Exhibit 10.18
EQUIPMENT LEASE
EQUIPMENT LEASE (together with any Schedules (as defined below) delivered
by the parties with respect hereto, this "LEASE"), made as of the 10th day of
December, 1999 by and between ALCATEL USA FINANCING, INC., a Delaware
corporation, with offices at 0000 Xxxx Xxxx, Xxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
(the "LESSOR") and ZIPLINK, INC., a Delaware corporation with a principal place
of business at 000 Xxxxxxxxxx Xx., Xxxxxx, XX 00000 (the "LESSEE"). In
consideration of the mutual promises herein contained, the parties hereto agree
as follows:
ARTICLE 1 - LEASE
1.01 The Lessor hereby leases to the Lessee and the Lessee hereby leases
from the Lessor, property (collectively, the "EQUIPMENT" and, individually, an
"ITEM OF EQUIPMENT") described in the Schedules now or hereafter executed and
delivered by the parties, which Schedules shall be made a part hereof
(collectively, the "SCHEDULES" and, individually, a "SCHEDULE"). In the event of
any conflict between any provision of this Lease and any provision of any
Schedule, the terms of such Schedule shall control.
ARTICLE 2 - TERM
2.01 The lease term for each Item of Equipment ("LEASE TERM") shall
commence (the "LEASE COMMENCEMENT DATE") upon the earlier to occur of (i) the
date that the Lessor becomes liable for payment of the purchase price of such
Item of Equipment under the applicable purchase order (the "PURCHASE ORDER")
from the manufacturer or other seller (the "VENDOR") and related Assignment of
Purchase Order and Security Interest with respect to such Item of Equipment,
(ii) the date the Lessee executes and delivers a Certificate of Acceptance of
Equipment (a "CERTIFICATE OF ACCEPTANCE") in the form attached to the applicable
Schedule and made a part hereof with respect to such Item of Equipment and such
Certificate of Acceptance is accepted by Lessor or (iii) the date of delivery of
such Item of Equipment pursuant to the Product Purchase and Services Agreement
("Purchase Agreement") therefor executed by the Lessee and the Vendor and
assigned to the Lessor and shall expire on the Lease Expiration Date as set
forth in the applicable Schedule unless earlier terminated, renewed or extended
and such Items of Equipment are returned, all according to the terms of this
Lease and the applicable Schedule (in which case such other termination or
expiration date shall be the "LEASE EXPIRATION DATE"). Notwithstanding the
foregoing, the rent for any Item of Equipment shall commence on the First
Periodic Rent Payment Date as set forth in the applicable Schedule. The Lessee
will signify its receipt of the applicable Item of Equipment by the execution
and delivery to the Lessor of a Certificate of Acceptance; provided that
Lessee's failure to execute and deliver a Certificate of Acceptance with respect
to an Item of Equipment shall not release the Lessee from its obligations
hereunder or with respect to any Item of Equipment. The Lessee's execution and
delivery to the Lessor of the Certificate of Acceptance with respect to each
Item of Equipment shall conclusively establish as between the Lessor and the
Lessee that such Item of Equipment has been shipped to and accepted by the
Lessee for all purposes of this Lease, notwithstanding any defect with respect
to design, manufacture or condition or in any other respect.
ARTICLE 3 - RENT
3.01 AMOUNT. The rent of any and every Item of Equipment shall be the
amount designated in the applicable Schedule. The Lessee shall pay said rent
monthly, in the amounts and at the times set forth in the
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applicable Schedule, to the Lessor at the address indicated above, or to such
other person or at such other place as the Lessor may from time to time
designate.
3.02 DEFAULT. A default shall occur if:
(a) the Lessee with regard to any Item or Items of Equipment fails to pay
any rent or other amount herein provided within five (5) days after the same is
due and payable;
(b) any execution or any other writ of process shall be overtly threatened
or issued in any action or proceeding against the Lessee whereby any Item of
Equipment may be seized, taken or restrained;
(c) a proceeding in bankruptcy, receivership or insolvency shall be
instituted by or against the Lessee, any guarantor of any of the Lessee's
obligations hereunder (each such guarantor referred to as a "GUARANTOR") or the
respective property of the Lessee or any Guarantor and, if any such proceeding
is commenced against the Lessee or any Guarantor, such proceedings shall not
have been dismissed within sixty (60) days of such commencement;
(d) the Lessee or any Guarantor shall enter into any arrangement or
composition with their respective creditors;
(e) the Lessee, with regard to any Item or Items of Equipment, fails to
observe, keep or perform any term, covenant or agreement contained in SECTIONS
6.01, 8.02 or 11.02, or any representation or warranty made by the Lessee or a
Guarantor herein, in any Guaranty (defined below) or in any certificate or other
document delivered in connection with this Lease shall be incorrect in any
material respect on the date made;
(f) the Lessee, with regard to any Item or Items of Equipment, fails to
observe, keep or perform any other provision of this Lease required to be
observed, kept or performed by the Lessee and such failure continues uncured for
ten (10) days after notice thereof from the Lessor to the Lessee;
(g) a Guarantor, if any, with regard to any Item or Items of Equipment,
fails to observe, keep or perform any provision of the guaranty agreement with
respect to the obligations of the Lessee hereunder entered into by such
Guarantor (such guaranty agreement, as amended, supplemented or otherwise
modified from time to time, is referred to as a "Guaranty") required to be
observed, kept or performed by said Guarantor and such failure continues uncured
for such period of time, if any, as set forth in such Guaranty;
(h) for any reason a Guaranty, if any, with regard to any Item or Items of
Equipment, ceases to be in full force and effect; any Guarantor or any other
person shall institute an action seeking a determination that a Guaranty shall
not be in full force and effect; any action shall be taken to discontinue a
Guaranty or to assert the invalidity of a Guaranty; or any Guarantor that is a
natural person shall die;
(i) the Lessee or any Guarantor shall default under any material credit
facility, conditional sales agreement or lease after the expiration of grace or
cure periods, if any, related thereto; or
(j) the Lessor shall cease to be the owner, or have a first priority
perfected security interest in, the Equipment or any portion thereof, except
where such cessation results from the Lessee's valid exercise of its purchase
option pursuant to Article 13.01 below.
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Upon the occurrence of a default, the Lessor shall have the right to
exercise any one or more of the following remedies:
(1) To declare the entire amount of monthly rent (up to the Stipulated
Loss Value determined as of the date of default) and any other amounts
hereunder immediately due and payable as to any or all Items of
Equipment shipped to and received by Lessee, without presentment,
demand or notice to the Lessee of any kind, all of which are hereby
expressly waived by the Lessee;
(2) To xxx for and recover all rents and other payments then accrued or
thereafter accruing, with respect to any or all Items of Equipment,
and all damages for the breach of this Lease;
(3) To demand that the Lessee deliver any or all Items of Equipment
immediately to the Lessor at the Lessee's expense to such location in
the continental United States as the Lessor shall specify, or to take
possession of any or all Items of Equipment, after notice to Lessee if
so required by law, wherever the same may be located, without any
court order or other process of law. After having taken possession of
any such Item of Equipment, the Lessor, at its option and in its
discretion, shall have the right to, and may retain, keep idle, sell,
lease or otherwise dispose of any such Item of Equipment. The Lessee
hereby waives any and all reasonable damages occasioned by such taking
of possession or other actions or inactions which the Lessor is
allowed hereunder. Any said taking of possession shall not constitute
a termination of this Lease as to any or all Items of Equipment unless
the Lessor expressly so notifies the Lessee in writing;
(4) To terminate this Lease as to any or all Items of Equipment; or
(5) To pursue any other remedy at law or in equity.
Notwithstanding any such repossession, or any other action that the Lessor
may take, the Lessee shall be and remain liable for the full performance of all
obligations to be performed by the Lessee under this Lease, including, without
limitation, paying to the Lessor all rents and other payments then accrued with
respect to any or all Items of Equipment plus liquidated damages for loss of the
bargain and not as a penalty equal to the Stipulated Loss Value for each Item of
Equipment as set forth in the applicable Schedule hereto as of the date of
default.
All such remedies are cumulative, and may be exercised concurrently or
separately and the election of one remedy will not be deemed to be an election
of remedies to preclude the exercise of any other remedy.
3.03 INTEREST. If the Lessee fails to pay any part of the rent herein
reserved or any other amount required by the Lessee to be paid to the Lessor
within five (5) days after the due date thereof, the Lessee shall pay to the
Lessor interest on such delinquent payment from the due date thereof until paid
at the rate of eighteen percent (18%) per annum or the highest rate allowed by
applicable law, whichever is less.
3.04 OFFSET. This Lease is a net lease. The Lessee's obligations to pay
rent and all other amounts payable by it hereunder, as well as its obligations
to perform or observe, as the case may be, its other agreements hereunder are
absolute and unconditional and are not and shall not be subject to any
abatement, reduction, offset, setoff, counterclaim, recoupment, defense,
deferment or interruption for any reason whatsoever. Except as expressly
provided herein, this Lease shall not terminate, nor shall the Lessee's
obligations hereunder be affected, by reason of any defect in, damage to or loss
of any Item of Equipment, the
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failure of the Vendor of any Item of Equipment to perform on its warranties or
any one of them, the prohibition of or interference with the Lessee's use
thereof by any person, corporation or governmental authority, the invalidity or
unenforceability or lack of due authorization of this Lease or any other
occurrence or circumstance whatsoever, whether similar or dissimilar to the
foregoing, it being the express intention of the Lessor and the Lessee that all
rent and other amounts payable, and all obligations hereunder to be performed,
by the Lessee shall be, and shall continue to be, payable or performed as the
case may be, in all events unless the obligation to pay or perform the same
shall be terminated pursuant to the express provisions of this Lease.
ARTICLE 4 - USE
4.01 MANNER OF USE. The Lessee shall at all times use the Equipment in a
careful and proper manner in conformity with the manufacturer's specifications
thereof and shall comply with all laws, ordinances and regulations and all
conditions of insurance required hereby which relate in any way to the
possession, use or maintenance of the Equipment. Nothing herein contained shall
be construed to deny the fact that the Equipment is, and shall at all times be
and remain, the sole and exclusive property of the Lessor as agreed in Article
11.01 hereof.
4.02 MARKINGS. If at any time during the term of this Lease, the Lessor
supplies the Lessee with labels, plates or other markings stating that the
Equipment is owned by the Lessor, the Lessee shall affix and keep the same in a
prominent place on the Equipment.
ARTICLE 5 - INSPECTION
5.01 The Lessor shall, at any and all times during business hours, have the
right to enter into and on the premises where any Item of Equipment may be
located for the purpose of inspecting the same; observing its use or for any
other purpose, including, without limitation, the enforcement of Lessor's rights
hereunder in the event of a default by Lessee or by any Guarantor under any
Guaranty. The Lessee shall give the Lessor immediate notice of any attachment or
other judicial process affecting any Item of Equipment and of any other default
hereunder and shall, whenever requested by the Lessor, advise the Lessor of the
exact location of each Item of Equipment. Notwithstanding the foregoing, Lessee
shall not remove any Item of Equipment from its original installation site
without the prior written consent of Lessor, which may be withheld or granted by
Lessor in its sole and absolute discretion. In addition, upon request the Lessee
shall provide Lessor with any records related to the maintenance of the
Equipment and the financial condition, operations and prospects of the Lessee or
any Guarantor, in each case as maintained by the Lessee or such Guarantor or
otherwise reasonably available to each entity or person.
ARTICLE 6 - ALTERATIONS AND REPAIRS
6.01 ALTERATIONS. Except as expressly required by law or Vendor warranty
directive, without the prior written consent of the Lessor, the Lessee shall not
make any alterations, additions or improvements to the Equipment. All additions
and improvements of whatsoever kind or nature made to any Item of Equipment
shall belong to and become the property of the Lessor on the termination of this
Lease or repossession with respect to such Item of Equipment.
6.02 REPAIRS. Lessee, at its own cost and expense, shall keep each Item of
Equipment in good repair, condition and working order and shall furnish any and
all parts, mechanisms and devices and services required
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to keep each such Item of Equipment in good repair, condition and working order
and to maintain any manufacturer warranties.
ARTICLE 7 - LOSS AND DAMAGE
7.01 RISK OF LOSS AND DAMAGE. The Lessee hereby assumes and shall bear the
entire risk of loss, damage and destruction to each Item of Equipment from any
and every cause from and after the Lease Commencement Date and thereafter until
such Item of Equipment has been returned to Lessor, as herein provided. No loss,
damage or destruction to any Item of Equipment or any part thereof shall impair
any obligation of the Lessee under this Lease, which shall continue in full
force and effect, including, but not limited to, the obligation to pay the rent
and all other amounts with respect to such Item of Equipment hereunder.
7.02 DUTIES OF LESSEE. In the event of loss, damage or destruction of any
kind (but not beyond economical repair) to any Item of Equipment during the
Lease Term with respect thereto and thereafter until such Item of Equipment has
been returned to Lessor, as herein provided, the Lessee, at the option of the
Lessor but at the sole cost and expense of Lessee, shall place the same in good
repair, condition and working order and in the condition required by this Lease.
7.03 STIPULATED LOSS VALUE. If any Item of Equipment is lost, stolen,
destroyed, requisitioned by any governmental authority or damaged beyond
economical repair, the Lessee shall pay the Lessor therefor in cash the
Stipulated Loss Value for such Item of Equipment as set forth in the applicable
Schedule hereto. On such payment, this Lease shall terminate with respect to
such Item of Equipment so paid for and the Lessee thereupon shall receive title
to such Item of Equipment "as-is," "where-is" and "with all faults" without
warranty, express or implied, with respect to any matter whatsoever. Prior to
such payment, no such loss, theft, destruction, requisition by any governmental
authority or damage beyond economical repair of any Item of Equipment shall
impair any obligation of Lessee under this Lease, all of which shall continue in
full force and effect including, but not limited to, the obligation to pay the
rent and all other amounts hereunder.
ARTICLE 8 - INSURANCE AND TAXES
8.01 INSURANCE. In respect of this Lease and the Equipment, the Lessee
shall maintain public liability, property damage and casualty insurance covering
each Item of Equipment in form and amount and with companies approved by the
Lessor and shall name Lessor, Lessee and Lessor's assignees as loss payees
and/or additional insureds, as their interests may appear. The Lessee shall pay
the premiums therefor, at its sole cost and expense, and shall deliver to the
Lessor at any time upon request evidence of such policies satisfactory to the
Lessor. Each insurer shall agree, by endorsement on the policy issued by it or
by independent instrument furnished to the Lessor, that such insurer will give
the Lessor thirty (30) day's prior written notice before the policy in question
shall be altered, canceled or terminated without renewal. Each insurance policy
shall require payment thereunder notwithstanding any breach or violation by the
Lessee of any warranties, declarations or conditions thereof. The proceeds of
any casualty insurance with respect to any Item of Equipment, at the option of
the Lessor, shall be applied:
(a) toward the restoration or repair of such Item of Equipment; or
(b) toward payment of the Lessee's obligations hereunder.
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The Lessee hereby appoints the Lessor as the Lessee's attorney in fact to
make claim for, receive payment of, and execute and endorse all documents,
checks or drafts for loss or damage under any said insurance policy. At the
Lessor's request, the Lessee shall furnish the Lessor with evidence reasonably
satisfactory to the Lessor that the insurance coverage required hereby is in
effect.
8.02 TAXES. The Lessee shall keep the Equipment free and clear of all
levies, liens and encumbrances of any nature whatsoever, and shall pay and shall
indemnify and hold harmless the Lessor from, all license fees, registration
fees, assessments, withholding charges and taxes (including without limitation,
property taxes, value-added taxes, sales and use taxes) (all such items, being
collectively, "CHARGES") which may now or hereafter be imposed on the ownership,
delivery, return, leasing, renting, sale, possession or use of the Equipment or
otherwise arising out of this Lease, excluding, however, all taxes on or
measured by the Lessor's net income. In addition, Lessee shall timely make all
filings, reports and returns required in connection with any Charges, and, in
the event that the Lessor shall be required to execute any filing, report or
return, such document shall be completed and delivered to the Lessor with
instructions for execution within a reasonable period prior to the due date
thereof. When requested by Lessor, Lessee shall provide to Lessor evidence of
any payment or filing required to be made by Lessee hereunder.
8.03 LESSOR'S PAYMENT. In case of failure of the Lessee to procure or
maintain any such insurance, to pay any such Charges or to perform any other
covenant or obligation of the Lessee hereunder, as herein before specified, the
Lessor shall have the right, but shall not be obligated, to effect such
insurance, pay such Charges or perform such other covenant or obligation, as the
case may be. In any such event, any payment made or expense incurred by the
Lessor in connection therewith shall be repaid by the Lessee to the Lessor
within ten (10) days of notice, and failure of the Lessee to timely repay the
same shall carry with it the same consequences, including, without limitation,
interest at eighteen percent (18%) per annum (or the highest rate allowed by
applicable law, whichever is less), as failure to pay any installment of rent.
ARTICLE 9 - WARRANTIES
9.01 LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS, OR
DAMAGE (INCLUDING, BUT NOT LIMITED TO, LOST REVENUES OR LOST PROFITS) CAUSED OR
ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY OR CONSEQUENTLY BY THE
EQUIPMENT OR ANY ITEM OF EQUIPMENT, BY ANY INADEQUACY THEREOF OR DEFICIENCY OR
DEFECT THEREIN OR BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING IN
STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING
OUT OF THIS LEASE. THE LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY
KIND, INCLUDING THOSE OF MERCHANTABILITY, DURABILITY, CONDITION OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE EQUIPMENT OR ANY ITEM OF EQUIPMENT
AND EXPRESSLY DISCLAIMS THE SAME. FURTHER, THE LESSEE CONFIRMS THAT IT DECIDED
TO LEASE THE EQUIPMENT ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS
RELIANCE UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY THE LESSOR,
AND THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS NOT A MANUFACTURER OR VENDOR OF
ANY PART OF THE EQUIPMENT. As to each Item of Equipment and so long as no
default shall exist hereunder, Lessor hereby assigns to Lessee, without
recourse, during the Lease Term with respect to any such Item of Equipment, all
applicable manufacturer's warranties which by their terms are so assignable;
provided upon the occurrence of a default hereunder, all warranties shall,
without further action, revert to the Lessor and the Lessor shall be entitled to
administer the same and receive all proceeds therefrom. The Lessee shall take
all
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reasonable action to enforce such warranties to the extent so assigned. All
claims or actions on any warranty so assigned shall be made and prosecuted by
the Lessee at its sole cost and expense, and the Lessor shall have no obligation
to claim any warranty. The Lessee shall keep the Lessor informed of any such
claim or action by the Lessee, and any recovery under such warranty shall be
payable jointly to the Lessor and the Lessee, as their interests may appear. All
proceeds of such recovery shall be used, in the Lessor's discretion, to repair
the Item of Equipment to which such warranty relates or pay amounts due
herewith.
ARTICLE 10 - PERSONAL PROPERTY
10.01 The Equipment is, and shall at all times be and remain, personal
property, notwithstanding that the Equipment or any part thereof may be, or
hereafter become, in any manner affixed or attached to, or embedded in, or
permanently resting on, real property or any building thereon, or attached in
any manner to that which is permanent as by means of cement, plaster, nails,
screws or otherwise. If requested by the Lessor, the Lessee shall obtain, prior
to or after the delivery of any Item of Equipment, a certificate in form
satisfactory to the Lessor from each party having an interest in the real
property where any Item of Equipment may be located, waiving any claim with
respect to such Item of Equipment.
ARTICLE 11 - OWNERSHIP AND ASSIGNMENT
11.01 OWNERSHIP. The Equipment is, and shall at all times be and remain,
the sole and exclusive property of the Lessor. The Lessee shall have no right,
title or interest therein, except as expressly set forth in this Lease. Lessee
will execute and deliver to Lessor all such instruments and documentation
reasonably requested by Lessor confirming Lessor's ownership interest in the
Equipment. To the extent that the Lessee is deemed to receive any interest in
the Equipment or related warranties or that this Lease shall constitute a
financing under applicable law, then Lessee hereby grants to the Lessor a
security interest in and to the Equipment, all warranties related thereto and
the proceeds from the foregoing. Lessee agrees to execute and file Uniform
Commercial Code financing statements and to take whatsoever action as is
requested by the Lessor necessary or beneficial to protect or perfect the
Lessor's interest in any or all of this Lease, any Schedule, the payments due
hereunder, the Equipment and the proceeds of the foregoing. Lessor may file a
copy of this Lease, as well as any Schedule, as a financing statement. To
facilitate the foregoing, the Lessee covenants that it will not move any
Equipment from the site of its delivery (any such removal also requiring the
written consent of the Lessor), change its principal place of business or chief
executive office from its address as set forth in the heading of this Lease or
change its name (or do business in any other name) in each case without
providing to the Lessor at least thirty (30) days' prior written notice.
11.02 ASSIGNMENT. Without the prior written consent of the Lessor, the
Lessee shall not:
(a) assign, transfer, pledge or hypothecate this Lease, the Equipment, any
Item of Equipment or any interest in such Equipment; or
(b) sublet or lend the Equipment or any Item of Equipment, or permit the
Equipment or any Item of Equipment to be used by anyone other than the
Lessee or the Lessee's employees.
11.03 LESSOR'S ASSIGNMENT. All rights of the Lessor under this Lease and in
the Equipment (or any portion thereof) may be sold, assigned, pledged,
mortgaged, transferred or otherwise disposed of, either in whole or in part. If
the Lessor assigns or otherwise transfers this Lease or its interest in the
Equipment (or any portion thereof), or the rentals due or to become due
hereunder or any other interest herein, whether as
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security for any of its indebtedness or otherwise, no breach or default by the
Lessor hereunder or pursuant to any other agreement between the Lessor or
Lessee, shall excuse performance by the Lessee of any provision hereunder. No
such assignee shall be obligated to perform any duty, covenant or condition
required to be performed by the Lessor under the terms of this Lease; provided,
however, that no such assignment shall impair or diminish Lessor's obligations
hereunder. The Lessee hereby agrees to acknowledge and consent to any such
documentation as the Lessor or any such assignee may require and agrees to
furnish to any such assignee copies of any notices given by the Lessee under
this Lease or any Schedule.
ARTICLE 12 - INDEMNITY
12.01 The Lessee shall indemnify the Lessor against, and shall hold the
Lessor harmless from, any and all claims, actions, suits, proceedings, costs,
expenses, damages and liabilities, including attorney's fees, arising out of,
connected with, or resulting from the Equipment, any Item of Equipment or this
Lease, including without limitation, the selection, delivery, possession, use,
operation or return of the Equipment and any Item of Equipment. The indemnities,
assumptions of liability and obligations for costs and expenses contained in
this Lease, in any Schedule or in any other document or agreement delivered by
the Lessee in connection herewith, including without limitation this Article 12,
shall continue in full force and effect notwithstanding the termination of this
Lease or any Schedule, whether by expiration of time, by operation of law or
otherwise. If Lessor advises Lessee in good faith that an important general
interest of Lessor is involved in any claim, Lessor may control any defense or
settlement with counsel selected by Lessor and reasonably acceptable to the
Lessee without diminution of Lessee's obligations hereunder.
ARTICLE 13 - PURCHASE OPTION
13.01 On the Lease Expiration Date as to each and every Item of Equipment,
if all rents theretofore due and payable have been paid in full and Lessee has
performed all of its other obligations hereunder, the Lessee shall have the
option to purchase (which purchase with respect to any license to use software
comprising a portion of the Equipment shall include only such rights to use any
software as were conveyed to Lessor by Vendor and shall not include any
ownership interest in any such software) such Item of the Equipment on an
"AS-IS," "WHERE-IS" and "WITH ALL FAULTS" basis without warranty, express or
implied, with respect to any matter whatsoever, by Lessor, for ONE DOLLAR
($1.00). In connection with any sale of any such Item of Equipment Lessee shall
convey such rights in the Equipment as it received from the Vendor and the xxxx
of sale corresponding thereto shall expressly state, that such Item of Equipment
is sold "as-is," "where-is" and "with all faults," and Lessor shall disclaim any
express or implied warranties of any kind, including those of merchantability,
durability, condition and fitness for a particular purpose or use. Upon any such
purchase, the Lessor will duly execute and deliver to the Lessee a xxxx of sale
to effect transfer of ownership of such Item of Equipment to the Lessee, free
and clear of all encumbrances, security interests and liens arising as a result
of actions of the Lessor (other than encumbrances, security interests or liens
suffered or permitted by the Lessee to become effective thereon or otherwise the
responsibility of the Lessee hereunder), upon payment by the Lessee of the
purchase price and thereupon this Lease shall terminate as to such Item of
Equipment, and no further rents shall become due in respect to such Item of
Equipment so purchased by Lessee.
ARTICLE 14 - RETURN OF EQUIPMENT
14.01 Upon termination of this Lease with respect to any Item of Equipment,
the Lessee shall return such Item of Equipment to such location in the
continental United States as the Lessor shall specify, unless the Lessee shall
have purchased such Item of Equipment and shall have paid all amounts due in
connection
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therewith as provided herein. Upon such return, such Item of Equipment shall be
in good working order and condition, ordinary wear and tear excepted, shall be
certified for manufacturer's maintenance and shall be free and clear of all
encumbrances, security interests and liens. Notwithstanding any other provision
contained herein, until such Item of Equipment shall have been returned to the
Lessor as required above, all of the provisions of this Lease with respect
thereto shall continue in full force and effect. The Lessee shall pay all costs
and expenses in connection with or incidental to the return of each Item of
Equipment, including, without limitation, the cost of removing, assembling,
packing, insuring and transporting the same.
ARTICLE 15 - LESSEE'S REPRESENTATIONS AND WARRANTIES
15.01 The Lessee represents and warrants to and agrees with Lessor that:
(1) the Lessee is and (except as expressly permitted hereinbelow) shall continue
to be a corporation duly organized and validly existing in good standing under
the laws of the state of its incorporation, is duly qualified and in good
standing in all other jurisdictions in which Equipment may be located and is not
exempt from United States income taxation; (2) the Lessee's execution, delivery
and performance of this Lease, each Schedule and the other documents herein
contemplated have been (or if the same should be not yet executed and delivered,
at the time of such execution and delivery, will have been) duly authorized by
all necessary corporation action, will not result in any breach, default or
violation of or under the Lessee's certificate of incorporation or bylaws or any
agreement, order or law by which the Lessee is or may be bound or its property
is or may be affected; (3) this Lease as well as each Schedule and the other
documents executed and delivered by the Lessee in connection herewith constitute
(or if the same should be not yet executed and delivered, at the time of such
execution and delivery, will constitute) the legal, valid and binding
obligations of the Lessee enforceable against the Lessee in accordance with
their respective terms; (4) all financial statements and other information
heretofore furnished by the Lessee or any Guarantor, as the case may be, to the
Lessor were when so furnished (or if the same shall be furnished hereafter, when
so furnished shall be) true and complete; and (5) upon any consolidation or
merger of the Lessee with or into any other corporation(s) or upon any sale or
conveyance of all or substantially all of the property of the Lessee to any
other person or entity, the Lessee will cause the due and punctual performance
and observance of all covenants and obligations of the Lessee hereunder to be
assumed by the surviving corporation or by the person or entity which shall have
acquired such property; provided that any such assumption shall not release the
Lessee from its obligations hereunder in the case of any sale or conveyance of
all or substantially all of its property or where it survives any consolidation
or merger. The foregoing representations, warranties and agreements shall remain
in effect throughout the term of this Lease.
ARTICLE 16 - GENERAL PROVISIONS
16.01 COSTS AND EXPENSES. The Lessee shall pay or reimburse the Lessor
within five (5) days of demand therefor for all costs and expenses incurred by
the Lessor in connection with the preparation, delivery and execution of this
Lease or any document or instrument in connection with this Lease, the
consummation of the transactions contemplated by this Lease and the enforcement
or attempted enforcement of any rights or remedies under this Lease or any
document or instrument in connection with this Lease (including in connection
with any restructuring or "workout" related to an Item of Equipment, including
in any bankruptcy or insolvency proceeding).
16.02 INFORMATION. Lessee agrees to furnish to the Lessor: (i) copies of
annual and quarterly financial statements, including a copy of the balance sheet
and profit and loss statement of the Lessee certified to by an authorized
financial officer of the Lessee; and (ii) such additional information as the
Lessor or any assignee
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may reasonably request concerning this Lease in order to enable the Lessor or
assignee to determine whether the covenants, terms and provisions of this Lease
have been complied with by the Lessee.
16.03 CONCURRENT REMEDIES. No right or remedy herein conferred on or
reserved to the Lessor is exclusive of any right or remedy herein or by law or
equity provided or permitted; but each shall be cumulative of every other right
or remedy given hereunder or now or hereafter existing at law or in equity or by
statute or otherwise and may be enforced concurrently therewith or from time to
time.
16.04 NONWAIVER. No covenant or condition of this Lease may be waived
except by the written consent of the Lessor. Forbearance or indulgence by the
Lessor in any regard whatsoever shall not constitute a waiver of the covenant or
condition to be performed by the Lessee to which the same may apply, and, until
complete performance by the Lessee of any covenant or condition, the Lessor
shall be entitled to invoke any remedy available to the Lessor under this Lease
or by law or in equity despite any forbearance or indulgence. No waiver by the
Lessor of any default or noncompliance with this Lease shall operate as a waiver
of any other default or noncompliance or the same default or noncompliance on a
future occasion.
16.05 ENTIRE AGREEMENT. This Lease constitutes the entire agreement between
the Lessor and the Lessee and supersedes any prior understanding or written or
oral agreements between the parties with respect to the subject matter hereof,
and this Lease shall not be amended, altered or changed except by a written
agreement signed by the parties hereto.
16.06 NOTICES. Service of all notices under this Lease shall be sufficient
if given personally or mailed, sent by facsimile transmission or delivered by
overnight courier to the party involved at its respective address hereinabove
set forth, or at such address as such party may provide in writing from time to
time. Any such notice mailed to such address shall be effective when deposited
in the United States mail, duly addressed and with postage prepaid. Any such
notice sent by facsimile transmission shall be deemed received on the next
business day following the transmission; and any notice sent by national
recognized overnight courier shall be deemed received on the following business
day.
16.07 TIME. Time is of the essence with reference to payment in this Lease,
and in each and all of its provisions.
16.08 PARTIES BOUND. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns where permitted by
this Lease. As used herein, the term "LESSOR" shall include all assignees of the
Lessor.
16.09 SUCCESSORS AND ASSIGNS. If any one or more of the provisions
contained in this Lease shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect or in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision hereof or of such
provision in any other jurisdiction, and this Lease shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
16.10 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICTS
OF LAWS RULES.
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16.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) The Lessee hereby irrevocably agrees that any suit, action, proceeding
or claim against the Lessee arising out of, or relating to, this Lease or any
judgment entered by any court in respect thereof may be brought and enforced in
any court located in the State of Texas and the Lessee hereby irrevocably
submits to the nonexclusive jurisdiction of such courts for the purpose of any
such suit, action, proceeding or claim. The Lessee hereby irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Lease brought in any court located in the State of Texas and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
The Lessee further irrevocably consents to the service of process out of any of
the aforementioned courts in any suit, action, proceeding or claim by the
mailing of copies thereof by certified mail, return receipt requested, postage
prepaid, to its address set forth herein or in any other manner in accordance
with the provisions of the laws of the State of Texas. Nothing herein shall
affect the right of the Lessor to commence legal proceedings or otherwise
proceed against the Lessee in any jurisdiction or to serve process in any manner
permitted by applicable law.
(b) THE LESSOR AND THE LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS LEASE OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF THE LESSOR OR THE LESSEE.
16.12 POWER OF ATTORNEY. The Lessee hereby irrevocably constitutes and
appoints Lessor and any officer or agent thereof, with full power of
substitution and resubstitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Lessee and in
the name of Lessee or in its own name, from time to time in the Lessor's
discretion, for the purpose of carrying out the terms of this Lease, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Lease.
The powers conferred on the Lessor under this Section are solely to protect the
Lessor's interest in the Equipment or any Item of Equipment and shall not impose
any duty upon Lessor to exercise any such powers. The Lessor shall be
accountable only for its gross negligence or willful misconduct and for amounts
that it actually receives as a result of the exercise of such powers and neither
it nor any of its officers, directors, employees or agents shall be responsible
to the Lessee for any act or failure to act.
16.13 FURTHER ASSURANCES; CERTAIN EXPENSES. The Lessee will, at its own
cost and expense, promptly and duly execute and deliver to the Lessor such
further documents and assurances and take such further action as the Lessor may
from time to time request in order to more effectively carry out the intents and
purposes of this Lease and to establish and protect the rights, interests and
remedies created or intended to be created in favor of the Lessor hereunder.
Lessee shall pay or reimburse Lessor for any costs and expenses incurred by
Lessee in connection with any title or lien searches related to the Lessee or
the Equipment, stamp, documentary charges or financing statement filing fees
with respect to the Lease, administration expenses arising from the Lease and
any similar out-of-pocket costs and expenses. In addition, if the Lessor incurs
any breakage, make-whole or similar cost or expense to any third party as a
result of the prepayment by the Lessee of any of its obligations hereunder
(including, without limitation, where Lessor has sold, assigned or transferred
any of its rights hereunder), then the Lessee shall, upon request by the Lessor,
promptly reimburse the Lessor therefor; provided, however, that such
reimbursement: (I) shall be limited to reasonable expenses
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incurred by Lessor as a result of Lessee's prepayment; and (ii) shall not exceed
five percent (5%) of the total amount of the principal prepayment by Lessee that
resulted in the expense to Lessor. This provision shall survive the earlier
termination of this Lease or any Schedule.
16.14 COUNTERPARTS. This Lease and any amendments, waivers, consents or
supplements may be executed in counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
16.15 HEADINGS. Article and Section headings in this Lease are included
herein for convenience of reference only and shall not constitute a part of this
Lease for any other purpose or be given any substantive effect.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and
year first above written.
LESSEE: LESSOR:
ZIPLINK, INC. ALCATEL USA FINANCING, INC.
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ -----------------------------
Its: Chief Financial Officer Its: Treasurer and Senior Director
