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Exhibit 10.25
MASTER LEASE AGREEMENT
This Master Lease Agreement (the "Lease") is made the 9th day of June, 1999
between Leasing Technologies International, Inc., with its principal office at
000 Xxxxxxx Xxxx, Xxxxxx, XX 00000 (the "Lessor"), and Interliant, Inc., with
its principal xxxxxx xx Xxx Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Lessee").
The parties hereto agree as follows:
1. Lease:
This Lease establishes the general terms and conditions by which Lessor
may lease to Lessee die Equipment (the "Equipment") listed on each Equipment
Schedule executed periodically pursuant to this Lease. Each such Equipment
Schedule shall incorporate by reference the terms of this Lease, and shall be a
separate lease agreement as to the Equipment listed thereon for all purposes,
including default. In the event of any conflict between the terms and conditions
of this Lease and the terms and conditions of any Equipment Schedule(s) or
Rider(s) thereto, the terms and conditions of such Equipment Schedule(s) or
Rider(s) shall prevail.
2. Definitions:
(a) The "Installation Date" means the date determined in accordance with
the applicable Equipment Schedule.
(b) The "Commencement Date" means, as to any item of Equipment designated
on any Equipment Schedule where the Installation Date for such item of Equipment
falls on the first day of the month, that date, or, in any other case, the first
day of the month following the month in which such installation Date falls.
(c) The "Daily Rental" means 1/30th of the amount set forth as the monthly
rental in the applicable Equipment Schedule.
3. Term of Lease:
The term of this Lease, as to all Equipment designated on any Equipment
Schedule, shall commence on the Installation Date for such Equipment, and shall
continue for an initial period ending that number of months as is specified on
the applicable Equipment Schedule from the Commencement Date for the last item
of Equipment to be installed (the "Initial Term"). The term of this Lease for
all such Equipment shall be automatically extended for successive monthly
periods until terminated in accordance with this Lease. Any termination shall be
effective only on the last day of the initial Term or the last day of any such
successive period.
4. Rental:
The monthly rental payable hereunder is as set forth in the Equipment
Schedule(s). Rental shall begin to accrue on the Installation Date for each item
of Equipment and shall be due and payable by Lessee in advance on the first day
of each month. if the Installation Date does not fall on the first day of a
month, the rental for that period of time from the Installation Date until the
Commencement Date shall be an amount equal to the Daily Rental multiplied by the
number of days from (and including) the Installation Date to (but not including)
the Commencement Date and shall be due and payable on the Installation Date. In
addition to the monthly rental set forth in the Equipment Schedule(s), Lessee
shall pay to Lessor an amount equal to all taxes paid, payable or required to be
collected by Lessor, however designated, which are levied or based on the
rental, on the Lease or on the Equipment or on its purchase for lease hereunder,
or on its use, lease, operation, control or value (including, without
limitation, state and local privilege or excise taxes based on gross revenue),
any penalties or interest in connection therewith which are attributable to
Lessee's negligence or taxes or amounts in lieu thereof paid or payable by
Lessor in respect of the foregoing, but excluding taxes based on Lessor's net
income. Personal property taxes assessed on the Equipment during the term hereof
shall be paid by Lessee. Lessee agrees that Lessor, or Lessor's agent may file
all required property tax returns and reports and pay all taxes thereon
pertaining to the Equipment. In such event, Lessee shall reimburse Lessor or
Lessor's agent for all costs and expenses incurred in connection therewith,
provided that such costs and expenses (including property taxes) shall not
exceed the property taxes pursuant to statutory tax rates and regulations. If
requested by Lessor, Lessee agrees to file, on behalf of Lessor, all required
property tax returns and reports concerning the Equipment with all appropriate
governmental agencies, and, within not more than thirty (30) days after the due
date of such filing to send Lessor confirmation of such filing.
Interest on any past due payments, including but not limited to
administrative charges and any other charges or fees arising out of or related
to this Lease, shall accrue at the rate of 1 1/2% per month, or if such rate
shall exceed the
COUNTERPART NO. 2 of 2
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maximum rate allowed by law, then at such maximum rate, and shall be payable on
demand. Charges for taxes, penalties and interest shall be promptly paid by
Lessee when invoiced by Lessor.
As security for the full performance of all of Lessee's obligations under
each Equipment Schedule, Lessee shall, simultaneously with the execution and
delivery of each Equipment Schedule, deposit with Lessor the amount set forth on
such Equipment Schedule. The security deposit shall be promptly returned to
Lessee by Lessor upon the expiration of such Equipment Schedule and return or
purchase of all Equipment, as the case may be, provided that all Lessee
obligations under such Equipment Schedule have been fulfilled.
5. Installation, Use and Quiet Possession of Equipment:
(a) Lessee, at its own expense, will provide the required suitable
electric current to operate the Equipment and appropriate installation
facilities as specified by the manufacturer.
(b) Any equipment, cards, disks, tapes or other items not specified in the
Equipment Schedule(s) which are used on or in connection with the Equipment must
meet the specifications of the manufacturer and shall be acquired by Lessee at
its own expense.
(c) Lessee shall use the Equipment solely in connection with Lessee's
business and for no other purpose. Subject to the preceding sentence, Lessee
shall be entitled to unlimited usage of the Equipment without extra charge by
Lessor.
(d) Unless otherwise set forth in the applicable Equipment Schedule,
Lessee will at all times keep the Equipment in its sole possession and control.
The Equipment shall not be moved from the location stated in the applicable
Equipment Schedule without the prior written consent of Lessor which shall not
be unreasonably withheld or delayed.
(e) After prior notice to Lessor, Lessee may, at its own expense, make
alterations in or add attachments to the Equipment, provided such alterations or
attachments do not interfere with the normal and satisfactory operation or
maintenance of the Equipment or with Lessee's ability to obtain and maintain the
maintenance contract required by Section 5(h) hereof. The manufacturer or other
organization selected by Lessee and approved in writing by Lessor to maintain
the Equipment ("Maintenance Organization") may incorporate engineering changes
or make temporary alterations to the Equipment upon request of Lessee. All such
alterations and attachments shall be and become the property of Lessor or, at
the option of Lessee, shall be removed by Lessee and the Equipment restored, at
Lessee's expense, to its original condition as of the Installation Date thereof,
reasonable wear and tear only excepted, and upon the removal and restoration,
the alteration and/or attachment which was made by Lessee shall become the
property of Lessee. Notwithstanding anything to the contrary contained herein,
(i) Lessee shall be permitted, without the consent of Lessor, to load software
and make configuration or other changes to the Equipment as are reasonably
appropriate to operate Lessee's business provided that such alterations or
additions do not adversely affect the value thereof or the ability to operate,
maintain and remove the Equipment. The alterations and additions set forth in
the immediately preceding sentence need not be removed at the termination or
expiration of this Agreement.
(f) So long as Lessee in Lessor's reasonable judgement, is not in default
hereunder, neither Lessor nor any party claiming through or under Lessor shall
interfere with Lessee's use or possession of any Equipment during the term of
this Lease.
(g) Lessee shall, during the term of this Lease, at its expense, keep the
Equipment in good working order and condition and make all necessary
adjustments, repairs and replacements and shall not use or permit the Equipment
to be used in any manner or for any purpose for which, in the opinion of the
manufacturer, the Equipment is not designed or reasonably suitable.
(h) Unless otherwise set forth in the applicable Equipment Schedule,
Lessee shall, during the term of this Lease, at its own expense, enter into and
maintain in force a contract with the manufacturer or the Maintenance
Organization covering at least prime shift maintenance of each item of
Equipment. Such contract shall commence upon expiration of the manufacturer's
warranty period, if any, relating to such item. Lessee shall furnish Lessor with
a copy of such contract(s).
(i) At the termination of the applicable Equipment Schedule, Lessee at its
expense shall make available for return at Lessee's place of business, if
permitted by the applicable Equipment Schedule, not less than all the Equipment
subject thereto to Lessor (at the location designated by Lessor within the
Continental United States up to a maximum
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distance of 500 miles) in the same operating order, repair, condition and
appearance as on the Installation Date, reasonable wear and tear only excepted,
with all engineering and safety changes prescribed by the manufacturer or
Maintenance Organization incorporated therein. Lessee shall, prior to such
termination, arrange and pay for any repairs, changes and manufacturers
certifications as are necessary for the manufacturer or Maintenance Organization
to accept the Equipment under contract maintenance at its then standard rates.
Lessee shall return all accessories supplied with the Equipment, including but
nor limited to all manuals, cables and software diskettes. Lessee shall promptly
pay, after receipt of an invoice therefore, all reasonable costs and expenses
pertaining to the replacement of any missing accessories and for the repair of
any Equipment reasonable wear and tear excluded, together with any audit,
inspection or certification charges reasonably incurred by Lessor.
6. Leasehold Rights and Inspection:
(a) Lessee shall have no interest in the Equipment other than the rights
acquired as a lessee hereunder and the Equipment shall remain personalty
regardless of the manner in which it may be installed or attached. Lessee shall,
at Lessor's request, affix to the Equipment, tags, decals or plates tarnished by
Lessor, indicating Lessor's ownership and Lessee shall not permit their removal
or concealment. Lessee shall replace any such tag, decal or plate which may be
removed or destroyed or become illegible. Lessee shall keep all Equipment free
from any marking or labeling which might be interpreted as a claim of ownership
thereof by Lessee or any party other than Lessor or anyone claiming through
Lessor.
(b) Lessee shall keep the Equipment free and clear of all liens and
encumbrances except liens or encumbrances arising through the actions or
omissions of Lessor. LESSEE SHALL NOT ASSIGN OR OTHERWISE ENCUMBER THIS LEASE OR
ANY OF ITS RIGHTS HEREUNDER OR SUBLEASE THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR except that Lessee may assign this Lease or sublease the
Equipment to its parent or any subsidiary corporation, or to a corporation which
shall have acquired all or substantially all of the property of Lessee by
merger, consolidation or purchase. No permitted assignment or sublease shall
relieve Lessee of any of its obligations hereunder.
(c) Lessor or its agents shall have free access to the Equipment during
normal business hours, and, except in case of emergency or if a default has
occurred, upon at least three business days' notice for the purpose of
inspection and for any other purpose contemplated by this Lease.
(d) Lessee shall promptly notify Lessor of all details concerning any
material damage to, or loss of the Equipment arising out of any event or
occurrence whatsoever, including but not limited to, the alleged or apparent
improper manufacture, functioning or operation of the Equipment.
7. No Warranties By Lessor:
Lessee represents that, at the Installation Date thereof, it shall have
(a) thoroughly inspected the Equipment; (a) determined for itself that all items
of Equipment are of a size, design, capacity and manufacture selected by it; and
(c) satisfied itself that the Equipment is suitable for Lessee's purposes.
LESSOR SUPPLIES THE EQUIPMENT AS IS AND NOT BEING THE MANUFACTURER OF THE
EQUIPMENT, THE MANUFACTURER'S AGENT OR THE SELLER'S AGENT, MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED AS TO THE EQUIPMENT'S MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, DESIGN, CONDITION, QUALITY, CAPACITY, MATERIAL
OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed that
all such risks, as between Lessor and Lessee, are to be borne by Lessee. Lessee
agrees to look solely to the manufacturer, maintenance provider or to suppliers
of the Equipment for any and all warranty claims and any and all warranties made
by the manufacturer or the supplier of Lessor are, to the extent to which the
same may be assignable, hereby assigned to Lessee for the term of the applicable
Equipment Schedule. Lessee agrees that Lessor shall not be responsible for the
delivery, installation, maintenance, operation or service of the Equipment or
for delay or inadequacy of any or all of the foregoing. Except in the case of
Lessor's willful misconduct, Lessor shall not be responsible for any direct or
consequential loss or damage resulting from the installation, operation or use
of the Equipment or otherwise. Except in the case of Lessor's willful
misconduct, Lessee will defend, indemnify and hold Lessor harmless against any
and all claims, demands and liabilities arising out of or in connection with the
design, manufacture, possession or operation of the Equipment.
8. Risk of Loss on Lessee:
(a) Except in the case of Lessor's willful misconduct, beginning on the
Installation Date thereof and continuing until the Equipment is either returned
to Lessor or purchased by Lessee as provided in this Lease, Lessee relieves
Lessor
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of responsibility for all risks of physical damage to or loss or destruction of
the Equipment, howsoever caused. During the term of this Lease as to any
Equipment Schedule, Lessee shall, at its own expense, keep in effect "all risk"
property insurance and public liability insurance policies covering the
Equipment designated in each Equipment Schedule. The public liability insurance
policy shall be in such amount as is specified herein. The "all risk" property
insurance policy shall be for an amount not less than the replacement cost of
the Equipment. Lessor, its successors and assigns and/or such other party as may
be designated by any thereof to Lessee, in writing, shall be named as additional
insureds and loss payees on such policies, which shall be written by an
insurance company of recognized responsibility which is reasonably acceptable to
Lessor. Evidence of such insurance coverage shall be furnished to Lessor no
later than the Installation Date set forth in the Equipment Schedule(s) and,
from time to time, thereafter as Lessor may reasonably request. Such policies
shall provide that no less than ten days written notice shall be given Lessor
and any other party named as loss payee prior to cancellation of such policies
for any reason. To the extent of Lessor's interest therein, Lessee hereby
irrevocably appoints Lessor or any other party named as loss payee as Lessee's
attorney-in-fact coupled with an interest solely to make claim for, receive
payment of, and execute any and all documents that may be required to be
provided to the insurance carrier in substantiation of any such claim for loss
or damage under said insurance policies, and upon notice to Lessor, to endorse
Lessee's name to any and all drafts or checks in payment of the loss proceeds.
(b) If any item of Equipment is rendered unusable as a result of any
physical damage to, or destruction of, the Equipment, Lessee shall give to
Lessor prompt notice thereof and this Lease shall continue in full force and
effect without any abatement of rental. Lessee shall determine, within fifteen
(15) days after the date of occurrence of such damage or destruction, whether
such item of Equipment can be repaired. In the event Lessee determines that the
item of Equipment cannot be repaired, Lessee shall either, at its expense,
promptly replace such item of Equipment and convey title to such replacement to
Lessor free and clear of all liens and encumbrances, and this Lease shall
continue in full force and effect as though such damage or destruction had not
occurred, or pay Lessor therefor in cash the Stipulated Loss Value (defined
below) within thirty (30) days of such loss or damage. "Stipulated Loss Value,"
as used herein, shall be an amount as shown on Exhibit A to the applicable
Equipment Schedule. In the event Lessee determines that such item of Equipment
can be repaired, Lessee shall cause such item of Equipment to be promptly
repaired. All proceeds of insurance received by Lessor, the designated loss
payee, or Lessee under the policy referred to in the preceding paragraph of this
Section shall be applied toward the cost of any such repair or replacement so
long as Lessee shall not be in default of its obligations hereunder.
9. Events of Default and Remedies
The occurrence of any one of the following shall constitute an Event of
Default hereunder:
(a) Lessee fails to pay an installment of rent on or before the date when
the same becomes due and payable and such failure continues for a period of five
business days;
(b) Lessee attempts to remove, sell, transfer, encumber, sublet or part
with possession of the Equipment or any items thereof, except as expressly
permitted herein;
(c) Lessee shall fail to observe or perform any of the other material
obligations required to be observed or performed by Lessee hereunder and such
failure shall continue uncured for ten (10) days after written notice thereof to
Lessee by Lessor or the then assignee hereof;
(d) Lessee ceases doing business as a going concern, makes an assignment
for the benefit of creditors, admits in writing its inability to generally pay
its debts as they become due, files a voluntary petition of bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute, law or regulation or
files an answer admitting the material allegations of the petition filed against
it in any such proceeding, consents to or acquiesces in the appointment of a
trustee, receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or if it or its shareholders shall take any action looking
to its dissolution or liquidation;
(e) Within sixty (60) days after the commencement of any proceedings
against Lessee seeking reorganization, arrangement, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceedings shall not have been dismissed, or if within sixty
(60) days after the appointment without Lessee's consent or acquiescence of any
trustee, receiver or liquidator of it or of all or any substantial part of its
assets and properties, such appointment shall not be vacated;
(f) Lessee defaults in the performance or observation of any material
term, condition or covenant of any loan agreement, indenture, trust agreement,
lease or similar agreement to which Lessee is a party or by which Lessee is
bound
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involving an obligation by Lessee to pay more than $100,000 and such default
continues beyond any applicable cure period;
(g) Lessee enters into any transaction, the effect of which adversely
affects (i) a material portion of Lessee's business value and (ii) the ability
of Lessee, in Lessor's reasonable judgment, to repay Lessee's obligations under
the Lease as they become due.
Upon the occurrence of an Event of Default, Lessor may at its option do
any one or more of the following: (i) by written notice to Lessee terminate this
Lease as to any or all Equipment Schedules; (ii) whether or not this Lease is
terminated as to any or all Equipment Schedules, take possession on not less
than three (3) days' notice of any or all of the Equipment listed on any or all
Equipment Schedules, wherever situated, and for such purpose, enter upon any
premises without liability for so doing or Lessor may cause Lessee and Lessee
hereby agrees, to return said Equipment to Lessor as provided in this Lease;
(iii) recover from Lessee, as liquidated damages for loss of a bargain and not
as a penalty, all past due amounts as well as an amount equal to the present
value of all monies to be paid by Lessee during the remaining Initial Term or
any successive period then in effect, calculated by discounting at the rate of
six percent (6%) per annum compounded monthly, which payment shall become
immediately due and payable; and (iv) sell, dispose of, hold, use or lease any
Equipment as Lessor in its sole discretion may determine (and Lessor shall not
be obligated to give preference to the sale, lease or other disposition of the
Equipment over the sale, lease or other disposition of similar equipment owned
or leased by Lessor).
In the event that Lessee shall have first paid to Lessor or its assigns
the liquidated damages referred to in (iii) above, Lessee shall thereafter be
entitled to receive all rentals or proceeds received from any reletting or sale
of the Equipment during the balance of the Initial Term (after deduction of
Lessor's expected residual value of the Equipment at the expiration of the
Initial Term or any extension thereof and of all expenses incurred in connection
therewith) said amount never to exceed the amount of the liquidated damages paid
by Lessee. Lessee agrees that Lessor shall have no obligation to sell the
Equipment. Lessee shall in any event remain fully liable for reasonable damages
as provided by law and for all reasonable costs and expenses incurred by Lessor
or its assigns on account of such default including but not limited to all court
costs and reasonable attorney's fees. Lessee hereby agrees that, in any event,
it will be liable for any deficiency after any lease or other disposition of the
Equipment. The rights afforded Lessor hereunder shall not be deemed to be
exclusive, but shall be in addition to any rights or remedies provided by law.
10. Net Lease:
Except as otherwise specifically provided in this Lease, it is understood
and agreed that this is a net lease, and that, as between Lessor and Lessee,
Lessee shall be responsible for all reasonable costs and expenses of every
nature whatsoever arising out of or in connection with or related to this Lease
or the Equipment (including, but not limited to, equipment inspection, tagging,
transportation in and out, rigging, manufacturer's approved packing,
installation, certification costs and disconnect charges). Lessee hereby agrees
that in the event that Lessee fails to pay or perform any obligation under this
Lease, Lessor may, at its option, pay or perform said obligation and any
reasonable payment made or expense incurred by Lessor in connection therewith
shall become additional rent which shall be due and payable by Lessee upon
demand. Lessee acknowledges that Lessor may, from time to time, and at Lessee's
request, execute and deliver purchase orders pertaining to the purchase of
equipment to be leased pursuant to this Lease. Lessee agrees that it will
indemnify and hold Lessor harmless from and against any and all loss, cost,
liability and expense that Lessor may incur as a result of the execution and
delivery of such purchase orders.
11. Assignment:
Lessee agrees that Lessor may transfer or assign all or any part of
Lessor's right, title, and interest in, under or to the Equipment and this Lease
and any or all sums due or to become due pursuant to any of the above, to any
third party (the "Assignee") for any reason and that the Assignee may so
re-assign and transfer. Lessee agrees that upon receipt of written notice from
Lessor or Assignee of such assignment, Lessee shall perform all of its
obligations hereunder for the benefit of Assignee and any successor assignee
and, if so directed, shall pay all sums due or to become due thereunder directly
to the Assignee or to any other party designated by the Assignee. Lessee hereby
covenants, represents and warrants as follows and agrees that the Assignee and
any successor assignee shall be entitled to rely on and shall be considered a
third party beneficiary of the following covenants, representations and
warranties: (i) Lessee's obligations hereunder are absolute and unconditional
and are not subject to any abatement, reduction, recoupment, defense, offset or
counterclaim available to Lessee for any reason whatsoever including operation
of law, defect in the Equipment, failure of Lessor or Assignee to perform any of
its obligations hereunder or for any other cause or reason whatsoever, whether
similar or dissimilar to the foregoing; (ii) Lessee shall not look to Assignee
or any successor assignee to perform any of Lessor's obligations hereunder,
provided Lessor shall remain liable therefor; (iii) Lessee will
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not amend or modify this Agreement without the prior written consent of the
Assignee and any successor assignee; and (iv) Lessee will send a copy to
Assignee and any successor assignee of each notice which Lessee sends to Lessor.
12. Representations and Warranties of Lessee and Lessor:
Lessee represents and warrants to Lessor and its assigns, as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessee in accordance with its
terms, subject to laws governing creditors' rights;
2. The performance by Lessee will not result in any breach, default or
violation of Lessee's certificate of incorporation or by-laws or any agreement
to which Lessee is a party;
3. Lessee is in good standing in its jurisdiction of incorporation and in
any jurisdiction in which any of the Equipment is to be located; and
4. Any and all financial statements or other information with respect to
Lessee heretofore furnished by Lessee to Lessor was, when furnished, and remains
at the time of execution of this Lease, true and complete.
Lessor represents and warrants to Lessee as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessor in accordance with its
terms, subject to laws governing creditors' rights; and
2. The performance by Lessor will not result in any breach, default or
violation of Lessor's certificate of incorporation or by-laws or any agreement
to which Lessor is a party;
The foregoing representations and warranties shall survive the expiration
or termination of this Lease.
13. End of Lease:
Provided (i) no Event of Default has occurred and is continuing and (ii)
Lessee has made all payments in accordance with the Lease, upon written notice
furnished by Lessee no later than three (3) months prior to the expiration of
the Initial Term, Lessee shall, with respect to each Equipment Schedule elect
only such alternatives as may be set forth on the Equipment Schedule.
To the extent that any of such alternatives involves a determination of
Fair Market Value, the Fair Market Value shall be defined and determined by the
provisions of this Section. For purposes hereof, Fair Market Value shall mean
the amount that would be obtained in a retail arm's length transaction between
an informed and willing lessee-buyer in possession and an informed and willing
lessor-seller. Rental charges previously paid pursuant to the applicable
Equipment Schedule shall have no effect on the determination of Fair Market
Value. Unless otherwise stated in the Equipment Schedule: the Fair Market Value
for items set forth on the Equipment Schedule which do not have a readily
ascertainable market value, (including but not limited to software, cabling and
certain equipment) shall be determined by multiplying the Lessors acquisition
cost of such items by a fraction, the numerator of which shall be the Fair
Market Value of the other items and the denominator of which shall be the
Lessor's acquisition cost of such other items; and the determination of Fair
Market Value shall be based upon the assumption that all items set forth on the
Equipment Schedule or included with the Equipment may be transferred to, and
used by, a third party user. In such determination, all alternative uses in the
hands of each buyer or lessee, including, without limitation, the further
leasing of the Equipment shall be taken into account in making such
determination.
Not less than ninety (90) days prior to the end of the Initial Term,
Lessee may provide written notice to Lessor of Lessee's intention to exercise
the purchase or extension option described above. If, on or before a date sixty
(60) days prior to the expiration of the Initial term Lessor and Lessee are
unable to agree upon a determination of the fair market value of the Equipment,
such Fair Market Value shall be determined in accordance with the procedure for
appraisal as described below. After a determination of the Fair Market Value of
the Equipment has been made in accordance with the procedure described below,
Lessee may exercise its option to purchase the Equipment for the Fair Market
Value thereof by delivering written notice to Lessor not more than ten (10) days
after completion of appraisal as described below.
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Appraisal shall mean a procedure whereby two independent appraisers,
neither of whom shall be a manufacturer of such Items of Equipment, one chosen
by Lessee and one by Lessor, shall mutually agree upon the amount in question
based upon the definition set forth below. Each party shall deliver a written
notice to the other party appointing its appraiser on or before a date sixty
days prior to the expiration of the Initial Term. If within fifteen (15) days
after appointment of the two appraisers as described above, the two appraisers
are unable to agree upon the amount in question, a third independent appraiser,
who shall not be a manufacturer of such Items of Equipment, shall be chosen
within five (5) business days thereafter by the mutual consent of such first two
appraisers or, if such first two appraisers fail to agree upon the appointment
of a third appraiser, such appointment shall be made by an authorized
representative of the American Arbitration Association or any organization
successor thereof. The decision of the third appraiser so appointed and chosen
shall be given ten (10) business days after the selection of such third
appraiser. Lessee shall pay the fees and expenses of all appraisers, if any. The
Lease, including the obligation to pay monthly rentals, shall remain in effect
pending the determination of Fair Market Value.
14. Miscellaneous:
(a) During the term of this Lease until such time as a public offering is
completed, Lessee hereby agrees to deliver to Lessor or Assignee and any
successor assignee a copy of Lessee's monthly unaudited financial statements,
and the annual financial budget for the upcoming year as soon as available and
as it may be adjusted during the year. Upon completion of such public offering
Lessee shall furnish quarterly financial statements to Lessor; provided however,
that if any creditor of Lessee is furnished monthly financial statements,
(including but not limited to budgets), Lessee shall furnish such monthly
financial statements to Lessor. Lessee shall also furnish, as soon as available
and in any event within ninety (90) days after the last day of Lessee's fiscal
year, a copy of Lessee's annual audited statements and consolidating and
consolidated balance sheet, if any, as of the end of such fiscal year,
accompanied by the opinion of an independent certified public accounting firm of
recognized standing. The Lessee shall furnish such other financial information
as may be reasonably requested by Lessor, including but not limited to any
material changes in budgets or financial reports furnished to the Lessee's Board
of Directors or Shareholders.
(b) This Lease constitutes the entire agreement between Lessee and Lessor
with respect to the Equipment, and except as agreed upon in writing no covenant,
condition or other term or provision hereof may be waived or modified orally.
(c) All notices hereunder shall be in writing and shall be delivered in
person or sent by registered or certified mail, postage prepaid, or by facsimile
transmission (confirmed by registered mail as set forth in this section) to the
address of the other party as set forth herein or to such other address as such
party shall have designated by proper notice with a copy to Interliant, Inc.,
Attention: General Xxxxxxx, Xxx XxxxxxxxxXxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
(d) This Lease shall be binding upon and inure to the benefit of Lessor
and Lessee and their respective successors and assigns (including any subsequent
assignee of Assignee).
(e) If any term or provision of this Lease or the application thereof to
any person is, to any extent, invalid or unenforceable, the remainder of this
Lease, or the application of such provision to the person other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
(f) No waiver of any of the terms and conditions hereof shall be effective
unless in writing and signed by the party against whom such waiver is sought to
be enforced. Any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given. The subsequent acceptance
of rental payments hereunder by Lessor shall not be deemed a waiver of any prior
existing breach by Lessee regardless of Lessor's knowledge of such prior
existing breach at the time of acceptance of such rental payments. Where
permitted by law, Lessee authorizes any attorney of record, Clerk of Court or
Prothonotary of any state to appear for and confess judgment (a) against Lessee
for all amounts as to which Lessee is in default under this Agreement and (b)
against Lessee in any action for writ of replevin or possession of the
Equipment. No bond shall be required.
(g) Lessor is hereby authorized by Lessee to cause this Lease or other
instruments, including Uniform Commercial Code Financing Statements to be filed
or recorded for the purpose of showing Lessor's interest in the Equipment and
Lessee agrees that Lessor may execute such instruments for and on behalf of
Lessee. All filing fees
8
reasonably incurred by Lessor in connection therewith and filing fees incurred
by Lessor's assignees in perfecting security interests shall be paid by Lessee
or reimbursed to Lessor by Lessee.
(h) No consent or approval provided for herein shall be binding upon
Lessor unless signed on its behalf by an officer of Lessor. THIS LEASE AND EACH
EQUIPMENT SCHEDULE SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF CONNECTICUT
AND SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF SUCH STATE. The Lessee
accepts for itself the non-exclusive jurisdiction of any Federal or State court
of competent jurisdiction in the State of Connecticut in any action, suit or
proceeding of any kind against it which arises out of or by reason of this Lease
or any Equipment Schedule.
(i) Lessee acknowledges that the late payment by Lessee to Lessor of
monthly rental and other sums due hereunder will cause Lessor harm and to incur
costs not contemplated by this Lease, the precise amount and severity of which
will be difficult to ascertain. Such costs include, but are not limited to,
administrative, accounting and legal charges which Lessor may incur due to such
late payment. Accordingly, if any monthly rent or any other sum due from Lessee
shall not be received by Lessor or Lessor's assignee within twenty (20) days
after the same is due, Lessee shall pay to Lessor or Lessor's assignee a late
charge equal to five per cent (5%) of such overdue amount monthly until such
overdue amount is paid; provided however, that any such late charge shall only
be imposed once for each such overdue amount. Lessee acknowledges that such late
charge represents a fair and reasonable estimate of the cost Lessor will incur
by reason of a late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's default, if any, with respect
to such overdue amounts, nor prevent Lessor from exercising any of the other
rights and remedies which Lessor may have pursuant to this Lease.
(j) Any unsatisfied obligations which Lessee is required to perform during
the term of this Lease shall survive the expiration or other termination of this
Lease.
(k) Lessee will promptly execute and deliver to Lessor such further
documents and assurances and take such further action as Lessor may reasonably
request in order to effectuate the intent and purpose of this Lease and to
establish and protect the rights, interests and remedies intended to be created
in favor of Lessor hereunder, including without limitation, the execution and
filing of financing statements and continuation statements with respect to this
Lease, the Equipment and any Equipment Schedule. Lessee authorizes Lessor to
effect any such filing and Lessor's reasonable expenses (together with the
reasonable expenses of Lessor's assignees in this regard) shall be payable by
Lessee on demand.
LESSOR: LESSEE:
Leasing Technologies International, Inc. Interliant, Inc.
BY: /s/ F. Xxxxx Xxxxxx BY: /s/ Xxxxx X. Xxxxxxxx
---------------------------- ----------------------------
NAME: F. Xxxxx Xxxxxx NAME: Xxxxx X. Xxxxxxxx
-------------------------- --------------------------
TITLE: President TITLE: President
------------------------- -------------------------
DATE: 6/14/99 DATE: 6/9/99
-------------------------- --------------------------
COUNTERPART NO. 2 of 2
9
MASTER NOTE AND SECURITY AGREEMENT
Wilton, Connecticut
Date: June 9, 1999
1. Master Agreement.
(a) This Agreement sets forth the basic terms and conditions upon which
LEASING TECHNOLOGIES INTERNATIONAL, INC. (together with its successors and
assigns, collectively, the "Lender"), shall, lend to INTERLIANT, INC. a
Corporation organized under the laws of the State of Delaware (the "Borrower"),
and the Borrower shall borrow from the Lender, funds to purchase (or refinance
the purchase of) the items of "Equipment" specified (and as defined in) one or
more loan schedules hereto to be entered into from time to time (each, a "Loan
Schedule"). Each Loan Schedule shall reference this Master Note and Security
Agreement (this "Agreement") and shall be deemed to incorporate therein all of
the terms and conditions hereof, unless and to the extent any provisions hereof
are expressly excluded or modified therein, and shall contain such additional
terms as the Lender and the Borrower shall, in their sole discretion, agree
upon. Each Loan Schedule, together with the terms and conditions of this
Agreement so incorporated therein, shall constitute a separate promissory note
that evidences a separate loan with respect to the Equipment specified in such
Loan Schedule. Each Loan Schedule may be assigned by the Lender and/or
reassigned by any assignee(s) thereof separate and apart from any other Loan
Schedule(s) hereunder. With respect to each Loan Schedule, the Lender or its
respective assignee(s) shall have all of the rights of the "Lender" thereunder
and with respect to the Equipment and other Collateral covered thereby, and such
rights shall be separately exercisable by the Lender or such assignee(s), as the
case may be, collectively with all of the other Loan Schedules then held by the
Lender or such assignee(s), but exclusively and independently of the rights of
the Lender or such assignee(s) with respect to any other Loan Schedule(s) not
then held by the Lender or such assignee(s).
(b) The term "Loan" as used in this Agreement shall mean any and all of
the liabilities and obligations of the Borrower under a loan evidenced by a
particular Loan Schedule, which is entered into by the Lender and the Borrower
under this Agreement with respect to the Equipment specified in such Loan
Schedule. Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings ascribed to them in the relevant Loan Schedule.
2. Terms of Payment.
(a) FOR VALUE RECEIVED, the Borrower hereby promises to pay to the order
of the Lender, the "Principal Sum" set forth in each Loan Schedule, in the
"Total Number of Monthly Installments" set forth in such Loan Schedule,
consisting of the "Number of Consecutive Monthly Installments" of principal and
interest set forth in such Loan Schedule, each payable in advance, and the
"Final Payment" of principal and interest set forth in such Loan Schedule,
together with all other sums then owing thereunder, payable on the "Final
Payment Date" set forth in such Loan Schedule; the first such consecutive
monthly installment shall be in the "First Monthly Installment Amount" set forth
in such Loan Schedule and shall be due and payable on the "First Monthly
Installment Date" set forth in such Loan Schedule; the remaining consecutive
monthly installments shall each be in the "Remaining Consecutive Monthly
Installment Amount" set forth in such Loan Schedule and shall thereafter be due
and payable on the same day of each month in each year as such First Monthly
Installment Date and ending on the "Last Consecutive Monthly Installment Date"
set forth in such Loan Schedule; and the
Rev. 6/7/99
COUNTERPART NO. 2 of 2
10
Final Payment and shall be due and payable on the Final Payment Date, except as
otherwise expressly provided in Sections 17(b), 17(c), 17(d) or 18(b) hereof.
(b) The installments described in Sections 2(a) and 17(a) hereof include
interest on the unpaid principal amount of the relevant Loan from time to time
outstanding, computed on the basis of a 360-day year at the "Annual Interest
Rate" set forth in the relevant Loan Schedule.
(c) The proceeds of the Loan evidenced by each Loan Schedule shall be used
solely to purchase (or refinance the purchase of) the Equipment described in
such Loan Schedule.
(d) The Borrower shall have the right to prepay any Loan upon payment of
the present value of all Monthly Installments, and the Final Payment, calculated
by discounting at the rate of six percent (6%) per annum, compounded monthly, or
upon the payment of such other amount as may be set forth in the applicable Loan
Schedule.
(e) Whenever any installment or other amount payable to the Lender by the
Borrower hereunder is not paid when due, the Borrower agrees to pay to the
Lender, on demand, as liquidated damages and not as a penalty: (i) a late charge
on such overdue amounts calculated at the rate of one and a half (1 1/2) percent
a month, or the maximum amount permitted under applicable law, whichever is
less, from the date such payment is due until the date such payment is made in
full to the Lender; and (ii) in addition, with respect to overdue installment
payments only, an administrative fee equal to five cents ($.05) for each one
dollar ($1.00) of such delayed installment payment overdue for more than twenty
(20) days, or the maximum amount permitted under applicable law, whichever is
less. The Borrower agrees to also reimburse the Lender on demand for any and all
reasonable costs and expenses (including the Lender's reasonable attorneys' fees
and disbursements) arising out of or caused by this Agreement or any breach by
the Borrower hereunder, including (without limitation) any enforcement by the
Lender of its rights and remedies hereunder.
(f) All payments by the Borrower on account of principal, interest or fees
hereunder shall be made in lawful money of the United States of America, in
immediately available funds.
3. Grant of Security Interest. The Borrower hereby pledges, assigns and
grants to the Lender a continuing first priority security interest in and lien
on the following properties, assets and rights (collectively, the "Collateral"):
(a) the Equipment as set forth (and defined) in each Loan Schedule hereunder,
together with all warranties thereon and all additions, improvements,
accessions, replacements and substitutions thereto and therefor, whether now
owned or hereafter acquired, and all proceeds thereof; (b) the proceeds of any
insurance payable to the Borrower with respect to the Equipment; and (c) all of
the "Other Personal Property," if any, described in any Loan Schedule hereunder
and all proceeds thereof. In addition, all other property of the Borrower now or
hereafter pledged to or held by the Lender to secure any Obligations (as
hereinafter defined), whether under this Agreement, any Loan Schedule or
otherwise agreed to in writing, and all property now or hereafter leased by the
Lender to the Borrower, shall also serve as collateral security for the full
payment and performance of the Obligations.
4. Obligations Secured. The Collateral hereunder constitutes and will constitute
continuing security for the full payment, performance and observance by the
Borrower of the following obligations (collectively, the "Obligations"):
Rev. 6/7/99
-2-
11
(a) "Liabilities," which shall mean all of the indebtedness
evidenced by this Agreement and each Loan Schedule hereunder together with any
Lease Agreement(s) between Lender and Borrower (and any Schedules thereunder),
and all liabilities and obligations of any kind of the Borrower to the Lender
arising out of or relating thereto, whether (i) for the Lender's own account,
(ii) acquired directly or indirectly by the Lender from the Borrower, (iii)
absolute or contingent, joint or several, secured or unsecured, liquidated or
unliquidated, due or not due, contractual or tortious, now existing or hereafter
arising, or (iv) incurred by the Borrower as principal, surety, endorser,
guarantor, borrower, lessee or otherwise, and including (without limitation) all
reasonable expenses and attorneys' fees incurred by the Lender in connection
with any such indebtedness, liabilities or obligations or any of the Collateral
(including any sale or other disposition of the Collateral);
(b) the prompt payment, when due, of all present and future
obligations and indebtedness of the Borrower to the Lender under this Agreement
and/or any Loan Schedule, as the same may hereafter be amended or modified, and
under any other agreement or instrument executed by the Borrower in favor of the
Lender, whether direct or indirect, absolute or contingent; and
(c) the strict performance and observance by the Borrower of all
material warranties, covenants and agreements contained in this Agreement or any
Loan Schedule and any instrument or other agreement delivered by the Borrower to
the Lender.
5. Borrower Selected Equipment; Warranty Disclaimer. THE BORROWER
REPRESENTS AND ACKNOWLEDGES THAT IT HAS SELECTED BOTH THE EQUIPMENT AND THE
VENDOR OF THE EQUIPMENT (THE "VENDOR") AND THAT TO THE BEST OF ITS KNOWLEDGE THE
EQUIPMENT SUITS THE BORROWER'S PARTICULAR NEEDS. THE LENDER MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY,
EXPRESS OR IMPLIED, AS TO THE EQUIPMENT OR ANY OTHER MATTER WHATSOEVER,
INCLUDING WITHOUT LIMITATION, TITLE TO THE EQUIPMENT OR THE EQUIPMENT'S
CONDITION, THE SUITABILITY OF THE EQUIPMENT, ITS DURABILITY, CAPACITY,
OPERATION, PERFORMANCE, DESIGN, MATERIALS, WORKMANSHIP AND/OR QUALITY,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. THE BORROWER AGREES TO
LOOK SOLELY TO THE MANUFACTURER, VENDOR, MAINTENANCE PROVIDER OR CARRIER OF THE
EQUIPMENT FOR ANY CLAIM ARISING FROM ANY DEFECT, BREACH OF WARRANTY, FAILURE OR
DELAY IN DELIVERY, MISDELIVERY OR INABILITY TO USE THE EQUIPMENT FOR ANY REASON
WHATSOEVER, AND THE BORROWER'S OBLIGATIONS TO THE LENDER HEREUNDER SHALL NOT IN
ANY MANNER BE AFFECTED THEREBY. EXCEPT IN THE EVENT OF LENDER'S WILLFUL
MISCONDUCT, THE LENDER SHALL NOT BE LIABLE FOR ANY LOSS, DAMAGE, INJURY OR
EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY ANY ITEM OF EQUIPMENT, THE USE,
MAINTENANCE, REPAIR, DEFECT OR SERVICING THEREOF, BY ANY DELAY OR FAILURE TO
PROVIDE SAME, BY ANY INTERRUPTION OF SERVICE OR LOSS OF SERVICE OR LOSS OF USE,
OR FAILURE TO PROVIDE SAME, OR FOR ANY LOSS OF BUSINESS HOWEVER CAUSED. NO
REPRESENTATION OR WARRANTY AS TO THE EQUIPMENT OR ANY OTHER MATTER BY THE VENDOR
OF THE EQUIPMENT SHALL BE BINDING ON THE LENDER, NOR SHALL THE BREACH OF SUCH
RELIEVE THE BORROWER
Rev. 6/7/99
-3-
12
OF, OR IN ANY WAY AFFECT, ANY OF THE BORROWER'S OBLIGATIONS TO THE LENDER AS SET
FORTH HEREIN.
6. Representations and Warranties. The Borrower represents, warrants,
covenants and agrees that:
(a) If the Borrower is a corporation or a partnership, it is duly
organized, existing and in good standing under the laws of its state of
incorporation, and to the best of its knowledge is duly qualified and in good
standing under the laws of each jurisdiction where the character of its
properties or the transaction of its business makes such qualification necessary
and has full power to own its properties and assets and to carry on its business
as now being conducted.
(b) The Borrower has full power and authority to execute, deliver
and perform this Agreement and each Loan Schedule, which has been duly
authorized by all necessary and proper corporate or partnership action. No
consent of stockholders, if any, or of any public authority is required as a
condition to the validity of this Agreement and each Loan Schedule. The making
and performance by the Borrower of this Agreement and each Loan Schedule will
not violate any provision of law and will not conflict with or result in a
breach of any order, writ, injunction or decree of any court or government
instrumentality, or its charter or by-laws or partnership agreement, if any, or
create a default under any agreement, note or indenture to which it is a party
or by which it is bound or to which any of its property is subject, or result in
the imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of its properties or assets, except for the liens created under this
Agreement or any Loan Schedule.
(c) This Agreement and each Loan Schedule have been duly executed
and delivered, and constitutes the valid and legally binding obligation of the
Borrower, enforceable in accordance with its terms.
(d) The Borrower has good title to and is the lawful owner of the
Collateral free from all claims, liens, encumbrances, charges or security
interests whatsoever, except for the liens granted by this Note. For purposes of
this Agreement, Permitted Liens shall mean the liens granted by this Agreement
or any Loan Schedule.
(e) The Collateral is and will be kept at the location(s) set forth
in the relevant Loan Schedule hereto.
(f) To the best of its knowledge, the provisions of this Agreement
and each Loan Schedule create a valid and perfected first priority security
interest in the Collateral, enforceable in accordance with their respective
terms, subject to no prior or equal lien, charge, encumbrance or security
interest, upon the filing of appropriate Uniform Commercial Code financing
statements or equivalent instruments, and notation and issuance of appropriate
certificates of title, with respect to the Collateral. Uniform Commercial Code
financing statements or equivalent instruments and certificates of title with
the Lender's security interest duly noted thereon, with respect to the
Collateral in a form provided by Lender, have been executed by the Borrower and
delivered to the Lender for filing at the appropriate offices.
Rev. 6/7/99
-4-
13
(g) There are no judgments outstanding against the Borrower and
there are no material actions or proceedings before any court or administrative
agency pending or, to the knowledge of the Borrower, threatened against the
Borrower which, if determined adversely to the Borrower, would affect the
Collateral.
(h) The Borrower's principal office and place of business where it
maintains its records concerning the Collateral is at its address stated on the
relevant Loan Schedule. The Borrower has no other office or place of business,
except as indicated on the relevant Loan Schedule.
7. Insurance. The Borrower shall keep and maintain the Equipment and other
Collateral insured with all risk insurance, for not less than the replacement
cost thereof. The Borrower shall also provide, for the benefit of the Lender,
public liability insurance (both personal injury and property damage) covering
the Equipment and other Collateral. The amount of any such insurance shall be
sufficient so that neither the Borrower nor the Lender will be considered a
co-insurer. Such insurance shall be in form, issued by insurance companies and
in amounts reasonably satisfactory to the Lender. Each insurer shall agree, by
endorsement upon the policy or policies issued by it or by independent
instrument furnished to the Lender, that such insurer give at least ten (10)
days' prior written notice of the effective date of any alteration or
cancellation of such policy and that coverage under such policy shall not be
affected by any default, misrepresentation or other breach by the Borrower or
the Lender under this Agreement or any Loan Schedule or such policy. The Lender
shall have the option but not the obligation, to pay the premiums to continue
any such canceled insurance policy in effect or to obtain like coverage. The
Borrower agrees that any payment made by the Lender pursuant to the foregoing
authorization (and interest thereon at the rate of one and a half (1 1/2)
percent a month, or if such rate shall exceed the maximum rate allowed by law,
then, at such maximum rate from the date of such payment) shall become part of
the Obligations and be secured by the Collateral. The proceeds of all insurance
payable as a result of loss or damage to any item of the Equipment, up to the
amount of the Obligations pertaining to such Equipment may be applied by Lender
to satisfy such Obligations. The Borrower hereby irrevocably appoints the Lender
as the Borrower's attorney-in-fact solely to make claim for, receive payments of
and execute and endorse all documents, checks or drafts received in payment for
loss or damage under any such insurance policy. In the event that the amount of
such payments exceeds the amount of the Obligations pertaining to such Equipment
or this Agreement, Lender shall remit such excess amount to Borrower within ten
(10) business days after receipt thereof. In all events, the Borrower shall be
liable for any loss, damage, expense or costs suffered or incurred by the Lender
relating to or in any manner pertaining to this Agreement or any Loan Schedule,
the Collateral or the use or operation of the Collateral, provided that Borrower
shall not be liable for any loss, damage, expense or cost solely caused by
Lender's gross negligence or willful misconduct.
8. Maintenance; Loss of Collateral. The Borrower acknowledges that, in making
its decision to extend the credit evidenced by this Agreement and each Loan
Schedule to the Borrower, the Lender is depending heavily upon the realizable
value of the Collateral at all times during the term of this Agreement and each
Loan Schedule, and the Borrower hereby represents and warrants to the Lender
that the purchase price paid by the Borrower for the Collateral represents the
retail fair market value thereof. Accordingly, the Borrower agrees at all times
to maintain the Collateral in good operating condition, repair and appearance,
and protect the same from deterioration, other than normal wear and tear, keep
the Collateral in its exclusive possession and control at the location specified
in the relevant Loan Schedule and use the Collateral only in the regular course
of its business within its normal capacity, without abuse
Rev. 6/7/99
-5-
14
and in a manner contemplated by the Vendor, shall comply with all laws,
ordinances, regulations, requirements and rules with respect to the use,
maintenance and operation of the Collateral, shall not make any modification,
alteration or addition to the Collateral (other than normal operating
accessories or controls which, when added to the Collateral, shall not impair
the operation or reduce the value of the Collateral) without the prior written
consent of the Lender, and all modifications, alterations, accessories, parts,
replacements and additions to the Collateral which affect the value or operation
of the Collateral shall become part of the Collateral and be included within the
term "Collateral" as used herein. Notwithstanding anything to the contrary
contained herein, (i) Borrower shall be permitted, without the consent of
Lender, to load software and make configuration or other changes to the
Collateral as are reasonably appropriate to operate Borrower's business provided
that such alterations or additions do not adversely affect the value thereof or
the ability to operate, maintain and remove the Collateral. The alterations and
additions set forth in the immediately preceding sentence need not be removed at
the termination or expiration of this Agreement. For the purpose of assuring the
Lender that the Collateral will be properly serviced, the Borrower agrees, in
the event that the Lender so requests, to cause the Collateral to be maintained
by the Vendor (or another maintenance organization approved by the Lender in
writing) pursuant to Vendor's standard preventive maintenance contract or
comparable maintenance contract, in each case covering at least prime shift
maintenance of each item of Collateral. Except for loss, damage or destruction
arising from Lenders gross negligence or willful misconduct, the Borrower hereby
assumes the entire risk of loss, damage or destruction of the Collateral from
any and every cause whatsoever. The Borrower agrees that any such loss, damage
or destruction of the Collateral shall not relieve the Borrower of its
obligations hereunder, which obligations shall remain absolute, unconditional
and not subject to any claim, defense, set-off, counterclaim, reduction or
abatement of any kind whatsoever; provided, however, that the foregoing shall
not limit the right of the Borrower to bring a separate claim against Lender for
breach of this Agreement or any other reason. In the event of any loss, damage
or destruction of any item of Collateral, the Borrower shall give the Lender
prompt written notice thereof and shall, at the Borrowers sole expense (except
to the extent of any proceeds of insurance maintained by the Borrower which
shall have been received by the Borrower as a result of such loss, damage or
destruction) and at the Lender's sole option, either (a) repair such item,
returning it to its previous condition, unless damaged beyond repair, or (b)
replace such item with a like item acceptable to the Lender, in good condition
and of equivalent value, which shall be included within the term "Collateral" as
used herein.
9. Books and Records. The Borrower shall give the Lender full and free
access to the Collateral during normal business hours and with at least three
business days notice and to all books, correspondence and records of the
Borrower with respect thereto, permit the Lender and its representatives to
examine the same and to make copies and extracts therefrom, Lender shall keep
and maintain the confidentiality of all such information in a manner at least as
restrictive as the manner in which it maintains its own most confidential
information. Notice shall not be required if at such time Borrower is in default
under this Agreement.
10. Taxes and Encumbrances. The Borrower shall promptly pay and discharge
or cause to be paid and discharged all its obligations and liabilities,
including (without limitation) all taxes, assessments and governmental charges
upon it and its income or properties, when due unless and to the extent only
that the same shall be contested in good faith and by appropriate proceedings
and then only to the extent that a bond is filed in cases where the filing of a
bond is necessary to avoid the creation of a lien against any of the Collateral
or any of its other assets. Other than Permitted Liens, the Borrower
Rev. 6/7/99
-6-
15
covenants and agrees to keep the Collateral free and clear of all levies, liens,
claims, security interests and encumbrances (including, without limitation, any
lease or sublease thereof) and to promptly pay all charges, taxes and fees which
may now or hereafter be imposed upon the ownership, sale, purchase, possession
or use of the Collateral. In addition, the Borrower shall timely file all tax
returns required in connection with the use, operation or possession of the
Collateral, and shall upon written request promptly furnish copies thereof to
the Lender.
11. Corporate Existence. If the Borrower is a corporation or partnership,
the Borrower shall do, or cause to be done, all things necessary to preserve and
keep in full force and effect its corporate or partnership existence and all
franchises, rights and privileges necessary for the proper conduct of its
business, and continue to engage in the business of the same type as now
conducted by it.
12. Notice of Events of Default The Borrower shall give notice in writing
promptly to the Lender of the occurrence of any event which constitutes, or
which with notice or lapse of time or both would constitute, an Event of Default
(as hereinafter defined).
13. Delivery of Financial Data.
(a) So long as any obligations remain unsatisfied under this Agreement,
Borrower agrees to deliver to Lender or any assignee and any successor assignee
a copy of Borrower's monthly unaudited financial statements until such time as a
public offering is completed, and the annual financial budget for the upcoming
year as soon as available and as it may be adjusted during the year. Upon
completion of such public offering Borrower shall furnish quarterly financial
statements to Lender; provided however, that if any creditor of Lessee is
furnished monthly financial statements, (including but not limited to budgets),
Borrower shall furnish such monthly financial statements to Lender. Borrower
shall also furnish, as soon as available and in any event within ninety (90)
days after the last day of Borrower's fiscal year, a copy of Borrower's annual
audited statements and consolidating and consolidated balance sheet, if any, as
of the end of such fiscal year, accompanied by the opinion of an independent
certified public accounting firm of recognized standing. The Borrower shall
furnish such other financial information as may be reasonably requested by
Lender, including but not limited to any material changes in budgets or
financial reports furnished to the Borrower's Board of Directors or
Shareholders.
(b) The Borrower acknowledges and agrees that all credit applications,
statements, financial reports and other information prepared by (including any
information prepared by the Borrower's CPA's, as hereafter defined) and
submitted by it to the Lender are material inducements to the execution by the
Lender of this Agreement and each Loan Schedule and the financing provided
hereunder. The Borrower warrants that to its knowledge all such credit
applications, statements, reports and other information are and all information
hereafter prepared by (including any information prepared by the Borrower's
CPA's, as hereafter defined) and furnished by the Borrower to the Lender will
be, true and correct in all material respects as of the date submitted, that no
such credit application, statement, report or other information contains any
material untrue or misleading information or omits any material fact necessary
to make such application, statement, report or other information not misleading
and that the Borrower is in no way affiliated with any Vendor of any of the
Equipment. The Borrower agrees, upon written request by Lender, to use best
efforts to obtain for the Lender such estoppel certificates, landlord's waivers
or other similar documents as the Lender may reasonably request.
Rev. 6/7/99
-7-
16
14. Principal Office. Except for movement to another facility operated by
Borrower within the same taxing and Uniform Commercial Code filing jurisdiction,
the Borrower shall not change its principal office or the place where it
maintains its records pertaining to the Collateral, as specified in Sections
6(d) and 6(g) hereof, without giving the Lender at least thirty (30) days' prior
written notice thereof.
15.Location of Collateral; Inspection; Labels. The Borrower shall not
remove or permit the removal of the Collateral from its present location as set
forth on the relevant Loan Schedule, without the prior written consent of the
Lender which consent shall not be unreasonably withheld or delayed. Upon at
least three business days' prior notice, the Lender and its representatives
shall have the right to enter the Borrower's premises from time to time during
business hours to inspect, observe or, after the occurrence and during the
continuance of an Event of Default, remove the Collateral, and to confirm its
existence, condition and proper maintenance or otherwise protect the Lender's
interest therein. The Borrower shall comply with all material laws, ordinances,
regulations or requirements of any governmental authority, official, board or
department relating to the Collateral's installation, possession, use or
maintenance. The Collateral shall remain personal property regardless of its
affixation to any realty. Upon the Lender's written request, the Borrower shall
affix and keep in a prominent place on each item of Collateral labels, plates or
other markings indicating the Lender's security interest in the Collateral.
16. Option to Perform Obligations of the Borrower in Respect of the
Collateral. If the Borrower fails or refuses, after any applicable grace period
and notice to the Borrower, to make any payment, perform any covenant or
obligation, or take any other action which the Borrower is obligated hereunder
to perform, observe, take or do hereunder, then the Lender may, at its option,
without releasing the Borrower from any obligation or covenant hereof, perform.
observe, take or do the same in such manner and to such extent as the Lender may
deem necessary or appropriate to protect any of the Collateral and its rights
hereunder, including (without limitation) obtaining insurance and the payment of
any taxes and the payment of any sums necessary to discharge liens or security
interests at any time levied or placed on the Collateral. The Borrower agrees
that any payment or expense incurred by the Lender pursuant to the foregoing
authorization (and interest thereon at the rate of one and a half (1 1/2)
percent a month, or if such rate shall exceed the maximum rate allowed by law,
then, at such maximum rate from the date of incurring of any such expense is
incurred) shall become part of the Obligations and be secured by the Collateral
set forth in this Agreement and each Loan Schedule.
17. Final Payment Alternatives (a) Notwithstanding anything to the
contrary set forth in Section 2(a) of this Agreement, if at least 90 days prior
to the Final Payment Date under a Loan Schedule, the Borrower gives the Lender
written notice requesting that the Lender extend and finance the repayment of
the relevant Final Payment over an additional 12-month term commencing on such
Final Payment Date (the "Refinancing Request"), and provided that no Event of
Default (as hereinafter defined) and no event or circumstance that, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, including (without limitation) the nonpayment or nonperformance of any
outstanding liability or obligation under this Agreement (each, a "Default"),
shall have occurred and be continuing as of (i) the date such Refinancing
Request is given, or (ii) the relevant Final Payment Date, then such Final
Payment shall not be due and payable on such Final Payment Date but instead
shall be payable in 12 equal monthly installments of principal and interest,
each in the "Refinanced Monthly Installment Amount" set forth in
Rev. 6/7/99
-8-
17
the relevant Loan Schedule and due and payable on the same day of each month as
such Final Payment Date, commencing on such Final Payment Date.
(b) Notwithstanding anything to the contrary set forth in Section 2(a) of
this Agreement, so long as no Default or Event of Default has occurred and is
continuing on the Final Payment Date under a Loan Schedule and if, at least 90
days prior to the relevant Final Payment Date, the Borrower notifies the Lender
in writing (the "Return Option Exercise Notice") of the Borrower's desire to
transfer title to the related Equipment to the Lender in partial satisfaction of
the Borrower's obligation to pay the relevant Final Payment (the "Return
Option"), the Borrower shall receive a credit in an amount equal to the "Return
Option Credit" set forth in such Loan Schedule against such Final Payment by
unconditionally and irrevocably transferring and assigning to the Lender or its
designee on such Final Payment Date all of the Borrower's right, title and
interest in and to the related Equipment; provided, however, that the Borrower
pays the entire remaining "Return Option Balance Amount" set forth in such Loan
Schedule to the Lender on the relevant Final Payment Date. If a Return Option
Exercise Notice is duly given as provided above, the relevant Return Option
shall be exercised by the Borrower delivering each of the following to the
Lender, at the Borrower's sole cost and expense, on or before the relevant Final
Payment Date: (i) a duly executed xxxx of sale in favor of the Lender with
respect to all of the Equipment covered by the relevant Loan Schedule, in form
and substance reasonably satisfactory to the Lender and its counsel; (ii)
payment in full of the relevant Return Option Balance Amount; and (iii) the
relevant Equipment, at a location up to a maximum distance of 500 miles within
the continental United States designated by the Lender, in the same operating
order, repair, condition and appearance as on the date hereof, reasonable wear
and tear only excepted, and with all engineering and safety changes prescribed
by the manufacturer or approved maintenance organization to accept such
Equipment under contract maintenance at its then standard rates. The Borrower
shall promptly pay any and all costs of repair, replacement, deinstallation,
packing, shipping and delivery of the relevant Equipment to the Lender upon the
Borrower's exercise of such Return Option. If the Borrower duly satisfies all of
the terms and conditions of this Section 17(b), the Borrower shall have fully
satisfied all of its obligations under the related Loan Schedule.
(c) Notwithstanding anything to the contrary set forth in Section 2(a) of
this Agreement, if the Borrower believes that the "Fair Market Value" (as
hereinafter defined) of the Equipment covered by a Loan Schedule as of the
relevant Final Payment Date will be less than the amount of the Final Payment
under such Loan Schedule, the Borrower may notify the Lender in writing at least
90 days prior to such Final Payment Date of the Borrower's election to have the
amount of such Final Payment adjusted (the "Final Payment Adjustment Option
Notice") to an amount equal to the greater of (i) Fair Market Value of the
relevant Equipment as of such Final Payment Date, or (ii) the "Adjusted Final
Payment" set forth in the such Loan Schedule. If such Final Payment Adjustment
Option Notice is so given, and so long as no Default or Event of Default has
occurred and is continuing as of (A) the date such Final Payment Adjustment
Option Notice is given, or (B) the relevant Final Payment Date, then unless the
amount of such Adjusted Final Payment is greater than the amount of such Final
Payment, such Final Payment shall automatically be deemed changed to such
Adjusted Final Payment and the Borrower irrevocably and unconditionally agrees
to pay such Adjusted Final Payment on the relevant Final Payment Date in lieu of
such Final Payment. "Fair Market Value" of any Equipment shall mean the amount
as of the relevant Final Payment Xxxx that would obtain for such Equipment in a
retail arms'-length transaction between an informed and willing buyer in
possession under no compulsion to buy and an informed and willing seller under
no compulsion to sell. The Lender shall initially determine the Fair Market
Value of any Equipment by notifying the Borrower thereof in writing at least 75
days prior to the relevant Final
Rev. 6/7/99
-9-
18
Payment Date. If the Borrower does not accept such determination of Fair Market
Value by the Lender, the Borrower shall notify the Lender of such non-acceptance
in writing not less than 60 days prior to such Final Payment Date. If the
Borrower does not so notify the Lender of its non-acceptance of the Lender's
determination within such period, then the Fair Market Value of such Equipment
as initially determined by the Lender shall be conclusive. If the Borrower does
so notify the Lender of such non-acceptance within such period, then the Fair
Market Value of such Equipment shall conclusively be established not less than
30 days prior to the relevant Final Payment Date by an independent appraiser
selected by the Lender and reasonably acceptable to the Borrower. All costs for
such appraiser shall be paid by the Borrower within 10 days after its receipt of
an invoice therefor.
18. Events of Default; Remedies. (a) If any one of the following events
(each, an "Event of Default") shall occur, then to the extent permitted by
applicable law, the Lender shall have the right to exercise any one or more of
the remedies set forth in Section 18(b) hereof: (i) the Borrower fails to make
any payment when due hereunder and such failure continues for a period of five
business days; or (ii) Borrower fails to observe or perform (A) any other
agreement or obligation to be observed or performed hereunder or under any Loan
Schedule or other agreement, document or instrument delivered to the Lender by
or on behalf of an Obligor or otherwise relating to any of the Obligations
(collectively, the "Other Documents") and unless expressly set forth in this
Agreement or any Loan Schedule, such failure continues uncured for a period of
thirty (30) days following notice by Lender, or (B) any other obligation of
Borrower to the Lender and the failure to observe or perform shall continue
uncured for thirty (30) days following notice by Lender; provided however that
such thirty day period shall be extended if Borrower commences, in a reasonably
diligent manner to cure such default if such default cannot be cured within such
thirty days; provided further that such cure period shall not be extended beyond
seventy-five days; or (iii) any representation or warranty made by or on behalf
of Borrower in this Agreement or any Loan Schedule or in any of the Other
Documents shall at any time prove to have been incorrect or untrue in any
material respect when made; or (iv) the Borrower's failure to obtain or maintain
any insurance required by the Lender hereunder and such failure continues
uncured for a period of ten (10) days following notice by Lender; or (v) a
default occurs in the payment of any indebtedness in an amount in excess of
$100,000 owed by Borrower to any individual or entity other than the Lender and
such default continues beyond any applicable cure period; or (vi) a default
occurs in the performance or observance of the terms of any agreement, document
or instrument pursuant to which such indebtedness was created, secured or
guaranteed, the effect of which default is to cause or permit the holder of any
such indebtedness to cause the same to be due prior to its stated maturity
(whether or not such default is waived by the holder thereof); or (vii) Borrower
fails (after ten (10) days prior notice thereof) to pay, withhold, collect or
remit when asserted or due any tax, assessment or other sum payable with respect
to the Collateral or any security for any of the Obligations (including, without
limitation, any premium on any insurance policy with respect to any of the
Collateral or any security for any of the Obligations, or any insurance policy
assigned to the Lender as security for any of the Obligations), or (viii) a
judgment is entered against the Borrower in an amount in excess of $25,000 and
such judgment is not satisfied, dismissed, bonded or stayed within 30 days, or
any attachment, levy or execution is made against any Collateral; or (ix)
Borrower enters into any transaction which adversely affects a significant
portion of the business value of Borrower and which materially affects the
ability of the Borrower to repay the Borrower's obligations under the Agreement;
or (x) Borrower fails (or Borrower admits in writing its inability) to generally
pay its debts as they become due or the insolvency or business failure of
Borrower; or (xi) the filing of an application for appointment of a trustee,
custodian or receiver for Borrower or of any part of Borrower's property (and in
the case of an involuntary filing against the Borrower, such filing is not
dismissed within
Rev. 6/7/99
-10-
19
60 days); or (xii) the filing of a petition in bankruptcy by or against
Borrower, or the commencement by or against Borrower of any proceeding under any
bankruptcy or insolvency law or statute, or any law or statute relating to the
relief of debtors or arrangement of debt, readjustment of indebtedness,
reorganization, receivership or composition, or the extension of indebtedness
(and in the case of an involuntary filing against the Borrower, such filing is
not dismissed within 60 days); or (xiii) a material adverse change in the
condition or affairs (financial or otherwise) of Borrower or any other event or
circumstance occurs that materially impairs the prospects of full and prompt
payment or performance by Borrower of any of its Obligations; or (xiv) Borrower
attempts to remove, sell, transfer, encumber, sublet or part with possession of
the Equipment or any item thereof, except as expressly permitted herein; no cure
period shall apply to this Section 18 (xiv).
(b) Upon the occurrence of an Event of Default, which default has
not been cured within the applicable cure period, at the Lender's sole option,
all or any part of the entire unpaid total amount of the Obligations then owed
to the Lender for the balance of the term thereof shall be at once due and
payable and the Lender may, enter upon the premises where any or all of the
Collateral securing such Obligations is located, take possession of and remove
same, and exercise any one or more of the following rights and remedies, without
liability to the Borrower therefor and without affecting the Borrower's
obligations hereunder: (i) sell, lease or otherwise dispose of any or all of
such Collateral or any part thereof at one or more public or private sales,
leases or other dispositions, at wholesale or retail, for such consideration, on
such terms, for cash or on credit, as the Lender may deem advisable, and the
Lender may immediately, without demand of performance and without intention of
notice to sell or of the time or place of sale or of redemption or of
advertisement or other notice or demand whatsoever to the Borrower, all of which
are hereby expressly waived (if notice of any sale or other disposition is
required by law to be given, the Borrower hereby agrees that a notice sent at
least five (5) days before the time of any intended public sale or of the time
after which any private sale or other disposition of such Collateral is to be
made, shall be reasonable notice of such sale or other disposition); or (ii) to
the extent permitted by law, retain such Collateral or any part thereof,
crediting the Borrower with the reasonable fair market or rental value thereof
for the balance of the term of the related Loan Schedule; and/or (iii) require
the Borrower to assemble such Collateral at the Borrower's sole expense, for the
Lender's benefit, at a place designated by the Lender; and/or (iv) pursue any
other remedy granted by any existing or future document executed by the Borrower
or by law, including, without limitation, the rights and remedies of a secured
party under the Uniform Commercial Code as enacted in any jurisdiction in which
any of such Collateral may be located. At any public sale, the Lender may be the
purchaser of all or any part of such Collateral, free from any right of
redemption on the part of the Borrower, which right is hereby waived and
released. The Borrower agrees to pay all of the Lender's reasonable expenses,
including but not limited to the costs of repossessing, storing, repairing and
preparing such Collateral for sale or lease, any commissions payable in
connection with any such sale or lease, and reasonable attorney's fees and
disbursements, if an attorney shall be consulted. The net proceeds realized from
any such sale, lease or other disposition or the exercise of any other remedy,
after deducting therefrom all related expenses, shall be applied toward payment
of the unpaid Obligations due and to become due to the Lender hereunder, the
Borrower to remain personally liable for any deficiency. The Lender's recovery
shall in no event exceed the maximum amount permitted by law. If any of such
Collateral is leased by the Lender to a bona fide third party, the present
value of such lease receivable discounted at an interest rate of 12% per annum
shall be credited to the Borrower's liability to the Lender after deducting all
expenses associated with the lease of such Collateral and the Borrower shall
remain liable for any deficiency thereof. It is understood that facility of
repossession in an Event of Default is a basis for the financial accommodation
reflected by this
Rev. 6/7/99
-11-
20
Agreement and each Loan Schedule. Any late charges payable to the Lender under
Section 2(e) hereof shall be payable in addition to all amounts payable by the
Lender as a result of exercise of any of the remedies herein provided. The
Borrower agrees to also reimburse the Lender for any reasonable expenses
(including the Lender's reasonable attorneys' fees and expenses) arising out of
or caused by Borrower's breach of this Agreement or any Loan Schedule.
Notwithstanding anything to the contrary contained herein, if any one or more
Loan Schedules are assigned by the Lender to one or more assignees, the
Collateral securing the Obligations under each Loan Schedule shall be limited to
the Collateral securing the Obligations under each Loan Schedule then held by
the Lender or such assignee, as the case may be.
19. Power of Attorney. The Borrower authorizes the Lender and does hereby make,
constitute and appoint the Lender and any officer, employee or agent of the
Lender with full power of substitution, as the Borrower's true and lawful
attorney-in-fact with power, in its own name or in the name of the Borrower:
upon the occurrence and during the continuance of an Event of Default, solely
(i) to endorse any notes, checks, drafts, money orders, or other instruments of
payment (including payments under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Lender, (ii) to
sign and endorse any documents relating to the Collateral, (iii) to pay or
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral, and/or (iv) to grant,
collect, receipt for, compromise, settle and xxx for monies due in respect of
the Collateral; and (v) generally to do, at the Lender's option, all acts and
things that the Lender reasonably deems necessary or desirable to protect,
preserve and realize upon the Collateral and the Lender's security interests
therein, or (vi) in order to otherwise effectuate the intents of this Agreement
and each Loan Schedule, in each case as fully and effectually as the Borrower
might or could itself do; and the Borrower hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS
POWER OF ATTORNEY IS COUPLED WITH AN INTEREST ANT) SHALL BE IRREVOCABLE FOR AS
LONG AS ANY OF THE OBLIGATIONS SHALL BE OUTSTANDING. The Borrower agrees that
any expense incurred by the Lender pursuant to the foregoing authorization, and
interest thereon at the rate of one and a half (1 1/2) percent a month, or if
such rate shall exceed the maximum rate allowed by law, then, at such maximum
rate from the date of incurring any such expense, shall become part of the
Obligations and be secured by the Collateral.
20. Assignment, Etc. The Borrower shall not assign, pledge, mortgage, lease,
transfer, encumber or otherwise dispose of any of its rights in the Collateral
or any part thereof, nor permit its use by anyone other than its regular
employees or customers without the Lender's prior written consent, which shall
not be unreasonably withheld or delayed, except that Borrower may assign,
pledge, mortgage, lease, transfer, encumber or otherwise dispose of its rights
in the Collateral to its parent or any subsidiary corporation or to a
corporation which shall have acquired all or substantially all of the property
of Borrower by merger, consolidation or purchase. No permitted assignment or
sublease shall relieve Borrower of any of its obligations hereunder. Any such
purported transfer, assignment or other action without the Lender's prior
written consent shall be void. The Lender may, upon notice to (but without the
consent of) the Borrower, transfer or assign this Agreement and each Loan
Schedule or any interest herein and may mortgage, pledge, encumber or transfer
any of its rights or interest in and to the Collateral or any part thereof and,
without limitation, each assignee, transferee, pledgee and mortgagee (which may
include any affiliate of the Lender) shall have the right to further transfer or
assign its interest. Each such assignee, transferee, pledgee and mortgagee shall
have all of the rights (but none of the obligations) of the Lender under this
Agreement and each Loan Schedule. The Borrower hereby acknowledges notice of the
Lender's intended assignment of this Agreement and each Loan Schedule
Rev. 6/7/99
-12-
21
and, upon such assignment, the Borrower agrees not to assert against any such
assignees, transferees, pledgees and mortgagees any defense, claim,
counterclaim, recoupment or set-off that the Borrower may have against the
Lender, whether arising under this Agreement or any Loan Schedule or otherwise.
Any assignee, transferee, pledgee or mortgagee of the Lender's rights under this
Agreement or any Loan Schedule shall be considered a third party beneficiary of
all of the Borrower's representations, warranties and obligations hereunder to
the Lender. The Borrower agrees (a) in connection with any such transfer or
assignment, to provide such instruments, documents, acknowledgments and further
assurances as the Lender or any assignee, transferee, mortgagee or pledgee may
deem necessary or advisable to effectuate the intents of this Agreement or any
Loan Schedule or any such transfer or assignment, with respect to such matters
as the Agreement, any Loan Schedule, the Collateral, the Borrower's obligations
to such assignee, transferee, mortgagee or pledgee and such other matters as may
be reasonably requested, and (b) that after receipt by the Borrower of written
notice of assignment from the Lender or from the Lender's assignee, transferee,
pledgee or mortgagee, all principal, interest and other amounts which are then
and thereafter become due under this Agreement or any Loan Schedule shall be
paid to such assignee, transferee, pledgee or mortgagee, at the place of payment
designated in such notice. This Agreement and each Loan Schedule shall be
binding upon the Borrower and its successors and shall inure to the benefit of
the Lender and its successors and assigns.
21. No Waiver. No failure on the part of the Lender to exercise, and no
delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Lender of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. No course of dealing between the Borrower and the
Lender nor any delay or omission on the part of the Lender shall operate as a
waiver of any rights of the Lender. Each and every right, remedy or power hereby
granted to the Lender or allowed if by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Lender
from time to time. Waiver of any particular Event of Default shall not be deemed
to be a waiver of any other or subsequent Event of Default.
22. Further Assurances; Filing. The Borrower from time to time, at its
sole expense, will promptly execute and deliver all further instruments,
documents and assurances, and take all further action, that may be necessary or
desirable, or that the Lender may reasonably request, and hereby authorizes the
Lender to take all action (including the filing of any financing statements,
continuation statements or amendments thereto without the signature of the
Borrower) as the Lender may deem reasonably necessary, proper or desirable in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. The Borrower hereby
authorizes the Lender to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral without
the signature of the Borrower where permitted by law. A carbon, photographic or
other reproduction of this Agreement or any Loan Schedule or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. The Borrower agrees to pay the
Lender the actual fees for such filing, recording or stamp fees or taxes arising
from the filing or recording of any such instrument or statement, Lender shall
provide Borrower with copies of each filing which has been made hereunder.
23. Indemnity and Expenses. Except if such occur as a result of Lender's
gross negligence or willful misconduct, the Borrower shall and does hereby
indemnify and save the Lender, its directors,
Rev. 6/7/99
-13-
22
officers, employees, agents, attorneys, servants, successors and assigns,
harmless from any and all liabilities (including, without limitation,
negligence, tort and strict liability), damages, expenses, claims, actions,
proceedings, judgments, settlements, losses, liens and obligations (each, an
"Indemnified Claim"), including (without limitation) attorneys' fees and
expenses, arising out of the ordering, purchase, delivery, rejection,
non-delivery, ownership, selection, possession, leasing, renting, financing,
operation (regardless of where, how and by whom operated), control, use,
condition (including but not limited to latent and other defects, whether or not
discoverable by the Borrower), maintenance, delivery, transportation, storage,
repair, furnishing of specifications with respect to, and the return or other
disposition of, the Equipment or any other Collateral, or, in the event that the
Borrower shall be in default hereunder, arising out of the condition of any item
of Equipment or any other Collateral sold or disposed of after use by the
Borrower, including (without limitation) claims for injury to or death of
persons and for damage to property. The indemnities and obligations herein
provided shall continue in full force and effect notwithstanding the expiration,
termination or cancellation of this Agreement or any Loan Schedule for any
reason whatsoever and irrespective of whether the Borrower ever accepts the
Equipment or any other Collateral. The Lender shall give the Borrower prompt
written notice of any Indemnified Claim and, at the Lender's sole option,
Borrower shall defend the Lender against any Indemnified Claim at the Borrower's
sole expense with attorney(s) selected by the Borrower and reasonably acceptable
to Lender. The Borrower is an independent contractor and nothing contained
herein shall authorize the Borrower or any other person to operate any item of
Equipment or any other Collateral so as to incur any liability or obligation for
or on behalf of the Lender. The Borrower will upon demand pay to the Lender the
amount of any and all reasonable expenses, including the fees and disbursements
of its counsel and of any experts and agents, which the Lender may incur in
connection with (a) the exercise, enforcement or protection of any of the rights
of the Lender hereunder after the occurrence and during the continuance of an
Event of Default, or (b) the failure by the Borrower to perform or observe any
of the material provisions hereof. The foregoing amounts shall become part of
the Obligations and secured by the Collateral as set forth in this Agreement or
any Loan Schedule and the Lender may at any time apply to the payment of all
such costs and expenses all proceeds arising from the possession or disposition
of all or any portion of the Collateral.
24. Modifications, Etc. Neither this Agreement nor any Loan Schedule, nor
any provision hereof or thereof, may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by a duly
authorized representative of the party against whom enforcement of the change,
waiver, discharge or termination is sought.
25. Termination. Upon the non-defeasible payment in full of all
Obligations, the Lender shall execute and deliver to the Borrower all such
documents and instruments as shall be necessary to evidence termination of this
Agreement or any Loan Schedule and the security interests created hereunder.
26. Entire Agreement: Partial Invalidity. This Agreement and each Loan
Schedule constitutes the entire agreement of the Lender and the Borrower with
respect to the transactions covered hereby, and supersedes any and all prior
agreements, understandings and negotiations with respect thereto. If any
provision of this Agreement or any Loan Schedule is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this
Agreement or any Loan Schedule as a whole, but this Agreement or such Loan
Schedule shall be construed as though it did not contain the particular
Rev. 6/7/99
-14-
23
provision or provisions held to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and enforced to such extent as
shall be permitted by law.
27. Miscellaneous. (a) Any notice or other communication to a party
hereunder shall be sufficiently given if in writing and personally delivered or
mailed to said party by certified mail, return receipt requested, at its address
set forth herein with a copy to Interliant, Inc., Attn: General Counsel, Two
Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000 or such other address as either may
designate for itself in such a notice to the other and such notice shall be
deemed to have been given when received if personally delivered or served by
overnight delivery or by mail. Whenever the sense of this Agreement or any Loan
Schedule requires, words in the singular shall be deemed to include the plural
and words in the plural shall be deemed to include the singular. If more than
one Borrower is named herein, the liability of each shall be joint and several.
The headings set forth in this Agreement or any Loan Schedule are for
convenience of reference only, and shall not be given substantive effect.
(b) To the extent that any Loan Schedule evidencing a Loan hereunder would
constitute "chattel paper," as such term is defined under the Connecticut
Uniform Commercial Code, a security interest therein may be created only through
the transfer or possession of the original of Counterpart No. 1 of such Loan
Schedule executed pursuant to this Agreement. Transfer or possession of an
original counterpart of this Agreement shall not be necessary to perfect such
security interest and no security interest in any such Loan Schedule may be
created by the transfer or possession of any other counterpart of such Loan
Schedule or by the transfer or possession of any counterpart of this Agreement.
28. Choice of Law and Venue; Waiver of Jury Trial. THIS AGREEMENT AND EACH
LOAN SCHEDULE SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF CONNECTICUT,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW. The Borrower
hereby agrees that all actions or proceedings arising directly or indirectly
from or in connection with this Agreement or any Loan Schedule or any of the
Collateral shall, at the Lender's sole option. be litigated only in the
Connecticut state courts or the United States District Court for the District of
Connecticut sitting in Fairfield County, Connecticut. The Borrower consents to
the jurisdiction and venue of the foregoing courts and consents that any process
or notice of motion or other application to either of such courts or a judge
thereof may be served inside or outside the State of Connecticut or the District
of Connecticut by registered mail, return receipt requested, directed to the
Borrower at its address set forth in this Agreement or any Loan Schedule (and
service so made shall be deemed complete upon receipt or by personal service, or
in such other manner as may be permissible under the rules of said courts. THE
LENDER AND THE BORROWER EACH WAIVE THE RIGHT TO TRIAL BY JURY IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY LOAN
SCHEDULE, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT
THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING, BETWEEN THE BORROWER
AND THE LENDER. The Borrower hereby waives the right to interpose any set-off or
counterclaim or cross-claim in any such litigation; provided, however, that
nothing in this Section 28 shall prevent the Borrower from asserting, in a
separate and independent proceeding, any claim it may have against the Lender.
Rev. 6/7/99
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