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EXHIBIT 10.19
LESSEE
XXX XXXXXXXXXXX EMC(2) No. 12035
MASTER LEASE AGREEMENT
This MASTER LEASE AGREEMENT (hereinafter called the "Master Agreement") is
entered into by and between XXX Xxxxxxxxxxx, a Massachusetts corporation
(hereinafter called "Lessor"), having its principal place of business at 000
Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, and FUTURELINK CORP. (hereinafter called
"Lessee"), having a principal place of business at 0 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000.
I. THE LEASE
1.1 LEASE OF EQUIPMENT. In accordance with the terms and conditions of this
Master Agreement, Lessor agrees to lease to Lessee, and Lessee agrees to
lease from Lessor, the units of personal property (hereinafter
individually called a "Unit" and collectively called "Equipment")
described in supplement(s) which are executed pursuant to and incorporate
the terms of this Master Agreement (each hereinafter, a "Supplement").
Each Supplement shall constitute a separate, distinct, and independent
lease and contractual obligation of Lessee. The term "Lease" as used
hereinafter shall refer to an individual Supplement which incorporates
the terms of this Master Agreement. Lessor or its assignee shall retain
the full legal title to the Equipment, it being expressly agreed by both
parties that this Master Agreement and each Lease shall constitute an
agreement of lease only. Each Lessee shall be binding upon Lessor and
Lessee from the date of acceptance and execution of the applicable
Supplement, by Lessor at its headquarters.
1.2 TERM OF LEASE. The original term of lease for each Unit (hereinafter the
"Original Term") shall commence on the date specified in the applicable
Supplement and, subject to Section 2.5 below, shall terminate as
specified in such Supplement. No Lease may be canceled by Lessee for any
reason whatsoever.
1.3 DISCLAIMERS; WARRANTIES. LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR MAKES
NO EXPRESS OR IMPLIED WARRANTIES ARISING OUT OF OR RELATED TO LESSEE'S
USE OR OPERATION OF THE EQUIPMENT. LESSOR EXPRESSLY DISCLAIMS THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE FOR
THE EQUIPMENT OR OTHER PRODUCTS, DOCUMENTATION AND SERVICES PROVIDED
HEREIN. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INDIRECT SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR ASSOCIATED WITH THE
EQUIPMENT OR THE LEASE THEREOF EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
1.4 RENTAL PAYMENTS. Lessee shall pay rental to Lessor for the Unit(s) in the
amounts and on the dates specified in the applicable Supplement. If any
rental or other amount due hereunder is not paid within five (5) days of
the due date thereof, Lessee shall pay to Lessor on demand, as additional
rental, interest thereon from the due date until payment at a rate equal
to the lesser of (i) eighteen (18%) per annum, or (ii) the maximum rate
permitted by law. All rental and other amounts payable by Lessee to
Lessor hereunder shall be paid to Lessor at the address specified above,
or at such other place as Lessor may designate in writing to Lessee. Time
is of the essence with respect to all of Lessee's obligations under any
Lease.
1.5 RETURN OF EQUIPMENT. Upon expiration of the Original Term, Lessee will
immediately return the Equipment to Lessor as provided in Section 2.3
below. Should Lessee not return the Equipment at the end of the Original
Term, the Equipment shall continue to be held and leased hereunder, and
the Lease shall thereupon be extended for successive three (3) month
terms, at the same monthly rental, subject to the right of either Lessee
or the Lessor to terminate the Lease upon ninety (90) days written
notice, whereupon the Lessee shall forthwith deliver the Equipment to the
Lessor. If Lessee fails to return the Equipment upon demand therefor by
Lessor, Lessee shall pay Lessor, as the reasonable measure of Lessor's
damages, the value, at replacement cost, of the Equipment so converted.
II. COVENANTS OF LESSEE
2.1 PAYMENT OF RENTAL AND OTHER MONIES. Each lease is a net lease and Lessee
acknowledges and agrees that Lessee's obligation to pay all rental and
other sums payable hereunder, and the rights of Lessor in and to such
payments, shall be absolute and unconditional and shall not be subject to
any abatement, reduction, setoff, counterclaim or other defense for any
reason whatsoever. It being the intent of Lessor, and an inducement to
Lessor, to enter into the Lease, to claim all available tax benefits of
ownership with respect to the Equipment, Lessee acknowledges and agrees
that (i) no right, title or interest in the Equipment has been or is
intended to be passed to Lessee, other than the right to maintain
possession and use of the Equipment for the Original Term, conditioned on
Lessee's performance of the terms and conditions of the Lease, (ii)
Lessee has not taken and will not at any time during the Original Term,
take any action which shall cause Lessor to lose any tax benefits of
ownership, and (iii) the Stipulated Loss Values (defined in the
applicable Lease) agreed to under this Lease are intended to provide
recovery by Lessor of such lost tax benefits of ownership.
2.1.1 ACCEPTANCE OF EQUIPMENT. Lessee's acceptance of the Equipment shall be
conclusively and irrevocably evidenced by Lessee executing the
Certificate of Delivery and Acceptance and upon acceptance the Lessee of
such Equipment shall be noncancellable for the Original Term unless
otherwise agreed to in writing by Lessor.
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2.2 USE OF EQUIPMENT. Lessee shall use the Equipment solely in the conduct
of his business, in a manner and for the use contemplated by the
manufacturer thereof, and in compliance with all laws, rules and
regulations of every governmental authority having jurisdiction over the
Equipment and with the provisions of all policies of insurance carried
by Lessee pursuant to Section 2.4 below; provided, however, Lessee shall
have the right to allow third parties, under Lessee's supervision, to
use the Equipment, so long as Lessee shall retain uninterrupted
possession and control of the Equipment. Lessee shall pay all costs,
expenses, fees and charges incurred in conjunction with the use and
operation of the Equipment.
2.3 DELIVERY, INSTALLATION, MAINTENANCE AND REPAIR. Lessee shall be solely
responsible, at its own expense, for the delivery of the Equipment to
Lessor, the packing, rigging and delivery of the Equipment back to
Lessor upon expiration of the Original Term in good repair, condition,
and working order, ordinary wear and tear excepted, at the location(s)
within the continental United States specified by Lessor. Lessor is also
solely responsible for the installation, de-installation, maintenance
and repair of the Equipment. Lessee shall, at its expense, (a) keep the
Equipment in good repair, condition and working order, ordinary wear and
tear excepted, and (b) at the expiration of the Original Term or any
renewal term have the Equipment inspected and certified as acceptable
for maintenance service by the manufacturer. Lessor shall be entitled to
inspect the Equipment at Lessee's location at reasonable times.
2.4 TERMS. Lessee agrees to pay, and to indemnify and hold Lessor harmless
from, all license fees, assessments, and sales, use, property, excise
and other taxes and charges ("Imports") (other than those assessed by
Lessor's ????????? ????????) now or hereafter imposed by any
governmental body or agency upon or with respect to (a) the Equipment or
the possession, ownership, use or operation thereof or (b) this Master
Agreement, any Lease, or the consummation of the transaction herein
contemplated. All required personal property tax returns relating to the
Equipment shall be filed by Lessee unless otherwise provided in writing.
Lessee shall reimburse Lessor promptly upon demand for the amount of any
Imports remitted by Lessor which are required hereunder to be borne by
Lessee.
2.5 LOSS OF EQUIPMENT. Lessee shall bear the entire risk of the Equipment
being lost, destroyed or otherwise rendered permanently unfit or
unavailable for use from any cause whatsoever (hereinafter called an
"Event of Loss") after its delivery to Lessee. If an Event of Loss shall
occur with respect to any Unit, Lessee shall promptly and fully notify
Lessor thereof. On the rental payment date following such notice Lessee
shall pay to Lessor an amount equal to the rental payment or payments
due and payable for such Unit on each date plus a sum equal to the
Stipulated Loss Value (as defined in the applicable Supplement) of such
Units as of the date of such payment set forth in each Supplement. Upon
the making of such payment by Lessee regarding any Unit, the rental
obligation for such Unit shall cease, the Lease as to such Unit shall
terminate and (except in the case of loss, theft or complete
destruction) Lessor shall be entitled to recover possession of such Unit
at Lessor's expense in accordance with the provisions of Section 2.3
above. Provided that Lessor has received the Stipulated Loss Value for
any Unit, Lessee shall be entitled to the proceeds of any recovery in
respect of such Unit from insurance or otherwise.
2.6 INSURANCE. Lessee shall obtain and maintain for the entire term of the
Lease, at its own expense, property damage and liability insurance and
insurance against loss or damage to the Equipment including, without
limitation, loss by fire (including so-called extended coverage), theft
and such other risks of loss as are required on the type of Equipment
leased hereunder and by businesses in which Lessee is engaged in such
amounts in such form and with such insurance as shall be satisfactory to
Lessor, provided however, that such insurance for loss or damage of any
Unit shall always be at a minimum, the amount of the Stipulated Loss
Value of each Unit. Each insurance policy will name Lessee as insured
and Lessor as an additional insured and loss payee thereof as Lessor's
interest may appear and shall provide that it may not be canceled or
altered without at least 30 days prior written notice to Lessor or its
successors and assigns. Lessee shall provide to Lessor a certificate of
insurance as evidence of insurance coverage prior to delivery of any
Unit.
2.7 INDEMNITY. Lessee shall and does hereby indemnify Lessor and its
successors and assigns against, and hold Lessor and its successors and
assigns harmless from, any and all claims, demands, actions and suits,
proceedings, costs, expenses, damages and liabilities, including
reasonable attorneys' fees, hereinafter ("Claims"), arising out of,
connected with or resulting from this Master Agreement, any Lease, or
the Equipment, including, without limitation, the selection, ownership,
control, maintenance, lease, purchase, delivery, possession, condition,
use, operation, or return of the Equipment. Lessee shall give Lessor
immediate notice of any Claim and Lessee shall satisfy, pay and
discharge any and all judgments and fines that may be recovered against
Lessor in connection with any such Claim. Lessor shall give Lessee
written notice of any such Claim of which Lessor has knowledge.
2.8 POSSESSION; ASSIGNMENT; PLEDGE. Without the prior written consent of
Lessor, which such consent as it pertains to subsection (n) and (d),
shall not be unreasonably withheld or delayed, Lessee shall not (a)
sublease the Equipment, or any part thereof, provided, that Lessee may,
without the prior written consent of Lessor, permit any parent or
subsidiary of Lessee to use the Equipment, or any part thereof, in the
ordinary course of its business, (b) assign this Master Agreement or any
Lease or its interest hereunder or thereafter, (c) create or incur any
liens or encumbrance with respect to the equipment, or any part thereof,
(d) move the Equipment, or any part thereof, or permit any of the
Equipment to be moved from the location at which it is first installed,
or (e) permit the Equipment, or any part thereof, to be removed outside
the continental limits of the United States.
2.9 INDEMNIFICATION. At any time during the term of a Lease, Lessor may
require Lessee to legibly xxxx each Unit subject to such Lease in a
reasonably prominent location with a label, ???? or other marking
stating that the Equipment is owned by Lessor.
2.10 ALTERATIONS OR MODIFICATIONS. Lessee shall not make any alterations of
or additions to the Equipment without the prior written consent of
Lessor. At any time during the Original Term, of any Lease there may be
added to each Lease additional Units of the same type as are rented
thereunder for a term equal to the remaining Original Term and, subject
to the terms and conditions hereof, at the rental rates applicable to
such Equipment and term in effect at the time the order is placed,
provided that the order is in writing and accepted by Lessor. Such
acceptance shall be at the sole discretion of Lessor. All additions,
attachments or accessories to or improvements of the Equipment shall
immediately belong to and become property of the Lessor unless, at the
request of Lessor, such additions, attachments or accessories to or
improvements of the Equipment are removed prior to the return of said
Equipment by Lessee. Lessee shall be responsible for the costs of such
removal and shall restore the Equipment to the same operating conditions
as when it became subject to the Lease.
2.11 EQUIPMENT TO BE PERSONAL PROPERTY. Lessee agrees that the Equipment
shall be and remains personal property notwithstanding the manner in
which it may be attached or affixed to realty, and Lessor shall do all
acts and enter into all agreements necessary to ensure that the
Equipment remains personal property.
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2.12 FINANCIAL STATEMENTS. Lessee shall promptly furnish, or cause to be
furnished, to Lessor such financial or other statements respecting the
condition and operations of Lessee or respecting the Equipment as Lessor
may from time to time reasonably request.
2.13 LESSEE REPRESENTATIONS. Lessee hereby represents, warrants and covenants
that with respect to this Master Agreement and each Lease entered into
hereunder:
(a) The execution, delivery and performance thereof by the Lessee have
been duly authorized by all necessary corporate action;
(b) The individual executing such was duly authorized to do so;
(c) This Master Agreement and each Lease constitute the legal, valid
and binding obligations of the Lessee enforceable in accordance
with their respective terms.
III. DEFAULT AND REMEDIES
3.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default hereunder; (a) Lessee shall fail to pay
on the due date any rental or other payment due under any lease, (b) any
provision of this Master Agreement or any Lease or any provision in any
document provided by Lessee for this Master Agreement or any Lease, or in
any document furnished pursuant to the provisions hereof or otherwise,
shall prove to have been false or misleading in any material respect as
of the date when it was made, (c) Lessee shall fail to perform any
provision, covenant, condition or agreement made by it under this Master
Agreement or Lease, and such failure shall continue for ten (10) days
after notice thereof from Lessor to Lessee or (d) bankruptcy,
receivership, insolvency, reorganization, dissolution, liquidation, or
other similar proceedings shall be instituted by or against Lessee or all
or any part of its property under the Federal Bankruptcy Code or other
law of the United States or of any state law, and if against Lessee it
shall consent thereto or shall fail to cause the same to be discharged
within twenty (20) days, or (e) Lessee shall default under any agreement
with respect to the purchase or installation of the Equipment, or (f) if
Lessee or any guarantor of Lessee's obligations hereunder shall default
under any other agreement with Lessor.
3.2 REMEDIES. If an Event of Default hereunder shall occur and be continuing,
Lessor may exercise any one or more of the following remedies: (a)
immediately terminate this Master Agreement and any or all Leases and
Lessee's rights hereunder and thereunder, (b) proceed, by appropriate
court action or actions either at law or in equity, to enforce
performance by Lessee of the applicable covenants of the Lease or to
recover damages for the breach thereof, (c) by notice in writing to
Lessee, recover all amounts due on or before the date of the event of
default, plus, as liquidated damages for loss of a bargain and not as a
penalty, accelerate, and declare to be immediately due and payable all
rentals and other sums payable under any or all such Leases, without any
presentment, demand, protest or future notice (all of which hereby are
expressly waived by Lessee), whereupon the same shall be and become
immediately due and payable, and (d) personally, or by its agents take
immediate possession of the Equipment, or any part thereof, from Lessee
and for such purpose, enter upon Lessee's premises where any of the
Equipment is located with or without notice or process of law and free
from all claims by Lessee. The exercise of any of the foregoing remedies
by Lessor shall not constitute a termination of any Lease unless Lessor so
notifies Lessee in writing.
3.3 DISPOSITION OF EQUIPMENT. In the event Lessor repossesses Equipment,
Lessor may (a) lease the Equipment, or any portion thereof, in such a
manner, for such time and upon such term(s) as Lessor may determine or
(b) sell the Equipment, or any portion thereof, at one or more public or
private sales, in such manner, and at such times and upon such terms as
Lessor may determine. In the event that Lessor leases any such Units, any
rentals received by Lessor for the Remaining Lease Term(s) (the period
ending on the date when the Original Term for the Unit(s) would have
expired if an Event of Default had not occurred) for such Units shall be
applied to the payment of (i) all costs and expenses (including
attorneys' fees) incurred by Lessor in retaking possession of, and
removing, storing, repairing, refurbishing and leasing such Units, and
(ii) the rentals for the remainder of the Original Term and all other
sums, including past due rentals, remaining unpaid under the Lease. The
balance of such rentals, if any, shall be applied first to reimburse
Lessee for any sums previously paid by Lessee as liquidated damages, and
any remaining amounts shall be retained by Lessor. All rentals received by
Lessor for the period commencing after the expiration of the Remaining
Lease Term(s) shall be retained by Lessor. Lessee shall remain liable to
Lessor to the extent that the aggregate amount of the sums referred to in
clauses (i) and (ii) above shall exceed the aggregate rentals received by
Lessor under such leases for the respective Remaining Lease Term(s)
applicable to the Units covered by such leases. In the event that Lessor
shall sell or otherwise dispose of (other than pursuant to a lease) any
such Unit, the proceeds thereof shall be applied to the payment of (i)
all costs and expenses (including reasonable attorneys' fees) incurred by
Lessor in retaking possession of, and removing, storing, repairing,
refurbishing and selling or otherwise disposing of such Unit(s), (ii) the
rentals that either did or would have accrued under the Lease but are
unpaid up to the time of such sale or other disposition, (iii) any and
all other sums (other than rentals) then owing to Lessor by Lessee under,
and (iv) the Stipulated Loss Value of such Unit(s) determined as of the
date of such sales or other disposition in accordance with the schedule
set forth in the Lease for such Unit(s). The balance of such proceeds, if
any, shall be applied first to reimburse Lessee for any sums previously
paid by Lessee as liquidated damages, and any remaining amounts shall be
retained by Lessor. Lessee shall remain liable to Lessor to the extent
that the aggregate amount of the sums referred to in clauses (i) through
(iv) above shall exceed the aggregate proceeds received by Lessor in
connection with the sale or disposition of the Equipment (other than
pursuant to a lease).
IV. MISCELLANEOUS
4.1 PERFORMANCE OF LESSEE'S OBLIGATIONS. Upon Lessee's failure to pay any sum
or perform any obligation hereunder when due, Lessor shall have the
option, but shall in no case be obligated, to pay such sum or perform
such obligation, whereupon such sum or the cost of such performance shall
immediately become due and payable as additional rent from Lessee to
Lessor with interest at the highest legal rate from the date payment or
performance was due.
4.2 ASSIGNMENT. No right, obligation or interest of Lessee with respect to
this Master Agreement, any Lease or Equipment shall, without the prior
written consent of Lessor, by assignable by Lessee or by operation of law,
and any such purported assignment, transfer or succession shall be null
and void. Lessor may, at any time, without the consent of Lessee, assign
the Master Agreement and any Lease or any interest herein or therein to
any party. In the event of any assignment of Lessor, the assignee shall
have all of Lessor's rights hereunder, but none of its obligations, and
upon receipt by Lessee of written notice of any such assignment, Lessee
shall make all payments thereafter becoming due under any assigned Lease
to such assignee without regard to any set-off, defense or counter claim
that Lessee may have against Lessor.
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4.3 Quiet Enjoyment. So long as Lessee shall not be in default hereunder, and
Lessor continues to receive all rent and other sums payable by Lessee
hereunder in accordance with the terms hereof, neither Lessor nor its
assignee, shall interfere with Lessee's right of quiet enjoyment and use of
the Equipment.
4.4 Further Assurances. Lessee agrees that at any time, and from time to time,
after the execution and delivery of this Lease, it shall, upon the request
of Lessor, execute and deliver such further documents and do such further
acts and things as Lessor may reasonably request in order fully to effect
the purposes of this Lease including without limitation, the filing of
financial and confirmation statements. Lessee authorizes Lessor to file a
financing statement or any confirmation statements signed only by Lessor in
accordance with the Uniform Commercial Code or signed by Lessor as Lessee's
attorney in fact.
4.5 Rights, Remedies, Powers. Each and every right, remedy and power granted to
Lessor hereunder shall be cumulative and in addition to any other right,
remedy or power herein specifically granted or now or hereafter adopting in
equity, at law, by virtue of statutes or otherwise, and may be exercised by
Lessor from time to time concurrently or independently and as often and in
such order as Lessor may deem expedient. And any failure or delay on the
part of Lessor in exercising any such right, remedy or power, or
abandonment or discontinuance of steps to enforce the same, shall not
operate as a waiver thereof or affect Lessor's right thereafter to exercise
the same; and any single or partial exercise of any such right, remedy or
power shall not preclude any other or further exercise thereof or the
exercise of any other right, remedy or power.
4.6 Notices. Any notice, request, demand, consent, approval or other
communication provided or permitted hereunder shall be in writing and shall
be conclusively deemed to have been received by a party hereto on the day
it is delivered to such party at its address set forth above (or at such
other address as such party shall specify to the other party in writing),
or if sent by registered or certified mail, return receipt requested, on
the third business day after the day on which mailed, addressed to such
party at such address.
4.7 Section Headings. Section headings are inserted for convenience only and
shall not affect any construction or interpretation of any Lease.
4.8 Binding Effect. Each Lease, subject to the provisions of Sections 2.8 and
4.3 hereof, shall be binding upon and shall inure to the benefit of the
respective successors and assigns of the Lessee and Lessor.
4.9 Governing Law. Each Lease shall be governed in all respects by the laws of
the Commonwealth of Massachusetts.
4.10 Entire Lease. Each Lease, consisting of the terms and conditions of this
Master Agreement, a Supplement, and any Amendments, Schedules or Riders to
either of them, constitutes the entire agreement between Lessor and Lessee.
No waiver, comment, modification or change of terms of this Lease shall
bind either party unless in writing signed by both parties, and then such
waiver, comment, modification or change shall be effective only in the
specific instance and for the specific purpose given. There are no
understandings, agreements, representations or warranties, express or
implied, not specified therein regarding any Lease or the Equipment leased
thereunder. Any terms and conditions of any purchase order or other
document (with the exception of Supplements) submitted by Lessee in
connection with any Lease which are in addition to or inconsistent with the
terms and conditions of such Lease will not be binding on Lessor and will
not apply to the Lease. LESSEE BY THE SIGNATURE BELOW OF ITS AUTHORIZED
REPRESENTATIVE ACKNOWLEDGES THAT IT HAS READ THIS MASTER AGREEMENT,
UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS WITH
RESPECT TO ANY LEASE ENTERED INTO HEREUNDER.
LEASE ACCEPTED BY:
XXX XXXXXXXXXXX, (Lessor) FUTURELINK CORP. (Lessee)
BY: BY: /s/ Xxxxx Xxxxxxx
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TITLE: TITLE: Chief Financial Officer
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