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EXHIBIT 10.18
MASTER LEASE AGREEMENT
No.
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This Master Lease Agreement (the "MLA") is entered into by and between
Cisco Capital Systems Corporation ("Lessor"), having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and Verio, Inc.
("Lessee"), having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. LEASE AGREEMENT. Lessor agrees to lease to Lessee, and Lessee agrees
to lease from Lessor, the equipment (the "Equipment") referenced in each of the
Schedules (the "Schedule" or "Schedules") which incorporate this MLA therein
(the "Lease"). The Equipment covered by this MLA and each Schedule includes
software and related rights only to the extent that such rights are
specifically licensed to Lessee by Cisco Systems, Inc. ("Cisco") pursuant to
the Domestic Internet Service Provider Agreement between Cisco and Lessee.
2. TERM. Each Lease shall be effective upon the execution of the MLA and
the related Schedule by the Lessor and the Lessee. The lease term (the "Lease
Term") of the Equipment referenced in each of the Schedules shall commence on
the rent commencement date specified in each Schedule (the "Rent Commencement
Date"). The Rent Commencement Date shall be the date 30 days from the date that
the Equipment is shipped by the supplier (the "Ship Date") as evidenced by a
shipping document provided by the supplier related to the Equipment (the
"Shipping Document"). Lessor will provide Lessee with a copy of the Shipping
Document evidencing the Ship Date.
3. RENT. The rent (the "Rent") for the Equipment referenced in any
Schedule shall be as stated in such Schedule and shall be payable according to
the provisions of such Schedule. If any amount payable under a Schedule is not
received by Lessor within 10 days of the due date, Lessee agrees to pay an
Overdue Charge, as defined herein, with respect to such amount.
4. SELECTION AND ASSIGNMENT. Lessee will select the type, quantity and
Supplier of each item of Equipment designated in a Schedule, and Lessee hereby
assigns to Lessor all of its right, title and interest in and to the related
equipment purchase agreement, a copy of which has been provided to Lessor by
Lessee (the "Agreement"). The Agreement may be amended with the consent of
Lessor. Any such assignment with respect to Equipment shall become binding upon
Lessor when Lessor and Lessee have entered into a Lease with respect to such
Equipment and as of the Rent Commencement Date referenced in such Lease. Upon
such an assignment becoming effective, Lessor shall be obligated to purchase
the Equipment from the Supplier in accordance with the provisions of the
Agreement. It is expressly agreed that Lessee shall at all times remain liable
to Supplier under the Agreement to perform all duties and obligations of Lessee
thereunder, except for the obligation to purchase the Equipment to the extent
expressly assumed by the Lessor hereunder, and that the Lessee shall be
entitled to the same rights of the purchaser of the Equipment under the
Agreement, except such right, title and interest in the Equipment retained
exclusively by the Lessor as owner of the Equipment. Lessor shall have no
liability for a Supplier's failure to meet the terms and conditions of the
Agreement.
5. DELIVERY AND INSTALLATION. Lessee shall be responsible for payment of
all transportation, packing, installation, testing and other charges associated
with the delivery, installation or use of any Equipment which are not included
in the Agreement with respect to such Equipment.
6. WARRANTIES. SUBJECT TO THE DOMESTIC INTERNET SERVICE PROVIDER
AGREEMENT BETWEEN CISCO AND LESSEE AND THE LEASE ASSIGNMENT OF PURCHASE ORDER
BETWEEN CISCO, LESSEE AND LESSOR, 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 ARISING FROM LESSEE'S USE OF THE EQUIPMENT, OR FOR
DAMAGES BASED ON STRICT OR ABSOLUTE TORT LIABILITY OR LESSOR'S PASSIVE
NEGLIGENCE. LESSEE HEREBY ACKNOWLEDGES THAT ANY MANUFACTURER'S OR SUPPLIER'S
WARRANTIES WITH RESPECT TO THE EQUIPMENT ARE FOR THE BENEFIT OF BOTH LESSOR AND
LESSEE. NOTWITHSTANDING THE FOREGOING, LESSEE'S OBLIGATIONS TO PAY EACH RENT
PAYMENT DUE, OR OTHERWISE PERFORM ITS OBLIGATIONS, UNDER THIS LEASE ARE
ABSOLUTE AND UNCONDITIONAL.
7. TITLE TO AND LOCATION OF EQUIPMENT. Lessor shall retain title to each
item of Equipment. Lessee, at its expense, shall protect Lessor's title and
keep the Equipment free from all claims, liens, encumbrances and legal
processes. The Equipment is personal property and is not to be regarded as part
of the real estate on which it may be situated. If requested by Lessor, Lessee
will, at Lessee's expense, furnish a landlord or mortgagee waiver with respect
to the Equipment. The Equipment shall not be removed from the location
specified in the Schedule without the written consent of Lessor. Lessee shall,
upon Lessor's request, affix and maintain plates, tags or other identifying
labels, showing Lessor's ownership of the Equipment in a prominent position on
the Equipment.
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8. USE OF EQUIPMENT, INSPECTION AND REPORTS. The use of the Equipment by
Lessee shall conform with all applicable laws, insurance policies, and
warranties of the manufacturer or Supplier of the Equipment, together with
specifications supplied to Lessee by the manufacturer or Supplier of the
Equipment. Lessor shall have the right to inspect the Equipment at the premises
where the Equipment is located. Lessee shall notify Lessor promptly of any
claims, liens, encumbrances or legal processes with respect to the Equipment.
During the term of this MLA, Lessee shall keep the Equipment free from all
liens, security interests and encumbrances, except to the extent approved in
writing in advance by Lessor.
9. FURTHER ASSURANCES. Lessee shall execute and deliver to Lessor such
instruments as Lessor deems necessary for the confirmation of this Lease and
Lessor's rights hereunder. Lessor is authorized to file financing statements
signed only by the Lessor in accordance with the Uniform Commercial Code, or
financing statements signed by Lessor as Lessee's attorney-in-fact. Any such
filing with respect to the Equipment leased pursuant to a true lease shall not
be deemed evidence of any intent to create a security interest under the
Uniform Commercial Code.
10. MAINTENANCE AND REPAIRS. Lessee shall, at its expense, maintain each
item of Equipment in good condition, normal wear and tear excepted. Lessee
shall not make any addition, alteration, or attachment to the Equipment without
Lessor's prior written consent. Lessee shall make no repair, addition,
alteration or attachment to the Equipment which interferes with the normal
operation or maintenance thereof creates a safety hazard, or might result in
the creation of a mechanic's or materialman's lien.
11. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to
perform any of its obligations under a Lease, Lessor may perform any act or
make any payment which Lessor deems necessary for the maintenance and
preservation of the Equipment subject thereto and Lessor's title thereto. All
sums so paid by Lessor (together with all related Overdue Charges), and
reasonable attorneys' fees incurred by Lessor in connection therewith, shall be
additional rent payable to Lessor on demand. The performance of any such act or
the making of any such payment by Lessor shall not be deemed a waiver or
release of any obligation or default on the part of Lessee.
12. INDEMNIFICATION. Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold harmless, Lessor, and its agents, employees,
officers, directors, partners and successors and assigns, from and against, all
liabilities, obligations, losses, damages, injuries, claims, demands, penalties,
actions, costs and expenses, including, without limitation, reasonable
attorneys' fees, of whatever kind and nature, in contract or in tort, arising
out of the use, condition, operation, ownership, selection, delivery, leasing
or return of any item of Equipment, regardless of when, how and by whom
operated, or any failure on the part of Lessee to perform or comply with any of
its obligations under a Lease, excluding, however, any of the foregoing which
result from the gross negligence or willful misconduct of Lessor. Such
indemnities and assumptions of liabilities and obligations shall continue in
full force and effect, notwithstanding the expiration or other termination of
such Lease. Nothing contained in any Lease shall authorize Lessee to operate
the Equipment subject thereto so as to incur or impose any liability on, or
obligation for or on behalf of, Lessor.
13. NO OFF-SET. All Rents shall be paid by Lessee irrespective of any
off-set, counterclaim, recoupment, defense or other right which Lessee may have
against Lessor, the manufacturer or Supplier of the Equipment or any other
party.
14. ASSIGNMENT BY LESSEE. Lessee shall not, without Lessor's prior
written consent, (a) sell, assign, transfer, pledge, hypothecate, or otherwise
dispose of, encumber or suffer to exist a lien upon or against, any of the
Equipment or any Lease or any interest therein, by operation of law or
otherwise (provided that the foregoing shall not apply in connection with the
sale or disposition, by means of merger or otherwise, of all or substantially
all of the assets of Lessee), or (b) sublease or lend any of the Equipment or
permit any of the Equipment to be used by anyone other than Lessee other than
to an affiliate of Lessee.
15. ASSIGNMENT BY LESSOR. Lessor may assign, sell or encumber its
interest in any of the Equipment and any Lease. Upon Lessor's written consent,
Lessee shall pay directly to the assignee of any such interest all Rent and
other sums due under an assigned Lease. THE RIGHTS OF ANY SUCH ASSIGNEE SHALL
NOT BE SUBJECT TO ANY ABATEMENT, DEDUCTION, OFF-SET, COUNTERCLAIM, RECOUPMENT,
DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE AGAINST LESSOR OR ANY OTHER PERSON
OR ENTITY. Notwithstanding the foregoing, any such assignment (a) shall be
subject to Lessee's right to possess and use the Equipment subject to a lease
so long as Lessee is not in default thereunder, and (b) shall not release any
of Lessor's obligations hereunder.
16. RETURN OF EQUIPMENT. Unless Lessee has exercised its option, if any,
to renew a lease or purchase the Equipment subject thereto, upon expiration of
the then current Lease Term of such Lease, Lessee shall, at its expense, cause
such Equipment to be removed, disassembled, and placed in the same condition as
when delivered to Lessee (reasonable wear and tear excepted) and properly crate
such Equipment for shipment and deliver it to a common carrier designated by
Lessor. Lessee will ship such Equipment, F.O.B. destination, to any address
specified in writing by Lessor within the continental United States. All
additions, attachments, alterations and repairs made or placed upon any of the
Equipment shall become part of such Equipment and shall be the property of
Lessor, unless Lessor requires that Lessee remove such additions, attachments,
alterations, and repairs prior to returning such Equipment to Lessor.
EVENTS OF DEFAULT. The occurrence of any of the following shall be deemed to
constitute an Event of Default hereunder: (a) Lessee fails to pay Rent, any
other amount it is obligated to pay under a Lease or any other amount it is
obligated to pay to Lessor and does not cure such
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failure within 10 days of such amount becoming due; (b) Lessee fails to perform
or observe any obligation or covenant to be performed or observed by Lessee
hereunder or under any Schedule, including, without limitation, supplying all
requested documentation, and does not cure such failure within 10 days of
receiving written notice thereof from Lessor; (c) any warranty, representation
or statement made or furnished to Lessor by or on behalf of Lessee is proven to
have been false in any material respect when made or furnished; (d) the
attempted sale or encumbrance by Lessee of the Equipment, or the making of any
levy, seizure or attachment thereof or thereon; or (e) the dissolution,
termination of existence, discontinuance of business, insolvency, or
appointment of a receiver of any part of the property of Lessee, assignment by
Lessee for the benefit of creditors, the commencement of proceedings under any
bankruptcy, reorganization or arrangement laws by or against Lessee, or any
other act of bankruptcy on the part of Lessee, or, (f) Lessee defaults in the
performance of its obligations under any guaranty in favor of Lessor of the
obligations of any affiliate, person or entity party to an agreement or
schedule now or hereafter made with Lessor.
17. REMEDIES OF LESSOR. At any time after the occurrence of any Event of
Default, Lessor may exercise one or more of the following remedies: (a) Lessor
may terminate any or all of the Leases with respect to any or all items of
Equipment subject thereto; (b) Lessor may recover from Lessee all Rent and
other amounts then due and to become due under any or all of the Leases; (c)
Lessor may take possession of any or all items of Equipment, wherever the same
may be located, without demand or notice, without any court order or other
process of law and without liability to Lessee for any damages occasioned by
such taking of possession, and any such taking of possession shall not
constitute a termination of any Lease; (d) Lessor may demand that Lessee return
any or all items of Equipment to Lessor in accordance with Paragraph 16; and
(e) Lessor may pursue any other remedy available at law or in equity,
including, without limitation, seeking damages, specific performance or an
injunction.
Upon repossession or return of any item of the Equipment, Lessor shall
sell, lease or otherwise dispose of such item in a commercially reasonable
manner, with or without notice and on public or private bid, and apply the net
proceeds thereof (after deducting the estimated fair market value of such item
at the expiration of the term of the applicable Lease, in the case of a sale,
or the rents due for any period beyond the scheduled expiration of such Lease,
in the case of any subsequent lease of such item, and all expenses, including,
without limitation, reasonable attorneys' fees, incurred in connection
therewith) towards the Rent and other amounts due under such Lease, with any
excess net proceeds to be retained by Lessor.
Each of the remedies under this Lease shall be cumulative, and not
exclusive, and in addition to any other remedy referred to herein or otherwise
available to Lessor in law or in equity. Any repossession or subsequent sale or
lease by Lessor of any item of Equipment shall not bar an action for a
deficiency as herein provided, and the bringing of an action or the entry of
judgment against Lessee shall not bar Lessor's right to repossess any or all
items of Equipment.
18. CREDIT AND FINANCIAL INFORMATION. Within 90 days of the close of
each of Lessee's fiscal years, Lessee shall deliver to Lessor a copy of
Lessee's annual report, if any, and an audited balance sheet and profit and
loss statement with respect to such year. If audited financial statements of
Lessee for such year are not prepared, Lessee may provide financial statements
certified by an officer of Lessee. At Lessor's request, Lessee shall deliver to
Lessor a balance sheet and profit and loss statement for any of its fiscal
quarters, certified by an officer of Lessee.
19. INSURANCE. Risk of loss shall pass to Lessee upon delivery of the
applicable Equipment to the carrier or Lessee's representative at the FCA
point. As of the date that risk of loss for the Equipment passes from the
Supplier to the Lessee under the terms of the Agreement, Lessee shall obtain
and maintain through the end of the Lease Term of each Lease (and any renewal
or extension thereof), at its own expense, property damage and personal
liability insurance and insurance against loss or damage to the Equipment,
including, without limitation, loss by fire (with extended coverage), theft and
such other risks of loss as are customarily insured against with respect to the
types of Equipment leased hereunder and by the types of businesses in which
such Equipment will be used by Lessee. Such insurance shall be in such amounts,
with such deductibles, in such form and with such insurers as shall be
satisfactory to Lessor; provided, however, that the amount of the insurance
against loss or damage to the Equipment shall not be less than the greater of
the replacement value of the Equipment, from time to time, or the original
purchase price of the Equipment. Each insurance policy shall name Lessee as an
insured and Lessor as an additional insured or loss payee, and shall contain a
clause requiring the insurer to give Lessor at least 30 days prior written
notice of any alteration in the terms of such policy or of the cancellation
thereof. Lessee shall furnish to Lessor a certificate of insurance or other
evidence satisfactory to Lessor that such insurance coverage is in effect;
provided, however, that Lessor shall be under no duty either to ascertain the
existence of or to examine such insurance policy or to advise Lessee in the
event such insurance coverage shall not comply with the requirements hereof.
Lessee shall give Lessor prompt notice of any damage to, or loss of, any of the
Equipment, or any part thereof, or any personal injury or property damage
occasioned by the use of any of the Equipment.
20. TAXES. Lessee hereby assumes liability for, and shall pay when due,
and, on a net after-tax basis, shall indemnify, protect and hold harmless
Lessor against all fees, taxes and governmental charges (including, without
limitation, interest and penalties) of any nature imposed on or in any way
relating to Lessor, Lessee, any item of Equipment or any Lease, except state
and local taxes on or measured by Lessor's net income (other than any such tax
which is in substitution for or relieves Lessee from the payment of taxes it
would otherwise be obligated to pay or reimburse to Lessor as herein provided)
and federal taxes on Lessor's net income. Lessee shall, at its expense, file
when due with the
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appropriate authorities any and all tax and similar returns, and reports
required to be filed with respect thereto, for which it has indemnified Lessor
hereunder or, if requested by Lessor, notify Lessor of all such requirements
and furnish Lessor with all information required for Lessor to effect such
filings. Any fees, taxes or other charges paid by Lessor upon failure of Lessee
to make such payments shall, at Lessor's option, become immediately due from
Lessee to Lessor and shall be subject to the Overdue Charge from the date paid
by Lessor until the date reimbursed by Lessee.
21. SEVERABILITY. If any provision of any Lease is held to be invalid by
a court of competent jurisdiction, such invalidity shall not affect the other
provisions of such Lease or any provision of any other Lease.
22. NOTICES. All notices hereunder shall be in writing and shall be
deemed given when sent by certified mail, postage prepaid, return receipt
requested, addressed to the party to which it is being sent at its address set
forth herein or to such other address as such party may designate in writing to
the other party.
23. AMENDMENTS, WAIVERS AND EXTENSIONS. This MLA and each Schedule and,
if applicable, the Lease Assignment of Purchase Order Agreement between Lessor,
Lessee and Cisco constitute the entire agreement between Lessor and Lessee with
respect to the lease of the Equipment subject to such Schedule, and supersede
all previous communications, understandings, and agreements, whether oral or
written, between the parties with respect to such subject matter. No provision
of any Lease may be changed, waived, amended or terminated except by a written
agreement, specifying such change, waiver, amendment or termination, signed by
both Lessee and Lessor, except that Lessor may insert, on the appropriate
schedule, the serial number of Equipment, after delivery of such Equipment, and
the Installation Date for the Equipment, after receiving a Certificate of
Installation with respect thereto. No waiver by Lessor of any Event of Default
shall be construed as a waiver of any future Event of Default or any other
Event of Default. At the expiration of the Lease Term with respect to a Lease,
upon notice given by Lessee at least ninety (90) days prior thereto, (a) such
Lease shall be renewed or the Equipment subject thereto shall be purchased
under the terms and conditions set forth herein for a term and rent amount or
purchase price, as the case may be, to be agreed upon, or (b) if no such
agreement is reached prior to the expiration of such Lease Term or such notice
specifies that Lessee intends to return the Equipment, then Lessee shall return
the Equipment to Lessor in the manner prescribed in Paragraph 16 of this MLA.
In the absence of Lessor's timely receipt of the notice contemplated by the
preceding sentence, the Lease shall be automatically extended, on a
month-to-month basis, until terminated (upon notice by either party given at
least ninety (90) days prior to the end of the month on which the termination
is to be effective) or until renewed or the Equipment subject thereto is
purchased by agreement of the parties. Unless otherwise agreed, Lessee shall
continue to pay Rent for each month following such Lease Term until the
Equipment subject to such Lease is returned pursuant to Paragraph 16 of this
MLA.
24. CONSTRUCTION. This MLA shall be governed by and construed in
accordance with the internal laws, but not the choice of laws provisions, of
the State of California. The titles of the sections of this MLA are for
convenience only and shall not define or limit any of the terms or provisions
hereof. Time is of the essence in each of the provisions hereof.
25. PARTIES. This MLA shall be binding upon, and inure to the benefit
of, the permitted assigns, representatives and successors of the Lessor and
Lessee. If there is more than one Lessee named in this MLA, the liability of
each shall be joint and several.
26. COUNTERPARTS. Each Lease may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
27. OVERDUE CHARGE. Overdue Charge shall mean an amount equal to 2% per
month of any payment under a Lease which is past due, including, without
limitation, any amounts not included in any payment of Rent hereunder, or the
highest charge permitted by law, whichever is lower.
The person executing this MLA on behalf of Lessee hereby certifies that he or
she has read, and is duly authorized to execute, this MLA.
Accepted by:
LESSOR: Cisco Systems Capital LESSEE: Verio, Inc.
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BY: /s/ ▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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NAME: ▇▇▇ ▇▇▇▇▇▇▇ NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Print Print
TITLE: Mgr, Operation & Customer Service TITLE: Chief Financial Officer
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DATE: January 5, 1998 DATE: Oct. 27, 1997
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