EX. 10.2
MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT dated as of October 31, 1996 between SHIVA
CORPORATION, a Massachusetts corporation ("Lessor"), and FlashNet
Communications corporation ("Lessee").
IN CONSIDERATION of the mutual agreements hereinafter set forth and the
payment of rent as herein provided, the parties hereto agree as follows:
1. PROPERTY LEASED.
Lessor hereby rents, demises and lets to Lessee all of the tangible
personal property (the "Equipment") listed on each equipment schedule
("Equipment Schedule") executed, from time to time, pursuant to this Master
Lease. Each Equipment Schedule shall be substantially in the form of Exhibit A,
shall incorporate therein all of the terms and conditions of this Master
Lease, shall contain such additional terms and conditions as Lessor and
Lessee shall agree and shall constitute a separate, distinct and independent
lease and contractual obligation of Lessee.
2. DEFINITIONS.
2.1 "Acceptance Date" means, as to each Item of Equipment designated on
any Equipment Schedule, the date on which the Certificate of Acceptance with
respect to such Equipment is executed by Lessee.
2.2 "Commencement Date" means, as to each Item of Equipment designated
on any Equipment Schedule, where the Acceptance Date for such Equipment falls
on the first day of the month, that date, or, in any other case, the first
day of the month following the month in which the Installation Date occurs.
2.3 "Event of Default" has the meaning specified in Section 14 hereof.
2.4 "Shiva" means Shiva Corporation or any subsidiary or associated
company thereof.
2.5 "Item" means any individual item or items of Equipment identified
in an Equipment Schedule.
2.6 "Lease" means an Equipment Schedule as it incorporates the terms of
this Master Lease, together with any riders, supplements and amendments to
such Equipment Schedule and Master Lease.
2.7 "Manufacturer" means the manufacturer of the Equipment.
2.8 "Potential Event of Default" means any event which with the lapse
of time or the giving of notice, or both, would constitute an Event of
Default.
3. TERM AND RENEWAL.
3.1 TERM. The term of this Master Lease shall commence on the date set
forth above and shall continue in effect so long as any Equipment Schedule
remains in effect. The lease term for each Item shall commence on the
Acceptance Date for such Item and shall continue for an initial period ending
that number of months from the Commencement Date as is specified in the
applicable Equipment Schedule (the "Initial Term"). On the Acceptance Date
for each Item of Equipment, Lessee shall execute and deliver to Lessor a
Certificate of Acceptance substantially in the form of Exhibit B. The fact
that a Manufacturer's maintenance agreement has been entered into by Lessee
or (where applicable) there is in force a valid Manufacturer's warranty in
respect of an Item shall be conclusive evidence that Lessee finds such Item
complete, in good working order and condition and satisfactory for its
requirements.
3.2 RENEWAL. Upon the expiration of the Initial Term of a Lease, if
Lessee has not exercised the purchase option provided in the applicable
Equipment Schedule, then such Lease automatically shall be renewed for
successive six month periods ("Renewal Terms") until terminated by either
party giving to the other not less than three
months prior written notice of termination. Any such termination shall be
effective on the last day of the Initial Term or the last day of any Renewal
Term. Each Renewal Term shall be upon the same terms and conditions as those
of the Initial Term. Rent during the Renewal Term shall accrue to Lessor
beginning upon the commencement of the Renewal Term and shall be due and
payable during the Renewal Term and any extensions thereof on the same terms
as during the Initial Term.
4. RENT AND PAYMENT.
Rent shall begin to accrue on the Acceptance Date and Lessee shall pay
to Lessor, as rental for the Equipment during the Initial Term, the rent set
forth in the applicable Equipment Schedule ("Rent"), which shall be due and
payable on the dates ("Rent Payment Dates") specified therein. Rent shall be
paid to Lessor at the address set forth for Lessor in the Equipment Schedule
or at such other place as Lessor shall designate in writing, or if to an
assignee of Lessor, at such place as such assignee shall designate in
writing, and shall be paid free and clear of all claims, demands or setoffs
against Lessor or such assignee. Whenever any payment (of Rent or otherwise)
is not made when due hereunder, Lessee shall pay interest on such amount
until and including the date of payment, at the lesser of (a) 1.5% per month
("the Overdue Rate") and (b) the maximum allowable rate of interest permitted
by law.
5. SELECTION; WARRANTY AND DISCLAIMER OF WARRANTIES.
Lessee represents and warrants that it selects the Equipment based on
its own judgement and expressly disclaims any reliance upon statements made
by Lessor. Lessee authorizes Lessor to insert in each Equipment Schedule the
serial numbers and other identifying data of the Equipment. Lessor warrants
to Lessee that, so long as Lessee shall not be in default of any of the
provisions of the applicable Equipment Schedule, neither Lessor nor any
Assignee or Secured Party (as such terms are defined in Section 6.2) of
Lessor will disturb Lessee's quiet and peaceful possession of the Equipment
and Lessee's unrestricted use thereof for its intended purpose LESSOR MAKES
NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT
TO ANY OF THE EQUIPMENT, ITS MERCHANTABILITY, OR ITS FITNESS FOR A PARTICULAR
PURPOSE. LESSOR SHALL NOT BE LIABLE TO LESSEE OR ANY OTHER PERSON FOR DIRECT,
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES BASED ON STRICT OR
ABSOLUTE TORT LIABILITY OR LESSORS PASSIVE NEGLIGENCE. LESSEE HEREBY
ACKNOWLEDGES THAT ANY MANUFACTURER'S OR SUPPLIERS'S WARRANTIES WITH RESPECT
TO THE EQUIPMENT ARE FOR THE BENEFIT OF BOTH LESSOR AND LESSEE.
NOTWITHSTANDING TO FOREGOING, LESSEE'S OBLIGATIONS TO PAY EACH RENT PAYMENT
DUE, OR OTHERWISE PERFORM ITS OBLIGATIONS UNDER THIS LEASE ARE ABSOLUTE AND
UNCONDITIONAL.
6. TITLE AND ASSIGNMENT.
6.1 TITLE. Nothing contained herein or in any Equipment Schedule shall
give or convey to Lessee any right, title or interest in or to the Equipment,
except as a lessee as set forth therein and Lessee represents and agrees that
Lessee shall hold the Equipment subject and subordinate to the rights of
Lessor, any Assignee and any Secured Party and Lessee shall furnish Lessor
with such documentation as Lessor shall reasonably request with respect
thereto. Lessor is hereby authorized by Lessee, at Lessor's expense, to cause
this Master Lease, any Equipment Schedule or any statement or other
instrument in respect of any Equipment Schedule as it may deem necessary or
appropriate showing the interest of Lessor, any Assignee and any Secured
Party in the Equipment to be filed in all jurisdictions deemed by Lessor to
be necessary or appropriate and Lessee agrees to execute and deliver Uniform
commercial Code financing statements reasonably requested
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by Lessor for such purpose. Lessee, at its expense, shall protect and defend
Lessor's title as well as the interest of any Assignee and any Secured Party
against all persons claiming against or through Lessee and shall at all times
keep the Equipment free and clear from any legal process, liens or
encumbrances whatsoever (except any placed thereon by or through Lessor) and
shall give Lessor immediate written notice thereof and shall indemnify and
hold Lessor, any Assignee and any Secured Party harmless from and against any
loss caused thereby.
6.2 ASSIGNMENT BY LESSOR. Lessee acknowledges Lessor's intent to have
the ability to sell and assign its interest, or grant a security interest for
the purpose of securing an obligation, in and to each Equipment Schedule and
the Equipment listed therein in whole or in part to a security assignee (a
"Secured Party") for the purpose of securing a loan to Lessor. Lessor may
also sell and assign its rights as owners and lessor of the Equipment under
any Equipment Schedule to an assignee (an "Assignee") which, at the option of
Lessor or the Assignee, may be represented by a bank or trust company acting
as a trustee in which case such trustee shall be the Assignee. After such
assignments, the term Lessor shall mean, as the case may be, such Assignee or
trustee and any Secured Party. Lessee hereby consents to such assignments and
shall acknowledge such assignment or assignments as shall be designated by
written notice, hereto, given by Lessor to Lessee and further covenants and
agrees that:
(a) Any such Secured Party or Assignee shall have and be entitled to
exercise any and all discretions, rights and powers of Lessor hereunder or
under any equipment Schedule, but such Secured Party or Assignee shall not be
obligated to perform any of the obligations of Lessor hereunder or under any
Equipment Schedule. However, any such Secured Party or Assignee shall
covenant that it will not disturb Lessee's quiet and peaceful possession of
such Equipment or its unrestricted use thereof for its intended purpose
during the term hereof so long as no Event of Default has occurred and is
continuing hereunder.
(b) Lessee shall pay to such Secured Party or Assignee as shall be
designated in such notice, all Rent and any and all other amounts designated
in such notice which are payable by Lessee under any Equipment Schedule,
notwithstanding any defense, counterclaim, recoupment or setoff of whatever
nature, whether by reason of breach of such Equipment Schedule or otherwise,
which it may or might now or hereafter have against Lessor (Lessee reserving
its right to have recourse directly against Lessor on account of any such
defense or claim).
(c) Lessee will execute and deliver such further documentation as such
Secured Party or Assignee may reasonably require to perfect or further the
assignments contemplated by this Section 6.2.
(d) Subject to and without impairment of Lessee's leasehold rights in
and to the Equipment, Lessee holds the Equipment for such Secured Party or
Assignee to the extent of such Secured Party's or Assignee's rights therein.
Notwithstanding the foregoing, upon expiration of the Initial Term or any
extension thereof, Lessee shall return the Equipment pursuant to Section 10
upon the direction of Lessor.
(e) Notwithstanding any assignment of Lessor's rights hereunder to an
Assignee, Secured Party or any other person or entity, Lessor agrees that it
shall remain principally responsible and obligated to perform all of Lessor's
obligations and agreements hereunder.
6.3 ASSIGNMENT BY LESSEE. Lessee shall not assign, transfer, or
sublease any of its rights or obligations in, to, or under this Master Lease
or any Equipment Schedule without the prior written consent of Lessor.
Notwithstanding any such permitted assignment, Lessee shall not be relieved
of any liabilities or obligations hereunder, except by prior written
agreement between Lessee, Lessor, and any other Secured Party or Assignee.
7. NET LEASES; TAXES AND FEES.
7.1 NET LEASE. Each Equipment Schedule constitutes a net lease.
Lessee's obligation to pay all Rent and any and all amounts payable by Lessee
under any Equipment Schedule shall be absolute and unconditional and shall
not be subject to any abatement, reduction, set off, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever, and such
payments shall be and continue to be payable in all events.
7.2 TAXES AND FEES. Lessee covenants and agrees to pay when due or
reimburse and indemnify and hold Lessor harmless from and against all taxes,
fees or other charges of any nature whatsoever (together with any related
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interest or penalties) now or hereafter imposed or assessed during the term
of each Equipment Schedule against Lessor, Lessee or the Equipment by any
federal, state, county or local governmental authority upon or with respect
to the Equipment or upon the ordering, purchase, ownership, delivery,
leasing, possession, use, operation, return or other disposition thereof or
upon the rents, receipts or earnings arising therefrom or upon or with
respect to any Equipment Schedule (except only federal, state and local taxes
based on or measured by the net income of Lessor). To the extent permitted by
applicable law, Lessee shall prepare (in such manner as will show Lessor's
ownership of the Equipment) and timely file all tax returns required in
connection with taxes payable by Lessee hereunder.
8. CARE, USE AND MAINTENANCE; ALTERATIONS AND ATTACHMENTS; AND INSPECTION BY
LESSOR.
8.1 CARE, USE AND MAINTENANCE. Lessee shall, at its sole expense, at
all times during the term of each Equipment Schedule, maintain the Equipment
in good operating order, repair, condition and appearance and protect the
Equipment from deterioration, other than normal wear and tear.
Lessee shall not use the Equipment for any purpose other than that for which
it was designed. Lessee covenants that the Equipment will at all times be
used and operated in accordance with the Manufacturer's instructions and in
compliance with any restriction contained in the Manufacturer's warranties
and the Maintenance Agreement (if applicable) regarding the Equipment and
with any and all statutes, laws, ordinances and regulations of any
governmental agency applicable to the Equipment. Lessee will not, without the
prior written consent of Lessor and subject to such conditions as Lessor may
impose for its protection, affix the Equipment to any real property, if, as a
result thereof, the Equipment will become a fixture under applicable law and
will provide Lessor with such landlord's and mortgagee's waivers as Lessor
may request in connection therewith.
8.2 ALTERATIONS AND ATTACHMENTS. Lessee will not, without prior
written consent of Lessor, affix or install any accessory, equipment or
device on the Equipment leased hereunder which will either impair the
originally intended function or use of such Equipment or cannot be readily
removed without causing material damage to such Equipment. All such
accessories, equipment and devices furnished, attached or affixed to the
Equipment shall thereupon become the property of Lessor (except such as may
be readily removed without causing material damage to the Equipment).
8.3 INSPECTION BY LESSOR. Upon the request of Lessor, Lessee shall, at
reasonable times during business hours and subject to Lessee's normal
security, safety and confidentiality regulations, make the Equipment
available to Lessor for inspection at the place where it is normally located
and shall make Lessee's log and maintenance records pertaining to the
Equipment available to Lessor for inspection.
9. REPRESENTATIONS AND WARRANTIES OF LESSEE AND LESSOR.
9.1 REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents,
warrants and covenants that, with respect to this Master Lease and each
Equipment Schedule executed hereunder:
(a) The execution, delivery and performance thereof by Lessee have been
duly authorized by all necessary corporate action and do not conflict with
Lessee's charter or by-laws or with any indenture, contract or agreement by
which it is bound, or with any statute, judgment, decree, rule or regulation
binding upon it.
(b) Any individual executing this Master Lease or any documents
delivered in connection herewith on behalf of Lessee is duly authorized to do
so.
(c) The Master Lease and each Equipment Schedule constitute legal,
valid and binding agreements of Lessee enforceable in accordance with their
respective terms.
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(d) The Equipment is personal property and when subjected to use by
Lessee will not be or become fixtures under applicable law.
9.2 REPRESENTATIONS AND WARRANTIES OF LESSOR. Lessor represents,
warrants and covenants that, with respect to the Master Lease and each
Equipment Schedule executed hereunder:
(a) The execution, delivery and performance thereof by Lessor have been
duly authorized by all necessary corporate action.
(b) Any individual executing this Master Lease or any documents
delivered in connection herewith on behalf of Lessor is duly authorized to do
so.
(c) The Master Lease and each Equipment Schedule constitute legal,
valid and binding agreements of Lessor enforceable in accordance with their
respective terms.
10. DELIVERY AND RETURN OF EQUIPMENT.
Lessee hereby assumes the full expense of transportation to Lessee's
premises (including in-transit insurance) and installation thereat of the
Equipment. Upon termination (by expiration or otherwise) of each Equipment
Schedule, Lessee shall, pursuant to Lessor's instructions and at Lessee's
expense recrate or otherwise suitably package the Equipment and deliver the
Equipment to Lessor at a location to be designated by Lessor which is within
the continental United States. The Equipment shall be returned to Lessor in
the same operating order, repair, condition and appearance as on the
Acceptance Date, reasonable wear and tear only excepted, with the
Manufacturer's then latest engineering and safety changes incorporated
therein to the extent that such changes were applicable to Lessee's business.
11. LABELING.
Lessee covenants and agrees that, upon the request of Lessor, it shall
cause the Equipment to be plainly, permanently and conspicuously marked on
the rear of the Equipment, by stenciling or by metal tag or plate affixed
thereto as supplied by Lessor, indicating Lessor's interest in the Equipment.
Lessee shall replace any such stenciling, tag or plate which may be removed
or destroyed or become illegible. Lessee shall keep all Equipment free from
any marking or labeling which might be interpreted as a claim of ownership
thereof by Lessee or any party other than Lessor or anyone so claiming
through Lessor.
12. INDEMNIFICATIONS.
12.1 LOSS INDEMNIFICATION. Lessee shall and does hereby indemnify and
hold Lessor, any Assignee and any Secured Party harmless from and against any
and all claims, costs, expenses, damages and liabilities, including
reasonable attorneys' fees (a "Claim"), arising out of the ownership,
selection, possession, leasing, renting, operation, control, use, maintenance
or delivery of the Equipment. Notwithstanding the foregoing, Lessee shall not
be responsible under the terms of this Section 12 to a party indemnified
hereunder for any claim occasioned by the gross negligence or willful
misconduct of such indemnified party. Lessee shall immediately notify Lessor
of any Claim arising out of the alleged or improper manufacturing,
functioning or operation of any Item of Equipment, and promptly furnish
Lessor with details thereof and copies of documents pertaining thereto.
13. RISK OF LOSS AND INSURANCE.
13.1 RISK OF LOSS. Lessee hereby assumes the entire risk of loss,
damage, theft or destruction of the Equipment, including during shipment of
the Equipment to Lessee, and ending upon Lessee's delivery of the Equipment
to Lessor as required in Section 10, and no such loss, damage or destruction
shall relieve Lessee of any of its obligations under any Equipment Schedule
executed hereunder. In the event the Equipment is lost, damaged, destroyed or
stolen or title thereto shall be taken by any governmental authority under
power of eminent domain or otherwise (an "Event of Loss"), Lessee shall give
Lessor immediate notice thereof and (a) have the damage repaired at its
expense, without interruption of payments of Rent, or (b) if the Equipment so
damaged cannot be repaired, or if the Equipment was lost,
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destroyed or title thereto taken then, on the next Rent Payment Date, pay to
Lessor the Stipulated Loss Value (as set forth in the applicable Equipment
Schedule) of any irreparably damaged Equipment and all Rent charges and other
charges accrued and unpaid to and including the date of such payment.
Lessee shall give Lessor immediate notice of any damage to, or loss or
destruction of, any Item of Equipment. All proceeds of insurance received by
Lessor or Lessee under the policy referred to in Section 13.2 shall be
applied toward the cost of repair or replacement of the Equipment or, if
applicable, to reimburse Lessee for amounts, representing the Stipulated Loss
Value of the Equipment, that were actually paid by Lessee to Lessor, in
advance of the insurance proceeds.
Upon replacement or payment of the Stipulated Loss Value as provided
hereinabove, title to the irreparably damaged Item or Items of Equipment
shall transfer to Lessee (or Lessee's designee as may be required under the
provisions of an insurance policy or maintenance agreement provided by Lessee
with respect to the Equipment or otherwise) on an "as is" basis, without
recourse or warranty and the Lease with respect to such Item or Items of
Equipment shall terminate.
13.2 INSURANCE. (a) Lessee will, at all times prior to the return of
the Equipment to Lessor, at its own expense, carry and maintain or cause to
be carried and maintained (i) property insurance with respect to the
Equipment, and (ii) public liability insurance with respect to third party
personal and property damage, in each case with no greater deductibles and at
least comparable in amounts and against risk customarily insured against by
Lessee with respect to equipment it owns or leases similar in nature to the
Equipment. Property insurance with respect to the Equipment in any event
shall be in an amount at least equal to the greater of (i) the fair market
replacement value of the Equipment, or (ii) the Stipulated Loss Value, if
any, applicable to the relevant Lease. Public liability insurance with
respect to third party personal and property damage in any event shall be for
an amount not less than $2,000,000 per occurrence. Any policies of insurance
carried in accordance with this Section 13.2 shall (i) require 30 days' prior
notice to Lessor, any Assignee and any Secured Party of cancellation,
invalidation or material change in coverage, (ii) name Lessor, any Assignee
and any Secured Party as additional insured, and (iii) be written by a
company of recognized responsibility which is reasonably acceptable to Lessor.
(b) On or prior to the Installation Date and thereafter not less than
five days prior to any expiration date of a policy required pursuant to this
Section 13.2, Lessee shall deliver to Lessor and any additional insureds
certificates of insurance issued by the insurers thereunder or by an
insurance broker authorized to bind such insurers evidencing the insurance
maintained pursuant to this Section 13.2; provided, however, that if the
delivery of any certificate is delayed, Lessee shall deliver an executed
binder with respect thereto and shall deliver the formal certificate upon
receipt thereof.
(c) Lessee irrevocably appoints Lessor as Lessee's attorney-in-fact to
make claim for, receive payment of, and execute any and all documents that
may be required to be provided to the insurance carrier in substantiation of,
any claim for loss under any insurance policy and to endorse Lessee's name to
any and all drafts or checks in payment of the loss proceeds limited to the
coverage provided for the Equipment described in Exhibit A, the Equipment
Schedule.
(d) Notwithstanding the foregoing provisions of this Section 13.2,
Lessee may self-insure with respect to damage to the Equipment, or third
party personal and property damage, or both, provided that (i) such
self-insurance is consistent with the self-insurance practices of Lessee with
respect to equipment it owns similar in nature to the Equipment, (ii) a
description of such self-insurance practices including any limits or
restrictions on coverage is provided in writing to Lessor and any Assignee or
Secured Party upon request, and (iii) Lessor shall in its sole discretion
agree to accept self-insurance in lieu of the foregoing insurance
requirements set forth in this Section 13.2.
14. DEFAULT.
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14.1 DEFINITION. The occurrence of any one or more of the following
events shall constitute an Event of Default under this Master Lease:
(a) Lessee falls to pay any installment of Rent or other charge payable
by Lessee under any Equipment Schedule when the same becomes due and payable
and such default continues for a period of five days after written notice
thereof to Lessee; or
(b) Lessee falls to perform any other term, covenant or condition of
any Equipment Schedule and such failure continues uncured for a period of
15 days after written notice; or Lessee commences action to cure such default
and proceeds with reasonable diligence.
(c) The making of an assignment by Lessee for the benefit of its
creditors or the admission by Lessee in writing of its inability to pay its
debts as they become due, or the insolvency of Lessee, or the filing by
Lessee of a voluntary petition in bankruptcy, or the adjudication of Lessee
as a bankrupt, or the filing by Lessee of any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future
statute, law or regulation, or the filing of any answer by Lessee admitting,
or the failure by Lessee to deny, the material allegations of a petition
filed against it for any such relief, or the seeking or consenting by Lessee
to, or acquiescence by Lessee in, the appointment of any trustee, receiver or
liquidator of Lessee or of all or any substantial part of the properties of
Lessee, or the inability of Lessee to pay its debts when due; or
(d) The failure by Lessee, within 45 days after the commencement of any
proceeding against Lessee seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, to obtain the dismissal of
such proceeding or, within 45 days after the appointment, without the consent
or acquiescence of Lessee, of any trustee, receiver or liquidator of Lessee
or of all or any substantial part of the properties of Lessee, to vacate such
appointment; or
(e) Any representation or warranty made by Lessee herein or in any
document or certificate delivered by Lessee in connection herewith shall
prove to have been incorrect in any material respect when such representation
or warranty was made or given; or
(f) Lessee shall, or shall attempt to or permit any person to, remove,
sell, transfer, encumber, part with possession of, assign, relocate or sublet
any Item of Equipment (except as expressly permitted by the provisions of
this Master Lease).
(g) Lessee shall consolidate with, or merge with or into any entity, or
shall sell or otherwise transfer all or substantial amount of indebtedness
other than in the ordinary course of its business, or engage in a leverage
buy-out or any other form of corporate reorganization, unless in each case
and before the event in question, the obligations under this Master Lease or
any Equipment Schedule are assumed or guaranteed in a manner reasonably
satisfactory to Lessor or its Assignee or Secured Party by an entity having
in such party's opinion at least as good a financial condition and credit
standing as those of the Lessee immediately before the event.
14.2 REMEDIES. (a) Upon the occurrence of any Event of Default, Lessor
may, at its option:
(i) Proceed by appropriate court action, either at law or in equity,
to enforce performance by Lessee of the applicable terms and covenants of
this Master Lease or any Equipment Schedule or to recover damages for the
breach thereof;
(ii) By notice to Lessee terminate this Master Lease or any Equipment
Schedule;
(iii) Take possession of the Equipment during Lessee's normal working
hours, without demand or notice, wherever such Equipment may be located.
Lessee hereby waives any right it may have for damages occasioned by any
repossession. Any taking of possession pursuant to this subsection shall not
in itself constitute termination of this Master Lease or any Equipment
Schedule and shall not, in any event, relieve Lessee of its obligations
hereunder or thereunder.
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(b) Upon taking of possession of any Equipment pursuant to
Section 14.2(a)(iv), Lessor may, at its option and without notice to Lessee,
lease the repossessed Equipment to any third party on such terms and
conditions as Lessor may determine or sell such Equipment at public auction
or at private sale. In the event that Lessor leases or sells such repossessed
Equipment, the Net Proceeds (as defined below) shall first be credited to
amounts due and owing by Lessee, and shall then be used to reimburse Lessee
for any liquidated damage payment made by Lessee pursuant to
Section 14.2(a)(iii). Any surplus shall be retained by Lessor. Lessee shall
remain liable for any deficiency resulting from an excess of amounts due and
owing by Lessee over Net Proceeds. As used herein "Net Proceeds" shall mean
the sale price of the Equipment, or the aggregate rent payable pursuant to a
re-lease of the Equipment discounted at the Overdue Rate, less all costs and
expenses (including reasonable attorneys' fees and disbursements) incurred by
Lessor as a result of Lessee's default and Lessor's exercise of its remedies
with respect thereto. In calculating Net Proceeds with respect to a re-lease
of the Equipment for a term that extends beyond the Initial Term, only that
portion of the re-lease term which does not extend beyond the Initial Term
shall be used in such calculation.
(c) Notwithstanding Lessor's choice of one or more of the remedies
provided herein, Lessee shall be liable for (i) all sums due and payable for
all periods up to and including the date on which Lessor declared an Event of
Default to exist, and (ii) all costs, charges and expenses, including
reasonable attorneys' fees and disbursements, incurred by Lessor by reason of
the occurrence of any Event of Default or Lessor's exercise of its remedies
hereunder. Any overdue Rent, and any unpaid amounts payable as liquidated
damages pursuant to Section 14.2(a)(iii) shall bear interest at the Overdue
Rate until paid in full.
(d) No remedy referred to herein is intended to be exclusive, but each
shall be cumulative and in addition to any other rights or remedy otherwise
available to Lessor at law or in equity.
15. MISCELLANEOUS.
15.1 ENTIRE AGREEMENT. Lessor and Lessee acknowledge that there are no
agreements or understandings, written or oral, between Lessor and Lessee with
respect to the Equipment, other than as set forth herein and in each
Equipment Schedule and that this Master Lease and each Equipment Schedule
contain the entire agreement between Lessor and Lessee with respect thereto.
Neither this Master Lease nor any Equipment Schedule may be altered,
modified, terminated or discharged except by a writing signed by the party
against whom such alteration, modification, termination or discharge is
sought.
15.2 NO WAIVER; CURE. No omission or delay by Lessor at any time to
exercise or enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Lessee at
any time designated, shall be a waiver of any such right or remedy to which
Lessor is entitled, nor shall it in any way affect the right of Lessor to
enforce such provisions thereafter. If Lessee fails to perform any of its
obligations under this Master Lease, Lessor or its assigns in addition to
their other rights and remedies may, at the cost and expense of Lessee,
perform such obligations but shall not be obligated to do so. All sums so
paid by Lessor or its assigns shall be immediately due and payable by Lessee
upon demand and shall bear interest at the Overdue Rate.
15.3 BINDING NATURE. Each Equipment Schedule shall be binding upon,
and shall inure to the benefit of, Lessor, Lessee and their respective
successors, legal representatives and assigns, except, in the case of any
Assignee or Secured Party, to the extent set forth in Section 6.2(e) hereof.
15.4 SURVIVAL OF OBLIGATIONS. All agreements, representations and
warranties contained in this Master Lease, any Equipment Schedule or in any
document delivered pursuant hereto or in connection herewith shall be for the
benefit of Lessor and its successors and assigns and shall survive the
execution and delivery of this Master Lease and the expiration or other
termination of this Master Lease.
15.5 NOTICES. Any notice, request or other communication to either
party by the other as provided for herein shall be given in writing and only
shall be deemed received upon the earlier of receipt or three days after
mailing if mailed postage prepaid by registered mail to Lessor or Lessee, as
the case may be, at the address for such party set forth in the appropriate
equipment Schedule or at such changed address as may be subsequently
submitted by written notice of either party.
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15.6 APPLICABLE LAW. This Master Lease and each Equipment Schedule
shall be deemed to have been made, executed and delivered in the Commonwealth
of Massachusetts and shall be governed by and construed in accordance with
the internal laws of the Commonwealth of Massachusetts applicable to
contracts made and to be performed entirely within such State.
15.7 SEVERABILITY. If any one or more of the provisions of this Master
Lease or any Equipment Schedule shall for any reason be held invalid, illegal
or unenforceable, the remaining provisions of this Master Lease and any such
Equipment Schedule shall not be affected thereby and shall be enforced to the
fullest extent permitted by law.
15.8 DELAY IN INSTALLATION. Lessee hereby assumes and shall bear the
entire risk of loss arising out of or in connection with delays, partial
performance or nonperformance by the supplier of the Equipment and Lessor
shall not be liable for specific performance of this Lease or for damages if,
for any reason, any supplier delays or fails to fill or improperly fills an
order.
15.9 FURTHER ASSURANCES. Upon Lessor's request, Lessee will deliver to
Lessor, prior to the execution of each Equipment Schedule, a copy of its most
recent Annual Report on Form 10-K filed with the securities and Exchange
Commission (the "SEC") and copies of each of its quarterly reports on Form 10-Q
filed with the SEC subsequent to the filing of such Form 10-K or, if Lessee
does not file such reports with the SEC, copies of its most recent audited
financial statements and its subsequent interim period financial statements.
Lessee also shall furnish in connection with the execution and delivery of
this Master Lease and, upon request by Lessor in connection with each
Equipment Schedule hereunder, an opinion of counsel, a certificate of
incumbency and such other documents as Lessor may reasonably request in form
reasonably acceptable to Lessor. Lessee hereby authorizes Lessor to insert
the serial numbers provided by Shiva for any Shiva Equipment in the Equipment
Schedule, Certificate of Acceptance and UCC-1 financing statements, covering
such Equipment.
15.10 ADDITIONAL MATTERS. (a) Pursuant to Section 1, Lessee and Lessor
may, from time to time mutually agree on additional terms and conditions with
respect to an Equipment Schedule which may be set forth therein or attached
thereto as "Riders" which shall be applicable to and constitute a part
thereof. The form and content of such Riders may be (but are not limited to)
as set forth in the exhibits which are attached hereto.
(a) In the event of any conflict between the terms and conditions of
this Master Lease and the terms and conditions of any Equipment Schedule or
Rider, the terms and conditions of the Equipment Schedule or Rider shall
prevail.
(b) Section headings are for convenience only and shall not be
construed as part of this Master Lease.
(c) Unless otherwise specified, references to Exhibits or Sections
herein shall be references to Exhibits to or Sections of this Master Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Master Lease
on or as of the day and year first above written.
SHIVA CORPORATION
as Lessee as Lessor
By: /s/ A.L. Thurburn By:
-------------------------- --------------------------
Title: CEO Title:
9
HARDWARE WARRANTY
-------------------------------------------------------------------------------
SHIVA CORPORATION LIMITED WARRANTY ON HARDWARE
Shiva Corporation ("Shiva") warrants the LanRover Access Switch
against defects in materials and workmanship for a period of one
year from the date of original retail purchase. During the
warranty period, Shiva will, at its option, repair, replace, or
refund the purchase price of any defective product at no
additional cost, provided you return it during the warranty
period, transportation charges prepaid, to Shiva. You must attach
your name, address and telephone number, a description of the
problem(s), and a dated proof-of-purchase bearing the serial
number of each product returned for warranty service.
This warranty is limited to the original purchaser of the product
and is not transferable unless otherwise agreed by Shiva in
writing. This warranty does not apply if the product: has been
damaged by accident, abuse, misuse or misapplication; has been
modified without written permission by Shiva; or if any Shiva
serial number has been removed or defaced.
UNDER NO CIRCUMSTANCES SHALL SHIVA'S LIABILITY ARISING OUT OF
OR IN CONNECTION WITH THE PRODUCT OR THE USE OF, OR INABILITY TO
USE, THE PRODUCT IN TORT (INCLUDING NEGLIGENCE), OR OTHERWISE,
EXCEED THE PURCHASE PRICE OF THE PRODUCT. SHIVA MAKES NO WARRANTY
OR REPRESENTATIONS, EITHER EXPRESSED OR IMPLIED, WITH RESPECT TO
THE PRODUCT, ITS QUALITY, PERFORMANCE, MERCHANTABILITY, OR
FITNESS IN A PARTICULAR PURPOSE.
ANY IMPLIED WARRANTIES ARE LIMITED IN DURATION TO ONE YEAR FROM
THE DATE OF ORIGINAL PURCHASE OF THE PRODUCT.
THIS WARRANTY AND REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND IN
LIEU OF ALL OTHERS, ORAL OR WRITTEN, EXPRESSED OR IMPLIED. No
Shiva dealer, agent, or employee is authorized to make any
modification, extension, or addition to this warranty.
SHIVA IS NOT RESPONSIBLE FOR SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY BREACH OF WARRANTY, OR
UNDER ANY LEGAL THEORY, INCLUDING LOST PROFITS, DOWNTIME,
GOODWILL DAMAGE TO OR REPLACEMENT OF EQUIPMENT AND PROPERTY, AND
ANY COST OF RECOVERING, REPROGRAMMING, OR REPRODUCING ANY PROGRAM
OR DATA STORED IN OR USED WITH SHIVA PRODUCTS.
Some states do not allow the exclusion of implied warranties or
liability for incidental or consequential damages, so the above
limitation or exclusion may not apply to you. This warranty gives
you specific legal rights, and you may also have other rights
which vary from state to state.
LEASETEC CORPORATION
OPERATING LEASES FOR TECHNOLOGY EQUIPMENT
December 13, 1996
▇▇. ▇▇▇ Thurburn
Chief Executive Officer
Website Management Co., Inc.
dba FlashNet Communications, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Subject: Master Lease Agreement No. 96-101 dated October 31, 1996
(the "Lease")
Dear Mr. Thurburn:
The purpose of this letter is to clarify the legal entity obligated as Lessee
under the above-referenced Lease. The Lease was executed by "FlashNet
Communications" as Lessee. Because "FlashNet Communications" is a "doing
business as" name of Website Management Co., Inc., the Lease should designate
Website Management Co., Inc. as the legal entity subject to all rights and
obligations under the Lease.
By your signature below, you represent and warrant on behalf of Website
Management Co., Inc. that all references to "FlashNet Communications" in the
Lease shall include Website Management Co., Inc. and that Website Management
Co., Inc. is the Lessee under the Lease as if originally set forth therein.
Sincerely,
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Program Manager
ACCEPTED AND AGREED:
WEBSITE MANAGEMENT CO., INC.
By: /s/ A.L. Thurburn
----------------------------------
Printed Name: A.L. Thurburn
-------------------------
Title: CEO
--------------------------------
Date: 12/16/96
---------------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - (▇▇▇) ▇▇▇-▇▇▇▇
-----------
MASTER LEASE AGREEMENT Lease No. 96-101
EXHIBIT A -----------
EQUIPMENT SCHEDULE Amendment No.
-----------
LESSEE INFORMATION
--------------------------------------------------------------------------------
FULL LEGAL NAME OF LESSEE FULL LEGAL NAME AND ADDRESS OF LESSOR
FlashNet Communications Shiva Corporation
----------------------------------
BUSINESS ADDRESS ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: Legal Department
---------------------------------------------
EQUIPMENT LOCATION
----------------------------------
PERSON TO CONTACT
▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
QTY MODEL NO. EQUIPMENT DESCRIPTION SERIAL NUMBER LIST PRICE TOTAL PRICE
40 1se-▇▇▇▇ Access Switch Chassis 16,400.00 656,000.00
80 1s-crd-tprc2-us Dual Port T1/PRI with CSU 8,400.00 672,000.00
240 1s-crd-288-us-1 Modem Module 8,500.00 2,040,000.00
---------------
Total List Price 3,368,000.00
Less: Discount (2,334,080.00)
---------------
Total Selling Price $ 1,033,920.00
---------------
---------------
Prices quoted are F.O.B shipping point
Prices quoted do not include installation, training or taxes
--------------------------------------------------------------------------------
TERMS OF RENTAL PAYMENT
--------------------------------------------------------------------------------------------------------------------
TERM OF LEASE MONTHLY PAYMENT ADVANCE PAYMENT PURCHASE OPTION
36 Months $33,140.86 $ 66,281.72 Representing first and Lesser of 5% of original
last mo. payments, thereafter, price or FMV at expiration if
payments will be made monthly on the Lessee elects to purchase.
first day of each month.
--------------------------------------------------------------------------------------------------------------------
1. INVOICING INFORMATION
Street Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
--------------------------
City, State, Zip: ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------
Department:
--------------------------
Contact Person: ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Telephone: (▇▇▇)▇▇▇-▇▇▇▇ ▇▇▇▇
--------------------------
Lessee Ref No.
--------------------------
2. PURCHASE OPTION: Upon Expiration of the Lease Term of this Equipment
Schedule, Lessee shall have the option to purchase all, but not less
than all, the items of Equipment subject to and described in this
Equipment Schedule for the aggregate purchase price above, provided that
(i) this Equipment Schedule has not been terminated earlier, (ii) no
default has occurred and is continuing and (iii) Lessee has provided
Lessor with notice of its intention to exercise such option at least
ninety (90) days prior to the expiration of the Lease Term. Upon
payment to Lessor, Lessor shall transfer title to such Equipment to
Lessee all on AS IS, WHERE IS, BASIS WITHOUT RECOURSE TO OR WARRANTY OF
LESSOR, except that Lessor shall represent that it owns such Equipment
free of any lien placed on such Equipment by, through, or under Lessor.
3. STIPULATED LOSS VALUE: The Stipulated Loss Value(s) with respect to
this Equipment Schedule shall be as set forth in the attached Stipulated
Loss Value Table.
4. DEFINITIONS: The terms used in this Equipment Schedule which are not
otherwise defined herein shall have the meanings set forth in the Master
Lease identified above.
5. LEASE TERMS AND CONDITIONS: Lessor and Lessee agree that this Equipment
Schedule shall constitute a lease of the Equipment described above upon
the execution and delivery to Lessor by Lessee of a Certificate of
Acceptance.
ACCEPTED BY:
SHIVA CORPORATION FLASHNET COMMUNICATIONS
--------------------------------------- -------------------------------------
LESSOR LESSEE
[ILLEGIBLE] 11/15/96 /s/ A.L. Thurburn 10/31/96
--------------------------------------- -------------------------------------
AUTHORIZED SIGNATURE DATE AUTHORIZED SIGNATURE DATE
CFO CEO
--------------------------------------- -------------------------------------
TITLE TITLE