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EXHIBIT 10.9
LINC CAPITAL MANAGEMENT, A DIVISION OF LINC Capital Management, a division of
SCIENTIFIC LEASING INC. Scientific Leasing Inc.
MASTER LEASE AGREEMENT ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Lessee: CyberGold, Inc. Master Lease Agreement No. 6869
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Date: March 27, 1997
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LINC Capital Management, a division of Scientific Leasing Inc. ("Lessor")
hereby leases to Lessee and Lessee leases from Lessor, in accordance with the
terms and conditions hereinafter set forth, the equipment and property together
with all replacement parts, additions, accessories, alterations and repairs
incorporated therein or now or hereafter affixed thereto (herein collectively
referred to as the "Equipment") described in each Equipment Schedule which may
be executed by Lessor and Lessee from time to time (individually a "Schedule"
and collectively, the "Schedules"), each of which is made a part hereof. For
all purposes of this Master Lease Agreement ("Lease"), each Equipment Schedule
relating to one or more items of Equipment shall be deemed a separate lease
incorporating all of the terms and provisions of this Lease. In the event of a
conflict between the terms of this Lease and the terms and conditions of an
Equipment Schedule, the terms and conditions of the Equipment Schedule shall
govern and control that Equipment Schedule.
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1. TERM AND RENTAL. The term of this Lease (the "Initial Lease Term") for any
item of Equipment shall be set forth in the Equipment Schedule relating to such
items of Equipment and shall commence (the "Commencement Date") on the
Acceptance Date ("Acceptance Date"), which shall be the applicable of: (1) the
date of delivery of the Equipment to Lessee; (2) in the case of Equipment which
is the subject of a sale and leaseback between Lessor and Lessee, the date upon
which Lessor purchases such Equipment from Lessee; or (3) in the case of
Equipment requiring installation, the date of installation of the Equipment. If
the Acceptance Date is other than the first day of a calendar quarter, then the
Commencement Date of the Initial Lease Term set forth in any Equipment Schedule
shall be the first day of the calendar quarter following the month which
includes the Acceptance Date and Lessee shall pay to Lessor, in addition to all
other sums due hereunder, an amount equal to one-thirtieth of the amount of the
average monthly rental payment due or to become due hereunder multiplied by the
number of days from and including the Acceptance Date to the Commencement Date
of the Initial Lease Term set forth in the Equipment Schedule. Lessee agrees to
pay the total rental for the entire term hereof, which shall be the total
amount of all rental payments set forth in the Equipment Schedule plus such
additional amounts as may become due hereunder or pursuant to any written
modification hereof or additional written agreement hereto. Except as otherwise
specified in the Equipment Schedule, rental payments hereunder shall be monthly
and shall be payable in advance on the first day of each month during the term
of this Lease beginning with the Commencement Date of the Initial Lease Term and
shall be sent to the address of the Lessor specified in this Lease or in the
Equipment Schedule or as otherwise directed by the Lessor in writing. Rental
payments or any other payments due hereunder not receivable on or before five
(5) days after the due date shall be overdue and shall be subject to a service
charge in an amount equal to two percent (2%) per month of the overdue payments
or the maximum rate permitted by law whichever is less (the "Service Charge
Rate"). If Lessor shall at any time accept a rental payment after it shall
become due, such acceptance shall not constitute or be construed as a waiver of
any or all of Lessor's rights hereunder, including without limitation those
rights of Lessor set forth in Sections 12 and 13 hereof.
2. TITLE. This is an agreement of lease only. Lessee shall have no right, title
or interest in or to the Equipment leased hereunder, except as to the use
thereof subject to the terms and conditions of this Lease. All of the Equipment
shall remain personal property (whether or not the Equipment may at any time
become attached or affixed to real property). The Equipment is and shall remain
the sole and exclusive property of Lessor or its assignees. All replacement
parts, modifications, repairs, alterations, additions and accessories
incorporated in or affixed to the Equipment (herein collectively called
"additions" and included in the definition of "Equipment"), whether before or
after the Commencement Date, shall become the property of Lessor upon being so
incorporated or affixed and shall be returned to Lessor as provided in Section
3. Upon the request of Lessor, Lessee will affix to the Equipment labels or
other markings supplied by Lessor indicating its ownership of the Equipment and
shall keep the same affixed for the entire term of this Lease. Lessee agrees to
promptly execute and deliver or cause to be executed and delivered to Lessor and
Lessor is hereby authorized to record or file, any statement and/or instrument
requested by Lessor for the purpose of showing Lessor's interest in the
Equipment, including without limitation, financing statements, security
agreements, and waivers with respect to rights in the Equipment from any owners
or mortgagees of any real estate where the Equipment may be located. In the
event that Lessee fails or refuses to execute and/or file Uniform Commercial
Code financing statements or other instruments or recordings which Lessor or
its assignee reasonably deems necessary to perfect or maintain perfection of
Lessor's or its assignee's interests hereunder, Lessee hereby appoints Lessor as
Lessee's limited attorney-in-fact to execute and record all documents necessary
to perfect or maintain the perfection of Lessor's interest hereunder. Lessee
shall pay Lessor for any costs and fees relating to any filings hereunder
including, but not limited to, costs, fees, searches, document preparation,
documentary stamps, privilege taxes and reasonable attorneys' fees. If any item
of Equipment includes computer software, Lessee shall execute and deliver and
shall cause Seller (as hereinafter defined) to deliver all such documents as
are necessary to effectuate assignment of all applicable software licenses to
Lessor. Lessee shall at its expense: (i) indemnify, protect and defend Lessor's
title to the Equipment from and against all persons claiming against or through
Lessee; (ii) at all times keep the Equipment free from any and all liens,
encumbrances, attachments, levies, executions, burdens, charges or legal
process of any and every type whatsoever, (iii) give Lessor immediate written
notice of any breach of this Lease described in clause (ii); and (iv)
indemnify, protect and save Lessor harmless from any loss, cost or expense
(including reasonable attorneys' fees) caused by the Lessee's breach of
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any of the provisions of this Lease, whether incurred by Lessor in pursuing its
rights against Lessee or defending against any claims or defenses asserted by or
through Lessee.
3. ACCEPTANCE AND RETURN OF EQUIPMENT. Lessor shall, at any time prior to
unconditional acceptance of all Equipment by Lessee, have the right to cancel
this Lease with respect to such Equipment (and if the Equipment or any portion
thereof has not previously been delivered, Lessor may refuse to pay for the
Equipment or any portion thereof or refuse to cause the same to be delivered)
if: (a) the Acceptance Date with respect to any item of Equipment to be leased
pursuant to any Equipment Schedule has not occurred within sixty (60) days of
the estimated Acceptance Date set forth in such Equipment Schedule or (b) there
shall be, in the reasonable judgment of Lessor, a material adverse change in the
financial condition or credit standing of Lessee or of any guarantor of Lessee's
performance under this Lease since the date of the most recent financial
statements of Lessee or of such guarantor submitted to Lessor. Upon any
cancellation by Lessor pursuant to this Section or the provisions of any
Equipment Schedule, Lessee shall forthwith reimburse to Lessor all sums paid by
Lessor with respect to such Equipment plus all costs and expenses of Lessor
incurred in connection with such Equipment and any interest or rentals due
hereunder in connection with such Equipment and shall pay to Lessor all other
sums then due hereunder, whereupon if Lessee is not in then in default and has
fully performed all of its obligations hereunder, Lessor will, upon request of
Lessee, transfer to Lessee without warranty or recourse any rights that Lessor
may then have with respect to such Equipment. Lessee agrees to promptly execute
and deliver to Lessor (in no event later than 15 days after the Acceptance Date)
a confirmation by Lessee of unconditional acceptance of the Equipment in the
form supplied by Lessor (the "Equipment Acceptance"). Lessee agrees, before
execution of the aforesaid Equipment Acceptance, to inform Lessor in writing of
any defects in the Equipment, or in the installation thereof, which have come to
the attention of Lessee or its agents and which might give rise to a claim by
Lessee against the Seller or any other person. If Lessee fails to give notice to
Lessor of any such defects or fails to deliver to Lessor the Equipment
Acceptance as provided herein, it shall be deemed an acknowledgement by Lessee
(for purposes of this Lease only) that no such defects in the Equipment or its
installation exist and it shall be conclusively presumed, solely as between
Lessor and its assignees and Lessee, that such Equipment has been
unconditionally accepted by Lessee for lease hereunder. Except as otherwise
provided in any Equipment Schedule, Lessee shall provide Lessor ninety (90) days
prior written notice of its intention to return the Equipment upon expiration of
the Initial Lease Term. Upon expiration or the cancellation or termination of
the Lease with respect to any Equipment, Lessee shall, at its own expense,
assemble, crate, insure and deliver all of the Equipment and all of the service
records and all software and software documentation subject to this Lease and
any Equipment Schedules hereto to Lessor in the same good condition and repair
as when received, reasonable wear and tear resulting only from proper use
thereof excepted, to such reasonable destination within the continental United
States as Lessor shall designate. Lessee shall, immediately prior to such return
of each item of Equipment, provide to Lessor a letter from the manufacturer of
the equipment or another service organization reasonably acceptable to Lessor
certifying that said item is in good working order, reasonable wear and tear
resulting only from proper use thereof excepted, that such item is eligible for
a maintenance agreement by such manufacturer and all software is included
thereon. If any computer software requires relicensing when removed from
Lessee's premises, Lessee shall bear all costs of such relicensing. Except as
otherwise expressly provided in the Equipment Schedule, if Lessee fails for any
reason to provide the notice set forth above or to re-deliver the Equipment back
to Lessor in accordance with the terms set forth above, Lessee shall pay to
Lessor, at Lessor's election, an amount equal to the highest monthly payment set
forth in the Equipment Schedule for a period of not less than three (3) months
and at the end of such period of time ("Holdover Period"), Lessee shall return
the Equipment to Lessor as provided herein. Except as otherwise expressly
provided in the Equipment Schedule, if Lessee fails or refuses to return the
Equipment as provided herein at the end of any Holdover Period, Lessee shall pay
to Lessor, at Lessor's option, an amount equal to one hundred percent (100%) of
the highest monthly payment set forth in the Equipment Schedule or the highest
rate permitted by law, whichever is less, for each month or portion thereof,
until Lessee so returns the Equipment to Lessor.
4. DISCLAIMER OF WARRANTIES. LESSEE HAS EXCLUSIVELY SELECTED AND CHOSEN THE
TYPE, DESIGN, CONFIGURATION, SPECIFICATION AND QUALITY OF THE EQUIPMENT HEREIN
LEASED AND THE VENDOR, DEALER, SELLER, MANUFACTURER OR SUPPLIER THEREOF (HEREIN
COLLECTIVELY CALLED "SELLER"), AS SET FORTH IN THE EQUIPMENT SCHEDULES. LESSOR
MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE CONDITION OF THE
EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS, ADAPTABILITY, ANY IMPLIED
WARRANTY OF QUIET ENJOYMENT OR NON-INTERFERENCE OR SUITABILITY FOR ANY
PARTICULAR PURPOSE, AND, LESSEE LEASES, HIRES AND RENTS THE EQUIPMENT "AS IS,
WHERE IS." Lessee understands and agrees that neither Seller, nor any agent of
Seller, is an agent of Lessor or is in any manner authorized to waive or alter
any term or condition of this Lease. Lessor shall not be liable for any loss or
damage suffered by Lessee or by any other person or entity, direct or indirect
or consequential, including, but not limited to, business interruption and
injury to persons or property, resulting from non-delivery or late delivery,
installation, failure or faulty operation, condition, suitability or use of the
Equipment leased by Lessee hereunder, or for any failure of any
representations, warranties or covenants made by the Seller. Any claims of
Lessee shall not be made against Lessor but shall be made, if at all, solely
and exclusively against Seller, or any persons other than the Lessor. Lessor
hereby authorizes Lessee to enforce during the term of this Lease, in its name
but at Lessee's sole effort and expense, all warranties, agreements or
representations, if any, which may have been made by Seller to Lessor or to
Lessee, and Lessor hereby assigns to Lessee solely for the limited purpose of
making and prosecuting any such claim, all rights which Lessor may have against
Seller for breach of warranty or other representation respecting the Equipment.
5. CARE, TRANSFER AND USE OF EQUIPMENT. Lessee, at its own expense, shall
maintain the Equipment in good operating condition, repair and appearance in
accordance with Seller's specifications and in compliance with all applicable
laws and regulations and shall protect the Equipment from deterioration except
for reasonable wear and tear resulting only from proper use thereof. When
generally offered, Lessee shall, at its expense, keep a maintenance contract in
full force and effect, throughout the term of this Lease and any Equipment
Schedule hereto. The disrepair or inoperability of the Equipment regardless of
the cause thereof shall not relieve Lessee of the obligation to pay rental
hereunder. Lessee shall not make any modification, alteration or addition to the
Equipment (other than normal operating accessories or controls). Lessee will
not, and will not permit anyone other than the authorized field engineering
representatives of Seller or other maintenance organization reasonably
acceptable to Lessor to effect any inspection, adjustment, preventative or
remedial maintenance or repair to the
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Equipment. Lessee may not (a) relocate or operate the Equipment at locations
other than the premises of Lessee specified in the applicable Equipment Schedule
(the "Premises"), except with Lessor's prior written consent, which shall not be
unreasonably withheld if such other location within the continental United
States, or (b) SELL, CONVEY, TRANSFER, ENCUMBER, PART WITH POSSESSION OF, OR
ASSIGN ANY ITEM OF EQUIPMENT OR ANY OF ITS RIGHTS HEREUNDER, AND ANY SUCH
PURPORTED TRANSACTION SHALL BE NULL AND VOID AND OF NO FORCE OR EFFECT. In the
event of a relocation of the Equipment or any item thereof to which Lessor
consents, all costs (including any additional property taxes or other taxes and
any additional expense of insurance coverage) resulting from any such
relocation, shall be promptly paid by Lessee upon presentation to Lessee of
evidence supporting such cost. Lessor shall have the right during normal hours
upon reasonable notice to Lessee, subject to applicable laws and regulations, to
enter Lessee's Premises in order to inspect, observe, affix labels or other
markings, or to exhibit the Equipment to prospective purchasers or future
lessees thereof, or to otherwise protect Lessor's interest therein.
6. NET LEASE. THIS LEASE AND ANY EQUIPMENT SCHEDULE HERETO IS A NET LEASE, AND
ALL PAYMENTS HEREUNDER ARE NET TO LESSOR. All taxes, assessments, licenses, and
other charges (including, without limitation personal property taxes and sales,
use and leasing taxes and penalties and interest on such taxes) imposed, levied
or assessed on the ownership, possession, rental or use of the Equipment during
the term of this Lease and any Equipment Schedule hereto (except for Lessor's
federal or state net income taxes) shall be paid by Lessee when due and before
the same shall become delinquent, whether such taxes are assessed or would
ordinarily be assessed against Lessor or Lessee. To the extent possible under
applicable law, for personal property or advalorem tax return purposes only,
Lessee shall include the Equipment on such returns as may be required, which
returns shall be timely filed by it. In any event, Lessee shall file all tax
returns required for itself or Lessor and Lessor hereby appoints Lessee as its
attorney-in-fact for such purpose. In case of failure by Lessee to co-pay said
taxes, assessments, licenses or other charges, Lessor may pay all or any part of
such items, in which event the amount so paid by Lessor including any interest
or penalties thereon and reasonable attorneys' fees incurred by Lessor in
pursuing its rights against Lessee or defending against any claims or defenses
asserted by or through Lessee shall be immediately paid by Lessee to Lessor as
additional rental hereunder. Lessee shall promptly pay all costs, expenses and
obligations of every kind and nature incurred in connection with the use or
operation of the Equipment which may arise or become due during the term of this
Lease and any Equipment Schedule hereto, whether or not specifically mentioned
herein. In case of failure by Lessee to comply with any provision of this Lease
and any Equipment Schedule hereto, Lessor shall have the right, but not the
obligation, to effect such compliance on behalf of Lessee. In such event, all
costs and expenses incurred by Lessor in effecting such compliance shall be
immediately paid by Lessee to Lessor as additional rental hereunder.
7. INDEMNITY. Lessee shall and does hereby agree to indemnify, defend and hold
Lessor and its assigns harmless from and against any and all liability, loss,
costs, injury, damage, penalties, suits, judgements, demands, claims, expenses
and disbursements (including without limitation, reasonable attorneys' fees
incurred by Lessor in pursuing its rights against Lessee or defending against
any claims or defenses asserted by or through Lessee) of any kind whatsoever
arising out of, on account of, or in connection with this Lease and the
Equipment leased hereunder, including, without limitation, its manufacture,
selection, purchase, delivery, rejection installation, ownership, possession,
leasing, renting, operation, control, use, maintenance and the return thereof.
This indemnity shall survive the Initial Lease Term or earlier cancellation or
termination of this Lease and any Equipment Schedule hereto.
8. INSURANCE. Commencing on the date that risk of loss or damage passes to
Lessor from the Seller and continuing until Lessee has re-delivered possession
of the Equipment to Lessor, Lessee shall, at its own expense, keep the Equipment
(including all additions thereto) insured against all risks of loss or damage
from every and any cause whatsoever in such amounts (but in no event less than
the greater of the replacement value thereof or the amount set forth in the
applicable Casualty Schedule, whichever is higher) with such deductibles and
exclusions as approved by Lessor and in such form as is satisfactory to Lessor.
All such insurance policies shall protect Lessor and Lessor's assignee(s) as
loss payees as their interests may appear. Lessee shall also, at its own
expense, carry public liability insurance, with Lessor and Lessor's assignee(s)
as an additional insured, in such amounts with such companies and in such form
as is satisfactory to Lessor, with respect to injury to person or property
resulting from or based in any way upon or in any way connected with or relating
to the installation, use or alleged use, or operation of any or all of the
Equipment, or its location or condition. Not less than ten days prior to the
Acceptance Date, Lessee shall deliver to Lessor satisfactory evidence of such
insurance and shall further deliver evidence of renewal of each such policy not
less than thirty (30) days prior to expiration thereunder. Each such policy
shall contain an endorsement providing that the insurer will give Lessor not
less than thirty (30) days prior written notice of the effective date of any
alteration, change, cancellation, or modification of such policy or the failure
by Lessee to timely pay all required premiums, costs or charges with respect
thereto. Upon Lessor's request, Lessee shall cause its insurance agent(s) to
execute and deliver to Lessor Loss Payable Clause Endorsement and Additional
Insured Endorsement (bodily injury and property damage liability insurance)
forms provided to Lessee by Lessor. In case of the failure to procure or
maintain such insurance, Lessor shall have the right, but not the obligation, to
obtain such insurance and any premium paid by Lessor shall be immediately due
and payable by Lessee to Lessor as additional rent hereunder. The maintenance of
any policy or policies of insurance pursuant to this Section shall not limit any
obligation or liability of Lessee pursuant to Sections 7 or 9 or any other
provision of this Lease and any Equipment Schedule hereto.
9. RISK OF LOSS. Until such time as the Equipment is returned and delivered to
and accepted by Lessor, pursuant to the terms of this Lease and any Equipment
Schedule hereto, Lessee hereby assumes and shall bear the entire risk of loss,
damage, theft and destruction of the Equipment, or any portion thereof, from any
cause whatsoever ("Equipment Loss"). Without limitation of the foregoing, no
Equipment Loss shall relieve Lessee in any way from its obligations hereunder.
Lessee shall promptly notify Lessor in writing of any Equipment Loss. In the
event of any such Equipment Loss, Lessee shall: (a) in the event Lessor
determines such Equipment to be repairable, promptly place, at Lessee's expense,
the Equipment in good repaid, condition and working order in accordance with
Seller's specifications and to the satisfaction of Lessor; or (b) in the event
of an actual or constructive total loss of any item of Equipment, at Lessor's
option: (i) promptly replace, at Lessee's expense, the Equipment with like
equipment of the same or a later model with the same additions as the Equipment,
and in good repaid, condition and working order in accordance with the Seller's
specifications and to the satisfaction of Lessor; or (ii) immediately pay to
Lessor the amount obtained by multiplying the Actual Equipment Cost as specified
in the applicable Equipment Schedule by the percentage contained in the
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applicable Casualty Schedule for the date of such Equipment Loss plus, any
unpaid rentals or any amounts due hereunder or, if no Casualty Schedule has been
made a part of any applicable Equipment Schedule, an amount equal to the present
value of the total amount of unpaid rentals and all other amounts due and to
become due under any applicable Equipment Schedule during the term thereof as of
the date of any payment, discounted at a rate equal to discount rate of the
Federal Reserve Bank of Chicago as of the Commencement Date of the Lease with
respect to each applicable Equipment Schedule, plus an additional amount equal
to the fair market value of the Equipment immediately prior to the loss, theft,
damage, or destruction, but in no event shall the amount of such fair market
value be less than twenty percent (20%) of the actual cost of the Equipment. In
the event Lessee is required to repair or replace any such item of Equipment
pursuant to Subsections (a) or (b)(i) of the preceding sentence, the insurance
proceeds received by Lessor, if any, pursuant to Section 8, after the use of
such funds to pay any unpaid amounts then due hereunder, shall be paid to Lessee
or, if applicable, to a third party repairing or replacing the Equipment upon
Lessee's furnishing proof satisfactory to Lessor that such repair or replacement
has been completed in a satisfactory manner. In the event Lessor elects option
(b)(ii), Lessee shall be entitled to a credit against the payment required by
said Subsection in an amount equal to such insurance proceeds actually received
by Lessor pursuant to Section 8 on account of such Equipment, and, upon payment
by Lessee to Lessor of all of the sums required pursuant to Subsection (b)(ii),
the applicable Equipment Schedule shall terminate with respect to such item of
Equipment and Lessee shall be entitled to whatever interest Lessor may have in
such item "as is, where is" and "with all faults" in its then condition and
location without warranties of any type whatsoever, express or implied.
10. COVENANTS OF LESSEE. Lessee agrees that its obligations under this Lease and
any Equipment Schedule hereto, including without limitation, the obligation to
pay rental, are irrevocable and absolute, shall not ▇▇▇▇▇ for any reason
whatsoever (including any claims against Lessor), and shall continue in full
force and effect regardless of any inability of Lessee to use the Equipment or
any part thereof for any reason whatsoever including, without limitation, war,
act of God, storms, governmental regulations, strike or other labor troubles,
loss, damage, destruction, disrepair, obsolescence, failure of or delay in
delivery of the Equipment, or failure of the Equipment to properly operate for
any cause. In the event of any alleged claim (including a claim which would
otherwise be in the nature of a set-off) against Lessor, Lessee shall fully
perform and pay its obligations hereunder (including all rents, without set-off
or defense of any kind) and its only exclusive recourse against Lessor shall be
by a separate action. Lessee agrees to furnish promptly to Lessor the annual
financial statements of Lessee (and of any guarantors of Lessee's performance
under this Lease and any Equipment Schedule hereto), prepared in accordance with
generally accepted accounting principles and certified by independent certified
public accountants, and such interim financial statements of Lessee as Lessor
may require during the entire term of this Lease and any Equipment Schedule
hereto. Lessee, if requested, shall provide at Lessee's expense an opinion of
its counsel acceptable to Lessor affirming the covenants, representations and
warranties of Lessee under this Lease and any Equipment Schedule hereto.
11. REPRESENTATIONS AND WARRANTIES. In order to induce Lessor in enter into this
Lease and any Equipment Schedule hereto and to lease the Equipment to Lessee
hereunder, Lessee represents and warrants that: (a) FINANCIAL STATEMENTS. (i)
applications, financial statements, and reports which have been submitted by
Lessee and any Obligors (as hereinafter defined) to Lessor are, and all
information hereafter furnished by Lessee and Obligors to Lessor will be, true
and correct in all material respects as of the date submitted; (ii) as of the
date hereof, the date of any Equipment Schedule and any Acceptance Date, there
has been no material adverse change in any matter stated in such applications,
financial statements and reports; and, (iii) none of the foregoing omit or
omitted to state any material fact. (b) ORGANIZATION. Lessee is an
organizational entity described on the signature page hereof and is duly
organized, validly existing and is duly qualified to do business and is in good
standing in each State in which the Equipment will be located. (c) AUTHORITY.
Lessee has full power, authority and right to execute, deliver and perform this
Lease and any Equipment Schedule hereto, and the execution, delivery and
performance hereof has been authorized by all necessary action of Lessee. (d)
ENFORCEABILITY. This Lease and any Equipment Schedule or other document executed
in connection therewith has been duly executed and delivered by Lessee and any
Obligor and constitutes a legal, valid and binding obligation of Lessee and any
Obligor enforceable in accordance with its terms. (e) CONSENTS. The execution,
delivery and performance of this Lease and any Equipment Schedule hereto does
not require any approval or consent of any stockholders, partners or proprietors
or of any trustee or holders of any indebtedness or obligations of Lessee, and
will not contravene any law, regulation, judgment or decree applicable to
Lessee, or the certificate of incorporation, partnership agreement, by-laws or
other governing documents of Lessee, or contravene the provisions of, or
constitute a default under, or result in the creation of any lien upon any
property of Lessee under any mortgage, instrument or other agreement to which
Lessee is a party or by which Lessee or its assets may be bound or affected.
Except as disclosed, no authorization, approval, license, filing or registration
with any court or governmental agency or instrumentality is necessary in
connection with the execution, delivery, performance, validity and
enforceability of this Lease and any Equipment Schedule hereto. (f) TITLE. On
each Commencement Date, Lessor shall have good and marketable title to the items
of Equipment which is subject to this Lease and any Equipment Schedule hereto on
such date, free and clear of all liens, except the lien of Seller which will be
released upon receipt of payment. Lessee warrants that no party has a security
interest in the Equipment which will not be released on or before payment by
Lessor to Seller of the Equipment and that the Equipment is and shall at all
times remain personal property regardless of how it may be affixed to any real
property. (g) LITIGATION. There is no action, suit, investigation or proceeding
by or before any court, arbitrator, agency or governmental authority pending or
threatened against or affecting Lessee: (i) which involves the Equipment or the
transactions contemplated by this Lease and any Equipment Schedule hereto; or
(ii) which, if adversely determined, could have a material adverse effect on the
financial condition, business or operation of Lessee.
12. EVENTS OF DEFAULT. An event of default ("Event of Default") shall occur
hereunder if Lessee or any Obligor ("Obligor" shall include any guarantor or
surety of any obligations of Lessee to Lessor under this Lease and any Equipment
Schedule hereto): (i) fails to pay any installment of rent or other payment
required hereunder when due; or (ii) attempts to or does remove from the
Premises (except a relocation with Lessor's consent as provided in Section 5),
sell, transfer, encumber, part with possession of, or sublet any item of the
Equipment; or (iii) shall suffer or have suffered, in the reasonable judgment of
Lessor, a material adverse change in its financial condition since the date of
the last financial statements submitted to Lessor, and as a result thereof
Lessor deems itself to be insecure, or any of the statements or other documents
or information submitted at any time heretofore or hereafter by Lessee or
Obligor to Lessor has misstated or shall misstate or has failed or shall fail to
state a material fact; or (iv) breaches or shall have breached any
representation or warranty made or given by Lessee or Obligor in this Lease or
in any other document furnished to Lessor in connection herewith, or any such
representation or warranty shall be untrue or, by
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reason of failure to state a material fact or otherwise, shall be misleading;
or (v) fails to perform or observe any other covenant, condition or agreement
to be performed or observed by it hereunder, and such failure or breach shall
continue unremedied for a period of ten days after the earlier of (a) the date
on which Lessee obtains, or should have obtained knowledge of such failure or
breach, or (b) the date on which notice thereof shall be given by Lessor to
Lessee; or (vi) shall become insolvent or bankrupt or make an assignment for
the benefit of creditors or consent to the appointment of a trustee or
receiver, or a trustee or receiver shall be appointed for a substantial part of
its property without its consent, or bankruptcy or reorganization or insolvency
proceeding shall be instituted by or against Lessee or Obligor; or (vii)
conveys, sells, transfers or assigns substantially all of Lessee's or Obligor's
assets or ceases doing business as a going concern, or, if a corporation,
ceases to be in good standing or files a statement of intent to dissolve, or
abandons any or all of the Equipment; or (viii) shall be in breach of or
default under any lease or other agreement at any time executed with Lessor or
any other lessor or with any lender to Lessee or Obligor.
13. REMEDIES. Upon the occurrence of an Event of Default (the "Default Date")
set forth in Section 12 and at any time thereafter, Lessor may, in its sole and
absolute discretion, do any one or more of the following: (a) upon notice to
Lessee cancel all or any portion of this Lease and some or all Equipment
Schedules executed pursuant thereto; (b) enter Lessee's Premises and without
removal of the Equipment, render the Equipment unusable or, require Lessee to
assemble the Equipment and make it available to Lessor at a place designated by
Lessor, and/or dispose of the Equipment by sale or otherwise (all of which
determinations may be made by Lessor in its sole and absolute discretion)
without any duty to account for such action or inaction or for any proceeds or
profits with respect thereto; (c) declare immediately due and payable all sums
due and to become due hereunder for the full term of the Lease (including any
renewal or purchase obligations which Lessee has contracted to pay); (d) with
or without canceling this Lease, recover from Lessee damages, in an amount
equal to the sum of: (i) all unpaid rent and other amounts that became due and
payable on, or prior to, the Default Date, (ii) the present value of all future
rentals and other amounts described in the Lease and not included in (i) above
discounted to the Default Date at a rate equal to the discount rate of the
Federal Reserve Bank of Chicago as of the Commencement Date of the Lease with
respect to each Equipment Schedule (which discount rate, Lessee agrees is a
commercially reasonable rate which takes into account the facts and
circumstances at the time such Equipment Schedule commenced), (iii) all
commercially reasonable costs and expenses incurred by Lessor in enforcing
Lessor's rights under this Lease, or defending against any claims or defenses
asserted by or through Lessee, including but not limited to, costs of
repossession, recovery, storage, repair, sale, re-lease and reasonable
attorneys' fees, (iv) the estimated residual value of the Equipment as of the
expiration of the Lease, (v) any indemnity amount payable to Lessor; and (vi)
interest on all of the foregoing from the Default Date until the date payment
is received by Lessor at 2 1/2% in excess of the Prime Rate (or its equivalent)
per annum in effect on the date of such payment at the First National Bank of
Chicago) or the highest rate permitted by law, whichever is less; (e) exercise
any other right or remedy which may be available to it under the Uniform
Commercial Code or any other applicable law. Lessor reserves the right, in its
sole and absolute discretion, to release or sell any or all of the Equipment at
a public auction or in a private sale, at such time, on such terms and with
such notice as Lessor shall in its sole and absolute discretion deem reasonable.
In such event, without any duty on Lessor's part to effect any such re-lease or
sale of the Equipment, Lessor will credit the present value of any proceeds from
such sale or re-lease actually received and retainable by it (net of any and all
costs or expenses) discounted from the date of Lessor's receipt thereof to the
Default Date at 2 1/2% in excess of the Prime Rate (or its equivalent) per annum
in effect on the date of such payment at the First National Bank of Chicago, or
the highest rate permitted by law, whichever is less to the amounts due to
Lessor from Lessee under the provisions of (c), (d) and/or (e) above. A
cancellation of this Lease shall occur only upon notice by Lessor and only as to
such items of Equipment as Lessor specifically elects to cancel and this Lease
shall continue in full force and effect as to the remaining items of Equipment,
if any. If this Lease and/or any Equipment Schedule is deemed at any time to be
one intended as security, Lessee agrees that the Equipment shall secure, in
addition to the indebtedness set forth herein, any other indebtedness at any
time owing by Lessee to Lessor. No remedy referred to in this Section is
intended to be exclusive, but shall be cumulative and in addition to any other
remedy referred to above or otherwise available to Lessor at law or in equity.
No express or implied waiver by Lessor of any default shall constitute a waiver
of any other default by Lessee or a waiver of any of Lessor's rights.
14. ASSIGNMENT BY LESSOR. LESSOR MAY (WITH OR WITHOUT NOTICE TO LESSEE) SELL,
TRANSFER, ASSIGN OR GRANT A SECURITY INTEREST IN ALL OR ANY PART OF ITS
INTEREST IN THIS LEASE, ANY EQUIPMENT SCHEDULE, ANY ITEMS OF EQUIPMENT OR ANY
AMOUNT PAYABLE HEREUNDER. In such an event, Lessee shall, upon receipt of
notice, acknowledge any such sale, transfer, assignment or grant of a security
interest and shall pay its obligations hereunder or amounts equal thereto to
the respective transferee, assignee or secured party in the manner specified in
any instructions received from Lessor. Notwithstanding any such sale, transfer,
assignment or grant of a security interest by Lessor and so long as no event of
default shall have occurred hereunder, neither Lessor nor any transferee,
assignee or secured party shall interfere with Lessee's right of use or quiet
enjoyment of the Equipment. In the event of such sale, transfer, assignment or
grant of a security interest in all or any part of this Lease and any Equipment
Schedule hereto, or in the Equipment or in sums payable hereunder, as
aforesaid, Lessee agrees to execute such documents as may be reasonably
necessary to evidence, secure and complete such sale, transfer, assignment or
grant of a security interest and to perfect the transferee's, assignee's or
secured party's interest therein and Lessee further agrees that the rights of
any transferee, assignee or secured party shall not be subject to any defense,
set-off or counterclaim that Lessee may have against Lessor or any other party,
including the Seller, which defenses, set-offs and counterclaims shall be
asserted only against such party, and that any such transferee, assignee or
secured party shall have all of Lessor's rights hereunder, but shall assume
none of Lessor's obligations hereunder. Lessee acknowledges that any assignment
or transfer by Lessor shall not materially change Lessee's duties or
obligations under this Lease nor materially increase the burdens and risks
imposed on Lessee. Lessee agrees that Lessor may assign or transfer this Lease
or Lessor's interest in the Equipment even if said assignment or transfer could
be deemed to materially affect the interests of Lessee. Nothing in the
preceding sentence shall affect or impair the provisions of Section 4, Section
10 or any other provision of this Lease.
15. AMENDMENTS. This Lease and any Equipment Schedule hereto contain the
entire agreement between the parties with respect to the Equipment, this Lease
and any Equipment Schedule hereto and there is no agreement or understanding,
oral or written, which is not set forth herein. This Lease and any Equipment
Schedule hereto may not be altered, modified, terminated or discharged except
by a writing assigned by the party against whom such alteration, modification,
termination or discharge is sought.
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Lessee's Initials _____
16. LAW. This Lease and any Equipment Schedule hereto shall be binding only
when accepted by Lessor at its corporate headquarters in Illinois and shall in
all respects be governed and construed, and the rights and the liabilities of
the parties hereto determined, except for local filing requirements, in
accordance with the laws of the State of Illinois. LESSEE WAIVES TRIAL BY JURY
AND SUBMITS TO THE JURISDICTION OF THE FEDERAL DISTRICT COURTS OF COMPETENT
JURISDICTION OR ANY STATE COURT WITHIN THE STATE OF ILLINOIS AND WAIVES ANY
RIGHT TO ASSERT THAT ANY ACTION INSTITUTED BY LESSOR IN ANY SUCH COURT IS IN
THE IMPROPER VENUE OR SHOULD BE TRANSFERRED TO A MORE CONVENIENT FORUM.
Lessee's Initials _____
17. INVALIDITY. In the event that any provision of this Lease and any
Equipment Schedule hereto shall be unenforceable in whole or in part, such
provision shall be limited to the extent necessary to render the same valid, or
shall be exercised from this Lease or any Equipment Schedule hereto, as
circumstances may require, and this Lease and the applicable Equipment Schedule
shall be construed as if said provision had been incorporated herein as so
limited, or as if said provision had not been included herein, as the case may
be without invalidating any of the remaining provisions hereof.
18. MISCELLANEOUS. All notices and demands relating hereto shall be in
writing and mailed by certified mail, return receipt requested, to Lessor or
Lessee at their respective addresses above or shown in the Equipment Schedule,
or at any other address designated by notice served in accordance herewith.
Notice shall become effective when deposited in the United States mail, with
proper postage prepaid, addressed to the party intended to be served at the
address designated herein. All obligations of Lessee shall survive the
termination or expiration of this Lease and any Equipment Schedule hereto.
Should Lessor permit use by Lessee of any Equipment beyond the Initial Lease
Term, or, if applicable, any exercised extension or renewal term, the lease
obligations of Lessee shall continue and such permissive use shall not be
construed as a renewal of the term thereof, or as a waiver of any right or
continuation of any obligation of Lessor hereunder, and Lessor may take
possession of any such Equipment at any time upon demand. If more than one
Lessee is named in this Lease, the liability of each shall be joint and
several. Lessee shall, upon request of Lessor from time to time, perform all
acts and execute and deliver to Lessor all documents which Lessor deems
reasonably necessary to implement this Lease and any Equipment Schedule hereto,
including, without limitation, certificates addressed to such persons as Lessor
may direct stating that this Lease and the Equipment Schedule hereto is in full
force and effect, that there are no amendments or modifications thereto, that
Lessor is not in default hereof or breach hereunder, setting forth the date to
which rentals due hereunder have been paid, and stating such other matters as
Lessor may request. This Lease and any Equipment Schedule hereto shall be
binding upon the parties and their successors, legal representatives and
assigns. Lessee's successors and assigns shall include, without limitation, a
receiver, debtor-in-possession, or trustee of or for Lessee. If any person,
firm, corporation or other entity shall guarantee this Lease and the
performance by Lessee of its obligations hereunder, all of the terms and
provisions hereof shall be duly applicable to such Obligor.
19. LESSEE'S WAIVERS. To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a Lessee by
Article 2A of the Uniform Commercial Code as adopted in any jurisdiction,
including but not limited to Lessee's rights 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; (vi) claim a security interest in the Equipment in Lessee's
possession or control for any reason (vii) deduct 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 those due from Lessor; (x) recover any general, special, incidental, or
consequential damages for any reason whatsoever; and (xi) specific performance,
replevin, detinue, sequestration, claim, and delivery of the like for any
Equipment identified to this Lease. To the extent permitted by applicable law,
Lessee also hereby 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 as set forth in Paragraph 13 or
which may otherwise limit or modify any of Lessor's rights or remedies under
Paragraph 13. Any action by Lessee against Lessor for any default by Lessor
under this Lease, including breach of warranty or indemnity, shall be commenced
within one (1) year after any such cause of action accrues.
20. COUNTERPARTS. This Lease may be executed in any number of counterparts,
each of which shall be deemed an original. Each Equipment Schedule shall be
executed in three (3) serially numbered counterparts each of which shall be
deemed an original but only counterpart number 1 shall constitute "chattel
paper" or "collateral" within the meaning of the Uniform Commercial Code in any
jurisdiction.
21. ADDENDUM. ("X" if applicable) [X] See Addendum(s) attached hereto and
made a part hereof.
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THE PERSON EXECUTING THIS LEASE FOR AND ON BEHALF OF LESSEE WARRANTS AND
REPRESENTS, WHICH WARRANTY AND REPRESENTATION SHALL SURVIVE THE EXPIRATION OR
TERMINATION OF THIS LEASE, THAT THIS LEASE AND THE EXECUTION HEREOF HAS BEEN
DULY AND VALIDLY AUTHORIZED BY LESSEE, CONSTITUTES A VALID AND BINDING
OBLIGATION OF LESSEE AND THAT HE HAS AUTHORITY TO MAKE SUCH EXECUTION FOR AND
ON BEHALF OF LESSEE.
IN WITNESS WHEREOF, this Lease has been executed by lessee this 4th day of
April, 1997.
ACCEPTED AT CHICAGO, ILLINOIS
CYBERGOLD, INC. LINC CAPITAL MANAGEMENT, A DIVISION OF
SCIENTIFIC LEASING INC.
Lessee Lessor
By: A.▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: LINC CAPITAL MANAGEMENT
-------------------------------- --------------------------------------
Title: CEO TITLE: Vice President
----------------------------- -----------------------------------
Date: 4-4-97 Date: September 16, 1997
------------------------------ ------------------------------------
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ADDENDUM NO. 1 TO
MASTER LEASE AGREEMENT NO. 6869
DATED AS OF MARCH 28, 1997
BETWEEN
LINC CAPITAL MANAGEMENT,
A DIVISION OF SCIENTIFIC LEASING INC., AS LESSOR
AND
CYBERGOLD, INC., AS LESSEE
This Addendum is attached to and forms part of that certain Master
Lease Agreement No. 6869 dated as of March 18, 1997, between LINC Capital
Management, a division of Scientific Leasing Inc., ("Lessor" or "LINC") and
CyberGold, Inc. ("Lessee" or "CyberGold"), (the "Lease") agreeing as follows:
A. Terms defined in the Lease shall have the same meanings herein unless
otherwise expressly set forth herein or otherwise required by context
hereof.
B. The following shall be added to the terms of the lease and are hereby
incorporated therein by reference.
2. LEASING OF EQUIPMENT.
a. Lease Line. Subject to the terms and conditions herein set
forth and in the applicable Equipment Schedule, and provided no event of
default under the Lease shall have occurred and be then continuing, Lessor
agrees to purchase and lease to Lessee, from time to time, the "Equipment" (as
defined below). The aggregate "Cost" (as defined below) of Equipment purchased
by Lessor pursuant to this Section 22.a shall in no event exceed $350,000.00
(the "Lease Line Amount"). All Takedowns" (as defined below) shall be completed
on or before April 1, 1998 (the "Last Takedown Date").
b. Equipment. (1) Lessor will purchase certain computer
equipment, and ancillary equipment related thereto (the "Equipment") from Lessee
or from vendors designated by Lessee. The purchase price for the Equipment will
be equal to the lesser of either (i) 100% of the manufacturers' net invoice
price (excluding applicable sales or use taxes, freight, installation, and
similar charges) for the Equipment or (ii) the Net Book Value of the Equipment
(as defined below); and (iii) the then fair market value for each item or
commercial unit of the Equipment as determined by Lessor ("Cost").
(2) All Equipment shall be tangible personal property
eligible for MACRS depreciation under the Internal Revenue Code of 1986, as
amended. The depreciation benefits arising from the Equipment will be for the
account of Lessor.
(3) Each item of or commercial unit of the Equipment, its
vendor and all purchase orders, invoices and related documents will be subject
to review and approval by Lessor prior to funding any Takedown. The minimum Cost
for an individual item of or commercial unit of the Equipment shall not be less
than $1,000.
(4) Notwithstanding the provisions of subsection (1) above,
the "Cost" of for any Equipment placed in service by Lessee more than ninety
(90) days prior to purchase by LINC ("Used Equipment") shall be as follows:
(i) The Sale Leaseback Amount ("SLB Amount") paid by LINC for used Equipment
shall be equal to the lesser of either (a) 100% of the Net Book Value of the
Equipment or (b) the then fair market value for each item or commercial unit of
the type of Used Equipment acceptable to LINC but in either event not more or
less than $250,000.00 for Used Equipment purchased by LINC in connection with
Equipment Schedule No. 001. The SLB Amount shall be funded by LINC immediately
upon execution of the Master Lease Agreement and all related documents required
by Lessor including Equipment Schedule No. 001 to the Lease. Title to all Used
Equipment described in Equipment Schedule No. 001 shall pass to Lessor upon
payment of the SLB Amount.
(5) The Net Book Value shall mean the depreciated value of
the Equipment (determined in accordance with generally accepted accounting
principles according to the books and records of Lessee) and shall be supported
by the original manufacturer's net invoice amount actually paid by Lessee
(excluding applicable sales or use taxes, freight, installation and other
similar charges) as evidenced by canceled checks, copies of which are to be
delivered to Lessor prior to any purchase of Equipment by LINC.
c. Initial Lease Term and Monthly Lease Rate. The Initial Lease
Term shall be 36 months. The applicable Monthly Lease Rate factor shall be
3.2552% of Cost per month, subject to Rate Adjustments described below.
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d. Rate Adjustment. The Monthly Lease Rate Factor will be indexed to the
yield for U.S. Treasury Notes maturing closest to the date (3) years from the
Commencement Date of each Equipment Schedule (the "Index Instrument")
[(currently 5.97% for the 7 3/4% Treasury Notes maturing December, 1999 as
reported in the Wall Street Journal dated December 24, 1996)].
The Monthly Lease Rate Factor shall be adjusted by Lessor to provide for any
increase in the yield of the Index Instrument on the Commencement Date of each
Equipment Schedule. Upon commencement of each Equipment Schedule, the Monthly
Lease Rate Factor (as adjusted) shall be fixed for the Lease Term of each such
Equipment Schedule.
e. TAKEDOWNS. "Takedowns" means the date of the final payment of the Cost
of the Equipment for the applicable Equipment Schedules by LINC. All Takedowns
shall commence on the first day of the calendar quarter following Lessee's
acceptance of all Equipment on each Equipment Schedule. The initial Takedown
shall include any Used Equipment accepted by LINC as a separate Equipment
Schedule for the SLB Amount. Any Equipment purchased after the Initial Takedown
shall be ended on subsequent Takedowns through additional Equipment schedules
of at least $50,000.00 each up to the amount of the Cost of such Equipment.
Each Equipment Schedule will include all purchases of Equipment made for
Equipment on a progress payment basis in the previous calendar quarter not
previously included in an Equipment Schedule. Aggregate takedowns prior to
April 15, 1997 shall be for at least $50,000. All Equipment Schedules shall
takedown prior to the Last Takedown Date.
f. FIRST MONTH'S RENT. An amount equal to the first month's rental payment
shall be payable to Lessor upon commencement of each Equipment Schedule and may
be retained by Lessor from the amount of any other sums payable by Lessor to
Lessee or on behalf of Lessee
g. LAST MONTH'S RENT. An amount equal to $11,393.20 representing Lessor's
estimate of the last month's rental amount based upon the Monthly Lease Rate
Factor and based upon Equipment Cost equal to the aggregate Lease Line Amount,
will be due at the time of the commencement of Equipment Schedule 001 and this
rent will be applied to the last Monthly Lease Payment due under each Equipment
Schedule on a pro rata basis. If the entire Lease Line Amount is not fully
funded by April 1, 1998, then the unused amount of the last payment paid under
this paragraph shall be retained by Lessor.
h. END OF TERM OPTIONS. Provided that the Lease has not been terminated and
that no Event of Default or event which, with notice or lapse of time or both,
would become an Event of Default shall have occurred and be continuing, Lessee
shall at the end of the Initial Lease Term of each Equipment Schedule, renew the
Lease with respect to all, and not less than all, of the Equipment under each
Equipment Schedule to the Lease at their respective expiration dates for 12
months at 60% of the applicable Monthly Lease Rate Factor, which shall be
payable monthly in advance plus any applicable taxes. At the end of such renewal
term, Lessee will purchase the Equipment for $1.00. When Lessee so purchases the
Equipment, the purchase shall take place on the day immediately following the
date of expiration of the renewal Lease Term, and by the delivery at such time
by Lessee to Lessor of payment of the amount of the purchase price for the
Equipment. The purchase of the Equipment by Lessee pursuant to any options
herein granted shall be "AS IS WHERE IS," "WITH ALL FAULTS" without recourse to
or any warranty by Lessor, other than a warranty that the Equipment is free and
clear of liens and encumbrances resulting by or through acts of Lessor.
▇. ▇▇▇▇▇▇▇ MONEY DEPOSIT. Lessor acknowledges receipt of 5,000,00 (the
"▇▇▇▇▇▇▇ Money Deposit") from Lessee. The ▇▇▇▇▇▇▇ Money Deposit will be first
applied to legal and due diligence expenses, then to the documentation fee of
2,000.00. Any remainder shall then be applied pro rata to the initial months
rent on each schedule. If Lessee does not utilize the entire Lease Line Amount
contemplated by this Agreement or execute and deliver all documents required by
Lessor, the ▇▇▇▇▇▇▇ Money Deposit or any unapplied portion thereof will be
retained by Lessor as a fee and not as a penalty.
j. CONDITIONS PRECEDENT TO LEASING. (i) lessor shall have no obligation to
purchase any Equipment for lease to Lessee unless or until acceptable
documentation, the form of which will be provided by Lessor has been executed
by Lessee and delivered to Lessor and (ii) Lessor has confirmed with Lessee
that no material adverse change in Lessee's financial condition and business
prospects prior to each takedown. In addition to items (i) and (ii) above and
any other document or item requested by Lessor, Lessee shall deliver the items
set forth below in form and substance acceptable to Lessor.
(1) Execution and delivery by Lessee to Lessor the following documents prior to
the Initial Takedown.
(a) Master Lease Agreement;
(b) Addendum No. 1, Master Lease Agreement;
(c) Equipment Schedule(s), as required by Lessor;
(d) Secretary's certificate as to board of director's resolutions and
incumbency:
(e) UCC-1 financing statements and protective fixture filings signed by
Lessee (to be filed prior to the earlier of funding or, for Equipment delivered
after the date of the Lease, delivery of Equipment to Lessee) along with any
UCC Amendments relating thereto for any prior, present or subsequent Equipment
Schedule.
(f) Progress Payment Authorization (if applicable);
(g) ▇▇▇▇(s) of sale for Equipment sold by Lessee to Lessor (if
applicable);
(h) Purchase Agreement Assignment of agreements between Lessee and its
Equipment vendors for new Equipment (if applicable); and
(i) The Warrant described in Section 24 below.
(2) Delivery to Lessor of executed copies of the following Documents prior to
the Initial Takedown.
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(a) Certificate of insurance:
(b) Release or subordination of all security interests in favor of any other
party granted by Lessee or the owners of Equipment to be sold to Lessor
which cover either the Equipment to be sold or include "after acquired"
Equipment clauses in favor of such other party ("Equipment Liens"), (if
applicable); and
(c) Release, disclaimer or subordination agreements (if required by Lessor) by
each owner of any premises in which Equipment will be located of any
landlord's lien or other right which a real property owner might claim in
the Equipment to be leased hereunder.
(3) With respect to Subsequent Takedowns occurring prior to January 17, 1998,
the following items will be required to be delivered and executed, if
applicable, prior to each Subsequent Shakedown:
(a) Equipment Schedule(s), as needed by Lessor;
(b) Secretary's certificate as to board of directors' resolutions and
incumbency (if requested by Lessor);
(c) UCC-1 financing statements and protective fixture filings signed by Lessee
(to be filed prior to the earlier of funding or delivery of Equipment to
Lessee) along with any UCC Amendments relating thereto for any prior,
present, or subsequent Equipment Schedule;
(d) Progress Payment Authorization, (if applicable);
(e) ▇▇▇▇(s) of sale for Equipment sold by Lessee to Lessor (if applicable);
(f) Purchase Agreement Assignment of agreements between Lessee and its
Equipment vendors for new Equipment (if applicable);
(g) Certificate of insurance (if requested by Lessor);
(h) Release of "Equipment Liens" (if applicable);
(i) Landlord subordination agreements or Equipment Waiver agreements acceptable
to Lessor; (if applicable);
(j) Original invoices issued to Lessor (or copies of invoices to Lessee and
canceled checks of Lessee);
(k) Amendments to Articles of Incorporation and By-Laws (if applicable);
(4) The following other documents shall also be required to be delivered by
Lessee prior to any Takedown:
(a) Copies of invoices to Lessee and canceled checks of Lessee or original
invoices billed to Lessor for all Items of Equipment proposed for the
initial Takedown(s)
(b) Certified copies of the Lessee's Articles of Incorporation
(c) Current Financial Statements prepared by Lessee or its independent auditor
not previously furnished to Lessor, if any.
23. PROGRESS PAYMENTS. If requested, progress payments will be made for any
amount over $1,000 per invoice to vendors in accordance with Lessor's standard
procedures. Unless otherwise agreed by Lessor the minimum progress payment
amount shall not be less than $5,000.00. Interim rent, on progress payments on
Equipment, shall be payable from the date progress payments are made to the
Commencement Date of the corresponding Equipment Schedule. Interim rent shall
be calculated at the daily equivalent of the Monthly Lease Rate Factor.
Lessee shall deliver to Lessor Lessee's authorization not less than 30 days
prior to the due date thereof and in a form acceptable to Lessor, to make a
progress payment and, provided on such due date no Events of Default have
occurred and be continuing hereunder or under the Lease. Lessor shall make the
progress payment set forth to the manufacturer(s) or supplier(s) as set forth
in such authorization. In respect of such progress payments so made by Lessor,
Lessee agrees as follows:
(i) to pay the Lessor or Lessor's Assignee a daily rental amount equal to the
product of the aggregate amount of progress payments actually made by Lessor
multiplied by the Lease Rate Factor as set forth in each applicable Equipment
Schedule divided by thirty (30) from the date such progress payments are in
fact made. Such payment shall be made by Lessee to Lessor immediately upon
Lessee's receipt of a written request therefor (but not more than one such
payment shall be made within any given period of thirty (30) days accompanied by
evidence reasonably satisfactory to Lessee indicating the amount and date of
payment by Lessor of the progress payments in respect of which such payment is
so requested.
(ii) in the event Lessee shall not deliver Lessee's Equipment Acceptance Form
in respect of the Equipment to Lessor on or before three (3) months from the
date of the first progress payment made hereunder (unless such period is
extended by mutual written agreement of Lessor and Lessee), to pay to Lessor or
Lessor's Assignee, upon demand, an amount equal to the sum of all progress
payments theretofore made by Lessor pursuant to this provision, together with
unpaid daily rental amounts thereon;
(iii) Lessee acknowledges and understands that Lessor may elect to borrow all
or a portion of the progress payments required of Lessor under this provision
and that as security therefor, Lessor may assign the applicable Equipment
Schedule, including but not limited to Lessor's rights hereunder, to the lender
of such amounts so borrowed. Lessee agrees, without notice to Lessee, Lessor
may make such assignment in connection with any such borrowing and for the
protection and benefit of Lessor and any such assignee, the rights of Lessor or
its assignee in and to such payments shall be absolute and unconditional under
all circumstances, notwithstanding: (i) any set-off, abatement, reduction,
counterclaim, recoupment, defense or other right which Lessee may have against
Lessor, the manufacturer(s) or seller(s) of the Equipment, or any other person
for any reason whatsoever; or (ii) any defect in condition, operation, fitness
or use, damage or destruction of the Equipment, or failure of the
manufacturer(s) or supplier(s) to deliver the Equipment for any reason
whatsoever; or (iii) or any insolvency, bankruptcy, reorganization or similar
proceedings instituted by or against the Lessor or Lessee.
24. WARRANTS. In connection with the Master Lease Agreement No. 6869 and prior
to the Initial Takedown, CyberGold shall issue to LINC warrants to purchase
$35,000 (thirty-five thousand dollars)
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of CyberGold Preferred Stock Series B Shares at an exercise price equal to the
actual Series B price unless the closing of the Series B round takes place in
the excess of 90 days from the execution of the lease. If this occurs, the
price per share of the warrant shall be equal to the Series A Preferred price.
The warrants shall be issued and delivered to Lessor upon execution of the
lease documents and shall be exercisable at any time within ten (10) years from
the date of the final acceptance of the equipment under the Lease. The terms of
the warrant shall include piggyback registration rights on a pro rata basis
with the shares of other shareholders, acceptable anti-dilution rights, and
shall provide for a "cashless" exercise provision in the event of exercise by
LINC.
25. REPORTS. So long as there are amounts due LINC under the Lease (or LINC
holds any unexpired and unexercised warrants) Lessee shall supply LINC with
financial and operating performance data as is provided to Board Members and
investors and, if applicable, the S.E.C., and shall immediately notify LINC of
any material adverse change in its financial condition or business prospects.
IN WITNESS WHEREOF, this Addendum has been executed by a duly authorized
officer of Lessee as of the _________ day of _______________, 1997.
Cybergold, Inc.
(Lessee)
By: CyberGold, Inc.
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
LINC CAPITAL MANAGEMENT, A DIVISION OF
SCIENTIFIC LEASING INC.
(Lessor)
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Date:
-----------------------------------
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