upon notice to Lessee advise Lessee that certain Items are
leased to Lessor and provided to Lessee under the Lease as a sublease.
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Lessee agrees to execute and deliver such acknowledgments and assignments in
connection with such Lease as are reasonably required. If, at any time during
the Lease Term, Lessor's right to lease the Equipment expires, Lessor may remove
the Equipment from Lessee's premises and immediately provide identical
substitute Equipment. All expenses of such substitution shall be borne by
Lessor.
22. PERSONAL PROPERTY. The Equipment is, and shall at all times be and remain,
personal property, notwithstanding that the Equipment or any Item or part
thereof may now be, or hereafter become, in any manner affixed or attached to
any real property. If requested by Lessor prior to or at any time during the
Lease Term, Lessee will obtain and deliver to Lessor waivers of interest or
liens in recordable form and satisfactory to Lessor, from all persons claiming
any interest in the real property on which such Item or Equipment is installed
or located.
23. NET LEASE; OFFSET. This lease is a net lease, it being the intention of the
parties that all costs, expenses and liabilities associated with the Equipment
or its lease shall be the obligations of Lessee. Except in the event of a
Casualty Loss and payment of Stipulated Loss Value pursuant to Section 11,
Lessee shall not be entitled, and hereby waives any right it may have, to any
abatement of Rent or other payments due hereunder or any reduction thereof
under any circumstances or for any reason whatsoever.
24. FINANCIAL AND OTHER COVENANTS.
(a) Lessee hereby represents, warrants and agrees with Lessor and any Assignee
as follows:
(1) Lessee is a legal entity, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and in each
jurisdiction where the Equipment will be located and has adequate power to
enter into and perform the Master Lease and each Schedule.
(2) The Master Lease and each Schedule have been duly authorized, executed and
delivered by Lessee, and constitute valid, legal and binding agreements of
Lessee, enforceable in accordance with their terms.
(3) The entering into and performance of the Master Lease and each Schedule
does not and will not violate any judgment, order, law or regulation applicable
to Lessee or any provision of Lessee's Articles of Incorporation or Bylaws, or
result in any breach of, or constitute a default under, or result in the
creation of any lien, charge, security interest or other encumbrance upon any
assets of Lessee or on the Equipment pursuant to any instrument to which Lessee
is a party or by which it or its assets may be bound.
(4) There are no actions, suits or proceedings pending, or to the knowledge of
Lessee threatened, before any court, administrative agency, arbitrator or
governmental body which will, if determined adversely to Lessee, materially
adversely affect its ability to perform its obligations under this Master
Lease, any Schedule or any related agreement to which it is a party.
(5) No consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of any state, federal or other
governmental authority or agency is required with respect to the execution,
delivery and performance by Lessee of the Master Lease or any Schedule, or, if
any such approval, notice, registration or action is required, it has been
obtained.
(6)(i) Within forty-five (45) days after the end of each fiscal quarter, Lessee
shall provide Lessor with a balance sheet and an income statement as of the end
of such quarter prepared by Lessee's own accounting staff in accordance with
generally accepted accounting principles and practices consistently applied
("GAAP"); and within ninety (90) days after the end of each fiscal year, Lessee
shall provide Lessor with a balance sheet, an income statement, a statement of
cash flows and a statement of stockholders equity as of the end of such fiscal
year prepared in accordance with GAAP and audited by an independent accounting
firm reasonably acceptable to Lessor. (ii) Lessor acknowledges that any
non-public information furnished by Lessee to Lessor under this paragraph (6)
or any other non-public information concerning Lessee's business disclosed by
Lessee to Lessor during the Lease Term is confidential and proprietary
information of Lessee ("Confidential Information"). Lessor will not disclose
the Confidential Information to any third party or use the Confidential
Information other than for purposes of evaluating this Lease without Lessee's
prior written consent; provided, however that Lessor may disclose the
Confidential Information to its assignee, or to employees or legal and
financial representatives of its assignee or its assignee's assignee or
potential assignee (collectively, the "Assignee") who are bound to observe the
provisions of this paragraph 6 and provided that such individuals or entities
only use the Confidential Information for the purposes of evaluating this Lease
and do not otherwise use or disclose the Confidential Information. If Lessor or
Assignee are compelled to disclose any Confidential Information either by
judicial or administrative process, or in the reasonable opinion of its
counsel, by other requirements of law, Lessor or Assignee shall, to the extent
reasonably practical, notify Lessee in advance of such disclosure.
Notwithstanding anything to the contrary set forth herein, any Confidential
Information in the public domain through no fault of Lessor or Assignee later
acquired by Lessor or Assignee from other sources not in violation of any
similar confidentiality agreement, need not be held in confidence as provided
hereunder.
(b) Upon Lessor's request, Lessee shall, with respect to each Lease, deliver to
Lessor (i) a certificate of a secretarial officer of Lessee certifying the
bylaw, resolution (specific or general) or corporate action authorizing the
transaction contemplated in the Lease; (ii) an incumbency certificate
certifying that the person signing this Master Lease and the Schedule holds the
office the person purports to hold and has authority to sign on behalf of
Lessee; (iii) an opinion of counsel with respect to the representations in this
Section 24; (iv) an agreement with Lessor's Assignee with regard to any
assignment as referred to in Subsection 20(b); (v) purchase documents if Lessee
has sold or assigned its interest in the Equipment to Lessor; (vi) an insurance
certificate evidencing the insurance provided by Lessee pursuant to Section 12;
and (vii) Certificate of Acceptance(s) duly executed by Lessee.
(c) The foregoing representations, warranties and agreements shall continue
throughout the Lease Term and shall, upon request of Lessor, be made to any
Assignee.
25. LESSEE CHANGE OF OWNERSHIP; FINANCIAL CONDITION.
During the Lease Term should controlling interest in Lessee be acquired by
another company, or should a substantial portion of Lessee's assets be acquired
by another entity, such other company or entity shall agree in writing to be
bound by the terms and conditions of this Lease and any existing Guaranty's of
Lessee's affiliates. This section 25 does not apply to public offering of
shares in Lessee.
26. ADDITIONAL DOCUMENTS.
(a) NOTICE OR PERFECTION OF INTEREST. Lessee shall execute and deliver to
Lessor such documents as Lessor shall deem necessary or desirable to protect
Lessor's or Assignee's title to or interest in the Equipment and the Lease
including, without limitation, UCC financing statements, which shall be filed
at Lessee's expense.
(b) OTHER DOCUMENTS. Lessee shall execute and deliver to Lessor, duly
acknowledged and in recordable form if so requested, any other document
reasonably requested by Lessor.
6
27. NON-WAIVER. No covenant or condition of this Lease can be waived except by
written consent of Lessor. The waiver by Lessor of any breach of Lessee shall
not be a waiver of any other breach of the same or any other obligation. The
subsequent acceptance of Rent by Lessor shall not be deemed a waiver of any
such prior existing breach at the time of acceptance of such Rent payment.
28. NOTICES. Any notice, consent or request required or permitted hereunder
shall be in writing and will be conclusively deemed to have been received by a
party hereto on the day it is delivered to such party at the address set forth
above (or at such other address as such party specifies to the other in
writing) and shall be sent by registered mail, return receipt requested,
overnight courier service, or facsimile (with telephonic verification of
receipt).
29. SEVERABILITY. Any provision of the Lease prohibited by or unlawful or
unenforceable under any applicable law or any jurisdiction shall be ineffective
as to such jurisdiction without invalidating the remaining provisions of the
Lease.
30. SECURITY INTEREST. Each Schedule shall be executed in three counterparts,
consecutively numbered. To the extent, if any, that a Schedule constitutes
chattel paper (as such term is defined in the UCC) no security interest may be
created through the transfer or possession of any counterpart other than that
designated "Counterpart No. 1". The Master Lease, in the form of a photocopy, is
incorporated into the Schedule and is not chattel paper by itself.
31. SUSPENSION OF OBLIGATIONS OF LESSOR. Prior to delivery of any Item
hereunder, the obligations of Lessor will be suspended to the extent that it is
hindered or prevented from complying therewith because of labor disturbances,
including but not limited to, strikes and lockouts, or acts of God, fires,
storms, accidents, failure of the manufacturer to deliver any Item,
governmental regulations or interference or any cause whatsoever not within the
exclusive control of Lessor.
32. NON-SPECIFIED FEATURES. If Equipment delivered pursuant to any Lease
contains any feature not specified therein, Lessee grants Lessor, at Lessor's
option and expense, the right to remove or deactivate any such feature. Such
removal or deactivation shall be performed by the manufacturer or other
acceptable party at the request of Lessor at a time convenient to Lessee,
provided that Lessee shall not unreasonably delay the removal or deactivation
of such feature.
33. MISCELLANEOUS.
(a) Lessor and Lessee acknowledge that there are no agreements or
understandings, written or oral, between Lessor and Lessee with respect to the
Equipment, other than as set forth in the Lease, and the Lease contains the
entire agreement between Lessor and Lessee with respect thereto. NEITHER THE
MASTER LEASE NOR ANY SCHEDULE MAY BE ALTERED, MODIFIED, TERMINATED OR
DISCHARGED EXCEPT BY A WRITING SIGNED BY BOTH PARTIES, AND AGREEMENT TO THE
FOREGOING IS EVIDENCED BY THE FOLLOWING INITIALS:
Lessor: [ILLEGIBLE] Lessee: [ILLEGIBLE]
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(b) If there is more than one Lessee named in this Lease, the liability of each
shall be joint and several.
(c) Section headings are for convenience only and shall not be construed as
part of the Lease.
(d) Time is of the essence of this Lease and each and all of its provisions.
(e) This Lease shall be governed by the laws of the State of California without
giving effect to the principles of conflict of laws, and shall be deemed to
have been made in California.
NO RIGHTS OR REMEDIES REFERRED TO IN ARTICLE 2A OF THE UCC WILL BE CONFERRED ON
LESSOR OR LESSEE UNLESS EXPRESSLY GRANTED IN THIS MASTER LEASE OR THE SCHEDULE.
(f) Lessee's obligations and liabilities hereunder shall not be affected by,
and shall survive, the expiration or earlier termination of this Lease.
(g) This Lease shall inure to the benefit of and shall be binding upon Lessee
and Lessor and their respective successors and assigns.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS MASTER LEASE AS OF THE DATE
FIRST ABOVE WRITTEN.
LESSOR: INSIGHT INVESTMENT, CORP. LESSEE: VERIO INC.
By: /s/ XXXX XXXX By: /s/ XXXXX X. XXXXXXXXXX
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Name: XXXX XXXX Name: Xxxxx X. Xxxxxxxxxx
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Title: PRESIDENT Title: CFO
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