EQUIPMENT LEASE AGREEMENT
THIS AGREEMENT (this "LEASE") is made as of July 12, 2002 (the "EFFECTIVE
DATE"), by and between InPhonic, Inc., a Delaware corporation ("LESSOR"), and
Appiant Technologies, Inc., a Delaware corporation ("LESSEE").
Lessee agrees to rent from Lessor, and Lessor agrees to rent to Lessee, the
equipment described on Exhibit A attached hereto (the "EQUIPMENT") subject to
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all of the terms and conditions herein. Lessee hereby warrants and represents
that the Equipment will be used for business purposes and not for personal,
family or household purposes. Equipment shall be deemed accepted for purposes
of this Lease as of the Effective Date.
1. TERM; RENT. The term of the Lease ("LEASE TERM") shall commence on
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the Effective Date and end on July 12, 2005. Lessee agrees to pay Lessor or
its assignees during the Lease Term, in U.S. Dollars, at an address to be
provided by Lessor, thirty-six (36) rent payments ("RENT PAYMENTS") as
follows: the first six (6) Rent Payments shall be in the amount of $5,000
per month and the remaining thirty (30) Rent Payments shall be in the
amount of $22,700 per month. The first Rent Payments is due on July 12,
2002, and subsequent Rent Payments are due on the same date of each month
thereafter (or the last day of the month if there is no such date). If any
Rent Payment or other amount payable to Lessor is not paid within five (5)
days after the due date thereof, Lessee shall pay to Lessor interest on any
such late payment from the due date thereof until payment at a rate of 18%
per annum or, if less, the highest interest rate permitted by applicable
law. At the end of the Lease Term, this Lease will automatically re-new for
additional three-month periods on the same terms and conditions (including
the then applicable monthly Rent Payments) unless Lessee gives Lessor
ninety (90) days written notice prior to the expiration of the Lease Term
or any three-month renewal term and returns the Equipment to the Lessor as
provided herein.
2. PURCHASE OPTION: Lessee shall have the option to purchase all, but not
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less than all, of the Equipment, for an amount equal to its fair market
value ("FMV") on the expiration of this lease or any renewal term, provided
Lessee is not in default of any of its obligations under this Lease on such
expiration date. This purchase option may be exercised by Lessee's written
notice to Lessor not earlier than 180 days, nor later than 30 days, prior
to the end of the Lease Term or any renewal term. The purchase price, which
shall be payable in cash, for such Equipment shall be due and payable upon
the expiration of the Lease Term. FMV shall be equal to the value of the
Equipment, as agreed upon by Lessor and Lessee, with consideration given to
the age, condition, utility and replacement cost for the Equipment. In the
event that the Lessor and Lessee are unable to agree upon the FMV for the
Equipment, such FMV will be determined by an independent appraiser selected
by the parties. Lessee shall be responsible for all applicable sales and/or
use taxes on the Equipment. Upon exercise of this purchase option and
payment of the purchase price, Lessor shall execute and deliver to Lessee
such documents as Lessee may reasonably request in order to vest in Lessee
all right, title and interest in the Equipment.
3. LOCATION; USE; MAINTENANCE: Lessee shall use the Equipment solely
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at its principal place of business or such other locations that Lessee
notifies Lessor of in writing, and the Equipment shall not be moved without
Lessor's prior written consent. Lessee shall, at its expense, maintain the
Equipment in good repair, condition, and functional order, shall not use
the Equipment unlawfully or unsafely and shall not alter the Equipment
without Lessor's prior written consent. Lessor, its
assignees and agents shall have the right to inspect the Equipment at the
premises where the Equipment is located.
4. TITLE; PERSONAL PROPERTY; FILING: The Equipment is, and shall at all
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times remain, the property of Lessor, and Lessee shall have no right, title
or interest therein or thereto except as expressly set forth in this Lease.
Lessee shall keep the Equipment free from any and all liens, encumbrances
and claims, except those created by Lessor, and shall not do or permit any
act or thing whereby Lessor's title or rights may be encumbered or
impaired. So long as Lessee is not in Default hereunder, Lessor agrees not
to interfere with Lessee's quiet use and enjoyment of the Equipment during
the Lease Term or any renewal term. The Equipment is, and shall at all
times remain, personal property notwithstanding that the Equipment or any
part thereof may now be or hereafter become in any manner affixed or
attached to real property or any improvements thereof. All additions or
improvements to the Equipment of any kind or nature made by Lessee shall
become component parts thereof, and title shall immediately vest in Lessor
and be governed by the terms of this Lease. Lessee will, if requested, at
its expense, furnish a landlord or mortgagees waiver with respect to the
Equipment in form satisfactory to Lessor. Lessee hereby appoints Lessor its
attorney-in-fact to prepare, execute and sign any instrument or financing
statement necessary to protect Lessor's interest in the Equipment, to sign
the name of Lessee with the same force and effect as if signed by Lessee,
and to file same at the proper location or locations. Lessee further
agrees, if Lessor so requests, to execute any instrument or financing
statement necessary to protect Lessor's interest in the Equipment and to
pay a one-time documentation fee to cover Lessor's costs for such filing
and other documentation costs-
5. LOSS OR DAMAGE: Lessee assumes and shall bear the entire risk of
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loss, theft, destruction or damage of or to the Equipment or any item
thereof ("LOSS" or "DAMAGE") from any cause whatsoever, whether or not
covered by insurance, from the time the Equipment is delivered to a carrier
for shipment to Lessee until its return to Lessor, and no such Loss or
Damage shall result in a termination of Lessee's obligations under this
Lease. Lessee shall promptly notify Lessor, and, at the option of Lessor,
shall (1) at Lessee's expense, repair the affected items of Equipment to
the satisfaction of Lessor; or (2) at Lessee's expense, and to the
satisfaction of Lessor, replace the affected items of Equipment with
similar or like equipment in good condition and repair and of similar
manufacture and equal or greater capacity and capability, with clear title
thereto in Lessor; or (3) make payment to Lessor in an amount equal to the
sum of: (I) all Rent Payments on all the Equipment or other amounts past
due (plus interest thereon) or currently owed to Lessor under this Lease,
including unpaid taxes and (II) all future Rent Payments that would accrue
over the remaining Lease Term plus the estimated fair market value of all
of the Equipment at the end of the Lease Term, such sum to be discounted to
present value at a discount rate equal to the lesser of six (6) percent or
the latest 1 year Treasury Note rate, or if required under applicable law,
the lowest effective discount rate allowable under applicable law
("DISCOUNT RATE"). Upon Lessor's receipt of such payment, Lessee shall be
entitled to whatever interest Lessor may have in the Equipment,
as-is-where-is, without any warranty, express or implied, including
warranty of merchantability or fitness for any particular purpose.
6. INSURANCE: Lessee shall provide, maintain and pay for (a) insurance
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against the loss or theft of or damage to the Equipment, for the full
replacement value thereof, naming Lessor (and/or such other person
designated by Lessor) as a loss payee and (b) public liability and property
damage insurance naming Lessor (and/or such other person designated by
Lessor) as an additional insured. All insurance shall be in a form and
amount and with companies satisfactory to Lessor and shall contain the
insurer's agreement to give thirty (30) days written notice to Lessor
before cancellation
or material change of the policy. Upon Lessor's request, Lessee shall
deliver the policies or copies thereof or certificates of insurance to
Lessor (and/or such other person designated by Lessor). If Lessee fails to
provide or maintain such insurance, Lessor shall have the right, but shall
not be obligated, to obtain such insurance and in such event, Lessee shall
repay to Lessor the cost thereof with the next Rent Payment (not reduced by
any amount paid to Lessor as refund or commission). Lessor reserves the
right to terminate any insurance coverage it may obtain and Lessor may
allow any such insurance coverage to lapse without liability to Lessee.
Lessee hereby appoints Lessor its attorney-in-fact to make claims for,
receive payment of, and execute and endorse all documents, checks, or
drafts for loss or damage under any insurance policies.
7. TAXES: Lessee shall pay or reimburse Lessor for all charges, taxes
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(local, state and federal), fines or penalties which may now or hereafter
be imposed or levied upon the sale, purchase, ownership, leasing or use of
the Equipment, excluding taxes on Lessor's net income. Lessor may, at its
option, charge Lessee a liquidated monthly personal property management
fee, to be added to Rent Payments owed under this Lease.
8. RETURN: Upon expiration of the Lease Term if not renewed or purchased,
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or upon demand by Lessor pursuant to paragraph 9 hereof, Lessee, at its
expense, shall return the Equipment (including, but not limited to,
original software, media, documentation, manuals, cables, power cords,
keys, etc.) in good repair and operable condition, ordinary wear and tear
excepted, to such place or on board such carrier, freight prepaid, packed
for shipping as Lessor may specify. Lessee shall immediately pay to Lessor
any cost of replacement or repair. Should Lessee fail to comply with the
provisions described above, the term of the Lease shall be extended as
outlined in paragraph 1.
9. ASSIGNABILITY: (a) Without Lessor's prior written consent, Lessee
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shall not (1) assign, transfer, pledge, hypothecate or otherwise dispose of
this Lease, any of the Equipment, or any interest therein; or (2) sublet or
lend any of the Equipment or permit any of the Equipment to be used by
anyone other than Lessee or Lessee's employees. Any buyer of all of
Lessee's assets shall, without further action, assume the obligations under
this Lease. (b) Lessor may sell or assign this Lease or the Equipment or
grant a security interest in the Equipment in whole or part without notice
to Lessee, and Xxxxxx'x purchaser, assignee or secured party may then sell
or assign this Lease or the Equipment or the security interest without
notice to Lessee. Each such purchaser, assignee or secured party shall have
all the rights but none of the obligations of Lessor under this Lease.
Lessee shall recognize such sales, assignments and/or security agreements
and shall not assert against the purchasers, assignees and/or secured
parties any defense, counterclaim or offset Lessee may have against Lessor.
Notwithstanding the foregoing, any assignment by Lessor shall be subject to
Lessee's right to possess and use the Equipment subject to this Lease so
long as Lessee is not in default hereunder. Subject to the foregoing, this
Lease inures to the benefit of and is binding upon the heirs, legatees,
personal representatives, successors and assigns of the parties hereto.
10. DEFAULT AND REMEDIES: (a) Lessee shall be in Default ("DEFAULT") if
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(1) Lessee fails to pay any Rent Payment or any other amount due under this
Lease within five (5) days after the same becomes due and payable; (2)
Lessee fails to make any payments on any lease or indebtedness of Lessee to
Lessor arising independently of this Lease, in each case within five (5)
days after the same becomes due and payable; (3) Lessee fails to perform or
observe any term or covenant contained in this Lease, or any other
instrument or document executed in connection with this Lease; (4) Lessee
becomes insolvent (however defined), ceases business as a going concern,
makes
an assignment for the benefit of creditors, causes a petition of
receivership or in bankruptcy to be filed or have the same filed against it
(including a petition for reorganization or an arrangement), dies or is
judicially declared incompetent; (5) Lessee has made or furnished to Lessor
any warranty, representation or statement which is proven to have been
false in any material respect when made or furnished; (6) Lessee attempts
to sell or encumber the Equipment, or suffers any levy, seizure or
attachment to be made thereof or thereon; or (7) Lessee commits or fails to
commit any act which results in jeopardizing the rights of Lessor or causes
Lessor to deem itself insecure as to its rights. (b) If Lessee is in
Default, Lessor, with or without notice to Lessee, shall have the right to
exercise concurrently or separately, and without any election of remedies
to be deemed made, the following remedies: (1) declare all Rent Payments
due hereunder immediately due and payable; (2) terminate this Lease; (3)
without incurring any liability to Lessee, enter upon Lessee's premises and
without any court order or other process of law remove the Equipment with
or without notice to Lessee; (4) sell or lease the Equipment at public
auction or by private sale or lease; (5) bring an action for damages or
pursue any other remedy available at law or equity. (c) Whether or not
Lessor exercises any of its rights described in this paragraph 10, Lessor
may recover from Lessee as liquidated damages, and not as a penalty, a sum
equal to: (1) all unpaid Rent Payments including unpaid taxes (together
with interest thereon) due up to the date of delivery of the Equipment to
Lessor; plus (2) all expenses of any kind incurred by Lessor as a result of
Lessee's Default, including costs of recovery, repair, storage, renting and
sale, and attorney's fees and costs; plus (3) all unpaid Rent Payments due
and to become due after the date of surrender of the Equipment to Lessor,
together with the estimated fair market value of the Equipment, both
discounted to present value at the Discount Rate; minus (4) the proceeds
(if any) received or to be received upon re-lease (discounted to present
value at the Discount Rate) or actual sale of the Equipment or any item
thereof as determined by Lessor, which determination shall be conclusive.
Lessee understands that there can be no assurance that Lessor will be able
to re-lease or sell the Equipment or any item thereof in such
circumstances.
11. INDEMNITY: Lessee shall indemnify, protect and hold harmless Lessor
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and its employees, agents and assigns from and against all liabilities
(including negligence, tort, and strict liability), claims, costs
(including attorney's fees and expenses), actions, suits and proceedings of
every kind, arising out of or in connection with this Lease or the
Equipment.
12. CHOICE OF LAW; ARBITRATION: THIS AGREEMENT SHALL BE GOVERNED BY THE
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INTERNAL LAWS OF DELAWARE. Any claim or controversy, including any contract
or tort claim, between or among Lessor or Lessee related to this Lease, but
excluding any claim or controversy related to the Equipment or manufacturer
warranties, shall be determined by binding arbitration in accordance with
Title 9 of the U.S. Code and the Commercial Arbitration Rules of the
American Arbitration Association. All statutes otherwise applicable shall
apply. Judgment upon the arbitration award may be entered in any court
having jurisdiction. This paragraph shall not apply, in the event Lessee
Defaults, to Lessor's right to obtain possession of the Equipment and to
bring suit for any amounts due. This Lease is made in interstate commerce.
13. FINANCE LEASE: Lessee hereby agrees that this Lease is a "finance
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lease" as defined by the Delaware Uniform Commercial Code, that is Lessee
acknowledges that (1) Lessor did not select, manufacture or supply the
Equipment, but did purchase the Equipment for lease to Lessee; and (2)
Lessor has given Lessee the name of the supplier of the Equipment. Lessee
may have rights and warranties under the supply contracts for the Equipment
and Lessee may contact the supplier of the Equipment for a description of
those rights and warranties. To the extent permitted by
applicable law, Lessee hereby waives any and all rights and remedies
conferred upon a lessee by the Delaware Uniform Commercial Code.
14. MISCELLANEOUS: All of the covenants required of Lessee under this
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Lease shall survive the expiration or termination of this Lease to the
extent required for their full observance and performance. This Lease
constitutes the entire agreement between Lessor and Lessee and is
irrevocable for the Lease Term and for the aggregate Rent Payments
herein-above reserved, and it shall not be amended, altered or changed
except by a written agreement signed by the parties hereto. All notices
under this Lease shall be in writing and shall be deemed to have been duly
given on the date of receipted delivery or four (4) business days after
they are mailed to the respective address herein set forth or to such other
address as the parties may hereafter substitute by written notice. Time is
of the essence in this Lease. Any failure of Lessor to require strict
performance by Lessee or any waiver by Lessor of any provision hereof shall
not be construed as a consent or waiver of any other breach of the same or
any provision. If any portion of this Lease is deemed invalid, it shall not
affect the balance of this Lease.
LESSOR DISCLAIMS ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE WITH RESPECT TO THE EOUIPMENT. LESSOR HEREBY ASSIGNS ALL WARRANTIES
MADE TO LESSOR BY SUPPLIER AND/OR MANUFACTURER TO LESSEE, AND LESSEE AGREES THAT
ALL CLAIMS OF ANY KIND RELATING TO THE EQUIPMENT SHALL BE MADE AGAINST SUPPLIER
AND/OR MANUFACTURER.
THE LEASE IS NON-CANCELABLE. THE OBLIGATION TO PAY ALL RENT PAYMENTS AND OTHER
AMOUNTS PAYABLE UNDER THIS LEASE IS ABSOLUTE AND UNCONDITIONAL, DESPITE ANY
DISSATISFACTION WITH THE EQUIPMENT FOR ANY REASON, SHALL NOT BE AFFECTED BY ANY
EVENT OR CIRCUMSTANCE, AND SHALL BE PAID BY LESSEE IRRESPECTIVE OF ANY RIGHT OF
OFF-SET, COUNTERCLAN, RECOUPMENT, DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE
AGAINST LESSOR, THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT OR ANY OTHER THIRD
PARTY.
BY SIGNING THE LEASE, LESSEE ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE
TERMS AND CONDITIONS OF THIS LEASE. LESSEE REPRESENTS AND WARRANTS THAT THE
INFORMATION IN ANY APPLICATION, STATEMENT, TRADE REFERENCE OR FINANCIAL REPORT
SUBMITTED TO LESSOR IS TRUE AND CORRECT AND UNDERSTANDS THAT ANY MATERIAL
MISREPRESENTATION SHALL CONSTITUTE A DEFAULT HEREUNDER. LESSEE FURTHER
REPRESENTS AND WARRANTS THAT LESSEE HAS FULL POWER AND AUTHORITY TO EXECUTE AND
DELIVER THIS LEASE AND PERFORM ITS OBLIGATIONS HEREUNDER, THAT THIS LEASE IS A
VALID AND BINDING OBLIGATION OF LESSEE ENFORCEABLE AGAINST LESSEE IN ACCORDANCE
WITH ITS TERMS AND THAT THE PERSON EXECUTING THE LEASE ON BEHALF OF LESSEE IS
DULY AUTHORIZED TO DO SO BY ALL NECESSARY ACTION ON THE PART OF LESSEE.
{Signatures on the following page}
LESSEE: APPIANT TECHNOLOGIES INC. LESSOR: INPHONIC, INC.
SIGNATURE /s/ Xxxxxxx X. Xxxx SIGNATURE /s/ Xxxxxx X. Xxxxx
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TITLE President & CEO DATE TITLE DATE
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Exhibit A
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Equipment
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Attached hereto.
