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Exhibit 10.5
LEASE AGREEMENT
THIS LEASE AGREEMENT (THE "LEASE") is entered into between PrinVest Financial
Corp. (the "Lessor") and GlobalNet, LLC (the "Lessee") with respect to that
certain equipment as more particularly described in the Schedule 1 attached
hereto and incorporated by reference (the "Equipment Schedules") together with
all components, parts, additions and attachments now or hereafter incorporated
therein (the "Equipment"). The Lessor and the Lessee are hereinafter
collectively referred to as the "Parties."
1. TERMS AND CONDITIONS.
(a) The Lessor hereby leases the Equipment to the Lessee pursuant
to the terms and conditions set forth herein.
(b) The Lessee has selected the Equipment and has chosen the
manufacturer (the "Manufacturer") and the Supplier thereof
(the "Supplier").
(c) This Lease constitutes the full and entire agreement between
the Lessor and the Lessee in connection with the Equipment and
merges any other or prior understanding.
(d) In no case shall the preprinted terms and conditions on the
Lessee's, Manufacturer's or the Supplier's standard
transactional documentation (e.g., order forms and invoices)
apply to the Lessor.
(e) The Lease can be neither canceled nor modified except by a
written agreement signed by an authorized representative of
each of the Lessee and the Lessor.
(f) This Lease is a "finance lease" as that term is defined in the
New York Uniform Commercial Code (the "UCC"). The Lease is not
a "consumer lease" as that term is defined in the UCC.
(g) The term of the Lease is 42 months.
(h) On or about September 20,1999, Lessee entered into a Lease
Agreement with Lessor (the "Original Lease"). This Lease
amends, replaces and supercedes the Original Lease in its
entirety.
2. LESSEE'S WARRANTIES TO LESSOR.
The Lessee expressly represents and warrants to the Lessor, and the
Lessor relies on the fact that:
(a) the Lessee has read and understood this Lease before it was
signed;
(b) the Lessee has selected the Equipment, the Manufacturer and
the Supplier;
(c) the Lessee is fully satisfied with the Equipment, the
Manufacturer and the Supplier;
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(d) the Lessee has freely chosen to enter into this finance lease,
only after having considered other means of obtaining the use
of the Equipment;
(e) neither the Manufacturer, the Supplier, nor any of their
respective salespersons are, or have acted as, the Lessor's
agents or employees;
(f) financial information and other statements provided to the
Lessor are accurate and correct and will be updated upon the
Lessor's request during the term of the Lease;
(g) the Lessee is currently meeting all of its debts as such sums
come due;
(h) the Lessee has unrestricted power to enter into this Lease,
has duly authorized the person executing it, and certifies
that all signatures are authentic; and
(i) the Lessee will pay all costs connected with the Equipment,
including, but not limited to, taxes, insurance, repairs,
shipping, collection costs and expenses normally paid in a net
lease.
(j) prior to execution of this Lease, the Lessee has received an
accurate and complete statement designating the promises,
warranties, disclaimers of warranties, limitations or
modifications of remedies, or liquidated damages, including
those, if any, of the Manufacturer and/or the Supplier, which
were provided to Lessor by the Manufacturer and/or the
Supplier.
3. LESSEE'S WAIVER OF DAMAGES AND WARRANTIES FROM LESSOR.
(a) The Lessee leases the Equipment from the Lessor on an "AS IS,
WHERE IS, WITHOUT REPRESENTATION OR WARRANTY BASIS".
(b) THE LESSOR MAKES ABSOLUTELY NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(c) IF THE EQUIPMENT IS NOT PROPERLY INSTALLED, DOES NOT OPERATE
AS REPRESENTED OR WARRANTED BY THE MANUFACTURER AND/OR THE
SUPPLIER, OR IS UNSATISFACTORY FOR ANY REASON WHATSOEVER, THE
LESSEE SHALL MAKE ANY CLAIM ON ACCOUNT THEREOF SOLELY AGAINST
THE MANUFACTURER AND/OR THE SUPPLIER AND THE LESSEE HEREBY
WAIVES ANY SUCH CLAIM AGAINST THE LESSOR. Provided that the
Lessee is not in default under the Lease, all warranties from
the Manufacturer and/or the Supplier to the Lessor are
assigned to the Lessee solely for the term of the Lease for
the Lessee's exercise at the Lessee's sole expense.
(d) THE LESSEE SHALL INDEMNIFY AND HOLD THE LESSOR HARMLESS AND
SHALL BE RESPONSIBLE FOR ANY LOSS, DAMAGE OR INJURY TO PERSONS
OR PROPERTY CAUSED BY THE EQUIPMENT.
(e) NO REPRESENTATION OR WARRANTY BY THE MANUFACTURER, THE
SUPPLIER AND/OR ANY SALESPERSON OF EITHER IS BINDING ON THE
LESSOR NOR SHALL BREACH OF SUCH WARRANTY RELIEVE THE LESSEE OF
THE LESSEE'S OBLIGATIONS TO THE LESSOR.
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(f) IN NO CASE SHALL THE LESSOR BE LIABLE TO THE LESSEE FOR
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
4. PAYMENTS.
(a) Lessee agrees to make lease payments in advance.
(b) The Lessee shall cause to be made to the Lessor when due, all
Payments set forth in the Amortization Schedule attached
hereto.
(c) The first Payment on the Amortization Schedule shall be due on
November 1, 1999.
(d) Each Payment thereafter shall be due on the first day of the
month.
(e) If the first day of the month is a Saturday, Sunday or a
federal holiday, the Payment shall be due on the next business
day.
(f) The Lessor may, in its sole and absolute discretion, apply any
sums of the Lessee in the Lessor's possession to any of the
Lessee's Obligations (as hereinafter defined) under this
Lease.
(g) The Lessee shall be liable to the Lessor for any cost or
expense the Lessor incurs to preserve any of the Equipment or
for any taxes, assessments, fees, penalties, liens, or
encumbrances related to any of the Equipment or this Lease.
The Lessee shall reimburse the Lessor for any of the
foregoing, upon demand by the Lessor.
(h) Each Payment received will be applied to the Obligations in a
manner at the Lessor's sole and absolute discretion.
(i) THE LESSEE AGREES THAT TIME IS OF THE ESSENCE AND TO MAKE
PAYMENTS REGARDLESS OF ANY PROBLEMS THE LESSEE MIGHT HAVE WITH
THE EQUIPMENT INCLUDING ITS OPERATION, CAPABILITY,
INSTALLATION OR REPAIR AND REGARDLESS OF ANY CLAIM, SETOFF OR
DEFENSE THAT THE LESSEE MIGHT HAVE AGAINST THE MANUFACTURER,
THE SUPPLIER, ANY SALESPERSON OF EITHER OR ANY OTHER THIRD
PARTY.
(j) Without the Lessor's prior written consent, any Payment to the
Lessor of a smaller sum than due at any time under this Lease
shall not constitute a release or an accord and satisfaction
for any greater sum due, or to become due or which is in
dispute, regardless of any endorsement restriction, unless
otherwise agreed by both Parties in a signed writing.
5. TAXES, ASSESSMENTS AND FEES.
(a) The Lessee agrees:
(i) to pay all licensing, filing and registration fees;
(ii) to keep the Equipment free of all liens and
encumbrances;
(iii) to pay all personal property taxes assessed against
the Equipment; and
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(iv) to pay all other taxes, assessments, royalties,
license fees, duties, levies, charges, fees and
penalties which may be levied or assessed with
respect to the Equipment, its use or any interest
therein, or any lease Payments, including but not
limited to all taxes, however designated, levied or
assessed, whether upon the Lessee or the Lessor or
the Equipment or upon the sale, ownership, use or
operation thereof, excepting any taxes on income
levied on the Lessor.
(b) The Lessor may, at its option, pay on the Lessee's behalf such
taxes and other amounts, file applicable returns, and collect
from the Lessee full reimbursement plus an administrative fee
equal to two percent (2%) of the taxes and other amounts paid.
(c) The Lessee agrees to reimburse the Lessor for reasonable costs
incurred in collecting taxes, assessments, or fees for which
the Lessee is liable, and any collection charges attributable
thereto, including any attorney's fees and costs incurred by
Lessor.
(d) Except as expressly set forth to the contrary, all of the
above sums shall be due and payable by the Lessee to the
Lessor, on demand.
6. NOTICES.
Until the Lessor and the Lessee notify each other of any new address in
writing, any invoice or notice required by the Lease or by law is validly given
when mailed postage prepaid by first class mail or national overnight or courier
delivery service to the last known address or by fax pursuant to paragraph 17
(j) hereof.
7. ASSIGNMENTS.
(a) The Lessee agrees not to transfer, sell, assign, sublease,
pledge or encumber any of the Equipment or any rights under
this Lease without the prior written consent of the Lessor,
and even with the Lessor's consent, the Lessee shall remain
jointly and severally liable to the full extent with the
Lessee's assignee.
(b) The Lessor may assign its rights and obligations under this
Lease or the Lease in its entirety, all without the Lessee's
consent. The Lessor shall have the right to assign or sell all
or any portion of the Obligations (as defined in paragraph
11(g) hereof), all without the Lessee's consent. The Lessee
acknowledges and agrees that the Lessor may assign or sell
participation interests in all or any portion of the
Obligations. The Lessee agrees that in no event shall it have
or acquire any rights or claims against any assignees or
purchasers of participation interests.
(c) The Lessor may, at its option, assign its rights and interests
under this Lease or the Lease in its entirety without notice.
The Lessee agrees that the Lessor's assignee will have the
same rights and remedies that the Lessor now has. The Lessee
agrees that the rights of the Lessor's assignee will not be
subject to claims, defenses, or setoffs that the Lessee may
have against the Lessor. The Lessee stipulates that any such
assignment by the Lessor shall not materially change the
Lessee's duties, obligations or risks under this Lease.
8. THE EQUIPMENT.
(a) The Lessor has the right throughout the term of the Lease to
inspect the Equipment and has the right to affix and display a
notice of the Lessor's interest thereon.
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(b) The Equipment shall remain "personal property" whether or not
affixed to realty and shall not be part of any real property
on which it is located.
(c) The Lessee shall obtain landlord and/or mortgage waivers for
all of the Equipment in form and substance satisfactory to the
Lessor. The Lessee shall provide the Lessor with said waivers
concurrent with the execution of each Equipment Schedule.
(d) All additions, attachments, and accessories placed on the
Equipment shall become part of the Equipment.
(e) The Lessee agrees to maintain the Equipment so that it may be
removed from the property or building where located without
damage.
9. OPERATION AND TERMINATION.
(a) The Lessee shall be solely responsible for the installation,
operation, and maintenance of the Equipment, shall cause it to
be kept in good condition and running order, and shall cause
the Equipment to be used and operated only in compliance with
applicable laws. The Lessee shall pay all installation and
programming costs and all commissions in connection with
and/or with respect to the Equipment.
(b) The Lessee, at its expense, shall maintain in full force and
effect throughout the Lease term, the respective
Manufacturer's standard maintenance contract for the
Equipment.
(c) Upon return to the Lessor, all of the Equipment must be
eligible for immediate continuation of coverage under the
respective Manufacture's standard maintenance contracts. The
Lessee shall be liable for all costs and expenses to make all
of the Equipment eligible for such coverage.
(d) The Lessee shall cause the Equipment to be kept only at the
address specified in the Equipment Schedule 1 for that
Equipment, to never abandon or move any Equipment from the
specified address, except with the Lessor's written consent or
for turnover to the Lessor's agent.
(e) At least thirty (30) days prior to the end of the Lease term
for any portion of the Equipment, the Lessee must contact the
Lessor, who will designate the return location within the
United States, and the Lessee shall, at the Lessee's expense,
immediately crate, insure and return that portion of the
Equipment to the designated location in as good condition as
when the Lessee received it, excepting only reasonable wear
and tear. Until the Lessor actually receives the Equipment at
the return location, the Lease renews automatically from month
to month and the Lessee agrees to continue to make Payments
for that portion of the Equipment at the applicable rate
stated in Section 4(b) above.
10. PURCHASE OPTION.
(a) So long as no default exists hereunder and the Lease has not
been earlier terminated, the Lessee may at the end of the
Lease term of each Equipment Schedule, upon at least ninety
(90) days prior written notice to the Lessor, purchase all
(but not less than all) of the Equipment on that Equipment
Schedule on an "AS IS, WHERE IS, WITHOUT REPRESENTATION OR
WARRANTY BASIS" for the sum of $1.00.
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11. SECURITY INTEREST.
(a) To secure the Obligations, the Lessee hereby grants to the
Lessor, a first priority security interest in all present and
future Equipment, accounts, accounts receivable, instruments,
documents, contract rights, chattel paper, inventory in all
stages of manufacture, equipment, fixtures, goods, money,
deposit accounts, insurance policies, reserves, reserve
accounts, intellectual property, general intangibles, and
proceeds thereof presently existing or hereafter arising,
either now owned or hereafter acquired by the Lessee, and the
interest of the Lessee in any goods, products, and proceeds
thereof, and all books and records pertaining thereto
(hereinafter collectively, the "Collateral").
(b) The Lessee authorizes the Lessor to file financing statements
and/or fixture filings without Lessee's signature and, if the
signature is required by law, Lessee appoints Lessor as
Lessee's attorney-in-fact to execute such statements and
filings.
(c) The Lessee authorizes the Lessor to file any documents to
perfect or protect Lessor's interest in any intellectual
property, all without the Lessee's signature and, if a
signature is required by law, the Lessee appoints the Lessor
as the Lessee's attorney-in-fact to execute such documents.
(d) Lessee shall cooperate with Lessor and (i) shall execute any
and all documents in connection with filing financing
statements, documents and/or agreements to perfect, protect,
and evidence the Lessor's interest in the Collateral, (ii)
shall pay to Lessor any and all fees and costs in connection
with the financing statements, fixture filings and/or
documents to perfect or protect Lessor's interest in and to
the Collateral and (iii) shall take any and all actions
reasonably requested by Lessor to protect Lessor's interests
in and to the Collateral.
(e) The Lessee warrants and represents that it is the owner of all
of the Collateral and has full legal right to encumber the
same as set forth herein.
(f) None of the Collateral is subject to any lien, encumbrance or
security interest other than in favor of the Lessor.
(g) The security interest granted in Section 11(a) herein shall
secure the Lessee's performance and payment of all of its
obligations to the Lessor whether such obligations are now
existing or hereinafter incurred, however such obligations may
be evidenced, including without limitation, Payments,
interest, fees, charges, Surcharge, attorney's fees and costs
and any other obligation of the Lessee to the Lessor, whether
or not such obligations arise under the Lease (hereinafter
collectively, the "Obligations").
(h) The Lessee shall advise the Lessor within one (1) business day
if the Lessee adds to or changes any locations where any of
the Collateral is maintained.
(i) Upon payment in full of all Obligations, and, at the Lessee's
written request, and subject to the Lessee's execution of the
Lessor's release waiver (in form and substance satisfactory to
the Lessor), the Lessor agrees to release its security
interest under this Lease. The Lessee shall be responsible for
preparing and filing any termination statements reasonably
required in connection therewith, provided that the Lessor
shall cooperate with the Lessee and shall not unreasonably
withhold its consent and acknowledgment of the same.
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(j) The Lessee warrants that it maintains inventory in___________.
(k) The Lessee warrants that it maintains equipment in___________.
(l) The Lessee warrants that it maintains deposit accounts in ___.
(m) The Lessee warrants that it is in compliance with all
applicable statutes, regulations, ordinances, court decrees,
or other directives of the United States of America, and all
states, counties, municipalities and agencies with respect to
the rendition of its services and/or its conduct of business
and, without limiting the foregoing, the Lessee has filed all
federal, state and local tax returns and other reports it is
required to file and has paid or made adequate provisions for
payment of all such taxes, assessments and other government
charges; except as otherwise may have been disclosed in
writing to and acknowledged by the Lessor on or before the
date of execution of this Lease.
12. RISK OF LOSS AND INSURANCE.
(a) Until the Lessee has returned the Equipment to the designated
return location, the Lessee bears the entire risk of loss or
damage to the Equipment, regardless how arising.
(b) The Lessee shall immediately notify the Lessor of the
occurrence of any loss or other occurrence affecting the
Lessor's interests in and to any of the Equipment and the
Lessee shall make repairs or corrections at the Lessee's
expense. In such event and notwithstanding any damage or loss
to any and/or all of the Equipment, the Lessee agrees to
continue to meet all Payments and other Obligations as and
when the same come due.
(c) In the event of a loss or damage to any of the Equipment where
the cost of repairs or corrections is not cost effective,
Lessor shall have the right to require the Lessee to pay
immediately all remaining Payments and other charges becoming
due under the Lease after the date of such loss or damage,
plus any past due amounts under the Lease. For the purposes of
this section (c) only, the remaining Payments shall be
discounted by a rate equal to .05% per annum. The
determination as to whether the cost of repairs or corrections
is cost effective shall be in Lessor's sole and absolute
discretion.
(d) The Lessee agrees to keep the Equipment insured at the
Lessee's expense against risks of loss or damage from any
cause whatsoever. The Lessee agrees that such insurance shall
not be less than the unpaid balance of the Lease term with
respect to said Equipment plus the then-current fair market
value of the Equipment. The Lessee also agrees that the
insurance shall be in such additional amount as is reasonable
to cover the Lessor for public liability and property damage
arising from the Equipment or the Lessee's use of it. The
Lessee agrees to name the Lessor as the loss payee and an
additional insured. The Lessee shall ensure that the Lessor is
the Certificate Holder with respect to all insurance. On the
date of execution of each Equipment Schedule to this Lease,
the Lessee shall provide the Lessor with an insurance binder
with coverage in accordance with the terms of this Lease.
Within 5 days of execution of each Equipment Schedule, the
Lessee shall provide the Lessor with a Certificate Of Property
Insurance in favor of the Lessor. Each policy shall provide
that the insurance cannot be canceled without thirty days
prior written notice to the Lessor. Upon request by the
Lessor, the Lessee agrees to furnish proof of each insurance
policy including a certificate of insurance and a copy of the
policy. The proceeds of such insurance shall be applied at the
Lessor's sole election toward the replacement or repair of the
damaged portion of the Equipment or payment
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towards the Obligations. The Lessee appoints the Lessor as
attorney-in-fact to make any claim for, receive payment of, or
execute or endorse all documents, checks or drafts for loss or
damage or return of premium under such insurance.
(e) If the Lessee fails to obtain or maintain the insurance
described herein, the Lessor may, and shall not be obliged to,
obtain and maintain such insurance. The Lessee agrees to pay
to the Lessor the out-of-pocket cost of such insurance as
incurred by the Lessor plus an administration fee equal to 5%
of such cost. The Lessee shall have no right or claim to any
insurance benefits from Lessor.
13. INDEMNITY.
The Lessee agrees to indemnify and hold the Lessor and its affiliates,
officers, directors, employees, principals, shareholders and attorneys, agents,
representatives and consultants harmless from and against any and all losses,
damages, injuries, claims, demands, and expenses, including any and all
attorney's fees and costs arising from or caused directly or indirectly by any
actual or alleged use, possession, maintenance, condition (whether or not latent
or discoverable), operation, location, delivery, transportation or removal of
the Equipment, or arising from acts or omissions of the Lessee, acts or
omissions of any agent, assignee, or delegee of the Lessee or otherwise in
connection with the leasing of any or all of the Equipment herein. The Lessee's
obligation to provide such indemnification shall survive the term of this Lease.
Should the Lessee be entitled under applicable law to revoke its acceptance of
any of the Equipment, the Lessee agrees to pay and indemnify the Lessor for any
payment made by the Lessor to the Lessee, the Manufacturer and/or to the
Supplier.
14. ATTORNEY'S FEES.
(a) The Lessee shall pay to the Lessor any and all attorney's fees
and costs, any accountant's fees, costs, and any out of pocket
expenses incurred by the Lessor:
(i) in the negotiation, preparation and/or administration
of this Lease, any amendments thereto, any Equipment
Schedules, any Guarantees, and any related documents
related to any of the foregoing;
(ii) in connection with any disagreement or litigation
arising out of, or in connection with any of the
foregoing; or
(iii) in any restructuring of the Obligations.
(b) In addition, if it becomes necessary for the Lessor to utilize
collection efforts or engage an attorney to enforce its rights
against the Lessee, the Lessee agrees to pay all costs of
collection, including actual attorney's fees and costs whether
or not suit is filed and in all proceedings arising under the
Lease, including any arbitration, bankruptcy proceeding, civil
action, mediation, counterclaim or post-judgment action or
appeal with respect to any of the foregoing. All attorney's
fees and costs shall be payable by the Lessee to the Lessor on
demand.
(c) The Lessee promises to pay and agrees that the Lessor may
deduct from monies otherwise due to the Lessee, all of the
above described attorney's fees, costs and out-of-pocket
expenses.
(d) In the event any Obligations become due and remain unpaid in
part or in their entirety, the Lessor, at its sole option, may
do one or more of the following:
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(i) require the Lessee to pledge additional assets to
secure the Obligations; or
(ii) declare an Event of Default under paragraph 15 and
exercise its rights and remedies hereunder or
otherwise available to it.
15. DEFAULT.
The Lessee shall be in default of this Lease upon any of the following
events (an "Event of Default"):
(a) The Lessee fails to pay any amount when due under the Lease;
(b) The Lessee assigns, moves, pledges, subleases or sells any of
the Equipment or attempts to do so, without the Lessor's
written authorization;
(c) The Lessee breaches any of its warranties under this Lease or
under any other agreement with the Lessor;
(d) The Lessee fails to pay and/or perform any of its Obligations
when the same come due;
(e) Any execution or writ of process is issued in any action or
proceeding to seize or detain any of the Equipment;
(f) The Lessee gives the Lessor reasonable cause to be insecure
about the Lessee's willingness or ability to perform any of
the Lessee's Obligations;
(g) The Lessee becomes insolvent or unable to pay debts when due,
stops doing business as a going concern, merges, consolidates,
transfers all or substantially all of its assets, makes an
assignment for the benefit or creditors, appoints a trustee or
receiver or undergoes a substantial deterioration of financial
health;
(h) The Lessee files a petition or a petition is filed against the
Lessee under the United States Bankruptcy Code or the Lessee
commences, authorizes or acquiesces in the commencement of a
proceeding under any law for the protection from creditors;
(i) Any default under any other agreement or document between
and/or concerning the Lessee and the Lessor;
(j) The Lessee fails to perform any of its covenants and/or
reporting obligations to the Lessor under this Lease when and
as required herein;
(k) The Lessee fails to comply in a timely manner with any
federal, state, or local tax or other reporting requirements
(including without limitation, requirements relating to the
filing of payroll tax returns), or fails to make timely
payment of any tax or municipal obligations, or if any
federal, state, or local government asserts or files any tax
or other statutory lien or levy on, or claim of set-off
against, any of the Equipment or any other Collateral, or
otherwise claims or asserts in writing that the Lessee has
failed to comply with its tax or other payment obligations or
otherwise states in writing its intention to file any lien
against any of the Equipment or any of the other Collateral
for failure to pay any or all required tax or other
obligations;
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(l) If any representation or warranty contained herein or any
information, report, financial statement, exhibit, certificate
or schedule furnished by or on behalf of the Lessee, whether
provided prior to, simultaneous with or after the execution of
this Lease, contains any material misstatement of fact or
omitted or omits to state any material fact necessary to make
the statements herein or therein not misleading.
Upon the occurrence of an Event of Default hereunder, a surcharge of 4%
per annum (a "Surcharge") on the Obligations shall immediately be charged to
Lessee without notice and thereafter shall be payable by Lessee to Lessor until
and inclusive of the date the Event of Default has been cured, or in the event
that the Obligations have been accelerated, until all Obligations have been paid
in full, including the period following entry of any judgment on or relating to
any of the Obligations. The Surcharge shall accrue on any such judgment until
actual receipt by the Lessor of payment in full of all Obligations (including
the Surcharge) and said judgment. The Surcharge shall be secured by the
Collateral.
After the occurrence of an Event of Default, Lessor shall be entitled
to apply any payments or proceeds received by it and/or any monies of Lessee
held by Lessor against the Obligations, whether interest, Payments, Surcharge,
attorney's fees and costs, costs of collection or otherwise, in such manner and
order as Lessor may, at its sole discretion, determine.
16. REMEDIES.
Should the Lessee default under this Lease, the Lessor has the right to
collect and to exercise any or all of the following:
(i) the Lessor may seek any and all remedies available for the
enforcement of this Lease at law or in equity, and without
limitation, the Lessor may also, in its sole discretion, but
shall not be obligated to, declare all Obligations to be
forthwith due and payable and/or exercise any or all of its
rights to collect on the Collateral. If it becomes necessary
for the Lessor to utilize collection efforts to enforce its
rights against the Lessee, the Lessee agrees to pay all
expenses in connection therewith.
(ii) The Lessor may, without notice, accelerate all sums under the
Lease and under any other agreement with the Lessor and
require the Lessee to immediately pay the Lessor all
Obligations including but not limited to, all sums that are
already due and those that will become due, including the
lease-end Purchase Options of all of the Equipment;
(iii) At the time of an Event of Default or at any time thereafter,
the Lessor has the immediate unfettered right to take
possession of all of the Equipment and all of the other
Collateral without any court order or other process of law and
for such purposes may enter upon any premises where any
Equipment or other Collateral may be, remove the same,
foreclose upon the same, sell or re-lease any or all of the
Equipment and/or other Collateral, and apply any proceeds to
the Obligations in a manner in the Lessor's sole and absolute
discretion. The Lessee shall be liable to the Lessor for all
reasonable costs and expenses incurred in the repossession,
recovery, storage, repair, sale, re-lease or other disposition
of the Equipment and the other Collateral;
(iv) The Lessor has the right to exercise any remedy at law or
equity, notice thereof being expressly waived by the Lessee;
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(v) The Lessor's action or failure to act on one remedy
constitutes neither an election to be limited thereto nor a
waiver of any other remedy or a release of the Lessee from any
liability.
17. MISCELLANEOUS.
(a) The Lessee will provide the Lessor with copies of its: annual
audited financial statements, if available, and any in-house
prepared annual financial statements within seventy-five (75)
days of the end of the Lessee's fiscal year, monthly financial
statements within thirty (30) days after the end of each
calendar month and IRS 940 and 941 within thirty-one (31) days
after the end of each calendar quarter. Further, upon any
request by the Lessor, within five (5) business days, the
Lessee shall provide the Lessor with a detailed list of all
Collateral.
(b) All installation and servicing with respect to the Equipment
shall be the sole responsibility of the Lessee.
(c) The Lessee shall within one (1) business day, advise the
Lessor, in writing if:
(i) the Lessee's place of business and record keeping is
changed or a new place is added or the Lessee changes
its jurisdiction of incorporation;
(ii) the Lessee adds to or changes any locations in which
any of the Equipment or any of the Collateral is
maintained;
(iii) there are any changes in the senior management of the
Lessee or should any person previously authorized to
execute documents on behalf of the Lessee be
terminated or relieved of their authority to execute
such documents;
(iv) there is any change of greater than five percent (5%)
in the ownership of the Lessee within any thirty (30)
day period.
(v) there is, or is threatened, any attachment or other
legal process levied against the Lessee including
without limitation, any assessment made concerning
any tax liability, if any taxing authority provides
any notice of an intent to place a levy or lien, or
if any tax lien or levy is actually recorded;
(vi) there are any previously undisclosed adverse changes
with respect to the Lessee's financial condition or
any of the Collateral;
(vii) the Lessee dissolves, merges or consolidates with or
into any corporation or otherwise changes its
identity, including without limitation the use of a
new trade name, or corporate or business structure;
and/or
(viii) the Lessee changes its name or uses any trade name
not previously disclosed in writing to the Lessor.
(d) The Lessee hereby grants a limited power of attorney to the
Lessor to execute and file financing statements pursuant to
the Uniform Commercial Code, or any similar legislation in the
Lessee's name, to execute and file any documents or
instruments to protect or perfect the Lessor's interest in any
Collateral located in international
12
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jurisdictions (collectively, the "International Documents")
and/or any Collateral consisting of intellectual property, to
sign and file with the Internal Revenue Service IRS Form 8821,
on behalf of the Lessee; and to endorse the Lessee's name, and
to negotiate or to deposit, any and all checks, notes, drafts,
or other orders for payment of money payable or endorsed to
the Lessee which come into the Lessor's possession hereunder.
(e) The Lessee affirms that its hardware and software are
designed, or will be modified prior to December 31, 1999, to
be used prior to, during and after the calendar year 2000 A.D.
and such hardware and software will operate during such time
period without error, including errors relating to date data,
century recognition, leap year calculations, calculations
which accommodate same century and multi-century formulas and
date values, and date data interface values that reflect the
century. The Lessee also agrees to hold the Lessor harmless
for any transfers or funds occasioned by the inability of any
banks, other financial institutions and/or the federal reserve
system to properly accommodate dates after December 31, 1999.
(f) The Lessee acknowledges that any reports, audits, credit
checks or similar investigations which have been or will be
performed by or for the Lessor's own purposes are not for the
benefit of the Lessee, and the Lessee agrees that it has no
right to rely thereon.
(g) The Lessor and the Lessee acknowledge that this Lease shall
not create any agency, partnership or joint venture
relationship between the Lessor and the Lessee.
(h) Amendments to this Lease shall be made in writing and must be
signed by both parties.
(i) The Lessee agrees to indemnify and hold the Lessor, its
affiliates, officers, directors, employees, principals,
shareholders, agents, attorneys, and representatives harmless
from and against any loss, liability, expense, damage or
injury suffered or sustained resulting from third-party claims
and arising from acts or omissions of the Lessee, or acts or
omissions of any agent, assignee, broker or delegee of the
Lessee. The Lessee's obligations to provide such
indemnification shall survive the term of this Lease.
(j) Whenever, by the terms of this Lease, notice shall be given,
such notice shall be in writing and sent by facsimile
transmission to the fax numbers provided below (provided
evidence of transmission is maintained), or national overnight
or courier delivery service:
Lessee: Fax No. 000-000-0000
Lessor: Fax No. 000-000-0000
(k) No waiver of or failure to enforce any provisions of this
Lease shall be deemed, or shall constitute, a waiver of any
other provision of this Lease, nor shall such waiver or
failure to enforce constitute a continuing waiver of any
provision of this Lease.
(l) The Parties hereby represent that each has caused, and will
cause, the proper corporate or individual actions to be taken
by each respectively, to effectuate the rights and obligations
granted under this Lease.
(m) All the terms and provisions of this Lease shall be binding
upon, inure to the benefit of and shall be enforceable by the
successors in interest of the respective Parties hereto.
Nothing contained herein, expressed or implied is intended nor
shall it be construed to
13
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confer to or give to any person, firm, or corporation other
than the parties hereto any rights or remedies under or by
reason of this Lease.
(n) Reference to the masculine shall include the feminine and
neuter, and vice versa. Reference to the singular shall
include the plural, and vice versa.
(o) This Lease sets forth the entire agreement and understanding
between the Parties as to the subject matter hereof, and
supersedes all prior discussions between them concerning the
subject matter hereof. No party shall be bound by any
condition, definition, warranty, or representation, regarding
the terms of this Lease other than as expressly set forth or
provided for in this Lease, or as may be, on or subsequent to
the date hereof, set forth in writing and signed by the
Parties hereto.
(p) This Lease may be executed in any number of counterparts, each
of which shall be an original but all of which shall
constitute the entire instrument. Signature pages may be
exchanged by facsimile to expedite the closing, with original
signatures to be exchanged as soon as possible thereafter. In
any event, the Lessee must provide copy of this Lease with
original signatures to the Lessor within three (3) business
days.
(q) By executing this Lease, the Parties acknowledge that they
have been fully advised by independent counsel as to the
ramifications of the terms and provisions of this Lease, and
the signatories have authority to act on behalf of the
respective entities in executing this Lease, for the purposes
herein contained.
(r) The execution and delivery of this Lease, and the performance
by the Lessee of its obligations hereunder, do not conflict
with any provision of law applicable to the Lessee or of any
agreement binding on it.
(s) This Lease is expressly limited so that in no event
whatsoever, shall the amounts paid or agreed to be paid to the
Lessor, exceed the maximum interest rate permissible under
applicable law. If, from any circumstances whatsoever, the
maximum interest rate limit validly prescribed by applicable
law is transcended, then, ipso facto the obligation to be
fulfilled shall be reduced to the maximum interest rate
prescribed by applicable law. If from any circumstance, the
Lessor shall ever receive interest, or anything that might be
deemed interest under applicable law that would exceed the
highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the non-interest
portions of the Obligations under this Lease or under any
other agreement between the Lessor and the Lessee. If the
non-interest portions of the aforementioned Obligations are
paid in full, such excess amount shall be refunded to the
Lessee.
(t) Bank wire and lock box fees, search and filing fees, messenger
costs, postal and/or overnight mail and other costs incurred
by the Lessor (including, but not limited to, attorney's fees,
costs and insurance bonding premiums) will be charged to the
Lessee as they are incurred.
(u) In the event any payments received on behalf of the Lessee are
subsequently returned by the Lessee's bank for insufficient
funds or any other reason which was not caused by a mistake on
the part of the Lessor, the Lessee shall be assessed by the
Lessor, a charge of the greater of $50, or the maximum allowed
under law.
14
-14-
(v) The provisions of this Lease are severable. Should any
provisions herein be found to be invalid or unenforceable by a
court of competent jurisdiction, the other provisions shall
remain in full force and effect as though the invalid or
unenforceable provision were never a part hereof. Any
provision held in conflict with any statute or rule of law
shall be deemed inoperative only to the extent of such
conflict and shall be modified to conform with such statute or
rule.
(w) To the extent permitted by applicable law, the Lessee hereby
waives any rights to:
(i) cancel or repudiate this Lease;
(ii) revoke acceptance of or reject any of the Equipment;
(iii) claim a security interest in any of the Equipment;
(iv) accept partial delivery of any of the Equipment;
(v) sell or dispose of any of the Equipment upon
rejection or revocation;
(vi) seek "cover" in substitution for the Lease from the
Lessor.
18. CONSENT TO NEW YORK LAW, JURISDICTION, VENUE, AND NON-JURY TRIAL.
The Lessee stipulates that:
(a) this Lease shall be deemed fully executed, performed, governed
by and construed in accordance with the laws of the State of
New York; and
(b) in an action, proceeding, or appeal on any matter related to
or arising out of this Lease, the Lessee:
(i) shall be subject to and submit to the jurisdictions
of the States of New York, California and Illinois,
including any state or federal courts sitting
therein, and all court rules therefrom and waives any
and all rights under the laws of any jurisdictions to
object to such jurisdictions;
(ii) shall accept venue in any federal or state court in
New York, California or Illinois;
(iii) any claims by Lessee against the Lessor shall be
brought in the Supreme Court of the State of New York
or the Superior Court of the State of California
only; and
(iv) THE LESSEE AND LESSOR HEREBY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY in any action, suit, counterclaim
or cross-claim arising in connection with, out of or
otherwise relating to this Lease, any other documents
between the Parties, the Obligations, the Collateral,
or in any transaction arising therefrom and/or
related thereto.
15
-15-
LENDER: PRINVEST FINANCIAL CORP
By:
--------------------- ----------------------
Officer's Signature Date
ACCEPTED AND AGREED TO:
BORROWER: GLOBALNET, LLC
By:
--------------------- ----------------------
Manager's Signature Date
---------------------
Print Name & Title
BORROWER'S ABOVE SIGNATURE MUST BE NOTARIZED.
STATE OF ILLINOIS, COUNTY OF DUPAGE
Lessee's Acceptance And Agreement Sworn To And Subscribed Before Me This 8th Day
of November 1999.
-----------------------------------
Notary Public/Justice of the Peace
16
-16-
BORROWER: GLOBALNET, LLC
By:
--------------------- ----------------------
Manager's Signature Date
---------------------
Print Name & Title
BORROWER'S ABOVE SIGNATURE MUST BE NOTARIZED.
STATE OF ILLINOIS, COUNTY OF DUPAGE
Lessee's Acceptance And Agreement Sworn To And Subscribed Before Me This 8th Day
of November 1999.
-----------------------------------
Notary Public/Justice of the Peace
17
Page 1
GlobalNet, LLC - Lease Amortization Schedule
--------------------------------------------------------------------------------
Compound Period ........................ : Monthly
Nominal Annual Rate..................... : 22.000%
Periodic Rate........................... : 1.8333%
Daily Rate.............................. : 0.06027%
CASH FLOW DATA
Event Start Date Amount Number Period End Date
--------------------------------------------------------------------------------
1 Loan 10/15/1999 5,091,835.14 1
2 Payment 11/01/1999 173,507.32 42 Monthly 04/01/2003
AMORTIZATION SCHEDULE - Normal Amortization
Date Payment Interest Principal Balance
-------------------------------------------------------------------------------------------
Loan 10/15/1999 5,091,835.14
1 11/01/1999 173,507.32 52,173.87 121,333.45 4,970,501.69
2 12/01/1999 173,507.32 91,125.86 82,381.46 4,888,120.23
3 01/01/2000 173,507.32 89,615.54 83,891.78 4,804,228.45
4 02/01/2000 173,507.32 88,077.52 85,429.80 4,718,798.65
5 03/01/2000 173,507.32 86,511.31 86,996.01 4,631,802.64
6 04/01/2000 173,507.32 84,916.38 88,590.94 4,543,211.70
7 05/01/2000 173,507.32 83,292.21 90,215.11 4,452,996.59
8 06/01/2000 173,507.32 81,638.27 91,869.05 4,361,127.54
9 07/01/2000 173,507.32 79,954.00 93,553.32 4,267,574.22
10 08/01/2000 173,507.32 78,238.86 95,268.46 4,172,305.76
11 09/01/2000 173,507.32 76,492.27 97,015.05 4,075,290.71
12 10/01/2000 173,507.32 74,713.66 98,793.66 3,976,497.05
13 11/01/2000 173,507.32 72,902.45 100,604.87 3,875,892.18
14 12/01/2000 173,507.32 71,058.02 102,449.30 3,773,442.88
15 01/01/2001 173,507.32 69,179.79 104,327.53 3,669,115.35
16 02/01/2001 173,507.32 67,267.11 106,240.21 3,562,875.14
17 03/01/2001 173,507.32 65,319.38 108,187.94 3,454,687.20
18 04/01/2001 173,507.32 63,335.93 110,171.39 3,344,515.81
19 05/01/2001 173,507.32 61,316.12 112,191.20 3,232,324.61
20 06/01/2001 173,507.32 59,259.28 114,248.04 3,118,076.57
21 07/01/2001 173,507.32 57,164.74 116,342.58 3,001,733.99
22 08/01/2001 173,507.32 55,031.79 118,475.53 2,883,258.46
23 09/01/2001 173,507.32 52,859.74 120,647.58 2,762,610.88
24 10/01/2001 173,507.32 50,647.87 122,859.45 2,639,751.43
25 11/01/2001 173,507.32 48,395.44 125,111.88 2,514,639.55
26 12/01/2001 173,507.32 46,101.73 127,405.59 2,387,233.96
27 01/01/2002 173,507.32 43,765.96 129,741.36 2,257,492.60
28 02/01/2002 173,507.32 41,387.36 132,119.96 2,125,372.64
29 03/01/2002 173,507.32 38,965.17 134,542.15 1,990,830.49
30 04/01/2002 173,507.32 36,498.56 137,008.76 1,853,821.73
31 05/01/2002 173,507.32 33,986.73 139,520.59 1,714,301.14
Please Acknowledge ---------------------------------- (Sign and date)
18
Page 2
GlobalNet, LLC - Lease Amortization Schedule
Date Payment Interest Principal Balance
-------------------------------------------------------------------------------------------
32 06/01/2002 173,507.32 31,428.85 142,078.47 1,572,222.67
33 07/01/2002 173,507.32 28,824.08 144,683.24 1,427,539.43
34 08/01/2002 173,507.32 26,171.56 147,335.76 1,280,203.67
35 09/01/2002 173,507.32 23,470.40 150,036.92 1,130,166.75
36 10/01/2002 173,507.32 20,719.72 152,787.60 977,379.15
37 11/01/2002 173,507.32 17,918.62 155,588.70 821,790.45
38 12/01/2002 173,507.32 15,066.16 158,441.16 663,349.29
39 01/01/2003 173,507.32 12,161.40 161,345.92 502,003.37
40 02/01/2003 173,507.32 9,203.40 164,303.92 337,699.45
41 03/01/2003 173,507.32 6,191.16 167,316.16 170,383.29
42 04/01/2003 173,507.32 3,124.03 170,383.29 0.00
Please Acknowledge ---------------------------------- (Sign and date)
19
As the Lender will provide the Borrower with ongoing receipt and application
information as detailed in this Term Sheet, the Lender reserves the right to
charge the Borrower for time and materials should the Borrower request the
Lender to provide additional detailed reconciliations and/or copies of materials
previously provided.
The interest rates, fees and other charges, authorized advance rates: credit
limits and other terms and conditions contained herein are subject to change
with a 30-day advance written notice by the Lender. This Term Sheet, and any
amendments thereto, commits Lender to the financing against collateral in which
the Lender has (i) a first priority, perfected security interest, (ii) been
assigned the proceeds therefrom and (iii) in its sole discretion, accepted for
financing in a specific written acknowledgement delivered to the Borrower or, if
no written acknowledgement is so delivered, for which the Lender has actually
advanced loan proceeds. Borrower acknowledges that the Lender is under no
obligation to make any Advances or provide any Draws hereunder and Lender, at
its sole discretion, reserves the right to fund or decline to fund any such
request for any reason or for no reason.
ACCEPTED AND EXECUTED
LENDER: PRINVEST FINANCIAL CORP
By:
--------------------- ----------------------
Officer's Signature Date
ACCEPTED AND AGREED TO:
BORROWER: GLOBALNET, LLC
By:
--------------------- ----------------------
Manager's Signature Date
---------------------
Print Name & Title
BORROWER'S ABOVE SIGNATURE MUST BE NOTARIZED.
STATE OF ILLINOIS, COUNTY OF DUPAGE
Lessee's Acceptance And Agreement Sworn To And Subscribed Before Me This 8th Day
of November 1999.
-----------------------------------
Notary Public/Justice of the Peace
