Exhibit 10.14
LEASE
Date: April 3, 1995 Lease No. 317
Lessor:
APPLIED TELECOMMUNICATIONS
TECHNOLOGIES, INC.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X'Xxxxxxx
(000) 000-0000 Phone (000) 000-0000 Fax
Lessee:
FiveCom, Inc.
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention:Xxxxxx Xxxxxxxxxx
Phone: 617/000-0000
Equipment Location: See Schedule B
County: Middlesex Federal ID No.00-0000000
Equipment: See Schedule B Capitalized
Lessor's Cost: $500,000.00
Primary Term: Basic Rent:
PRIMARY TERM BASIC RENT PER MONTH: $13,269.99
COMMENCEMENT DATE: excepting the final payment of Basic
May 1, 1995 Rent, which is $38,269.99
PRIMARY TERM
EXPIRATION DATE: April 30, 1999
PAYMENT DATES:
BASIC RENT PAYMENT DATES: The 1st day of each month, beginning with
May 1, 1995.
1. DEFINITIONS AND RULES OF CONSTRUCTION. Unless the context shall
otherwise require, capitalized terms used herein, but not otherwise defined
herein, shall have the respective meanings specified in Schedule A attached
hereto, which is hereby incorporated by reference.
2. LEASE. Lessee hereby agrees to lease from the Lessor, and Lessor, by
acceptance of this Lease, agrees to lease to Lessee, the Equipment. Lessee
agrees that it shall, pursuant to the terms hereof, comply with all of the terms
and conditions herein.
3. TERM AND RENT; OBLIGATIONS UNCONDITIONAL. (a) The Equipment is
leased for the Interim Term and the Primary Term, unless and until the Term of
this Lease shall sooner expire pursuant to the terms hereof. The Interim Term
shall commence on the date of acceptance of such Equipment as evidenced by
Lessee's Indemnification and Installation Certificate as provided in Section 9
hereof and shall expire at midnight on the date that is one calendar day prior
to the Primary Term Commencement Date. The Primary Term shall commence at 12:01
a.m. and expire at midnight on the dates set forth on the cover page hereof as
the "Primary Term Commencement Date" and the "Primary Term Expiration Date,"
respectively.
(b) Lessee shall pay to Lessor or an agent designated by
Lessor or any Transferee in writing, in lawful money of the United States, (i)
as fixed rent for the Equipment during the Interim Term, the Basic Rent Per Day
multiplied by number of calendar days (full or partial) in the Interim Term on
the first Basic Rent Payment Date and (ii) as fixed rent for the Equipment
during the Primary Term, (A) the Basic Rent Per Month on each Basic Rent Payment
Date and (B), on the final Basic Rent Payment Date, an amount equal to five
percent (5% ) of the Capitalized Lessor's Cost of the Equipment; provided,
however, that if the first Basic Rent Payment Date is also the Primary Term
Commencement Date, Lessee shall pay all Basic Rent Per Day and the first
installment of Basic Rent Per Month on the date that the Lessee delivers its
Indemnification and Installation Certificate. All payments of Basic Rent shall
be made by wire transfer to Lessor's account as set forth in Schedule D attached
hereto, which is hereby incorporated by reference, or at such other address or
to such other Person and in such other manner as Lessor, from time to time, may
designate. Each payment of Basic Rent shall be apportioned between the Equipment
Expense and the Amortization Expense for the Equipment as specified in Schedule
E, which schedule is hereby incorporated by reference.
(c) Lessee shall also pay to Lessor or an agent designated by
Lessor or any Transferee in writing, in lawful money of the United States, all
Supplemental Rent. Supplemental Rent shall be paid when due or on demand if
there is no due date therefor. If Lessee shall fail to pay any Supplemental
Rent, Lessor shall have the right to pay the same and shall have all rights,
powers and remedies for reimbursement from Lessee with respect thereto as are
provided herein (including, without limitation, Sections 14 and 15 hereof) or by
Law in the case of non-payment of Basic Rent. Lessee shall also pay to Lessor
the Excess Use Fee on all overdue Rent from the due date
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thereof until paid. Lessee shall perform all of its obligations under this Lease
at its sole cost and expense, and shall pay all Rent when due, without further
notice or demand.
(d) This Lease is a net lease and Lessee acknowledges and
agrees that Lessee's obligation to pay all Rent 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,
defense, counterclaim or recoupment due to or alleged to be due to, or by reason
of, any past, present or future claims that Lessee may have against Lessor, any
Transferee, the manufacturer or Supplier of the Equipment or any Person for any
reason whatsoever.
4. PERSONAL PROPERTY; SECURITY INTEREST AND LIENS.
(a) Lessee covenants and agrees that the Equipment is, and
shall at all times be and remain, personal or movable property. If requested by
Lessor, Lessee shall obtain prior to delivery of any item of Equipment or at any
other time reasonably requested by Lessor, a certificate in form satisfactory to
Lessor from all parties with a real property interest in the premises where the
Equipment may be located waiving any claim with respect to the Equipment.
(b) During the Term of this Lease and until (i) Lessee
acquires such Equipment pursuant to Section 19 hereof or (ii) Lessee returns the
Equipment to Lessor in compliance with Section 17 hereof, Lessor shall retain
title to such Equipment; provided, however, that Lessee and Lessor acknowledge
that transactions documented hereunder shall not constitute a "lease" or a "true
lease," and instead shall constitute a "lease intended as security," or
"security interest," as the case may be, under Applicable Law (including under
Section 1-201(37) of the UCC). In furtherance thereof, in order to secure the
prompt payment and performance as and when due of all of Lessee's obligations
hereunder, Lessee hereby grants to Lessor security interest in the Equipment
leased hereunder and all replacements, substitutions, accessions thereto, and
proceeds (cash and non-cash) thereof, including the proceeds of all insurance
policies on the Equipment. Lessee agrees that, with respect to the Equipment,
Lessor shall have all of the rights and remedies of a secured party under the
UCC. Lessee may not dispose of any of the Equipment except to the extent
expressly provided herein.
(c) Lessee shall not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to any of the Equipment,
title thereto or any interest therein, except Permitted Liens. Lessee shall
notify Lessor immediately in writing upon receipt of notice of any Lien
affecting the Equipment in whole or in part, and shall, at its own cost and
expense, defend Lessor's title therein and Lessor's first priority security
interest with respect thereto against all Persons holding or claiming to hold
such a Lien on the Equipment; and any losses, expenses or costs suffered by
Lessor as a result thereof shall be covered by the Lessee's indemnity in Xxxxxxx
00 xxxxxx.
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(x) Xxxxxx shall not move any tangible Equipment or permit any
tangible Equipment to be moved from the address set forth on the cover page
hereof without Lessor's prior written consent; provided, however, that in no
event shall any Equipment be moved to any location outside the United States of
America or to any jurisdiction within the United States of America that has not
adopted the UCC.
5. INSTALLATION, DEINSTALLATION, MAINTENANCE AND REPAIR. At all times
during the Term of this Lease, Lessee shall be solely responsible, at its own
expense, for the delivery, installation, maintenance, repair, use, possession,
operation, storage, deinstallation, and drayage of the Equipment by a party
acceptable to Lessor, and shall keep the Equipment in good repair, condition and
working order, and shall furnish any and all parts, mechanisms and devices
required to keep the Equipment in good repair, condition and working order, all
at the expense of Lessee. Lessee shall not make any alterations or additions to
the Equipment without the prior written consent of Lessor. All parts furnished
and all additions made to and all substitutions and replacements for the
Equipment shall immediately upon the installation thereof be deemed part of the
Equipment and become the property of Lessor subject to the terms of this Lease.
At all times during the Term of this Lease, Lessee shall maintain at its own
cost and expense in effect a comprehensive maintenance and servicing agreement
with respect to each item of the Equipment with the manufacturer or Supplier
thereof or such other party as may be acceptable to Lessor. Lessor shall be
entitled to inspect the Equipment at the location thereof during normal business
hours.
6. USE. Lessee shall use the Equipment in a careful and proper manner
and shall comply with and conform to all Applicable Laws and insurance and/or
maintenance requirements. Lessee shall not use the Equipment for any purpose
other than that for which it was designed. Lessor shall have the right to remove
the Equipment from the premises where located if the Equipment is, in the sole
discretion of Lessor, used beyond its capacity or in any manner improperly cared
for or abused.
7 QUIET ENJOYMENT. So long as no Event of Default has occurred and is
continuing hereunder and subject to Section 6 hereof Lessor warrants peaceful
and quiet use and enjoyment of the Equipment by Lessee against acts of Lessor.
8. ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY. LESSEE HEREBY
ACKNOWLEDGES AND AGREES THAT: THE EQUIPMENT, AND THE RIGHTS, TITLE AND INTEREST
BEING CONVEYED HEREIN WITH RESPECT THERETO, ARE BEING CONVEYED AND DELIVERED TO
LESSEE "AS IS" AND "WHERE IS" WITHOUT ANY RECOURSE TO LESSOR AND LESSOR HAS NOT
MADE, AND HEREBY DISCLAIMS, LIABILITY FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS
AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES, GUARANTIES, REPRESENTATIONS
OR OBLIGATIONS OF ANY KIND WITH RESPECT THERETO, EITHER EXPRESS OR IMPLIED OR
ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING (A) ANY EXPRESS OR IMPLIED
WARRANTIES,
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GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF, ARISING FROM OR IN (1)
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, (2) COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (3) QUALITY OF WORKMANSHIP OR
THE PROVISIONS OF ANY SUPPLY CONTRACT WITH SUPPLIER OR (4) TORT (WHETHER OR NOT
ARISING FROM THE ACTUAL, IMPLIED OR IMPUTED NEGLIGENCE OF LESSOR OR STRICT
LIABILITY) OR UNDER THE UCC OR OTHER APPLICABLE LAW WITH RESPECT TO THE
EQUIPMENT, INCLUDING TITLE THERETO (INCLUDING ANY WARRANTY OF GOOD OR MARKETABLE
TITLE OR FREEDOM FROM LIENS), FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT
INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT DISCOVERABLE), CONDITION,
MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND (B) ALL
OBLIGATIONS, LIABILITY, RIGHTS AND REMEDIES, HOWSOEVER ARISING UNDER ANY
APPLICABLE LAW WITH RESPECT TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING FOR
LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY
OF LESSEE OR LESSOR TO ANY THIRD PARTY, OR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE USED IN SECTION 2-719(3) OF THE UCC, OR
OTHER APPLICABLE LAW); all such risks, as between Lessor and Lessee, are to be
borne by Lessee. Lessee acknowledges and agrees that the Equipment has been
selected by Lessee on the basis of its own judgment, and Lessee has not asked
for, been given or relied upon the skill or opinion of, or any statements,
representations, guaranties or warranties by, Lessor or its agents or
representatives in relation thereto. Lessee understands and acknowledges that
Lessor is not in the business of manufacturing, assembling or supplying
Equipment or otherwise in the business of being a vendor but is instead
providing financial accommodations, including lease financing. Lessee has
examined the Equipment and delivered to Lessor its Indemnification and
Installation Certificate therefor. The Equipment is not to be used, and is not
being acquired hereby, for use in any respect for Lessee's or any other Person's
personal or family purposes and, as such, the Equipment does not constitute
"consumer goods" as such term is defined under Applicable Law. Lessor's
agreement to enter into this Lease is in reliance upon the freedom from
liability or responsibility for the matters waived and disclaimed herein. THE
PROVISIONS OF THIS SECTION 8 HAVE BEEN NEGOTIATED BY LESSOR AND LESSEE AND,
EXCEPT FOR THE WARRANTY MADE BY LESSOR IN SECTION 7 HEREOF, ARE INTENDED TO
CONSTITUTE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS, GUARANTIES,
OBLIGATIONS OR WARRANTIES OF LESSOR, EXPRESS OR IMPLIED, WITH RESPECT TO THE
EQUIPMENT AND THE RIGHTS, TITLE AND INTEREST BEING CONVEYED HEREIN WITH RESPECT
THERETO THAT MAY ARISE PURSUANT TO ANY APPLICABLE LAW NOW OR HEREAFTER IN
EFFECT. (LESSEE'S INITIALS VC)
Lessee agrees that the only representations, warranties, guaranties or
indemnities made with respect to the Equipment are those made by the Supplier
thereof. Provided that no Default or Event of Default has occurred and is
continuing hereunder, Lessor:
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(i) shall cooperate fully with Lessee with respect to the resolution of any
claims by Lessee against Supplier with respect to an item of Equipment, in good
faith and by appropriate proceedings at Lessee's expense, (ii) subject to the
initial proviso of this sentence, hereby assigns to Lessee, for and during the
Term of this Lease, any applicable warranties, indemnities or other rights under
any Supply Contracts (excluding any refunds or other similar payments reflecting
a decrease in the value of any such Equipment, which amount shall be received by
and paid to Lessor, for application to Lessee's obligations to pay Rent for such
Equipment), and (iii) hereby authorizes Lessee to obtain all services,
warranties or amounts from the Supplier of such Equipment to be used to repair
such Equipment (and such amounts shall be used by Lessee to repair such
Equipment). Lessee understands, acknowledges and agrees that neither Supplier
nor its salesmen or agents is an agent of Lessor or authorized to waive, alter
or add to any provision of this Lease.
9. REPRESENTATIONS AND WARRANTIES. Lessee represents and warrants for
the benefit of Lessor:
(a) Lessee is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
is duly qualified to do business and is in good standing in the jurisdiction(s)
where the Equipment will be located and has adequate corporate power to enter
into and perform this Lease.
(b) This Lease has been duly authorized, executed and
delivered by Lessee and constitutes a valid, legal and binding agreement of
Lessee, enforceable in accordance with its terms.
(c) The entering into and performance of this Lease by Lessee
will not violate any Applicable Law or any provision of Lessee's charter or
bylaws or result in any breach of, or constitute a default under, or result in
the creation of any Lien upon any assets of Lessee, or on the Equipment pursuant
to any instrument or Applicable Law to which Lessee is a party or by which it or
its assets may be bound.
(d) There are no pending or threatened actions or proceedings
to which Lessee is a party, or otherwise affecting Lessee, before any Government
Authority, which, either individually or in the aggregate, would adversely
affect the financial condition of Lessee, or the ability of Lessee to perform
its obligations under, or comply with the terms of, the Lease Documents.
(e) Other than to Lessor, Lessee is not in default under any
obligation for the payment of borrowed money, for the deferred purchase price of
property or for the payment of any rent under any lease agreement which, either
individually or in the aggregate, would adversely affect the financial condition
of Lessee, or the ability of Lessee to perform its obligations under, or comply
with the terms of, the Lease Documents.
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(f) No consent, approval or other authorization of or by any
Governmental Authority is required in connection with the execution, delivery or
performance by Lessee of, or the consummation by Lessee of the transactions
contemplated by, this Lease.
(g) With respect to the Equipment, under the Applicable Law of
the state(s) in which such Equipment is to be located, such Equipment consists
solely of personal property and not fixtures.
(h) The financial statements of Lessee that have been provided
to Lessor have been prepared in accordance with GAAP, and fairly present
Lessee's financial condition and the results of its operations as of the date of
and for the period covered by such statements, and since the date of such
statements there has been no material adverse change in such conditions or
operations.
(i) The address of Lessee as set forth on the cover page
hereof is the chief place of business and chief executive off ice (which terms
shall have the meanings ascribed therefor in Article 9 of the UCC) of Lessee;
and Lessee does not conduct business under any trade, assumed or fictitious
name.
(j) With respect to the Equipment, no filing, recordation or
registration of any Financing Statement or other document or instrument was or
is necessary in order to cause Lessor to have good, valid and enforceable title
with respect thereto and, without limiting the generality of the foregoing, upon
the last to occur of (1) Lessor's payment of the Total Invoice Cost (or any
portion thereof) of any item of Equipment to Lessee or any Supplier as the case
may be and (2) the filing of a Financing Statement in the State Filing Office,
County Filing Office and, if applicable, the Fixture Filing Office (naming
Lessee as debtor and Lessor as secured party and describing such item of
Equipment), Lessor will have a valid, perfected, first priority security
interest in such item of Equipment pursuant to the UCC and other Applicable Law.
(k) For purposes of Federal, state and local income tax laws:
(i) Lessee (and not Lessor or any Transferee) will be treated as the owner of
the Equipment; and (ii) all payments made by Lessee to Lessor or any Transferee
will constitute returns of capital and/or payments for the use or forbearance of
money.
(l) Lessee has obtained all Permits necessary to possess and
use the Equipment in compliance with and as contemplated by this Lease.
(m) If requested by Lessor, Lessee will provide an opinion of
counsel and other supporting documents to the foregoing effect and with respect
to such other legal matters as Lessor may request.
10. COVENANTS OF LESSEE. Lessee covenants and agrees as follows:
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(a) Lessee will, if requested by Lessor, furnish Lessor (i)
within one hundred twenty (120) days after the end of each fiscal year of
Lessee, a balance sheet of Lessee as at the end of such year, and the related
statements of income and retained earnings and cash flows of Lessee for such
fiscal year, prepared in accordance with GAAP, all in reasonable detail and
certified by independent certified public accountants of recognized standing
selected by Lessee; (ii) within sixty (60) days after the end of each quarter of
Lessee's fiscal year a balance sheet of Lessee as at the end of such quarter,
and the related statement of income and retained earnings and cash flows of
Lessee for such quarter, prepared in accordance with GAAP; and (iii) within
thirty (30) days after the date on which they are filed, all regular periodic
reports, forms and other filings required to be made by Lessee to the Securities
and Exchange Commission, if any.
(b) Lessee will promptly execute and deliver to Lessor such
further documents, instruments and assurances and take such further action as
Lessor from time to time may reasonably request in order to carry out the intent
and purpose of this Lease and to establish and protect the rights and remedies
created or intended to be created in favor of Lessor hereunder and under the
other Lease Documents.
(c) Lessee shall provide written notice to Lessor: (i) thirty
(30) days prior to any contemplated change in the name or address of Lessee;
(ii) promptly upon the occurrence of any Default or Event of Default; (iii) of
the commencement of proceedings under Federal bankruptcy laws or any other
insolvency laws (as now or hereafter in effect) involving Lessee or any Person
(other than Lessor) holding an interest in the Equipment or related property as
the debtor; (iv) promptly upon Lessee becoming aware of (1) any alleged
violation of Applicable Law,. or (2) any threatened or actual suspension,
revocation or rescission of any Permit necessary for Lessee to be in compliance
with the terms hereof; and (v) promptly after any of the Equipment becomes lost,
stolen, destroyed, materially damaged or worn out.
(d) Lessee shall not attach or incorporate the Equipment to or
in any other item of equipment or any realty in such a manner that the Equipment
may be deemed to have become an accession to or a part of such other item of
equipment or realty.
(e) Lessee shall cause each principal item of the Equipment to
be marked at all times, in a plain, distinct and legible manner, with the name
of Lessor or its designee followed by the words "Lessor and Secured Party," or
other appropriate words designated by Lessor on labels furnished by Lessor.
(f) Lessee will not take any action or suffer any omission
that is inconsistent with the representations and warranties of Lessee set forth
in Section 9(k), and will (i) refrain from withholding, from payments made by
Lessee to Lessor or any Transferee under any Lease Document, any Federal income
tax under any section of the Code (including, without limitation, Section 1442)
provided that Lessee receives from
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any Transferee that is a foreign corporation (and from Lessor, if Lessor is a
foreign corporation) the statement described in Section 881 (c)(2)(B)(ii) of the
Code, and (ii) timely file all required information and other returns required
under Federal income tax regulations implementing and interpreting Section
881(c) of the Code.
11. ASSIGNMENT AND TRANSFER. (a) WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR, LESSEE WILL NOT ASSIGN ANY OF ITS RIGHTS NOR DELEGATE ANY OF ITS
OBLIGATIONS HEREUNDER, SUBLET THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO
BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANY
PERSON BUT LESSEE. No assignment or sublease, whether authorized in this Section
11 or in violation of the terms he root, shall relieve Lessee of its obligations
hereunder and Lessee shall remain primarily liable hereunder.
(b) Lessor and any subsequent Transferee may transfer any or
all of their respective rights, obligations, title and/or interest herein, to
one or more other Transferees. Lessor shall give prompt written notice to Lessee
of such a Transfer, including the name(s) and address(es) of the Transferee(s)
pursuant to such Transfer. Lessee hereby acknowledges and agrees that in the
event Lessor or such other Transferee has transferred its interest herein (i) no
Transferee(s) shall be obligated to perform any duty, covenant or condition
required to be performed by the Lessor under the terms of this Lease (other than
the covenant of quiet enjoyment specified in Section 7 hereof) and (ii) all
notices or other communications shall be given to, and made by, Lessor or its
designee.
(c) Upon written notice from Lessor of a Transfer of an
interest herein, Lessee shall promptly record such Transfer in its books and
records, including the name(s) and address(es) of the Transferee(s). Lessee
acknowledges and agrees that (i) its failure to record such Transfer within ten
(10) days of delivery of such notice shall be an Event of Default pursuant to
Section 16(a)(ii) hereof and (ii) Lessor's obligations to any Transferee(s) may
be secured by Lessor's interest in the Lease and the Equipment.
(d) LESSEE HEREBY WAIVES AS AGAINST ANY TRANSFEREE(S) OF
LESSOR, ITS SUCCESSORS AND ASSIGNS, ANY CLAIM OR DEFENSE THAT LESSEE MAY NOW OR
HEREAFTER HAVE AS AGAINST LESSOR, WHETHER FOR BREACH OF THIS LEASE, BREACH OF
WARRANTY OR OTHERWISE.
12. INSURANCE. At all times during the Term of this Lease, Lessee, at
its own expense, shall maintain insurance on each item of the Equipment against
all risks and in such amounts as Lessor shall reasonably require with carriers
acceptable to Lessor, and shall maintain a loss payable endorsement in favor of
Lessor and its successors and assigns affording to Lessor and Its successors and
assigns such additional protection as Lessor and its successors and assignees
shall reasonably require (such as a breach of Lessee's warranty clause), and
Lessee shall maintain public liability and property
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damage insurance with respect to each item of Equipment in amounts satisfactory
to Lessor for both personal and property damage. Lessee shall be liable for any
deductibles contained in such insurance policies. All such insurance policies
shall name Lessor and its successors and Transferees as insureds and shall
provide that all amounts payable by reason of loss, theft or damage to the
Equipment shall be payable only to Lessor or its designees and that such
policies may not be canceled or altered without at least 30 days' prior written
notice to Lessor or its successors and Transferees. The Lessee shall furnish the
Lessor with certificates or other satisfactory evidence of the maintenance of
the insurance required hereunder.
13. LOSS AND DAMAGE. Lessee hereby assumes and shall bear the entire
risk of loss, damage, theft or destruction, partial or complete, whether or not
insured against, of the Equipment from any and every cause whatsoever from the
date of delivery of the Equipment to Lessee. No loss, damage, theft or
destruction of the Equipment or any part thereof shall relieve Lessee of any
obligation under this Lease, which shall continue in full force and effect. In
the event of loss or damage of any kind to any item of Equipment, Lessee shall
promptly notify Lessor of such event and, at Lessor's option, Lessee shall, at
its own cost and expense, (i) use all reasonable efforts to place the same in
good repair, condition and working order to the satisfaction of Lessor within 30
days of such loss or damage unless Lessor shall determine that such item has
been irreparably damaged, in which case Lessor may elect to shorten or terminate
said 30-day period, or (ii) replace such Equipment with like equipment in good
repair, condition and working order and, upon prior written notice to Lessor,
cause such replacement equipment to be delivered to and installed at a location
otherwise permitted hereunder and give clear title thereto by appropriate
instrument to Lessor, which replacement equipment shall be subject to the terms
and conditions hereof, including, without limitation, Section 4(b) hereof. In
the event Lessee has fully complied to Lessor's reasonable satisfaction with the
requirements of the previous sentence, Lessor shall return to Lessee (without
interest) the insurance proceeds, if any, paid to Lessor as a result of such
loss or damage under the insurance policies required pursuant to Section 12
hereof. In the event that any item of Equipment shall become subject to a Total
Loss, Lessee shall inform the Lessor in writing in regard thereto within thirty
(30) days after such Total Loss and Lessee shall pay to Lessor, in cash, an
amount equal to the Stipulated Loss Value thereof as set forth in Schedule C
hereto as the case may be; provided, however, that such amount shall be reduced
if and to the extent that Lessor or any Transferee has received proceeds from
the insurance required to be maintained by Lessee pursuant to Section 12 as a
result of such Total Loss, and Lessor agrees that if such insurance proceeds are
paid to Lessor after Lessee has paid Stipulated Loss Value in full, Lessor shall
reimburse Lessee the proceeds thereof, such reimbursement not to exceed the
Stipulated Loss Value amount paid by Lessee related to such Total Loss. Where a
single amount for the payment of Basic Rent is set forth on the cover page
hereof for more than one item of Equipment, and less than all such items are
subject to a Total Loss, such Basic Rent shall be apportioned among such items
in accordance with their original list prices, and the Stipulated Loss Value
shall be based on such
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apportioned Basic Rent. Upon such payment of Stipulated Loss Value for any
item(s) hereunder, this Lease shall terminate with respect to such items(s) and
Basic Rent shall thereafter xxxxx proportionately.
14. TAXES AND FEES. (a) To the extent permitted by Law, Lessee shall
file any necessary reports and returns for, shall pay promptly when due, shall
otherwise be liable to reimburse Lessor (on an after-tax basis) for, and agrees
to indemnity and hold Lessor harmless from, all Impositions.
(b) If any report, return or property listing relating to any
Imposition is, by Law, required to be filed by, assessed or billed to or paid
by, Lessor, Lessee will do all things required to be done by Lessor (to the
extent permitted by Law) in connection therewith and is hereby authorized by
Lessor to act on behalf of Lessor in all respects in relation thereto, including
the contest or protest, in good faith and by appropriate proceedings, of the
validity of any Imposition, or the amount thereof; provided, however, that
Lessor hereby unconditionally reserves the right to revoke such authorization
and such revocation shall not affect Lessee's indemnity or other obligations
under this Lease, including, without limitation, this Section 14 and Section 18
hereof. Lessor agrees fully to cooperate with Lessee in any such contest, and
Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred
by Lessor in the course of such cooperation. An Imposition or claim therefor
shall be paid by Lessee, subject to refund proceedings, if failure to pay would
adversely affect the title or rights of Lessor in the Equipment or otherwise
hereunder. Provided that no Default or Event of Default has occurred and is then
continuing, if Lessor obtains a refund of any Imposition that has been paid (by
Lessee, or by Lessor and for which Lessor has been fully reimbursed by Lessee),
Lessor shall promptly pay to Lessee the amount of such refund actually received.
Lessee shall cause all xxxxxxxx of such charges to Lessor to be made to Lessor
in care of Lessee and shall, in preparing any report or return required by Law,
show the ownership of the Equipment in Lessee, and shall send a copy of any such
report or return to Lessor. If Lessee fails to pay any such charges when the
except any Imposition being contested in good faith and by appropriate
proceedings (as above provided) for a reasonable period of time, Lessor at its
option may do so pursuant to Section 15, in which event the amount so paid shall
be payable by Lessee as Supplemental Rent as provided in Section 15.
(c) The provisions of this Section 14 shall not apply to any
Impositions (i) imposed as a result of any voluntary transfer or disposition by
Lessor of all or any portion of its interest in the Equipment pursuant to
Section 11 hereof; (ii) that Lessee is contesting in good faith, by appropriate
proceedings and as otherwise permitted pursuant to the provisions of this Lease
until the conclusion of such contest; except that Lessee's right to contest any
Imposition is conditioned upon the existence of such Imposition during any such
contest not causing any material danger, as determined by Lessor in its sole
discretion, of the sale, forfeiture or loss of the Equipment; or (iii) imposed
on Lessor that are based on or measured by gross or net income (including
- 12 -
capital gains taxes, income taxes collected by withholding and taxes on tax
preference items), except for (1) amounts payable by Lessee to Lessor or any
Transferee under the Lease Documents but not so paid to the extent that such
failure to pay constitutes a breach of Lessee's obligations under Sections 9(k)
or 10(f) hereof, (2) Lessee's obligation to pay indemnities and reimbursements
on an "after-tax basis" and (3) as otherwise expressly provided herein.
15. LESSEE'S FAILURE TO PAY TAXES, INSURANCE, ETC. Should Lessee fail
to make any tax, insurance or other payment or do any act required to be
performed by Lessee as herein provided, Lessor shall have the right, but not the
obligation and without releasing Lessee from any obligation hereunder to make or
do the same, and to pay, purchase, contest or compromise any Imposition that in
the judgement of Lessor appears to affect the Equipment, and, in exercising any
such rights, incur any liability and expend whatever amounts in its absolute
discretion Lessor may deem necessary therefor. All sums so incurred or expended
by Lessor (including any penalty incurred as a result of Lessee's failure to
perform such obligation or make such payment) shall be without demand
immediately due and payable by Lessee and shall be payable as Supplemental Rent.
16. DEFAULT AND REMEDIES. (a) The occurrences of any of the following
events shall constitute an Event of Default hereunder, and shall permit Lessor
to exercise the remedies provided in Section 16(b) below, including the
termination of Lessee's right to possession of the Equipment:
(i) the nonpayment when due from Lessee of any installment of Rent
or any other sum required hereunder to be paid by Lessee which
nonpayment is not cured within 60 days;
(ii) the failure by Lessee to perform any other term, obligation,
covenant or condition of this Lease that is not cured within
60 days after such failure;
(iii) Lessee shall be in default under the terms of any other
written agreement with Lessor (or any Transferee) and Lessor
(or such Transferee) shall have declared a default and/or
begun to exercise remedies thereunder which default is not
cured within 60 days;
(iv) the subjection of a substantial part of Lessee's property or
any part of the Equipment to any Lien other than a Permitted
Lien which Lien is not removed within 60 days:
(v) in the event that (A) Lessee shall (1) authorize or agree to
the commencement of a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy,
insolvency, corporation, receivership or other
- 13 -
similar Law now or hereafter in effect that authorizes the
reorganization or liquidation of such party or its debt or the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, (2) make a general assignment for the benefit of its
creditors, (3) fail generally or admit in writing its
inability to pay its debts as they become due, (4) take any
corporate action to authorize any of the foregoing or (5) have
an involuntary or other proceeding commenced against it
seeking liquidation, reorganization or other relief with
respect of it or its debts under any bankruptcy, insolvency or
other similar Law now or hereafter in effect, and such
involuntary case or other proceeding shall remain undismissed
and unstayed for a period exceeding 60 days; or (B) an order
for relief pursuant' to such applicable debtor/creditor law
shall have been entered against Lessee; or
(vi) if any representation or warranty made by the Lessee herein,
or made by the Lessee in any statement or certificate
furnished by the Lessee in connection with the execution of
this Lease or the delivery of any Items of Equipment hereunder
or furnished by the Lessee pursuant hereto, proves untrue in
any material respect as of the date of the issuance or making
thereof (and Lessee hereby agrees that the falsity of its
representation set forth in Section 9(k) would be material);
(vii) The issuance of any writ or order of attachment or execution
or other legal process against any Equipment which is not
discharged or satisfied within sixty (60) days;
(viii) The occurrence of any event or condition described in
subsections (iii), (iv), (v) or (vi) hereof with respect to
any guarantor or any other party liable, in whole or in part,
for performance of any Lessee's obligations under this Lease.
(b) Upon the happening of any of the above Events of Default,
Lessor may declare this Lease in Default. Such declaration shall be by written
notice to Lessee and shall apply to all Equipment leased hereunder. Lessee
hereby authorizes Lessor at any time thereafter to enter with or without legal
process any premises where the Equipment may be and take possession thereof.
Lessee shall, without further demand, forthwith pay to Lessor an amount that is
equal to any unpaid Rent due on or before Lessor has declared this Lease to be
in Default plus, as liquidated damages for loss of a bargain and not as a
penalty, an amount equal to the Stipulated Loss Value for the Equipment (as
defined in Schedule C hereto) on the date the Lessor shall declare this Lease in
Default (in each case together with any Excess Use Fee related thereto). After
Default, as and to the extent requested by Lessor, Lessee shall comply with the
provisions of Section 17 of this Lease. Lessor shall be entitled to sell the
Equipment at private or public sale within or without the United States, in bulk
or in parcels, with or
- 14 -
without notice, without having the Equipment present at the place of sale, with
the privilege of becoming the purchaser thereof; and Lessor shall be entitled to
lease, otherwise dispose of or keep idle all or any part of the Equipment, and
Lessor may use Lessee's premises for any or all of the foregoing without
liability for rent, costs, damages or otherwise. The proceeds of sale, lease or
other disposition, if any, shall be applied (1) to all Lessor's costs, charges
and expenses incurred in taking, removing, holding, repairing and selling,
leasing or otherwise disposing of the Equipment (including, without limitation,
reasonable attorneys' fees, costs and disbursements); then, (2) to the extent
not previously paid by Lessee, to pay Lessor the Stipulated Loss Value for the
Equipment and all other sums then-payable by Lessee hereunder, including any
unpaid Rent; then, (3) any remaining amounts shall be paid to Lessee. Lessee
shall pay any deficiency for amounts described in clauses (1) and (2) above
forthwith. The exercise of any of the foregoing remedies by Lessor shall not
constitute a termination of this Lease unless Lessor so notifies Lessee in
writing.
No remedy referred to in this Section 16 is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to
above or otherwise available to Lessor at law or in equity.
17. SURRENDER OF EQUIPMENT. Upon the expiration or earlier termination
of this Lease with respect to any item of Equipment. Lessee shall, unless (i)
Lessee has paid Lessor in cash the stipulated Loss Value of such Equipment
pursuant to Section 13 hereof, (ii) Lessee has acquired such Equipment pursuant
to Section 19 hereof or (iii) Lessor has abandoned such Equipment pursuant to
Section 19 hereof, return the same to Lessor in good repair, condition and
working order, ordinary wear and tear resulting from permitted use thereof under
the terms of this Lease alone excepted, to a location within or outside of the
continental United States specified by Lessor. Such Equipment shall be carefully
crated and shipped, freight, drayage and reassembly costs prepaid and properly
insured, by Lessee, and Lessee shall bear all risk of loss until the Equipment
is delivered to Lessor or its designee.
18. INDEMNITY. Lessee agrees to indemnify, defend, and hold harmless,
even if such claims are groundless, false or fraudulent, Lessor, any Transferee
and their respective agents and employees, from and against any and all Claims
(other than such as may directly and proximately result from the gross
negligence or wilful misconduct of Lessor, any Transferee or their respective,
agents or employees), by paying (on an after-tax basis) or otherwise ,
discharging same, when and as such Claims shall become due, including, without
limitation, Claims arising on account of (a) this Lease or any other Lease
Documents, or (b) the Equipment, or any item or part thereof, including. without
limitation, the selection, ordering, acquisition, delivery, installation,
return, rejection, abandonment or other disposition of any item of Equipment,
the possession, maintenance, leasing, use, condition, ownership, operation or
control of any item of Equipment by whosoever owned, used or operated during the
Term of this Lease or the existence of latent and other defects (whether or not
discoverable or discovered by
- 15 -
Lessor or Lessee). Lessor shall give Lessee prompt notice of any Claim or
liability hereby indemnified against and Lessee shall be entitled to control the
defense thereof; provided, however that (i) Lessor shall have the right to
approve or reject defense counsel selected by Lessee and any settlement proposed
by Lessee or its counsel and (ii) the defense of any Claim relating to the
payment of any tax, fee, assessment or other charge upon Lessor or any
Transferee shall be controlled by Lessor.
19. PURCHASE AND SALE OPTIONS. (a) On the Purchase Option Date, Lessee
shall have the option, upon at least sixty (60) days' prior irrevocable written
notice to Lessor, to purchase on such date all (but not less than all) Equipment
from Lessor for a purchase price equal to the Option Price. Upon such payment in
full and payment of any other amounts then due hereunder (including the costs of
expenses of Lessor, if any, in connection with such purchase), Lessor will
transfer to Lessee, without recourse or warranty and on a "WHERE IS, AS IS"
basis. all of Lessor's right, title and interest in and to the Equipment.
(b) At the expiration of the Primary Term. Lessee may, and upon written
notice Lessor may require Lessee to, purchase all of the Equipment from Lessor
for a sales price equal to $1.00. Upon such payment in full and payment of any
other amounts then due hereunder (including the costs and expenses of Lessor, if
any, in connection with such sale or transfer). Lessor will transfer to Lessee,
without recourse or warranty and on a "WHERE IS, AS IS" basis, all of Lessor's
right, title and interest in and to the Equipment. If Lessee fails to pay such
purchase price and such other amounts then due hereunder, Lessor may, without
prejudice to its rights under Section 16 hereof, abandon such Equipment where
such Equipment 5 located without liability of any kind to Lessee.
20. MISCELLANEOUS. (a) Any notice required or permitted to be given by
the provisions hereof shall be conclusively deemed to have been received by a
party hereto on the day it is delivered by hand or by facsimile transmission to
such party at the address as set forth on the cover page hereof (or at such
other address as such party shall specify to the other party in writing) or, if
sent by registered or certified mail, on the third Business Day after the date
on which mailed, addressed to such party at the address set forth above, postage
prepaid.
(b) No delay or omission to exercise any right or remedy
accruing to Lessor upon any breach or default of Lessee shall impair any such
right to remedy or be construed to be a waiver of any such breach or default;
nor shall any waiver of any single breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval on the part of Lessor of any
breach or default under this Lease or, of any provision or condition hereof,
must be in writing and shall be effective only to the extent in such writing
specifically set forth. All remedies, either under this Lease or by law or
otherwise afforded to Lessor, shall be cumulative and not exclusive.
- 16 -
(c) Lessee agrees to reimburse Lessor on demand for any and
all costs and expenses incurred by Lessor in enforcing its rights hereunder,
including without limitation, reasonable attorney's fees and costs of
repossession, storage, insuring, re-leasing and selling of all Equipment.
(d) The obligations of Lessor hereunder shall be suspended to
the extent that it is hindered or prevented from complying therewith because of
labor disturbances, including strikes and lockouts, acts of God, fires, storms,
accidents, failure of the manufacturer or Supplier to deliver any item of
Equipment, commercial frustration, Laws or interference of any cause whatsoever
not within the sole control of Lessor.
(e) THIS AGREEMENT MAY NOT BE TERMINATED EXCEPT AS EXPRESSLY
PROVIDED HEREIN. This Lease may be modified only by a written agreement duly
signed by Persons authorized to sign agreements on behalf of Lessor and Lessee,
and any variance from the terms and conditions of this Lease in any order or
other notification from Lessee, written or oral, shall be of no effect. The
capitalized term "Lease" as used herein includes any supplement, subsequent
schedule or exhibit or future written amendment made in accordance herewith, and
Lessee, by its execution hereof, explicitly acknowledges and agrees with the
foregoing. LESSEE ACKNOWLEDGES THAT IT HAS READ THIS LEASE, UNDERSTANDS IT, AND
AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, LESSEE AGREES THAT THIS
LEASE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE LEASE BETWEEN THE PARTIES,
WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS OR UNDERSTANDINGS, ORAL OR
WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER OF THIS LEASE.
(f) This Lease and the covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, Lessor and its
successors and assigns and Lessee and its successors and permitted assigns.
(g) The table of contents and the headings of the sections
hereof are for convenience of reference only, are not a part of this Lease and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
(h) This Lease may be executed in any number of counterparts.
However, to the extent, if any, that this Lease constitutes chattel paper (as
such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction) no security interest in this Lease may be created
through the transfer of possession of any counterpart other than the counterpart
identified by marking as the "Original".
(i) THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
- 17 -
AND PERFORMANCE. LESSOR AND LESSEE HEREBY IRREVOCABLY SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF THE MASSACHUSETTS STATE AND FEDERAL COURTS LOCATED IN MIDDLESEX
COUNTY, MASSACHUSETTS, FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THE OVERALL TRANSACTION EVIDENCED BY THE LEASE DOCUMENTS. LESSOR AND LESSEE
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH MASSACHUSETTS STATE COURTS, OR TO
THE EXTENT PERMITTED BY LAW, SUCH FEDERAL COURTS. LESSOR AND LESSEE HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE
OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING. LESSOR
AND LESSEE HEREBY WAIVE ANY RIGHTS EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN
ACTIONS OR PROCEEDINGS BROUGHT IN RESPECT OF THE LEASE DOCUMENTS.
(j) Should any Section or any part of a Section within this
Lease be rendered void, invalid or unenforceable by any court or Law for any
reason, such invalidity or unenforceability shall not void or render invalid or
unenforceable any other Section or part of a Section in this Lease.
21. ADDITIONAL PROVISIONS. The schedules and exhibits attached hereto
and any riders signed by the parties hereto and attached hereto are hereby
incorporated by reference.
- 18 -
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be duly
executed, all as of the date first above written.
LESSOR:
APPLIED TELECOMMUNICATIONS
TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxx
-------------------
Title: President
-------------------
LESSEE:
FIVECOM, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------
Name: Xxxxxx Xxxxxxxxxx
-------------------
Title: President
-------------------
X- 0
XXXXXXXX A TO LEASE
-------------------
DEFINITIONS AND RULES OF CONSTRUCTION.
--------------------------------------
1. DEFINITIONS. The following terms, when capitalized as below, have
the following meanings:
"Amortization Expense": that portion of Basic Rent applied to the
amortization over the Term of the invoice cost to the Lessor of the Equipment,
as set forth on Schedule E to the Lease for each payment of Basic Rent.
"Applicable Law": any Law that may apply to (i) the Lessee or its
properties and operations, (ii) the operation, modification, maintenance,
ownership, leasing or use of the Equipment, or (iii) any transaction
contemplated under any Lease Document, including in each case any environmental
Law, federal or state securities Law, commercial Law (pertaining to the rights
and obligations of sellers, purchasers, debtors, secured parties, or to any
other pertinent matter), zoning, sanitation, siting or building Law, energy,
occupational safety and health practices Law or the Employee Retirement Income
Security Act of 1974, as amended, and any regulations promulgated thereunder.
"Basic Rent": the rental installments due from Lessee pursuant to
Section 3(b) of the Lease for the Interim Term and the Primary Term in the
amounts and on the dates as provided therein.
"Basic Rent Per Day": one thirtieth (1/30th) of the Basic Per Month.
"Basic Rent Payment Date": as set forth in the cover page to the Lease.
"Basic Rent Per Month": as set forth on the cover page to the Lease.
"Business Day": any day, other than a Saturday, Sunday or legal holiday
for commercial banks under the laws of the Commonwealth of Massachusetts (or
such other jurisdictions in the United States as Lessor specifies to Lessee by
at least 30 days' prior written notice).
"Capitalized Lessor's Cost": the amount specified in the Equipment
Schedule under the heading "capitalized lessor's cost."
"Claims": all claims, judgments, good faith settlements entered into,
suits, actions, debts, obligations, damages (whether incidental, consequential
or direct), demands (for compensation, indemnification, reimbursement or
otherwise), losses, penalties, fines, liabilities (including strict liability),
charges that Lessor has incurred or is responsible for in the nature of amounts
(or the use or forbearance of money, Liens, and costs (including
A- 2
attorneys' fees and disbursements and other legal or non-legal expenses of the
investigation or defense of any claim, whether or not such claim is ultimately
defeated, or the enforcement of the rights, remedies or indemnities provided for
hereunder, or otherwise available at law or in equity to Lessor), of whatever
kind or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, by or against any Person.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"County Recording Office": as set forth in Schedule D to the Lease.
"Default": except when inconsistent with the context of any provision
hereof, an event that, but for the lapse of time or the giving of notice or
both, would constitute an Event of Default.
"Equipment": with respect to the Equipment Schedule, the property
described therein, together with all appliances, parts, instruments accessories
and furnishings that are from time to time incorporated in the Equipment, or
having been so incorporated, are later removed therefrom, unless title thereto
is expressly released by Lessor, and all replacements of, and additions,
improvements and accessions to any and all of the foregoing, and all books,
records, maintenance logs and general intangibles (including all patents,
copyrights and trade secrets) relating thereto; and, when used in the context of
Lessor's title to the Equipment (whether relating to the creation, grant,
perfection, release, priority, enforcement or application of proceeds thereof),
shall also include all other property in which Lessor is granted a security
interest hereunder or under the Equipment Schedule.
"Equipment Expense": that portion of Basic Rent equivalent to Basic
Rent minus the Amortization Expense, as set forth on Schedule E to the Lease for
each payment of Basic Rent.
"Equipment Schedule": the Equipment Schedule that is attached as
Schedule B to the Lease.
"Event of Default": any event of default as specified in Section 16(a)
of the Lease.
"Excess Use Fee": the fee payable by Lessee for the continued use or
possession of the Equipment by the Lessee, which is payable if the Lessee has
not paid Rent when due and which shall equal 1-1/2% per month, or the highest
rate permitted by law, whichever is lower, on all overdue Rent from the due date
thereof until paid.
"Financing Statement": a Uniform Commercial Code financing statement.
"Fixture Filing Office": as set forth in Schedule D to the Lease.
X- 0
"XXXX": generally accepted accounting principles, applied consistently.
"Governmental Authority": any federal, state, county, municipal,
regional or other governmental authority, agency board, body, instrumentality or
court, in each case either domestic or foreign.
"Imposition": any title, recordation, documentary stamp or other fees,
taxes, assessments, charges or withholdings of any nature (together with any
penalties or fines thereon) arising at any time upon or relating to the
Equipment or to the Lease, or the delivery, acquisition, ownership, use,
operation, leasing or other disposition of such Equipment or upon the Rent
payable thereunder, whether the same be assessed to Lessor (or any Transferee)
or Lessee.
"Indemnification and Installation Certificate": the certificate of
Lessee in the form of Exhibit I to the Lease.
"Interim Term": the period from the date of the Lessee's acceptance of
the Equipment as evidenced by Lessee's Indemnification and Installation
Certificate to but not including the Primary Term Commencement Date.
"Law": any law, rule, regulation, ordinance, order, code, common law,
interpretation, judgment, directive, decree, treaty, injunction, writ,
determination, Permit or similar norm or decision of any Governmental Authority.
"Lease": the Full. Payout Net Lease by and between Lessor and Lessee
and relating to the Equipment, as amended from time to time, including any
exhibits, schedules and riders thereto as provided in Section 21 thereof.
"Lease Documents": collectively, the Lease, the Indemnification and
Installation Certificate(s) and all instruments, documents, certificates and
agreements delivered pursuant hereto.
"Lien": any mortgage, pledge, lease, sublease, security interest,
attachment, charge, encumbrance or right or claim of others whatsoever
(including any conditional sale or other retention agreement).
"Option Price": as set forth in Schedule D to the Lease.
"Permit": any action, approval, certificate of occupancy, consent,
waiver, exemption, variance, franchise, order, permit, authorization, right or
license, or other form of legally required permissions of or from a Governmental
Authority.
"Permitted Lien": (a) Lessor's and Lessee's respective rights, titles
and interests in the Equipment (b) Liens for the benefit of -mechanics,
materialmen, laborers,
X- 0
employees or suppliers and similar Liens arising by operation of Law and
incurred by Lessee in the ordinary course of business for sums that are not yet
delinquent or are being contested in good faith by negotiations or by
appropriate proceedings that suspend the collection and enforcement thereof
(provided that the existence of such Lien while such negotiations or proceedings
are pending does not involve any substantial risk (as determined by Lessor in
its discretion) of the sale, forfeiture or loss of the Equipment or any therein,
and for which adequate reserves have been provided in accordance with GAAP), and
(c) Liens arising out of any judgments or awards against Lessee that have been
adequately bonded to protect Lessor's interests or with respect to which a stay
of execution has been granted pending an appeal or a proceeding for review and
(d) Liens expressly authorized by the terms of the Collateral Assignment between
Lessor and Lessee of even date herewith.
"Person": any individual, corporation, partnership, joint venture, or
other legal entity or a Governmental Authority.
"Primary Term": as set forth on the cover page to the Lease.
"Primary Term Commencement Date": as set forth on the cover page to the
Lease.
"Primary Term Expiration Date": as set forth on the cover page to the
Lease.
"Purchase Option Date": as set forth in Schedule D to the Lease.
"Rent": collectively, the Basic Rent and the Supplemental Rent.
"State Filing Office": as set forth in Schedule D to the Lease.
"Stipulated Loss Value": with respect to each item of Equipment listed
in the Equipment Schedule, the product of the Capitalized Lessor's Cost of such
item and the applicable percentage set forth on the Schedule of Stipulated Loss
Value attached as Schedule C to the Lease.
"Supplemental Rent": all amounts, liabilities and obligations (other
than Basic Rent) that Lessee assumes or agrees to pay to Lessor or others
hereunder, or under any other Lease Document, including, without limitation,
Stipulated Loss Value, the purchase price for the Equipment pursuant to Section
19 of the Lease and payments constituting indemnities, reimbursements, expenses,
Excess Use Fees and other charges payable pursuant to the terms of any Lease
Document.
"Supplier": the person from whom Lessor is purchasing or has purchased
the Equipment.
X- 0
"Supply Contract": any written contract from the Supplier of the
Equipment or any item thereof, pursuant to which Lessor has purchased such
Equipment (or item thereof) for lease to Lessee under an Equipment Schedule.
"Term": the period for which Equipment is leased under the Lease,
including the Interim Term and the Primary Term.
"Total Invoice Cost": with respect to each item of Equipment set forth
in the Equipment Schedule, the amount specified as such thereon.
"Total Loss": for any item of Equipment, the occurrence of any of the
following: (i) the actual or constructive total loss of such item of the
Equipment; or (ii) the loss, disappearance, theft or destruction of such item of
the Equipment; or (iii) damage to such item of the Equipment to such extent as
shall make repair thereof uneconomical, or shall render. any item of the
Equipment permanently unfit for normal use, for any reason whatsoever; or (iv)
the condemnation, confiscation, requisition, seizure, forfeiture or other taking
of title to or use of such item of the Equipment; or (v) as a result of any Law
or other action taken by any Governmental Authority, the use of such item of
Equipment in the normal course of Lessee's business shall have been prohibited
(1) indefinitely or (2) for a period (A) in excess of 60 days or (8) that
extends beyond the then existing Term; all of the foregoing, to the extent
established to the reasonable satisfaction of Lessor.
"Transfer": any transfer or other agreement pursuant to which Lessor or
Transferee has transferred or agreed to pay any Person the Rent, or a portion
thereof, received from Lessee pursuant to the Lease, which obligation may be
secured by Lessor's interest in the Lease and the Equipment.
"Transferee": any Person to whom Lessor or any subsequent transferee
thereof has assigned any or all of its rights, obligations, title and/or
interest under the Lease.
"Uniform Commercial Code" or "UCC": the Uniform Commercial Code as in
effect in Massachusetts or in any other pertinent jurisdiction; and any
reference to an article or section thereof shall mean the corresponding article
or section (however named) of any such other applicable version of the Uniform
Commercial Code.
2. RULES OF CONSTRUCTION. Any defined term used in the singular
preceded by "any" indicates any number of the members of the relevant class. Any
Lease Document or other agreement or instrument referred to herein means such
agreement or Instrument as supplemented and amended from time to time. Any
reference to Lessor or Lessee shall include their permitted successors and
assigns. Any reference to a Law or Permit shall also mean such Law or Permit as
amended, superseded or replaced from time to time. Unless otherwise expressly
provided to the contrary in the Lease, all actions that Lessee takes or is
required to take under this Lease
X- 0
or any other Lease Document shall be taken at Lessee's sole cost and expense,
and all such costs and expenses borne by Lessor shall constitute Claims and
shall be covered by Sections 14 and 18 of the Lease.
3. INTEGRATION. Lessor and Lessee agree that the definitions and rules
of construction herein shall constitute an integral part of this Lease.
Lease No.317
SCHEDULE B
Vendor Quantity Description Capitalized Lessor's
------ -------- ----------- --------------------
Cost
NorthEast Utility
Collateral Assignment $500,000.00
Including all accessions, additions, attachments, replacements, repairs,
substitutions, and accessories thereto.
Lessee acknowledges that this Lease No. 317 is secured by the Collateral
Assignment dated February 15, 1995 between FiveCom, Inc. and Applied
Telecommunications Technologies, Inc.
Total Capitalized Lessor's Cost: $ 500,000.00
Lessee Lessor:
FiveCom,Inc. Applied Telecommunications
Technologies,Inc.
By: /s/ Xxxxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------------- ----------------------
Title: President Title: President
---------------------- -------------------
Schedule C To Lease
-------------------
Stipulated Loss Value
---------------------
The Stipulated Loss Value with respect to the Equipment or any item of
the Equipment shall be an amount equal to the product of (i) the Capitalized
Lessor's Cost of such Equipment or item of Equipment as set forth in Schedule B
to the Lease multiplied by (ii) the applicable Stipulated Loss Value Percentage
set forth below opposite the "Stipulated Loss Value Date" on which such
"Stipulated Loss Value Payment" occurs.
Stipulated Loss Stipulated Loss Stipulated Loss Stipulated Loss
Value Date Value Percentage Value Date Value Percentage
---------- ---------------- ---------- ----------------
Before the 1st Basic Rent 105.00%
Payment Date
After the following Basic Rent
Payment Dates
1 102.35% 25 58.78%
2 100.75% 26 56.70%
3 99.13% 27 54.61%
4 97.50% 28 52.49%
5 95.84% 29 50.35%
6 94.17% 30 48.19%
7 92.49% 31 46.01%
8 90.78% 32 43.80%
9 89.05% 33 41.56%
10 87.31% 34 39.30%
11 85.55% 35 37.02%
12 83.77% 36 34.71%
13 81.97% 37 32.38%
14 80.15% 38 30.02%
15 78.31% 39 27.64%
16 76.45% 40 25.23%
17 74.57% 41 22.80%
18 72.67% 42 20.34%
19 70.75% 43 17.85%
20 68.80% 44 15.33%
21 66.84% 45 12.79%
22 64.86% 46 10.22%
23 62.85% 47 7.63%
24 60.82% 48 0.00%
SCHEDULE D TO LEASE
MISCELLANEOUS INFORMATION
1. Lessor's wire transfer information: Marine Midland Bank, N.A.
Xxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
ABA # 000000000
Acct. #000-00000-0
2. Name and Address of State Filing Office: Secretary of State of MA, Boston, MA
3 Name and Address of Town Recording Office: Waltham MA, Wellesley, MA
4. Purchase Option date: April 30, 1999
Schedule E
ATTI Lease Amortization and OID Calculation
FIVECOM, INC. LEASE 317
Amortization Schedule Showing OID Daily Portions for 19-Day Initial Accrual
Period and First Monthly Accrual Periods
Assumptions:
------------
Gross equipment cost $500,000.00
Number of warrants received 7,310
Price per warrant $1.82
Total cost of warrants $13,304.20
Net amount loaned $486,695.80
Lease term 48 months
19 days
Repayment term 47 months
20 days
Balloon payment (5%) $25,000.00
Stated annual lease rate 13.0000%
Advance (1) or Arrears (0) Advance
Interim payment per diem 1/30 x basic monthly
payment (due with first
payment)
Basic monthly payment $13,269.99
Day Pmt Payment Equipment Amortization
No. Amount Expense Expense
----------------------- ----------------------- ----------------------- ----------------------- ----------------------
11-Apr 0.00 223.48 (223.48)
12-Apr 0.00 223.48 (223.48)
13-Apr 0.00 223.48 (223.48)
14-Apr 0.00 223.48 (223.48)
15-Apr 0.00 223.48 (223.48)
16-Apr 0.00 223.48 (223.48)
17-Apr 0.00 223.48 (223.48)
18-Apr 0.00 223.48 (223.48)
19-Apr 0.00 223.48 (223.48)
20-Apr 0.00 223.48 (223.48)
21-Apr 0.00 223.48 (223.48)
22-Apr 0.00 223.48 (223.48)
5/1/95 1 21,674.32 223.48 21,450.83
Day Pmt Payment Equipment Amortization
No. Amount Expense Expense
----------------------- ----------------------- ----------------------- ----------------------- ----------------------
6/1/95 2 13,269.99 6,485.40 6,784.59
7/1/95 3 13,269.99 6,391.72 6,878.27
8/1/95 4 13,269.99 6,296.75 6,973.24
9/1/95 5 13,269.99 6,200.47 7,069.52
10/1/95 6 13,269.99 6,102.86 7,167.13
11/1/95 7 13,269.99 6,003.90 7,266.09
12/1/95 8 13,269.99 5,903.58 7,366.41
1/1/95 9 13,269.99 5,801.87 7,468.12
2/1/95 10 13,269.99 5,698.76 7,571.23
3/1/96 11 13,269.99 5,594.22 7,675.77
4/1/96 12 13,269.99 5,488.24 7,781.75
5/1/96 13 13,269.99 5,380.80 7,889.19
6/1/96 14 13,269.99 5,271.87 7,998.12
7/1/96 15 13,269.99 5,161.44 8,108.55
8/1/96 16 13,269.99 5,049.49 8,220.50
9/1/96 17 13,269.99 4,935.98 8,334.00
10/1/96 18 13,269.99 4,820.92 8,449.07
11/1/96 19 13,269.99 4,704.26 8,565.73
12/1/96 20 13,269.99 4,585.99 8,684.00
1/1/96 21 13,269.99 4,466.09 8,803.90
2/1/96 22 13,269.99 4,344.53 8,925.46
3/1/97 23 13,269.99 4,221.30 9,048.69
4/1/97 24 13,269.99 4,096.36 9,173.63
5/1/97 25 13,269.99 3,969.70 9,300.29
6/1/97 26 13,269.99 3,841.29 9,428.70
7/1/97 27 13,269.99 3,711.11 9,558.88
8/1/97 28 13,269.99 3,579.13 9,690.86
9/1/97 29 13,269.99 3,445.33 9,824.66
10/1/97 30 13,269.99 3,309.68 9,960.31
11/1/97 31 13,269.99 3,172.15 10,097.84
12/1/97 32 13,269.99 3,032.73 10,237.26
1/1/98 33 13,269.99 2,891.38 10,378.61
2/1/98 34 13,269.99 2,748.09 10,521.90
3/1/98 35 13,269.99 2,602.81 10,667.18
4/1/98 36 13,269.99 2,455.53 10,814.46
5/1/98 37 13,269.99 2,306.21 10,963.78
6/1/98 38 13,269.99 2,154.83 11,115.16
7/1/98 39 13,269.99 2,001.36 11,268.63
Day Pmt Payment Equipment Amortization
No. Amount Expense Expense
----------------------- ----------------------- ----------------------- ----------------------- ----------------------
8/1/98 40 13,269.99 1,845.78 11,424.21
9/1/98 41 13,269.99 1,688.04 11,581.95
10/1/98 42 13,269.99 1,528.13 11,741.86
11/1/98 43 13,269.99 1,366.01 11,903.98
12/1/98 44 13,269.99 1,201.65 12,068.34
1/1/99 45 13,269.99 1,035.02 12,234.97
2/1/99 46 13,269.99 866.09 12,403.90
3/1/99 47 13,269.99 694.83 12,575.16
4/1/99 48 38,269.99 521.20 37,748.79
TOTALS: 670,363.83 183,668.03 486,695.80
EXHIBIT I TO LEASE
INDEMNIFICATION AND INSTALLATION CERTIFICATE
_________________________ ___, 19__
TO: Applied Telecommunications Technologies, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Gentlemen:
This Indemnification and Installation Certificate is issued pursuant to
that certain Full Payout Net Lease, dated ________ , 19 ___, Lease No._________
, (the "Lease") between Applied Telecommunications Technologies, Inc., as
Lessor, and the undersigned, as lessee (the "Lessee"), and evidences delivery to
and acceptance by Lessee of the equipment described on Schedule B attached
hereto (the "Equipment") pursuant to the Lease calling for Basic Rent Per Day in
the amount of $___________ and Basic Rent Per Month in the amount of $_________,
commencing in accordance with the payment dates as described in the Lease.
Capitalized terms used but not defined herein shall have the respective
meanings assigned therefor in Schedule A to the Lease.
We confirm to you as follows:
1. The Commencement Date of the Interim Term of the Lease is the date
of this Certificate. All of the Equipment has been delivered to and has been
received by the undersigned; all installation or other work necessary prior to
the use thereof has been completed; the Equipment has been examined and/or
tested and is in good operating order and condition and is in all respects
satisfactory to the undersigned as represented; the Equipment is new and unused
(unless otherwise noted below) and has not been placed in service prior to the
date of this Certificate; the Equipment has been accepted by the undersigned and
complies with all terms of the Lease Documents; and the Equipment has been
marked and labeled to show the interests of Lessor or its assigns.
2. In the future, in the event that the Equipment fails to perform as
expected or represented or in the event that the undersigned shall have a claim
or defense against the Lessor of said Equipment, whether by breach of the Lease
or otherwise, we will continue to honor the Lease by continuing to make our
rental payments in the normal course of business and we indemnify any
Transferees, their successors and assigns and hold it harmless from such
nonperformance of the Equipment.
3. Lessee further confirms that the representations and warranties of
Lessee contained in the Lease are true and accurate as of the date hereof as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date) and that no
event has occurred and is continuing which constitutes a Default or an Event of
Default under the Lease.
(Signature of individual or name of
corporation or partnership)
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
