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EXHIBIT 10.11
MASTER EQUIPMENT LEASE AGREEMENT
Agreement No. 101 Dated: Xxxxx 00, 0000
XXXXXX: LIGHTHOUSE CAPITAL PARTNERS, L.P., a Delaware limited
partnership ("Lessor") 000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxxx 00000
LESSEE: 3D/FX INTERACTIVE, INC., a California corporation ("Lessee")
ADDRESS: 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:
1. LEASE. Lessor leases to Lessee and Lessee leases from Lessor
the personal property described in each Equipment Schedule executed pursuant
hereto, subject to the terms and conditions of this Master Equipment Lease
Agreement ("Master Lease") and the applicable Lease Line Schedule (defined
below). The "Equipment" (as defined in the Lease Line Schedules) is being leased
for commercial or business purposes only, and not for personal, home, or family
purposes. The parties agree that each Lease is a "finance lease" under the
Uniform Commercial Code (as in effect in the State of California during the term
of the Lease and referred to hereafter as the "UCC").
2. LEASE LINE SCHEDULE. "Lease Line Schedule" means a Lease Line
Schedule in the form of EXHIBIT A-L or EXHIBIT A-2 signed by Lessor and Lessee
and incorporating by reference the terms and provisions of this Master Lease.
3. EQUIPMENT SCHEDULES. "Equipment Schedule" means an Equipment
Schedule in the form of EXHIBIT B-1 or EXHIBIT B-2 signed by Lessor and Lessee
and incorporating, by reference, the terms and provisions of this Master Lease
and the applicable Lease Line Schedule. Each Equipment Schedule shall constitute
a separate and independent lease (a "Lease"); the original of such Lease shall
consist of the signed Equipment Schedule and a copy of the Master Lease and
applicable Lease Line Schedule. Capitalized terms used, but not defined, in this
Master Lease have the meanings given to such terms in the applicable Lease Line
Schedule or Equipment Schedule, as the case may be.
4. TERM AND RENTALS.
(a) ACCEPTANCE. The Lease shall commence with respect to
Equipment described on an Equipment Schedule upon the Acceptance Date. The
"Acceptance Date" shall be the date upon which Lessee executes a Delivery and
Acceptance Certificate in the form of EXHIBIT C.
(b) TERM AND PAYMENT OF RENT. The lease term for the Equipment
shall be the "Lease Term" set forth in the applicable Equipment Schedule which
shall commence on the "Commencement Date" (as defined in the applicable Lease
Line Schedule). Lessee agrees to pay to Lessor the "Rental Payments" for the
Lease Term, in the amounts and at the times set forth in the applicable
Equipment Schedule.
(c) INTERIM PERIOD. If an Acceptance Date does not fall on a
Commencement Date, then Lessee agrees to pay to Lessor "Interim Rent" for the
period commencing on the Acceptance Date through and including the day preceding
the Commencement Date (the "Interim Period"). The Interim Rent payment for the
Interim Period shall accrue at the "Interim Rate" (as defined in the applicable
Lease Line Schedule) and shall be due and payable in full on the Commencement
Date.
(d) LEASE TERMINATION. Lessee may terminate the Lease at the
expiration of the Lease Term or any renewal term (the "Lease Termination") by
submitting to Lessor a Notice of Election in the form of EXHIBIT D. If a
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Notice of Election is not submitted by Lessee to Lessor during the "Advance
Notice Period" (as defined in the Lease Line Schedule), then the Lease Term or
any renewal Term will be automatically extended for an additional period equal
to the "Automatic Extension Period" (as defined in the Lease Line Schedule). The
Lease will continue to automatically extend until Lessee submits to Lessor a
Notice of Election. The Lease may only be terminated as expressly provided in
this Section, in the applicable Lease Line Schedule or in the applicable
Equipment Schedule. Lessee agrees to continue paying rent for the Equipment in
the amount of the Rental Payment set forth in the applicable Equipment Schedule
until the later of (i) the expiration of the Lease Term, any renewal term and
any Automatic Extension Period and (ii) either (A) the purchase option price is
paid pursuant to SECTION 6(a), or (B) a mutually agreed renewal of the Lease
takes effect pursuant to SECTION 6(b), or (C) the Equipment is returned in the
manner and condition prescribed in SECTION 6(c), in each case after delivery of
a Notice of Election.
(e) NET LEASE. Each Equipment Schedule shall be a net lease,
and Lessee's obligation to pay all rent and other sums thereunder shall be
absolute and unconditional, and shall not be subject to any abatement,
reduction, setoff, defense, counterclaims, interruption, deferment or
recoupment, for any reason whatsoever.
5. LATE FEE. Lessee shall pay a late charge on any rent payments
or other sums due hereunder which are past due, in the amount specified in the
applicable Lease Line Schedule, payable on demand. In addition, interest shall
accrue daily at the "Default Rate" (as defined in the Lease Line Schedule), or
if such rate exceeds the maximum rate allowed by law, then at such maximum rate,
and shall be payable on demand.
6. LEASE TERMINATION OPTIONS. Upon Lease Termination, Lessee will
have the option to purchase the Equipment or renew the term of the Lease as set
forth below. Lessee shall specify its election of a Lease Termination Option in
the Notice of Election.
(a) PURCHASE OPTION. If Lessee exercises the option to
purchase, then, provided no Event of Default has occurred and is then
continuing, Lessee shall at the expiration of the Lease Term, renewal term or
extension, as the case may be, purchase the Equipment. The purchase price shall
be the Equipment's then fair market value ("FMV") or as may be otherwise
provided in a particular Lease Line Schedule. FMV, as applied to a purchase
option, shall be determined by Lessor based on the price a willing buyer would
pay and a willing seller would accept (neither buyer nor seller being under
compulsion to act) for the Equipment as installed and in use, giving due
consideration to its condition, utility, revenue-producing capability, and
replacement costs. If Lessee fails to agree with Lessor's good faith
determination of the FMV, Lessee shall nevertheless pay Lessor's invoice and
provide Lessor with a written request for a determination of the FMV with or
prior to such payment. Within ten (10) days after such request Lessor and Lessee
shall agree on an appraiser to determine the FMV or, lacking such agreement,
shall each tender the name of an appraiser. The appraiser(s) shall, within
thirty (30) days, either agree on the FMV or select a third appraiser, to form a
committee to determine the FMV. Determination by the appraiser(s) shall be final
and binding on both parties. Within fifteen (15) days after such determination,
Lessor shall refund any excess received over the FMV, and/or Lessee shall pay
any additional amount of the FMV above the amount previously paid. Each party
shall bear the fees and expenses of any appraiser which it names and share
equally the fees and expenses of any appraiser(s) jointly selected. If the
appraised FMV is within 5% of the amount invoiced by Lessor, then Lessee shall
pay all appraiser fees and expenses. The purchase option price shall be paid not
later than the last day of the Lease Term.
(b) RENEWAL. If Lessee exercises the option to renew this
Lease, such renewal shall be upon the terms and conditions of this Master Lease
and the applicable Lease Line Schedule, for a rental period and rental amount to
be agreed upon by Lessee and Lessor.
7. USE; MAINTENANCE.
(a) Lessee, at its expense, shall make all necessary site
preparations and cause the Equipment to be operated in accordance with any
applicable operating manuals and manufacturer's instructions. Notwithstanding
any
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transfer or assignment by Lessor and provided Lessee is not in default
hereunder, Lessee shall have the right to quietly possess and use the Equipment
as provided herein without interference by Lessor, its assigns or any other
third party claiming through or under Lessor.
(b) Lessee shall effect and bear the expense of all necessary
repair, maintenance, operation and replacements required to be made to maintain
the Equipment in good condition, reasonable wear and tear excepted, and to
comply with all domestic and international laws to which the use and operation
of the Equipment may be or become subject. All replacement Equipment and parts
furnished in connection with such maintenance or repair shall immediately become
the property of Lessor and part of the Equipment for all purposes hereof. All
such maintenance, repair and replacement services shall be immediately paid for
and discharged by Lessee with the result that no lien under any applicable laws,
will attach to the Equipment as a result of the performance of such services or
the provision of any such material, except mechanic's liens not based on
delinquent payments which the Lessee may contest in good faith.
8. INSURANCE. Lessee shall obtain and maintain for the Lease Term
(and any renewal term or extension), at its own expense, (a) "all risk"
insurance against loss or damage to the Equipment, (b) commercial general
liability insurance (including contractual liability, products liability and
completed operations coverage) reasonably satisfactory to Lessor, and (c) such
other insurance against such other risks of loss and with such terms, as shall
in each case be reasonably satisfactory to or reasonably required by Lessor (as
to carriers, amounts and otherwise). The amount of the "all risk" insurance
shall be greater than or equal to the Stipulated Loss Value (as defined in
Section 9 below) of all Equipment outstanding under the Lease Line Schedules and
must otherwise be reasonably satisfactory to Lessor as of each anniversary date
of this Lease. Any increase in the amount of such insurance coverage reasonably
requested by Lessor shall be put into effect on the next succeeding renewal date
of such insurance.
Each "all risk" policy shall: (i) name Lessor as sole loss payee with
respect lo the Equipment, (ii) provide for each insurer's waiver of its right of
subrogation against Lessor and Lessee, and (iii) shall waive set-off,
counterclaim or offset against Lessor.
Each liability policy shall name Lessor as an additional insured and
provide that such insurance shall have cross-liability and severability of
interest endorsements (which shall not increase the aggregate policy limits of
Lessee's insurance).
All insurance policies shall provide that Lessee's insurance shall be
primary without a right of contribution of Lessor's insurance, if any, or any
obligation on the part of Lessor to pay premiums of Lessee! and shall contain a
clause requiring the insurer to give Lessor at least 30 days' prior written
notice of its cancellation (other than cancellation for non-payment for which 10
days' notice shall be sufficient. Lessee shall on or prior to the date of the
first effective Equipment Schedule and prior to each policy renewal, furnish to
Lessor certificates of insurance or other evidence satisfactory to Lessor that
such insurance coverage is in effect. Lessee further agrees to give Lessor
prompt notice of any damage to, or loss of, the Equipment, or any part thereof.
9. LOSS OR DAMAGE. If any items of Equipment shall become lost,
stolen, destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Lessee shall promptly pay to Lessor
the applicable Stipulated Loss Value of the Equipment subject to the Event of
Loss. Upon payment by Lessee of the Stipulated Loss Value, Lessor will transfer
to Lessee, "AS IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all
of Lessor's right, title and interest, if any, in such items of Equipment. The
"Stipulated Loss Value" payable by Lessee under this Lease shall be an amount
equal to the product of (a) Lessor's Cost of the affected Equipment and (b) the
percentage set forth in the table attached to the applicable Lease Line Schedule
as Annex A opposite the Rental Payment number next following the Event of Loss.
Stipulated Loss Values and Rental Payments shall not be prorated.
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10. TITLE, INSPECTION AND LOCATION.
(a) TITLE. Lessor and Lessee confirm their intent that title
(if an ) to the Equipment shall remain in Lessor (or its successors and assigns)
exclusively. If requested by Lessor, Lessee will affix plates or markings on the
Equipment and on any operating manuals and manufacturer's instructions
indicating the interests of Lessor and its assigns therein, and Lessee will not
allow any other indicia of ownership or other interest in the Equipment to be
placed on the Equipment. Lessee shall not sell, assign, grant a security
interest in, sublet, pledge, hypothecate or otherwise encumber or suffer a lien
upon or against this Lease or the Equipment.
(b) INSPECTION. Lessor (through any of its officers, employees
or agents) shall have the right to inspect the Equipment during regular business
hours, with reasonable notice, and in compliance with Lessee's reasonable
security procedures; provided, that such inspections will be conducted no more
often than every six (6) months unless an Event of Default, or event which, with
notice or lapse of time or both, would become an Event of Default, has occurred
and is continuing.
(c) LOCATION. In the case of Equipment other than mobile
Equipment, Lessee may move such Equipment from the installation address shown on
the Equipment Schedule (or any other location for which Lessee has complied with
this provision) only if (i) the new location is within the continental United
States, and (ii) Lessee gives prior written notice of the relocation and
provides UCC-I financing statements, landlord waivers or such other
documentation as Lessor reasonably requests to protect its interest in the
Equipment. In the case of mobile equipment (including, without limitation,
lap-top computers), Lessee agrees to obtain from the person using such mobile
Equipment and deliver to Lessor, an Acknowledgment in the form of EXHIBIT F.
(d) Lessee shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the locations specified in Section 10(c).
11. LESSEE'S REPRESENTATIONS, WARRANTIES AND WAIVERS. Upon
execution of the Master Lease and each Equipment Schedule, Lessee warrants and
represents the following:
(a) Lessee is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Lessee has
full power and authority and all necessary licenses and permits to carry on its
business as presently conducted, to own or hold under lease its properties and
to enter into this Master Lease, each Lease Line Schedule and each Equipment
Schedule and to perform its obligations thereunder; and Lessee is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of its properties or the nature of its
business or the performance of its obligations under this Master Lease, the
Lease Line Schedules and any Equipment Schedules requires such qualification,
except for such jurisdictions in which failure to qualify would not have a
material adverse effect on Lessee.
(b) The execution and delivery by Lessee of this Master Lease,
the Lease Line Schedules and each Equipment Schedule and the performance by
Lessee of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of Lessee; and do not and will not contravene the
provisions of or constitute a default (either with or without notice or lapse of
time, or both) under, or result in the creation of any lien upon, the Equipment
or any property of Lessee under any indenture, mortgage, contract or other
instrument to which Lessee is a party or by which Lessee or its properties is
bound.
(c) No consent or approval of, giving of notice to,
registration with, or taking of any other action by, any state, federal, foreign
or other governmental commission, agency or regulatory authority or any other
person or entity is required for the consummation or performance by Lessee of
the transactions contemplated under this Master Lease, the Lease Line Schedules
and each Equipment Schedule.
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(d) This Master Lease, the Lease Line Schedules and each
Equipment Schedule, when executed by Lessee, constitute legal, valid and binding
agreements of Lessee enforceable against Lessee in accordance with their terms,
except as limited by any bankruptcy, insolvency, reorganization, or other
similar laws of general application affecting the enforcement of creditor or
Lessor rights.
(e) There are no actions, suits or proceedings pending or
threatened against or affecting Lessee or any property of Lessee in any court,
before any arbitrator of any kind or before or by any federal state, municipal
or other government department, commission, board, bureau, agency or
instrumentality (collectively "Governmental Body"), which, if adversely
determined, would materially adversely affect the business, financial condition,
assets, or operations of Lessee, or adversely affect the ability of Lessee to
perform its obligations under this Master Lease, the Lease Line Schedules and
each Equipment Schedule; and Lessee is not in default with respect to any order
of any court, arbitrator or Governmental Body or with respect to any material
loan agreement, debt instrument or contract with a supplier or customer of
Lessee, except as disclosed in writing to Lessor.
(f) To the extent permitted by applicable law, Lessee waives
any and all rights and remedies to: (i) cancel this Lease; (ii) repudiate this
Lease; (iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v)
recover damages from Lessor for any breaches of warranty or for any other reason
other than breach by Lessor of the covenant of quiet enjoyment as set forth in
Section 7(a) hereof; (vi) claim a security interest in the Equipment in Lessee's
possession or control for any reason; (vii) deduct from Rental Payments all or
any part of any claimed damages resulting from Lessor's default, if any, under
this Lease; (viii) accept partial delivery of the Equipment; (ix) "cover" by
making any purchase or lease of or contract to purchase or lease equipment in
substitution for Equipment designated in the Lease; (x) recover any direct,
general, special, incidental, indirect, exemplary or consequential damages, for
any reason whatsoever; and (xi) obtain specific performance, replevin, detinue,
sequestration, claim and delivery or the like for any Equipment identified to
this Lease. To the extent permitted by applicable law, Lessee also waives any
rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Equipment in mitigation of Lessor's
damages or which may otherwise limit or modify any of Lessor's rights or
remedies.
12. ASSIGNMENT BY LESSOR. LESSEE ACKNOWLEDGES THAT LESSOR MAY
SELL, ASSIGN, GRANT A SECURITY INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY
PART OF ITS RIGHTS, TITLE AND INTEREST IN THIS LEASE AND THE EQUIPMENT WITHOUT
NOTICE TO OR CONSENT OF LESSEE. Upon Lessor's written notice to Lessee that this
Lease, or the right to the Rental Payments hereunder, have been assigned, Lessee
shall, if requested, pay directly to Lessor's assignee without abatement,
deduction or set-off amounts which become due hereunder. Lessee waives and
agrees it will not assert against Lessor's assignee any counterclaim or set-off
in any action for rent under the Lease. Upon the assignment of this Lease,
Lessor's assignee shall have and be entitled to exercise any and all rights and
remedies (but none of the obligations) of lessor hereunder, and all references
herein to Lessor shall include Lessor's assignee. Lessee acknowledges that any
assignment or transfer by Lessor does not materially change Lessee's duties or
obligations under this Lease nor materially increase the burdens or risks
imposed on Lessee.
13. ASSIGNMENT BY LESSEE. LESSEE MAY NOT, WITHOUT LESSOR IS PRIOR
WRITTEN CONSENT, (;) ASSIGN THIS LEASE, WHETHER BY OPERATION OF LAW OR
OTHERWISE, OR SUBLEASE THE EQUIPMENT OR ANY PART THEREOF OR (;;) ASSIGN, GRANT A
SECURITY INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF ITS RIGHTS, TITLE
AND INTEREST IN AND TO THIS LEASE OR THE EQUIPMENT. In the event Lessee makes an
assignment, sublease or other transfer (to which Lessor has consented), Lessee
shall not thereby be relieved of its duties and obligations hereunder, for which
it shall remain fully responsible and liable (independent of its assignee).
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14. TAXES.
(a) Lessee shall comply with all applicable federal, state,
local, foreign and international laws, regulations and orders relating to this
Lease. Lessee assumes liability for, and shall pay when due, and on a net
after-tax basis shall indemnify and defend Lessor against, all federal, state,
local, foreign and international fees, taxes and government charges (including,
without limitation, interest and penalties) of any nature imposed upon or in any
way relating to Lessor, Lessee, any item of Equipment or this Lease, except
federal, state and local taxes on or measured by Lessor's net income (other than
any such tax which is in substitution for or relieves Lessee from the payment of
taxes it would otherwise be obligated to pay to or reimburse Lessor for as
herein provided). Lessee shall at its expense file when due with the appropriate
authorities any and all tax and similar returns and reports required to be filed
with respect thereto or, if requested by Lessor, notify Lessor of all such
requirements and furnish Lessor with all information required for Lessor to
effect such filings, which filings shall also be at Lessee's expense. Any fees,
taxes or other charges paid by Lessor upon failure of Lessee to make such
payments shall at Lessor's option become immediately due from Lessee to Lessor.
(b) This Lease has been entered into on the assumption that
Lessor shall be entitled to all deductions, credits, and other tax benefits as
are provided in the Internal Revenue Code of 1986, including amendments as may
occur (the "Code"), to an owner of property including, without limitation,
depreciation deductions and interest deductions with respect to any debts
incurred to finance the purchase of the Equipment. If, as a result of any acts,
omissions or misrepresentations by Lessee, Lessor's projected after-tax economic
return resulting from ownership and lease of the Equipment is reduced, then
Lessee's Rental Payments shall be increased in an amount (based on Lessor's
reasonable calculations) sufficient to provide the same net after-tax economic
return as if such acts or omissions had not occurred. Appropriate increases
shall also be made in the applicable Stipulated Loss Values for this Lease. In
the event the Equipment is sold by Lessor to another party, the net after-tax
economic returns considered shall be those of such other party.
15. EQUIPMENT WARRANTIES. Lessee acknowledges that (i) Lessee has
selected the supplier of the Equipment, (ii) Lessor acquired the goods or the
right to possession and use of the goods in connection with the Lease, and (iii)
Lessee received a copy of the contract by which Lessor acquired the Equipment or
the right to possession and use of the Equipment before signing the a particular
Lease. LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE WITH RESPECT TO THE EQUIPMENT
AND DISCLAIMS THE SAME. Lessor shall have no liability for any damages, whether
direct, indirect, general, special, incidental, exemplary or consequential,
incurred b, Lessee as a result of an), defect or malfunction of the Equipment.
Lessee shall look solely to the Equipment supplier for any and all claims
related to the Equipment. Lessor assigns to Lessee, for and during the Lease
Term, any warranty on the Equipment provided by the supplier. Lessor and Lessee
agree that all limitations on remedies and liability contained in this Lease
represent a reasonable allocation of risks that is part of the fundamental
bargain between the parties.
16. EVENTS OF DEFAULT. An Event of Default shall occur if Lessee
(i) fails to pay any Rental Payment or other payment required under the Lease
when due and such failure continues for a period of five (5) days after written
notice from Lessor; or (ii) fails to perform or observe any other covenant,
condition or agreement to be performed or observed by it or breaches any
provision contained in the Lease or in any other document furnished to Lessor in
connection herewith, and such failure or breach continues for a period of thirty
(30) days after written notice from Lessor; or (iii) without Lessor's consent,
attempts to assign this Lease or sell, transfer, encumber, part with possession,
or sublet any item of Equipment; or (iv) makes any representation or warranty
herein or in any document furnished by Lessor in connection herewith, which
shall have been materially false or inaccurate when made or at the time to which
such representation or warranty relates; or (v) shall commit an act of
bankruptcy or become insolvent or bankrupt or make an assignment for the benefit
of creditors or consent to the appointment of a Trustee or Receiver or either
shall be appointed for Lessee or for a substantial part of its property without
its consent, or bankruptcy reorganization, or insolvency proceedings shall be
instituted by or against Lessee,
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and, if instituted against Lessee, shall not be vacated or dismissed within
sixty (60) days. Any Event of Default shall be deemed material and a substantial
impairment of Lessor's interests for the purposes of this Lease, the UCC, and
any other applicable law.
17. REMEDIES. Upon the occurrences of any Events of Default and at
any time thereafter. provided such Event of Default is then continuing, Lessor
may, in its discretion, do any one or more of the following:
(a) cancel any or all Leases which reference this Master Lease
or the Lease Line Schedule, upon notice to Lessee;
(b) recover any accrued and unpaid Rental Payments and other
amounts which are due and owing under the Leases so canceled on the Rental
Payment Date immediately preceding the date on which Lessor obtains possession
of the Equipment (or such earlier date as judgment is entered in favor of
Lessor) (the "Determination Date"), plus interest at the Default Rate;
(c) with or without canceling this Lease, recover (i) such
Stipulated Loss Value as of the Rental Payment Date immediately preceding the
Determination Date, and (ii) the amount of any loss or reduction of tax benefits
which Lessor anticipated it would receive if the Lease continued for its full
Lease Term;
(d) recover any amounts due under any indemnity then
determinable, plus interest at the Default Rate;
(e) require that Lessee provide the return and certification
of the Equipment in accordance with Section 6(c) hereof;
(f) enter the premises where such Equipment is located and
take immediate possession of and remove the same, all without liability to
Lessor or its agents for such entry, except for costs incurred for any physical
damage to the premises caused by Lessor or its agents for such entry;
(g) sell any or all of the Equipment at public or private
sale, with or without notice to Lessee or advertisement, or otherwise dispose
of, hold, use, operate, lease to others or keep idle such Equipment, all free
and clear of any rights of Lessee and without any duty to account to Lessee for
such action or inaction or for any proceeds with respect thereto; and
(h) exercise any other right or remedy , which may be
available to it under the UCC or other applicable law including the right to
recover damages for the breach hereof.
In addition, Lessee shall be liable for, and reimburse Lessor for, all
reasonable legal fees and all commercially reasonable costs and expenses
incurred by Lessor as a result of the foregoing defaults or the exercise of
Lessor's remedies, including without limitation recovering possession of the
Equipment, selling or leasing the Equipment (including broker's and sales
representative's fees and commissions), and placing any Equipment in the
condition and obtaining the certificate required by Section 6(c) hereof. No
remedy referred to in this Section is intended to be exclusive. but each shall
be cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at la\v or in equity. No express or implied waiver by Lessor
of any default shall constitute a waiver of any other default by Lessor, or a
waiver of any of Lessor's rights.
18. INDEMNIFICATION. Lessee assumes liability for, and shall pay
when due, and shall indemnify, reimburse and hold each Indemnified Person
(defined below) harmless from and against all Claims (defined below), directly
or indirectly relating to or arising out of the acquisition, use. manufacture,
purchase, shipment, transportation, delivery, installation, lease or sublease,
ownership, operation. possession, control, storage, return or condition of any
item of Equipment (regardless of whether such item of Equipment is at the time
in the possession
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of Lessee), the falsity of any non-tax representation or warranty of Lessee or
Lessee's failure to comply with the terms of the Lease during the Lease Term.
The foregoing indemnity shall cover, without limitation, (i) any Claim in
connection with a design or other defect (latent or patent) in any item of
Equipment, (ii) any Claim for infringement of any patent, copyright, trademark
or other intellectual property right, or (iii) any Claim for negligence or
strict or absolute liability in tort; provided, however, that Lessee shall not
indemnify Lessor for any liability incurred by Lessor as a direct and sole
result of Lessor's gross negligence or willful misconduct.
"Claim" means all liabilities, losses, damages, actions, suits,
demands, claims of any kind and nature (including, without limitation, claims
relating to environmental discharge, cleanup or compliance), and all costs and
expenses whatsoever to the extent they may be incurred or suffered by an
Indemnified Person in connection therewith (including, without limitation,
reasonable attorneys' fees and expenses), fines, penalties (and other charges of
applicable governmental authorities), licensing fees relating to any item of
Equipment, damage to or loss of use of property (including, without limitation,
consequential or special damages to third parties or damages to Lessee's
property), or bodily injury to or death of any person (including, without
limitation, any agent or employee of Lessee).
"Indemnified Person" means Lessor (including without limitation, each
of its partners) and each of their respective successors, assigns, agents,
officers, directors, shareholders, partners, servants, agents and employees.
Such indemnities shall continue in full force and effect,
notwithstanding the expiration or termination of this Lease. Upon Lessor's
written demand, Lessee shall assume and diligently conduct, at its sole cost and
expense, the entire defense of any Indemnified Person against any indemnified
Claim described in this Section 18. Lessee shall not settle or compromise any
Claim against or involving Lessor without first obtaining Lessor's written
consent thereto, which consent shall not be unreasonably withheld. Lessee shall
give Lessor prompt notice of any occurrence, event or condition in connection
with which Lessor may be entitled to indemnification hereunder. The provisions
of this Section 18 are in addition to, and not in limitation of, the provisions
of Section 14(b).
19. NOTICES. Any notices or demands required or permitted
hereunder shall be given to the parties in writing and by personal delivery,
regular or certified mail. facsimile or telegram at the address set forth in the
Lease Line Schedule or to such other address as the parties may hereafter
substitute by written notice given in the manner prescribed in this Section.
Such notices or demands shall be deemed given upon receipt in the case of
personal delivery and upon mailing or transmission in the case of mail,
facsimile or telegram. Lessee agrees to provide Lessor with thirty (30) days'
prior written notice of (a) any merger or consolidation with or into any other
business organization, (b) any sale, lease or other disposition of assets not in
the ordinary course of business, and (c) any other material change in Lessee's
financial structure or ownership.
20. FURTHER ASSURANCES. Lessee will promptly execute and deliver
to Lessor such further reasonable documents and take such further reasonable
action as Lessor may request in order to more effectively carry out the intent
and purpose of this Lease or an assignment of Lessor's interest herein.
21. MISCELLANEOUS. This Lease shall be binding upon and inure to
the benefit of the parties hereto, their permitted successors and assigns. Any
provision of the Lease which is unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof; and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; provided,
however, that to the extent that the provisions of any such applicable law can
be waived, they are waived by Lessee Time is of the essence with respect to the
Lease. Lessee expressly assumes liability for and agrees to indemnify and defend
and hold Lessor harmless from and against any breach by Lessee of any
representation, warranty or covenant made by Lessee herein and in connection
therewith to pay and reimburse Lessor for the payment of any and all expenses,
including reasonable attorney fees incurred by Lessor in connection with or as
the result of any such breach. The captions set forth herein are for convenience
only and shall not define or limit any of the terms hereof. THIS LEASE SHALL IN
ALL
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RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF CALIFORNIA, WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES. LESSOR AND
LESSEE WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM THIS
LEASE. THIS LEASE SHALL BECOME EFFECTIVE AND BINDING ON THE PARTIES, THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, AND SHALL BE DEEMED EXECUTED AND
PERFORMED IN THE STATE OF CALIFORNIA, WHEN THE RELATED EQUIPMENT SCHEDULES ARE
ACCEPTED BY LESSOR LESSEE CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE COURTS OF CALIFORNIA FOR THE RESOLUTION OF ANY DISPUTES HEREUNDER
22. AMENDMENTS, MODIFICATIONS, WAIVERS. NONE OF THE PROVISIONS OF
THIS LEASE MAY BE AMENDED, MODIFIED OR WAIVED EXCEPT IN A WRITING SIGNED BY
LESSOR AND LESSEE.
INITIALS _________ (LESSEE) INITIALS _________ (LESSEE)
LESSEE: LESSOR:
3D/FX INTERACTIVE, INC. By: LIGHTHOUSE CAPITAL PARTNERS,
L.P., its general partner
By: __________________________ By: LIGHTHOUSE CAPITAL PARTNERS,
L.P., its general partner
Name: ________________________
By: ___________________________
Title: _______________________
Name: _________________________
Date: ________________________
Title: ________________________
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EXHIBIT A-1
LEASE LINE SCHEDULE NO. 01, dated March 31, 1995 ("Lease Line Schedule"),
to
MASTER EQUIPMENT LEASE AGREEMENT NO. 101, dated March 31, 1995 ("Master Lease"),
by and between
LIGHTHOUSE CAPITAL PARTNERS, LP., a Delaware limited partnership
("Lessor") and 3D/FX INTERACTIVE, INC., a California corporation ("Lessee").
(All capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Master Lease.)
IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:
LEASE LINE. The total Lessor's Cost of all units of Equipment under all
Equipment Schedules pursuant to Lease Line Schedule No. 01 and 02, both dated
March 31, 1995, to Master Equipment Lease Agreement No. 101, dated March 31,
1995, shall not exceed $l,000,000.00 (the "Commitment"). "Lessor's Cost" means,
with respect to a unit of Equipment, the total cost to Lessor of purchasing such
unit, as indicated on the applicable Equipment Schedule. Lessor's obligation to
fund Equipment Schedules under the Commitment shall terminate on June 30, 1996
(the "Commitment Termination Date"). The minimum Lessor's Cost for each Delivery
& Acceptance Certificate shall be $10,000.00.
RENTAL FACTOR. The Rental Factor for each Equipment Schedule will be
based upon an implicit interest rate equal to the prime lending rate as quoted
in The Wall Street Journal ten business days prior to the Commencement Date for
such Equipment Schedule (the "Prime Rate") plus 300 basis points. If on such
date the Prime Rate is other than 9 %, then the Rental Factor for that Equipment
Schedule will be adjusted upward or downward basis point for basis point to
maintain an implicit interest rate equal to the Prime Rate plus 300 basis
points. Once the Lease Term commences for any Equipment Schedule, there will be
no further adjustments to the Rental Factor for such Equipment Schedule. The
Rental Payment under a particular Equipment Schedule shall be an amount equal to
the product of (a) the Rental Factor and (b) the aggregate Lessor's Cost of
Equipment subject to such Equipment Schedule.
INTERIM RATE. The Interim Rate used to calculate the daily Interim Rent
shall be equal to the Rental Factor for each Equipment Schedule divided by
thirty (30). The Interim Period as defined in the Master Lease shall be modified
to start on the date the Equipment is delivered to and accepted by the Lessee
and the Lessor's Cost of Equipment is advanced by Lessor.
ADVANCE RENT. Upon execution of each Summary Equipment Schedule under
this Lease Line Schedule, Lessee shall pay to Lessor advance rent equal to the
product of the Lessor's Cost and the Rental Factor ("Advance Rent"), to be
applied toward the last Rental Payment due from Lessee to Lessor under each
Equipment Schedule.
EXPENSES. Lessee agrees to reimburse Lessor for a total of up to
Fifteen Hundred Dollars ($ 1,500.00) of expenses incurred in connection with the
negotiation and documentation of this transaction, promptly upon receipt of an
invoice together with appropriate back-up.
ELIGIBLE EQUIPMENT. All equipment financed under an Equipment Schedule
shall be Eligible Equipment. "Eligible Equipment" means the following types of
equipment to the extent acceptable to Lessor:
Various new and used computers, peripherals, analytical and test
equipment, laboratory equipment and furniture, office furniture and equipment
and other equipment as mutually agreed between Lessee and Lessor.
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...together with all replacements, parts, cables. repairs, additions and
accessories incorporated therein or affixed thereto and all operating manuals
and manufacturer's instructions (collectively hereinafter called the
"Equipment"). Such replacements, parts, cables, repairs, additions and
accessories shall (whether or not purchased by Lessor) be considered part of the
Equipment for all purposes and, when installed in or attached to the Equipment
(unless otherwise agreed), be or become the property of the Lessor except such
external, stand-alone accessories acquired by Lessee which may be removed
without damage to the equipment which shall be the property of the Lessee.
Except as otherwise specifically provided or the context so requires, the term
"Equipment" includes operating system or other bundled software which is
delivered on or with the Equipment or is included on the Equipment Schedules.
COMMENCEMENT DATE. The "Commencement Date" for each Equipment Schedule
shall be the first day of the calendar month following the Acceptance Date for
the items of Equipment subject to such Equipment Schedule. If the Acceptance
Date is the first day of a calendar month, then the Commencement Date shall be
the Acceptance Date.
LEASE TERMINATION OPTIONS. Notwithstanding anything to the contrary in
Section 6 of the Master Lease, upon Lease Termination (as defined in the Master
Lease), Lessee will have, with respect to all but not less than all of the
Equipment governed by this Lease Line Schedule, the option to (a) purchase the
Equipment from Lessor for the lesser of its Fair Market Value or fifteen percent
(15% ) of the Lessor's Cost or (b) renew the Lease.
ADVANCE NOTICE PERIOD. The "Advance Notice Period" shall be at least
ninety (90) days, but not more than 180 days, prior to Lease Termination (as
defined in the Master Lease) of Equipment Schedule No. 1 to this Lease Line
Schedule.
AUTOMATIC EXTENSION PERIOD. The "Automatic Extension Period" shall
equal three (3) months and affects each Equipment Schedule under this Lease Line
Schedule.
INSURANCE. The amount of commercial general liability insurance (other
than products liability coverage and completed operations insurance) required
under the Master Lease shall be at least $1,000,000 per occurrence. The amount
of the products liability and completed operations insurance under the Master
Lease shall be at least $1,000,000 per occurrence; provided however, that Lessee
shall not be required to obtain products liability and completed operations
insurance until the occurrence of the first shipment of a product to a customer.
FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon as
available, but in any event within twenty (20) days after the end of each month,
a company prepared balance sheet, income statement and cash flow statement
covering Lessee's operations during such period, certified by an officer of
Lessee reasonably acceptable to Lessor; (b) as soon as practicable after the end
of each fiscal year, and in any event within one hundred twenty (120) days
Lessee will provide Lessor with consolidated balance sheets of Lessee and its
subsidiaries, if any, as at the end of each fiscal year, and consolidated
statements of operations and consolidate statements of cash flows of the Lessee
and its subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles, all in reasonable detail certified by
independent public auditors of recognized national standing selected by Lessee;
provided, however, that until the Lessee shall have revenues in excess of
$10,000,000, such financial statements may be reviewed but not audited; (c)
promptly upon becoming available, copies of all statements, reports, budgets,
sales projections, operating plans and notices sent or made available generally
by Lessee to its security holders; (d) immediately upon receipt of notice
thereof, a report of any material legal actions pending or threatened against
Lessee; and (e) such other financial information as Lessor may reasonably
request from time to time.
MAINTENANCE SERVICE CONTRACTS. Lessee shall obtain and keep in effect
at all times during the Lease Term (and any renewal or extension thereof),
maintenance service contracts covering the Equipment with the Equipment
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supplier or with suppliers of maintenance services approved by Lessor, such
approval not to be unreasonably withheld.
INSTALLATION, HANDLING AND DELIVERY CHARGES. Any handling and delivery
charge to cover all Equipment transportation, rigging, drayage, packing,
installation and handling to and from vendor's plant and upon return to Lessor's
designated location shall be paid by Lessee.
MISCELLANEOUS TAXES. Without limitation of the provisions of the Master
Lease, Lessee agrees to pay and to indemnify Lessor for any sales or use tax and
any property tax in connection with the sale, lease or use of the Equipment.
LATE FEE. Lessee shall pay a late charge on any rent payments or other
sums due hereunder which are past due, in an amount equal to 2 % of the past due
amount, payable on demand.
DEFAULT RATE. The Default Rate of interest on late payments shall be
fifteen percent (15%) per annum.
NOTICES. All notices shall be addressed as follows:
If to Lessor:
Lighthouse Capital Partners, L.P.
000 Xxxxx'x Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Contract Administration
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Lessee:
3D/fx Interactive, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
CONDITIONS TO THE FIRST EQUIPMENT SCHEDULE. On or prior to the date of
execution of the first Equipment Schedule under this Lease Line Schedule, Lessor
shall have received in form and substance satisfactory to Lessor, each of the
following:
A Warrant substantially in the form of EXHIBIT H to the Master
Lease.
A legal opinion of Lessee's legal counsel in form and
substance reasonably satisfactory to Lessor, covering the
matters set forth in EXHIBIT C to the Master Lease.
Copies, certified by the Secretary or Assistant Secretary or
Chief Financial Officer of Lessee, of: (i) the Articles of
Incorporation and By-Laws of Lessee (as amended to the date of
the Lease) and (ii) the resolutions adopted by Lessee's board
of directors authorizing the execution and delivery of this
Lease, the Lease Line Schedule, the Equipment Schedules, the
Warrant and the other documents referred in this Lease Line
Schedule and the performance by Lessee of its obligations in
such documents.
Evidence of the insurance coverage required by SECTION 8 of
the Master Lease.
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All necessary consents of shareholders and other third parties
with respect to the subject matter of the Master Lease, the
Lease Line Schedule, the Equipment Schedules and the Warrant.
Payment of the Advance Rent.
Conditions to all findings under all Equipment Schedules. On
or prior to each funding under each Equipment Schedule under
this Lease Line Schedule, each of the following conditions
shall have been satisfied:
No Event of Default or event which, with notice or lapse of
time or both, would become an Event of Default, has occurred
and is continuing.
Lessor shall have received all necessary or desirable estoppel
certificates and UCC filings, releases or terminations.
Lessor shall have received a landlord waiver and consent in
substantially the form of EXHIBIT E to the Master Lease with
respect to each equipment location, provided that Lessee shall
have until the earlier of (i) the execution of a lease for its
corporate headquarters or (ii) June 30, 1995, to provide such
landlord waiver. Until such landlord waiver has been provided
Lessor will not finance any Equipment that in its sole opinion
may or may not be a fixture.
There shall not have occurred (i) any material adverse change
to the general affairs, management, results of operations,
condition (financial or otherwise) or prospects of Lessee,
whether or not arising from transactions in the ordinary
course of business, or (ii) any material adverse deviation by
Lessee from the business plan of Lessee presented to and not
disapproved by Lessor, since the date of the Master Lease.
Lessee shall have delivered to Lessor an Equipment Schedule
covering the appropriate funding period.
Lessee shall have delivered to Lessor (i) in the case of a
sale-leaseback, copies of invoices, canceled checks or other
proof of payment, a Xxxx of Sale, a Deliver,' and Acceptance
Certificate, and any UCC filings or other notices deemed
necessary or desirable in connection with the sale leaseback
or (ii) at Lessor's request, in the case of a purchase of new
equipment in excess of $25,000 from an equipment vendor, a
Purchase Order and Invoice Assignment and a Delivery and
Acceptance Certificate.
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All terms and conditions in the Equipment Schedule shall have
been satisfied by the Acceptance Date for the Equipment under
such Equipment Schedule.
All other documents as Lessor shall have reasonably requested.
LESSEE: LESSOR:
3D/FX INTERACTIVE, INC. By: LIGHTHOUSE CAPITAL PARTNERS,
L.P., its general partner
By: ___________________________ By: LIGHTHOUSE CAPITAL PARTNERS,
L.P., its general partner
Name: _________________________
By: _________________________________
Title: ________________________
Name: _______________________________
Date: _________________________
Title: ______________________________
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