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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 28, 2000
INTEGRATED INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 29947 860624332
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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1560 W. FOUNTAINHEAD PARKWAY, TEMPE, ARIZONA 85282
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (480) 317-8000
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On March 28, 2000, Integrated Information Systems, Inc. (the "Company")
entered into a sublease for a portion of goracing.com's 65,018 square foot
facility in Tempe, Arizona, and assumed leases of equipment for an application
hosting center previously operated as an in-house facility by goracing.com, Inc.
(and its parent company Action Performance Companies, Inc., collectively
"goracing"). The Company also entered into an Asset Purchase Agreement for the
purchase of approximately $2 million in computer equipment. In connection with
the transaction, the Company will provide goracing.com with hosting services for
goracing.com's web site and related applications. Payments for the facilities
and capital equipment total approximately $18 million over up to 10 years.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
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EXHIBIT
NUMBER DESCRIPTION
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10.1 Sublease Agreement between the Company and Action Performance
Companies, Inc. dated March 28, 2000.
10.2 Equipment Sublease Agreement between the Company and
goracing.com, Inc. dated March 28, 2000.
10.3 Equipment Sublease Agreement between the Company and Action
Performance Companies, Inc. dated March 28, 2000.
10.4 Asset Purchase Agreement between the Company and goracing.com,
Inc. dated March 28, 2000.
10.5 Services Agreement between the Company and goracing.com, Inc.
dated March 28, 2000.
99.1 Press Release dated March 31, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTEGRATED INFORMATION SYSTEMS, INC.
Date: March 31, 2000 By: /s/ David Wirthlin
----------------------------------
David Wirthlin
(Principal Financial Officer and
Duly Authorized Officer)
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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EXHIBIT
NUMBER DESCRIPTION
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10.1 Sublease Agreement between the Company and Action Performance
Companies, Inc. dated March 28, 2000.
10.2 Equipment Sublease Agreement between the Company and
goracing.com, Inc. dated March 28, 2000.
10.3 Equipment Sublease Agreement between the Company and Action
Performance Companies, Inc. dated March 28, 2000.
10.4 Asset Purchase Agreement between the Company and goracing.com,
Inc. dated March 28, 2000.
10.5 Services Agreement between the Company and goracing.com, Inc.
dated March 28, 2000.
99.1 Press Release dated March 31, 2000.
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Exhibit 10.1
SUBLEASE
by and between
ACTION PERFORMANCE COMPANIES, INC.,
an Arizona corporation
"Lessor"
and
INTEGRATED INFORMATION SYSTEMS, INC.,
a Delaware corporation
"Lessee"
March 28, 2000
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TABLE OF CONTENTS
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1. BASIC LEASE PROVISIONS ............................................................................... 1
2. PRIME LEASE .......................................................................................... 2
3. SUBLEASE ............................................................................................. 2
4. TERM ................................................................................................. 2
5. ACCESS FROM AND AFTER EXECUTION OF SUBLEASE UNTIL THE
COMMENCEMENT DATE .................................................................................. 3
6. FIRST FLOOR RETAINED PREMISES EXPANSION RIGHT ........................................................ 3
7. SURRENDER OF FIRST FLOOR RETAINED PREMISES ........................................................... 3
8. SECOND FLOOR RETAINED PREMISES EXPANSION RIGHT ....................................................... 3
9. SURRENDER OF SECOND FLOOR RETAINED PREMISES .......................................................... 4
10. RELEASE OF LESSOR .................................................................................... 4
11. POSSESSION ........................................................................................... 4
12. LESSEE'S USE ......................................................................................... 5
13. RENT ................................................................................................. 5
14. ADDITIONAL RENT ...................................................................................... 6
15. LESSEE'S OBLIGATIONS ................................................................................. 6
16. QUIET ENJOYMENT ...................................................................................... 6
17. LESSEE'S INSURANCE ................................................................................... 7
18. ASSIGNMENT OR SUBLETTING ............................................................................. 7
19. RULES ................................................................................................ 8
20. REPAIRS AND COMPLIANCE ............................................................................... 8
21. FIRE OR CASUALTY OR EMINENT DOMAIN ................................................................... 8
22. ALTERATIONS .......................................................................................... 8
23. SURRENDER ............................................................................................ 9
24. REMOVAL OF LESSEE'S PROPERTY ......................................................................... 9
25. HOLDING OVER ......................................................................................... 9
26. ENCUMBERING TITLE .................................................................................... 10
27. INDEMNITY ............................................................................................ 10
28. LESSOR'S RESERVED RIGHTS ............................................................................. 13
29. DEFAULTS ............................................................................................. 13
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TABLE OF CONTENTS
(continued)
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30. REMEDIES ............................................................................................. 14
31. SECURITY DEPOSIT ..................................................................................... 14
32. NOTICES AND CONSENTS ................................................................................. 14
33. PROVISIONS REGARDING SUBLEASE ........................................................................ 15
34. ADDITIONAL SERVICES .................................................................................. 16
35. BROKERAGE ............................................................................................ 16
36. FORCE MAJEURE ........................................................................................ 16
37. SIGNAGE .............................................................................................. 16
38. PARKING .............................................................................................. 17
39. MISCELLANEOUS ........................................................................................ 17
40. HAZARDOUS MATERIALS .................................................................................. 19
41. ESTOPPEL CERTIFICATE ................................................................................. 20
42. ATTORNEYS' FEES ...................................................................................... 20
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SUBLEASE
THIS SUBLEASE ("Sublease") is made and entered into as of March 28, 2000,
by and between ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation
("Lessor") and INTEGRATED INFORMATION SYSTEMS, INC., a Delaware
corporation ("Lessee").
1. BASIC LEASE PROVISIONS.
A. Building Property Address: 1480 South Hohokam Drive, Tempe, Arizona
85281.
B. Lessee's Address (for notices): 1560 West Fountainhead Parkway,
Suite 200, Tempe, Arizona 85282, Attn: General Counsel.
C. Lessor's Address (for notices): 4707 East Baseline Road, Phoenix,
Arizona 85034, Attn: Chief Financial Officer.
D. Prime Lessor: H-B TEMPE, L.L.C.
E. Prime Lessor's Address (for notices): 4636 East University Drive
Suite 265, Phoenix, Arizona 85034, Attn: Property Manager.
F. Identification of Prime Lease and all Amendments thereto: Lease
dated June 28, 1999 by and between H-B TEMPE, L.L.C., an Arizona limited
liability company, as Lessor, and ACTION PERFORMANCE COMPANIES, INC., an Arizona
corporation, as Lessee.
G. Commencement Date: The later to occur of (i) Prime Lessor's written
consent to this Sublease, or (ii) April 1, 2000.
H. Expiration Date: 11:59 p.m. on October 30, 2009.
I. Base Rent: See Exhibit D attached to this Sublease.
J. Payee of Rent: Prime Lessor for the account of Lessor.
K. Address for Payment of Rent: 4707 East Baseline Road, Phoenix,
Arizona 85034, Attn: Accounts Receivable.
L. Description of Premises: Portions of the first and second floors of
the building (the "Building") consisting of approximately 36,285 of the
approximate 65,018 rentable square feet of the Building, all as depicted on the
Floor Plan attached to this Sublease as Exhibit A, subject to Lessor's retention
of the "Retained Premises" and identified on Exhibit B.
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M. Lessee's Use: General Office use and for any other purpose permitted
under the Prime Lease.
N. Security Deposit: $43,844.00
2. PRIME LEASE. Lessor is the Lessee under a Prime Lease (the "Prime
Lease") with the Prime Lessor identified in Section 1(D), bearing the date
specified in Section 1(F). Lessor represents and warrants that (a) Lessor has
delivered to Lessee a full and complete copy of the Prime Lease and all other
agreements between Prime Lessor and Lessor relating to the leasing, use, and
occupancy of the Premises, which Prime Lease and other agreements are attached
as Exhibit E hereto, (b) the Prime Lease is, as of the date hereof and as of the
Commencement Date, in full force and effect, and (c) as of the date hereof and
as of the Commencement Date there exist no material defaults under the Prime
Lease. Lessor and Lessee acknowledge and agree that the consent of the Prime
Lessor to this Sublease is required under the terms of Paragraph 16 of the Prime
Lease.
3. SUBLEASE.
A. Lessor, for and in consideration of the rents herein reserved and of
the covenants and agreements herein contained on the part of the Lessee to be
performed, hereby subleases to the Lessee, and the Lessee accepts from the
Lessor, that certain space described in Section 1(L) (the "Premises") and
located in the Building, situated on and a part of the property (the "Property")
described in Section 1(A). Lessor and Lessee acknowledge and agree that the Base
Rent set forth in Section 1(I) is based upon the Premises containing the
rentable square footage set forth in Section 1(L) Neither Lessor nor Lessee has
caused the precise rentable square footage of the Premises to be measured, but
rather Lessor and Lessee have stipulated to the rentable square footage of the
Premises as set forth in Section 1(L).
B. Lessee acknowledges and agrees that the Premises include certain
common areas within the Building including, without limitation, lobbies,
hallways, elevators, stairs and restroom facilities, and Lessee grants to Lessor
the nonexclusive right to use, in common with Lessee such common areas. In
addition, Lessee grants to Lessor the nonexclusive right to use, in common with
Lessee the certain agreed upon portions of the Data Center as depicted on the
attached Exhibit F.
C. Lessor and Lessee acknowledge and agree that the Premises constitute
less than the entire premises leased by Lessor from the Prime Lessor pursuant to
the Prime Lease (the "Prime Lease Premises"). For convenience, those portions of
the Prime Lease Premises not subleased by Lessor to Lessee are referred to in
this Sublease as the "First Floor Retained Premises" and "Second Floor Retained
Premises" or collectively, the "Retained Premises" as depicted on the Floor Plan
attached to this Sublease as Exhibit B.
4. TERM. The term of this Sublease (the "Term") shall commence on the
date (the "Commencement Date") specified in Section 1(G) and shall expire on the
date (the "Expiration Date") specified in Section 1(H), unless sooner terminated
as otherwise provided elsewhere in this Sublease. Provided Lessor shall be
released from all liability under the Prime Lease by Prime Lessor, Lessee shall
have and is hereby granted the option, pursuant to Exhibit E of the
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Prime Lease and subject to the terms and conditions contained therein, to extend
the Term for up to two (2) consecutive terms of five (5) years each.
5. ACCESS FROM AND AFTER EXECUTION OF SUBLEASE UNTIL THE COMMENCEMENT
DATE . Lessee shall have access to the Premises from and after the execution of
this Sublease until the Commencement Date (the "Access Period") for purposes of
constructing certain improvements, preparing the Premises for its intended use
and, should such preparations be completed prior to the Commencement Date,
actual occupation of the Premises, subject to all of the terms and conditions of
this Sublease except that Lessee shall have no obligation to pay the Rent (as
defined below) until the Commencement Date. Lessee's right to possession of the
Premises during the Access Period shall not be exclusive as to Lessor and the
parties shall cooperate and coordinate with each other to insure the efficient
and timely completion of any tenant improvements which Lessee, with Lessor's and
Prime Lessor's consent (as required), shall require for its use and occupation
of the Premises. Lessee shall require that any and all contractors in the
Premises during the Access Period shall be insured and shall carry policies of
general commercial liability and workmen's compensation in form and amounts
reasonably acceptable to Lessor. Lessee shall furnish to Lessor and Lessor shall
approve of all certificates of insurance evidencing each contractor's insurance
coverage prior to such contractor's access to the Premises. Subject to Section
27 below, Lessee shall indemnify, protect, defend and hold Lessor harmless for,
from and against all claims, actions, liens, damages. losses, causes,
liabilities and expenses including, without limitation, reasonable attorney's,
accountant's and investigator's fees and court costs (collectively, the
"Claims"), arising in whole or in part from any activity, work or thing done,
permitted or suffered to be done by Lessee, its contractors, licensees,
invitees, employees and agents in or on the Premises during the Access Period,
except to the extent such claims arise from the negligent acts or omissions of
Lessor, its contractors, licensees, invitees, employees and agents.
6. FIRST FLOOR RETAINED PREMISES EXPANSION RIGHT. Provided that: (i) an
Event of Default by Lessee has not occurred and is continuing at the time of the
delivery of the Expansion Notice and at the time the First Floor Retained
Premises becomes a part of the Premises; and (ii) Lessee is fully occupying the
Premises. Lessee shall have and is hereby granted an option to lease the First
Floor Retained Premises commencing no earlier than October 1, 2000 and
terminating on the Expiration Date (the "First Floor Retained Premises Expansion
Right"). If Lessee desires to exercise its option to lease the First Floor
Retained Premises, it must give Lessor written notice of its intent to do so
(the "First Floor Expansion Notice") no later than three (3) months prior to the
date upon which it intends to take possession of the First Floor Retained
Premises. Effective as of the date the First Floor Retained Premises becomes a
part of the Premises, the Base Rent shall be as specified in Exhibit D.
7. SURRENDER OF FIRST FLOOR RETAINED PREMISES. Lessor may, upon three
(3) months notice to Lessee, surrender possession of the First Floor Retained
Premises to Lessee. Effective as of the date the First Floor Retained Premises
becomes a part of the Premises, the Base Rent shall be as specified in Exhibit
D.
8. SECOND FLOOR RETAINED PREMISES EXPANSION RIGHT. Provided that: (i)
an Event of Default by Lessee has not occurred and is continuing at the time of
the delivery of the Expansion Notice and at the time the Second Floor Retained
Premises becomes a
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part of the Premises; and (ii) Lessee is fully occupying the Premises, Lessee
shall have and is hereby granted an option to lease the Second Floor Retained
Premises (the "Second Floor Retained Premises Expansion Right"). If Lessee
desires to exercise its option to lease the Second Floor Retained Premises, it
must give Lessor written notice of its intent to do so (the " Second Floor
Expansion Notice") no later than thirty (30) days prior to the date upon which
it intends to take possession of the Second Floor Retained Premises. Effective
as of the date the Second Floor Retained Premises becomes a part of the
Premises, the Base Rent shall be as specified in Exhibit D.
9. SURRENDER OF SECOND FLOOR RETAINED PREMISES. Lessor may, upon thirty
(30) days notice to Lessee, surrender possession of the Second Floor Retained
Premises to Lessee. Effective as of the date the Second Floor Retained Premises
becomes a part of the Premises, the Base Rent shall be as specified in Exhibit
D.
10. RELEASE OF LESSOR. Upon the taking of possession by Lessee of the
Retained Premises and thereafter, during the Term, Lessee shall use its
commercially reasonable efforts to obtain agreement from the Prime Lessor to
enter into a new lease between Lessee and Prime Lessor and to release Lessor
from all liability under the Prime Lease. Upon Lessor's written request, Lessee
shall deliver to Lessor all applications, requests, correspondence and other
documents delivered to Prime Lessor from time to time that evidence or confirm
Lessee's efforts to obtain Lessor's release of such liability and Lessee agrees
to provide to Lessor a report summarizing Lessee's efforts to obtain the
release. At such time as Lessee has entered into a lease with Prime Lessor for a
lease of the Premises and the Prime Lessor has released Lessor from liability
under the Prime Lease, this Sublease shall terminate.
11. POSSESSION.
A. Lessor shall provide the Premises to Lessee and Lessee accepts the
Premises in their current "as is" condition, Lessee acknowledging that Lessor
makes no representations or warranties concerning the condition of the Premises
including, without limitation, those relating to the structure of the Premises,
systems and components thereof and/or the presence of patent or latent defects
and that Lessor has no obligation to construct, remodel, improve, repair,
decorate or paint the Premises or any improvement thereon or a part thereof.
Lessee represents and warrants to Lessor that it has inspected the Premises
prior to the execution of this Sublease, that it is relying on its own
inspections in executing this Sublease and not on any statement, representation
or warranty of Lessor, its agents or employees and as a material inducement to
Lessor executing this Sublease, subject to Section 339H, latent defects and
Section 27 below, Lessee hereby releases Lessor for, from and against any and
all claims, demands, losses, liabilities, costs and expenses (including
reasonable attorneys' fees) incurred or sustained by Lessee with respect to the
condition of the Premises.
B. Lessor and Lessee acknowledge and agree that this Sublease relates
only to Lessee's use and occupancy of the Premises and does not extend to the
use of any furniture, fixtures, equipment, computer or telephone systems or
other personal property located within the Premises (the "Lessor's Other
Property"). Lessee's right to use Lessor's Other Property shall be set forth, if
at all, in a separate written agreement between Lessor and Lessee.
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12. LESSEE'S USE. The Premises shall be used and occupied only for the
Lessee's Use set forth in Section 1(M). Lessee shall not use or occupy the
Premises nor permit anything to be done in or on the Premises which will
constitute a public or private nuisance and Lessee shall not use or occupy or
permit the Premises to be used or occupied in any manner which will violate any
laws or any of the terms, covenants and provisions of the Prime Lease, including
the rules and regulations attached to the Prime Lease, if any.
13. RENT.
A. Beginning on the Commencement Date, Lessee agrees to pay via wire
transfer the Base Rent set forth in Section 1(I) to the Prime Lessor specified
in Section 1(D), at the address specified in the Prime Lease, or to such other
payee or at such other address as may be designated by notice in writing from
Prime Lessor to Lessee and Lessor, without prior demand therefor and except as
expressly set forth in this Sublease, without any deduction, setoff or abatement
whatsoever. Base Rent shall be paid in equal monthly installments in advance on
the first day of each month of the Term, except that the first installment of
Base Rent shall be paid by Lessee to Prime Lessor upon execution of this
Sublease by Lessee. Lessee shall provide Lessor with written proof of the timely
payment of Rent under this Sublease within three (3) business days after the
payment of such sums are due and payable. Base Rent shall be pro-rated for
partial months at the beginning and end of the Tenn. All charges, costs and sums
required to be paid by Lessee under this Sublease in addition to Base Rent shall
be deemed "Additional Rent," and Base Rent and Additional Rent shall hereinafter
collectively be referred to as "Rent." Except as may be otherwise provided
herein, Lessee's covenant to pay Rent shall be independent of every other
covenant in this Sublease.
B. If Rent is not paid when due, which failure is not cured within
three (3) days after written notice thereof by Lessor to Lessee, such delinquent
Rent shall thereafter bear interest at the rate of twelve percent (12%) per
annum. In addition. if any installment of Base Rent or Additional Rent is not
paid when due, which failure continues for ten (10) days, a late charge equal to
five percent (5%) of such overdue amount or Two Hundred Fifty and No/100 Dollars
($250.00), whichever is greater, shall be due and payable. Lessee acknowledges
that such late charge represents a fair and reasonable estimate of the
administrative costs Lessor will incur by reason of late payments by Lessee. The
provisions of this Section providing for the assessment of interest and/or a
late charge shall not be deemed to authorize or grant to Lessee an option for
the late payment of Base Rent or Additional Rent and shall not prevent Lessor
from exercising the rights and remedies available to Lessor in the event of
delinquent payments.
C. In addition to the Base Rent and Additional Rent payable under this
Sublease, Lessee shall pay to Prime Lessor, upon receipt of invoices with
supporting documentation from Prime Lessor, together with its installments of
Base Rent and Additional Rent, as applicable, an amount equal to any
governmental sales, rental, occupancy, excise, use or transaction privilege
taxes assessed upon Lessor with respect to the amounts paid by Lessee to Prime
Lessor under this Sublease. Lessee shall indemnify, defend and hold Lessor
harmless for, from and against any and all claims, demands, losses, liabilities
and expenses (including reasonable attorneys' fees) arising from or relating to
a breach or default of Lessee's obligations hereunder.
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D. Lessee agrees to pay Base Rent and any fixed, recurring amounts,
including impounds that may become payable during the Term, via an automatic
clearing house account established and maintained through Lessee's main
corporate bank account at Imperial Bank of Phoenix, Arizona. All automatic
clearing house payments shall be made without the requirement of any action on
Lessee's part on the first day of each month of the Term to an account with
Norwest Bank to be designated by Landlord.
14. ADDITIONAL RENT. Lessor and Lessee acknowledge that Lessor is
obligated to pay additional rent under the Prime Lease for taxes, operating
expenses, insurance, common area maintenance charges and other expenses incurred
in connection with the Property (hereinafter "Additional Rent"). Lessor and
Lessee agree that Lessee shall pay all Additional Rent under the Prime Lease
subject to reimbursement by Lessor for its proportionate share of such
Additional Rent. To the extent any Additional Rent is or becomes payable to
Prime Lessor directly under the terms of the Prime Lease, Lessor and Lessee
agree to pay such amounts directly to Prime Lessor. In the event any such
Additional Rent shall remain payable directly by Lessor after the Commencement
Date, Lessor shall be entitled to reimbursement by Lessee for Lessee's
proportionate share of such sums. Lessor's proportionate share is calculated by
dividing the rentable area of the First Floor Retained Premises and Second Floor
Retained Premises (as applicable) by the rentable area of the premises leased by
Lessor pursuant to the Prime Lease. In the event the rentable area of the First
Floor Retained Premises or Second Floor Retained Premises or the area of the
premises leased pursuant to the Prime Lease shall be changed during the Term,
then Lessee's proportionate share shall be recalculated. Lessee's proportionate
share is calculated by dividing the rentable area of the Premises and by the
rentable area of the premises leased by Lessor pursuant to the Prime Lease.
15. LESSEE'S OBLIGATIONS. Lessee shall be responsible for, and shall
pay prior to delinquency the following:
A. To the extent not provided by Prime Lessor and subject to
reimbursement by Lessor for its proportionate share of such costs, all utility
consumption costs, including without limitation, telephone, trash removal, cable
television and other charges incurred in connection with the Premises and
Retained Premises.
B. All maintenance, repairs and replacements as to the Premises and
Lessee's fixtures and equipment therein, to the extent Lessor is obligated to
perform the same under the Prime Lease.
16. QUIET ENJOYMENT. Lessor represents and warrants that it has full
power and authority to enter into this Sublease, subject to the consent of the
Prime Lessor as described in Section 2 above. So long as Lessee is not in
default in the performance of its covenants and agreements in this Sublease,
Lessee's quiet and peaceable enjoyment of the Premises shall not be disturbed or
interfered with by Lessor or by any person claiming by, through, or under
Lessor, subject, however, to the provisions of this Sublease. In addition,
Lessee acknowledges that Lessor is not obligated to furnish to Lessee any
services under this Sublease and that any services to be furnished to the
Premises, shall be furnished by the Prime Lessor subject to and in accordance
with the provisions of the Prime Lease. As such, Lessor shall have no liability
to Lessee and Lessee hereby releases Lessor for, from and against any claims,
demands, judgments,
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losses, liabilities, costs and expenses (including reasonable attorneys' fees)
incurred or sustained by Lessee as a result of the failure by the Prime Lessor
to furnish to the Premises the services described in the Prime Lease. In this
regard, Lessor hereby assigns to Lessee all of its rights against the prime
lessor under the prime lease with respect to the provision of services to the
Premises and agrees that, if such assignment is not effective, Lessor will, at
Lessee's sole cost and expense, use reasonable efforts to obtain from Prime
Lessor such services to the Premises.
17. LESSEE'S INSURANCE. Lessee shall procure and maintain, at its own
cost and expense, such insurance as is required to be carried by Lessor under
the Prime Lease, naming Lessor, as well as Prime Lessor, as additional insureds.
If the Prime Lease requires Lessor to insure leasehold improvements or
alterations, then Lessee shall insure such leasehold improvements which are
located in the Premises, as well as alterations in the Premises, made by Lessee.
Lessee shall furnish to Lessor a certificate of Lessee's insurance required
hereunder not later than the Commencement Date. No such policy shall be
cancelable or subject to reduction of coverage or other modification without the
prior written consent of Lessor. Lessee shall within thirty (30) days of the
expiration of any such policies, furnish to Lessor renewals or "binders"
thereof. If Lessee shall fail to procure and maintain any insurance required to
be maintained by it pursuant to the terms of the Prime Lease, Lessor may, but
shall not be required to, procure the same at Lessee's expense.
18. ASSIGNMENT OR SUBLETTING.
A. Lessee shall not (i) assign, convey or mortgage this Sublease or any
interest under it; (ii) allow any transfer thereof or any lien upon Lessee's
interest by operation of law; (iii) further sublet the Premises or any part
thereof; or (iv) permit the occupancy of the Premises, or any part thereof by
anyone other than Lessee, without the prior written consent of Lessor and Prime
Lessor, which consent Lessor shall not unreasonably withhold, condition or
delay. Lessee shall be solely responsible for obtaining the consent of Prime
Lessor under the Prime Lease. Any cost of obtaining Prime Lessor's consent shall
be borne by Lessee.
B. No permitted assignment shall be effective and no permitted sublease
shall commence unless and until any default by Lessee hereunder shall have been
cured. No permitted assignment or subletting shall relieve Lessee from Lessee's
obligations and agreements hereunder and Lessee shall continue to be liable as a
principal and not as a guarantor or surety to the same extent as though no
assignment or subletting had been made.
C. If Lessee wishes at any time to assign this Sublease or further
sublet the Premises, it shall first notify Lessor of its wish to do so and shall
submit in writing to Lessor such financial and other information as Lessor may
reasonably request concerning the proposed sublessee or assignee. Lessee's
failure to comply with the provisions of this Section 18(C) shall entitle Lessor
to withhold its consent to the proposed assignment or subletting.
D. If Lessor consents to an assignment, sublease or other transfer by
Lessee of all or any portion of Lessee's interests under this Sublease or the
Premises. Lessee shall execute and deliver to Lessor and cause the transferee to
execute and deliver to Lessor an instrument in a form and substance reasonably
acceptable to Lessor setting forth its written assumption of this
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Sublease (in the event of an assignment) or its acknowledgement that its
sublease is subject and subordinate to the terms of this Sublease and the Prime
Lease.
E. If Lessor consents to an assignment, sublease or other transfer by
Lessee of this Sublease or the Premises, Lessee shall pay or cause to be paid to
Lessor an administrative fee of not less than Five Hundred and No/100 Dollars
($500.00) to reimburse Lessor for administrative, legal, accounting and other
expenses incurred by Lessor.
19. RULES. Lessee agrees to comply with all rules and regulations that
Prime Lessor has made or may hereafter from time to time make for the Building.
Lessor shall not be liable in any way for damage caused by the non-observance by
any other sublessee of similar covenants or of such rules and regulations.
20. REPAIRS AND COMPLIANCE.
A. Lessee shall promptly pay for the repairs set forth in Section 15(B)
and Lessee shall, at Lessee's own expenses, comply with all laws and ordinances,
and all orders, rules and regulations of all governmental authorities and of all
insurance bodies and their fire prevention engineers at any time in force,
applicable to the Premises. Lessor and Lessee acknowledge and agree that Lessor
shall not be obligated to make any maintenance, repairs or replacements to the
Premises, and Lessee shall look solely to the Prime Lessor for the maintenance,
repair and replacements that may be necessary to the Premises. For this purpose,
Lessor hereby assigns to Lessee all of its rights against the Prime Lessor under
the Prime Lease with respect to maintenance, repair and replacement of the
Premises, and agrees that if such assignment is not effective, Lessor will, at
Lessee's sole cost and expense, use reasonable efforts to obtain from Prime
Lessor performance of such maintenance, repair and/or replacement obligations.
21. FIRE OR CASUALTY OR EMINENT DOMAIN. In the event of a fire or other
casualty affecting the Building or the Premises, or of a taking of all or a part
of the Building or Premises, under the power of eminent domain, Lessor shall not
exercise any right which may have the effect of terminating the Prime Lease
without first obtaining the prior written consent of Lessee. In the event Lessor
is entitled, under the Prime Lease, to rent abatement as a result of a fire or
other casualty or as a result of a taking under the power of eminent domain,
then Lessee shall be similarly entitled to rent abatement. If the Prime Lease
imposes on Lessor the obligation to repair or restore leasehold improvements or
alterations, Lessee shall be responsible for repair or restoration of leasehold
improvements or alterations to the Premises and Lessee shall apply any insurance
proceeds resulting from the loss to repair and restore such leasehold
improvements and alterations. Lessor and Lessee acknowledge and agree that
Lessor shall not be obligated to perform any repair or restoration to the
Premises, following the occurrence of a casualty event or the exercise of the
power of eminent domain. For such matters, Lessee shall look solely to the Prime
Lessor and Lessor hereby assigns to Lessee all of its rights against the Prime
Lessor under the Prime Lease with respect to the repair or restoration of the
Premises, as a result of a casualty or the exercise of power of eminent domain,
and agrees that, if such assignment is not effective, Lessor, at Lessee's sole
cost and expense, will use reasonable efforts to cause Prime Lessor to repair or
restore the Premises.
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22. ALTERATIONS. Lessee shall not make any alterations in or additions
to the Premises ("Alterations") without the prior written consent of Lessor and
Prime Lessor, which consent Lessor shall not unreasonably withhold, condition or
delay. Lessee shall be solely responsible for obtaining the consent of Prime
Lessor, if such consent is required under the Prime Lease. If Alterations by
Lessee are permitted or consented to as aforesaid, Lessee shall comply with all
of the covenants of Lessor contained in the Prime Lease pertaining to the
performance of such Alterations. In addition, Lessee shall indemnify, defend and
hold harmless Lessor for, from and against liability, loss, cost, damage, liens
and expense imposed on Lessor arising out of the performance of Alterations by
Lessee, except to the extent same is caused by the negligent acts or omissions
of Lessor.
23. SURRENDER. Upon the expiration of this Sublease, or upon the
termination of the Sublease or of the Lessee's right to possession of the
Premises, Lessee will at once surrender and deliver up the Premises, together
with all improvements thereon, to Lessor in good condition and repair,
reasonable wear and tear and, subject to Section 21 of this Sublease, casualty
damage excepted; conditions existing because of Lessee's failure to perform
maintenance, repairs or replacements as required of Lessee under this Sublease
shall not be deemed "reasonable wear and tear." Said improvements shall include
all plumbing, lighting, electrical, heating, cooling and ventilating fixtures
and equipment and other articles of personal property used in the operation of
the Premises (as distinguished from operations incident to the business of
Lessee). Lessee shall surrender to Lessor all keys to the Premises, and make
known to Lessor the combination of all combination locks which Lessee is
permitted to leave on the Premises. All Alterations in or upon the Premises made
by Lessee shall become a part of and shall remain upon the Premises, upon such
termination without compensation, allowance or credit to Lessee; provided,
however, Lessee shall remove any Alterations made by Lessee, or portion thereof
to the extent Lessor may be required to do so by Prime Lessor. If Prime Lessor
requires removal of any Alteration made by Lessee, or a portion thereof, and
Lessee does not make such removal in accordance with this Section, Lessor may
remove the same (and repair any damage occasioned thereby), and dispose thereof,
or at its election, deliver the same to any other place of business of Lessee,
or warehouse the same. Lessee shall pay the reasonable costs of such removal,
repair, delivery and warehousing within ten (days) following receipt of Lessor's
documented invoice therefor.
24. REMOVAL OF LESSEE'S PROPERTY. Upon the expiration of this Sublease,
Lessee shall remove Lessee's articles of personal property incident to Lessee's
business ("Trade Fixtures"); provided, however, to the extent Lessor is required
to do so under the Prime Lease, Lessee shall repair any injury or damage to the
Premises, which may result from such removal. If Lessee does not remove Lessee's
Trade Fixtures from the Premises, prior to the expiration or earlier termination
of the Term, Lessor may, at its option, remove the same (and repair any damage
occasioned thereby) and dispose thereof or deliver the same to any other place
of business of Lessee, or warehouse the same, and Lessee shall pay the
reasonable cost of such removal, repair, restoration, delivery or warehousing to
Lessor within ten (10) days following receipt of Lessor's documented invoice
therefor. Lessee shall pay, prior to delinquency, directly to the appropriate
taxing authorities, any personal property taxes levied or assessed against
Lessee's Trade Fixtures.
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25. HOLDING OVER. Lessee shall have no right to occupy the Premises, or
any Portion thereof after the expiration of this Sublease or after termination
of this Sublease or of Lessee's right to possession as a result of an Event of
Default hereunder. In the event Lessee or any party claiming by, through or
under Lessee holds over, Lessor may exercise any and all remedies available to
it at law or in equity to recover possession of the Premises, and to recover
damages. For each and every month or partial month that Lessee or any party
claiming by, through or under Lessee remains in occupancy of all or any portion
of the Premises, after the expiration of this Sublease or after termination of
this Sublease or Lessee's right to possession, Lessee shall pay, as minimum
damages and not as a penalty, an amount equal to the sum of monthly rental at a
rate equal to double the rate of Base Rent and Additional Rent, if any, payable
by Lessee hereunder immediately prior to the expiration or other termination of
this Sublease or of Lessee's right to possession. The acceptance by Lessor of
any lesser sum shall be construed as payment on account and not in satisfaction
of damages for such holding over.
26. ENCUMBERING TITLE. Lessee shall not do any act which shall in any
way encumber the title of Prime Lessor in and to the Building or the Property,
nor shall the interest or estate of Prime Lessor or Lessor be in any way subject
to any claim by way of lien or encumbrance, whether by operation of law by
virtue of any express or implied contract by Lessee, or by reason of any other
act or omission of Lessee. Any claim to, or lien upon, the Premises, the
Building or the Property arising from any act or omission of Lessee shall accrue
only against the subleasehold estate of Lessee and shall be subject and
subordinate to the paramount title and rights of Prime Lessor in and to the
Building and the Property and the interest of Lessor in the premises leased
pursuant to the Prime Lease. Without limiting the generality of the foregoing,
Lessee shall not permit the Premises, the Building or the Property to become
subject to any mechanics', laborers' or materialmen's lien on account of labor
or material furnished to Lessee or claimed to have been furnished to Lessee in
connection with work of any character performed or claimed to have been
performed on the Premises by, or at the direction or sufferance of, Lessee,
provided, however, that if so permitted under the Prime Lease, Lessee shall have
the right to contest in good faith and with reasonable diligence, the validity
of any such lien or claimed lien if Lessee shall give to Prime Lessor and Lessor
such security as may be deemed satisfactory to them to assure payment thereof
and to prevent any sale, foreclosure, or forfeiture of the Premises, the
Building or the Property by reason of nonpayment thereof, provided further,
however, that on final determination of the lien or claim of lien, Lessee shall
immediately pay any judgment rendered, with all property costs and charges, and
shall have the lien released and any judgment satisfied.
27. INDEMNITY.
A. Indemnification. To the fullest extent permitted by law, each party
hereto ("Party") will, at said Party's sole cost and expense, indemnify the
other Party (a Party for all purposes of this Section 27 to be defined as set
forth in Section 27(c) below) against all Claims arising from (i) any Personal
Injury, Bodily Injury or Property Damage whatsoever occurring in or at the
Premises, the Retained Premises, the Building and/or the Property, except to the
extent caused by the negligence and/or a breach of this Sublease by the other
Party; (ii) any Bodily Injury to an employee of a Party arising out of and in
the course of employment of the employee and occurring anywhere in the Property,
except to the extent caused by the negligence and/or a breach of this Sublease
by the other Party; (iii) the use or occupancy, or manner of use or
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occupancy, or conduct or management of the Premises, or any Retained Premises,
or of any business therein; (iv) subject to the waiver of subrogation provisions
of this Sublease, any act, error, omission or negligence of any of the Parties
in, on or about the Premises, the Retained Premises, the Building and/or the
Property, except to the extent caused by the negligence and/or a breach of this
Sublease by the other Party; (v) the conduct of a Party's business; (vi) any
alterations, activities, work or things done, omitted, permitted or allowed by
Parties in, at or about the Premises, the Retained Premises, the Building and
the Property, including the violation of or failure to comply with, or the
alleged violation of or alleged failure to comply with any applicable laws,
statutes, ordinances, standards, rules, regulations, orders, or judgments in
existence on the date of the Sublease or enacted, promulgated or issued after
the date of this Sublease including hazardous materials laws; (vii) any breach
or default by a Party in the full and prompt payment of any amount due under
this Sublease, any breach, violation or nonperformance of any term, condition,
covenant or other obligation of a Party under this Sublease, or any
misrepresentation made by a Party or any guarantor of a Party's obligations in
connection with this Sublease provided, however, that neither Party shall be
liable for special or consequential damages; (viii) all damages sustained by a
Party as a result of any holdover by the other Party in the Premises or any
Retained Premises provided, however, that neither Party shall be liable for
special or consequential damages; or (ix) any matter enumerated in Section 27(B)
below.
B. Waivers. To the fullest extent permitted by law, each Party waives
all Claims against the other Party arising from the following: (i) any Personal
Injury, Bodily Injury, or Property Damage occurring in or at the Premises, the
Retained Premises, the Building and/or the Property; (ii) any loss of or damage
to property of a Party located in the Premises, the Retained Premises, the
Building and/or the Property by theft or otherwise; (iii) any Personal Injury,
Bodily Injury, or Property Damage to any Party caused by other lessees of the
Property, parties not occupying space in the Property, occupants of property
adjacent to the Property, or the public or by the construction of any private,
public, or quasi-public work occurring either in the Premises, the Retained
Premises, the Building and/or the Property; (iv) any interruption or stoppage of
any utility service or for any damage to persons or property resulting from such
stoppage; (v) business interruption or loss of use of the Premises, the Retained
Premises, the Building and/or the Property; (vi) any latent defect in
construction of the Premises; (vii) damages or injuries or interference with a
Party's business, loss of occupancy or quiet enjoyment and any other loss
resulting from the exercise by the other Party of any right or the performance
of any obligations under this Sublease, or (viii) any Bodily Injury to an
employee of a Party arising out of and in the course of employment of the
employee and occurring anywhere in the Premises, the Retained Premises, the
Building or the Property.
C. Definitions. For purposes of this Section 27: (i) the term "Party"
or "Parties" means Lessor and/or Lessee, as applicable, and their respective
officers, members, sublessees, shareholders, partners, venturers, parent,
subsidiaries, trustees and ancillary trustees and the respective officers,
directors, shareholders, members, parents, subsidiaries of any affiliated
entities, personal representatives, executors, heirs, assigns, licensees,
invitees, beneficiaries, agents, servants, employees and independent contractors
of these persons or entities and all persons and entities claiming through any
of these persons or entities; (ii) the term "Indemnify" means indemnify, defend
(with counsel reasonably acceptable to the indemnified Party) and hold free and
harmless for, from and against; (iv) the term "Claims" means all liabilities,
claims,
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damages (including consequential damages), losses, penalties, litigation,
demands, causes of action (whether in tort or contract, in law or at equity or
otherwise), suits, proceedings, judgments, disbursements, charges, assessments,
and expenses (including reasonable attorneys' and experts' fees and expenses
incurred in investigating, defending, or prosecuting any litigation, claim, or
proceeding); (v) the term "Waives" means that the Lessee Parties waive and
knowingly and voluntarily assume the risk of, and (vi) the terms "Bodily
Injury", "Personal Injury" and "Property Damage" will have the same meanings
as in the form of commercial general insurance policy issued by Insurance
Services Office, Inc. most recently prior to the date of the injury or loss
in question.
D. Scope of Indemnities and Waivers. Except as provided in the
following sentence, the indemnities and waivers contained in Section 27 will
apply regardless of the active or passive negligence or sole, joint, concurrent,
or comparative negligence of any of the Parties, and regardless of whether
liability without fault or strict liability is imposed or sought to be imposed
on any of the Parties. The indemnities and waivers contained in Section 27 will
not apply to the extent of the percentage of liabilities that a final judgment
of a court of competent jurisdiction establishes under the comparative
negligence principles of the State of Arizona, that a Claim against a Party was
proximately caused by the willful misconduct or negligence of that Party,
provided, however, that in such event the indemnity or waiver will remain valid
for all other Parties.
E. Obligations Independent of Insurance. The indemnification provided
in Section 27(A) may not be construed or interpreted as in any way restricting,
limiting or modifying Lessee's insurance or other obligations under this
Sublease, and the provisions of Section 27(A) are independent of Lessee's
insurance and other obligations. Lessee's compliance with the insurance
requirements and other obligations under this Sublease does not in any way
restrict, limit or modify Lessee's indemnification obligations under this
Sublease.
F. Survival. The provisions of this Section 27 will survive the
expiration or earlier termination of this Sublease until all Claims against any
Parties involving any of the indemnified or waived matters are fully and finally
barred by the applicable statutes of limitations.
G. Duty to Defend. A Party's duty to defend the other Party is separate
and independent of a Party's duty to Indemnify a Party. A Party's duty to defend
includes Claims for which the other Party may be liable without fault or may be
strictly liable. A Party's duty to defend applies regardless of whether issues
of negligence, liability, fault, or default have been determined. A Party's duty
to defend applies immediately, regardless of whether the Parties have paid any
sums or incurred any detriment arising out of or relating, directly or
indirectly, to any Claims. It is the express intention of Lessor and Lessee that
a Party will be entitled to obtain summary adjudication regarding the other
Party's duty to defend at any stage of any Claim within the scope of this
Section 27.
H. Waiver of Subrogation. In addition to the waiver of subrogation
contained in Section 27(B), each Party hereby waives its rights and the
subrogation rights of its insurer against the other Party and any other lessees
of space in the Building or the Property, as well as their respective members,
officers, employees, agents, authorized representatives and invitees, with
respect to any claims including, but not limited to, claims for injury to any
persons, and/or
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damage to the Premises, and/or any fixtures, equipment, personal property,
furniture, improvements and/or alterations in or to the Premises, which are
caused by or result from (a) risks or damages required to be insured against
under a policy of property insurance under this Sublease or under the Prime
Lease, or (b) risks and damages which are in fact insured against by one or more
property insurance policies maintained by either Party from time to time. It is
the intent of the Parties that with respect to any loss from a named peril
required to be covered under a policy of property insurance, each Party will
look solely to its insurance companies for recovery. Each Party shall obtain
from its insurers under each policy required by this Sublease or under the Prime
Lease a waiver of all rights of subrogation which such insurers of such Party
might otherwise have against the other Party.
28. LESSOR'S RESERVED RIGHTS. Lessor reserves and shall at any and all
reasonable times with reasonable notice have the right to enter the Premises, to
inspect the same for the purposes of inspecting the performance by Lessee of the
terms and conditions of this Sublease. In addition, Lessor expressly reserves
for its benefit a reasonable right of access through, above and below the
Premises, to any portion of the Retained Premises by Lessor, including the right
to run cabling and wiring. Lessor reserves the right to enter the Premises, at
reasonable times to post notices of non-responsibility, to alter, improve or
repair the Premises, including making repairs or alterations to the Retained
Premises. In exercising the rights reserved by Lessor, Lessor shall use
commercially reasonable efforts to not unreasonably interfere with the conduct
by Lessee of its business in the Premises, and the exercise by Lessor of its
rights pursuant to this Section 28 shall not entitle Lessee to an abatement of
Rent unless such exercise materially prevents Lessee from conducting its
business operations in the Premises. Nothing in this Section 28 shall be
construed as obligating Lessor to perform any repairs, alterations or
maintenance to the Premises.
29. DEFAULTS. Lessee further agrees that the occurrence of any one or
more of the following events shall be considered an Event of Default:
A. Lessee shall be adjudged an involuntary bankrupt, or a decree or
order approving, as properly filed, a petition or answer filed against Lessee
asking reorganization of Lessee under the Federal bankruptcy laws as now or
hereafter amended, or under the laws of any State, shall be entered, and any
such decree of judgment or order shall not have been vacated or stayed or set
aside within sixty (60) days from the date of the entry or granting thereof; or
B. Lessee shall file, or admit the jurisdiction of the court and the
material allegations contained in, any petition in bankruptcy, or any petition
pursuant or purporting to be pursuant to the Federal bankruptcy laws now or
hereafter amended, or Lessee shall institute any proceedings for relief of
Lessee under any bankruptcy or insolvency laws or any laws relating to the
relief of debtors, readjustment of indebtedness, reorganization, arrangements,
composition or extension; or
C. Lessee shall make any assignment for the benefit of creditors or
shall apply for a consent to the appointment of a receiver for Lessee or any of
the property of Lessee; or
D. Lessee shall admit in writing its inability to pay its debts as they
become due; or
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E. The Premises are levied on by any revenue officer or similar
officer; or
F. A decree or order appointing a receiver of the property of Lessee
shall be made and such decree or order shall not have been vacated, stayed or
set aside within sixty (60) days from the date of entry or granting thereof, or
G. Lessee shall abandon the Premises during the Term hereof, or
H. Lessee shall default in any payment of Rent required to be made by
Lessee hereunder when due as herein provided and such default shall continue for
three (3) days after notice thereof in writing to Lessee; or
I. Lessee shall default in securing insurance or in providing evidence
of insurance as set forth in Section 17 of this Sublease or shall default with
respect to lien claims as set forth in Section 26 of this Sublease and either
such default shall continue for five (5) days after notice thereof in writing to
Lessee; or
J. Lessee shall, by its act or omission to act, cause a default under
the Prime Lease and such default shall not be cured within the time, if any
permitted for such cure under the Prime Lease; or
K. Lessee shall default in any of the other covenants and agreements
herein contained to be kept, observed and performed by Lessee, and such default
shall continue for twenty (20) days after notice thereof in writing to Lessee,
provided that if the nature of Lessee's default is such that more than twenty
(20) days are reasonably required for its cure, then Lessee shall not be deemed
in default if Lessee commences such cure within said 20-day period and
thereafter diligently prosecutes such cure to completion.
30. REMEDIES. Upon the occurrence of any one or more Events of Default,
Lessor may exercise the rights and remedies available to Lessor at law, in
equity, by statute or otherwise and Lessor may exercise any remedy against
Lessee which Prime Lessor may exercise for default by Lessor under the Prime
Lease. All of the remedies given to Lessor in this Sublease in the event Lessee
commits an Event of Default shall be construed and held to be cumulative and no
one of them shall be exclusive of the other.
31. SECURITY DEPOSIT. Upon execution of this Sublease, Lessee shall
deposit with Lessor the Security Deposit as specified in Section 1(N) as
security for the prompt, full and faithful performance by Lessee of each and
every provision of this Sublease and of all obligations of Lessee hereunder.
Thereafter, throughout the Term of this Sublease, Tenant shall deposit with
Lessor such additional amounts as are necessary to increase the Security Deposit
to an amount equal to the monthly Base Rent being paid by Tenant pursuant to the
schedule of increases set forth in Exhibit D of this Sublease. If Lessee fails
to perform any of its obligations hereunder, Lessor may use, apply, retain or
hold any part of the Security Deposit for the payment of: (a) any Base Rent or
other sums of money which Lessee may not have paid when due, (b) any sum
expended by Lessor on Lessee's behalf in accordance with the provisions hereof,
(c) any sum which Lessor may expend or may be required to expend by reason of
Lessee's default hereunder. The use, application or retention of the Security
Deposit or any portion thereof, shall not prevent Lessor from exercising any
other right or remedy provided by this Sublease or
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available to Lessor at law or in equity. If Lessee shall fully and faithfully
comply with all of the provisions of this Sublease, the Security Deposit, or any
balance thereof, shall be returned to Lessee without interest within thirty (30)
days of expiration of the Term.
32. NOTICES AND CONSENTS. All notices, demands, request, consents or
approvals which may or are required to be given by either party to the other
shall be in writing and shall be deemed given when received or refused if
personally delivered, if sent by United States registered or certified mail,
postage prepaid, return receipt requested or if sent by overnight commercial
courier service (a) if to Lessee, addressed to Lessee at the address specified
in Section 1(B) or at such other place as Lessee may from time to time designate
by notice in writing to Lessor, or (b) if for Lessor, addressed to Lessor at the
address specified in Section 1(C) or at such other place as Lessor may from
time to time designate by notice in writing to Lessee. Each party agrees
promptly to deliver a copy of each notice, demand, request, consent or approval
from such party to Prime Lessor and promptly to deliver to the other party a
copy of any notice, demand, request, consent or approval received from Prime
Lessor. Such copies shall be delivered by overnight commercial courier. Notice
by a party may be given by legal counsel to such party.
33. PROVISIONS REGARDING SUBLEASE. Except as specifically provided
herein, this Sublease and all the rights of parties hereunder are subject and
subordinate to the Prime Lease. Lessee and Lessor (provided Lessee is not then
in default under this Sublease) each agree that it will not, by its act or
omission to act, cause a default under the Prime Lease. Subject to the terms and
conditions of this Sublease and Lessee's prior access pursuant to Section 5
above, Lessor shall be responsible for all Claims under the Prime Lease prior to
the Commencement Date and thereafter for all Claims relating to those portions
of the Retained Premises of which it is actually in possession. Lessee shall be
responsible for all Claims arising from or relating to the Premises following
the Commencement Date. In furtherance of the foregoing, the parties hereby
confirm, each to the other, that it is not practical in this Sublease to
enumerate all of the rights and obligations of the various parties under the
Prime Lease and specifically to allocate those rights and obligations in this
Sublease. Accordingly, in order to afford to Lessee the benefits of this
Sublease and of those provisions of the Prime Lease which by their nature are
intended to benefit the party in possession of the Premises, and in order to
protect Lessor against a default by Lessee which might cause a default or event
of default by Lessor under the Prime Lease:
A. Lessee and Lessor shall pay, when and as due, all base rent,
additional rent and other charges payable under the Prime Lease as otherwise set
forth herein;
B. Except as otherwise expressly provided herein, Lessee shall perform
all affirmative covenants and shall refrain from performing any act which is
prohibited by the negative covenants of the Prime Lease, where the obligation to
perform or refrain from performing is by its nature imposed upon the party in
possession of the Premises. If practicable, Lessee shall perform affirmative
covenants which are also covenants of Lessor under the Prime Lease at least five
(5) days prior to the date when Lessor's performance is required under the Prime
Lease. Lessor shall have the right to enter the Premises to cure any default by
Lessee under this Sublease provided that Lessee is first given written notice
and opportunity to cure in accordance with the provisions of this Sublease.
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C. Lessor shall not agree to an amendment to the Prime Lease which
might have an adverse effect on Lessee's occupancy of the Premises, or its use
of the Premises, for their intended purpose, unless Lessor shall first obtain
Lessee's prior written approval thereof which approval may be withheld in
Lessee's reasonable discretion; Lessor expressly reserves, however, the right to
enter into partial terminations of the Prime Lease with respect to the Retained
Premises provided that any portion of the Retained Premises subject to partial
termination shall have first been offered to and rejected by Lessee in writing.
D. Lessor hereby grants to Lessee the right to receive all of the
services and benefits with respect to the Premises, which are to be provided by
Prime Lessor under the Prime Lease. Lessor shall have no duty to perform any
obligations of the Prime Lessor which are, by their nature, the obligation of an
owner or manager of real property. For example, Lessor shall not be required to
provide the services or repairs which the Prime Lessor is required to provide
under the Prime Lease. Lessor shall have no responsibility for or be liable to
Lessee for any default, failure or delay on the part of Prime Lessor in the
performance or observance by Prime Lessor of any of its obligations under the
Prime Lease, nor shall such default by Prime Lessor affect this Sublease or
waive or defer the performance of any of Lessee's obligations hereunder except
to the extent that such default by Prime Lessor excuses performance by Lessor
under the Prime Lease. Notwithstanding the foregoing, the parties contemplate
that Prime Lessor shall, in fact, perform its obligations under the Prime Lease
and in the event of any default or failure of such performance by Prime Lessor,
Lessor agrees that it will, upon notice from Lessee, make demand upon Prime
Lessor to perform its obligations under the Prime Lease and, provided that
Lessee specifically agrees to pay all reasonable costs and expenses of Lessor
and provides Lessor with security reasonably satisfactory to Lessor to pay such
costs and expenses, Lessor will take appropriate legal action to enforce the
Prime Lease.
34. ADDITIONAL SERVICES. Lessor shall cooperate with Lessee to cause
Prime Lessor to provide services required by Lessee in addition to those
otherwise required to be provided by Prime Lessor under the Prime Lease. Lessee
shall pay Prime Lessor's charge for such services promptly after having been
billed therefor by Prime Lessor or by Lessor. If at any time a charge for such
additional services is attributable to the use of such services both by Lessor
and by Lessee, the cost thereof shall be equitably divided by Lessor between
Lessor and Lessee.
35. BROKERAGE. Each party warrants to the other that it has had no
dealing with any broker or agent in connection with this Sublease and covenants
to pay, hold harmless and indemnify the other party for, from and against any
and all costs (including reasonable attorneys' fees), expense or liability for
any compensation, commissions and charges claimed by any broker or agent with
respect to this Sublease or the negotiation thereof on behalf of such party.
36. FORCE MAJEURE. With the exception of monetary defaults, neither
Party shall be deemed in default with respect to any of the terms, covenants and
conditions of this Sublease to be performed, if the failure to timely perform
same is due in whole or in part to any strike, lockout, labor trouble (whether
legal or illegal), civil disorder, failure of power, restrictive governmental
laws and regulations, riots, insurrections, war, shortages, accidents,
causalities, acts of God, acts caused directly by the other Party's agents,
employees and invitees or any other cause beyond the reasonable control of the
Party whose performance has been delayed.
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37. SIGNAGE. Lessor and Lessee acknowledge and agree that in accordance
with the provisions of the Prime Lease, Lessor currently maintains a sign
located on the Building above Lessor's leased premises. Lessor grants Lessee the
right to install its sign on the exterior of the Building in place of Lessor's
sign subject to the Prime Lease, approval of Prime Lessor and Lessee's
compliance with all applicable code requirements. To the extent the consent of
Prime Lessor under the Prime Lease is necessary for Lessee to install its
signage, Lessor grants to Lessee the right to seek such approval.
38. PARKING. Lessor and Lessee acknowledge and agree that under the
Prime Lease Lessor is entitled to the use of two hundred seventy-five (275)
vehicle parking spaces on the Property. Parking spaces shall be allocated as
follows: Lessor shall be entitled to the use of ninety-nine (99) of the parking
spaces, Lessee shall be entitled to the use of one hundred forty-three (143) of
the parking spaces, and thirty-three of the parking spaces shall be reserved for
Building visitors, all as depicted on Site Plan attached to this Sublease as
Exhibit C. Should Lessor surrender the First Floor Retained Premises or Lessee
exercise its First Floor Retained Premises Expansion Right, Lessee shall be
entitled to an additional sixty-three (63) parking spaces contiguous to Lessee's
existing parking spaces. Should Lessor surrender the Second Floor Retained
Premises or Lessee exercise its Second Floor Retained Premises Expansion Right,
Lessee shall be entitled to an additional thirty-six (36) parking spaces
contiguous to Lessee's existing parking spaces.
39. MISCELLANEOUS.
A. Entire Agreement, Amendments. This Sublease and any Exhibits and
Riders attached hereto and forming a part hereof, set forth all of the
covenants, promises, agreements, conditions and understandings between Lessor
and Lessee concerning the Premises, and there are no covenants, promises,
agreements, representations, warranties, conditions or understandings either
oral or written between them other than as contained in this Sublease. Except as
otherwise provided in this Sublease, no subsequent alteration, amendment, change
or addition to this Sublease shall be binding unless it is in writing and signed
by both Lessor and Lessee.
B. Time is of the Essence. Time is of the essence of each and every
term, covenant and condition of this Sublease.
C. Binding Effect. The covenants and conditions of this Sublease shall,
subject to the restrictions on assignment and subletting, apply to and bind the
heirs, executors, administrators, personal representatives, successors and
assigns of the parties hereto.
D. Recordation. Neither this Sublease nor any memorandum hereof shall
be recorded by Lessee. At the sole option of Lessor, Lessee and Lessor shall
execute, and Lessor may record, a short form memorandum of this Sublease in form
and substance satisfactory to Lessor.
E. Governing Law. This Sublease and all the terms and conditions
thereof shall be governed by and construed in accordance with the laws of the
State of Arizona.
17
<PAGE> 21
F. Defined Terms and Paragraph Headings. The words "Lessor" and
"Lessee" as used in this Sublease shall include the plural as well as the
singular. Words used in masculine gender include the feminine and neuter. If
there is more than one Lessee, the obligations in this Sublease imposed upon
Lessee shall be joint and several. The paragraph headings and titles to the
paragraphs of this Sublease are not a part of this Sublease and shall have no
effect upon the construction or interpretation of any part hereof.
G. Representations and Warranties of Lessee. Lessee represents and
warrants to Lessor as follows:
1. Lessee has been duly organized, is validly existing, and is
in good standing under the laws of its state of incorporation and is qualified
to transact business in Arizona. All necessary action on the part of Lessee has
been taken to authorize the execution, delivery and performance of this Sublease
and of the other documents, instruments and agreements, if any, provided for
herein. The persons who have executed this Sublease on behalf of Lessee are duly
authorized to do so;
2. This Sublease constitutes the legal, valid and binding
obligation of Lessee, enforceable against Lessee in accordance with its terms,
subject, however, to bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, general principles of equity, whether enforceability is
considered in a proceeding in equity or at law, and to the qualification that
certain waivers, procedures, remedies and other provisions of this Sublease may
be unenforceable under or limited by applicable law, however, none of the
foregoing shall prevent the practical realization to Lessor of the benefits
intended by this Sublease;
3. To the its actual knowledge, there are no suits, actions,
proceedings or investigations pending, or to the best of its knowledge,
threatened against or involving Lessee before any court, arbitrator or
administrative or governmental body which might reasonably result in any
material adverse change in the contemplated business, condition or operations of
Lessee;
4. To its actual knowledge, Lessee is not, and the execution,
delivery and performance of this Sublease and the documents, instruments and
agreements, if any, provided for herein will not result in any breach of or
default under any other document, instrument or agreement to which Lessee is a
party or by which Lessee is subject or bound;
5. Lessee has or will obtain before or within ninety (90) days
following the Commencement Date all required licenses and permits, both
governmental and private, relating to the Premises.
H. Representations and Warranties of Lessor. Lessor represents and
warrants to Lessor as follows:
1. Lessor has been duly organized, is validly existing, and is
in good standing under the laws of its state of incorporation and is qualified
to transact business in Arizona. All necessary action on the part of Lessor has
been taken to authorize the execution, delivery and performance of this Sublease
and of the other documents, instruments and agreements, if any,
18
<PAGE> 22
provided for herein. The persons who have executed this Sublease on behalf of
Lessor are duly authorized to do so;
2. To Lessor's actual knowledge, there are no suits, actions,
proceedings or investigations pending, or to the best of its knowledge,
threatened against or involving Lessor before any court, arbitrator or
administrative or governmental body which might reasonably result in any
material adverse change in the contemplated business, condition or operations of
Lessor;
3. To Lessor's actual knowledge, and subject to Prime Lessor's
approval, the execution, delivery and performance of this Sublease and the
documents, instruments and agreements, if any, provided for herein, will not
result in any breach of or default under the Prime Lease, any other document,
instrument or agreement to which Lessor is a party or by which Lessor is subject
or bound;
4. To its actual knowledge, neither Lessor, its contractors,
licensees, invitees, employees or agents have disposed or released any hazardous
materials on or under the Premises, Retained Premises, Building or Property,
except in compliance with the terms and conditions of the Prime Lease and
applicable environmental laws.
I. No Waiver. The failure of either party to insist in any one or more
instances upon the strict performance of any one or more of the obligations of
this Sublease, or to exercise any election herein contained, shall not be
construed as a waiver or relinquishment for the future of the performance of
such one or more obligations of this Sublease or the right to exercise such
election, but the same shall continue and remain in full force and effect with
respect to any subsequent breach, act or omission.
J. Severability. If any clause or provision of this Sublease is or
becomes illegal or unenforceable because of any present or future law or
regulation of any governmental body or entity effective during the Sublease
Term, the intention of the parties is that the remaining provisions of this
Sublease shall not be affected thereby.
K. Exhibits. If any provision contained in an Exhibit, Rider or Addenda
to this Sublease is inconsistent with any other provision of this Sublease, the
provision contained in this Sublease shall supersede the provisions contained in
such Exhibit, Rider or Addenda, unless otherwise provided.
L. Fair Meaning. The language of this Sublease shall be construed to
its normal and usual meaning and not strictly for or against either Lessor or
Lessee. Lessor and Lessee acknowledge and agree that each party has reviewed and
revised this Sublease and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Sublease, or any Exhibits, Riders or amendments hereto.
M. No Merger. The voluntary or other surrender of this Sublease by
Lessee or a mutual cancellation of this Sublease shall not work as a merger and
shall, at Lessor's option, either terminate any or all existing subleases or
subtenancies, or operate as an assignment to Lessor of any or all of such
subleases or subtenancies.
19
<PAGE> 23
40. HAZARDOUS MATERIALS. Neither Lessor nor Lessee shall introduce,
release, deposit or store within the Premises any hazardous substances or toxic
materials. The provisions of this Section 40 shall not, however, extend to
reasonable quantities of hazardous or toxic materials typically and customarily
used in connection with first-class office operations, provided that such
materials are used and stored in accordance with the codes and ordinances of
governmental authorities having jurisdiction and in accordance with any storage
requirements set forth on the containers for such materials or substances.
41. ESTOPPEL CERTIFICATE. Each of Lessee and Lessor shall, whenever
requested by the other, without charge and within twenty (20) days after written
request, execute, acknowledge and deliver to the other a statement in writing to
such Party's actual knowledge and based upon the then current facts as known to
such Party, certifying that this Sublease is unmodified and in full force and
effect (or if modified, stating the nature of such modification and certifying
that this Sublease, as so modified, is in full force and effect); (b) the dates
to which Base Rent and Additional Rent and other charges are paid, (c) that
there are not to such parties knowledge, any uncured defaults on the part of the
other under this Sublease or specifying such defaults if any are claims, and (d)
such other information as may be reasonably requested and as may be factually
accurate.
42. ATTORNEYS' FEES. In the event that it becomes necessary for either
Lessor or Lessee to employ an attorney to enforce any of the terms or provisions
of this Sublease, the prevailing party shall be entitled to all of its
reasonable attorneys' fees and court costs (if any) in connection therewith, the
amount to be fixed by the court without a jury.
(Signatures on next page.)
20
<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Sublease the day and
year first above written.
LESSOR: LESSEE:
ACTION PERFORMANCE INTEGRATED INFORMATION
COMPANIES, INC., an SYSTEMS, INC., an Arizona corporation
Arizona corporation
By: /s/ David Husband By: /s/ Craig A. King
------------------------------------ ----------------------------------
Name: David Husband Name: Craig A. King
---------------------------------- --------------------------------
Its: Chief Financial Officer Its: Vice President
----------------------------------- ---------------------------------
21
<PAGE> 25
Exhibit A
Floor Plan of Premises
A-1
<PAGE> 26
Exhibit A
Premises Floor Plan
[Layout of Floor Plan]
Southwest Partitions & Office Interiors
Drawing 3171
Drawn by: M.P.
August 9, 1999 - Revised August 13, 1999 - August 20, 1999
Approved by: _____________________________________________________________
<PAGE> 27
Exhibit A
Premises Floor Plan
[Layout of Floor Plan]
Southwest Partitions & Office Interiors
Drawing 3172
Drawn by: M.P.
August 9, 1999 - Revised August 13, 1999 - August 20, 1999
August 25, 1999
Approved by: ______________________________
<PAGE> 28
Exhibit B
Floor Plan of Retained Premises
B-1
<PAGE> 29
Exhibit B
Retained Premises
[Layout of Floor Plan]
Southwest Partitions & Office Interiors
Drawing 3171
Drawn by: M.P.
August 9, 1999 - Revised August 13, 1999 - August 20, 1999
Approved by: ___________________________________________
<PAGE> 30
Exhibit C
Site Plan
C-1
<PAGE> 31
Exhibit C
SITE PLAN FOR THE PREMISES
[Layout of Parking Lot]
<PAGE> 32
Exhibit D
Base Rent
1. Premises:
<TABLE>
<CAPTION>
Period Monthly Amount
------ --------------
<S> <C>
Commencement Date - October 31, 2004 $43,844.00
November 1, 2004 - October 30, 2009 $52,914.00
</TABLE>
2. Premises and First Floor Retained Premises:
<TABLE>
<CAPTION>
Period Monthly Amount
------ --------------
<S> <C>
April 1, 2000 - October 31, 2004 $59,958.00
November 1, 2004 - October 30, 2009 $72,361.00
</TABLE>
3. Premises and Second Floor Retained Premises:
<TABLE>
<CAPTION>
Period Monthly Amount
------ --------------
<S> <C>
April 1, 2000 - October 31, 2004 $62,450.00
November 1, 2004 - October 30, 2009 $75,369.00
</TABLE>
4. Premises and First Floor and Second Floor Retained Premises:
<TABLE>
<CAPTION>
Period Monthly Amount
------ --------------
<S> <C>
April 1, 2000 - October 31, 2004 $78,563.00
November 1, 2004 - October 30, 2009 $94,817.00
</TABLE>
D-1
<PAGE> 33
Exhibit E
Prime Lease
E-1
<PAGE> 34
CONSENT TO SUBLEASE
H-B Tempe, L.L.C., an Arizona limited liability company ("Landlord"), as
Landlord under that certain Standard Form Industrial Lease (Single Tenant) (the
"Lease"), dated June 28, 1999, by and between Landlord and Action Performance
Companies, Inc., an Arizona corporation, ("Tenant"), as Tenant, a copy of which
is attached as Exhibit A and incorporated herein by reference, subject to and
specifically conditioned upon the following terms and conditions, hereby grants
its consent to a sublease transaction to be evidenced by that certain Sublease,
dated March ___, 2000, made by and between the Tenant, as Sublessor, and
Integrated Information Systems, Inc., a Delaware corporation ("Sublessee"), as
Sublessee, a copy of which is attached hereto as Exhibit B and incorporated
herein by reference (the "Sublease"), covering certain premises (the
"Premises"), as more particularly described in the Sublease, in the building
located at 1480 South Hohokam Drive, Tempe, Arizona 85281.
The capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Lease. This Consent to Sublease and the
acknowledgment and acceptance of the conditions hereof may be executed in
counterparts, each of which shall be considered an original, but all of which
shall constitute one and the same document.
AGREEMENT
As conditions to the consent of Landlord to the Sublease, it is understood
and agreed as follows:
1. No Release. This Consent to Sublease shall in no way release Tenant
or any person or entity claiming by, through or under Tenant, including
Sublessee, from any of its covenants, agreements, liabilities and duties under
the Lease (including without limitation all duties to cause and keep Landlord
and others named or referred to in the Lease fully insured and indemnified with
respect to any acts or omissions of Tenant or Sublessee or their respective
agents, employees or invitees or other matters arising by reason of the Lease,
the Sublease or Tenant's or Sublessee's use or occupancy of the Premises), as
the same may be amended from time to time, notwithstanding any provision to the
contrary in the Sublease.
2. Specific Provisions of Lease and Sublease. This Consent to Sublease
does not constitute approval by Landlord of any of the specific provisions of
the specific Sublease document or agreement thereto or therewith and, except to
the extent provided in the last sentence of Section 15, shall not be construed
to amend the Lease in any respect. Except to the extent provided in Section 9
hereof upon election of Landlord to cause Sublessee to attorn to Landlord, no
provision of the Sublease shall be binding upon Landlord.
3. Amendment of Sublease; Third Party Beneficiary. Tenant and Sublessee
shall not amend in any respect the Sublease without the prior written approval
of Landlord. In no event shall any such amendment affect or modify or be deemed
to affect or modify the Lease in any respect. Consent by Landlord to one such
amendment of the Sublease shall not be construed or implied to be a consent to
any prior or subsequent amendment. Landlord shall be deemed to be a third party
beneficiary of the provisions of the Sublease which require that payments of
amounts owing under the Sublease be made directly to Landlord, including but
not limited to Sections 1J,
<PAGE> 35
13A and 14 of the Sublease; provided, however, such provisions are solely to
facilitate the receipt by Landlord of payments under the Lease which are the
responsibility of Tenant and shall not be deemed in any way to cause Sublessee
to be deemed a direct lessee of Landlord or to create any obligations of
Landlord in favor of the Sublessee.
4. Limited Consent. This Consent to Sublease does not and shall not be
construed or implied to be a consent to any other matter for which Landlord's
consent is required under the Lease, including without limitation any
alterations, improvements or modifications of the Premises.
5. Tenant's Continuing Liability. Tenant shall be liable to Landlord for
any default under the Lease, whether such default is caused by Tenant or
Sublessee or anyone claiming by or through either Tenant or Sublessee, but the
foregoing shall not be deemed to restrict or diminish any right which Landlord
may have against Sublessee pursuant to the Lease, in law or in equity, for
violation of the Lease or otherwise, including without limitation the right to
recover possession of the Premises or to enjoin or otherwise restrain any
violation of the Lease by Sublessee.
6. Acceptance by Tenant and Subtenant. Tenant and Sublessee understand and
acknowledge that Landlord has agreed to execute this Consent to Sublease based
upon Tenant's and Sublessee's acknowledgment and acceptance of the terms and
conditions hereof.
7. Subordination. The Sublease is in all respects subject and subordinate
to the Lease, as the same may be amended from time to time, which amendment
shall not require notice to Sublessee or the consent or approval of Sublessee.
Furthermore, in the case of any conflict between the provisions of this Consent
to Sublease or the Lease and the provisions of the Sublease, the provisions of
this Consent to Sublease or the Lease, as the case may be, shall prevail
unaffected by the Sublease.
8. Additional Rent. Notwithstanding anything to the contrary herein, Tenant
acknowledges and agrees that Tenant will promptly pay to Landlord throughout the
Term of the Lease all Fixed Rent, Additional Rent or other amounts owed to
Landlord as required under the Lease and Tenant shall otherwise comply with each
and every other provision of the Lease; provided, however, Tenant shall be
entitled to a credit against the amounts owing by Tenant for all sums which are
paid by the Sublessee to the Landlord pursuant to Sections 1J, 13A, 13D and 14
of the Sublease, but Landlord shall be entitled to determine the manner of
application of such payments to amounts due and owing under the Lease. Tenant
shall pay all of Landlord's costs, charges and expenses, including attorneys'
fees, incurred in connection with this Consent to Sublease upon execution
hereof, which amount is $3,900. Tenant and Sublessee, by execution of this
Consent, confirm to each other that they have agreed that Sublessee shall
reimburse Tenant for one-half of such amount.
9. Termination of Lease. If at any time prior to the expiration of the term
of the Sublease the Lease shall terminate or be terminated for any reason, or
Tenant's right to possession shall terminate without termination of the Lease,
the Sublease shall simultaneously terminate. However, Sublessee agrees, at the
election and upon written demand of Landlord and not otherwise, to attorn to
Landlord for the remainder of the term of the Sublease, such
2
<PAGE> 36
attornment to be upon all of the terms and conditions of the Lease, except that
the Base Rent set forth in the Sublease shall be substituted for the Fixed Rent
set forth in the Lease, the computation of Additional Rent as provided in the
Lease shall be modified as set forth in the Sublease and the Lease shall be
supplemented by provisions creating rights and obligations substantially similar
to those set forth in Sections 6, 7, 8, 9 and 38 of the Sublease. The foregoing
provisions of this paragraph shall apply notwithstanding that, as a matter of
law, the Sublease may otherwise terminate upon the termination of the Lease and
shall be self-operative upon such written demand of the Landlord and no further
instrument shall be required to give effect to said provisions. Upon the demand
of Landlord, however, Sublessee agrees to execute, from time to time, documents
in confirmation of the foregoing provisions of this paragraph satisfactory to
Landlord in which Sublessee shall acknowledge such attornment and shall set
forth the terms and conditions of its tenancy. Nothing contained in this
paragraph shall be construed to impair or modify any right otherwise exercisable
by the Landlord, whether under the Lease, any other agreement or in law or
equity.
10. Services. Sublessee acknowledges that Landlord has no duty to furnish
to the Premises any services other than or in addition to those, if any, to be
provided to Tenant under the Lease and that Sublessee has no right to request
any such services from Landlord.
11. No Waiver; No Privity. Nothing herein contained shall be deemed a
waiver of any of the Landlord's rights under the Lease. Except to the extent
provided in Section 9 hereof upon election of Landlord to cause Sublessee to
attorn to Landlord, in no event shall Landlord be deemed to be in privity of
contract with Sublessee or owe any obligation or duty to Sublessee under the
Lease, or otherwise, any duties of Landlord under the Lease being in favor of,
for the benefit of and enforceable solely by Tenant.
12. Notices. Sublessee agrees to promptly deliver a copy to Landlord of all
notices of default and all other notices sent to Tenant under the Sublease, and
Tenant agrees to promptly deliver a copy to Landlord of all such notices sent to
Sublessee under the Sublease.
All copies of any such notices shall be delivered personally or sent by
United States certified mail, postage paid, return receipt requested, to the
persons listed below, or to such other place or persons as Landlord or its agent
may designate from time to time.
Landlord:
H-B Tempe, L.L.C.
c/o Hewson Development Corporation
4636 East University Drive, Suite 265
Phoenix, Arizona 85034
Attention: Mr. Alan Gillespie
13. Reservation of Rights. This Consent to Sublease shall be deemed limited
solely to the transaction contemplated by the Sublease and Landlord reserves the
right to consent or to withhold consent and all other rights under the Lease
with respect to any other matters, including without limitation any proposed
alterations, improvements or modifications to the Premises and
3
<PAGE> 37
with respect to any further or additional subleases, assignments or transfers
of the Lease or any interest therein, including without limitation a sublease
or any assignment of the Sublease.
14. Acceptance of Cure. If there is a default under the Lease by the Tenant
and cure of such default is tendered by the Sublessee on behalf of the Tenant,
Landlord agrees to accept such cure on behalf of Tenant on the same terms and
conditions as Landlord would be obligated to accept such cure if tendered
directly by Tenant.
15. Tenant and Subtenant Bound. By executing this Consent to Sublease,
Tenant and Sublessee acknowledge and agree to be bound by all of the terms and
conditions of Landlord's consent to the Sublease as set forth herein. Any
breach by Tenant of the provisions of this Consent to Sublease shall also be a
breach of and default by Tenant under the Lease.
16. Attorney's Fees. In the event of any dispute regarding this Consent to
Sublease, the non-prevailing party or parties in any action pursued in courts
of competent jurisdiction shall pay to the prevailing party or parties all
reasonable costs, damages, and expenses, including attorneys' fees, expended or
incurred by the prevailing party.
17. Governing Law. The terms and conditions hereof shall be governed by and
construed in accordance with the laws of the State of Arizona.
18. Headings. The headings herein are for reference purposes only and
shall not affect the meaning or interpretation of the terms and conditions
hereof.
19. Parties Bound. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
20. Signage. Subject to Landlord's rights to approve all signage as set
forth in the Lease, Landlord agrees that it will not object to a change in the
signage on the Building from one which identifies Tenant to one which
identifies Sublessee merely because of such change in identity.
21. Rent Tax. Landlord and Tenant recognize that Landlord is liable to the
appropriate governmental authorities for rent tax under Paragraph 14(e) of the
Lease ("Rent Tax") applicable to the portion of Premises not subleased to
Sublessee and that Tenant is liable to the appropriate governmental authorities
for the Rent Tax on the portion of the Premises subleased by Sublessee.
Therefore, there is a reduction in the amount of the Rent Tax payable by Tenant
to Landlord during the term of the Sublease. In order to facilitate payment of
all such Rent Tax, Sublessee, in addition to the payments to be made directly by
Sublessee to Landlord under the Sublease for Tenant's account, will also pay to
Landlord an amount equal to the Rent Tax payments on the Sublease for forwarding
to the appropriate governmental authorities. However, (a) Tenant shall indemnify
and hold harmless Landlord from all liability and expenses incurred by Landlord,
including but not limited to reasonable attorneys fees, interest and penalties,
resulting from the failure of any applicable governmental authority to receive
rent tax or transaction privilege tax payments to the extent such deficiency is
attributable to amounts which are claimed to be owing by Landlord under the
Lease but which are not paid by Tenant to Landlord under the Lease; (b) Landlord
shall not have any duty to refund payments paid by
4
<PAGE> 38
Tenant to Landlord for Rent Tax under Paragraph 14(e) of the Lease unless, until
and only to the extent that, Landlord has received a refund of such payments
from the applicable taxing authority; and (c) Landlord shall not be obligated
to apply for or seek any refunds of rent taxes or other transaction privilege
taxes paid in connection with the Lease but Landlord will, at the expense of
Tenant, cooperate with Tenant in seeking a refund of any taxes which Tenant in
good faith believes should be refunded.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing Consent
to Sublease on the date and year first written above.
LANDLORD:
H-B TEMPE, L.L.C., AN ARIZONA LIMITED LIABILITY
COMPANY, BY HEWSON DEVELOPMENT CORPORATION, AN
ARIZONA CORPORATION
By: /s/ Jane A. Pederson
__________________________________
Its President
__________________________________
TENANT:
ACTION PERFORMANCE COMPANIES, INC., AN ARIZONA
CORPORATION
By: __________________________________
Title: _______________________________
SUBLESSEE:
INTEGRATED INFORMATION SYSTEMS, INC., A DELAWARE
CORPORATION
By: __________________________________
Title: _______________________________
5
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have executed the foregoing Consent
to Sublease on the date and year first written above.
LANDLORD:
H-B TEMPE, L.L.C., AN ARIZONA LIMITED LIABILITY
COMPANY, BY HEWSON DEVELOPMENT CORPORATION, AN
ARIZONA CORPORATION
By: __________________________________
Its __________________________________
TENANT:
ACTION PERFORMANCE COMPANIES, INC., AN ARIZONA
CORPORATION
By: /s/ FRED W. WAGENHALS
__________________________________
Title: C.E.O.
_______________________________
SUBLESSEE:
INTEGRATED INFORMATION SYSTEMS, INC., AN ARIZONA
CORPORATION
By: /s/ CRAIG A. KING
__________________________________
Title: Vice President
_______________________________
<PAGE> 1
Exhibit 10.2
EQUIPMENT SUBLEASE
THIS EQUIPMENT SUBLEASE (this "Sublease") is made and entered into as of the 28
day of March, 2000, by and between INTEGRATED INFORMATION SYSTEMS, INC., a
Delaware corporation ("IIS"), and GORACING.COM, INC., a Delaware corporation,
("goracing").
RECITALS
A. Action Performance Companies, Inc., an Arizona corporation and sole
shareholder of goracing ("Action") and goracing (goracing and Action are
hereinafter collectively referred to as the "Retaining Parties") have entered
into certain equipment leases with General Electric Capital Corporation, a New
York Corporation ("GE Capital"), dated as of December 22, 1998, and August 9,
1999, respectively (the "Master Equipment Leases") whereby the Retaining Parties
lease certain equipment (the "GEAC Equipment") located at and used as part of
the occupancy of 1480 S. Hohokam Drive, Tempe, Arizona (the "Premises").
B. Action has entered into a Lease Agreement with H-B TEMPE, L.L.C., an
Arizona limited liability company ("Tempe") dated June 28, 1999 for the Premises
(the "Hohokam Lease").
C. As of the date hereof, Action intends to enter into a Sublease with
IIS (the "Hohokam Sublease") whereby IIS will assume certain of the rights and
obligations of Action under the Hohokam Lease.
D. As of the date hereof, the Retaining Parties intend to enter into an
Equipment Sublease with IIS (the "Equipment Sublease") whereby IIS assumes all
of the rights and obligations of the Retaining Parties under the Master
Equipment Leases.
E. As of the date hereof, goracing intends to enter into an Asset
Purchase Agreement with IIS (the "Asset Purchase Agreement") whereby IIS will
purchase certain assets from goracing that are currently located on and are
being used as part of the occupancy of the Premises (the "Purchased Equipment").
The Purchased Equipment is listed on Schedules A and B of the Asset Purchase
Agreement. (The GEAC Equipment and the Purchased Equipment is collectively
referred to hereinafter as the "Equipment").
F. A portion of the Equipment is located in the portion of the Premises
that is currently not subject to the Hohokam Sublease (the "Retained Premises")
and/or is currently being used by goracing (the "goracing Equipment"). The
goracing Equipment includes, but is not limited to certain furniture, fixtures,
computers and network equipment.
G. goracing desires to sublease from IIS and IIS desires for goracing
to sublease the goracing Equipment upon the terms and conditions contained
herein,
1
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. GRANT. IIS hereby subleases the goracing Equipment to goracing, and
goracing hereby subleases the goracing Equipment from IIS, on the terms and
conditions herein set forth.
2. RENT.
(a) BASE RENT. In exchange for the leasehold interest of the
goracing Equipment, goracing shall pay IIS $8,000 per month (the "Base Rent"),
which shall be due and payable on the 1" day of each month beginning on April 1,
2000.
(b) ADJUSTMENTS TO BASE RENT.
(i) FIRST FLOOR RETAINED PREMISES EXPANSION RIGHT. In
the event that IIS exercises its First Floor Retained Expansion Right (as
defined in Section 5 of the Hohokam Sublease) the Base Rent shall be reduced by
$3,000 per month beginning on the date such exercise becomes effective.
(ii) SURRENDER OF FIRST FLOOR RETAINED PREMISES. In
the event that Action surrenders its right to the First Floor Retained Premises
(as defined in Section 3(C) of the Hohokam Sublease) the Base Rent shall be
reduced by $3,000 per month beginning on the date such surrender becomes
effective.
(iii) SECOND FLOOR RETAINED PREMISES EXPANSION RIGHT.
In the event that IIS exercises its Second Floor Retained Expansion Right (as
defined in Section 8 of the Hohokam Sublease) the Base Rent shall be reduced by
$5,000 per month beginning on the date such exercise becomes effective.
(iv) SURRENDER OF SECOND FLOOR RETAINED PREMISES. In
the event that Action surrenders its right to the Second Floor Retained Premises
(as defined in Section 3(C) of the Hohokam Sublease the Base Rent shall be
reduced by $5,000 per month beginning on the date such surrender becomes
effective.
3. Term.
(a) BASE TERM. goracing's rights and obligations under this
Sublease shall commence as of the date set forth above and shall expire upon the
Expiration Date of the Hohokam Sublease (as defined in Section 1(H) of the
Hohokam Sublease).
(b) ADJUSTMENTS TO THE TERM. In the event that IIS exercises
its First Floor Retained Premises Expansion Right or its Second Floor Retained
Premises Expansion Right, or in the event that Action surrenders its rights to
the First Floor Retained Premises or the Second
2
<PAGE> 3
Floor Retained Premises, the term of this Sublease, with respect to the portion
of the Equipment located in or associated with the respective retained or
surrendered area, shall be reduced to the effective date of such exercise or
surrender.
(c) AUTOMATIC TERMINATION. In the event that Action's
occupancy of the Premises is completely terminated in accordance with the terms
and conditions of the Hohokam Sublease, this Sublease shall simultaneously, and
automatically terminate (without being deemed, however, to be a waiver by
goracing of any other rights or remedies it may have under this Sublease).
4. NETWORKING EQUIPMENT. The parties agree that the Equipment includes
approximately $170,000 of networking equipment more fully described on Exhibit A
hereto (the "Networking Equipment"). The parties further agree that in exchange
for a monthly payment of $5,000, goracing shall have exclusive use of the
Networking Equipment until such Networking Equipment is no longer needed by
goracing, but in no event shall such period of use extend beyond May 30, 2000.
5. LATE PAYMENT CHARGE. If any amount due to IIS, is not received in
full by IIS on or before five (5) days after the date any such payment is due,
then goracing shall pay to IIS a late payment charge in the amount of ten
percent (10%) of the amount then due. This provision shall not be construed to
allow or permit goracing to make payments after the due date, or to waive any of
IIS's rights in connection with late payments made by goracing.
6. NOTICES. All notices of communication required or permitted
hereunder or with regard to the Base Equipment Leases shall be in writing and
may be given by depositing the same in the United States mail, addressed to the
party to be notified, postage prepaid and registered or certified with return
receipt requested, or by delivering the same in person to an officer or agent of
such party.
(i) If to goracing, addressed to it at:
goracing.com, inc.
4707 East Baseline Road
Tempe, Arizona 85040
Attn: Chief Financial Officer
Fax: (602) 337-3780
With a copy to:
Greenberg Traurig, LLP
I E. Camelback Road, Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq.
Fax: (602) 263-2350
3
<PAGE> 4
(ii) If to IIS, addressed to it at:
Integrated Information Systems, Inc.
1480 S. Hohokam Drive
Tempe, Arizona 85281
Attn: Jeffrey Frankel
Fax: (480) 317-8010
With a copy to:
Snell & Wilmer, LLP
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004-2202
Attn: Michael Christopher, Esq.
Fax: (602) 382-6070
7. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
(b) CONTROLLING LAW. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement, shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of Arizona, notwithstanding any Arizona or other conflict-of-law provision
to the contrary.
(c) COSTS AND FEES. goracing agrees to reimburse IIS and IIS
agrees to reimburse goracing for any reasonable costs and expenses, including
attorney's fees, incurred by such party in connection with the enforcement or
preservation of any right or remedy of the other party under this Agreement.
4
<PAGE> 5
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS SUBLEASE AS OF THE DATE FIRST
ABOVE WRITTEN.
IIS:
INTEGRATED INFORMATION SYSTEMS,
INC., a Delaware corporation
By: /s/ Craig A. King
----------------------------
Name: Craig A. King
--------------------------
Its: Vice President
---------------------------
GORACING:
goracing.com, Inc., a
Delaware corporation
By: David Husband
--------------------------
Name: David Husband
--------------------------
Its: Chief Financial Officer
--------------------------
5
<PAGE> 6
EXHIBIT A
6
<PAGE> 7
EXHIBIT A TO EQUIPMENT SUBLEASE (IIS TO GORACING)
<TABLE>
<CAPTION>
BRAND MODEL DESCRIPTION Quantity Price ea. Total
- ----- ----- ----------- -------- --------- -----
<S> <C> <C> <C> <C> <C>
Compaq 1850R High density Proliant server 3 $3,260 $9,780
Compaq 1600R Proliant server 1 3,095 3,095
Compaq 40OP11 Processor for server 4 1,560 6,240
Compaq 256MB Memory kit for server 4 1,670 6,680
Compaq 128MB Memory kit for server 4 826 3,304
Compaq Smart-2DH SCSI array controller 4 1,645 6,580
Compaq 4.3GIG Internal hard drive 8 503 4,024
Compaq 9.1GIG External hot-pluggable drive 14 1,080 15,120
Compaq DLT ArrayII DLT Drive system 1 26,685 26,685
Compaq StorEdge Ul array storage system 1 1,457 1,457
Compaq Rack&access Rack & keyboard, etc. 1 3,305 3,305
Compaq UPS 30DO Rack mountable UPS system 1 1,853 1,853
Compaq FILMon Flat monitor for servers 1 1,295 1,295
Cisco Catalyst 6509 Switch for connectivity 1 7,196 7,196
Cisco PWR supply 2nd Power supply for Catalyst 1 2,876 2,876
Cisco SupE1 SUP Engine for Catalyst 1 7,196 7,196
Cisco MSM mod MSM Module for Catalyst 1 14,396 14,396
Cisco CAT6000 48prt 48 Port Switch module for Catalyst 4 9,356 37,424
Cisco 3640 Router Router for connectivity 1 4,745 4,745
Cisco CAT6000 gig Gigabit module for Catalyst 1 7,196 7,196
--------
Total $170,447
</TABLE>
Fixed Asset Schedules Page 1 of 1 Assets Retained by goracing.com
<PAGE> 8
CS(R062599)
COMPUTER EQUIPMENT SCHEDULE
SCHEDULE NO. 01
DATED THIS 10/1/99
--------------
TO MASTER LEASE AGREEMENT
DATED AS OF August 9, 1999
<TABLE>
<CAPTION>
Lessor & Mailing Address: Lessee & Mailing Address:
- ------------------------- -------------------------
<S> <C>
General Electric Capital Corporation goracing.com,inc.
One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B.3 4707 E. Baseline Road
Dallas, TX 75240 Phoenix, AZ 85040
</TABLE>
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes
a separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSOR'S COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
-------- ------------- ------------ ------------- ---------------------------
<S> <C> <C> <C> <C>
$3,250,730.07 Numerous Personal Computers, monitors, printers,
software and the various equipment
needed for installation and running of the
systems.
</TABLE>
SEE COLLATERAL SCHEDULE A ATTACHED HERETO FOR THE VARIOUS
EQUIPMENT, SERIAL NUMBERS AND COSTS.
Equipment immediately listed above is located at: 4707 E. Baseline Road,
Phoenix, Maricopa County, AZ 85040
B. FINANCIAL TERMS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1. Advance Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date:
2. Capitalized Lessor's Cost: $3,250,730.07 6. Lessee Federal Tax ID No.: 860956244
3. Basic Term (No. of Months): 36 MONTHS. 7. Last Delivery Date: OCTOBER 1, 1999
4. Basic Term Lease Rate Factor: 2.843469% 8. Daily Lease Rate Factor: N/A
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
9. First Termination Date: THIRTY-SIX (36) MONTHS AFTER THE BASIC TERM COMMENCEMENT DATE.
10. Interim Rent: For the period from and including the Lease Commencement Date to but not including the Basic Term Commencement
Date ("Interim Period"), Lessee shall pay as rent ("Interim Rent") for each unit of Equipment, the product of the Daily Lease
Rate Factor times the Capitalized Lessor's Cost of such unit times the number of days in the Interim Period. Interim Rent
shall be due on NOT APPLICABLE.
11. Basic Term Rent. Commencing on OCTOBER 1, 1999 and on the same day of each month thereafter (each, a "Rent Payment Date")
during the Basic Term, Lessee shall pay as rent ("Basic Term Rent") the product of the Basic Term Lease Rate Factor times the
Capitalized Lessor's Cost of all Equipment on this Schedule.
</TABLE>
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching
to straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
2. Recovery Period: FIVE (5) YEARS.
3. Basis: 100% of the Capitalized Lessor's Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN 4707 E. BASELINE ROAD, PHOENIX, MARICOPA
COUNTY, AZ: Lessee agrees that it will not list any of such Equipment for
property tax purposes or report any property tax assessed against such
Equipment until otherwise directed in writing by Lessor. Upon receipt of
any property tax bill pertaining to such Equipment from the appropriate
taxing authority, Lessor will pay such tax and will invoice Lessee for the
expense. Upon receipt of such invoice, Lessee will promptly reimburse
Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
1
<PAGE> 9
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE
AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS ADVANCED SYSTEMS GROUP, KENT DATA COMM, ORACLE,
ACCRUE SOFTWARE, INC. (THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE
PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE
LESSOR BY SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS
PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT
TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN
ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY
DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED
UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE
OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER
THE DEFAULT AND REMEDIES SECTION OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
<TABLE>
<CAPTION>
Termination Stipulated Termination Stipulated
Value Loss Value Value Loss Value
Rental Percentage Percentage Rental Percentage Percentage
<S> <C> <C> <C> <C> <C>
1 103.656 107.834 19 61.007 68.541
2 101.452 105.816 20 58.481 66.202
3 99.219 103.769 21 55.942 63.849
4 96.955 101.692 22 53.389 61.482
5 94.675 99.598 23 50.818 59.098
6 92.378 97.488 24 48.233 56.699
7 90.065 95.361 25 45.634 54.287
8 87.735 93.218 26 43.017 51.856
9 85.389 91.059 27 40.386 49.412
10 83.027 88.883 28 37.741 46.953
11 80.648 86.690 29 35.077 44.476
12 78.251 84.480 30 32.395 41.980
13 75.839 82.254 31 29.697 39.469
14 73.409 80.011 32 26.983 36.941
15 70.962 77.750 33 24.252 34.396
16 68.499 75.473 34 21.505 31.836
17 66.018 73.179 35 18.739 29.256
18 63.519 70.867 36 15.956 26.661
</TABLE>
* The Stipulated Loss Value or Termination Value for any unit of Equipment shall
be the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event that the Lease is for
any reason extended, then the last percentage figure shown above shall control
throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. EQUIPMENT SPECIFIC PROVISIONS
The MAINTENANCE Section of the Lease is amended by adding the following as
the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with all
original manufacturer's performance specifications for new Equipment without
expense to Lessor. Lessee shall, if requested by Lessor, obtain a certificate or
service report from the manufacturer attesting to such condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the existence or
the continuation of the existence, of an Environmental Emission (including,
without limitation, a sudden or non-sudden accidental or non-accidental
Environmental Emission), of, or exposure to, any substance, chemical, material,
pollutant, Contaminant, odor or audible noise or other release or emission in,
into or onto the environment (including, without limitation, the air, ground,
water or any surface) at, in, by, from or related to any Equipment, (ii) the
environmental aspect of the transportation, storage, treatment or disposal of
materials in connection with the operation of any Equipment or (iii) the
violation, or alleged violation of any statutes, ordinances, orders, rules,
regulations, permits or licenses of, by or from any governmental authority,
agency or court relating to environmental matters connected with any Equipment.
(b) "Affiliates" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries, controls,
or
2
<PAGE> 10
is controlled by, or is under common control with, such Person.
(c) "Contaminant" shall refer to those substances which are regulated by
or form the basis of liability under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls ("PCBs"), and radioactive
substances, or other material or substance which has in the past or could in the
future constitute a health, safely or environmental hazard to any Person,
property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation,
notice of violation, claim, demand, abatement or other order on direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, damage to the environment or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon any Adverse Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or in the
air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or local
law, rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clear Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 1361 et seq.), and the Occupational Safety and
Health Act (19 U.S.C. Section 651 et seq.), as these laws have been amended or
supplemented, and any analogous foreign, federal, state or local statutes, and
the regulations promulgated pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation, reasonable
attorney's fees, engineering and other professional or expert fees),
investigation, removal, cleanup and remedial costs (voluntary or involuntarily
incurred) and damages to, loss of the use of or decrease in value of the
Equipment arising out of or related to any Adverse Environmental Condition.
(h) "Person" shall include any individual, partnership, corporation,
trust, unincorporated organization, government or department or agency thereof
and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless Lessor and its Affiliates, successors and assigns, directors,
officers, employees and agents from and against any Environmental Claim or
Environmental Loss.
The provisions of this Schedule shall survive any expiration or termination
of the Lease and shall be enforceable by lessor, it successors and assigns.
RETURN CONDITIONS: In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that the Lessee has not elected
its option to purchase the Equipment, Lessee shall, at its expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90)
days prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and
serial number of each major component thereof), including without limitation,
all internal circuit boards, module boards, and software features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and other data
that may be reasonably requested by Lessor concerning the configuration and
operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance
provider acceptable to Lessor that the Equipment (1) has been tested and is
operating in accordance with manufacturers specifications (together with a
report detailing the condition of the Equipment), the results of such test(s)
and inspection(s) and all repairs that were performed as a result of such
test(s) and inspection(s) and (2) that the Equipment qualifies for the
manufacturers used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60)
days prior to the expiration or other termination of the Lease, make the
Equipment available for on-site operational inspection by persons designated by
the Lessor who shall be duly qualified to inspect the Equipment in its
operational environment.
(c) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations and
consistent with the best practices of dealers in used equipment similar to the
Equipment; shall have no Lessee installed markings or labels which are not
necessary for the operation, maintenance or repair of the Equipment; and shall
be in compliance with all applicable governmental laws, rules and regulations.
(d) The Equipment shall be deinstalled and packed by or under the
supervision of the manufacturer or such other person acceptable to Lessor in
accordance with manufacturers recommendations. Without limitation, all internal
fluids will either be drained and disposed of or filled and secured in
accordance with manufacturers recommendations and applicable governmental laws,
rules and regulations.
(e) Provide for transportation of the Equipment in a manner consistent
with the manufacturer's recommendations and practices to any locations within
the continental United States as Lessor shall direct; and shall have the
Equipment unloaded at such locations.
2. LEASE TERM OPTIONS
EARLY LEASE TERM OPTIONS
The Lease is hereby amended by adding the following to the end thereof:
3
<PAGE> 11
CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly provided that
all of the terms and conditions of this Provision are fulfilled, Lessee may
cancel the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of any one of the Cancellation Dates set forth below (each, a
"Cancellation Date") upon at least 90 days prior written notice (the "Notice
Date") to Lessor (which notice shall be irrevocable and shall be sent to the
attention of Lessor's Asset Management Organization, 44 Old Ridgebury Road,
Danbury, CT 06810-5105). Such notice shall state the Cancellation Date which
shall apply. If all of the terms and conditions of this Provision are not
fulfilled, this Lease shall continue in full force and effect and Lessee shall
continue to be liable for all obligations thereunder, including, without
limitation, the obligation to continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value
(set forth below for the applicable Cancellation Date) for the Equipment, plus
(B) all rent and all other sums due and unpaid as of the Cancellation Date
(including, but not limited to, any Rent payment due and payable on the
Cancellation Date and any sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified
by an independent appraiser selected by Lessor (reasonably acceptable to
Lessee) to determine that the Equipment is in such compliance, which
determination shall be final, binding and conclusive. Lessee shall bear all
costs associated with such appraiser's determination and such costs, if any, to
cause the Equipment to be in full compliance with the RETURN OF EQUIPMENT
Section of the Lease on or prior to such Cancellation Date.
(c) The Cancellation Dates and the applicable Cancellation Values are as
set forth below:
October 1, 2001 1,350,028.20
(d) Lessee shall, from the applicable Notice Date through the
Cancellation Date,
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the applicable Cancellation Date through the
earlier of the date the Equipment is sold by Lessor to a third party or 30 days
following the Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor
to market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(f) The proceeds of any sale or re-sale of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor and
Lessee shall have no interest in or any claim upon any of such proceeds.
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:
<TABLE>
<CAPTION>
COMPANY NAME ADDRESS AMOUNT
- ------------ -------- -------
<S> <C> <C>
Advanced Systems Group, Inc. 12405 North Grant Street $1,831,694.00
Thornton, CO 80241
Kent Datacomm P.O. Box 201523 $525,931.07
Houston, TX 77216-1523
Oracle Wire Transfer Information: $570,326.00
Wells Fargo Bank
Chicago, IL
ABA# 121000248
Account# 4522-020841
Accrue Software, Inc. 48634 Milmount Drive $322,779.00
Freemont, CA 94538
</TABLE>
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
4
<PAGE> 12
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding or
effective with respect to the Agreement or Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION GORACING.COM, INC.
By: /s/ ARTHUR G. ABELLO By: /s/ CHRIS BESING
--------------------------------- ---------------------------------
Name: ARTHUR G. ABELLO Name: CHRIS BESING
------------------------------- -------------------------------
Title: Senior Risk Analyst Title: C.E.O.
------------------------------ ------------------------------
5
<PAGE> 13
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
ADVANCED SYSTEMS GROUP
VENDOR
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY TOTAL SOFT COST
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
SL-WEB1-1500-1 Veritas Web Edition 2 $7,744.00
DS-WEB1-1500-1 Veritas Edition Support 2 $1,834.00
SL-WEB1-1500-1 Veritas Web Edition 20 $77,440.00
PS-WEB1-1500-1 Veritas Web Edition Support 20 $18,340.00
MD-WEB1-1500-1 Veritas Web Edition 2 $300.00
See Invoice #0016427 A26-AA-R E250 SERVER BASE CONFIG (RACK) 20 $79,480.00
See Invoice #0016427 1194A Opt 400MHz/2MB processor 40 $201,600.00
7004A OPT MEMORY 256MB (2*128MB) 40 $54,000.00
See Invoice #0016427 5234A OPT INT DISK 9.1GB/10K USCSI 120 $118,800.00
3668A PGX32 CARD W/VIDEO ADAPTOR 20 $5,320.00
9683A REDUNDNT POWER SUPPLY FOR E250 20 $12,520.00
X1034A OPT QFE PCI CARD W/SW 20 $15,120.00
SOLMS-260W9999 SOLARIS 2.6 STD ENGLISH SVR 2 $160.00
ASG installation 20 $39,900.00
7004A OPT MEMORY 256MB (2*128MB) 24 $32,400.00
SL-WEB1-1500-1 Veritas Web Edition 2 $7,744.00
DS-WEB1-1500-1 Veritas Web Edition Support 2 $1,834.00
2580A OPT PROCESSOR US 400-MHZ/8MB 2 $26,600.00
SL-WEB1-1500-2 Veritas Web Edition lic for E3500 1 $9,040.00
DS-WEB1-1500-2 Veritas Web Edition annual support 7x24 1 $2,141.00
SL-WEB1-1500-1 Veritas Web Edition 2 $7,744.00
PS-WEB1-1500-1 Veritas Web Edition support 2 $1,834.00
SL-WEB1-1500-1 Veritas Web Edition 1 $3,872.00
DS-WEB1-1500-1 Veritas Web Edition support 1 $917.00
See Invoice #0016428 A26-AA-R E250 SERVER BASE CONFIG (RACK) 2 $7,948.00
See Invoice #0016428 1194A Opt 400MHz/2MB processor 4 $20,160.00
7004A OPT MEMORY 256MB (2*128MB) 4 $5,400.00
See Invoice #0016428 5234A OPT INT DISK 9.1GB/10K USCSI 12 $11,880.00
3668A PGX32 CARD W/VIDEO ADAPTOR 2 $532.00
9683A REDUNDNT POWER SUPPLY FOR E250 2 $1,252.00
X1141A SUN GIGABITETHERNET T/P 2.0 4 $6,368.00
ASG installation 2 $3,990.00
See Invoice #0016428 E3501-C82 ENT 3500 BASE, 400MHZ/8MB 1 $33,440.00
See Invoice #0016428 2602A OPT INT CPU/MEM BD FOR EXX00 1 $6,840.00
X7023A OTP MEMORY 1GB (8*128MB) 2 $14,440.00
</TABLE>
1
<PAGE> 14
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
ADVANCED SYSTEMS GROUP
VENDOR
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY TOTAL SOFT COST
- -------------------- ----------------- ----------------------------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
3655A TURBOGXPLUS CARD W/CABLES, DOC 1 $747.00
2652A OPTIONAL FC-AL INTERFACE BOARD 1 $1,140.00
X6731A FCAL GBIC MODULE 100MB/S 2 $912.00
X973A 2 METER FIBRE CHANNEL CABLE 1 $150.00
9689A OPT 2ND PERIPHERAL PS/195W 1 $1,140.00
2612A OPT INT I/O BD EXXOO W/FC-AL 2 $9,880.00
X6710A FC-AL 9.1 GB 10000RPM 1" DISK 4 $8,816.00
X954A OPT INT PS/300W FOR EX000 2 $2,736.00
ASG installation 1 $3,495.00
1065A OPT ULTRA DWIS/S HOST ADAPTER 2 $1,968.00
X979A OPT CABLE DSCSI 12M 2 $530.00
X5235A OPT INT DISK 9GB/10000 USCSI 50 $51,750.00
X6537A STOREDGE A3500 CONTROLLER 1 $ 3,641.00
X7020A Opt A3500 Memory 64BM 2 $2,660.00
See Invoice # 0016433 A21UHC1A9P-B256CP WS U5/333 PGX24 256/9GB/CD 1 $ 3,641.00
See Invoice # 0016433 X7119A 19" COLOR MONITOR W/CABLE 1 $711.00
See Invoice # 0016433 X5236A OPT INT 9 GB Drive for U5/U10 1 $405.00
SYMY9-201-E999 SyMON 2.0.1 for 25 servers 1 $15,000.00
SYMX9-201-E999 SyMON 2.0.1 for 10 servers 1 8,000.00
SYMM9-201-999M SyMON 2.0.1 Media Kit 1 $50.00
ASG installation 1 $2,495.00
See Invoice # 0016434 A21UHC1Z9S-B128CP SERVER U5/333, 128/9GB 2 $8,092.00
X7037A OPT 128MB DRAM, 50NS, U5/U10 2 $766.00
ASG installation 2 $3,990.00
SG-XARY030A 72" STOREDGE EXPANSION RACK 7 $39,900.00
X9818A OPT DOOR ASSEMBLY 72" CABINET 7 $3,458.00
2244A OPT 400MHZ CPU W/4MB FOR E450 8 $40,320.00
See Invoice # 0016440 A25-BA SRVR E450 ZERO BASE 2 $20,422.00
X9690A E450 RACKMOUNTING KIT 2 $1,360.00
7005A OPT MEMORY 512MB (2*256MB) 4 $14,400.00
See Invoice # 0016440 5234A OPT INT DISK 9.1GB/10K USCSI 12 $11,880.00
6602A OPT 8BAY H/W RAID FOR E450 2 $4,852.00
3668A PGX32 CARD W/VIDEO ADAPTOR 2 $532.00
X1034A OPT QFE PCI CARD W/SW 2 $1,512.00
ENT 3500 Rackmount Kit 1 $6,500.00
</TABLE>
goracing.com, inc. 2
<PAGE> 15
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
VENDOR ADVANCED SYSTEMS GROUP
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY TOTAL SOFT COST
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CL6IS-229-9999 SC 2.2 FOR E4/5X00 & SC2000 2 $19,200.00
- -------------------------------------------------------------------------------------------------------------------------
CL9DS-229-9999 SUN CLUSTER 2.2 DOCS - ENGLISH 1 $400.00
- -------------------------------------------------------------------------------------------------------------------------
CLCIS-22P-9999 SC 2.2 OPS FOR E4/5/6x00 2 $6,400.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 2580A OPT PROCESSOR US 400-MHZ/8MB 12 $159,600.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 E5501 ENT 5500 SERVER BASE 2*PS 1 $36,480.00
- -------------------------------------------------------------------------------------------------------------------------
OPT 2ND POWER SEQUENCER 1 $836.00
- -------------------------------------------------------------------------------------------------------------------------
X9626A 2ND SEQ. MOUNTING FOR E55/6500 1 $114.00
- -------------------------------------------------------------------------------------------------------------------------
X9602A Ex000 Cabinet Floor Brackets 1 $304.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 E4501 ENT 4500 SERVER BASE 2*PS 1 $28,120.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 2602A OPT INT CPU/MEM BD FOR EXX00 6 $41,040.00
- -------------------------------------------------------------------------------------------------------------------------
X7023A OTP MEMORY 1GB (8*128MB) 4 $28,880.00
- -------------------------------------------------------------------------------------------------------------------------
2612A OPT INT I/O BD EXX00 W/FC-AL 6 $29,640.00
- -------------------------------------------------------------------------------------------------------------------------
X954A OPT INT PS/300W FOR EX000 4 $5,472.00
- -------------------------------------------------------------------------------------------------------------------------
X1065A OPT ULTRA DWIS/S HOST ADAPTER 4 $3,936.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 SG-XARY147A-36G 36GB D1000 FOR RACK (10K RPM) 2 $16,372.00
- -------------------------------------------------------------------------------------------------------------------------
X1073A SC 2.1 SCI/SBUS BOARD 4 $13,680.00
- -------------------------------------------------------------------------------------------------------------------------
X3825A SC 2.1 SCI CABLE (10M) 2 $500.00
- -------------------------------------------------------------------------------------------------------------------------
X1312A TERMINAL CONCENTRATOR KIT 1 $1,900.00
- -------------------------------------------------------------------------------------------------------------------------
X3836A 5M SERIAL CABLE 1 $125.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 A21UGE1A9P-C128CR WS U5/360 PGX24 128/8GB/CD 1 $2,403.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016439 X7126A 17" ENTRY COLOR MONITOR 1 $432.00
- -------------------------------------------------------------------------------------------------------------------------
SOLMS-260WD999 SOLARIS 2.6 STD. ENGLISH DT 1 $60.00
- -------------------------------------------------------------------------------------------------------------------------
Installation 1 $15,000.00
- -------------------------------------------------------------------------------------------------------------------------
X1065A OPT ULTRA DWIS/S HOST ADAPTER 4 $3,936.00
- -------------------------------------------------------------------------------------------------------------------------
X979A OPT CABLE DSCSI 12M 4 $1,060.00
- -------------------------------------------------------------------------------------------------------------------------
X5235A OPT INT DISK 9GB/10000 USCSI 30 $31,050.00
- -------------------------------------------------------------------------------------------------------------------------
X6537A STOREDGE A3500 CONTROLLER 1 $19,874.00
- -------------------------------------------------------------------------------------------------------------------------
X7020A OPT A3500 MEMORY 64MB 2 $2,660.00
- -------------------------------------------------------------------------------------------------------------------------
Netscape Enterprise Server 14 $15,666.00
- -------------------------------------------------------------------------------------------------------------------------
Netscape Enterprise Server Support 14 $3,920.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016820 SG-ARY370A-91G 91-GB A3500 (1x5x9-GB) 1 $43,092.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016822 SG-ARY370A-91G 91-GB A3500 (1x5x9-GB) 1 $43,092.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016826 Annual Gold Support for E450 Server 2 $5,682.00
- -------------------------------------------------------------------------------------------------------------------------
Annual Gold Support for E250 Server 20 $38,760.00
- -------------------------------------------------------------------------------------------------------------------------
See Invoice # 0016824 Annual Gold Support for WS U5/333 1 $442.00
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 16
Collateral Schedule A
to
Schedule No. 01
<TABLE>
ADVANCED SYSTEMS GROUP
VENDOR
SERIAL NUMBER ITEM # DESCRIPTION QUANTITY TOTAL SOFT COST
<C> <C> <C> <C> <C> <C>
See Invoice #0016824 Annual Gold Support for SyMON for 25 servers 1 $3,569.00
See Invoice #0016824 Annual Gold Support for SyMon for 10 servers 1 $1,894.00
See Invoice #0016823 Annual Gold Support for Server U5/333 2 $858.00
See Invoice #0016827 Annual Gold Support E250 Server 2 $3,876.00
See Invoice #0016827 Annual Gold Support ENT 3500 Base & 1 $5,739.00
See Invoice #0016827 Annual Gold Support OPT INT CPU 1 $0.00
See Invoice #0016827 Annual Gold Support 91-GB A3500 & 1 $13,402.00
See Invoice #0016827 Annual Gold Support Storedge A3500 Controller 1 $0.00
See Invoice #0016828 Annual Gold Support for ENT 5500 & 1 $10,971.50
See Invoice #0016828 Annual Gold Support for ENT 4500 1 $0.00
See Invoice #0016828 Annual Gold Support for OPT INT CPU 1 $9,646.50
See Invoice #0016828 Annual Gold Support for 36GB D1000 1 $2,954.00
See Invoice #0016828 Annual Gold Support for WS U5/360 1 $442.00
See Invoice #0016828 Annual Gold Support for SC 2.2 for E4/5x00 1 $5,103.00
See Invoice #0016828 Annual Gold Support for SC 2.2 for OPS 1 $1,701.00
See Invoice #0016828 Annual Gold Support for 91-BG A3500 & 1 $13,402.00
See Invoice #0016828 Annual Gold Support for Storedge A3500 1 $0.00
See Invoice #0017035 ASG Installation Services 1 $4,990.00
</TABLE>
4
<PAGE> 17
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Kent DataComm
Vendor
Serial Number Item # Description Quantity Total Soft Cost
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
See Invoice #99764485 WS-C6509 Catalyst 6509 Chassis IDF 1 & 2 2 $14,392.80
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 WS-CAC-1300W Catalyst 6000 1300W AC Power Supply 2 $5,752.80
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 WS-CAC-1300W/2 Catalyst 6000 Second 1300W AC Power 2 $5,752.80
Supply
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 WS-X6K-SUP1-2GE Catalyst 6000 Supervisor Engine 1, 2GE 2 $14,392.80
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 MEM-C6K-FLC16M Catalyst 6000 Supervisor PCMCIA Flash 2 $576.00
Mem Card
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 WS-X6248-RJ-45 Catalyst 6000 48-port 10/100 RJ-45 6 $56,138.40
Module
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 WS-G5484 100Base-SX Short Wavelengh GBIC 4 $1,440.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764485 CON-SNTP-WS-C6509 24x7x4 Service, Catalyst 6509 2 $20,800.00
- ------------------------------------------------------------------------------------------------------------------------------------
Shipping & Handling $303.45
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-C6509 Catalyst 6509 Chassis MDF 1 $7,196.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-CAC-1300W Catalyst 6000 1300W AC Power Supply 1 $2,876.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-CAC-1300W/2 Catalyst 6000 Second 1300W AC Power 1 $2,876.40
Supply
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-X6K-SUP1-2GE Catalyst 6000 Supervisor Engine 1, 2GE 1 $7,196.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 MEM-C6K-FLC16M Catalyst 6000 Supervisor PCMCIA Flash 1 $288.00
Mem Card
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-X6K-SUP1-2GE Catalyst 6000 Supervisor Engine 1, 2GE 1 $7,196.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 MEM-C6K-FLC16M Catalyst 6000 Supervisor PCMCIA Flash 1 $288.00
Mem Card
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-X6408-GBIC Catalyst 6000 8-port Gigabit Ethernet 2 $14,392.80
Module
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-X6248-RJ-45 Catalyst 6000 48-port 10/100 RJ-45 Module 1 $9,356.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-G5484 1000Base-SX Short Wavelengh GBIC 4 $1,440.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 WS-X6302-MSM Catalyst 6000 Multilayer Switch Module 1 $14,396.40
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764488 CON-SNTP-WS-C6509 24x7x4 Service, Catalyst 6509 1 $10,400.00
- ------------------------------------------------------------------------------------------------------------------------------------
Shipping & Handling $210.75
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764494 LDIR-430 LocalDirector 430 2 $36,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764494 CAB-AC Power Cord, 110V 2 $7,833.60
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764494 CON-SNTP-LDIR430, smartnet premium 2 $6,968.82
24x7x4
- ------------------------------------------------------------------------------------------------------------------------------------
Shipping & Handling $116.25
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 CISCO7206VXR Cisco 7206VXR, 6-slot Chassis 1 AC Supply 2 $10,080.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 PWR-7200/2 Cisco 7200 Dual AC Power Supply Option, 2 $4,320.00
280W
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 S72CH-12.0.4T IP/FW 2 $7,200.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 FR-IR72 Cisco IOS 7200 Series InterDomain 2 $4,896.00
Routing/Tag
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 C7200-I/O-FE Cisco 7200 Input/Output Controller with 2 $3,600.00
Fast Ethernet Port
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 MEM-I/O-FLD16M Cisco 7200 I/O PCMCIA Flash Memory, 16MB 2 $576.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 MEM-I/O-FLD40M Cisco 7200 I/O PCMCIA Flash Memory, 40MB 2 $576.00
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 NPE-300 Cisco 7200VXR Network Processing Engine 2 $10,800.00
300
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 PA-2FEISL-TX 2 Port Fast Ethernet/ISL 100Base TX Port 2 $5,472.00
Adapter
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 PA-POS-OC3MM 1-Port Packet/SONET OC3c/STM1 Multimode 2 $8,640.00
Port adapter
- ------------------------------------------------------------------------------------------------------------------------------------
See Invoice #99764493 PA-A3-T3 1-Port ATM Enhanced DS3 4 $23,040.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
goracing.com, inc. 5
<PAGE> 18
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
Kent DataComm
Serial Number Vendor Item # Description Quantity Total Soft Cost
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
See Invoice #99764493 CON-SNTP-7206 Cisco 7206 SMARTnet Premium Maintenance 2 $6,912.00
Shipping & Handling $290.85
See Invoice #99764489 WS-C6509 Catalyst 6509 Chassis 3 $21,589.20
See Invoice #99764489 WS-CAC-1300W Catalyst 6000 1300W AC Power Supply 3 $ 8,629.20
See Invoice #99764489 WS-CAC-1300W/2 Catalyst 6000 Second 1300W AC Power Supply 3 $ 8,629.20
See Invoice #99764489 WS-X6K-SUP1-2GE Catalyst 6000 Supervisor Engine 1, 2GE 3 $21,589.20
See Invoice #99764489 MEM-C65-FLC16M Catalyst 6000 Supervisor PCMCIA Flash Mem Card 3 $ 864.00
See Invoice #99764489 WS-X6408-GBIC Catalyst 6000 8-port Gigabit Ethernet Module 3 $21,589.00
See Invoice #99764489 WS-X6248-RJ-45 Catalyst 6000 48-port 10/100 RJ-45 Module 3 $28,069.20
See Invoice #99764489 CON-SNTP-WS-C6509 24x7x4 Service, Catalyst 6509 3 $31,200.00
Shipping & Handling $341.25
See Invoice #99764491 NRS-2FE NetRanger Sensor, 2 10/100bT Intfc 2 $27,360.00
CON-SNTP-LDIR430, smartnet premium 24x7x4 2 $ 8,635.00
Shipping & Handling $ 90.45
See Invoice #2125819 PA-2FEISL-TX 2 Port Fast Ethernet/ISL 100Base TX Port Adapter 2 $ 5,472.00
Shipping & Handling $ 28.07
See Invoice #2152775 CON-SNTP-NRS-2FE SNTP Svc, NetRanger Sensor, 2 10/100bT Intfc 2 $ 2,308.74
See Invoice #2152775 CON-SNTP-LDIR430 24X7X4 Service, LDIR-430, LocalDirector 430 2 $ 1,863.18
See Invoice #2152775 CON-SNTP-7206 SNTP Svc, -7206 2 $ 2,688.00
</TABLE>
<PAGE> 19
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
ORACLE
Serial Number Vendor Item # Description Quantity Total Soft Cost
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OR-0308iPLPU Oracle Enterprise server V8i 4800 $297,600.00
perpetual license, power unit $ 0.00
Diagnostics Pack 4800 $ 22,320.00
Tuning Pack 4800 $ 22,320.00
OR-050PARALLEL8iPUSL Oracle Enterprise Edition Parallel server V8i 4800 $119,040.00
perpetual license, power unit annual support $ 0.00
Designer/2000 3 $ 5,575.00
1 Year Annual Technical Support 1 $ 96,378.00
Oracle Designer 2.1 for Microsoft 1 5,575.00
Silver Advance Service for Oracle Design 1 1,518.00
</TABLE>
<PAGE> 20
Collateral Schedule A
to
Schedule No. 01
<TABLE>
<CAPTION>
Vendor Accure Software Inc.
Serial Number Item# Description Quantity Software Soft Cost
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Base Product 1 $17,000.00
Software Software Support - 17.5% of
software list price in year 1 1 $69,644.00
Additional Components UNIX CPUs Analyzed 33 $329,967.00
Additional Components Non-UNIX CPUs Analyzed 4 $31,996.00
Additional Components Network Segments Monitored 1 $4,000.00
Additional Components Vignette Bridge 1 $15,000.00
Quick Insight 1 $7,500.00
Administrator's Training 1 $2,000.00
Business Analyst Training 2 $2,000.00
Discount Special Discount Incentive 1 $156,328.00
</TABLE>
<PAGE> 21
ANNEX C
TO
SCHEDULE NO. 01
TO MASTER LEASE AGREEMENT
DATED AS OF AUGUST 9, 1999
CERTIFICATE OF ACCEPTANCE
To: GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and
assigns, if any, "LESSOR")
Pursuant to the provisions of the above schedule and lease (collectively,
the "LEASE"), Lessee hereby certifies and warrants that (a) all Equipment
listed below has been delivered and installed (if applicable); (b) Lessee has
inspected the Equipment, and all such testing as it deems necessary has been
performed by Lessee, Supplier or the manufacturer; (c) Lessee accepts the
Equipment for all purposes of the Lease, the purchase documents and all
attendant documents; and (d) the Equipment was first delivered to Lessee within
ten (10) days of the date hereof.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
DESCRIPTION OF EQUIPMENT
NUMBER
OF UNITS MANUFACTURER SERIAL NUMBERS MODEL AND TYPE OF EQUIPMENT
- -------- ------------ -------------- ---------------------------
Numerous Personal Computers, monitors,
printers, software and the
various equipment needed for
installation and running of
the systems.
SEE COLLATERAL SCHEDULE A ATTACHED TO EQUIPMENT SCHEDULE NO. 01
FOR THE VARIOUS EQUIPMENT, SERIAL NUMBERS AND COST
Equipment immediately listed above is located at: 4707 E. Baseline Road,
Phoenix, Maricopa County, AZ
goracing.com,Inc.
By: /s/ CHRIS BESING
------------------------
Title: C.E.O.
---------------------
Dated: 10/01/99
---------------------
<PAGE> 22
[GE LOGO]
GE Capital
- --------------------------------------------------------------------------------
General Electric Capital Corporation
One Lincoln Centre, 5400 LBJ Freeway, Suite 1280
Dallas, TX 75240
972 419-3200
November 4, 1999
goracing.com,inc.
1480 South Hohokam Drive
Tempe, AZ 85281
Attn: Dean Jargo
Dear Mr. Jargo:
Attached please find the following documents.
1. Equipment Schedule No. 02
2. Collateral Schedule A
3. Annex C (Certificate of Acceptance)
4. 1-UCC-1 Financing Statement, (SOS-AZ)
5. Invoice for Documentation & 1st Payment
The master documents dated 08/09/1999 will also be used for this schedule.
Please execute the documents and return the original by Federal Express. Should
you have any questions, please call. Thanks.
Sincerely,
General Electric Capital Corporation
/s/ Vicki Braches
Vicki Braches
Documentation Specialist
A GE Capital Services Company
<PAGE> 23
COMPUTER EQUIPMENT SCHEDULE
SCHEDULE NO. 02
DATED THIS 11/5/99
TO MASTER LEASE AGREEMENT
DATED AS OF AUGUST 9, 1999
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
GENERAL ELECTRIC CAPITAL CORPORATION GORACING.COM, INC.
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY 4707 E. BASELINE ROAD
SUITE 1280, L.B.3 PHOENIX, AZ 85040
DALLAS, TX 75240
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes
a separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSOR'S COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
- -------- ------------- ------------ ------------- ---------------------------
<S> <C> <C> <C> <C>
1 $1,048,073.67 Computers, printers, software and the
various equipment needed for installation
and running of the system.
</TABLE>
SEE COLLATERAL SCHEDULE A ATTACHED HERETO FOR THE VARIOUS
EQUIPMENT, SOFTWARE, AND COSTS.
and including all additions, attachments, accessories and accessions thereto,
and any and all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof by and between Lessee and Lessor
whether now owned or hereafter acquired.
Equipment immediately listed above is located at: 1480 S. Hohokam Drive,
Tempe, Maricopa County, AZ 85281
B. FINANCIAL TERMS
<TABLE>
<S> <C>
1. Advance Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date: NOVEMBER 5, 1999
2. Capitalized Lessor's Cost: $1,048,073.67 6. Lessee Federal Tax ID No.: 860956244
3. Basic Term (No. of Months): 36 Months. 7. Last Delivery Date: NOVEMBER 5, 1999
4. Basic Term Lease Rate Factor: 3.034789% 8. Daily Lease Rate Factor: N/A
</TABLE>
9. First Termination Date: THIRTY-SIX (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement Date
to but not including the Basic Term Commencement Date ("Interim Period"),
Lessee shall pay as rent ("Interim Rent") for each unit of Equipment, the
product of the Daily Lease Rate Factor times the Capitalized Lessor's Cost
of such unit times the number of days in the Interim Period. Interim Rent
shall be due on NOT APPLICABLE.
11. Basic Term Rent. Commencing on NOVEMBER 5, 1999 and on the same day of each
month thereafter (each, a "Rent Payment Date") during the Basic Term, Lessee
shall pay as rent ("Basic Term Rent") the product of the Basic Term Lease
Rate Factor times the Capitalized Lessor's Cost of all Equipment on this
Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using straight
line method with respect to the adjusted basis as of the beginning of
such year will yield a larger allowance.
2. Recovery Period: FIVE (5) YEARS.
3. Basis: 100% of the Capitalized Lessor's Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN 1480 S. HOHOKAM DRIVE, TEMPE, MARICOPA
COUNTY, AZ 85281: Lessee agrees that it will not list any of such Equipment for
property tax purposes or report any property tax assessed against such
Equipment until otherwise directed in writing by Lessor. Upon receipt of any
property tax bill pertaining to such Equipment from the appropriate taxing
authority, Lessor will pay such tax and will invoice Lessee for the expense.
Upon receipt of such invoice, Lessee will promptly reimburse Lessor for such
expense.
1
<PAGE> 24
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. ARTICLE 2A
NOTICE IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE
FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE
PERSON(S) SUPPLYING THE EQUIPMENT IS ADVANCED SYSTEMS GROUP, BROADCAST
SOFTWARE INT'L, BROADCAST SUPPLY WORLDWIDE, ENGAGE TECHNOLOGIES, INC., KENT
DATACOMM, ORACLE, PACIFIC RESEARCH & ENGINEERING CORP., VIGNETTE
CORPORATION (THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND
WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY
SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART
OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT
TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN
ACCURATE NAD COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING
ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND
REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR
HEREAFTER CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY
OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION OF
THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
<TABLE>
<CAPTION>
Termination Stipulated Termination Stipulated
Value Loss Value Value Loss Value
Rental Percentage Percentage Rental Percentage Percentage
- ------ ----------- ---------- ------ ----------- ----------
<S> <C> <C> <C> <C> <C>
1 103.568 107.890 19 57.275 68.839
2 101.160 105.844 20 54.534 66.500
3 98.720 103.847 21 51.776 64.144
4 96.262 101.791 22 48.998 61.769
5 93.787 99.718 23 46.203 59.376
6 91.294 97.627 24 43.391 56.966
7 88.784 95.519 25 40.559 54.536
8 86.256 93.394 26 37,709 52,089
9 83.712 91.252 27 34.842 49.624
10 81.149 89.091 28 31.955 47.139
11 78.568 86.913 29 29.048 44.635
12 75.970 84.717 30 26.125 42.114
13 73.353 82.503 31 23.186 39.577
14 70.719 80.271 32 20.230 37.024
15 68.067 78.021 33 17.259 34.455
16 65.396 75.753 34 14.267 31,865
17 62.706 73.465 35 11.258 29.259
18 59.999 71.161 36 8.234 26.637
</TABLE>
* The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the Lease
is for any reason extended, then the last percentage figure shown above shall
control throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
EQUIPMENT SPECIFIC PROVISIONS
The MAINTENANCE Section of the Lease is amended by adding the
following as the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with
all original manufacturer's performance specifications for new Equipment without
expense to Lessor. Lessee shall, if requested by Lessor, obtain a certificate or
service report from the manufacturer attesting to such condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the
existence or the continuation of the existence, of an Environmental Emission
(including, without limitation, a sudden or non-sudden accidental or
non-accidental Environment Emission), of or exposure to, any substance,
chemical, material, pollutant, Contaminant, odor or audible noise or other
release or emission in, into or onto the environment (including, without
limitation, the air, ground, water or any surface) at, in, by, from or related
to any Equipment, (ii) the environment aspect of the transportation, storage,
treatment or disposal of materials in connection with the operation of any
Equipment or (iii) the violation, or alleged violation of any statutes,
ordinances, orders, rules, regulations, permits or licenses of, by or from any
governmental authority, agency or court relating to environmental matters
connected with any
<PAGE> 25
Equipment.
(b) "Affiliate" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person.
(c) "Contaminant" shall refer to those substances which are regulated by
or form the basis of liability under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls ("PCBs"), and radioactive
substances, or other material or substance which has in the past or could in
the future constitute a health, safety or environmental hazard to any Person,
property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation,
notice of violation, claim, demand, abatement or other order on direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, damage to the environment or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon any Adverse Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or in
the air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or local
law, rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 1361 et seq.), and the Occupational Safety
and Health Act (19 U.S.C. Section 651 et seq.), as these laws have been amended
or supplemented, and any analogous foreign, federal, state or local statutes,
and the regulations promulgated pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation, reasonable
attorneys' fees, engineering and other professional or expert fees),
investigation, removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or decrease in value
of the Equipment arising out of or related to any Adverse Environmental
Condition.
(h) "Person" shall include any individual, partnership, corporation,
trust, unincorporated organization, government or department or agency thereof
and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless Lessor and its Affiliates, successors and assigns, directors,
officers, employees and agents from and against any Environmental Claim or
Environmental Loss.
The provisions of this Schedule shall survive any expiration or
termination of the Lease and shall be enforceable by lessor, its successors and
assigns.
RETURN CONDITIONS: In addition to the provisions provided for in the
RETURN OF EQUIPMENT Section of the Lease, and provided that the Lessee has not
elected its option to purchase the Equipment, Lessee shall, at its expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90)
days prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and
serial number of each major component thereof), including, without limitation,
all internal circuit boards, module boards, and software features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and other data
that may be reasonably requested by Lessor concerning the configuration and
operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance
provider acceptable to Lessor that the Equipment (1) has been tested and is
operating in accordance with manufacturers specifications (together with a
report detailing the condition of the Equipment), the results of such test(s)
and inspection(s) and all repairs that were performed as a result of such
test(s) and inspection(s) and (2) that the Equipment qualifies for the
manufacturers used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60)
days prior to the expiration or other termination of the Lease, make the
Equipment available for on-site operational inspection by persons designated by
the Lessor who shall be duly qualified to inspect the Equipment in its
operational environment.
(c) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations and
consistent with the best practices of dealers in used equipment similar to the
Equipment; shall have no Lessee installed markings or labels which are not
necessary for the operation, maintenance or repair of the Equipment; and shall
be in compliance with all applicable governmental laws, rules and regulations.
(d) The Equipment shall be deinstalled and packed by or under the
supervision of the manufacturer or such other person acceptable to Lessor in
accordance with manufacturers recommendations. Without limitation, all internal
fluids will either be drained and disposed of or filled and secured in
accordance with manufacturers recommendations and applicable governmental laws,
rules and regulations.
(e) Provide for transportation of the Equipment in a manner
consistent with the manufacturer's recommendations and practices to any
locations within the continental United States as Lessor shall direct; and
shall have the Equipment unloaded at such locations.
3
<PAGE> 26
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
<TABLE>
<CAPTION>
COMPANY NAME ADDRESS AMOUNT
- ------------ ------- ------
<S> <C> <C>
Advanced Systems Group, Inc. 12405 North Grant Street $286,319.00
Thornton, CO 80241
Broadcast Supply Worldwide 7012 - 27th Street West $ 26,454.24
Tacoma, WA 98466
Broadcast Software International 1925 Bailey Hill Road, Suite A $ 9,426.00
Eugene, OR 97405
Engage Technologies 100 Brookstone Square, 1st Floor $ 52,608.00
Andover, MA 01810
Kent Datacomm P.O. Box 201523 $ 61,634.85
Houston, TX 77216-1523
Oracle Per Wire Instructions: $ 6,976.58
Wells Fargo Bank
Chicago, IL
ABA# 121000248
Account # 4522-020841
Pacific Research & Engineering Corp. 2070 Las Palmas Drive $ 11,555.00
Carlsbad, CA 92009
Vignette Corporation 901 S. MoPac Expwy $593,100.00
Building 3
Austin, TX 78746
</TABLE>
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding
or effective with respect to the Agreement or Equipment until executed on
behalf of Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION goracing.com, inc.
By: By: /s/ CHRIS BESING
-------------------------------- ------------------------------------
Name: Name: CHRIS BESING
------------------------------ ----------------------------------
Title: Title: CEO
----------------------------- ---------------------------------
4
<PAGE> 27
Collateral Schedule A
to
Schedule No. 02
<TABLE>
<CAPTION>
ADVANCED SYSTEMS GROUP
VENDOR
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY HARDWARE SOFTWARE
<S> <C> <C> <C> <C> <C>
===============================================================================================================================
MD-NBS-1500-0 NETBACKUP FOR SUN MEDIA & DOC KIT 1 $ 200.00
SL-NBS1-1500-0 NETBACKUP SERVER LICENSE FOR SUN 2 $11,900.00
DS-NBS1-1500-0 DIRECT ASSIST SUPPORT 2 $ 2,602.00
SL-NBC1-1500-2 NETBACKUP CLIENT/1 LICENSE F/SOLARIS 32 $15,680.00
DS-NBC1-1500-2 DIRECT ASSIST SUPPORT 32 $ 3,424.00
MD-NBC1-1400-0 NBU MEDIA/DOCS (SOLARIS X86) 1 $ 100.00
SL-NBC1-1400-2 NBU CLIENT LIC (SOLARIS X86) 2 $ 980.00
DS-NBC1-1400-2 NBU CLIENT SUPPORT (SOLARIS X86) 2 $ 214.00
MD-NBD1-1500-0 NBU DB EXT MEDIA/DOC KIT-ORACLE, SYSBAS 1 $ 100.00
SL-NBO1-1500-2 NBU DATABASE EXTENSION FOR ORACLE-LI 1 $ 3,500.00
DS-NBO1-1500-2 DIRECT SUPPORT: NBU DATABASE EXTENSION 1 $ 765.00
SL-NHR1-1500-4 NBU ROBOTIC SUPPORT - TIER 4 1 $17,500.00
DS-NHR1-1500-4 NBU SUPPORT - ROBOTICS TIER 4 1 $ 3,825.00
SL-NAR-1500-4 NBU ROBOTIC SUPPORT - TIER 4 2ND CONNEC 1 $ 7,000.00
DS-NAR1-1500-4 NBU SUPPORT - ROBOTICS TIER 4 2ND 1 $ 1,530.00
CS-NBV1-9900-1 VERITAS VAULT EXTENSION 1 $15,000.00
CS-NBV3-9900-1 SUPPORT - VERITAS VAULT EXTENSION 1 $ 2,550.00
99-0161-01 SCALAR 1000 DLT CNTRL MOD, 6 DRIVE BAYS 1 $36,800.00
93-1170-02 SCALAR 100/DLT DRIVE MODULE DLT7000, H 6 $45,000.00
X1065A ULTRA F/W/D SCSI ADAPTER 4 $ 3,936.00
S979A OPT CABLE DSCSI 12M 4 $ 1,060.00
X5235A 9, 1GB, 1000RPM EXP DISK FOR A1000/D10 2 $ 2,070.00
ASG-INSTALL ASG INSTALLATION SERVICES 1 $23,500.00
99-0170-01 SCALAR 1000 ON-SITE INSTALLATION 1 $ 1,500.00
A26-AA-R ENTERPRISE 250 SERVER BASE/RACKMOUNT 2 $ 7,948.00
937h3075
937h307C
X119A 400MHZ-2MB ULTRASPARC - 11 PROCESSOR MO 4 $20,160.00
19316
22770
W/937H3075
W/937H307C
X7004A 256MB FOR ULTRA (2X128MB) 8 $10,800.00
X5234A 9, GB 1000 - RPM ULTRASCSI HARD DRIVE 12 $11,880.00
X3668A PGX32 8BIT COLOR FRAME BUFFER W/ 2 $ 532.00
X9683A REDUNDANT POWER SUPPLY 2 $ 1,252.00
</TABLE>
goracing.com, inc. 1
<PAGE> 28
Collateral Schedule A
to
Schedule No. 02
ADVANCED SYSTEMS GROUP
<TABLE>
<CAPTION>
VENDOR
SERIAL NUMBER ITEM # DESCRIPTION QUANTITY HARDWARE SOFTWARE
- ------------- ----------------- ----------------------------------------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
X1032A 100BT & F/W SCSI PCI ADAPTER 2 $1,512.00
SL-WEB1-1500-1 WEB EDITION - LICENSE ONLY, TIER 2 W/V 2 $7,744.00
DS-WEB1-1500-1 WEB EDITION - DIRECT ASSIST SUPPORT ON 2 $1,834.00
X311L POWER CORD 4 $ --
IS-ESB ENTERPRISE SYSTEM BUILD BY ACCESS INTE 2 $ --
ASG-INSTALL ASG INSTALLATION SERVICES 2 $3,990.00
SUN-SPECTRUM13 SUN SPECTRUM MAINTENANCE 2 $3,876.00
A21UHC1A9P-B256CP ULTRA 5, 333MHZ, 256MB, 9GB, CD, PGX G 1 $3,641.00
X7119A 19" COLOR MONITOR 1 $ 711.00
ISOL-2.6-USL-P SOLARIS 2.6 FOR X86 WGS MEDIA, LICENSE 3 $2,085.00
X3515A UNIX TYPE-6 KEYBOARD - U.S./IN AMERICAN 1 $ --
SUN-SPECTRUM17 SUN SPECTRUM MAINTENANCE 1 $ 429.00
ASG-INSTALL ASG INSTALLATION SERVICES 1 $ 995.00
SG-XARY030A 72" STOREGE EXPANSION RACK 2 $5,700.00
X9818A FRONT DOOR ASSEMBLY FOR 72" CABINET 1 $ 494.00
X3858A POWER CORD FOR A3500, DOMESTIC 2 $ --
Invoice #
006655-6714-6718-6719F
</TABLE>
goracing.com,inc. 2
<PAGE> 29
Collateral Schedule A
to
Schedule No. 02
BROADCAST SOFTWARE INTERNATIONAL
<TABLE>
<CAPTION>
VENDOR
SERIAL NUMBER ITEM # DESCRIPTION QUANTITY HARDCOST SOFTWARE
- ------------- ----------------- ----------------------------------------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
WSR WaveStation-Digital Audio Automation 1 $900.00
STR STINGER 2 $398.00
CMR Call Master 1 $349.00
CPRO Cool Edit Pro 1.1 1 $349.00
ASI4113 AudioScience ASI4113 - Triple Play, 3 $7,185.00
Single Record Balanced Audio Adaptor
Tele.Training Telephone Training - Buy 2 hours get 1 hour 2 $100.00
free special
Shipping Prep, Handling & Insured Shipping $ 46.00
</TABLE>
3
<PAGE> 30
Collateral Schedule A
to
Schedule No. 02
BROADCAST SUPPLY WORLDWIDE
<TABLE>
<CAPTION>
SERIAL NUMBER VENDOR ITEM # DESCRIPTION QUANTITY HARDCOST SOFTWARE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DNM2000R MINIDISC DJ RECORDER/PLAYER 3 $1,866.00
DN2500F CD PLAYER, DUAL TRANSPORT DJ 2 $1,992.28
K240M HEADPHONE 6 $ 450.00
610 BROADCAST AUDIO DELAY 1 $2,194,00
501 SINGLE CHANNEL COMP/LIMITER 2 $ 596.00
2200 OPTIMOD, FM ANALOG I/O 1 $3,670,00
HSC200SR BROADCAST ELECTRET HEADSET 2 $ 370.00
DT190 HEADSET W/INSTALLED CONNECTO 4 $1,096,00
RE20 MICROPHONE, DYNAMIC CARDIOID 6 $2,220.00
309A SHOCK MOUNT FOR RE20 6 $ 549.90
MS12C MIC STAND, FLOOR 3 $ 65.16
LM1-3BLK MIC BOOM, HEAVY DUTY 3LB, BLA 5 $ 244.20
WS1BLU WINDSCREEN, RE20/MD421U-NAVY 3 $ 49.56
WS1GR WINDSCREEN, RE20/MD421U-GREEN 3 $ 49.56
M25 MIC CABLE, 25' LOW Z #SMM25 5 $ 35.65
M10 MIC CABLE, 10' LOW Z #SMM10 5 $ 34.80
SMM5 MIC CABLE, MALE TO FEMALE XLR 5 $ 29.40
420 AMPLIFIER, POWER-STEREO 2 $ 597.68
NS10MS SPEAKERS, MONITOR-PAIR 2 $ 654.00
HA6A AMPLIFIER, HEADPHONE 1 $ 274.00
528E VOICE PROCESSOR 2 $1,032.00
8451BLKBOX CABLE, IN BOX, 1000' - BLACK 1 $ 80.00
CW2K12X12CH CUTTING WEDGE 2000, 12" X 12" - CHA 256 $ 596.48
CW2K2X4CH CUTTING WEDGE 2000, 2 X 4 - CHARC 128 $2,387.20
FREIGHT CHAR MISC. FREIGHT CHARGE 1 $ 350.00
220 DIRECT INTERFACEMODULE (DIM) 1 $1,691.00
310 SWITCH CONSOLE 1 $ 600.00
140 DIGITAL HYBRID, 200 DELTA 1 $1,636.00
900# TELOS MYTEL 0702-000 1 $ 270.00
AW LIGHT, ON AIR, SINGLE LENDS, WAL 1 $ 97.91
RW LIGHT, RECORDING, SINGLE LENS 1 $ 97.91
AC LIGHT, ON AIR, DUAL LENS, WALL 1 $ 115.51
RC LIGHT, RECORDING, SUAL LENDS, WALL 2 $ 231.02
900# PROLITE BC BLACK CEILING DOUB 2 $ 231.02
</TABLE>
goracing.com, inc. 4
<PAGE> 31
Collateral Schedule A
to
Schedule No. 02
ENGAGE TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
SERIAL NUMBER VENDOR ITEM # DESCRIPTION QUANTITY HARDCOST SOFTWARE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Accipiter Gold License Upgrade 1 $32,600.00
Pro-rated Support Contract Upgrade (Until 11/31/1 1 $ 1,358.00
Annual Support Contract (Until 11/3/2000) 1 $11,150.00
Consulting for transition to UNIX 5 $ 7,500.00
</TABLE>
goracing.com, inc. 5
<PAGE> 32
Collateral Schedule A
to
Schedule No. 02
<TABLE>
<CAPTION>
KENT DATACOMM
VENDOR
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY HARDWARE SOFTWARE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NM-16AM= 16 Port Analog Modem Network Module, Spare 1 $ 3,168.00
WIC-1DSU-T1= 1-Port T1/Fractional T1 DSU/CSU WAN Interface Card 1 $ 720.00
CSNT-2.3 CiscoSecure ACS V2.3 for Windows NT 1 $ 3,240.00
WS-G5484= 1000BASE-SX "Short Wavelength GBIC" (Mullimode on) 10 $ 3,600.00
WS-X6248-RJ-45= Catalyst 6000 48-port 10/100 RJ-45 Module, Spare 3 $28,069.20
15951 DalaSMART T3/E3 IDSU, AC 2 $ 6,892.50
C7200-I/O= Cisco 7200 Input/Output Controller, Spare 2 $ 1,440.00
RETURN - C7200-I/O-FE Cisco 7200 Input/Output Controller with Fast Ethernet Port 2 $(3,600.00)
MEM-SD-NPE-128MB 128MB Memory Upgrade Kit for NPE-30 2 $ 3,456.00
WS-X6302-MSM Catalyst 6000 Multilayer Switch Module 1 $14,396.40
SFC6-MSM-12.0.1W Catalyst 6000 MSM IP/IP-Multicast Routing Feature Set 1 $ --
WS-X6302-MSM Catalyst 6000 Multilayer Switch Module 1 $ --
SFC6-MSM-12.0.1W Catalyst 6000 MSM IP/IP-Multicast Routing Feature Set 1 $ --
Shipping $252.75
</TABLE>
goracing.com, inc. 6
<PAGE> 33
Collateral Schedule A
to
Schedule No. 02
<TABLE>
<CAPTION>
ORACLE
VENDOR
SERIAL NUMBER ITEM# DESCRIPTION QUANTITY HARDCOST SOFTCOST
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Silver Advance Service for Oracle Design 1 $1,680.00
Designer & Oracle Toos CD Pack v1 for 1 $5,296.58
Microsoft Windows 95/98/N
</TABLE>
goracing.com, inc. 7
<PAGE> 34
Collateral Schedule A
to
Schedule No. 02
<TABLE>
<CAPTION>
PACIFIC RESEARCH & ENGINEERING
VENDOR
SERIAL NUMBER ITEM # DESCRIPTION QUANTITY HARDCOST SOFT COST
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
99-970-1 12-Input Airwave Mainframe Assembly 1 $ 3,439.00
99-962 Stereo Line Input Module 11 $ 6,006.00
99-963 Telephone Line Input/Mix-Minus Output Module 1 $ 615.00
99-1109 Audio Wiring System for Airwave-12 Console 1 $ 1,495.00
</TABLE>
goracing.com, inc. 8
<PAGE> 35
Collateral Schedule A
to
Schedule No. 02
<TABLE>
<CAPTION>
VIGNETTE CORPORATION
VENDOR
SERIAL NUMBER ITEM # DESCRIPTION QUANTITY PRICE/EA. HARDCOST SOFT COST
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SS-Department StoryServer Live Delivery Server License 2 $100,000.00 $200,000.00
Page Views-2000K StoryServer Page View License 2000K/Day 6 $40,000.00 $240,000.00
SS-Developer-5VDC-5 StoryServer Template Developer License 1 $20,000.00
SS-SM StoryServer Updates and Web-Based Support 1 $107,100.00
SS-TS-2 StoryServer Phone Support 1 $10,000.00
VT-CSS0S4 StoryServer Training 1 $16,000.00
</TABLE>
goracing.com, inc. 9
<PAGE> 36
(8/91) ANNEX C
TO
SCHEDULE NO. 02
TO MASTER LEASE AGREEMENT
DATED AS OF August 9, 1999
CERTIFICATE OF ACCEPTANCE
To: GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and
assigns, if any, "LESSOR")
Pursuant to the provisions of the above schedule and lease (collectively,
the "LEASE"), Lessee hereby certifies and warrants that (a) all Equipment
listed below has been delivered and installed (if applicable); (b) Lessee has
inspected the Equipment, and all such testing as it deems necessary has been
performed by Lessee, Supplier or the manufacturer; (c) Lessee accepts the
Equipment for all purposes of the Lease, the purchase documents and all
attendant documents; and (d) the Equipment was first delivered to Lessee within
ten (10) days of the date hereof.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
DESCRIPTION OF EQUIPMENT
<TABLE>
<CAPTION>
NUMBER
OF UNITS MANUFACTURER SERIAL NUMBERS MODEL AND TYPE OF EQUIPMENT
- -------- ------------ -------------- ---------------------------
<S> <C> <C> <C>
Numerous Computers, software and the various
equipment needed for installation
and running of the system.
</TABLE>
SEE COLLATERAL SCHEDULE A ATTACHED TO EQUIPMENT SCHEDULE NO. 2 FOR THE
VARIOUS EQUIPMENT SOFTWARE AND COST.
Equipment immediately listed above is located at: 1480 S. Hohokam Drive, Tempe,
Maricopa County, AZ 85281
goracing.com, inc.
By: /s/ Chris Besing
---------------------
Title: Chris Besing CEO
---------------------
Dated: 11/5/99
---------------------
<PAGE> 37
[GE logo] General Electric Capital Corporation
- --------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------
Billing Id. Invoice No. Due Date
------------------------------------------------------
<S> <C> <C>
4092172-02 11/05/1999
------------------------------------------------------
Current Due Total Due
------------------------------------------------------
$ $34,660.52
------------------------------------------------------
</TABLE>
MAKE CHECKS PAYABLE AND REMIT TO:
GENERAL ELECTRIC CAPITAL CORPORATION
5400 LBJ FREEWAY, SUITE 1280,
ONE LINCOLN CENTRE, L.B.3
DALLAS, TX 75240
ATTN: VICKI A. BRACHES
goracing.com,inc.
1480 Hohokam Drive
Tempe, AZ 85281
Attn: Dean Jargo
To ensure proper credit-detach along dotted line and return upper portion with
payment.
Please do not staple or fold.
- --------------------------------------------------------------------------------
[GE logo] General Electric Capital Corporation
________________________________________________________________________________
<TABLE>
<CAPTION>
BILLING ID. CUSTOMER NO. OFFICE ID. CUSTOMER SERVICE
<S> <C> <C> <C>
4092172-002 8230 1-800-YES-GECC
INVOICE NO. INVOICE DATE DUE DATE TOTAL DUE
11/03/99 11/05/99 $34,660.52
</TABLE>
goracing.com,inc.
1480 Hohokam Drive
Tempe, AZ 85281
Attn: Dean Jargo
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ACCOUNT DUE DATE DESCRIPTION AMOUNT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4092172-002 11/03/99 1st Payment $31,806.82
Sales Tax @ 7.40% $ 2,353.70
Documentation Fee $ 500.00
- --------------------------------------------------------------------------------------------------------
</TABLE>
RETAIN THIS PORTION
<PAGE> 38
hSLB/CS(R062599)
FURNITURE SCHEDULE
SCHEDULE NO. 003
DATED THIS 12/29/99
TO MASTER LEASE AGREEMENT
DATED AS OF August 9, 1999
<TABLE>
<CAPTION>
Lessor & Mailing Address: Lessee & Mailing Address:
- ------------------------- -------------------------
<S> <C>
GENERAL ELECTRIC CAPITAL CORPORATION goracing.com, inc.
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY SUITE 1280, L.B. 3 4707 E. BASELINE ROAD
DALLAS, TX 75240 PHOENIX, AZ 85040
</TABLE>
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSOR'S COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
<S> <C> <C> <C> <C>
1 $800,000.00 Misc. Furniture & Fixtures All of Debtor's now owned and hereafter
acquired furniture and fixtures, together
with all parts, attachments, accessories,
substitutions, repairs, improvements and
replacements thereto, and any proceeds
thereof, including but not limited to
insurance proceeds.
</TABLE>
Equipment immediately listed above is located at: 1480 S. Hohokam Drive,
Tempe, Maricopa County, AZ 85281
B. FINANCIAL TERMS
<TABLE>
<S> <C>
1. Advanced Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date: JANUARY 2, 2000
2. Capitalized Lessor's Cost: $800,000.00 6. Lessee Federal Tax ID No.: 860956244
3. Basic Term (No. of Months): 60 MONTHS. 7. Last Delivery Date: DECEMBER 29, 1999
4. Basic Term Lease Rate Factor: 1.8941903% 8. Daily Lease Rate Factor: .0613968%
</TABLE>
9. First Termination Date: Thirty-six (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on JANUARY 1, 2000.
11. Basic Term Rent. Commencing on JANUARY 2, 2000 and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic
Term, Lessee shall pay as rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
2. Recovery Period: 7 YEARS
3. Basis: 100% OF THE CAPITALIZED LESSOR'S COST.
<PAGE> 39
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED AT 1480 S. HOHOKAM DRIVE, TEMPE, MARICOPA
COUNTY, AZ 85281: Lessee agrees that it will not list any of such Equipment for
property tax purposes or report any property tax assessed against such Equipment
until otherwise directed in writing by Lessor. Upon receipt of any property tax
bill pertaining to such Equipment from the appropriate taxing authority, Lessor
will pay such tax and will invoice Lessee for the expense. Upon receipt of such
invoice, Lessee will promptly reimburse Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE
AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS goracing.com,inc. (THE "SUPPLIER(S)"), (B) LESSEE IS
ENTITLED TO THE PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY,
PROVIDED TO THE LESSOR BY SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN
CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE
EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH
SUPPLIER(S) AND RECEIVE AN ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND
WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS
AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF
LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION OF THE
AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
<TABLE>
<CAPTION>
Termination Stipulated Termination Stipulated
Value Loss Value Value Loss Value
Rental Percentage Percentage Rental Percentage Percentage
<C> <C> <C> <C> <C> <C>
1 103.721 107.735 31 64.317 70.435
2 102.601 106.685 32 62.842 69.031
3 101.452 105.607 33 61.359 67.618
4 100.273 104.498 34 59.867 66.196
5 99.083 103.377 35 58.362 64.762
6 97.881 102.246 36 56.849 63.319
7 96.668 101.102 37 55.327 61.867
8 95.443 99.948 38 53.793 60.403
9 94.207 98.783 39 52.247 58.927
10 92.960 97.605 40 50.693 57.443
11 91.701 96.417 41 49.131 55.951
12 90.431 95.217 42 47.560 54.451
13 89.149 94.005 43 45.982 52.943
14 87.856 92.782 44 44.392 51.422
15 86.552 91.548 45 42.793 49.894
16 85.238 90.305 46 41.186 48.357
17 83.915 89.052 47 39.568 46.809
18 82.582 87.789 48 37.946 45.257
19 81.239 86.516 49 36.313 43.694
20 79.885 85.232 50 34.669 42.121
21 78.521 83.938 51 33.014 40.536
22 77.147 82.634 52 31.348 38.941
23 75.762 81.319 53 29.671 37.334
24 74.367 79.994 54 27.983 35.716
25 72.961 78.659 55 26.284 34.087
26 71.545 77.313 56 24.573 32.446
27 70.116 75.954 57 22.851 30.794
28 68.679 74.587 58 21.117 29.131
29 67.234 73.212 59 19.372 27.456
30 65.779 71.828 60 17.615 25.769
</TABLE>
<PAGE> 40
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead:
(b) The obligation of Lessor to purchase the Equipment from Lessee and
to lease the same to Lessee shall be subject to receipt by Lessor, on or
prior to the earlier of the Lease Commencement Date or Last Delivery Date
therefor, of each of the following documents in form and substance
satisfactory to Lessor: (i) a Schedule for the Equipment (ii) evidence of
insurance which complies with the requirements of the INSURANCE Section of
the Lease, and (iii) such other documents as Lessor may reasonably request.
Once the Schedule is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease
shall be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction and
the Equipment is in Lessee's possession as of the Lease Commencement
Date.
3. BILL OF SALE
Lessee, in consideration of the Lessor's payment of the amount set
forth in B 2 above, which includes any applicable sales taxes (which
payment Lessee acknowledges), hereby grants, sells, assigns, transfers and
delivers to Lessor the Equipment along with whatever claims and rights
Seller may have against the manufacturer and/or Supplier of the Equipment,
including but not limited to all warranties and representations. At Lessors
request Lessee will cause Supplier to deliver to Lessor a written statement
wherein the Supplier (i) consents to the assignment to Lessor of whatever
claims and rights Lessee may have against the Supplier, (ii) agrees not to
retain any security interest, lien or other encumbrance in or upon the
Equipment at any time, and to execute such documents as Lessor may request
to evidence the release of any such encumbrance, and (iii) represents and
warrants to Lessor (x) that Supplier has previously conveyed full title to
the Equipment to Lessee, (y) that the Equipment was delivered to Lessee and
installation completed, and (z) that the final purchase price of the
Equipment (or a specified portion of such purchase price) has been paid by
Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant
to the Lease. Lessee represents and warrants to Lessor that (i) Lessor will
acquire by the terms of this Bill of Sale good title to the Equipment free
from all liens and encumbrances whatsoever; (ii) Lessee has the right to
sell the Equipment; and (iii) the Equipment has been delivered to Lessee in
good order and condition, and conforms to the specifications, requirements
and standards applicable thereto; and (iv) the equipment has been
accurately labeled, consistent with the requirements of 40 CFR part 82
Subpart E, with respect to products manufactured with a controlled
(ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any
and all federal, state, municipal and local license fees and taxes of any
kind or nature, including, without limiting the generality of the
foregoing, any and all excise, personal property, use and sales taxes, and
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions and suits resulting therefrom and imposed upon,
incurred by or asserted against Lessor as a consequence of the sale of the
Equipment to Lessor.
4. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this
Schedule, Lessee hereby certifies and warrants that (i) all Equipment
listed above has been delivered and installed (if applicable); (ii) Lessee
has inspected the Equipment, and all such testing as it deems necessary has
been performed by Lessee, Supplier or the manufacturer; and (iii) Lessee
accepts the Equipment for all purposes of the Lease, the purchase documents
and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; (ii) the representations and warranties
made by Lessee pursuant to or under the Lease are true and correct on the
date hereof and (iii) Lessee has reviewed and approves of the purchase
documents for the Equipment, if any.
5. EQUIPMENT SPECIFIC PROVISIONS
RETURN PROVISIONS: In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that Lessee has elected not
to exercise its option to purchase the Equipment, Lessee shall, at its
expense:
(a) at least ninety (90) days and not more than one hundred twenty
(120) days prior to lease termination: (i) ensure Equipment has been
maintained, and is operating, within manufacturer's specifications; and;
(ii) cause manufacturer's representative or other qualified maintenance
provider, acceptable to Lessor, to perform a physical inspection and test
of all the components and capabilities of the Equipment and provide a full
inspection report to Lessor, and
<PAGE> 41
that there shall be no missing screws, bolts, fasteners, etc.; the furniture
will be free from all large scratches, marks, gouges, dents, discoloration or
stains; all drawers, runners, and locks will be in good working condition to
include keys; and there shall be no evidence of extreme use or overloading,
i.e. bowed or sagging shelves; (iii) if during such inspection the Equipment is
found not to be in compliance with the above, then Lessee shall remedy them per
the Lease Agreement and provide a follow-up inspection to verify the Equipment
meets the return provisions.
(b) Upon lease termination, Lessee shall (i) have the manufacturer's
representative or other person acceptable to Lessor de-install all Equipment
including all wire, cable, and mounting hardware; (ii) if applicable, ensure
all necessary permits and labor are obtained to deliver the Equipment; (iii)
the Equipment shall be packed properly and in accordance to the manufacturer's
recommendations; (iv) the Lessee shall provide for the transportation of the
Equipment in a manner consistent with the manufacturer's recommendations and
practices to any locations within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such locations; (v) at
Lessor's choice, either (1) allow Lessor, at Lessor's expense, and provided
Lessor has provided reasonable notice to Lessee, to arrange for an on-site
auction of the Equipment which will be conducted in a manner that will not
interfere with the Lessee's business operations, or (2) Lessee shall provide
free safe storage for the Equipment for a period not to exceed sixty (60) days
from the Lease expiration.
6. LEASE TERM OPTIONS
EARLY LEASE TERM OPTIONS
The Lease is hereby amended by adding the following to the end thereof:
CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly provided that all
of the terms and conditions of this Provision are fulfilled, Lessee may cancel
the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of any one of the Cancellation Dates set forth below (each, a
"Cancellation Date") upon at least 90 days prior written notice (the "Notice
Date") to Lessor (which notice shall be irrevocable and shall be sent to the
attention of Lessor's Asset Management Organization, 44 Old Ridgebury Road,
Danbury, CT 06810-5105). Such notice shall state the Cancellation Date, which
shall apply. If all of the terms and conditions of this Provision are not
fulfilled, this Lease shall continue in full force and effect and Lessee shall
continue to be liable for all obligations thereunder, including, without
limitation, the obligation to continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value
(set forth below for the applicable Cancellation Date) for the Equipment, plus
(B) all rent and all other sums due and unpaid as of the Cancellation Date
(including, but not limited to, any Rent payment due and payable on the
Cancellation Date and any sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified by
an independent appraiser selected by Lessor (reasonably acceptable to Lessee)
to determine that the Equipment is in such compliance, which determination
shall be final, binding and conclusive. Lessee shall bear all costs associated
with such appraiser's determination and such costs, if any, to cause the
Equipment to be in full compliance with the RETURN OF EQUIPMENT Section of the
Lease on or prior to such Cancellation Date.
(c) The Cancellation Dates and the applicable Cancellation Values are as
set forth below:
January 2, 2001 74.277% of Capitalized Lessors Costs
(d) Lessee shall, from the applicable Notice Date through the Cancellation
Date,
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the applicable Cancellation Date through the earlier
of the date the Equipment is sold by Lessor to a third party or 30 days
following the Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor
to market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
<PAGE> 42
(f) The proceeds of any sale or re-lease of the Equipment after
Lessee has exercised its Cancellation Option shall be for the sole benefit
of Lessor and Lessee shall have no interest in or any claim upon any of
such proceeds.
The Lease is amended by adding the following thereto:
EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been earlier terminated and
provided further that Lessee is not in default under the Lease or any other
agreement between Lessor and Lessee, Lessee may, UPON AT LEAST 30 DAYS BUT
NO MORE THAN 270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S
IRREVOCABLE ELECTION TO EXERCISE SUCH OPTION, purchase on an AS IS BASIS
all (but not less than all) of the Equipment listed and described in this
Schedule on the rent payment date (the "Early Purchase Date") which is 48
months from the Basic Term Commencement Date for a price equal to
THIRTY-THREE AND 32/100 percent (33.32%) of the Capitalized Lessor's Cost
(the "FMV Early Option Price"), plus all applicable sales taxes.
Lessor and Lessee agree that the FMV Early Option Price is a reasonable
prediction of the Fair Market Value (as such term is defined in the
PURCHASE OPTION Section subsection (b) of the Lease hereof) of the
Equipment at the time the option is exercisable. Lessor and Lessee agree
that if Lessee makes any non-severable improvement to the Equipment which
increases the value of the Equipment and is not required or permitted by
the MAINTENANCE Section or the RETURN OF EQUIPMENT Section of the Lease
prior to lease expiration, then at the time of such option being exercised,
Lessor and Lessee shall adjust the purchase price to reflect any addition
to the price anticipated to result from such improvement. (The purchase
option granted by this subsection shall be referred to herein as the "Early
Purchase Option".)
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment leased hereunder, then on the Early Purchase Option Date, Lessee
shall pay to Lessor any Rent and other sums due and unpaid on the Early
Purchase Option Date and Lessee shall pay the FMV Early Option Price, plus
all applicable sales taxes, to Lessor in cash.
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
---------------------------------------------------------------------------
goracing.com, inc. 4707 E. Baseline Road $800.000.00
Phoenix, AZ 85040
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding
or effective with respect to the Agreement or Equipment until executed on
behalf of Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation goracing.com, inc.
By: /s/ Arthur G. Abello By: /s/ David Husband
----------------------------------- -----------------------------------
Name: Arthur G. Abello Name: David Husband
Title: Senior Risk Analyst Title: CFO Action Performance
<PAGE> 43
[ACTION PERFORMANCE COMPANIES, INC. LETTERHEAD]
December 27, 1999
GE Capital Corp.
426 N. 44th St
Suite 495
Phoenix, AZ 85008
To Whom It May Concern:
As Chairman of the Board and CEO of Action Performance Companies, Inc.
("Action"), I hereby affirm that David Husband is an authorized officer of
Action, and therefore is allowed to execute agreements on behalf of Action and
its wholly owned subsidiaries. These subsidiaries include goracing.com, inc.
and this mandate provides David Husband the authorization to execute agreements
on behalf of goracing and/or obligate Action to guarantee funds of goracing, to
any of its vendors, including GE Capital Corporation.
Sincerely,
Action Performance Companies, Inc.
/s/ Fred W. Wagenhals
___________________________
Fred W. Wagenhals
C.E.O.
<PAGE> 44
SLB/CS(R062599) [BAR CODE]
FURNITURE SCHEDULE
SCHEDULE NO. 004
DATED THIS JAN. 24, 2000
TO MASTER LEASE AGREEMENT
DATED AS OF AUGUST 9, 1999
<TABLE>
<CAPTION>
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
- ------------------------- -------------------------
<S> <C>
GENERAL ELECTRIC CAPITAL CORPORATION goracing.com, inc.
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY SUITE 1280, L.B. 3 4707 E. BASELINE ROAD
DALLAS, TX 75240 PHOENIX, AZ 85040
</TABLE>
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes
a separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "EQUIPMENT").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSOR'S COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
- -------- ------------- ------------ ------------- ---------------------------
<S> <C> <C> <C> <C>
1 $583,097.00 Misc. Furniture & Fixtures All of Debtor's now owned and
hereafter acquired furniture
and fixtures, together with all
parts, attachments, accessories,
substitutions, repairs, improvements
and replacements thereto, and any
proceeds thereof, including but not
limited to insurance proceeds.
</TABLE>
Equipment immediately listed above is located at: 1480 S. Hohokam Drive,
Tempe, Maricopa County, AZ 85281
B. FINANCIAL TERMS
<TABLE>
<S> <C> <C> <C>
1. Advance Rent (if any): NOT APPLICABLE 5. Basic Term Commencement Date: FEBRUARY 1, 2000
2. Capitalized Lessor's Cost: $583,097.00 6. Lessee Federal Tax ID No.: 860956244
3. Basic Term (No. of Months): 60 Months. 7. Last Delivery Date: JANUARY 24, 2000
4. Basic Term Lease Rate Factor: 1.897760% 8. Daily Lease Rate Factor: .063259%
</TABLE>
9. First Termination Date: THIRTY-SIX (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement date
to but not including the Basic Term Commencement Date ("Interim Period"),
Lessee shall pay as rent ("Interim Rent") for each unit of Equipment, the
product of the Daily Lease Rate Factor times the Capitalized Lessor's Cost
of such unit times the number of days in the Interim Period. Interim Rent
shall be due on JANUARY 31, 2000.
11. Basic Term Rent. Commencing on FEBRUARY 1, 2000 and on the same day of each
month thereafter (each, a "Rent Payment Date") during the Basic Term,
Lessee shall pay as rent ("Basic Term Rent") the product of the Basic Term
Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
2. Recovery Period: 7 YEARS.
3. Basis: 100% of the Capitalized Lessor's Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN 1480 S. HOHOKAM DRIVE, TEMPE, MARICOPA
COUNTY, AZ 85281: Lessee agrees that it will not list any of such Equipment
for property tax purposes or report any property tax assessed against such
Equipment until otherwise directed in writing by Lessor. Upon receipt of
any property tax bill pertaining to such Equipment from the appropriate
taxing authority, Lessor will pay such tax and will invoice Lessee for the
expense. Upon receipt of such invoice, Lessee will promptly reimburse
Lessor for such expense.
<PAGE> 45
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS goracing.com, inc. (THE "SUPPLIER(S)"), (B)
LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY
THIRD PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S), WHICH IS SUPPLYING THE
EQUIPMENT IN CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR
ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT LESSEE MAY
COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN ACCURATE AND COMPLETE STATEMENT
OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS
OF THEM OR OF REMEDIES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE
HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN
ARTICLE 2A AND ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR
OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES
UNDER THE DEFAULT AND REMEDIES SECTION OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
<TABLE>
<CAPTION>
TERMINATION STIPULATED TERMINATION STIPULATED
VALUE LOSS VALUE VALUE LOSS VALUE
RENTAL PERCENTAGE PERCENTAGE RENTAL PERCENTAGE PERCENTAGE
<S> <C> <C> <C> <C> <C>
1 103.413 107.427 31 64.893 70.900
2 102.283 106.364 32 63.428 69.502
3 101.145 105.292 33 61.953 68.093
4 99.998 104.211 34 60.465 66.671
5 98.842 103.122 35 58.965 65.238
6 97.677 102.023 36 57.455 63.794
7 96.500 100.913 37 55.931 62.337
8 95.315 99.794 38 54.404 60.877
9 94.121 98.667 39 52.876 59.415
10 92.915 97.527 40 51.336 57.941
11 91.700 96.379 41 49.784 56.456
12 90.476 95.221 42 48.220 54.958
13 89.240 94.051 43 46.644 53.449
14 87.992 92.870 44 45.056 51.927
15 86.732 91.676 45 43.455 50.392
16 85.460 90.470 46 41.842 48.846
17 84.174 89.251 47 40.216 47.286
18 82.877 88.020 48 38.578 45.714
19 81.567 86.777 49 36.927 44.130
20 80.244 85.521 50 35.263 42.533
21 78.909 84.252 51 33.587 40.922
22 77.562 82.971 52 31.897 39.299
23 76.202 81.677 53 30.194 37.662
24 74.828 80.370 54 28.478 36.013
25 73.443 79.051 55 26.748 34.350
26 72.045 77.720 56 25.006 32.673
27 70.636 76.378 57 23.249 30.983
28 69.217 75.025 58 21.479 29.280
29 67.787 73.661 59 19.695 27.563
30 66.346 72.287 60 17.898 25.831
</TABLE>
* The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead:
<PAGE> 46
b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or prior to
the earlier of the Lease Commencement Date or Last Delivery Date therefor, of
each of the following documents in form and substance satisfactory to Lessor:
(i) a Schedule for the Equipment (ii) evidence of insurance which complies with
the requirements of the INSURANCE Section of the Lease, and (iii) such other
documents as Lessor may reasonably request. Once the Schedule is signed, the
Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease shall
be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.
3. BILL OF SALE
Lessee, in consideration of the Lessor's payment of the amount set forth
in B 2. above, which includes any applicable sales taxes (which payment Lessee
acknowledges), hereby grants, sells, assigns, transfers and delivers to Lessor
the Equipment along with whatever claims and rights Seller may have against the
manufacturer and/or Supplier of the Equipment, including but not limited to all
warranties and representations. At Lessors request Lessee will cause Supplier
to deliver to Lessor a written statement wherein the Supplier (i) consents to
the assignment to Lessor of whatever claims and rights Lessee may have against
the Supplier, (ii) agrees not to retain any security interest, lien or other
encumbrance in or upon the Equipment at any time, and to execute such documents
as Lessor may request to evidence the release of any such encumbrance, and
(iii) represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final purchase
price of the Equipment (or a specified portion of such purchase price) has been
paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant to
the Lease. Lessee represents and warrants to Lessor that (i) Lessor will
acquire by the terms of this Bill of Sale good title to the Equipment free from
all liens and encumbrances whatsoever, (ii) Lessee has the right to sell the
Equipment; and (iii) the Equipment has been delivered to Lessee in good order
and condition, and conforms to the specifications, requirements and standards
applicable thereto; and (iv) the equipment has been accurately labeled,
consistent with the requirements of 40 CFR part 82 Subpart E, with respect to
products manufactured with a controlled (ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and
all federal, state, municipal and local license fees and taxes of any kind or
nature, including, without limiting the generality of the foregoing, any and
all excise, personal property, use and sales taxes, and from and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions
and suits resulting therefrom and imposed upon, incurred by or asserted against
Lessor as a consequence of the sale of the Equipment to Lessor.
4. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above has
been delivered and installed (if applicable); (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier or the manufacturer; and (iii) Lessee accepts the Equipment
for all purposes of the Lease, the purchase documents and all attendant
documents.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
5. EQUIPMENT SPECIFIC PROVISIONS
RETURN PROVISIONS: In addition to the provisions provided for in the RETURN OF
EQUIPMENT Section of the Lease, and provided that Lessee has elected not to
exercise its option to purchase the Equipment, Lessee shall, at its expense:
(a) at least ninety (90) days and not more than one hundred twenty (120)
days prior to lease termination: (i) ensure Equipment has been maintained, and
is operating, within manufacturer's specifications; and; (ii) cause
manufacturer's representative or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and test of all the
components and capabilities of the Equipment and provide a full inspection
report to Lessor, and that there shall be no missing screws, bolts, fasteners,
etc.; the furniture will be free from all large scratches, marks, gouges,
dents, discoloration or stains; all drawers, runners, and locks will be in good
working condition to include keys; and there shall be no evidence of extreme
use or overloading, i.e. bowed or sagging shelves; (iii) if during such
inspection the Equipment is found not to be in compliance with the above, then
Lessee shall remedy them per the Lease Agreement and provide a follow-up
inspection to verify the Equipment meets the return provisions.
(b) Upon lease termination, Lessee shall (i) have the manufacturer's
representative or other person acceptable to Lessor de-install all Equipment
including all wire, cable, and mounting hardware; (ii) if applicable, ensure
all necessary permits and labor are obtained to deliver the Equipment; (iii)
the Equipment shall be packed properly and in accordance to the manufacturer's
recommendations; (iv) the Lessee shall provide for the transportation of the
Equipment in a manner consistent with the manufacturer's recommendations and
practices to any locations within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such locations; (v) at
Lessor's choice, either (1) allow Lessor, at Lessor's expense, and provided
Lessor has provided reasonable notice to Lessee, to arrange for an on-site
auction of the Equipment which will be conducted in a manner that will not
interfere with the Lessee's business operations, or (2) Lessee shall provide
free safe storage for the Equipment for a period not to exceed sixty (60) days
from the Lease expiration.
6. LEAST TERM OPTIONS
Early Lease Term Options
The Lease is hereby amended by adding the following to the end thereof:
CANCELLATION OPTION:
<PAGE> 47
(a) So long as no default exists hereunder and expressly provided that all
of the terms and conditions of this Provision are fulfilled, Lessee may cancel
the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of any one of the Cancellation Dates set forth below (each, a
"Cancellation Date") upon at least 90 days prior written notice (the "Notice
Date") to Lessor (which notice shall be irrevocable and shall be sent to the
attention of Lessor's Asset Management Organization, 44 Old Ridgebury Road,
Danbury, CT 06810-5105). Such notice shall state the Cancellation Date which
shall apply. If all of the terms and conditions of this Provision are not
fulfilled, this Lease shall continue in full force and effect and Lessee shall
continue to be liable for all obligations thereunder, including, without
limitation, the obligation to continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value
(set forth below for the applicable Cancellation Date) for the Equipment, plus
(B) all rent and all other sums due and unpaid as of the Cancellation Date
(including, but not limited to, any Rent payment due and payable on the
Cancellation Date and any sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified by
an independent appraiser selected by Lessor (reasonably acceptable to Lessee) to
determine that the Equipment is in such compliance, which determination shall be
final, binding and conclusive. Lessee shall bear all costs associated with such
appraiser's determination and such costs, if any, to cause the Equipment to be
in full compliance with the RETURN OF EQUIPMENT Section of the Lease on or prior
to such Cancellation Date.
(c) The Cancellation Dates and the applicable Cancellation Values are
as set forth below:
February 1, 2001 74% of Capitalized Lessors Costs
(d) Lessee shall, from the applicable Notice Date through the
Cancellation Date,
(i) continue to comply with all of the terms and conditions of
the Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the applicable Cancellation Date through the
earlier of the date the Equipment is sold by Lessor to a third party of 30 days
following the Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's
own expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after
Lessee has executed its Cancellation Option shall be for the sole benefit of
Lessor and Lessee shall have no interest in or any claim upon any of such
proceeds.
The Lease is amended by adding the following thereto:
EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been earlier terminated and
provided further that Lessee is not in default under the Lease or any other
agreement between Lessor and Lessee, Lessee may, UPON AT LEAST 30 DAYS BUT NO
MORE THAN 270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S IRREVOCABLE
ELECTION TO EXERCISE SUCH OPTION, purchase on an AS IS BASIS all (but not less
than all) of the Equipment listed and described in this Schedule on the rent
payment date (the "Early Purchase Date") which is 48 months from the Basic Term
Commencement Date for a price equal to THIRTY-THREE AND 93/100 percent (33.93%)
of the Capitalized Lessor's Cost (the "FMV Early Option Price"), plus all
applicable sales taxes.
Lessor and Lessee agree that the FMV Early Option Price is a reasonable
prediction of the Fair Market Value (as such term is defined in the PURCHASE
OPTION Section subsection (b) of the Lease hereof) of the Equipment at the time
the option is exercisable. Lessor and Lessee agree that if Lessee makes any
non-severable improvement to the Equipment which increases the value of the
Equipment and is not required or permitted by the MAINTENANCE Section or the
RETURN OF EQUIPMENT Section of the Lease prior to lease expiration, then at the
time of such option being exercised, Lessor and Lessee shall adjust the purchase
price to reflect any addition to the price anticipated to result from such
improvement. (The purchase option granted by this subsection shall be referred
to herein as the "Early Purchase Option").
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment leased hereunder, then on the Early Purchase Option Date, Lessee shall
pay to Lessor any Rent and other sums due and unpaid on the Early Purchase
Option Date and Lessee shall pay the FMV Early Option Price, plus all applicable
sales taxes, to Lessor in cash.
H. PAYMENT AUTHORIZATION
You are hereby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:
COMPANY NAME ADDRESS AMOUNT
------------ ------- ------
goracing.com, inc. 4707 E. Baseline Road $583,097.00
Phoenix, AZ 85040
4
<PAGE> 48
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding
or effective with respect to the Agreement or Equipment until executed on
behalf of Lessor and Lessee by authorized representatives of Lessor and Lessee,
respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION goracing.com, inc.
By: /s/ Arthur G. Abello By: /s/ David Husband
--------------------------------- -----------------------------
Name: Arthur G. Abello Name: David Husband
------------------------------- ---------------------------
Title: Senior Risk Analyst Title: CFO Action Performance
------------------------------ --------------------------
<PAGE> 49
[ACTION PERFORMANCE COMPANIES, INC. LOGO]
December 27, 1999
GE Capital Corp.
426 N. 44th St.
Suite 495
Phoenix, AZ 85008
To Whom It May Concern:
As Chairman of the Board and CEO of Action Performance Companies, Inc.
("Action"), I hereby affirm that David Husband is an authorized officer of
Action, and therefore is allowed to execute agreements on behalf of Action and
its wholly owned subsidiaries. These subsidiaries include goracing.com, inc. and
this mandate provides David Husband the authorization to execute agreements on
behalf of goracing and/or obligate Action to guarantee funds of goracing, to
any of its vendors, including GE Capital Corporation.
Sincerely,
Action Performance Companies, Inc.
/s/ Fred W. Wagenhals
Fred W. Wagenhals
C.E.O.
PHOENIX - CHARLOTTE - ATLANTA
1455 ELLSWORTH INDUSTRIAL DRIVE NW - Atlanta, GEORGIA 30318
404 350-2100 - 404 350-2118 FAX
<PAGE> 50
GORACING.COM DISPOSALS
<TABLE>
<CAPTION>
ACQUISITIO SYS ACQUISITION
DATE NO LIFE ACCOUNT DESCRIPTION VALUE NBV
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LEASED
11/17/99 198 05 00 1545-000 BLIND IDEAS-GORACING BUILDING BLINDS $ 592.92 $ 573.16
11/17/99 194 05 00 1545-000 BUSINESS RESOURCE GROUP-MAPLE OFFICE
CHAIRS/FURNITURE $ 8,377.45 $ 8,098.21
9/8/99 168 05 00 1545-000 BUSINESS RESOURCE-DEPOSIT FOR OFFICE FURNITURE $ 3,500.00 $ 3,266.67
10/31/99 181 10 00 1590-000 COMPEL-ADD RAISED FLOOR $ 144,067.14 $ 140,465.47
9/30/99 178 10 00 1590-000 COMPEL-CABLING GORACING.COM $ 110,115.12 $ 106,444.62
10/31/99 182 10 00 1590-000 COMPEL-CABLING-TV/SPEAKER $ 87,455.18 $ 85,268.80
9/30/99 174 05 00 1550-000 COMPEL-TECH CENTER PROJECT $ 195,704.06 $ 182,657.12
11/17/99 197 05 00 1545-000 CORPORATE EXPRESS-BREAKROOM TABLES/OFFICE FURNITURE $ 12,582.34 $ 12,162.93
12/17/99 208 05 00 1540-000 CORPORATE EXPRESS-CABINET STORAGE $ 1,739.82 $ 1,710.83
12/29/99 212 05 00 1540-000 CORPORATE EXPRESS-CHAIRS $ 36,166.00 $ 35,563.24
11/17/99 196 05 00 1545-000 CORPORATE EXPRESS-CONFERENCE ROOM FURNITURE/OFFICE $ 35,834.30 $ 34,639.83
FURNITURE
12/17/99 210 05 00 1540-000 CORPORATE EXPRESS-CONFERENCE TABLE $ 2,024.19 $ 1,990.46
11/17/99 195 05 00 1545-000 CORPORATE EXPRESS-OFFICE FURNITURE/OFFICE $ 136,890.73 $ 132,327.71
DESKS/BOOKCASES
12/17/99 209 05 00 1540-000 CORPORATE EXPRESS-SPECIAL FURNITURE/CHAIRS 10 $ 2,546.60 $ 2,504.16
12/17/99 211 05 00 1540-000 CORPORATE EXPRESS-WALL BOARDS $ 1,679.33 $ 1,651.35
10/8/99 183 05 00 1545-000 FITNESS SOURCE-WORKOUT EQUIPMENT FOR WEIGHTROOM $ 22,373.26 $ 21,254.60
11/19/99 203 05 00 1545-000 FRY'S ELECTRONICS-3 SONY TV/HPC4226A LJ1100SE
4 TEST SETS/NOKIA 6100/5100 $ 2,190.37 $ 2,117.36
10/11/99 184 05 00 1545-000 INSTANT BLINDS-VERTICAL BLINDS FOR BOARDROOM $ 880.50 $ 836.48
9/8/99 169 05 00 1545-000 KNOLL TEXTILES-DEPOSIT FOR FURNITURE $ 8,000.00 $ 7,466.67
11/30/99 205 05 00 1545-000 MCMASTER CARR SUPPLY CO.-OFFICE EQUIPMENT $ 627.23 $ 606.33
10/13/99 185 05 00 1545-000 ROYAL SIGN CO-GORACINGCOM BUILDING SIGNAGE/TAX $ 11,513.39 $ 10,937.72
9/8/99 167 05 00 1545-000 SOUTHWEST PARTITION-50% DEPOSIT ON CUBICLES $ 247,206.49 $ 230,726.06
AND OFFICE FURNITURE
11/17/99 192 05 00 1545-000 SOUTHWEST PARTITIONS-BREAKROOM CHAIRS/TASK $ 39,493.77 $ 38,177.31
CHAIRS/MANAGER CHAIRS
11/17/99 191 05 00 1545-000 SOUTHWEST PARTITIONS-CUBICLE PIECES $ 125,273.91 $ 121,098.12
12/2/99 206 05 00 1540-000 SOUTHWEST PARTITIONS-CUSTOM CONFERENCE TABLE $ 16,217.08 $ 16,217.08
W/ ACCESS FOR ELECTRICAL
9/15/99 170 05 00 1545-000 SOUTHWEST PARTITIONS-HIGHBACK CHAIRS FOR TOP EXECS $ 3,811.84 $ 3,557.72
11/17/99 193 05 00 1545-000 SOUTHWEST PARTITIONS-OFFICE FURNITURE $ 35,407.64 $ 34,227.39
11/18/99 199 05 00 1545-000 SOUTHWEST PARTITIONS-OFFICE FURNITURE $ 83,531.88 $ 80,747.49
9/23/99 171 05 00 1545-000 SYSTEM FREIGHT SYSTEMS-PUBLICATION SHIPPING $ 198.68 $ 185.44
$ 1,376,001.22 $ 1,317,480.33
</TABLE>
<PAGE> 1
EXHIBIT 10.3
EQUIPMENT SUBLEASE
THIS EQUIPMENT SUBLEASE (this "Sublease") is made and entered into as of
the 28 day of March, 2000, by and between GORACING.COM,INC., a Delaware
corporation ("goracing"), ACTION PERFORMANCE COMPANIES, INC., an Arizona
corporation ("Action") (Action and goracing are hereinafter referred to each as
a "Sublessor" and collectively as "Sublessors") and INTEGRATED INFORMATION
SYSTEMS, INC., a Delaware corporation, ("Sublessee").
RECITALS
A. Action entered into a certain Master Equipment Lease with General
Electric Capital Corporation, a New York corporation ("GE Capital") dated as of
December 22, 1998 including Computer Equipment Schedule No. 1 dated December
22, 1998, Computer Equipment Schedule No. 2 dated February 18, 1999 and
Addendum to Schedules No. 001 and 002 to Master Lease Agreement dated as of
February 18, 1999 (collectively the "Action Master Equipment Lease"), whereby
Action leased certain equipment listed on Schedule A hereto (the "Action
Equipment") from GE Capital.
B. goracing entered into a certain Master Equipment Lease with GE
Capital dated as of August 9, 1999 including Computer Equipment Schedule No. 01
dated October 1, 1999, Computer Equipment Schedule No. 02 dated November 5,
1999, Furniture Schedule No. 003 dated December 29, 1999, and Furniture
Schedule No. 004 dated January 24, 2000 (collectively the "goracing Master
Equipment Lease"), whereby goracing leased certain equipment listed on Schedule
B hereto (the "goracing Equipment") from GE Capital. (The Action Equipment and
the goracing Equipment are hereinafter collectively referred to as the
"Equipment" and the Action Master Equipment Lease and the goracing Master
Equipment Lease are hereinafter each referred to as a "Base Equipment Lease"
and collectively referred to as the "Base Equipment Leases.")
C. The Equipment is located at and used in connection with the occupancy
of the premises located at 1480 South Hohokam Drive, Tempe, Arizona (the
"Premises").
D. On even date herewith, Action and Sublessee intend to enter into a
Sublease Agreement (the "Hohokam Sublease") whereby Sublessee will sublease from
Action a portion of the Premises.
E. In connection with Hohokam Sublease, Sublessee desires to sublease
the Equipment from Sublessors and Sublessors desire to sublease the Equipment
to Sublessee, on the terms and conditions herein set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sublessors and Sublessee hereby
agree as follows:
1
<PAGE> 2
1. GRANT.
(a) BY ACTION. Action hereby subleases its rights and obligations
in the Action Master Equipment Lease to Sublessee, and Sublessee hereby
subleases Action's rights and obligations in the Action Master Equipment Lease
from Action, on the terms and conditions herein set forth.
(b) BY GORACING. goracing hereby subleases its rights and
obligations in the goracing Master Equipment Lease to Sublessee, and Sublessee
hereby subleases goracing's rights and obligations in the goracing Master
Equipment Lease from goracing, on the terms and conditions herein set forth.
2. INCORPORATION OF BASE EQUIPMENT LEASE; EXCEPTIONS. Each and every
provision of the Base Equipment Leases is incorporated herein by this
reference. Sublessors shall sublet their respective interests in the Equipment
to Sublessee under the same rental, terms and conditions to which Sublessors
agreed as the "Lessee" in the respective Base Equipment Leases, except as
otherwise herein provided. Wherever the term "Lessee" appears in the Base
Equipment Leases, it shall be deemed to refer to Sublessee. Sublessee shall
render performance to Lessor as required under all of the terms of the Base
Equipment Leases. Sublessee shall be entitled under this Sublease to all of the
rights and benefits that the Sublessors, as Lessee, enjoy under the Base
Equipment Leases, except as otherwise herein provided. Sublessee hereby
expressly agrees to be bound to all terms and conditions contained in the Base
Equipment Leases.
3. TERM.
(a) ACTION MASTER EQUIPMENT LEASE. Sublessee's rights and
obligations under this Sublease with respect to the Action Master Equipment
Lease shall commence as of the date first set forth above and shall expire
according to the terms of the Action Master Equipment Lease.
(b) GORACING MASTER EQUIPMENT LEASE. Sublessee's rights and
obligations under this Sublease with respect to the goracing Master Equipment
Lease shall commence as of the date first set forth above and shall expire
according to the terms of the goracing Master Equipment Lease.
4. BASE RENT AND OTHER CHARGES
(a) GENERALLY. Beginning with payments due after the date first
written above, the Sublessee shall pay directly to Lessor the monthly rent due
under Base Equipment Leases as well as any additional payments due under the
Base Equipment Leases, including but not limited to all taxes, fees and
assessments due, imposed, assessed or levied against any Equipment (each a
"Payment" and collectively the "Payments"), in the amount required by the terms
of the Base Equipment Leases which shall be due and payable to Lessor on or
before the date such Payment is due under the Base Equipment Leases. Sublessee
shall provide Sublessors with written proof of the timely payment of each
Payment within five (5) business days after the delivery of such Payment.
2
<PAGE> 3
(b) CONTINGENCY. To the extent that Lessor objects to the payment
structure agreed to in Section 4(a) hereto, the parties agree that Sublessee
shall deliver all Payments to goracing no later than five (5) business days
before the date such Payment is due to the Lessor under the Base Equipment
Leases. All Payments delivered under this Section 4(b) shall be made payable
jointly to the lesser and goracing. To the extent such Payment has been tendered
from Sublessee to goracing, pursuant to the terms of this Section 4(b), goracing
shall provide Sublessee with written proof of the timely payment to Landlord of
such Payment within five (5) business days after the due date.
5. REPORTS.
(a) LIENS. If any tax or other lien shall attach to any Equipment,
Sublessee will notify Sublessors in writing, within ten (10) days after
Sublessee becomes aware of the tax or lien. The notice shall include the full
particulars of the tax or lien and the location of such Equipment on the date of
the notice.
(b) FINANCIAL STATEMENTS. Sublessee shall deliver to Sublessors,
Sublessee's complete financial statements, certified by a recognized firm of
certified public accountants within ninety (90) days of the close of each fiscal
year of Sublessee.
(c) INSPECTION. Sublessors may inspect any portion of the Equipment
during normal business hours after giving the Sublessee reasonable prior notice.
(d) RELOCATION. Sublessee will keep the Equipment at the Premises and
will give Sublessors prior written notice of any relocation of any portion of
the Equipment.
(e) LOSS OR DAMAGE. If any Equipment is lost or damaged (where the
estimated repair costs would exceed the greater of ten percent (10%) of the
original equipment cost (as listed in the Base Equipment Leases) or ten thousand
dollars ($10,000), or is otherwise involved in an accident causing personal
injury or property damage, Sublessee will promptly and fully report the event to
Sublessors in writing.
(f) OFFICER'S CERTIFICATE. Sublessee will furnish a certificate of an
authorized officer of Sublessee stating that he has reviewed the activities of
Sublessee and that, to the best of his knowledge, there exists no default or
event which with notice or lapse of time (or both) would become such a default
within thirty (30) days after any request by Sublessors.
6. INSURANCE. Sublessee shall maintain insurance on the Equipment as
stipulated in Section 9 of the Base Equipment Leases. Sublessee shall name
Sublessors as an additional insured on such insurance policy(ies).
7. DEFAULT AND REMEDIES.
(a) DEFAULT. Sublessors may in writing declare this Sublease in
default if: (i) Lessor may currently declare Sublessee in default in accordance
with the provisions of Section 11 of either of the Base Equipment Leases, (ii)
Sublessee breaches any of its obligations under this Sublease and fails to cure
that breach within ten (10) days after written notice from the
3
<PAGE> 4
Sublessors; or (iii) any representation or warranty made in connection with
this Sublease shall be false or misleading in any material respect.
(b) REMEDIES. After a default under this Sublease, at the request of the
respective Sublessor, Subleasee shall comply with the provisions of Section
10(a) of the respective Base Equipment Lease. Sublessee hereby authorizes
Sublessor to peacefully enter any premises where any Equipment subject to the
respective Base Equipment Lease may be and take possession of the Equipment.
Sublessee shall immediately pay to the respective Sublessor without further
demand as liquidated damages for loss of bargain and not as a penalty, the
Stipulated Loss Value of the Equipment (as defined in the respective Base
Equipment Lease and calculated as of the rent payment date prior to the
declaration of default) and all rents and other sums then due under this
Sublease. Sublessors may terminate this Sublease as to any or all of the
Equipment. A termination shall occur only upon written notice by Sublessors to
Sublessee and only as to the specific Equipment specified in any such notice.
Sublessors may, but shall not be required to, lease, otherwise dispose of or
keep idle all or part of the Equipment. Sublessors may use Sublessee's premises
for a reasonable period of time for any or all of the purposes stated above
without liability for rent, costs, damages or otherwise. The proceeds of such
lease or other disposition, if any, shall be applied in the following order of
priorities:(i) to pay all of Sublessors costs, charges and expenses incurred in
taking, removing, holding, repairing, leasing or otherwise disposing of
Equipment; (ii) to the extent not previously paid by Sublessor, to pay Lessor
all sums due from Sublessee under this Sublease; (iii) to reimburse Sublessee
any sums previously paid by Sublessor as liquidated damages; and (iv) any
surplus shall be retained by the respective Sublessor. Sublessee shall
immediately pay any deficiency in (i) and (ii) above.
(c) REMEDIES CUMULATIVE. The foregoing remedies are cumulative, and any
or all thereof may be exercised instead of or in addition to each other or any
additional remedies under this Sublease, at law, in equity, or under statute.
Sublessee shall pay Sublessors' actual attorneys' fees incurred in connection
with the enforcement, assertion, defense or preservation of Sublessors' rights
and remedies under this Sublease, or if prohibited by law, such lesser sum as
may be permitted. Waiver of any default shall not be a waiver of any other or
subsequent default.
8. INDEMNIFICATION. Sublessee hereby agrees to indemnify Sublessors,
their agents, employees, successors and assigns from and against any and all
losses, damages, penalties, injuries, claims, actions and suits, including
legal expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Sublease, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Sublessors'
gross negligence or willful misconduct.
9. REPRESENTATIONS AND WARRANTIES OF SUBLESSEE. To induce the Sublessors
to enter into this Sublease, Sublessee makes the following representations and
warranties to Sublessor:
(a) POWER AND CAPACITY. Sublessee has adequate power and capacity
to enter into, and perform under, this Sublease. Sublessee is duly qualified to
do business wherever necessary to carry on its present business and operations,
including the jurisdiction(s) where the Equipment is or is to be located.
4
<PAGE> 5
(b) BINDING AGREEMENT. This Sublease has been duly authorized,
executed and delivered by Sublessee and constitutes a valid, legal and binding
agreement, enforceable in accordance with its terms.
(c) NO VIOLATION. The entry into and performance by Sublessee of
this Sublease will not: (i) violate any judgment, order, law or regulation
applicable to Sublessee or any provision of Sublessee's Certificate of
Incorporation or bylaws; or (ii) result in any breach of, constitute a default
under or result in the creation of any lien, charge, security interest or other
encumbrance upon any Equipment pursuant to any indenture, mortgage, deed or
trust, bank loan or credit agreement or other instrument (other than this
Sublease along with the Base Equipment Leases) to which Sublessee is a party.
(d) NO PROCEEDINGS. There are no suits or proceedings pending or
threatened in court or before any commission, board or other administrative
agency against or affecting Sublessee, which if decided against Sublessee will
have a material adverse effect on the ability of Sublessee to fulfill its
obligations under this Agreement.
(e) GOOD STANDING. Sublessee is and will be at all times validly
existing and in good standing under the laws of the State of its incorporation
(specified in the first sentence of this Agreement).
(f) USE OF EQUIPMENT. The Equipment will at all times be used for
commercial or business purposes.
(g) "AS IS" CONDITION. Sublessee acknowledges that the Equipment is
being subleased "as is" and that the Sublessors make no representation with
regard to the Equipment's condition or future use or performance.
10. REPRESENTATIONS AND WARRANTIES OF SUBLESSORS. To induce the Sublessee
to enter into this Sublease, Sublessors make the following representations and
warranties to Sublessee:
(a) POWER AND CAPACITY. Sublessors have adequate power and capacity
to enter into, and perform under, this Sublease. Sublessors are duly qualified
to do business wherever necessary to carry on their present business and
operations, including the jurisdiction(s) where the Equipment is located.
(b) BINDING AGREEMENT. This Sublease has been duly authorized,
executed and delivered by Sublessors and constitutes a valid, legal, and
binding agreement, enforceable in accordance with its terms.
(c) NO VIOLATION. The entry into and performance by Sublessors of
this Sublease will not: (i) violate any judgment order, law or regulation
applicable to Sublessors or any provision of Sublessors' Certificate of
Incorporation or bylaws; or (ii) result in any breach of, constitute a default
under or result in the creation of any lien, charge, security interest or other
encumbrance upon any Equipment pursuant to any indenture, mortgage, deed of
trust, bank loan or credit agreement or other instrument to which Sublessors
are a party.
5
<PAGE> 6
(d) NO PROCEEDINGS. There are no suits or proceedings pending or
threatened in court or before any commission, board or other administrative
agency against or affecting Sublessors, which if decided against Sublessors
will have a material adverse effect on the ability of Sublessors to fulfill
their obligations under this Agreement.
(e) DEFAULT; TERMINATION; CONSENT. There is no default existing
under the terms of the Base Equipment Leases or event which, with the passage
of time or the giving of notice, would become a default thereunder. There is no
pending termination under either Base Equipment Lease. The "purchase option"
under each of the Base Equipment Leases is presently existing and has not been
modified or surrendered by the Lessee thereunder. The prior written consent of
the Lessor to the Base Equipment Leases has been made and received by
Sublessors.
(f) DISPUTES. There are no outstanding, and to the best of
Sublessors' knowledge, no threatened, disputes or disagreements with respect to
the Equipment.
(g) INTELLECTUAL PROPERTY. All intellectual property rights relating
to the Equipment, to the best of Sublessors' knowledge, are currently in
compliance with all legal requirements, are valid and enforceable, and have not
been challenged or threatened in any way as infringing upon the rights of any
third party.
(h) TAXES. There are no taxes or assessment of taxes of Sublessors'
that are or may become payable by Sublessee or chargeable as a lien or
encumbrance against the Equipment listed on Exhibits A and B, including as a
result of this transaction.
11. LATE PAYMENT CHARGE. If any amount due to Lessors is not received in
full by Lessors on or before five (5) days after the date any such payment is
due, then Sublessee shall pay to the respective Sublessor a late payment charge
in the amount of ten percent (10%) of the amount then due. This provision shall
not be construed to allow or permit Sublessee to make payments after the due
date, or to waive any of Sublessors' rights in connection with late payments
made by Sublessee. Sublessee shall also reimburse the respective Sublessor
for, and indemnify and hold the respective Sublessor harmless for, from and
against, any late charges, penalties, interest or other charges incurred by
such Sublessor under the Base Equipment Leases as a result of any late payment
by Sublessee.
12. NOTICES. All notices of communication required or permitted hereunder
or with regard to the Base Equipment Leases shall be in writing and may be
given by depositing the same in the United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person to an officer or agent of such
party.
(i) If to Sublessors, addressed to them at:
Action Performance Companies, Inc./goracing.com,inc.
4707 East Baseline Road
Tempe, Arizona 85040
Attn: Chief Financial Officer
FAX: (602) 337-3780
6
<PAGE> 7
With a copy to:
Greenberg Traurig, LLP
1 E. Camelback Road, Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq.
Fax: (602) 263-2350
(ii) If to Sublessee, addressed to them at:
Integrated Information Systems, Inc.
1480 S. Hohokam Drive
Tempe, Arizona 85281
Attn: Jeffrey Frankel
Fax: (480) 317-8010
With a copy to:
Snell & Wilmer, LLP
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004-2202
Attn: Michael Christopher, Esq.
Fax: (602) 382-6070
13. TERMINATION OF GRANT.
(a) ACTION MASTER EQUIPMENT LEASE. In the event of the termination of
the Action Master Equipment Lease under its own terms or under any provision
thereof that authorizes such terminations, this Sublease shall simultaneously
and automatically terminate with respect to the grant contained in Section 1
hereto only. Such termination will in no way affect any of Sublessors' rights
under this Sublease, including but not limited to, Sublessors' rights contained
in Sections 7 and 8 hereto, which shall survive.
(b) GORACING MASTER EQUIPMENT LEASE. In the event of the termination
of the goracing Master Equipment Lease under its own terms or under any
provision thereof that authorizes such terminations, this Sublease shall
simultaneously and automatically terminate with respect to the grant contained
in Section 1 hereto only. Such termination will in no way affect any of
Sublessors' rights under this Sublease, including but not limited to,
Sublessors' rights contained in Sections 7 and 8 hereto, which shall survive.
14. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof.
(b) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed,
7
<PAGE> 8
interpreted and enforced in accordance with the laws of the State of Arizona,
notwithstanding any Arizona or other conflict-of-law provision to the contrary.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS SUBLEASE AS OF THE DATE
FIRST ABOVE WRITTEN.
SUBLESSORS:
goracing.com, inc., a Delaware corporation
By: /s/ David Husband
------------------------------
Name: David Husband
------------------------------
Its:
------------------------------
Action Performance Companies, Inc.,
an Arizona corporation
By: /s/ David Husband
------------------------------
Name: David Husband
------------------------------
Its: Chief Financial Officer
------------------------------
SUBLESSEE:
Integrated Information Systems, Inc.,
a Delaware corporation
By: /s/ Craig A. King
------------------------------
Name: Craig A. King
------------------------------
Its: Vice President
------------------------------
8
<PAGE> 9
SCHEDULE A
9
<PAGE> 10
COMPUTER EQUIPMENT SCHEDULE
SCHEDULE NO. 1
DATED THIS 12/22/98
TO MASTER LEASE AGREEMENT
DATED AS OF 12/22/98
Lessor & Mailing Address: Lessee & Mailing Address:
General Electric Capital Corporation Action Performance Companies, Inc.
8480 E. Orchard Rd., Suite 5000 4707 East Baseline Road
Englewood, CO 80111 Phoenix, AZ 84040
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("AGREEMENT" said Agreement and this Schedule being collectively referred to as
"LEASE"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees to
Lease to Lessee the Equipment described below (the "EQUIPMENT").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
-------- ------------ ------------ ------------- ---------------------------
<S> <C> <C> <C> <C>
</TABLE>
Various Computer Equipment as further described on the attached Exhibit A
B. FINANCIAL TERMS
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------
1. Advance Rent (if any): $41,869.35 5. Basic Term Commencement Date:
----------------------------------------------------------------------------------------
2. Capitalized Lessor's Cost: $1,500,191.73 6. Lessee Federal Tax ID No.: 86-0704792
----------------------------------------------------------------------------------------
3. Basic Term (No. of Months): 36 Months. 7. Last Delivery Date: December 31, 1998
----------------------------------------------------------------------------------------
4. Basic Term Lease Rate Factor: 2.790933% 8. Daily Lease Rate Factor: 0.093031%
----------------------------------------------------------------------------------------
</TABLE>
9. First Termination Date: Thirty-six (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on N/A.
11. Basic Term Rent. Commencing on 12/22/98 and on the same day of each month
thereafter (each, a "Rent Payment Date") during the Basic Term, Lessee
shall pay as rent ("Basic Term Rent") the product of the Basic Term Lease
Rate Factor times the Capitalized Lessor's Cost of all Equipment on this
Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such
year will yield a larger allowance.
2. Recovery Period: Five (5) Years.
3. Basis: 100% of Capitalized Lessors Cost.
D. PROPERTY TAX
APPLICABLE TO EQUIPMENT LOCATED IN PHOENIX, MARICOPA COUNTY, ARIZONA;
HARRISBURG, CABARRUS COUNTY, NORTH CAROLINA; ATLANTA, FULTON COUNTY, GEORGIA:
Lessee agrees that it will not list any of such Equipment for property tax
purposes or report any property tax assessed against such Equipment until
otherwise directed in writing by Lessor. Upon receipt of any property tax
bill pertaining to such Equipment from the appropriate taxing authority,
Lessor will pay such tax and will invoice Lessee for the expense. Upon
receipt of such invoice, Lessee will promptly reimburse Lessor for such
expense.
PROPERTY TAX NOT APPLICABLE ON EQUIPMENT LOCATED IN CANTON, NORFOLK COUNTY,
MASSACHUSETTS AND WALTHAM, MIDDLESEX COUNTY, MASSACHUSETTS.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment responsibilities.
E. ARTICLE 2A NOTICE
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE
<PAGE> 11
The MAINTENANCE Section of the Lease is amended by adding the following as
the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with all
original manufacturer's performance specifications for new Equipment without
expense to Lessor. Lessee shall, if requested by Lessor, obtain a certificate or
service report from the manufacturer attesting to such condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the existence or
the continuation of the existence, of an Environmental Emission (including,
without limitation, a sudden or non-sudden accidental or non-accidental
Environmental Emission), of, or exposure to, any substance, chemical, material,
pollutant, Contaminant, odor or audible noise or other release or emission in,
into or onto the environment (including, without limitation, the air, ground,
water or any surface) at, in, by, from or related to any Equipment, (ii) the
environmental aspect of the transportation, storage, treatment or disposal of
materials in connection with the operation of any Equipment or (iii) the
violation, or alleged violation of any statutes, ordinances, orders, rules
regulation, permits or licenses of, by or from any governmental authority,
agency or court relating to environmental matters connected with any Equipment.
(b) "Affiliate" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person.
(c) "Contaminant" shall refer to those substances which are regulated by or
form the basis of liability under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls ("PCBs"), and radioactive
substances, or other material or substance which has in the past or could in the
future constitute a health, safety or environmental hazard to any Person,
property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation, notice
of violation, claim, demand, abatement or other order on direction (conditional
or otherwise) by any governmental authority or any Person for personal injury
(including sickness, disease or death), tangible or intangible property damage,
damage to the environment or other adverse effects on the environment, or for
fines, penalties or restrictions, resulting from or based upon any Adverse
Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or in the
air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or local
law, rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 1361 et seq.), and the Occupational Safety and
Health Act (19 U.S.C. Section 651 et seq.), as these laws have been amended or
supplemented, and any analogous foreign, federal, state or local statutes, and
the regulations promulgated pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation, reasonable
attorneys' fees, engineering and other professional or expert fees),
investigation, removal, cleanup and remedial costs (voluntarily or involuntarily
incurred) and damages to, loss of the use of or decrease in value of the
Equipment arising out of or related to any Adverse Environmental Condition.
(h) "Person" shall include any individual, partnership, corporation, trust,
unincorporated organization, government or department or agency thereof and any
other entity.
Lessee shall fully and promptly pay, perform, discharge, defend, indemnify
and hold harmless Lessor and its Affiliates, successors and assigns, directors,
officers, employees and agents from and against any Environmental Claim or
Environmental Loss.
The provisions of this Schedule shall survive any expiration or termination
of the Lease and shall be enforceable by lessor, its successors and assigns.
RETURN CONDITIONS: In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that the Lessee has not elected
its option to purchase the Equipment, Lessee shall, at its expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90) days
prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model and
serial number of each major component thereof), including, without limitation,
all internal circuit boards, module boards, and software features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and other data
that may be reasonably requested by Lessor concerning the configuration and
operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance provider
acceptable to Lessor that the Equipment (1) has been tested and is operating in
accordance with manufacturers specifications (together with a report detailing
the condition of the Equipment), the results of such test(s) and inspection(s)
and all repairs that were performed as a result of such test(s) and
inspection(s) and (2) that the Equipment qualifies for the manufacturers used
equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60) days
prior to the expiration or other termination of the Lease, make the Equipment
available for on-site operational inspection by persons designated by the Lessor
who shall be duly qualified to inspect the Equipment in its operational
environment.
(c) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations and
consistent with the best practices of dealers in used equipment similar to the
Equipment; shall have no Lessee installed markings or labels which are not
necessary for the operation, maintenance or repair of the Equipment; and shall
be in compliance with all applicable governmental
<PAGE> 12
EXHIBIT A
TO
SCHEDULE NO. 1
DATED THIS 12/22/98
TO MASTER LEASE AGREEMENT
DATED AS OF 12/22/98
<TABLE>
<CAPTION>
Number Capitalized
of Units Lessors Cost Manufacturer Serial Number Model and Type of Equipment
- -------- ------------ ------------ ------------- ---------------------------
<C> <C> <C> <C> <C>
$245,235,10/Lot Cisco Systems Various Computer Equipment Consisting of:
(3) 69050114, 69052391, Series 5500 Bundle
69054144
(1) 5500 Chassis
(1) 5500 AC Power Supply
10912989, 11439326, 10913323 (1) 24 Port 10/100 Switch Module
10847310, 10906765, 10903430 (1) 5K Supervisory Module III with NFFC
(3) 5500 Secondary AC Power Supply
(6) AC Power Cord
(3) 5500 Flash Image
(1) 10850800 5K Supervisory Module III with NFFC
(4) 10102210, 10102234 100BaseFX Multimode Fiber Uplink
10102226, 10830093
(2) 09697952, 09699090 12 port 100 FX Module
(2) 11439767, 10920040 Catalyst Route Switch Module
(2) FAA0246S00R, FAA0246U026 RSM IP w/VIP
(13) 11430748, 11433490, 11433708, 24 Port 10/100 Module
11433727, 11469859, 11431399,
11456112, 11456153, 11458321,
11433696, 11457407, 11458093,
11458101
(2) 09989931, 09989987 FDDI Module (MMF/MIC)
(1) Switchprobe 1 port 100TX Full Duplex
(1) 11301119 CWSI for Windows NT
(2) FAA0246SOOR, FAA0246UO2K 2924 Chassis w/22p10/100TX, 2p100FX
all including all standard attachments,
accessions and accessories
</TABLE>
Equipment immediately listed above is located at: 4707 East Baseline Road,
Phoenix, Maricopa County, AZ 85040
<TABLE>
<CAPTION>
Number Capitalized
of Units Lessors Cost Manufacturer Serial Number Model and Type of Equipment
- -------- ------------ ------------ ------------- ---------------------------
<C> <C> <C> <C> <C>
$156,600.75/Lot Cisco Systems Various Computer Equipment consisting of:
(6) 364074248, 364074315, Cisco 3640 Router w/RPS
364074247, 364074246,
364074314, 364074243
(6) 3600 Series IOS IP/PLUS Feature Set
(6) 3600 Series 4-16 MB Flash Upgrade
(5) 10257113, 10518379, 10257182, 3600 Series 4 port Serial Network Module
10519034, 1057311
(7) 11265601, 11265868, 11265888, 3600 Series 1 port FE-TX Network Module
11265870, 11265814, 11265867,
11265828
(10) V3.5, DTE, Male, 10'
(4) CAH02360194, CAH02360188 600 Watt Redundant Power System
CAH02370226, CAH02360189
(6) RPS Redundant Cable
(9) FAA0246YOOA, FAA0245ZOON, 2924 Chassis w/24p10/100 TX
FAA0246XOOB, FAA0246ZOO6,
FAA0246XOOD, FAA0246XOOG,
FAA0246XOO4, FAA0245WOOP,
FAA0246XOOA
(2) 22202450090, 22202450118 Standard Local Director, 45 Mhps
(1) Local Director Failover Cable
(3) 18008319, 18008317, 18008318 PIX Firewall 520 w/2NIC's
(3) 10/100 Interface Card for PIX
200.00 Freight
all including all standard attachments
accessions and accessories
</TABLE>
Equipment immediately listed above is located at: 1095 Turnpike Street,
Canton, Norfolk County, MA 02021
<PAGE> 13
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSORS COSTS MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
- -------- ------------- ------------ --------------- ----------------------------
<S> <C> <C> <C> <C>
$964,519.57/lot Various Compaq and Microsoft Computer
Equipment consisting of:
(42) Compaq CPU to switch cable
(10) 42U rack for Proliant
(49) Netellignet ethernet
(3) 15U rack blanking panel kit
(4) rack stabalizing feet
(4) fibre host adapter
(8) 32 MB DIMM memory
(8) 64 MB DIMM memory
(31) 64 MB DIMM memory
(8) Switch box 8 port
(3) D844BSN10576 Proliant storage system
D844BSN10208
D844BSN10475
(12) XEON 400 1M SLOTZ
(14) 18.2 GB plug ultra-wide
(9) Proliant 1850R
(2) Firewall enterprise encryption
(10) Netelligent cable management
(4) 256 MB DIMM kit
(8) Proliant 850R model 6/200 H
(8) V55 15" Monitor
(30) SMART-2/DH PCI array
(8) rack mount keyboard
(4) CPU to switch cable 20FT
(4) INTERNAL 35/70-GB DLT drive
(1) SD838BR440013 DLT tape array II
(10) Monitor/utility shelf kit
(8) keyboard drawer kit
(2) D842HUQ10022 fibre channel array rack
D842HUQ10024
(2) fibre channel storage hub
(4) Proliant 7000 PD-400 1MB
(2) Proliant 1600R PII 400
(16) 4.3GB SCSI ultra-wide pluggable
(96) 9.1GB SCSI ultra-wide
(14) 18.2GB SCSI ultra-wide
(31) 64MB registered SDRAM
(25) 128MB registered SDRAM DIMM
(6) 128MB registered SDRAM DIMM
(2) P2-400 512K SLOT1 processor
(31) P2-400 512K SLOT1 processor
(84) 4.3GB NHP ultra-wide hard drive
(30) 256MB registered SDRAMM DIMM
(31) Proliant 1850R PII 400
(4) Microsoft SQL Server enterprise
(10) WIN NT Server V4.0 enterprise
(2) Exchange Server 25 client
(34) MS Windows NT Server w/option
(6) Site server commerce V3.0
(12) Site Server V3.0 10 clients
(2) Site Server V3.0 10 clients
(5) Site Server V3.0 10 clients
889.31 Freight
and all including all attachments,
accessions and accessories
</TABLE>
Equipment immediately listed above is located at: 600 Winter St.,
Waltham, Middlesex County, MA 02451
2
<PAGE> 14
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
- -------- ---------------- ------------- ------------------ ---------------------------------------------
<S> <C> <C> <C> <C>
$ 126,074.30/Lot Cisco Systems Various Computer Equipment consisting of:
(1) 69054145 Series 5500 Bundle to include:
(1) 5500 Chassis
(1) 5500 AC Power Supply
10910602 (1) 24 Port 10/100 Switch Module
10903547 (1) 5K Supervisory Module III with NFFC
(1) 5500 Secondary AC Power Supply
(2) AC Power Cord
(1) 5500 Flash Image
(1) 10867086 5K Supervisory Module III with NFFC
(2) 10105098, 10102185 100Base FX Multimode Fiber Uplink
(8) 11458464, 11463463 24 Port 10/100 Module
11471175, 11471381
11433713, 11458089
11464058, 11471361
(2) 11438370, 11438330 Catalyst Route Switch Module
(2) RSM IP w/VIP
(1) 63080450 Switchprobe 1 port 100TX Full Duplex
(3) FAA0246U01Z 2924 Chassis w/22p10/10TX, 2p100FX
FAA0246T02K
FAA0246T02H
(3) FAA0246YO38 2924 Chassis w/24p10/100TX
FAA0246W02L
FAA0246Z008
100.00 Freight
and all including all attachments, accessions
and accessories
</TABLE>
Equipment immediately listed above is located at:
6301 Performance Drive, Harrisburg, Cabarrus County, NC 28075
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
- -------- -------------- ------------- ------------------------ ---------------------------------------------
<S> <C> <C> <C> <C>
$ 6,472.70/Lot Cisco Systems Various Computer Equipment consisting of:
(2) FAA0246T012, FAA0246T02J 2924 Chassis w/22p10/10TX, 2p100FX
100.00 Freight
and all including all attachments, accessions
and accessories
</TABLE>
Equipment immediately listed above is located at:
1455 Ellsworth Industrial, Drive, NW, Atlanta, Fulton County, GA 30318
3
<PAGE> 15
[GE LOGO]
GE Capital
- --------------------------------------------------------------------------------
December 16, 1998
Insight Action Performance Companies, Inc.
6820 S. Harl Avenue 4707 East Baseline Rd.
Tempe, AZ 85283 Phoenix, AZ 85040
Ladies and Gentlemen:
As you are aware, General Electric Capital Corporation ("GE CAPITAL") intends
to purchase the equipment described on Exhibit A hereto (the "EQUIPMENT") from
Insight ("SUPPLIER") for lease to Action Performance Companies, Inc. ("LESSEE")
pursuant to Schedule No. 1 to that certain Master Lease Agreement, dated
12/22/98 (the "LEASE") between Lessor and Lessee. AS one of the conditions to
proceeding with the transaction, GE Capital seeks additional assurances that
title to the Equipment has not yet passed to Lessee, but instead remains with
the Supplier, notwithstanding that the Equipment may have already been
delivered to Lessee.
GE Capital requests Lessee to sign where indicated below to confirm that (i) it
has been Lessee's intent from the beginning to obtain the use of the Equipment
via a lease, and for GE Capital to take clear title to the Equipment directly
from the Supplier, and (ii) except for the rights which Customer may acquire as
Lessee under the Lease, Customer has no right, title or interest in the
Equipment and disclaims all right, title or interest in the Equipment.
GE Capital requests Supplier to sign where indicated below to confirm that (i)
the Equipment has not been previously sold by Supplier to Lessee, (ii) Supplier
presently retains clear title to the Equipment, and (iii) upon Lessee's
execution of the Certificate of Acceptance for the Equipment, title to and risk
of loss of the Equipment shall pass directly to GE Capital from Supplier, free
and clear of all security interests, liens and encumbrances.
Sincerely,
General Electric Capital Corporation
By: /s/ Robert J. Waters
-----------------------------------
Name & Title: Robert J. Waters
Risk Analyst
ACKNOWLEDGED AND AGREED:
Supplier: Lessee:
By: /s/ Brad M. Thompson By: /s/ Chris Besing
-------------------------------- -----------------------------------
Name & Title: Brad M. Thompson - Name & Title: Chris Besing, C.F.O.
Portfolio Manager
Date: 12/22/98 Date: 12/18/98
<PAGE> 16
EXHIBIT A
<TABLE>
<CAPTION>
Number Capitalized
of Units Lessors Cost Manufacturer Serial Number Model and Type of Equipment
<S> <C> <C> <C> <C>
$964,519.57/Lot Various Compaq and Microsoft
Computer Equipment consisting of:
Compaq CPU to switch cable
(42) 42U rack for Proliant
(10) Netellignet ethernet
(49) 15U rack blanking panel kit
(3) rack stabalizing feet
(4) fibre host adapter
(4) 32MB DIMM memory
(8) 64MB DIMM memory
(8) 64MB DIMM memory
(31) Switch box 8 port
(8) D844BSN10576 Proliant storage system
(3) D844BSN10208
D844BSN10475
(12) XEON 400 1M SLOT2
(14) 18.2 GB plug ultra-wide
(9) Proliant 1850R
(2) Firewall enterprise encryption
(10) Netelligent cable management
(4) 256 MB DIMM kit
(8) Proliant 850R model 6/200 H
(8) V55 15" Monitor
(30) SMART-2/DH PCI array
(8) rack mount keyboard
(4) CPU to switch cable 20FT
(4) INTERNAL 35/70-GB DLT drive
(1) SD838BR440013 DLT tape array II
(10) Monitor/utility shelf kit
(8) Keyboard drawer kit
(2) D842HUQ10022 fibre channel array rack
D842HUQ10042
(2) fibre channel storage hub
(4) Proliant 7000 PD-400 1MB
(2) Proliant 1600R PII 400
(16) 4.3GB SCSI ultra-wide pluggable
(96) 9.1GB SCSI ultra-wide
(14) 18.2GB SCSI ultra-wide
(31) 64MB registered SDRAM
(25) 128MB registered SDRAM DIMM
(6) 128MB registered SDRAM DIMM
(2) P2-400 512K SLOT1 processor
(31) P2-400 512K SLOT1 processor
(84) 4.3GB NHP ultra-wide hard drive
(30) 256MB registered SDRAM DIMM
(31) Proliant 1850R PII 400
(4) Microsoft SQL Server enterprise
(10) WIN NT Server V4.0 enterprise
(2) Exchange Server 25 client
(34) MS Windows NT Server w/option
(6) Site server commerce V3.0
(12) Site Server V3.0 10 clients
(2) Site Server V3.0 10 clients
(5) Site Server V3.0 10 clients
Freight
889.31
and all including all attachments,
accessions and accessories
</TABLE>
<PAGE> 17
Date December 22, 1998
-------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
8480 East Orchard Road, Suite 5000
Englewood, Colorado 80111
Attn: Debbie Zamudio
Gentlemen:
This is to acknowledge that the following invoices for equipment shipped to:
Tech2000 Worldwide, 1095 Turnpike St., Canton, MA 02021, should have named
General Electric Capital Corporation as buyer or "sold to" party and not Action
Performance Companies:
INVOICE NO.
-----------
4452162
4452365
4452400
4452402
4469230
4472050
4473540
4474158
4475787
4480223
4487874
4489767
4491575
4551503
4555303
4557246
INSIGHT
By Brad M. Thompson
---------------------
Title Brad M. Thompson - Portfolio Manager
---------------------
<PAGE> 18
COMPUTER EQUIPMENT SCHEDULE
SCHEDULE NO. 002
DATED THIS FEBRUARY 18, 1999
TO MASTER LEASE AGREEMENT
DATED AS OF DECEMBER 22, 1998
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
GENERAL ELECTRIC CAPITAL CORPORATION ACTION PERFORMANCE COMPANIES, INC.
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY 4707 EAST BASELINE ROAD
SUITE 1280, L.B. 3 PHOENIX, AZ 85040
DALLAS, TX 75240
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Schedule, incorporating by reference the Agreement, constitutes
a separate instrument of lease.
A. EQUIPMENT: Subject to the terms and conditions of the Lease, Lessor agrees
to Lease to Lessee the Equipment described below (the "Equipment").
<TABLE>
<CAPTION>
NUMBER CAPITALIZED
OF UNITS LESSORS COST MANUFACTURER SERIAL NUMBER MODEL AND TYPE OF EQUIPMENT
--------- ----------- ------------ ------------- ---------------------------
<S> <C> <C> <C> <C>
1 $53,495.80 N/A computer support system
consisting of the following:
two (2) 512MB DIMM kit, (4)
tower to rack conversion,
four (4) Mol-C SQL SVR
Internet Conn V7, four (4)
MOL-C site SVR Internet
Conn 3, and twelve (12) MOL-C
site SVR Internet Conn 3
Equipment immediately listed above is located at: 600 Winter St., Waltham, Middlesex County, MA 02451
</TABLE>
B. FINANCIAL TERMS
<TABLE>
<S> <C> <C> <C>
1. Advance Rent (if any): Not Applicable 5. Basic Term Commencement Date: February 22, 1999
2. Capitalized Lessor's Cost: $53,495.80 6. Lessee Federal Tax ID No.: 860704792
3. Basic Term (No. of Months): 34 Months. 7. Last Delivery Date: February 21, 1999
4. Basic Term Lease Rate Factor: 0.02928665 8. Daily Lease Rate Factor: 0.00097622
</TABLE>
9. First Termination Date: Thirty-six (36) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement Date
to but not including the Basic Term Commencement Date ("Interim Period"),
Lessee shall pay as rent ("Interim Rent") for each unit of Equipment, the
product of the Daily Lease Rate Factor times the Capitalized Lessor's Cost
of such unit times the number of days in the Interim Period. Interim Rent
shall be due on February 21, 1999.
11. Basic Term Rent. Commencing on February 22, 1999 and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic Term,
Lessee shall pay as rent ("Basic Term Rent") the product of the Basic Term
Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule.
C. TAX BENEFITS Depreciation Deductions:
1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
2. Recovery Period: FIVE (5) YEARS.
3. Basis: 100% of Capitalized Lessors Cost.
D. PROPERTY TAX
PROPERTY TAX NOT APPLICABLE ON EQUIPMENT LOCATED IN 600 WINTER STREET,
WALTHAM, MA 02451-1204.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. ARTICLE 2A NOTICE
<PAGE> 19
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS INSIGHT (THE "SUPPLIER(S)"), (B) LESSEE IS
ENTITLED TO THE PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY THIRD
PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S), WHICH IS SUPPLYING THE
EQUIPMENT IN CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR
ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT, LESSEE MAY
COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AND ACCURATE AND COMPLETE
STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY DISCLAIMERS AND
LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A
LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW AND HEREAFTER CONFERRED BY STATUTE
OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES
UNDER THE DEFAULT AND REMEDIES SECTION OF THE AGREEMENT.
F. STIPULATED LOSS AND TERMINATION VALUE TABLE*
<TABLE>
<CAPTION>
Termination Stipulated Termination Stipulated
Value Loss Value Value Loss Value
Rental Percentage Percentage Rental Percentage Percentage
<C> <C> <C> <C> <C> <C>
Interim 103.177 107.154
1 103.177 107.154 18 61.371 67.859
2 100.836 104.960 19 58.775 65.411
3 98.480 102.752 20 56.162 62.946
4 96.110 100.530 21 53.535 60.466
5 93.725 98.293 22 50.891 57.970
6 91.326 96.041 23 48.230 55.457
7 88.912 93.776 24 45.554 52.929
8 86.484 91.495 25 42.862 50.384
9 84.041 89.199 26 40.153 47.823
10 81.583 86.889 27 37.427 45.245
11 79.110 84.564 28 34.685 42.651
12 76.621 82.223 29 31.926 40.040
13 74.118 79.868 30 29.150 37.412
14 71.599 77.497 31 26.358 34.767
15 69.066 75.111 32 23.549 32.105
16 66.516 72.709 33 20.722 29.426
17 63.951 70.292 34 17.878 26.730
</TABLE>
*The Stipulated Loss Value or Termination Value for any unit of Equipment shall
be the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event that the Lease is for any
reason extended, then the last percentage figure shown above shall control
throughout any such extended term.
G. MODIFICATIONS AND ADDITIONS FOR THIS SCHEDULE ONLY.
For purposes of this Schedule only, the Agreement is amended as follows:
EQUIPMENT SPECIFIC PROVISIONS
The MAINTENANCE Section of the Lease is amended by adding the
following as the third sentence in subsection (a):
Lessee agrees that upon return of the Equipment, it will comply with
all original manufacturer's performance specifications for new Equipment
without expense to Lessor. Lessee shall, if requested by Lessor, obtain a
certificate or service report from the manufacturer attesting to such
condition.
Each reference contained in this Agreement to:
(a) "Adverse Environmental Condition" shall refer to (i) the
existence or the continuation of the existence, of an Environmental
Emission (including, without limitation, a sudden or non-sudden accidental
or non-accidential Environmental Emission), of, or exposure to, any
substance, chemical, material, pollutant, Contaminant, odor or audible
noise or other release or emission in, into or onto the environment
(including, without limitation, the air, ground, water or any surface) at,
in, by, from or related to any Equipment, (ii) the environmental aspect of
the transportation, storage, treatment or disposal of materials in
connection with the operation of any Equipment or (iii) the violation, or
alleged violation of any statutes, ordinances, orders, rules, regulations,
permits or licenses of, by or from any governmental authority, agency or
court relating to environmental matters connected with any Equipment.
(b) "Affiliate" shall refer, with respect to any given Person, to any
Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
Person.
<PAGE> 20
(c) "Contaminant" shall refer to those substances which are regulated
by or form the basis of liability under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls ("PCBs"), and
radioactive substances, or other material or substance which has in the
past or could in the future constitute a health, safety or environmental
hazard to any Person, property or natural resources.
(d) "Environmental Claim" shall refer to any accusation, allegation,
notice of violation, claim, demand, abatement or other order on direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
(e) "Environmental Emission" shall refer to any actual or threatened
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or
in the air, soil, surface water, groundwater or property.
(f) "Environmental Law" shall mean any federal, foreign, state or
local law, rule or regulation pertaining to the protection of the
environment, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801
et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 1361 et
seq.), and the Occupational Safety and Health Act (19 U.S.C. Section 651 et
seq.), as these laws have been amended or supplemented, and any analogous
foreign, federal, state or local statutes, and the regulations promulgated
pursuant thereto.
(g) "Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation,
reasonable attorneys' fees, engineering and other professional or expert
fees), investigation, removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or decrease in
value of the Equipment arising out of or related to any Adverse
Environmental Condition.
(h) "Person" shall include any individual, partnership, corporation,
trust, unincorporated organization, government or department or agency
thereof and any other entity.
Lessee shall fully and promptly pay, perform, discharge, defend,
indemnify and hold harmless Lessor and its Affiliates, successors and
assigns, directors, officers, employees and agents from and against any
Environmental Claim or Environmental Loss.
The provisions of this Schedule shall survive any expiration or
termination of the Lease and shall be enforceable by lessor, its successors
and assigns.
RETURN CONDITIONS: In addition to the provisions provided for in the
RETURN OF EQUIPMENT Section of the Lease, and provided that the Lessee has
not elected its option to purchase the Equipment, Lessee shall, at its
expense:
(a) Upon the request of Lessor, Lessee shall no later than ninety (90)
days prior to the expiration or other termination of the Lease provide:
(i) a detailed inventory of the Equipment (including the model
and serial number of each major component thereof), including, without
limitation, all internal circuit boards, module boards, and software
features;
(ii) a complete and current set of all manuals, equipment
configuration, setup and operation diagrams, maintenance records and other
data that may be reasonably requested by Lessor concerning the
configuration and operation of the Equipment; and
(iii) a certification of the manufacturer or of a maintenance
provider acceptable to Lessor that the Equipment (1) has been tested and is
operating in accordance with manufacturers specifications (together with a
report detailing the condition of the Equipment), the results of such
test(s) and inspection(s) and all repairs that were performed as a result
of such test(s) and inspection(s) and (2) that the Equipment qualifies for
the manufacturers used equipment maintenance program.
(b) Upon the request of Lessor, Lessee shall, no later than sixty (60)
days prior to the expiration or other termination of the Lease, make the
Equipment available for on-site operational inspection by persons
designated by the Lessor who shall be duly qualified to inspect the
Equipment in its operational environment.
(c) All Equipment shall be cleaned and treated with respect to rust,
corrosion and appearance in accordance with manufacturers recommendations
and consistent with the best practices of dealers in used equipment similar
to the Equipment; shall have no Lessee installed markings or labels which
are not necessary for the operation, maintenance or repair of the
Equipment; and shall be in compliance with all applicable governmental
laws, rules and regulations.
(d) The Equipment shall be deinstalled and packed by or under the
supervision of the manufacturer or such other person acceptable to Lessor
in accordance with manufacturers recommendations. Without limitation, all
internal fluids will either be drained and disposed of or filled and
secured in accordance with manufacturers recommendations and applicable
governmental laws, rules and regulations.
(e) Provide for transportation of the Equipment in a manner consistent
with the manufacturer's recommendations and practices to any locations
within the continental United States as Lessor shall direct; and shall have
the Equipment unloaded at such locations.
H. PAYMENT AUTHORIZATION
You are herby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:
<PAGE> 21
Company Name Address Amount
------------ ------- ------
Insight P. O. Box 78269, $53,495.80
Phoenix, AZ 85062
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Pursuant to the provisions of the lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above has
been delivered and installed (if applicable) as of the date stated above; (ii)
Lessee has inspected the Equipment, and all such testing as it deems necessary
has been performed by Lessee, Supplier or the manufacturer; and (iii) Lessee
accepts the Equipment for all purposes of the Lease, the purchase documents and
all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding
or effective with respect to the Agreement or Equipment until executed on
behalf of Lessor and Lessee by authorized representatives of Lessor and
Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation Action Performance Companies, Inc.
By:_________________________________ By: /s/ Chris Besing
------------------------------
Name:_______________________________ Name: Chris Besing
----------------------------
Title:______________________________ Title: CFO
---------------------------
Attest
By: /s/ Chris Philpost
-------------------------------
Name: Chris Philpost
-----------------------------
<PAGE> 22
ADDENDUM
TO SCHEDULES NO. 001 AND 002
TO MASTER LEASE AGREEMENT
DATED AS OF FEBRUARY 18, 1999
This Addendum (this "ADDENDUM") amends and supplements Schedule No. 1 and
Schedule No. 2 (each, a "SCHEDULE"; collectively, the "SCHEDULES") to the above
referenced Master Lease Agreement (the "AGREEMENT"), between GENERAL ELECTRIC
CAPITAL CORPORATION ("LESSOR") and Action Performance Co. ("LESSEE") and is
hereby incorporated into the Schedule as though fully set forth therein.
Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Schedule or Agreement.
WHEREAS, pursuant to Schedule No. 1 to the Agreement, Lessor has leased to
Lessee certain Equipment more particularly described therein (the "SCHEDULE NO.
1 EQUIPMENT"); and
WHEREAS, Lessee desires to lease certain additional Equipment from Lessor
pursuant to Schedule No. 2 of the Agreement, which Equipment is related to the
Schedule No. 1 Equipment and does not ordinarily function independently of the
Schedule No. 1 Equipment;
NOW THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, and in order to induce Lessor to enter into Schedule
No. 2, the parties agree that notwithstanding anything to the contrary
contained in the Schedules or the Agreement, if Lessee exercises its option to
early terminate the Agreement with respect to all of the Equipment on a
Schedule, it must at that same time exercise that same option with respect to
all of the Equipment on the other Schedule, and whichever end-of-lease option
Lessee elects with respect to either purchasing all of the Equipment on a
Schedule or returning all of the Equipment on a Schedule, must also be elected
by Lessee with respect to all of the Equipment on the other Schedule.
Except as expressly modified hereby, all terms and provisions of the Schedules
and Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be
executed by their duly authorized representatives on this 18 day of Feb., 1999.
Lessor: Lessee:
General Electric Capital Corporation Action Performance Companies, Inc.
By: By: /s/ Chris Besing
------------------------------ ------------------------------
Name: Name: Chris Besing
------------------------------ ------------------------------
Title: Title: CFO
------------------------------ ------------------------------
<PAGE> 23
IMPORTANT! YOUR INVOICE INFORMATION
DIRECTIONS: PLEASE COMPLETE AND RETURN WITH YOUR SIGNED DEAL DOCUMENTS OR FAX TO
972 991-6339 PLEASE MAKE ANY NECESSARY CORRECTIONS TO THE FOLLOWING INFORMATION:
Customer name: Action Performance Companies, Inc.
-----------------------------------
Contact name Accounts Payable Title
----------------------------------- --------------------
Contact phone 602 337-3700 Fax
----------------------------------- --------------------
REQUIRED SECTION:
1. Where would you like your invoice sent?
Billing address Same as Mailing
--------------------------------------------------------------
City/state/zip
--------------------------------------------------------------
Attention Phone
------------------------------------ -------------------
Department
--------------------------------------------------------------
OPTIONAL SECTION:
2. What information would you like on your invoice?
( ) Company Purchase Order number (if checked, list PO number: )
-------
( X ) Equipment serial number, model number and description
( X ) Equipment location
( ) Rent and sales tax broken down by asset
3. We can provide you with one invoice that incorporates the billing for all
your Commercial Equipment Financing accounts with the same due date, the same
billing address, and the same number of advance billing days.
Would you like to receive one combined invoice?
( ) Yes ( X ) No
4. Would you like to set up electronic payments?
( ) Yes (If Yes, see EPS Authorization attachment) ( X ) No
5. To help us plan for possible future enhancements to invoice, what other
information would you like to see on your invoice?
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
- -------------------------------
Judi Braddick
Region Documentation Specialist
Account Schedule # 4081372002
<PAGE> 24
SCHEDULE B
10
<PAGE> 1
Exhibit 10.4
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 28 day of March, 2000, by and between GORACING.COM, INC., a Delaware
corporation ("Seller") and INTEGRATED INFORMATION SYSTEMS, INC., a Delaware
corporation ("Purchaser").
RECITALS
A. On even date herewith, Action Performance Companies, Inc., an Arizona
corporation, and sole shareholder of goracing ("Action"), and Purchaser intend
to enter into a Sublease Agreement (the "Hohokam Sublease") whereby Purchaser
will sublease from Action a portion of the premises located at 1480 S. Hohokam
Drive, Tempe, Arizona (the "Subleased Premises").
B. The Subleased Premises currently contains among other assets, those
assets listed on Exhibits A and B hereto (the "Assets"), which are owned or
licensed by goracing.
C. Purchaser desires to purchase the Assets as part of its occupation of
the Subleased Premises and the Seller desires to sell the Assets, on the terms
and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. SALE AND PURCHASE. Seller hereby sells and Purchaser hereby purchases
the Assets.
2. LIABILITIES TO BE ASSUMED BY PURCHASER. Purchaser shall assume no
liabilities with regard to the Assets.
3. PURCHASE PRICE. The purchase price for the Assets shall be $1,963,307
(the "Purchase Price"). The Purchase Price is due and payable to Seller in
readily available funds upon the execution of this Agreement.
4. TAX OBLIGATIONS.
(a) 1999 YEAR TAX OBLIGATIONS. Seller agrees to pay any and all tax
obligations relating to the Assets for the year ended December 31, 1999.
(b) 2000 YEAR TAX OBLIGATIONS. Seller agrees to pay any and all tax
obligations relating to the Assets, which are incurred for the period January
1, 2000, through March 31, 2000. Purchaser agrees to pay any and all tax
obligations related to the Assets which are incurred for the period April 1,
2000 through December 31, 2000.
<PAGE> 2
(c) FUTURE TAX OBLIGATIONS. Purchaser agrees to pay all tax
obligations related to the Assets, to the extent applicable, beginning on April
1, 2000.
5. SELLER'S REPRESENTATIONS AND WARRANTIES. To induce Purchaser to enter
into this Agreement and for the benefit of Purchaser, Seller represents and
warrants as follows:
(a) CORPORATE STATUS AND AUTHORITY. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been validly
authorized by all necessary corporate action of Seller.
(b) OWNERSHIP OF ASSETS AND PROPERTIES.
(i) ASSETS LISTED ON EXHIBIT A. Seller has good and marketable
title to the assets listed on Exhibit A (the "A Assets"). Seller owns the A
Assets free and clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, encumbrances and claims of every kind and
character.
(ii) ASSETS LISTED ON EXHIBIT B. Seller makes no representations
or warranties with respect to title to or transferability of those assets
listed on Exhibit B (the "B Assets"). Seller agrees to use its reasonable best
efforts to assist Purchaser in transferring any of the B Assets from Seller to
Purchaser.
(c) DISPUTES. There are no outstanding, and to the best of Seller's
knowledge, no threatened, disputes or disagreements with respect to the Assets.
(d) INTELLECTUAL PROPERTY. All intellectual property rights relating
to the Assets, to the best of Seller's knowledge, are currently in compliance
with all legal requirements, are valid and enforceable, and have not been
challenged or threatened in any way as infringing upon the rights of any third
party.
6. NOTICES. All notices of communication required or permitted hereunder
or with regard to the Base Equipment Leases shall be in writing and may be
given by depositing the same in the United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person to any officer or agent of such
party.
(i) If to Seller, addressed to it at:
goracing.com, inc.
4707 East Baseline Road
Tempe, Arizona 85040
Attn: Chief Financial Officer
Fax: (602) 337-3780
2
<PAGE> 3
With a copy to:
Greenberg Traurig, LLP
1 E. Camelback Road, Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq.
Fax: (602) 263-2350
(ii) If to Purchaser, addressed to it at:
Integrated Information Systems, Inc.
1480 S. Hohokam Drive
Tempe, Arizona 85281
Attn: Jeffrey Frankel
Fax: (480) 317-8010
With a copy to:
Snell & Wilmer, LLP
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004-2202
Attn: Michael Christopher, Esq.
Fax: (602) 382-6070
7. PURCHASER'S REPRESENTATIONS AND WARRANTIES. To induce Seller to enter
into this Agreement, Purchaser represents and warrants as follows:
(a) CORPORATE STATUS AND AUTHORITY. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been validly
authorized by all necessary corporate action of Purchaser.
(b) "AS IS" CONDITION. The Purchaser acknowledges that the Assets are
being sold "as is" and the Seller makes no representations with regard to their
condition or their future use or performance.
8. DELIVERIES.
(a) BY SELLER. Upon the execution of this Agreement, Seller shall
deliver all other document(s) necessary to convey to Purchaser title to the
Assets to the extent contemplated by this Agreement.
(b) BY PURCHASER. Upon the execution of this Agreement, Purchaser
shall deliver to Seller, the Purchase Price.
3
<PAGE> 4
9. BILL OF SALE. This Agreement is intended to also operate as a bill of
sale and shall be evidence of the transfer of the Assets as provided for herein.
10. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
(b) CONTROLLING LAW. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed by
and construed, interpreted and enforced in accordance with the laws of the
State of Arizona, notwithstanding any Arizona or other conflict-of-law
provision to the contrary.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE DATE
FIRST WRITTEN ABOVE.
SELLER:
goracing.com, inc., a Delaware corporation
By: /s/ David Husband
-------------------------------------
Name: David Husband
------------------------------------
Its: Chief Financial Officer
------------------------------------
PURCHASER:
Integrated Information Systems, Inc., a
Delaware corporation
By: /s/ Craig A. King
-------------------------------------
Name: Craig A. King
------------------------------------
Its: Vice President
------------------------------------
4
<PAGE> 5
Exhibit A to Asset Purchase Agreement
(IIS Interest)
<TABLE>
<CAPTION>
Acquisition Sys Asset Acquisition
Date No. Life Account No. Asset Description Value NBV
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT
<S> <C> <C> <C> <C> <C> <C>
6/26/97 103 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BOB MARGOLIS-DIGITAL CAMERA $ 530 $ 256
10/1/95 106 05 00 1545-000 h CLOSE AI BOOKS TO JDE-FAX MACHINE 315 47
1/20/00 222 05 00 1545-000 CORPORATE EXPRESS-CHAIRS 3,594 3,594
5/7/99 114 05 00 1545-000 MARIA FURTADO-BOOKSHELVES 273 237
1/31/00 226 05 00 1545-000 h TEMPE CAMERA-PHOTO EQUIPMENT/CARD READER, MICROTECH USB/BACKGROUND/
6x7 CHROMA-KE 2,411 2,411
9/29/99 172 05 00 1545-000 W.B. MASON-CREDIT MEMO (469) (438)
5/19/99 115 05 00 1545-000 W.B. MASON-OFFICE FURNITURE 5,383 4,665
6/16/99 143 05 00 1545-000 WB MASON-FURNITURE 469 415
SOUTHWEST PARTITIONS 5,392 5,392
SOUTHWEST PARTITIONS 1,262 1,262
CORPORATE EXPRESS - MISC. OFFICE FURNITURE 7,533 7,533
NEOPOST 7,399 7,399
MCMASTER CARR SUPPLY CO. 386 386
R.C. TAYLOR - TRAINING ROOM FURNITURE 11,893 9,118
----------------
Office Equipment 46,371 42,277
----------------
</TABLE>
<TABLE>
<CAPTION>
COMPUTER EQUIPMENT
<S> <C> <C> <C> <C> <C> <C>
1/20/00 224 03 00 1550-000 h ANTHONY PEREZ-(2) C2NET STONGHOLD SECURE WE 2,020 2,020
1/29/99 30 05 00 1550-000 h AT&T WIRELESS-NOKIA 6160 TELEPHONE/LEATHER CARRY CASE/TAX 94 80
10/31/99 236 03 00 1550-000 h COMPAQ USA-IMAQ 333 32 MB COMPUTERS LIME 7,200 7,200
9/30/99 190 05 00 1550-000 h COMPAQ-COMPUTER EQUIPMENT 7,770 7,252
1/21/99 27 05 00 1550-000 h COMPUSA-EPSON HARDSHELL CARRYING CASE 249 212
1/29/99 31 05 00 1550-000 h COMPUSA-EPSON POWERLITES 5100XB 5,222 4,439
1/11/00 227 03 00 1550-000 h DEL MARKETING-(2) DELL PIII WORKSTATIONS/TAX & SHIPPING 49,253 49,253
12/17/99 217 03 00 1550-000 h DELL MARKETING-5 DELL P6450 SYSTEMS 8,012 7,789
5/20/99 119 05 00 1550-000 h DELL MARKETING-DELL P633 CEL COMPUTER/SALES TAX/SHIPPING 4,528 3,925
10/31/99 233 03 00 1550-000 h DELL MARKETING-DELL P6450 G1 COMPUTER/TAX/INSTALLATION 24,639 24,639
8/2/99 159 05 00 1550-000 h DELL MARKETING-DELL P6450 GX1 9,515 8,722
5/20/99 118 05 00 1550-000 h DELL MARKETING-DELL P6450 GXI COMPUTER/SALES TAX/SHIPPING 16,467 14,271
10/31/99 234 03 00 1550-000 h DELL MARKETING-DELL P64501 COMPUTER/TAX/INSTALLATION 14,796 14,796
10/31/99 232 03 00 1550-000 h DELL MARKETING-DELL PII 450K GX1 COMPUTER 28,781 28,781
12/31/98 2 05 00 1550-000 h DELL MARKETING-INSPRION D233ST PENTIUM II/DELL SYSTEM MOUSE/WIN95
SPACESAVER KEY 7,372 6,020
2/16/99 24 05 00 1550-000 h DELL MARKETING-LATITUDE CPI300XT 13.3/SHIPPING/TAX 8,072 6,592
12/31/98 1 05 00 1550-000 h DELL MARKETING-LATITUDE CPI300XT/DELL SYSTEMS MOUSE/WIN95
SPACESAVER KEYBOARD/SH 21,329 17,419
8/5/99 163 05 00 1550-000 l DELL MARKETING-SHIPPING/TAX/MS SUPPORT SYSTEM 915 839
</TABLE>
Fixed Asset Schedules Page 1 of 4 Interest
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1/13/99 26 05 00 1550-000 h DELL MARKETING-ULTRABOARD WINDOWS 95 104 KEY 2,110 1,793
12/31/98 23 05 00 1550-000 h DELL P6450 GX1 COMPUTER/READYWARE FACTORY 77,228 61,782
7/30/99 154 05 00 1550-000 h INSIGHT DIRECT INC 864 778
2/3/99 36 05 00 1550-000 h INSIGHT DIRECT INC-128 MB 569 484
6/28/99 150 05 00 1550-000 h INSIGHT DIRECT INC-COMPAQ 15U RACK BLANKING PANEL 113 100
12/31/98 11 05 00 1550-000 h INSIGHT DIRECT INC-COMPAQ 42U RACK FOR PROLIANT 5,481 4,476
12/31/98 9 05 00 1550-000 h INSIGHT DIRECT INC-COMPAQ PROLIANT STORAGE/WIN NT SERVER V4.0 ENTERPRISE/RACK MO 24,997 20,414
2/3/99 38 05 00 1550-000 h INSIGHT DIRECT INC-COMPAQ PROLINE 2500/4.3 GB SCSI ULTR WIDE 4,875 4,144
6/28/99 151 05 00 1550-000 h INSIGHT DIRECT INC-COMPUTER EQUIPMENT 1,963 1,734
4/22/99 62 05 00 1550-000 h INSIGHT DIRECT INC-DIGI ACC.PORT MODEMS 1,485 1,262
12/31/98 17 05 00 1550-000 h INSIGHT DIRECT INC-FIBRE CLUSTER OPTION KIT/6'COMPAQ EXTERNAL WIDE SCSI/NETELLIG 780 637
1/28/99 33 05 00 1550-000 h INSIGHT DIRECT INC-MAGICOLOR 330EX COLOR LASER/FIBRE CHANNEL TROUBLESHOOT 4,964 4,219
1/28/99 28 05 00 1550-000 h INSIGHT DIRECT INC-VHDCI TO 68PIN CABLE 69 59
9/30/99 176 05 00 1550-000 h INSIGHT DIRECT-0 VOUCHER (349) (326)
2/3/99 37 05 00 1550-000 h INSIGHT DIRECT-18.2 GB SCSI ULTRA WIDE/4.3 GB LOW CAT NON-HOT/SMART 2/DH PCI ARR 13,204 11,223
4/7/99 46 05 00 1550-000 h INSIGHT DIRECT-18.2 GB SCSI ULTRA-WIDE PLUGA/TAX 14,417 12,255
1/11/00 228 03 00 1550-000 h INSIGHT DIRECT-18.2GB SCSI ULTRA-WIDE PLUGAB 18,200 18,200
5/27/99 126 05 00 1550-000 h INSIGHT DIRECT-256MB REGISTERED SDRAM DIMM 6,680 5,789
5/13/99 117 05 00 1550-000 h INSIGHT DIRECT-256MB REGISTERED SDRAM DIMM/SHIPPING/HANDLING/SALES TAX 16,442 14,250
4/8/99 61 05 00 1550-000 h INSIGHT DIRECT-4.3 GB SCSI ULTRA WIDE/OKI MICROLINE 321 TURBO/TAX 16,031 13,626
4/22/99 55 05 00 1550-000 h INSIGHT DIRECT-512MB DIMM KIT/FIBRE CHANNEL ARRAY RACK 9,275 7,884
4/8/99 59 05 00 1550-000 h INSIGHT DIRECT-64 MB REGISTERED/256 MB/COMPAQ PII 450/COMPAQ ULTRA WIDE CONTROLL 4,419 3,756
5/27/99 128 05 00 1550-000 h INSIGHT DIRECT-APC MATRIX CASTERS BLACK META 170 147
5/12/99 116 05 00 1550-000 h INSIGHT DIRECT-COMPAQ 37-70GB EXTERNAL/SALES TAX/SHIPPING 6,777 5,874
6/14/99 140 05 00 1550-000 h INSIGHT DIRECT-COMPAQ 42U RACK SIDEWALL KIT/RACK COUPLING KIT/MONITOR UTILITY SH 1,500 1,325
5/27/99 123 05 00 1550-000 h INSIGHT DIRECT-COMPAQ CD STORAGE SYSTEM RACK/COMPAQ 24X MAX IDE CDROM/64MB SIMM 10,190 8,831
4/8/99 60 05 00 1550-000 h INSIGHT DIRECT-COMPAQ CPU TO SWITCH CABLE/37/70 GB DLT LIBRARY READY/DLT TAPE 12,246 10,409
9/16/99 175 05 00 1550-000 h INSIGHT DIRECT-COMPAQ FIBRE HOST ADAPTER (3,609) (3,368)
4/14/99 51 05 00 1550-000 h INSIGHT DIRECT-COMPAQ FIBRE HOST ADAPTER PCI/SALES TAX/SHIPPING/HANDLING 3,616 3,073
5/27/99 135 05 00 1550-000 h INSIGHT DIRECT-COMPAQ MULTI SERVER COMM/NETELLIGENT RECESSED RAIL KIT/COUPLING K 1,425 1,235
5/27/99 132 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT 1850R HOTPLUG/COMPQ 42U RACK SIDEWALL KIT/SALES T 1,625 1,408
4/7/99 44 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT REDUNDANT PWR 591 502
5/27/99 131 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT REDUNDANT PWR/CLUSTER KIT PROLIANT CLUST/COMPAQ R 1,091 946
5/27/99 137 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT REDUNDANT PWR/FIBRE CHANNEL STORAGE HUB/DLT TAPE 3,977 3,447
5/27/99 136 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT REDUNDAT/CLUSTER KIT/COMPAQ RECOVERY SERVER OPTIO 9,084 7,873
5/27/99 130 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROLIANT STORAGE SYS/FREIGHT 3,900 3,380
5/27/99 125 05 00 1550-000 h INSIGHT DIRECT-COMPAQ PROSIGNIA 200 6/300/9 10GB SCSI UW HOT PLUG HD/COMPAQ NETE 6,166 5,343
5/27/99 134 05 00 1550-000 h INSIGHT DIRECT-COMPAQ RACK STABILIZING/COMPAQ PROLIANT REDUNDANT/COMPAQ MULTISER 8,251 7,151
6/14/99 141 05 00 1550-000 h INSIGHT DIRECT-COMPAQ RECOVERY SERVER OPTION/NETELLIGENT ETHERNET 1,359 1,201
6/28/99 147 05 00 1550-000 h INSIGHT DIRECT-COMPUTER EQUIPMENT BOSTON 2,116 1,869
5/27/99 124 05 00 1550-000 h INSIGHT DIRECT-HP LASERJET 400N (2)/COMPAQ PROLIANT 1850R PII 400 10,836 9,391
5/27/99 129 05 00 1550-000 h INSIGHT DIRECT-KEYBOARD DRAWER KIT/COMPAQ 15U RACK BLANKING PANEL 1,029 892
5/27/99 121 05 00 1550-000 h INSIGHT DIRECT-P2400 512K SLOT 1 PROCESSOR 3,120 2,704
4/21/99 54 05 00 1550-000 h INSIGHT DIRECT-PLASMAVISION 42' MONITOR/SHIPPING 12,473 10,602
8/20/99 165 05 00 1550-000 h INSIGHT DIRECT-QD6525 DATA CARTRIDGE TAPES/SALES TAX/SHIPPING 71 65
</TABLE>
Fixed Asset Schedules Page 2 of 4 Interest
<PAGE> 7
<TABLE>
<C> <C> <C> <C> <C> <C>
5/27/99 133 05 00 1550-000 h INSIGHT DIRECT-RACK MOUNTABLE UPS MODEL 3000/COMPAQ 15U RACK
BLANKING PANEL/TAX 4,909 4,255
4/22/99 63 05 00 1550-000 h INSIGHT DIRECT-REMOTE INSIGHT PCI LAN ONLY 28,294 24,050
6/24/99 149 05 00 1550-000 h INSIGHT DIRECT-RETURNED COMPAQ PROLIANT/COMPAQ SCSI (5,289) (4,672)
6/14/99 139 05 00 1550-000 h INSIGHT DIRECT-RETURNED COMPAQ24X MAX IDE CDR (2,352) (2,078)
5/27/99 122 05 00 1550-000 h INSIGHT DIRECT-SMART 2/DH PCI ARRAY/COMPAQ PROLIANT 2500/
COMPAQ 18.2 GB PLUB UW 18,819 16,310
2/5/99 39 05 00 1550-000 h INSIGHT DIRECT-UNIVERSAL INPUT CASSETTE 170 145
4/8/99 58 05 00 1550-000 h INSIGHT DIRECT-WACOM INTUOS 12X12 SERIAL/COMPAQ NETELLIGENT
ETHERNET/COMPAQ PROL 4,978 4,232
2/25/99 35 05 00 1550-000 h INSIGHT DIRECT-ZERO VOUCHER (21,657) (18,408)
8/11/99 158 05 00 1550-000 h INSIGHT-COMPAQ FLAT PANEL MON 2,874 2,635
12/31/98 15 05 00 1550-000 h KENT DATACOMM-030-RED/040-RED/015-ORANGE/030-ORANGE/
040-ORANGE/015-GREEN/030/GRE 2,435 1,988
6/10/99 146 05 00 1550-000 h KENT DATACOMM-1 PORT T1 FRACTIONAL T1 806 712
12/31/98 12 05 00 1550-000 h KENT DATACOMM-30' FDDI-MMF-MIC/KUEHNE & NAGEL-FREIGHT 594 485
11/22/99 204 03 00 1555-000 h KENT DATACOMM-50' CAT 5 PURPLE CABLE/50' LEVEL 5 LINE/
50' BLUE PATCH CORD 986 931
12/17/99 216 03 00 1550-000 h KENT DATACOMM-600W REDUNDANT AC POWER SYSTEMS 2,140 2,080
1/20/99 34 05 00 1550-000 h KENT DATACOMM-CAT 5/6 RED/GREEN/PURPLE/3" PURPLE/TAX/FREIGHT" 115 98
1/29/99 29 05 00 1550-000 h KENT DATACOMM-CISCO ADD ON 8X5XNB FOR 2900 1,018 865
3/22/99 43 05 00 1550-000 h KENT DATACOMM-CISCO PIX FIREWALL 520/CISCO 1/100 INTERFACE CARD/
TAX/FREIGHT 18,311 15,565
4/7/99 57 05 00 1550-000 h KENT DATACOMM-CISCO SMARTNET PIX 5200 1,624 1,380
6/10/99 138 05 00 1550-000 h KENT DATACOMM-CROSS CONNECT 24 PORT PNL-25PR 650 574
8/3/99 162 05 00 1550-000 h KENT DATACOMM-FRIGHT/TAX/SHIPPING FOR COMPUTER EQUIPMENT 1,624 1,489
7/29/99 153 05 00 1550-000 h KENT DATACOMM-NETRANGER SENSOR,2 10/100T 13,680 12,312
7/19/99 152 05 00 1550-000 h KENT DATACOMM-NETSSONAR NT-UP TO 2500 DDR 12,668 11,402
7/2/99 155 05 00 1550-000 h KENT DATACOMM-NETWORK CONFIG MODULE 1,211 1,090
12/31/98 14 05 00 1550-000 h KENT DATACOMM-VELCROE TIE/CISCO ADD ON V.35-60 PIN/HORIZONTAL
MNGR/CISCO ADD ON 9,278 7,577
10/6/99 187 03 00 1550-000 h KENT DATACOMM-PATCH CORDS FOR NEW BUILDING 2,548 2,335
1/20/00 225 03 00 1550-000 h OPEN SYSTEM SOLUTIONS-PF FOR PIX-UP DEVICE LIC 4,515 4,515
9/8/99 173 05 00 1550-000 h PC CONNECTION-IBM THINKPAD 570 PII 9,268 8,650
10/31/99 231 03 00 1550-000 h PC CONNECTION-IBM THINKPAD 570 PII 3,479 3,479
12/31/98 6 05 00 1550-000 h PC CONNECTION-POWERMAC G3 COMPUTER/APPLE G3 64MV DIMM/APPLE G3
128MB DIMM/21 VI" 3,732 3,048
ACCRUE SOFTWARE, INC. 10,000 10,000
ACCRUE SOFTWARE, INC. 20,000 20,000
VERITAS DB EDITION/ORACLE TIER 2 LICENSE 28,576 28,576
PREMIER DIRECT ASSIST SUPPORT 8,648 8,648
UNIMOUNT BASE FOR SPARC 4,5,20,ULTRA 1,560 1,560
UNIMOUNT BEZEL FOR ULTRA 1 504 504
KENT DATACOMM-ETHERNET PORT 4,644 4,644
KENT DATACOMM-PPORT PLUS UPGRADES 600 600
KENT DATACOMM-1000BASE-SX GBIC MUL 3,600 3,600
MICROSOFT 1,225 1,225
COMPAQ PARTS AND SERVICE 1,805 1,805
COMPAQ PARTS AND SERVICE 1,805 1,805
FRY'S ELECTRONICS 494 494
FRY'S ELECTRONICS 644 644
PC CONNECTION 932 932
INSIGHT DIRECT, INC. 262 262
</TABLE>
Page 3 of 4
<PAGE> 8
Computer Equipment
<TABLE>
<CAPTION>
-------------------------------------
744,781 669,428
--------------------------------------
LEASEHOLD IMPROVEMENTS
<S> <C> <C> <C> <C>
11/19/99 200 10 00 1590-000 BOB'S LOCK & SAFE CENTER-REKEYS/KEYS/SERVICE 1,849 1,818
11/30/99 238 10 00 1590-000 COMPEL-CONTRACT PRICE/UPS UPGRADE/GENERATOR SET UP 313,574 305,735
11/30/99 237 10 00 1590-000 COMPEL-SPEAKER TERM/INSTALL/ADDN'L WORK STATIONS
ADDN VOICE/TECH CENTER/BALANCE 235,156 229,277
1/5/00 221 10 00 1590-000 GRINNELL-FIRE PROTECTION SYSTEM 25,102 25,102
12/10/99 213 10 00 1590-000 HB TEMPE LLC-FINAL PAYMENT FOR IMPROVEMENTS 88,216 87,481
11/4/99 201 10 00 1590-000 HB TEMPE LLC-GORACING BUILDING TENANT IMPROVEMENTS 169,046 166,228
12/29/99 207 10 00 1590-000 RICKABAUG INC-MAILROOM/COPYROOM CABINETRY 6,276 6,224
----------------------------------------
Leasehold Improvements 839,219 821,866
----------------------------------------
GRAND TOTAL ----------------------------------------
$1,630,372 $1,533,571
========================================
LESS EQUIPMENT TO BE RETAINED:
1/29/99 31 05 00 1550-000 h COMPUSA-EPSON POWERLITES 5100XB (5,222) (4,439)
10 DELL GX1 WORKSTATIONS (@ $1,300 EACH) (13,000) (13,000)
2 IBM THINKPAD LAPTOPS (@ $4,000 EACH) (8,000) (8,000)
----------------------------------------
$1,604,150 $1,508,132
$ 5,599
Telecommunication installation charges to be reimbursed by IIS for telecommunication
services assumed by IIS -------------------
$1,513,731
===================
</TABLE>
Page 4 of 4
<PAGE> 9
EXHIBIT B TO ASSET PURCHASE AGREEMENT
(IIS LESS INTEREST)
<TABLE>
<CAPTION>
ACQUISITION SYS ASSET ACQUISITION
DATE NO. LIFE ACCOUNT NO. ASSET DESCRIPTION VALUE NBV
- ----------- --- ----- ----------- -------------------------------------------------------------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE EQUIPMENT
3/25/96 78 05 00 1545-000 h CLOSE AI BOOKS TO JDE-INFORMATION SERVICE-SERVER $ 10,000 $ 2,333
3/27/96 79 05 00 1545-000 h CLOSE AI BOOKS TO JDE-INFORMATION SERVICE-SERVER 24,000 5,600
2/20/97 100 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP 1,377 574
12/30/96 99 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-2.1 GB INTERNAL DRIVE 800 307
12/19/96 97 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-HARD DRIVE 2.1 GB 858 329
12/26/96 98 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-HARDWARE AND SOFTWARE 3,570 1,369
7/12/96 86 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-HP VECTRA 3,421 1,026
7/12/96 87 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-HP VECTRA 2,983 895
3/6/97 101 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-LAP TOP & 16MB 3,674 1,592
7/15/96 88 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-NEC PORT REPLICA 146 44
10/25/96 96 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-NT USERS 5,250 1,838
7/22/96 89 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-SYNOPTICS 16 PORT 1,291 387
9/18/96 95 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-T1 UPGRADE 4,992 1,664
9/9/96 93 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-UNIX BOX (1,000) (333)
9/10/96 94 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BAY STATE COMPUTER GROUP-UNIX BOX 10,552 3,517
5/22/96 83 05 00 1545-000 h CLOSE AI BOOKS TO JDE-BBN PLANET-PBX EQUIPMENT 6,350 1,693
12/18/95 111 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DATATREND-PENTIUM 998 183
1/25/96 76 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DATATREND-RETUN COMP. (998) (200)
8/28/96 91 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DATAWARE PRODUCTS-MEMORY 756 239
8/28/96 92 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DATAWARE PRODUCTS-NEC VERSA 6,199 1,963
6/13/96 84 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DAVE HACKETT-2 COMPAQ COMPUTERS 6,682 1,893
7/24/96 90 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DAVE HACKETT-2 COMPUTERS 10,023 3,007
6/13/96 85 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DAVE HACKETT-DRIVE ET AL 1,914 542
1/25/96 77 05 00 1545-000 h CLOSE AI BOOKS TO JDE-DAVE HACKETT-HP 5P 883 177
5/3/96 82 05 00 1545-000 h CLOSE AI BOOKS TO JDE-LOUIS CATARINA-COMPTUER BALANCE 377 100
5/20/97 102 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MBNA AMERICA-MOTOROLA HAND HELD 462 216
9/12/95 104 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 13,442 1,792
10/20/95 107 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 1,435 215
11/20/95 108 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 5,000 833
11/20/95 109 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 6,000 1,000
11/30/95 110 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 875 146
12/28/95 113 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 2,734 501
1/10/96 73 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 5,140 1,028
1/10/96 74 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 5,465 1,093
1/24/96 75 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 1,321 264
10/1/95 105 05 00 1545-000 h CLOSE AI BOOKS TO JDE-PAID BY VB 2,555 383
4/24/96 80 05 00 1545-000 h CLOSE AI BOOKS TO JDE-SIGN-A-RAMA-ALUM SIGN BOX 1,475 369
5/2/96 81 05 00 1545-000 h CLOSE AI BOOKS TO JDE-SIGNATURE COMPUTER-2 PCS 3,742 998
12/28/95 112 05 00 1545-000 h CLOSE AI BOOKS TO JDE-MICRONET ASSOCIATES-COMPUTERS 1,894 347
8/17/99 166 05 00 1545-000 h DAVE HACKETT-EQUIPMENT FOR RADIO 3,349 3,070
</TABLE>
Fixed Asset Schedules Page 1 of 3 Non Interest
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
10/18/99 186 05 00 1545-000 HAYMARKET PUBLISHING SERVICES-PHOTOGRAPHY SERVICE-GORACING.COM 750 713
------- -------
Office Equipment 160,735 43,708
------- -------
COMPUTER EQUIPMENT
4/12/99 50 05 00 1550-000 s ADOBE ACCOBAT WRITER 210 178
11/19/96 65 05 00 1550-000 s CLOSE AI BOOKS TO JDE-STORM CLOUD-SOFTWARE 1,005 369
1/10/00 223 03 00 1550-000 h COMPEL-AIA DOCUMENT G703 7,238 7,238
12/31/98 7 05 00 1550-000 c COMPUTER BREAKTHROUGH-TIVOLI IT DIRECTOR 1.1/CBI INTALLATION-5 DAYS/CBI
SUPPORT 22,000 17,967
7/30/99 156 05 00 1550-000 s COMPUTER NETWORK SOFTWARE 224 202
12/31/99 230 03 00 1550-000 c CONSULTING FOR NEW EQUIPMENT 17,213 17,213
8/17/99 164 05 00 1550-000 h DAVE HACKETT-COMPUTER EXPENSE 793 727
4/20/99 52 05 00 1550-000 s DAVE HACKETT-TSI/SOFTWARE FOR SPEEDMALL 100 85
12/17/99 218 03 00 1550-000 s DTP DIRECT-DREAMWEAVER 867 843
12/1/99 219 03 00 1550-000 s DTP DIRECT-DREAMWEAVER 2/PHOTOSHOP 5.5/PHOTOTOOLS 3.0/ACROBAT 4.0/TYPE
MANAGER 4,409 4,286
12/1/99 214 03 00 1550-000 s DTP DIRECT-MS VISUAL STUD PROF 6.0/AB AFTER EFFECTS 4.1/HEADLINE
STUDIO 1.0/DIME 7,864 7,646
1/1/99 20 05 00 1550-000 c ENGAGE TECHNOLOGIES--PUBLIC TRAINING 12/10-12/11/98- doc PV40239 3,300 2,695
1/1/99 21 05 00 1550-000 c ENGAGE TECHNOLOGIES--INSTALLATION 11/30-12/01/98- doc PV40240 3,000 2,450
1/1/99 19 05 00 1550-000 l ENGAGE TECHNOLOGIES--LICENSE/MAINT&SUPPORT- doc PV38379 14,520 11,858
8/31/99 161 05 00 1550-000 h EYEWIRE INC-LETTERPRESS SPECIAL EDITION 400 367
4/7/99 48 05 00 1550-000 h INSIGHT DIRECT-BACKUP EXEC FOR WIN NT V7.2/SHIPPING 2,723 2,314
4/8/99 49 05 00 1550-000 h INSIGHT DIRECT-BACKUP EXEC FOR WIN NT V7.2/SQL AGENT/WNT V7.2 OPEN/DLT
35/70 CAR 14,347 12,195
4/7/99 47 05 00 1550-000 l INSIGHT DIRECT-LIC NMS ENTERPRISE ENCRYPTION/SW SUBSCRIPTION LIC NMS 8,971 7,625
6/14/99 142 05 00 1550-000 h INSIGHT DIRECT-MATRIX3000ES 3000VA ONLINE/CORD CONNECTED POWER DIST UNI 5,450 4,814
8/30/99 160 05 00 1550-000 s INSIGHT DIRECT-MIXIMIZER 5.0 864 792
10/31/99 235 03 00 1550-000 s INSIGHT DIRECT-MS OFFICE 2000 PRO FUL/TAX 18,723 18,723
10/21/99 180 03 00 1550-000 s INSIGHT DIRECT-MS OFFICE PROFESSIONAL 97/TAX/FREIGHT 4,802 4,402
5/27/99 120 05 00 1550-000 s INSIGHT DIRECT-MS WINDOWS NT SERVER 667 578
4/7/99 45 05 00 1550-000 l INSIGHT DIRECT-TOTIAL VIRUS DEFENSE LICENSE 4,491 3,817
6/9/99 145 05 00 1550-000 s INSIGHT DIRECT-VISIO PROFESSIONAL V5.0 SINGLE 349 308
5/27/99 127 05 00 1550-000 h INSIGHT DIRECT-WIN NT SERVER V4.0 ENTERPRISE/COMPAQ PROLIANT STORAGE SYS 4,800 4,160
6/15/99 148 05 00 1550-000 h KENT DATACOMM-COMPUTER SUPPLIES 5,348 4,724
12/31/98 13 05 00 1550-000 s LUNDEEN & ASSOCIATES-WEB CHAT SOFTWARE/WEB CROSSING/PLATINUM SERVER/WEB
CROSSING 25,171 20,556
10/18/99 179 03 00 1550-000 s LUNDEEN & ASSOCIATES-WEB CROSSING PRIORITY SUPPORT 6,190 5,674
12/31/98 3 05 00 1550-000 s PC CONNECTION-ADOBE PHOTOSHOP 5 MAC/ADOBE ILL 8 VRS UPGRADE MAC/PAINTER 5.5
WEB 1,340 1,095
12/31/98 8 05 00 1550-000 s PC CONNECTION-DIRECTOR MULTIMEDIA STUDIO 6. 936 764
12/31/98 5 05 00 1550-000 s PC CONNECTION-EYE CANDY 3.0 WIN95/EYE CANDY 3.0 MAC/KPT VECTOR EFFECTS
MAC/KEIS 2,630 2,148
12/31/98 4 05 00 1550-000 s PC CONNECTION-FLASH 3.0 MAC/FLASH 3.0 WIN95/ADOBE PAGEMAKER 6.5
MAC/QUARKXPRESS 1,624 1,326
9/30/99 188 05 00 1550-000 c PROFESSIONAL ALTERNATIVE WEB DEVELOPMENT 203,624 190,049
6/9/99 144 05 00 1550-000 s REAL NETWORKS-STEAMING MEDIA SOFTWARE 15,695 13,864
11/29/99 202 03 00 1550-000 s SOFTWARE 183 172
9/30/99 189 05 00 1550-000 s SOFTWARE FOR ACTION INTERACTIVE 22,000 20,533
4/30/99 56 05 00 1550-000 s SOFTWARE.COM-SERVICE PROVIDER/FREIGHT 3,001 2,551
Cisco 1,979 1,979
vignette 4,908 4,908
</TABLE>
Fixed Asset Schedules Page 2 of 3 Non Interest
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Visio Professional 1,720 1,672
-------- --------
Computer Equipment 445,678 405,868
-------- --------
GRAND TOTAL $606,413 $449,576
======== ========
</TABLE>
Fixed Asset Schedules Page 3 of 3 Non Interest
<PAGE> 1
Exhibit 10.5
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement") is made, executed and delivered
as of March 28, 2000, by and between INTEGRATED INFORMATION SYSTEMS, INC., a
Delaware corporation ("IIS"), and goracing.com,inc., a Delaware corporation,
("goracing").
RECITALS
A. As of the date hereof, IIS and goracing intend to enter into, among
other agreements, an Asset Purchase Agreement (the "Asset Purchase Agreement")
whereby IIS will purchase certain assets of goracing, and a Sublease Agreement
(the "Sublease Agreement") whereby IIS will assume the rights and obligations
of goracing and Action Performance Companies, Inc., an Arizona corporation and
sole shareholder of goracing ("Action"), respectively, with respect to certain
Master Lease Agreements dated December 22, 1998 and August 9, 1999,
respectively.
B. As an inducement for IIS to enter into the Asset Purchase Agreement
and the Sublease Agreement, goracing desires to purchase certain services from
IIS, and IIS desires to provide certain services to goracing upon the terms and
conditions herein set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. SERVICES OF IIS. goracing hereby agrees to purchase or shall direct
one or more of its affiliates, including without limitation, Action Performance
Companies, an Arizona corporation, to purchase $2,000,000 (the "Purchase
Amount") worth of services provided by IIS in the ordinary course of IIS's
business (the "IIS Services"). Of the Purchase Price Amount, goracing agrees to
purchase, or direct one or more of its affiliates to purchase, at fair market
value $1,000,000 (the "Annual Amount") of IIS Services between the date first
written above and one (1) year following the date first written above ("Year
One"). The obligation of goracing to purchase the Year One Annual Amount shall
include any amounts paid by goracing or its affiliates with regard to the work
orders attached as Schedule A hereto. goracing further agrees to purchase the
Annual Amount of IIS Services between the date beginning one (1) year from the
date first written above and ending two (2) years from the date first written
above ("Year Two").
2. FAILURE TO PURCHASE
(a) YEAR ONE. In the event that goracing fails to purchase the
Annual Amount of IIS Services in Year One, goracing shall pay IIS the
difference between the Annual Amount and the amount of IIS Services actually
purchased by goracing in Year One. Such payment shall be due thirty (30) days
following the end of Year One.
(b) YEAR TWO. In the event that goracing fails to purchase the
Annual Amount of IIS Services in Year Two, goracing shall pay IIS the
difference between the Annual
1
<PAGE> 2
Amount and the amount of IIS Services actually purchased in Year Two. Such
payment shall be due within thirty (30) days following the end of Year Two.
(c) FAILURE TO MAKE PAYMENT. If any payment is not received when due,
that amount shall bear interest from the due date at the rate of ten percent
(10%) per year until paid.
3. NOTICES. All notices of communication required or permitted hereunder
or with regard to the Base Equipment Leases shall be in writing and may be
given by depositing the same in the United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person to an officer or agent of such
party.
(i) If to goracing, addressed to it at:
goracing.com, inc.
4707 East Baseline Road
Tempe, Arizona 85040
Attn: Chief Financial Officer
Fax: (602) 337-3780
With a copy to:
Greenberg Traurig, LLP
1 E. Camelback Road, Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq.
Fax: (602) 263-2350
(ii) If to IIS, addressed to it at:
Integrated Information Systems, Inc.
1480 S. Hohokam Drive
Tempe, Arizona 85281
Attn: Jeffrey Frankel
Fax: (480) 317-8010
With a copy to:
Snell & Wilmer, LLP
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004-2202
Attn: Michael Christopher, Esq.
Fax: (602) 382-6070
4. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes
2
<PAGE> 3
all prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof.
(b) CONTROLLING LAW. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of Arizona, notwithstanding any Arizona or other conflict-of-law
provision to the contrary.
(c) COSTS AND FEES. goracing agrees to reimburse IIS and IIS agrees
to reimburse goracing for any reasonable costs and expenses, including
attorney's fees incurred by such party in connection with the enforcement or
preservation of any rights or remedies of the other party under this Agreement.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS SERVICE AGREEMENT AS OF
THE DATE FIRST ABOVE WRITTEN.
IIS:
INTEGRATED INFORMATION SYSTEMS,
INC., a Delaware corporation
By: /s/ Craig A. King
------------------------------------
Name: Craig A. King
----------------------------------
Its: Vice President
-----------------------------------
GORACING:
goracing.com,inc., a Delaware corporation
By: David Husband
--------------------------------------
Name: David Husband
-----------------------------------
Its: ____________________________________
3
<PAGE> 4
SCHEDULE A
4
<PAGE> 5
[INTEGRATED INFORMATION SYSTEMS LOGO]
WORK ORDER #008
IN CONNECTION WITH THE MASTER CONSULTING SERVICES AGREEMENT
PROJECT NAME: GORACING ASP AND HTML DEVELOPMENT
This Work Order is made pursuant to the Master Consulting Services Agreement
(the "Agreement") effective on October 19, 1999 between Integrated Information
Systems, Inc. ("IIS") and GoRacing.com ("Client") and is incorporated therein
by reference. Capitalized terms not otherwise defined have the meanings
provided in the Agreement.
1. Services. IIS shall perform the Scope of Work identified below for Client.
Any dates provided are estimates only.
Provide two months of interim development support utilizing ASP and HTML.
2. Rates.
The hourly rates shown below shall be applicable to this Work Order only for
the Scope of Work set forth above. Any hours incurred outside of the scope
of this agreement will be billed at a rate specified below.
<TABLE>
<CAPTION>
RESOURCE RATE ESTIMATED HOURS
------------------------------------------------------
<S> <C> <C>
ASP/HTML $130 320
Developer
------------------------------------------------------
HTML Developer $125 320
------------------------------------------------------
</TABLE>
Any services performed by IIS not included in the Scope of Work shall be
performed by IIS at an hourly rate based on standard rate schedule.
Work Order #008--Page 1 of 2
<PAGE> 6
IIS invoices shall be directed to Client's representative for payment at the
address shown below.
Client Contact for Invoices: John Doucette
Company Name: GoRacing.com
Address: 1480 S. Hohokam Dr., Tempe, AZ 85281
Phone #: (602) 636-7000
E-Mail Address: [email protected]
3. Commencement Date. Services under this Work Order will begin on or about
March 23, 2000 and will continue until May 19, 2000 or until the Scope of
Work is finished by IIS.
THEREFORE, the parties have executed this Work Order in duplicate originals.
INTEGRATED INFORMATION SYSTEMS, Inc. CLIENT
1560 W. Fountainhead Pkwy. #200 GoRacing.com
Tempe, Arizona 85282-1839 1480 S. Hohokam Dr.
Tempe, AZ 85281
IIS MANAGEMENT APPROVAL
By: ______________________________ By: ______________________________
Signature
__________________________________ __________________________________
Name (Print) Name (Print)
__________________________________ __________________________________
Title Title
__________________________________ __________________________________
Date Date
Work Order #008--Page 2 of 2
<PAGE> 7
[IIS LOGO]
Integrated Information
S Y S T E M S
WORK ORDER #007
IN CONNECTION WITH THE MASTER CONSULTING SERVICES AGREEMENT
PROJECT NAME: GORACING NETWORK ADMINISTRATOR SUPPORT
This Work Order is made pursuant to the Master Consulting Services Agreement
(the "Agreement") effective on October 19, 1999 between Integrated Information
Systems, Inc. ("IIS") and GoRacing.com ("Client") and is incorporated therein by
reference. Capitalized terms not otherwise defined have the meanings provided in
the Agreement.
1. Services. IIS shall perform the Scope of Work identified below for Client.
Any dates provided are estimates only.
Provide interim support for the goracing.com web site and supporting
infrastructure during transition stage of attaining a signed agreement
for site hosting.
2. Rates.
The hourly rates shown below shall be applicable to this Work Order only for
the Scope of Work set forth above. Billing rate will be at $150.00/hr.
<TABLE>
<CAPTION>
RESOURCE RATE ESTIMATED HOURS
- ------------------- -------- ---------------
<S> <C> <C>
Thomas Pierce 150.00 80
Jeffrey Tye 150.00 80
</TABLE>
Any services performed by IIS not included in the Scope of Work shall be
performed by IIS at an hourly rate based on standard rate schedule.
Work Order #007--Page 1 of 2
<PAGE> 8
IIS invoices shall be directed to Client's representative for payment at the
address shown below.
Client Contact for Invoices: Dean Jargo
Company Name: GoRacing.com
Address: 1480 S. Hohokam Dr., Tempe, AZ 85281
Phone #: (602) 337-3782
E-Mail Address: [email protected]
3. Commencement Date. Services under this Work Order will begin on or about
March 22, 2000 and will continue until April 7, 2000 or until the Scope of
Work is finished by IIS.
THEREFORE, the parties have executed this Work Order in duplicate originals.
INTEGRATED INFORMATION SYSTEMS, Inc. CLIENT
1560 W. Fountainhead Pkwy. #200 GoRacing.com
Tempe, Arizona 85282-1839 1480 S. Hohokam Dr.
Tempe, AZ 85281
IIS MANAGEMENT APPROVAL
By: ______________________________ By: ______________________________
Signature
__________________________________ __________________________________
Name (Print) Name (Print)
__________________________________ __________________________________
Title Title
__________________________________ __________________________________
Date Date
Work Order #007--Page 2 of 2
<PAGE> 9
WORK ORDER #003
IN CONNECTION WITH THE MASTER CONSULTING SERVICES AGREEMENT
PROJECT NAME: B2B OPERATIONS MODEL DESIGN
This Work Order is made pursuant to the Master Consulting Services Agreement
(the "Agreement") effective on August 27, 1999, between Integrated Information
Systems, Inc. ("IIS") and Action Performance ("Client") and is incorporated
therein by reference. Capitalized terms not otherwise defined have the meanings
provided in the Agreement.
1. Services. IIS shall perform the Scope of Work identified below for
Client. Any dates provided are estimates only.
1. PROJECT INITIATION
- Business Case Development
2. DEFINE SYSTEM REQUIREMENTS
Define Objectives
- Business Requirements
- Quality Requirements
Define Business Model
- Business Process Design
3. DEVELOP CONCEPTUAL DESIGN
Develop Positioning
- Develop Conceptual Design
- Review Design with Task Force
- Update Business Functions and Process
- Document Changes to Conceptual Design
4. SYSTEM DESIGN ALTERNATIVES
Investigate Alternatives
- Review Software Policy
- Review HW/SW/COM Environment
- Identify Development Alternatives
- Produce Pro's and Con's
- Define Screening Criteria
- Determine Process to Rank Candidates
- Develop Implementation Recommendations
Prepare Project Impact Analysis
- Approximate Cost
- Produce Software Development Plan
- Prepare Economic Analysis
- Identify Risks
- Draft Impact Part of Conceptual Vision Document
5. MANAGEMENT REVIEW AND APPROVAL
Work Order #003 -- Page 1
<PAGE> 10
Present Conceptual Vision Document
- Complete Draft of Conceptual Vision Document
- Review with Task Force
- Finalize and Issue Report
2. Estimate and Rates.
The hourly rates shown below shall be applicable to this Work Order only for
the Scope of Work set forth above. The overall "in good faith estimate" for
work authorized in section one is estimated to be $132,267 and will be
completed by April 28th, 2000. The date specified is achievable given
approval cycles are adequately met and appropriate project sponsorship is
allocated by Action Performance.
Any services performed by IIS not included in the Scope of Work shall be
performed by IIS at the hourly rates specified below with prior approval.
<TABLE>
<CAPTION>
RESOURCE RATE HOURS FEES
-------- ---- ----- --------
<S> <C> <C> <C>
Project Manager $225 84 $18,697
eBusiness Architect $265 222 $58,724
Sr. Consultant $165 322 $54,846
----- --------
Total 638 $132,267
===== ========
</TABLE>
IIS invoices shall be directed to Client's representative for payment at the
address shown below.
Client Contact for Invoices: Dean Jargo
Company Name: Action Performance
Address: 4707 E. Baseline Rd.
Phoenix AZ 85040
3. Commencement Date. Services under this Work Order will begin on or about
February 29, 2000 and will continue until April 28th, 2000 or until the Scope
of Work is completed by IIS.
THEREFORE, the parties have executed this Work Order in duplicate originals.
- -------------------------------------------------------------------------------
INTEGRATED INFORMATION SYSTEMS, Inc. CLIENT
1560 W. Fountainhead Pkwy. #200 Dean Jargo
Tempe, Arizona 85282-1839 4707 E. Baseline Rd.
Phoenix, AZ 85040
By: /s/ Troy D. Keys By:
---------------------------- --------------------------
Signature Signature
Troy D. Keys
- -------------------------------- -----------------------------
Name (Print) Name (Print)
VP of Sales
- -------------------------------- -----------------------------
Title Title
2/25/2000
- -------------------------------- -----------------------------
Effective Date Date
- -------------------------------------------------------------------------------
Work Order #003--Page 2
<PAGE> 1
Exhibit 99.1
DRAFT 2
FOR IMMEDIATE RELEASE CONTACT: Susan M. Bryan
(602) 870-4759
[email protected]
IIS SIGNS AGREEMENT TO EXPAND FACILITIES, HOSTING
SERVICES CAPACITY
COMPANY AGREES TO SUBLEASE BUILDING AND DATA CENTER FROM GORACING.COM
TEMPE, ARIZONA (March 31, 2000 - IIS (Integrated Information Systems) (NASDAQ:
IISX) announced today that it has entered into an agreement with goracing.com,
Inc. (and its parent company Action Performance Companies, Inc.) to sublease a
portion of the company's 65,018 square foot facility in Tempe, Arizona. IIS will
initially occupy approximately 32,500 square feet of the facility to expand its
corporate operations. IIS also will assume existing leases of equipment for an
application hosting center previously operated as an in-house facility by
goracing.com. The agreement includes provisions for IIS to provide hosting
services for goracing.com's website and related applications.
"Our agreement with goracing.com provides immediate, enhanced hosting
capabilities and the opportunity to rapidly adopt additional space to support
operations growth," said Jim Garvey, president and CEO of IIS. "In addition,
this expansion of our corporate relationship with goracing.com provides
opportunities for both companies to capitalize on existing resources and
capabilities in a very efficient way."
About IIS
Integrated Information Systems, based in Tempe, Arizona, is a full service
Internet professional services provider focusing exclusively on the digital
transformation of businesses. The company provides comprehensive e-business
solutions including strategic consulting, customer experience design solutions,
application development and integration services, network infrastructure
services, and application management and hosting services. For additional
information, visit the IIS website at http://www.iisweb.com.
- more -
<PAGE> 2
IIS AGREEMENT
ADD 1-1-1
This press release shall not constitute an offer to sell or a solicitation of an
offer to buy, nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such state
or jurisdiction.
This press release contains forward-looking statements that involve a number of
risks and uncertainties, including the company's ability to take advantage of
expected growth and expanded need for equipment and facilities. There are a
number of factors that could cause actual events to differ materially from those
indicated. Such factors include, without limitation, the competitive environment
in which the company operates, the company's ability to attract and retain high
quality employees, the company's ability to accurately estimate fees for and
timely complete current and future client projects, the continued acceptance of
the company's services, the ability of the company to manage its growth and
projects effectively and the ability of the company to stay at the forefront of
technological changes. Other factors identified in documents filed by IIS with
the Securities and Exchange Commission, including IIS' prospectus filed March
17, 2000, could negatively impact IIS' results of operations and financial
condition.
# # #
