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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
EXHIBIT 10.9
CHASE EQUIPMENT LEASING, INC. One Chase Square
Rochester, New York 14643
MASTER LEASE AGREEMENT
This Master Lease Agreement ("Agreement") is made as of August 8, 1997, between
CHASE EQUIPMENT LEASING, INC., having its principal place of business at One
Chase Square, Rochester, New York 14643 ("Lessor") and NETWORK PLUS, INC., a
Corporation having its principal place of business at 234 Copeland Street,
Quincy, MA. 02169 ("Lessee").
1. LEASE: Subject to the terms and conditions contained herein, Lessor hereby
leases to Lessee and Lessee shall lease from Lessor, various items of
personal property (collectively the "Equipment" or individually an "Item")
described in one or more Equipment Schedules to be executed substantially
in the form attached hereto. The terms "Equipment" and "Item" include, as
applicable, any associated software systems and programming. Each Equipment
Schedule incorporates the terms and conditions of this Agreement, and shall
constitute a separate, distinct and independent lease and contractual
relationship between Lessor and Lessee. The term "Lease" shall mean the
applicable Equipment Schedule which incorporates the terms and conditions
of this Agreement. The term "Subsidiary" means any corporation, the
majority of the shares of voting stock of which at any time outstanding is,
owned directly or indirectly by Lessee or by one or more of its other
subsidiaries or by Lessee in conjunction with one or more of its other
subsidiaries. By execution of this Agreement, the parties hereto agree to
the terms and conditions pursuant to which Equipment may be leased from
time to time by Lessor to Lessee.
2. TERMS AND RENTAL PAYMENTS: The term of this Agreement shall commence on
the date set forth above and shall continue in effect thereafter so long as
any Lease remains in effect. The term of each Equipment Schedule as to all
or any Item of Equipment designated on any Equipment Schedule shall
commence on the date on which the Lessee executes a Certificate of
Acceptance for such Equipment (the "Acceptance Date") and shall continue
for a period ending that number of months from the date the first periodic
rental payment is due as specified on the applicable Equipment Schedule.
Rent shall be specified and payable in accordance with the terms as set
forth in the Equipment Schedule. All payments shall be made at the office
of Lessor at One Chase Square, Rochester, New York 14643 or as otherwise
directed by Lessor in writing.
If Lessee fails to pay any periodic rent payment or other sum to be paid to
Lessor after [**] days of the due date, then Lessee shall pay a late charge
of [**] per dollar on, and in addition to, the amount of such payment but
not exceeding the maximum amount, if any, permitted by law ("Late Charge").
3. NET LEASE: This Lease is a net lease. Lessee's obligation to pay all rent
and any other amounts due hereunder shall be absolute and unconditional
and, except as expressly provided, shall not be subject to any abatement,
deferment, reduction, defense, counterclaim, set-off, or recoupment,
including, but not limited to, for example, (i) any existing or future
claims of whatever kind or nature against Lessor or the manufacturers) or
suppliers) of the Equipment or (ii) termination of Lessee's right of
possession and/or the taking of possession of the Equipment thereof by or
through Lessor in accordance with this Lease. Except as expressly provided
herein, this Lease shall not terminate for any reason, including, but not
limited to, any defect in the Equipment or Lessor's title thereto or any
destruction or loss of use of any Item of Equipment.
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
4. LOCATION AND USE OF EQUIPMENT: Lessee shall be solely responsible to
install the Equipment or have it installed, to inspect the Equipment during
installation, upon completion of installation to test the Equipment and to
accept it pursuant to the terms of this Lease. The full risk of loss
arising out of or in connection with delays, partial performance or
nonperformance by supplier(s) shall be on Lessee, 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.
During the term of this Lease, the Equipment shall be located at the
address specified in the Equipment Schedule and shall not be removed from
that address without the prior written consent of Lessor. Lessee covenants
and warrants that during the period that any Equipment is leased to Lessee,
or its successors or assigns, the Equipment will at all times be used and
operated in compliance with the laws of the jurisdictions in which it is
located, and in compliance with all acts, rules, regulations, and orders of
any commission, board or other legislative, administrative, or judicial
body or officer having power to regulate or supervise the use or operation
of the Equipment. Lessee shall not install or use the Equipment in such
manner or in such circumstances that any part of the Equipment is deemed to
be an accession to other personal property or deemed to be real property or
a fixture thereon.
5. ERRORS IN ESTIMATED COST: As used herein, "Total Cost" means the cost to
Lessor of purchasing and delivering the Equipment to Lessee, including
taxes and transportation and other charges. The amount of each rental
payment set forth on the Equipment Schedule is based on the Total Cost
initially set forth which is an estimate, and each shall be adjusted
proportionally if the actual cost of the Equipment differs from said
estimate. Lessee hereby authorizes Lessor to correct the figures set forth
on the Equipment Schedule(s) when the actual cost is known, and to add to
the amount of each rental payment any sales, use or other tax that may be
imposed on or measured by rental payments. If the actual cost of the
Equipment differs from the estimated cost by more than [**] however, either
party at its option may terminate the Lease with respect to the Equipment
as to subsequent obligations by giving written notice to the other party
within fifteen (15) days after receiving notice of the actual cost or the
corrected rentals and Lessee shall reimburse and indemnify Lessor for any
existing obligation and/or expenses incurred by Lessor such as but not
limited to, open purchase orders and progress payments made to supplier(s).
6. INSPECTION: Lessee shall, whenever requested, advise Lessor of the exact
location and condition of the Equipment and shall give Lessor immediate
notice of any attachment or other judicial processes, liens or encumbrances
affecting the Equipment and indemnify and save Lessor harmless from any
loss or damage caused thereby. Lessor may for the purpose of inspection, at
all reasonable business hours, enter any building or place where the
Equipment is located. Lessor shall be entitled to review Lessee's
maintenance records relating to the Equipment.
7. PRESERVATION OF LESSEE'S EXISTENCE AND BUSINESS:
(a) Lessee will preserve and keep in full force and effect Lessee's
existence, rights, licenses and franchises and those of any Subsidiaries,
necessary and material to Lessee's and Subsidiaries' operations taken as a
whole.
(b) Lessee will not make or permit to be made any material change in the
character of Lessee's business or operations.
8. FINANCIAL INFORMATION AND REPORTING:
(a) Lessee shall annually, within ninety (90) days after the close of
Lessee's fiscal year, furnish to Lessor, financial statements of Lessee
(including a balance sheet as of the close of such year and statements of
income, changes in financial condition and shareholder's equity for such
year) prepared in accordance with generally accepted accounting principles
and certified by Lessee's
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independent public accountants. Lessee shall also provide quarterly
financial statements of Lessee similarly prepared for each of the first
three quarters of each fiscal year, which shall be certified (subject to
normal year-end adjustments) by Lessee's chief financial officer and
furnished to Lessor within sixty (60) days following the end of the
quarter.
(b) Lessee will furnish Lessor with any and all information regarding
Lessee's business, condition or operations, financial or otherwise which
Lessee furnishes to any other creditor. This information shall be furnished
to Lessor at the same time it is furnished to that creditor.
(c) Lessee will immediately furnish Lessor with such further information
regarding Lessee's business, condition, property, assets or operations,
financial or otherwise, as Lessor may from time to time reasonably request,
all prepared in form and detail satisfactory to Lessor.
(d) Lessee will at all times maintain true and complete records and books
of account including, without limiting the generality of the foregoing,
appropriate reserves for possible losses and liabilities, all in accordance
with generally accepted accounting principles consistently applied.
(e) Lessee shall permit, and cause any Subsidiary to permit,
representatives of Lessor (i) to visit and inspect any of the properties of
Lessee or any Subsidiary (ii) to examine its or their corporate or
partnership books and records, (iii) to make extracts or copies of such
books and records, and (iv) to discuss its or their affairs, finances and
accounts with its or their officers or partners, as applicable. The
foregoing may be done at any time within regular business hours.
(f) Lessee will promptly notify Lessor in writing of the commencement of
any litigation to which Lessee or any of its affiliates may be a party
(except for litigation in which Lessee's (or the affiliate's) contingent
liability is fully covered by insurance) which, if decided adversely to
Lessee would adversely affect or impair the title of Lessor to the
Equipment or which, if decided adversely to Lessee would materially
adversely affect the business operations or financial condition of Lessee.
In addition, Lessee will immediately notify Lessor, in writing, of any
judgment against Lessee if such judgment would have the effect described in
the preceding sentence.
9. PAYMENT OF TAXES, DEBTS AND OBLIGATIONS:
(a) Lessee shall pay all taxes, assessments, fees, charges, penalties and
fines imposed upon the Equipment and/or arising out of the lease, use,
possession or operation thereof and whether levied or assessed against
Lessee or against Lessor. All taxes, fees and similar charges imposed on
the ownership, possession or use of the Equipment during the term of this
Lease shall be paid by Lessee. In case of failure of Lessee to pay said
taxes, fees and similar charges, Lessor may pay the same, and the amount
thereof shall be payable by Lessee as additional rent with the next rental
payment. (b) Lessee will cause to be paid and discharged all its
obligations when due and all lawful taxes, assessments and governmental
charges or levies imposed upon Lessee or any Subsidiary, or upon any
property, real, personal or mixed, belonging to Lessee or any Subsidiaries,
or upon any part thereof, before the same shall become in default, as well
as all lawful claims for labor, materials and supplies which, if unpaid,
might become a lien or charge upon the property or any part of it.
Notwithstanding the previous sentence, neither Lessee nor any Subsidiary
shall be required to cause to be paid and discharged any obligation, tax,
assessment, charge, levy or claim so long as its validity is contested in
the normal course of business and in good faith by appropriate and timely
proceedings and Lessee or any Subsidiary, as the case may be, sets aside on
its books adequate reserves with respect to each tax, assessment, charge,
levy or claim so contested, nor shall Lessee nor any Subsidiary be required
to pay or discharge any trade Indebtedness which is not past its stated due
date by more than thirty (30) days.
10. MAINTENANCE: Lessee shall enter into and maintain in force throughout the
term of this Lease a maintenance agreement with the equipment
manufacturers), or such other qualified maintenance organization as Lessee
may select, covering maintenance of the Equipment. Lessee will cause the
Equipment to be kept in good working order, repair and maintenance in
accordance with the provisions of each maintenance agreement and will make
all necessary adjustments and repairs to the Equipment. Any parts installed
or replacements made by Lessee to any Item pursuant to
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Lessee's obligation to maintain the Equipment shall be considered
accessions and title thereto shall immediately vest in Lessor. Each
manufacturer or service organization is hereby authorized to accept the
directions of Lessee with respect thereto. Lessee shall allow the
manufacturer(s) or service organization full and free access to the
Equipment. All maintenance and service charges, whether under a maintenance
agreement or otherwise, shall be borne by Lessee, including the expenses,
if any, of a manufacturer's or service organization's customer engineer
charged in connection with maintenance and repair services. Lessee
covenants that the Equipment will at all times be used and operated in
accordance with each manufacturer's instructions and in compliance with any
restriction contained in each manufacturer's warranties regarding the
Equipment.
11. ALTERATIONS AND ATTACHMENTS: Upon prior written notice to Lessor, Lessee
may, at its own expense, make alterations in or add attachments to the
Equipment provided any alteration or attachment shall not interfere with
the normal operation of the Equipment. The manufacturer may incorporate
engineering changes or make temporary alterations to the Equipment upon
request by Lessee. All such alterations and attachments, unless Lessor
shall otherwise agree in writing, shall be removed by Lessee and the
Equipment restored to its original condition, reasonable wear and tear
excepted, upon termination of this Lease. If the alteration or attachment
interferes with the normal and satisfactory operation or maintenance of the
Equipment in a manner as to increase the cost of maintenance of the
Equipment, or create a safety hazard, Lessee shall promptly remove the
alteration or attachment and restore the Equipment to its normal condition.
12. INSURANCE; NOTICE OF ACCIDENT:
(a) At its sole expense, Lessee shall secure and maintain in full force and
effect throughout the term of all Equipment Schedules and any extensions or
renewals thereof, insurance against all risks including, but not limited
to, theft, damage, or destruction of the Equipment in an amount equal to
the aggregate Total Cost of all Equipment Schedules written in the broadest
form available on usual commercial terms and with carriers acceptable to
Lessor. Lessee shall also maintain public liability insurance satisfactory
to Lessor and with at least the minimum limits as set forth in the
Equipment Schedule.
(b) Upon execution of the Certificate of Acceptance, Lessee shall deliver
the policy or policies or duplicates or certificates thereof, to Lessor.
Lessee shall maintain a loss payable endorsement on all such policies in
favor of Lessor and its successors and assigns and shall afford to Lessor
and its successors and assigns such additional protection as Lessor and its
successors and assigns shall reasonably require. All such insurance
policies shall name Lessor, its successors and assigns, as additional
insureds and expressly provide that any obligations imposed upon the
insureds (including, without limitation, the obligation to pay premiums)
shall be the obligation solely of Lessee and not the obligations of Lessor,
its successors and assigns. Each policy shall expressly provide that (1)
the insurance as to Lessor and its successors and assigns shall not be
invalidated by any act, omission or neglect of Lessee, (2) the same may not
be canceled, modified or allowed to lapse (for failure to renew or
otherwise) without at least thirty (30) days prior written notice to Lessor
or its successors and assigns, and (3) the insurance shall be primary,
without right or contribution of any other insurance carried by or on
behalf of Lessor with respect to its interests.
In the event that any policies insuring against liability risks described
above shall now or hereafter provide coverage on a "claims made" basis,
Lessee shall continue to maintain such policies in effect for a period of
not less than three years after the expiration of the Lease term of any
Equipment Schedule.
(c) Lessor and its successors and assigns may apply the proceeds of
insurance to replace or repair the Equipment and/or to satisfy Lessee's
obligations hereunder, as determined in Lessor's sole discretion. If Lessee
fails to pay when due any insurance premium for any policy written
hereunder, then Lessor may make such premium payment and add the amount
thereof to the next
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rent payment, and such premium amounts shall become rent. Lessee appoints
Lessor as Lessee's attorney-in-fact to make any claim for, to receive
payment for and to execute and endorse any documents, checks or other
instruments in payment for loss, theft or damage under any such insurance
policy. Lessor shall be under no duty to ascertain the existence of any
insurance coverage or to examine any certificate of insurance or other
evidence of insurance coverage or to advise Lessee in the event the
insurance coverage does not comply with the requirements of this Agreement.
Lessee will promptly notify the appropriate insurer, Lessor and any
assignee, of an accident or occurrence which may become the basis of a
claim against the insured. In connection with any claim against Lessor
and/or Lessee arising out of the ownership, operation, maintenance and use
of the Equipment, Lessee agrees to cooperate with Lessor in defending
against such claims, including making Lessee's employees available to
Lessor without charge.
(d) Lessee will maintain, and cause any Subsidiaries to maintain, insurance
from duly licensed and responsible insurers on all property of Lessee and
any Subsidiaries to its full insurable value, except to the extent limited
by applicable insurance law. This insurance shall be against risks of fire
and all other risks as fall within "extended coverage" as that term is
generally understood in the insurance industry. Lessee shall also maintain,
and cause any Subsidiaries to maintain, additional insurance in such
amounts and against such risks, including, without limitation, product
liability, personal injury, property damage, and workers' compensation, as
is usually carried by owners of similar businesses of similar size and
profits or as Lessor may reasonably require.
13. INDEMNIFICATION: To the fullest extent permitted by law, Lessor, its
officers, employees, agents, successors and assigns, shall not be liable to
Lessee for, and Lessee shall indemnify and hold Lessor, its officers,
employees, agents, successors and assigns, harmless with respect to any
third-party from any liability (including liability for Lessee negligence),
claim, loss, damage or expense (including litigation expense) of any kind
or nature arising out of this Lease, or the transactions contemplated in
this Lease, including, but not limited to: (a) the inadequacy of any Item
of Equipment for any purpose; (b) any deficiency or defect in any Item of
Equipment; (c) the use or performance or maintenance of any Item of
Equipment; (d) any interruption or loss of service, use or performance of
any Item of Equipment; or (e) any loss of business or other consequential
damage whether or not resulting from any of the foregoing. IN PARTICULAR,
LESSOR AND ITS SUCCESSORS AND ASSIGNS SHALL NOT BE LIABLE FOR INJURIES TO
PERSONS OR DAMAGE TO ANY ITEM OF EQUIPMENT OR OTHER PROPERTY UNDER ANY
THEORY OF STRICT LIABILITY, AND LESSEE SHALL INDEMNIFY AND SAVE LESSOR AND
ITS SUCCESSORS AND ASSIGNS HARMLESS FROM ANY SUCH LIABILITY AND ALL COSTS
AND EXPENSES IN DEFENDING THE SAME. This obligation to indemnify shall
apply from the date of the execution of the Equipment Schedule out of which
the claim arises, notwithstanding that the lease term may not have
commenced. All of Lessor's and its successors and assigns rights under this
section shall survive the termination of this Lease. However, Lessee shall
not be required to indemnify Lessor or its successors or assigns for claims
arising from events which occur after the Equipment has been redelivered to
Lessor, its successors or assigns.
14. RISK OF LOSS:
(a) Lessee hereby assumes and shall bear the entire risk of loss, theft,
damage and destruction of the Equipment, whether partial or complete, from
any cause whatsoever. No loss, theft, damage or destruction of Equipment
shall relieve Lessee of the obligation to pay rent or any other obligation
of this Lease, and, except as provided below, this Lease shall remain in
full force and effect. Lessee shall promptly notify Lessor in writing of
any such loss, theft, damage or destruction of the Equipment. Lessor shall
not be liable to Lessee for any loss, damage or expense of any kind or
nature, caused directly or indirectly by any Item of Equipment or by the
use, maintenance, repair, failure, destruction or damage of any Equipment.
(b) In the event of damage of any kind whatsoever to the Equipment (unless
the same is damaged
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
beyond repair), Lessee, at the option of Lessor, shall at Lessee's expense
(i) place the same in good repair, condition and working order, or (ii)
replace the same with like Equipment of the same or a later model, and in
good repair, condition and working order and provide Lessor good and valid
title thereto.
(c) In the event that the Equipment is lost, stolen, destroyed or damage
beyond repair (any such event is referred to as an "Event of Loss"),
Lessee, at the option of Lessor, shall (i) at Lessee's expense replace the
same with like Equipment of the same or a later model, in good repair,
condition and working order and provide Lessor good and valid title thereto
or (ii) pay to Lessor an amount equal to the unpaid balance of the rent and
any other sums then due or past due, plus the Stipulated Loss Value
attributable to the Equipment (as set forth on Attachment I to the
Equipment Schedule) calculated on the rental payment date immediately
preceding the date of the loss (this option (ii) shall only be applicable
if a Stipulated Loss Value table is referenced in the Equipment Schedule),
or (iii) pay to Lessor an amount equal to the unpaid balance of the rent
and any other sums then due, plus the balance of any remaining rents
(discounted at the rate of [**] percent per annum) attributable to the
Equipment during the term and extension thereof, if any, of this Lease.
Upon such payment Lessee's obligation to pay further rent for such
Equipment shall cease, and Lessee thereupon shall become entitled to the
Equipment paid for "as-is-where-is", without recourse or warranty, express
or implied, with respect to any matter whatsoever.
(d) To the extent of Lessee's expense actually incurred to repair or
replace the Equipment or of Lessee's payment to Lessor for the loss, theft,
damage or destruction of any Item of Equipment, Lessee shall then be
entitled to receive from Lessor any insurance or recovery received by
Lessor in connection with such loss, theft, damage or destruction, and any
amount of insurance or recovery received by Lessor in excess of Lessee's
expenses actually incurred or paid to Lessor shall belong to Lessor. Lessor
shall not be obligated to deliver to Lessee any insurance or recovery
received by Lessor in connection with any loss, theft, damage or
destruction until Lessee has provided Lessor with such documents as Lessor
shall deem necessary or desirable for purposes of evidencing that the
Equipment has been repaired or replaced in accordance with this Section 14.
15. OWNERSHIP OF EQUIPMENT: The Equipment shall at all times remain personal
property, and title thereto shall remain solely in Lessor. The Equipment
may be removed by Lessor at any time after termination of this Lease.
Lessee shall affix tags, decals or plates to the Equipment indicating
Lessor's ownership, which type of tag, decal or plate and location may be
specified by Lessor, and Lessee shall not permit their removal or
concealment. Lessee shall cause each Item of Equipment to be kept numbered
with the serial number specified in the Certificate of Acceptance. Lessee
shall, at its own expense, protect and defend Lessor's title in the
Equipment against all claims and liens of Lessee's creditors and keep the
Equipment free and clear of all claims, liens and encumbrances except those
resulting from the agreements or acts of Lessor. At Lessor's request Lessee
shall obtain and record such instruments and take such steps as may be
necessary to prevent any entity from acquiring any rights in the Equipment
by reason of the Equipment being claimed as or deemed as real property.
In the event this Agreement or any Equipment Schedule thereto shall be
adjudged or determined not to be a Lease, then Lessor's retention of title
to the Equipment shall be construed to be, and Lessee does hereby grant to
Lessor, a security interest in the Equipment, insurance covering the
Equipment and all of the proceeds of the foregoing.
16. ASSIGNMENT: Neither this Lease nor Lessee's rights hereunder shall be
assignable in whole or in part by Lessee except with Lessor's prior written
consent, and the provisions hereof shall bind any permitted successors and
assigns of Lessee. Lessor shall have the right to assign this Lease or any
part thereof. If Lessor assigns the rentals reserved herein or all or any
of Lessor's other rights hereunder, or amounts equal thereto, the right of
the Assignee to receive the rentals as well as any other right of the
Assignee shall not be subject to any defense, setoff, counterclaim, or
recoupment
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which may arise out of any breach or obligation of Lessor in connection
herewith or by reason of any other indebtedness or liability at any time
owing by Lessor to Lessee. All rentals due hereunder shall be payable to
the Assignee by Lessee whether or not this Lease is terminated by operation
of law or otherwise, including without limitation, termination arising out
of bankruptcy, reorganization or similar proceedings involving Lessor. On
receipt of notification of such assignment, Lessee, subject to its rights
hereunder, shall become the pledgeholder of the Equipment for and on behalf
of the Assignee and will relinquish possession thereof only to the Assignee
or pursuant to its written order. Lessee, on receiving notice of any such
assignment, shall abide thereby and make payment as may therein be
directed. Following any such assignment the term "Lessor" shall be deemed
to include or refer to Lessor's Assignee, provided that no such Assignee
shall be deemed to assume any obligation or duty imposed upon Lessor
hereunder, and Lessee shall look only to Lessor for performance thereof.
Lessee is further directed that after assignment of a Lease only Assignee
shall have the right or power to compromise, settle, extend or otherwise
negotiate the terms of payment under that Lease.
17. SECURITY INTEREST: Where appropriate, Lessor shall file all necessary
documents, including UCC financing statements, in connection with this
Lease so as to perfect Lessor's security interest under the Lease. Lessee
shall execute and deliver to Lessor such documents (including UCC financing
statements) as Lessor shall deem necessary or desirable for purposes of
evidencing, protecting or recording the rights and interest of Lessor in
the Equipment or this Lease and in furtherance of the performance of the
terms and conditions of this Lease. All reasonable expenses (including UCC
search and filing fees) related thereto shall be paid by Lessee. Lessee
hereby irrevocably appoints Lessor as its lawful attorney and agent to
execute UCC financing statements on Lessee's behalf and hereby authorizes
Lessor to file, at Lessee's expense, such UCC financing statements in any
appropriate public office.
18. DISPOSITION: At the expiration or termination of this Lease by lapse of
time, or otherwise, Lessee shall return the Equipment to Lessor or its
designee at a location designated by Lessor within New York State, with
transportation charges (including in-transit insurance), prepaid by Lessee,
in the same condition as when received by Lessee, ordinary wear and tear
alone excepted, and free of any lien created or suffered by Lessee. To the
extent the Lease does not terminate at the end of the Lease term thereof,
or the Equipment is not returned to Lessor or its designee, and other
rental amounts are not specified therein or mutually agreed to in writing,
then the same amount of rent shall continue to be due and payable by Lessee
until the Equipment is returned to Lessor or its designee. Lessee shall
remain responsible to maintain in full force and effect insurance in
accordance with paragraph 12 of this Agreement.
19. EVENTS OF DEFAULT AND LESSOR'S REMEDIES:
(a) Each of the following events shall constitute an event of default
("Event of Default") hereunder: (i) Lessee fails to pay any rent or other
amount due hereunder within ten (10) days after the same is due and
payable; or (ii) Lessee fails to perform any other obligation or observe
any condition of this Lease required to be performed or observed by Lessee;
or (iii) any representation, warranty or statement made in writing to
Lessor by Lessee (or any guarantor of Lessee's obligations under this
Agreement) in connection with the transactions contemplated under this
Lease shall have been false in any material respect when made; or (iv)
Lessee attempts to sell, transfer, encumber, part with possession of,
assign or sublet (except as expressly permitted by the provisions hereof)
any Item of Equipment; or (v) Lessee fails to insure (pursuant to Section
12 hereof) any Item of Equipment; or (vi) Lessee fails to deliver to Lessor
any documents required by Lessor under the Lease; or (vii) Lessee (or any
guarantor of Lessee's obligations under this Agreement) is in default under
any other agreement with Lessor or any of its affiliates; or (viii) Lessee
ceases doing business as a going concern; or (ix) Lessee (or any guarantor
of Lessee's obligations under this Agreement) shall consolidate with or
merge into any other entity, or convey, transfer or lease substantially all
of its
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
assets to any other entity; or (x) the corporate existence of Lessee (or
any guarantor of Lessee's obligations under this Agreement) shall
terminate; or (xi) any of Lessee's issued and outstanding shares of capital
stock are sold, assigned, pledged, transferred, exchanged in a corporate
reorganization or otherwise disposed of or new shares of such stock are
issued and such sale, assignment, pledge, transfer, exchange, issuance or
other disposition results in vesting the "control" of such corporation in a
person (or persons) not presently having control and not approved by Lessor
in writing prior to such vesting (except for involuntary transfers of such
stock by operation of law). "Control" shall be deemed vested in the person
or persons owning more than fifty percent (50%) of the number of issued and
outstanding shares of such stock, however designated, or holding more than
fifty percent (50%) of the voting power for the election of members of the
Board of Directors of the Lessee; or (xii) Lessee (a) incurs any
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended from time to time and
the regulations thereunder, equal to 5% of Consolidated Tangible Net Worth
of Lessee or (b) incurs any liability of comparable size to the Pension
Benefit Guaranty Corporation; or (xiii) Lessee or any subsidiary fails to
comply with the provisions of the Fair Labor Standards Act of 1938, as
amended; or (xiv) Lessee is, or permits any subsidiary to be, in violation
of any law or regulation, order, writ, injunction or decree of any court or
governmental instrumentality or in breach of any agreement or instrument to
which Lessee or any Subsidiary is subject or in default thereunder; or (xv)
Lessee (or any guarantor of Lessee's obligations under this Agreement)
applies for or consents to the appointment of a receiver, trustee,
assignee, custodian or liquidator of its business or any substantial part
of its property; or (xvi) Lessee (or any guarantor of Lessee's obligations
under this Agreement) fails to pay its debts generally as they become due;
or (xvii) Lessee (or any guarantor of Lessee's obligations under this
Agreement) makes a general assignment for the benefit of creditors; or
(xviii) Lessee (or any guarantor of Lessee's obligations under this
Agreement) fails within sixty (60) days to lift any execution, garnishment
or attachment of such consequences as will impair its ability to carry on
its operations under this Lease; or (xix) Lessee (or any guarantor of
Lessee's obligations under this Agreement) commences (as the debtor) a case
in bankruptcy (including a petition for reorganization or arrangement)
under the United States Bankruptcy Code or a proceeding under any state or
federal insolvency law; or (xx) a case in bankruptcy or any other
proceeding (including a petition for reorganization or arrangement) under
the United States Bankruptcy Code or any case or proceeding under any other
insolvency law shall be commenced against Lessee (or any guarantor of
Lessee's obligations under this Agreement) (as the debtor) involuntarily or
a decree or order for relief against Lessee (or any guarantor of Lessee's
obligations under this Agreement) (as the debtor) shall be entered in any
court of competent jurisdiction, and such case, proceeding or decree or
order is not dismissed within forty (40) days after such commencement or
entry, or Lessee (or any guarantor of Lessee's obligations under this
agreement) shall consent to or admit the material allegations against it in
any such case or proceeding; or (xxi) a trustee, assignee, receiver,
custodian or agent (however named) is appointed or authorized to take
charge of any substantial part of Lessee's (or any guarantor of Lessee's
obligations under this Agreement) property.
(b) Upon the occurrence of any Event of Default, Lessor may declare the
Lessee in default. At its option, Lessor may declare a default in all
Leases and any other agreement between Lessor, or any affiliate of Lessor,
and Lessee except as specifically exempted therefrom by Lessor in such
declaration. In the case of an Event of Default, Lessor or its agents shall
have the right, at their option, to exercise any or all of the rights and
remedies available to a secured party under the Uniform Commercial Code
and, in addition, to do any or all of the following: (i) to declare
immediately due and payable without notice or demand to Lessee an amount
equal to the balance of unpaid rent and any other sums then due plus the
balance of the rent and any other sums to become due (discounted at the
rate of [**] percent per annum) during the term and extension thereof, if
any, of this Lease; and/or (ii) to sue for and recover from Lessee an
amount equal to the unpaid balance of rent and any other sums then due plus
the balance of rents and any other sums to become due (discounted at the
rate of [**] percent per annum) during the term and extension thereof, if
any, of
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
this Lease (hereinafter "Unpaid Rent"); and/or (iii) to take possession of
any or all Item(s) of Equipment without demand or notice wherever the same
may be located without any court order or other process of law. Upon taking
possession of any or all Item(s) of Equipment, Lessor at its option may (i)
lease the repossessed Equipment to any third party on such terms and
conditions as Lessor may determine, or (ii) sell the Equipment or any part
thereof at public auction or at private sale. In the event Lessor re-lets
the repossessed Equipment, then Lessor shall credit against the Unpaid Rent
the present value of the aggregate of the rent to be received from the
re-lease during the remaining term of the applicable Equipment Schedules
(discounted at a rate equal to the sum of the prime interest rate in effect
at The Chase Manhattan Bank, on the date such re-lease is entered into
[**]). In the event Lessor sells the repossessed Equipment, then Lessor
shall credit all amounts received from the sale, less expenses incurred in
connection therewith, to the Unpaid Rent due. Lessee hereby agrees to
peaceably deliver the Equipment to Lessor upon demand after an Event of
Default is declared by Lessor; Lessee waives any and all damages occasioned
by such taking possession. Any such taking of possession shall not
constitute a termination of this Lease and shall not relieve Lessee of its
original obligation hereunder unless Lessor expressly so notifies Lessee in
writing.
(c) Should any proceeding be instituted by Lessor to recover any monies due
and/or to become due hereunder and/or for the possession of the Equipment,
Lessee shall pay a reasonable sum as attorney's fees and collection agency
fees, court costs and repossession expenses.
The exercise, or the beginning of exercise by the Lessor of any one or more
of such remedies described above shall not constitute the exclusive
election of such remedies and shall not preclude the simultaneous or later
exercise by Lessor of any or all of such other remedies.
20. LESSEE'S AND LESSOR'S WARRANTIES: (a) Lessee hereby warrants and represents
to Lessor, its successors and assigns that: (i) Lessee's execution and
performance of this Lease has been duly authorized by all necessary
corporate action and is not now and will not be in 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; (ii) no consent or approval of any trustee or holder of
any indebtedness or obligation of Lessee, and no consent or approval of any
governmental authority, is necessary for Lessee's execution or performance
of this Lease; (iii) there is no litigation or other proceeding pending, or
to the best of the Lessee's knowledge, threatened against or affecting
Lessee which, if decided adversely to Lessee would adversely affect or
impair the title of Lessor to the Equipment or which, if decided adversely
to Lessee would materially adversely affect the business operations or
financial condition of Lessee; (iv) all balance sheets, statements of
profit and loss and other financial data that have been delivered to Lessor
with respect to Lessee are complete and correct in all material respects,
fairly present the financial condition of the Lessee on the dates for
which, and the results of its operations for the periods for which, the
same have been furnished and have been prepared in accordance with
generally accepted accounting principles consistently applied; (v) there
has been no material adverse change in the condition of Lessee, financial
or otherwise, since the date of the most recent financial statements
delivered to Lessor; (vi) this Lease is valid and binding and enforceable
against Lessee in accordance with its terms, subject to enforcement
limitations imposed by rules of equity or by bankruptcy or similar laws.
Upon Lessor's request, Lessee shall submit to Lessor an opinion of Lessee's
counsel that the above warranties and representations are true.
(b) Lessor hereby warrants and represents to Lessee, its successors and
assigns that: (i) Lessor's execution and performance of this Lease has been
duly authorized by all necessary corporate action and is not now and will
not be in conflict with Lessor's charter and 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; (ii) no consent or
approval of any trustee or holder of any indebtedness or obligation of
Lessor, and no consent or approval of any governmental authority, is
necessary for Lessor's execution or performance of this Lease; and (iii)
this Lease is valid and binding and
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10
enforceable against Lessor in accordance with its terms, subject to
enforcement limitations imposed by rules of equity or by bankruptcy or
similar laws.
21. JOINT AND SEVERAL LIABILITY; AUTHORITY TO SIGN; SUBSIDIARIES; PURCHASE OF
EQUIPMENT: If more than one party executes this Lease as Lessee, each such
party shall be jointly and severally bound by the terms and provisions of
this Lease. Any person who signs as an officer or agent for a corporation,
partnership or other entity warrants that he has authority from such
corporation, partnership or other entity to enter into this Lease on its
behalf. Each Item of Equipment delivered pursuant to this Lease by Lessor
to a Subsidiary of Lessee or to any entity or person designated by Lessee,
whether at the request of Lessee or such Subsidiary, entity or person shall
be Equipment for all purposes of this Lease, and Lessee shall be and remain
primarily liable for its obligations under this Lease with respect to such
Equipment. Lessor shall not be obligated to purchase and deliver any Item
of Equipment unless Lessor has executed an Equipment Schedule covering the
Equipment.
22. MODIFICATION: No change, modification, or alteration of, and no additions
to, the terms of this Lease shall be effective or binding on Lessor unless
the same is in writing and signed by Lessor (except if the Lease term is
automatically extended per Section 18 hereof). In the event of conflict
between the terms of this Lease and the Equipment Schedule, the Equipment
Schedule shall govern.
23. NOTICES:
(a) Lessee will immediately notify Lessor in writing with full details if
(i) any event occurs or any condition exists which constitutes, or which
but for a requirement of lapse of time or notice or both would constitute,
an Event of Default under Part 19, or which might materially and adversely
affect the financial condition or operations of Lessee or of any Subsidiary
or (ii) any representation or warranty made in the Master Lease Agreement
or in any writing related to it may for any reason cease in any material
respect to be true and complete.
(b) All notices relating to this Lease, shall be in writing and shall be
deemed given when delivered or when deposited in the U.S. mail, certified,
postage prepaid and addressed with the Ml name and address of the
appropriate party set forth above, or to such other address as may have
been furnished by written notice from the party to whom notice is sent.
24. TIME OF ESSENCE; ENTIRE AGREEMENT; WAIVER; SURVIVAL OF TERMS: Time is of
the essence of this Lease. This Lease constitutes the entire agreement
between the parties and shall be binding upon the parties and their
respective successors or assigns, and shall only be amended by a written
instrument signed by Lessor and Lessee. Any waiver of the performance of
any of the terms, conditions or covenants hereof by either party shall not
be construed as thereafter waiving any such terms, conditions or covenants,
but the same shall remain in full force and effect, as if no such waiver
has occurred. Lessee's obligations and liabilities under this Lease shall
not be affected by the expiration or earlier termination of this Lease.
25. APPLICABLE LAW: This Lease shall be governed by and in accordance with the
laws of the State of New York. At Lessor's option, any action or proceeding
relating directly or indirectly to this Lease shall be tried in a court of
competent jurisdiction located in the State of New York. Lessee hereby
consents to jurisdiction of any court of competent jurisdiction chosen by
Lessor. This Lease shall be deemed to have been made in the State of New
York, regardless of the order in which it was executed.
26. HEADINGS: The headings of each numbered paragraph are for reference only
and constitute no part of this Lease.
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11
27. ACKNOWLEDGMENTS AND WARRANTIES: Lessee acknowledges that it has selected
both (a) the Equipment and (b) the manufacturer and/or supplier from whom
Lessor is to purchase it.
LESSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE, AND, AS TO LESSEE, LESSOR LEASES THE EQUIPMENT
AS IS. NO DEFECT OR UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE OF THE
OBLIGATION TO PAY RENT OR OF ANY OTHER OBLIGATION UNDER THIS LEASE. LESSOR
WARRANTS TO LESSEE THAT, SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, LESSOR WILL NOT INTERFERE WITH THE LESSEE'S USE AND POSSESSION
OF THE EQUIPMENT.
If the Equipment is unsatisfactory for any reason, Lessee shall make any
claim on account thereof solely against the manufacturer or supplier.
Lessor hereby agrees to assign to Lessee, solely for the purpose of making
and prosecuting any such claim, all of the rights which Lessor has against
such manufacturer or supplier for breach of warranty or other
representation respecting the Equipment to the extent the same are
assignable.
28. LESSOR'S RIGHT TO CURE: Upon Lessee's failure to perform any of its duties
under a Lease, Lessor may, but shall not be obligated to, perform any or
all such duties, and Lessee shall pay an amount equal to the expenses
thereof to Lessor forthwith upon demand by Lessor. No such performance of
any or all such duties by Lessor shall be deemed to cure any Event of
Default of Lessee.
29. ADDITIONAL ASSURANCES: If Lessor shall request, Lessee shall execute and
deliver to Lessor such documents as Lessor shall reasonably deem necessary
or desirable.
Lessee hereby authorizes Lessor to make corrections, if necessary, to the
description of Equipment, quantities, model numbers, and/or serial numbers,
on the Equipment Schedule, Certificate of Acceptance, UCC- 1 financing
statements covering the Equipment and all other related documents. Lessor
will provide Lessee with a copy of the corrected Equipment Schedule.
30. MODIFICATIONS/ADDITIONAL PROVISIONS: See attached Addendum, if there are
any modifications or additions hereto.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE DULY EXECUTED
AS OF THE DATE FIRST ABOVE WRITTEN.
CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS, INC.
BY: /s/ Janice M. SCHAWILLIE BY: /s/ STEVEN SHAPIRO
Janice M. Schawillie Steven Shapiro
TITLE: CONTRACT ADMINISTRATOR TITLE: Chief Financial Officer
(REV.2/93)
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12
[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
AMENDMENT
TO
MASTER LEASE AGREEMENT DATED AUGUST 8,1997 BETWEEN CHASE EQUIPMENT LEASING, INC.
("LESSOR") AND NETWORK PLUS, INC. ("LESSEE").
The following modifications are hereby incorporated in and made a part of the
above referenced Master Lease Agreement effective as of the date first written
above. Capitalized terms used herein shall have the meaning attributable to them
in GAAP (Generally Accepted Accounting Principles)
Lessee and Lessor hereby agree as follows:
Section 19, EVENTS OF DEFAULT AND LESSOR'S REMEDIES: In part (a), subsection
(vii), add the following after the word affiliates "or with Fleet Bank".
Additionally, insert as new events of defaults in Part (a) as separate
subsections beginning after subsection (xxi): ;or (xxii) No two consecutive
quarterly losses, commencing with periods after the December 31, 1997 fiscal
quarter- or (xxiii) The ratio of Consolidated Total Liabilities to
Consolidated Net Worth shall not exceed [**] until such time as the
"Warrants" (Tel-Save) are exercised; at such time the ratio shall not exceed
[**].
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EQUIPMENT SCHEDULE NO. 1
to Master Lease Agreement dated as of AUGUST 8, 1997
This is Counterpart NO. ONE of TWO serially numbered, manually executed
counterparts. To the extent that this document constitutes chattel paper under
the Uniform Commercial Code, no security interest in this document may be
created through transfer and possession of any counterpart other than
Counterpart No. ONE.
This Equipment Schedule is made as of AUGUST 8, 1997, between, CHASE EQUIPMENT
LEASING INC. ("Lessor") having its principal place of business at One Chase
Square, Rochester, New York 14643 and NETWORK PLUS, INC. ("Lessee") having its
principal place of business at 234 COPELAND STREET, QUINCY, MA 02169.
1. LEASE. Subject to the terms and conditions set forth in this Equipment
Schedule, Lessor hereby leases to Lessee and Lessee leases from Lessor the items
of personal property (collectively the "Equipment" or individually an "Item")
described in Section 2. Capitalized terms used herein shall have the meanings
attributed to them in this Equipment Schedule or in the Master Lease Agreement
incorporated herein.
2. DESCRIPTION OF EQUIPMENT AND TOTAL COST.
Computer equipment as further described on the attached Schedule of Leased
Equipment.
TOTAL COST
$1,521,442.00
3. SUPPLIER(s).
COMPUTER SALES INTERNATIONAL, INC.
4. LOCATION OF ITEMS OF EQUIPMENT: (If other than Lessee's address as set
forth above)
5. RENT. (includes Partial Rent and Periodic Rent)
(a) Partial Rent = Amount of rent, if any, from (a) $3,664.65
Acceptance Date to but excluding the date of the first
Periodic Rental Payment calculated by multiplying
1/30th of the Periodic Rental Payment by such number of
days elapsed. Such Partial Rent is due on the date of
the first Periodic Rental Payment. All Periodic Rental
Payments shall be due on the first day of the month
unless otherwise specified below.
(b) Periodic Rental Term (b) Thirty-six months
(c) Periodic Rental Payment (subject to change;
see Section 9 below) (c) $45,902.19
(d) Date of first Periodic Rental Payment (d) OCTOBER 1, 1997
(e) Number of Periodic Rental Payment Periods (e) 36 monthly
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
(f) Sales Tax: Each Periodic Rental Payment is subject to sales tax of 5% per
payment or such other percentages or amounts as may from time to time be in
effect.
6. TERMS. The terms and conditions of the above referenced Master Lease
Agreement are incorporated in this Equipment Schedule and made a part of
this Lease. This Equipment Schedule constitutes a separate Lease, evidenced
by the executed copies hereof.
7. THE EQUIPMENT. Lessor, at the express request of Lessee, has ordered or
shall order the Equipment set forth in this Equipment Schedule from
supplier(s) selected solely by Lessee. Lessor has made no representations
or recommendations regarding Lessee's choice of supplier(s). Lessee
negotiated the style, quality, price, delivery date(s) and all other terms
relating to the Equipment directly with the suppliers) and without Lessor's
assistance or participation.
8. INSURANCE. Lessee shall maintain insurance as provided in Section 12 of the
Master Lease Agreement. The required public liability policy shall have
limits of at least [**], bodily injury and property damage combined.
9. RENT ADJUSTMENT. The Periodic Rental Payment as indicated above is indexed
to a representative 36 month Treasury Note = [**] and based on a lease
factor = [**]. If, when the Lessee executes and delivers to Lessor the
Certificate of Acceptance as to the date of its acceptance of the Equipment
("Date of Acceptance"), there has been a change in the 36 Month Treasury
Note rate, then Lessor shall adjust the lease rate factor (either up or
down) by an adjustment factor = [**] for every basis point change in the
[**] rate. Lessee shall confirm its acceptance of the change by inserting
the new Periodic Rental Payment on the Certificate of Acceptance.
10. ADDITIONAL PROVISIONS:
RIDER I - TAX INDEMNIFICATION
RIDER 11 - OPTIONS AT LEASE MATURITY
ATTACHMENT 1 - STIPULATED LOSS VALUES
IN WITNESS WHEREOF, the parties have caused this Equipment Schedule to be duly
executed as of the date first above written.
CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS,
INC.
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
CHASE EQUIPMENT LEASING, INC. (LESSOR) PAGE 1
ONE CHASE SQUARE
ROCHESTER, NEW YORK 14643
SCHEDULE OF LEASED EQUIPMENT
TO
EQUIPMENT SCHEDULE NO. 1 DATED AUGUST 8,1997 UNDER MASTER LEASE AGREEMENT DATED
AUGUST 8,1997, BETWEEN NETWORK PLUS, INC. AS LESSEE AND CHASE EQUIPMENT LEASING,
INC. AS LESSOR.
QTY MANUFACTURERS MODEL AND DESCRIPTION SERIAL NUMBER COST
3 DIGITAL ALPHA SERVER 4100/UNTX CLUSTER 5/466 MHZ [**]
CPU 4 MB CACHE, I GB MEMORY
2 DIGITAL ALPHA SERVER 4100 5/466 MHZ CPU, 4 MB [**]
CACHE, I GB MEMORY (DEVELOPMENTAL SERVERS)
1 IMPLEMENTATION SERVICES [**]
1 EMC SYMMETRIX 3430 [**]
1 PRIORIS ZX 6200 NP/2 BASE SYSTEM (ADSM SERVER) [**]
1 ATL 4/52 TAPE LIBRARY [**]
1 ADSM SOFTWARE [**]
1 ADSM SERVICES [**]
1 SQL BACKTRACK [**]
2 PRIORIS ZX 6200 MP/2 BASE SYSTEM (NETWARE SERVERS) [**]
SUBTOTAL [**]
LESS: BERKSHIRE DISCOUNT ([**])
SUBTOTAL [**]
1 OPEN SYMMETRIX MANAGER [**]
9 SQL [**]
1 PRIORIS ZX 6200 MP/2 BASE SYSTEM (BACKUP SERVER) [**]
1 NETWORK COMPONENTS [**]
1 CISCO CATALYST 5500 [**]
2 EMC SYMMETRIX DISK PACKS [**]
1 BEST POWER FE 7000 UPS [**]
TOTAL COST: $1,521,442.00
TOGETHER WITH ALL PARTS, FITTINGS, CABLES, ACCESSORIES, ATTACHMENTS, FIXTURES,
RENEWALS, IMPROVEMENTS, SUBSTITUTIONS, AND REPLACEMENTS TO THE EQUIPMENT,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED, AND TOGETHER WITH ALL RENTS, PROCEEDS,
INCOME AND PROFITS DERIVED THEREFROM.
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RIDER 1
TAX INDEMNIFICATION
This Rider is appended to and made part of Equipment Schedule No. 1,
dated AUGUST 8, 1997 (the "Lease"), between Chase Equipment Leasing, Inc.
("Lessor") and NETWORK PLUS, INC. ("Lessee").
This Lease has been entered into on the basis that Lessor shall be
entitled to such deductions, credits and other tax benefits as are provided by
federal, state and local law to an owner of property ("Tax Benefits") including,
without limitation Modified Accelerated Cost Recovery deductions on the
Equipment allowed under Section 168 of the Internal Revenue Code of 1986, as
amended (the "Code") for "5 year property".
If Lessor shall lose, shall not have or shall lose the right to claim,
or if there shall be disallowed or recaptured with respect to Lessor, all or any
portion of the Tax Benefits as are provided to an owner of property with respect
to any Equipment ("Loss") then on the next succeeding rental payment date after
written notice to Lessee by Lessor that a Loss has occurred, or if there be no
such date, thirty days following such notice, Lessee shall pay Lessor an amount
which, in the reasonable opinion of Lessor and after deduction of all taxes
required to be paid by Lessor with respect to the receipt of such amount, will
cause the Lessor's net after-tax return over the term of the Lease in respect of
such Equipment to equal the net after-tax return that would have been available
if Lessor had been entitled to the utilization of all of the Tax Benefits.
For purposes of this Rider, a Loss shall occur upon the earliest of (i)
the happening of any event (such as disposition or change in use of any
Equipment) which may cause such Loss, (ii) the payment by Lessor to the Internal
Revenue Service of the tax increase resulting from such Loss, or (iii) the
adjustment of the tax return of Lessor to reflect such Loss. Lessor shall not be
entitled to a payment under this Rider on account of any Loss due solely to one
or more of the following events: (aa) a failure of Lessor to claim timely or
properly the Tax Benefits for the Equipment in the tax return of the Lessor;
(bb) a disqualifying change in the nature of the Lessor's business or
liquidation thereof; (cc) a Foreclosure by any person holding through Lessor of
a lien on the Equipment, which foreclosure results solely from an act of Lessor;
or (dd) the failure of Lessor to have sufficient taxable income or tax liability
to utilize such Tax Benefits.
All of the Lessor's rights and privileges arising from the indemnities
contained in this Rider shall survive the expiration or other termination of
this Lease.
For the purposes of this Rider the term "Lessor" shall include any
affiliated group (within the meaning of Section 1504 of the Code) of which
Lessor is a member for any year in which a consolidated income tax return is
filed for such affiliated group.
IN WITNESS WHEREOF, the parties have executed this Rider.
CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS INC.
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RIDER II
TO EQUIPMENT SCHEDULE NO. 1- (THE "LEASE) UNDER
MASTER LEASE AGREEMENT DATED: AUGUST 8,1997
BETWEEN
CHASE EQUIPMENT LEASING, INC. ("LESSOR")
AND
NETWORK PLUS, INC., ("LESSEE")
OPTIONS AT LEASE MATURITY
The following provisions are hereby agreed upon and made a part of the
above-referenced Lease. Capitalized terms used herein but not defined shall have
the meanings attributable to them in the Equipment Schedule or the Master Lease
Agreement incorporated thereunder. Provided LESSEE has faithfully performed and
carried out the terms and conditions of the Lease, on it's part to be kept and
performed, and no Event of Default shall have occurred and be continuing, LESSEE
may:
1. PURCHASE. Notwithstanding any provision contained in the Lease to
the contrary, at the expiration of the Periodic Rental Term hereof, at its
option, LESSEE may purchase from LESSOR, and LESSOR shall sell to LESSEE, not
less than all of the Equipment described on Equipment Schedule No. I to Master
Lease Agreement dated AUGUST 8, 1997 "as-is, whereis," without recourse or
warranty expressed or implied, for a cash consideration ("Purchase Price") equal
to the sum of the then Fair Market Value of the Equipment determined as
hereinafter provided, not to exceed 10% of the original cost of the Equipment,
plus any sales or use taxes, and other taxes (except taxes measured by the
income of LESSOR), fees or charges applicable to the sale and delivery of the
Equipment.
a. NOTICE. LESSEE shall exercise option by giving LESSOR written
notice, at least ninety (90) days prior to the expiration of the
Periodic Rental Term, of LESSEE's intent to purchase the Equipment.
b. Fair MARKET VALUE. The "Fair Market Value" of the Equipment shall
be an amount mutually agreed upon by LESSOR and LESSEE; provided that if
LESSOR and LESSEE are unable to agree upon the Fair Market Value of the
Equipment, or Items thereof, within 30 days after receipt by LESSOR of
LESSEE's notice of election to exercise this purchase option, the Fair
Market Value shall be determined by an appraiser selected by mutual
agreement of the LESSOR and LESSEE. The fees and costs of the appraisal
shall be shared equally by LESSOR and LESSEE.
c. PAYMENT. LESSEE shall pay to LESSOR the Purchase Price in full on
or before the expiration of the Periodic Rental Term of the Lease.
d. TITLE. All of LESSOR's rights, title and interest to and in the
Equipment shall pass to LESSEE upon receipt by LESSOR of the Purchase
Price in full.
e. OTHER TERMS AND CONDITIONS. If LESSEE has exercised its option to
purchase the Equipment and if the Purchase Price in full is not received
by LESSOR on or before the expiration of the Periodic Rental Term,
LESSEE hereby agrees to be bound by and to carry out each of the terms
and conditions of the Lease, including, but not limited to, the payment
of rent, assumption of risk of loss, maintenance of insurance and
maintenance of the Equipment, until such time as LESSOR receives the
Purchase Price in full. The amount of rent to be paid by LESSEE shall be
pro-rated to the date upon which the Purchase Price is received by
LESSOR in full.
OR
2. RENEWAL. At its option, LESSEE may renew the Lease, for not less than
all of the Equipment, annually for a monthly rental payment based on the Fair
Market Value of the Equipment and the prevailing rates charged by the LESSOR.
All other terms and conditions of the Lease shall remain in effect.
LESSOR: CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS. INC.
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[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
ATTACHMENT 1
STIPULATED LOSS VALUE TABLE
TO
EQUIPMENT SCHEDULE NO. 1 DATED AUGUST 8,1997
BETWEEN CHASE EQUIPMENT LEASING, INC. (LESSOR)
AND NETWORK PLUS, INC. (LESSEE)
STIPULATED LOSS VALUE: The Stipulated Loss Value of the Vehicle(s)
shall be an amount equal to the Total Cost of the Vehicle(s)
multiplied by the applicable percentage set forth below, plus any
previously unpaid Rent or other sums due on or before the date of
payment to Chase Equipment Leasing, Inc. Such Stipulated Loss Value
payment is due on or before the first day of the month following
the Event of Loss. (The Percentage Loss Value next to the
corresponding Payment No. does not include the monthly rental for
that period).
PERCENTAGE PERCENTAGE
PAYMENT NO. LOSS VALUE PAYMENT NO. LOSS VALUE
----------- ---------- ----------- ----------
1 [**] 19 [**]
2 [**] 20 [**]
3 [**] 21 [**]
4 [**] 22 [**]
5 [**] 23 [**]
6 [**] 24 [**]
7 [**] 25 [**]
8 [**] 26 [**]
9 [**] 27 [**]
10 [**] 28 [**]
11 [**] 29 [**]
12 [**] 30 [**]
13 [**] 31 [**]
14 [**] 32 [**]
15 [**] 33 [**]
16 [**] 34 [**]
17 [**] 35 [**]
18 [**] 36 [**]
18
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CERTIFICATE OF ACCEPTANCE
Under Equipment Schedule No. 1 dated as of August 8, 1997 (the "Lease"), between
CHASE EQUIPMENT LEASING, INC. (the "Lessor") and NETWORK PLUS, INC. (the
"Lessee"),
1. ITEMS OF EQUIPMENT, The Lessee hereby certifies and warrants to Lessor that
the following Items of Equipment have been delivered to the location indicated
on the Equipment Schedule, tested and inspected by the Lessee, or Lessee has had
a reasonable opportunity to do so, found to BE in good order and accepted as
Items of Equipment under the Lease, all as of the date indicated below. Lessee
approves full payment thereof by Lessor to supplier(s). To the extent not
available upon Lessee's execution of the Equipment Schedule, Lessee hereby
authorizes Lessor to insert serial numbers of the Equipment on this Certificate
of Acceptance, the Equipment Schedule, UCC-1 financing statements covering such
Equipment and all other related documents, when made available by the
suppliers).
(a) DATE OF ACCEPTANCE: 8/12, 1997
(b) DESCRIPTION OF EQUIPMENT AND LESSOR'S COST:
Computer equipment as further described on the attached Schedule of Leased
Equipment.
PERIODIC RENTAL PAYMENT: $45,902.19 TOTAL COST $1,521,442.00
2. REPRESENTATIONS BY THE LESSEE, The Lessee hereby represents and warrants to
Lessor that (i) no Event of Default or event which, with the giving of notice or
the lapse of time or both, would become such an Event of Default under the Lease
has occurred and is continuing, and (ii) the Lessee has obtained, and there are
in full force and effect, all insurance policies with respect to the Equipment
and public liability required to be obtained under the terms of the Lease.
3. SHOULD LESSEE HEREAFTER DISCOVER ANY DEFECT, UNFITNESS OR FAILURE OF
PERFORMANCE OF EQUIPMENT (INCLUDING) WITHOUT LIMITATION, SOFT ' WARE SYSTEMS AND
PROGRAMMING), LESSEE'S OBLIGATIONS TO LESSOR, INCLUDING THE OBLIGATION TO PAY
RENTS WHEN DUE, REMAIN IN EFFECT AS MORE FULLY STATED IN THE TERMS AND
CONDITIONS OF THE LEASE. IN SUCH EVENT, LESSEE'S EXCLUSIVE RECOURSE SHALL BE
AGAINST THE MANUFACTURER, SUPPLIER, PROGRAMMER AND/OR SERVICING AGENT FOR THE
EQUIPMENT, AS IN LESSEES JUDGMENT APPEARS APPROPRIATE.
LESSEE: NETWORK PLUS, INC.
19
20
EQUIPMENT SCHEDULE NO. 2
to Master Lease Agreement dated as of AUGUST 8, 1997
This is Counterpart NO.ONE of TWO serially numbered, manually executed
counterparts. To the extent that this document constitutes chattel paper under
the Uniform-n Commercial Code, no security interest in this document may be
created through transfer and possession of any counterpart other than
Counterpart No. ONE.
This Equipment Schedule is made as of OCTOBER 21,1997, between, CHASE EQUIPMENT
LEASING, INC. ("Lessor") having its principal place of business at One Chase
Square, Rochester, New York 14643 and NETWORK PLUS, INC. ("Lessee") having its
principal place of business at 234 COPELAND STREET, QUINCY, MA 02169.
1. LEASE. Subject to the terms and conditions set forth in this Equipment
Schedule, Lessor hereby leases to Lessee and Lessee leases from Lessor the items
of personal property (collectively the "Equipment" or individually an "Item")
described in Section 2. Capitalized terms used herein shall have the meanings
attributed to them in this Equipment Schedule or in the Master Lease Agreement
incorporated herein.
2. DESCRIPTION OF EQUIPMENT AND TOTAL COST.
Telephone switching equipment as further described on the attached Schedule
of Leased Equipment.
TOTAL COST $3,450,000.00
3. SUPPLIER(s).
SALE LEASEBACK
4. LOCATION OF ITEMS OF EQUIPMENT: (If other than Lessee's address as set
forth above)
234 COPELAND STREET, QUINCY, MA 02169, & I
SOUTH AVENUE, SUITE 204, ORLANDO, FL
5. RENT. (includes Partial Rent and Periodic Rent)
(a) Partial Rent = Amount of rent, if any, from
Acceptance Date to but excluding (a) $5,924.52
the date of the first Periodic Rental Payment
calculated by multiplying 1/30th of the Periodic Rental
Payment by such number of days elapsed. Such Partial
Rent is due on the date of the first Periodic Rental
Payment. All Periodic Rental Payments shall be due on
the first day of the month unless otherwise specified
below.
(b) Periodic Rental Term (b) Sixty months
(c) Periodic Rental Payment (subject to change;
see Section 9 below) (c) 68,020.22
(d) Date of first Periodic Rental Payment (d) DECEMBER 1, 1997
(e) Number of Periodic Rental Payment Periods (e) 60 monthly
(f) Sales Tax: Each Periodic Rental Payment is subject to sales tax of *% or
$ per payment or such other percentages or amounts as may from time to time
be in effect.
MASSACHUSETTS 5%
20
21
[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
FLORIDA 6%
6. TERMS The terms and conditions of the above referenced Master Lease
Agreement are incorporated in this Equipment Schedule and made a part of this
Lease. This Equipment Schedule constitutes a separate Lease, evidenced by the
executed copies hereof.
7. THE EQUIPMENT. Lessor, at the express request of Lessee, has ordered or
shall order the Equipment set forth in this Equipment Schedule from suppliers)
selected solely by Lessee. Lessor has made no representations or recommendations
regarding Lessee's choice of suppliers). Lessee negotiated the style, quality,
price, delivery date(s) and all other terms relating to the Equipment directly
with the suppliers) and without Lessor's assistance or participation.
8. INSURANCE. Lessee shall maintain insurance as provided in Section 12 of the
Master Lease Agreement. The required public liability policy shall have limits
of at least [**], bodily injury and property damage combined.
9. RENT ADJUSTMENT. The Periodic Rental Payment as indicated above is indexed
to a representative 60 month Treasury Note = [**] and based on a lease factor =
[**]. If, when the Lessee executes and delivers to Lessor the Certificate of
Acceptance as to the date of its acceptance of the Equipment ("Date of
Acceptance"), there has been a change in the 60 Month Treasury Note rate, then
Lessor shall adjust the lease rate factor (either up or down) by an adjustment
factor = [**] for every basis point change in the [**] RATE. LESSEE SHALL
CONFIRM ITS ACCEPTANCE OF THE CHANGE BY INSERTING THE NEW PERIODIC RENTAL
PAYMENT ON THE CERTIFICATE OF ACCEPTANCE.
10. ADDITIONAL PROVISIONS:
RIDER I - TAX INDEMNIFICATION
RIDER 11 - OPTIONS AT LEASE MATURITY
ATTACHMENT 1 - STIPULATED LOSS VALUES
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS EQUIPMENT SCHEDULE TO BE DULY
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS, INC.
21
22
[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
CHASE EQUIPMENT LEASING, INC. (LESSOR)
Page 1
ONE CHASE SQUARE
ROCHESTER, NEW YORK 14643
SCHEDULE OF LEASED EQUIPMENT
TO
EQUIPMENT SCHEDULE NO. 2 DATED October 21,1997 UNDER MASTER LEASE AGREEMENT
DATED August 8,1997, BETWEEN NETWORK PLUS, INC. AS LESSEE AND CHASE EQUIPMENT
LEASING, INC. AS LESSOR.
QTY MANUFACTURERS MODEL AND DESCRIPTION SERIAL NUMBER COST
LOCATION: 234 COPELAND STREET
QUINCY, MA 02169
DMS 250
1 SWITCHING EQUIPMENT [**]
1 SWITCHING EQUIPMENT [**]
1 SWITCHING EQUIPMENT [**]
1 SWITCHING EQUIPMENT [**]
SUBTOTAL [**]
LESS ([**])
SUBTOTAL [**]
DMS 250/300 UPGRADE
1 DMS 250/300 CONVERSION [**]
1 DMS 250/300 CONVERSION [**]
1 DMS 250/300 CONVERSION [**]
1 DMS 250/300 CONVERSION [**]
SUBTOTAL [**]
INTERNATIONAL UPGRADE
1 EQUIPMENT UPGRADE FOR QUINCY [**]
SWITCH(AMERICAN INTERNATIONAL PHONE)
1 INTERNATIONAL UPGRADE [**]
SUBTOTAL [**]
LOCATION SUBTOTAL [**]
LOCATION: 1 SOUTH ORANGE AVE., SUITE 204
ORLANDO, FL 32801
DMS 250
1 SWITCHING EQUIPMENT NORTHERN TELECOM [**]
1 FLORDIA SWITCHING EQUIPMENT(NORTEL) [**]
SWITCHING EQUIPMENT (NORTHERN TELECOM) [**]
1 SWITCHING EQUIPMENT (NORTHERN TELECOM) [**]
SUBTOTAL [**]
LOCATION SUBTOTAL [**]
TOTAL COST $3,450,000.00
22
23
Together with all parts, fittings, cables, accessories, attachments, fixtures,
renewals, improvements, substitutions, and replacements to the Equipment,
whether now owned or hereafter acquired, and together with all rents, proceeds,
income and profits derived therefrom.
23
24
RIDER I
TAX INDEMNIFICATION
This Rider is appended to and made part of Equipment Schedule No.2,
dated OCTOBER 21, 1997(the "Lease"), between Chase Equipment Leasing, Inc.
("Lessor") and NETWORK PLUS, INC. ("Lessee").
This Lease has been entered into on the basis that Lessor shall be
entitled to such deductions, credits and other tax benefits as are provided by
federal, state and local law to an owner of property ("Tax Benefits") including,
without limitation Modified Accelerated Cost Recovery deductions on the
Equipment allowed under Section 168 of the Internal Revenue Code of 1986, as
amended (the "Code") for "5 year property".
If Lessor shall lose, shall not have or shall lose the right to claim,
or if there shall be disallowed or recaptured with respect to Lessor, all or any
portion of the Tax Benefits as are provided to an owner of property with respect
to any Equipment ("Loss") then on the next succeeding rental payment date after
written notice to Lessee by Lessor that a Loss has occurred, or if there be no
such date, thirty days following such notice, Lessee shall pay Lessor an amount
which, in the reasonable opinion of Lessor and after deduction of all taxes
required to be paid by Lessor with respect to the receipt of such amount, will
cause the Lessor's net after-tax return over the term of the Lease in respect of
such Equipment to equal the net after-tax return that would have been available
if Lessor had been entitled to the utilization of all of the Tax .Benefits.
For purposes of this Rider, a Loss shall occur upon the earliest of (i)
the happening of any event (such as disposition or change in use of any
Equipment) which may cause such Loss, (ii) the payment by Lessor to the Internal
Revenue Service of the tax increase resulting from such Loss, or (iii) the
adjustment of the tax return of Lessor to reflect such Loss. Lessor shall not be
entitled to a payment under this Rider on account of any Loss due solely to one
or more of the following events: (aa) a failure of Lessor to claim timely or
properly the Tax Benefits for the Equipment in the tax return of the Lessor;
(bb) a disqualifying change in the nature of the Lessor's business or
liquidation thereof, (cc) a foreclosure by any person holding through Lessor of
a lien on the Equipment, which foreclosure results solely from an act of Lessor;
or (dd) the failure of Lessor to have sufficient taxable income or tax liability
to utilize such Tax Benefits.
All of the Lessor's rights and privileges arising from the indemnities
contained in this Rider shall survive the expiration or other termination of
this Lease.
For the purposes of this Rider the term "Lessor" shall include any
affiliated group (within the meaning of Section 1504 of the Code) of which
Lessor is a member for any year in which a consolidated income tax return is
filed for such affiliated group.
IN WITNESS WHEREOF, the parties have executed this Rider.
CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS, INC.
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25
RIDER II
TO EQUIPMENT SCHEDULE NO. 2 (THE "LEASE") UNDER
MASTER LEASE AGREEMENT DATED: AUGUST 8, 1997
BETWEEN
CHASE EQUIPMENT LEASING, INC. ("LESSOR")
AND
NETWORK PLUS, INC. ("LESSEE")
OPTIONS AT LEASE MATURITY
The following provisions are hereby agreed upon and made a part of the
above-referenced Lease. Capitalized terms used herein but not defined shall have
the meanings attributable to them in the Equipment Schedule or the Master Lease
Agreement incorporated thereunder. Provided LESSEE has faithfully performed and
carried out the terms and conditions of the Lease, on it's part to be kept and
performed, and no Event of Default shall have occurred and be continuing, LESSEE
may:
1 PURCHASE. Notwithstanding any provision contained in the Lease to the
contrary, at the expiration of the Periodic Rental Term hereof, at its option,
LESSEE may purchase from LESSOR, and LESSOR shall sell to LESSEE, not less than
all of the Equipment described on Equipment Schedule No. 2 to Master Lease
Agreement dated AUGUST 8, 1997 "as-is, where-is," without recourse or warranty
expressed or implied, for a cash consideration ("Purchase Price") equal to the
sum of the then Fair Market Value of the Equipment determined as hereinafter
provided, not to exceed 12% of the original cost of the Equipment, plus any
sales or use taxes, and other taxes (except taxes measured by the income of
LESSOR), fees or charges applicable to the sale and delivery of the Equipment.
a. NOTICE. LESSEE shall exercise option by giving LESSOR written
notice, at least ninety (90) days prior to the expiration of the
Periodic Rental Term, of LESSEE's intent to purchase the Equipment.
b. FAIR MARKET VALUE. The 'Fair Market Value" of the Equipment shall
be an amount mutually agreed upon by LESSOR and LESSEE; provided that if
LESSOR and LESSEE are unable to agree upon the Fair Market Value of the
Equipment or Items thereof, within 30 days after receipt by LESSOR of
LESSEE's notice of election to exercise this purchase option, the Fair
Market Value shall be determined by an appraiser selected by mutual
agreement of the LESSOR and LESSEE. The fees and costs of the appraisal
shall be shared equally by LESSOR and LESSEE.
c. PAYMENT. LESSEE shall pay to LESSOR the Purchase Price in full on
or before the expiration of the Periodic Rental Term of the Lease.
d. TITLE. All of LESSOR's rights, title and interest to and in the
Equipment shall pass to LESSEE upon receipt by LESSOR of the Purchase
Price in full.
e. OTHER TERMS AND CONDITIONS. If LESSEE has exercised its option to
purchase the Equipment and if the Purchase Price in full is not received
by LESSOR on or before the expiration of the Periodic Rental Term,
LESSEE hereby agrees to be bound by and to carry out each of the terms
and conditions of the Lease, including, but not limited to, the payment
of rent, assumption of risk of loss, maintenance of insurance and
maintenance of the Equipment, until such time as LESSOR receives the
Purchase Price in full. The amount of rent to be paid by LESSEE shall be
prorated to the date upon which the Purchase Price is received by LESSOR
in full.
OR
2. RENEW At its option, LESSEE may renew the Lease, for not less than
all of the Equipment, annually for a monthly rental payment based on the Fair
Market Value of the Equipment and the prevailing rates charged by the LESSOR.
All other terms and conditions of the Lease shall remain in effect.
LESSOR. CHASE EQUIPMENT LEASING, INC. LESSEE: NETWORK PLUS, INC.
25
26
[Header]
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
ATTACHMENT 1
STIPULATED LOSS VALUES
UNDER
EQUIPMENT SCHEDULE NO 2 DATED OCTOBER 21,1997
BETWEEN CHASE EQUIPMENT LEASING, INC. AND NETWORK PLUS, INC.
STIPULATED LOSS VALUE: The Stipulated Loss Value of the Equipment or any Item
thereof shall be an amount equal to the Cost of the Equipment or Item multiplied
by the applicable percentage set forth below, plus any previously unpaid Rent or
other sums due on or before the date of payment to Chase Equipment Leasing, Inc.
Such Stipulated Loss Value payment is due on or before the first day of the
month following the Event of Loss. (The Percentage Loss Value next to the
corresponding Pmt. No. does not include the monthly rental for that period).
PERCENTAGE PERCENTAGE
PMT NO. LOSS VALUE PMT NO. LOSS VALUE
- ------- ---------- ------- ----------
1 [**] 31 [**]
2 [**] 32 [**]
3 [**] 33 [**]
4 [**] 34 [**]
5 [**] 35 [**]
6 [**] 36 [**]
7 [**] 37 [**]
8 [**] 38 [**]
9 [**] 39 [**]
10 [**] 40 [**]
11 [**] 41 [**]
12 [**] 42 [**]
13 [**] 43 [**]
14 [**] 44 [**]
15 [**] 45 [**]
16 [**] 46 [**]
17 [**] 47 [**]
18 [**] 48 [**]
19 [**] 49 [**]
20 [**] 50 [**]
21 [**] 51 [**]
22 [**] 52 [**]
23 [**] 53 [**]
24 [**] 54 [**]
25 [**] 55 [**]
26 [**] 56 [**]
27 [**] 57 [**]
28 [**] 68 [**]
29 [**] 59 [**]
30 [**] 60 [**]
26
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CERTIFICATE OF ACCEPTANCE
Under Equipment Schedule No. 2 dated as of October 21, 1997 (the "Lease"),
between CHASE EQUIPMENT LEASING, INC. (the "Lessor") and NETWORK PLUS, INC. (the
"Lessee").
1. ITEMS OF EQUIPMENT. The Lessee hereby certifies and warrants to Lessor that
the following Items of Equipment have been delivered to the location indicated
on the Equipment Schedule, tested and inspected by the Lessee, or Lessee has had
a reasonable opportunity to do so, found to be in good order and accepted as
Items of Equipment under the Lease, all as of the date indicated below. Lessee
approves full payment thereof by Lessor to supplier(s). To the extent not
available upon Lessee's execution of the Equipment Schedule, Lessee hereby
authorizes Lessor to insert serial numbers of the Equipment on this Certificate
of Acceptance, the Equipment Schedule, UCC- 1 financing statements covering such
Equipment and all other related documents, when made available by the
supplier(s).
(a) DATE OF ACCEPTANCE: 10/21 1997
(b) DESCRIPTION OF EQUIPMENT AND LESSOR'S COST!:
Telephone switching equipment as further described on the attached Schedule
of Leased Equipment.
PERIODIC RENTAL PAYMENT: $68,100.93 TOTAL COST $3,450,000.00
2. REPRESENTATIONS BY THE LESSEE The Lessee hereby represents and warrants to
Lessor that (i) no Event of Default or event which, with the giving of notice or
the lapse of time or both, would become such an Event of Default under the Lease
has occurred and is continuing, and (ii) the Lessee has obtained, and there are
in full force and effect, all insurance policies with respect to the Equipment
and public liability required to be obtained under the terms of the Lease.
3. SHOULD LESSEE HEREAFTER DISCOVER ANY DEFECT, UNFITNESS OR FAILURE OF
PERFORMANCE OF EQUIPMENT (INCLUDING WITHOUT LIMITATION, SOFTWARE SYSTEMS AND
PROGRAMMING), LESSEE'S OBLIGATIONS TO LESSOR,, INCLUDING THE OBLIGATION TO PAY
RENTS WHEN DUE, REMAIN IN EFFECT AS MORE FULLY STATED IN THE TERMS AND
CONDITIONS OF THE LEASE. IN SUCH EVENT, LESSEE'S EXCLUSIVE RECOURSE SHALL BE
AGAINST THE MANUFACTURER, SUPPLIER, PROGRAMMER AND/OR SERVICING AGENT FOR THE
EQUIPMENT AS IN LESSEE'S JUDGMENT APPEARS APPROPRIATE.
LESSEE: NETWORK PLUS, INC.
27