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Exhibit 10.38
Customer No. 1256
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
RIVERWAY II
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Lessee: CONTINUUS SOFTWARE CORPORATION
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The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
April 30, 1999, is Transamerica Business Credit Corporation ("Lessor"). All
equipment, together with all present and future additions, parts, accessories,
attachments, substitutions, repairs, improvements, and replacements thereof or
thereto, which are the subject of a Lease (as defined in the next sentence)
shall be referred to as "Equipment." Simultaneous with the execution and
delivery of this Agreement, the parties are entering into one or more Lease
Schedules (each, a "Schedule") which refer to and incorporate by reference this
Agreement, each of which constitutes a lease (each, a "Lease") for the Equipment
specified therein. Additional details pertaining to each Lease are specified in
the applicable Schedule. Each Schedule that the parties hereafter enter into
shall constitute a Lease. In the event of a conflict of terms between this
Agreement and a Schedule, such Schedule shall prevail over this Agreement.
Lessor has no obligation to enter into any additional leases with, or extend any
future financing to, Lessee.
1. LEASE. Subject to and upon all of the terms and conditions of
this Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and
Lessee hereby agrees to lease from Lessor the Equipment for the Term (as defined
in Paragraph 2 below) thereof. The timing and financial scope of Lessor's
obligation to enter into Leases hereunder are limited as set forth in the
Commitment Letter executed by Lessor and Lessee, dated as of March 26, 1999 and
attached hereto as Exhibit A (the "Commitment Letter").
2. TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule and, unless sooner terminated (as hereinafter provided), shall expire
at the end of the term specified in such Schedule; provided, however, that
obligations due to be performed by Lessee during the Term shall continue until
they have been performed in full. Schedules will only be executed after the
delivery of the Equipment to Lessee or upon completion of deliveries of items of
such Equipment with aggregate cost of not less than $50,000.
3. RENT. Lessee shall pay as rent to Lessor, for use of the
Equipment during the Term, rental payments equal to the sum of all rental
payments including, without limitation, security deposits, advance rents, and
interim rents payable in the amounts and on the dates specified in the
applicable Schedule ("Rent"). If any Rent or other amount payable by Lessee is
not paid within five days after the day on which it becomes payable, Lessee will
pay on demand, as a late charge, an amount equal to 5% of such unpaid Rent or
other amount but only to the extent permitted by applicable law. All payments
provided for herein shall be payable to
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Lessor at its address specified above, or at any other place designated by
Lessor.
4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease
may be canceled or terminated except as expressly provided herein. Lessee's
obligation to pay all Rent due or to become due hereunder shall be absolute and
unconditional and shall not be subject to any delay, reduction, set-off,
defense, counterclaim, or recoupment for any reason whatsoever, including any
failure of the Equipment or any representations by the manufacturer or the
vendor thereof. If the Equipment is unsatisfactory for any reason, Lessee shall
make any claim solely against the manufacturer or the vendor thereof and shall,
nevertheless, pay Lessor all Rent payable hereunder.
5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.
6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE DESIGN OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY,
QUALITY, OR FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH
WARRANTY. LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR
FOR BREACH OF ANY WARRANTY WHATSOEVER. LESSEE LEASES THE EQUIPMENT "AS IS." IN
NO EVENT SHALL LESSOR HAVE ANY LIABILITY, NOR SHALL LESSEE HAVE ANY REMEDY
AGAINST LESSOR, FOR ANY LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED
DIRECTLY OR INDIRECTLY BY THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR
THE OPERATION, MAINTENANCE, OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS
THAT TERM IS USED IN SECTION 2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS
AMENDED FROM TIME TO TIME ("UCC"). Lessor grants to Lessee, for the sole purpose
of prosecuting a claim, the benefits of any and all warranties made available by
the manufacturer or the vendor of the Equipment to the extent assignable.
7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for
the sole and limited purpose of accepting delivery of the Equipment from each
vendor thereof. Lessee shall pay any and all delivery and installation charges.
Lessor shall not be liable to Lessee for any delay in, or failure of, delivery
of the Equipment.
8. PURCHASE OBLIGATION. Lessee shall, upon expiration of the
Term, purchase all of the Equipment covered by the applicable Lease on the date
specified therefor in the applicable Schedule ("Purchase Date"). The purchase
price for such Equipment shall be set forth in the applicable Schedule, and
shall be equal to ten percent (10%) of the purchase price of such Equipment, in
addition to applicable sales and other taxes applicable to the transfer of the
Equipment (the "Purchase Price"). On the Purchase Date, for any Equipment,
Lessee shall pay to Lessor the Purchase Price, together with any other amount
payable and arising hereunder, in immediately available funds, whereupon Lessor
shall transfer to Lessee, without recourse or warranty of any kind, express or
implied, all of Lessor's right, title, and interest in and to such Equipment on
an "As Is, Where Is" basis.
9. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee
shall affix to the Equipment any labels supplied by Lessor indicating ownership
of such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee under a
Lease. The Equipment is and shall at all times be and remain personal property
and shall not become a
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fixture. Lessee shall obtain and record such instruments and take such steps as
may be necessary to prevent any person from acquiring any rights in the
Equipment by reason of the Equipment being claimed or deemed to be real
property. Upon request by Lessor, Lessee shall use its best efforts to obtain
and deliver to Lessor valid and effective waivers, in recordable form, by the
owners, landlords, and mortgagees of the real property upon which the Equipment
is located or certificates of Lessee that it is the owner of such real property
or that such real property is neither leased nor mortgaged. Lessee shall make
the Equipment and its maintenance records available for inspection by Lessor at
reasonable times and upon reasonable notice. Lessee shall execute and deliver to
Lessor for filing any UCC financing statements or similar documents Lessor may
reasonably request.
10. EQUIPMENT USE. Lessee agrees that the Equipment will be
operated by competent, qualified personnel in connection with Lessee's business
for the purpose for which the Equipment was designed and in accordance with
applicable operating instructions, laws, and government regulations, and that
Lessee shall use all reasonable precautions to prevent loss or damage to the
Equipment from fire and other hazards. Lessee shall procure and maintain in
effect all orders, licenses, certificates, permits, approvals, and consents
required by federal, state, or local laws or by any governmental body, agency,
or authority in connection with the delivery, installation, use, and operation
of the Equipment.
11. MAINTENANCE. Lessee, at its sole cost and expense, shall keep
the Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all recertification requirements, and
shall maintain the Equipment in its original condition and working order,
ordinary wear and tear excepted. At the reasonable request of Lessor, Lessee
shall furnish all proof of maintenance.
12. ALTERATION; MODIFICATIONS; PARTS. Lessee may alter or modify
the Equipment only with the prior written consent of Lessor, which consent shall
not be unreasonably withheld. Any alteration shall be removed and the Equipment
restored to its normal, unaltered condition at Lessee's expense (without
damaging the Equipment's originally intended function or its value) prior to its
return to Lessor. Any part installed in connection with warranty or maintenance
service or which cannot be removed in accordance with the preceding sentence
shall be the property of Lessor.
13. RETURN OF EQUIPMENT. Upon demand by Lessor pursuant to
Paragraph 21 below, Lessee shall contact Lessor for shipping instructions and,
at Lessee's own risk, immediately return the Equipment, freight prepaid, to a
location in the continental United States specified by Lessor. At the time of
such return to Lessor, the Equipment shall (i) be in the operating order,
repair, and condition as required by or specified in the original specifications
and warranties of each manufacturer and vendor thereof, ordinary wear and tear
excepted, (ii) meet all recertification requirements, and (iii) be capable of
being promptly assembled and operated by a third party purchaser or third party
lessee without further repair, replacement, alterations, or improvements, and in
accordance and material compliance with any and all statutes, laws, ordinances,
rules, and regulations of any governmental authority or any political
subdivision thereof applicable to the use and operation of the Equipment. The
provisions of this Paragraph 13 are of the essence of the Lease, and upon
application to any court of equity having jurisdiction in the premises, Lessor
shall be entitled to a decree against Lessee requiring specific performance of
the covenants of Lessee set forth in this Paragraph 13. If Lessee fails to
return the Equipment when required, the terms and conditions of the Lease shall
continue to be applicable and Lessee shall continue to pay Rent until the
Equipment is received by Lessor.
14. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at
its own expense, liability and property damage insurance relating to the
Equipment,
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insuring against such risks as are customarily insured against on the type of
equipment leased hereunder by businesses in which Lessee is engaged in such
amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each liability insurance policy shall provide
coverage (including, without limitation, personal injury coverage) of not less
than $1,000,000 for each occurrence, and shall name Lessor as an additional
insured; and each property damage policy shall name Lessor and Lessee as loss
payees and all policies shall contain a clause requiring the insurer to give
Lessor at least thirty days' prior written notice of any alteration in the terms
or cancellation of the policy. Lessee shall furnish to Lessor and Lessee a copy
of each insurance policy (with endorsements) or other evidence satisfactory to
Lessor that the required insurance coverage is in effect; provided, however,
Lessor shall have no duty to ascertain the existence of or to examine the
insurance policies to advise Lessee if the insurance coverage does not comply
with the requirements of this Paragraph. If Lessee fails to insure the Equipment
as required, Lessor shall have the right but not the obligation to obtain such
insurance, and the cost of the insurance shall be for the account of Lessee due
as part of the next due Rent. Lessee consents to Lessor's release, upon its
failure to obtain appropriate insurance coverage, of any and all information
necessary to obtain insurance with respect to the Equipment or Lessor's interest
therein.
Until the Equipment is returned to and received by Lessor as
provided in Paragraph 13 above, Lessee shall bear the entire risk of theft or
destruction of, or damage to, the Equipment including, without limitation, any
condemnation, seizure, or requisition of title or use ("Casualty Loss"). No
Casualty Loss shall relieve Lessee from its obligations to pay Rent except as
provided in clause (b) below. When any Casualty Loss occurs, Lessee shall
immediately notify Lessor and, at the option of Lessor, shall promptly (a) place
such Equipment in good repair and working order; or (b) pay Lessor an amount
equal to the Stipulated Loss Value of such Equipment and all other amounts
(excluding Rent) payable by Lessee hereunder, together with a late charge on
such amounts at a rate per annum equal to the rate imputed in the Rent payments
hereunder (as reasonably determined by Lessor) from the date of the Casualty
Loss through the date of payment of such amounts, whereupon Lessor shall
transfer to Lessee, without recourse or warranty (express or implied), all of
Lessor's interest, if any, in and to such Equipment on an "AS IS, WHERE IS"
basis. The proceeds of any insurance payable with respect to the Equipment shall
be applied, at the option of Lessor, either towards (i) repair of the Equipment
or (ii) payment of any of Lessee's obligations hereunder. Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to make claim for, receive payment of, and
execute and endorse all documents, checks or drafts issued with respect to any
Casualty Loss under any insurance policy relating to the Equipment.
15. TAXES. Lessee shall pay when due, and indemnify and hold
Lessor harmless from, all sales, use, excise, and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges, or withholdings
of any nature), and any fines, penalties, or interest thereon, imposed or levied
by any governmental body, agency, or tax authority upon or in connection with
the Equipment, its purchase, ownership, delivery, leasing, possession, use, or
relocation of the Equipment or otherwise in connection with the transactions
contemplated by each Lease or the Rent thereunder, excluding taxes on or
measured by the net income of Lessor. Upon request, Lessee will provide proof of
payment. Unless Lessor elects otherwise, Lessee will pay all property taxes on
the Equipment. Lessee shall timely prepare and file all reports and returns
which are required to be made with respect to any obligation of Lessee under
this Paragraph 15. Lessee shall, to the extent permitted by law, cause all
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governmental charges to be made to Lessor in care of Lessee. Upon request,
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Lessee will provide Lessor with copies of all such ▇▇▇▇▇▇▇▇.
16. LESSOR'S PAYMENT. If Lessee fails to perform its obligations
under Paragraph 14 or 15 above, or Paragraph 22 below, Lessor shall have the
right to substitute performance, in which case Lessee shall immediately
reimburse Lessor therefor.
17. GENERAL INDEMNITY. Each Lease is a net lease. Therefore,
Lessee shall indemnify Lessor and its successors and assigns against, and hold
Lessor and its successors and assigns harmless from, any and all claims,
actions, damages, obligations, liabilities, and all costs and expenses,
including, without limitation, reasonable legal fees incurred by Lessor or its
successors and assigns arising out of each Lease including, without limitation,
the purchase, ownership, delivery, lease, possession, maintenance, condition,
use, or return of the Equipment, or arising by operation of law, except that
Lessee shall not be liable for any claims, actions, damages, obligations, and
costs and expenses determined by a non-appealable, final order of a court of
competent jurisdiction to have occurred as a result of the gross negligence or
willful misconduct of Lessor or its successors and assigns. Lessee agrees that
upon written notice by Lessor of the assertion of any claim, action, damage,
obligation, liability, or lien, Lessee shall assume full responsibility for the
defense thereof, provided that Lessor's failure to give such notice shall not
limit or otherwise affect its rights hereunder. Any payment pursuant to this
Paragraph (except for any payment of Rent) shall be of such amount as shall be
necessary so that, after payment of any taxes required to be paid thereon by
Lessor, including taxes on or measured by the net income of Lessor, the balance
will equal the amount due hereunder. The provisions of this Paragraph with
regard to matters arising during a Lease shall survive the expiration or
termination of such Lease. Notwithstanding anything to the contrary herein,
Lessee shall not be required to indemnify Lessor for claims arising after return
of the equipment to Lessor pursuant to the provisions of Paragraph 13 hereof.
18. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior
written consent of Lessor, (a) assign, transfer, pledge, or otherwise dispose of
any Lease or Equipment, or any interest therein; (b) sublease or lend any
Equipment or permit it to be used by anyone other than Lessee and its employees;
or (c) move any Equipment from the location specified for it in the applicable
Schedule, except that Lessee may move Equipment to another location within the
United States provided that Lessee has delivered to Lessor (A) prior written
notice thereof and (B) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to Lessor) necessary to
protect Lessor's interest in such Equipment. Notwithstanding anything to the
contrary in the immediately preceding sentence, Lessee may keep any Equipment
consisting of motor vehicles or rolling stock at any location in the United
States.
19. ASSIGNMENT BY LESSOR. Lessor may, at no cost to Lessee,
assign its interest or grant a security interest in any Lease and the Equipment
individually or together, in whole or in part. If Lessee is given written notice
of any such assignment, it shall immediately make all payments of Rent and other
amounts hereunder directly to such assignee. Each such assignee shall have all
of the rights of Lessor under each Lease assigned to it. Lessee shall not assert
against any such assignee any set-off, defense, or counterclaim that Lessee may
have against Lessor or any other person.
20. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of
the obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within five days
of when due any amount required to be paid by Lessee under or in connection with
any Lease; (b) any of the Lease Parties fails to perform any other provision
under or in connection with a Lease or violates any of the covenants or
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agreements of such Lease Party under or in connection with a Lease; (c) any
representation made or financial information delivered or furnished by any of
the Lease Parties under or in connection with a Lease shall prove to have been
inaccurate in any material respect when made; (d) any of the Lease Parties makes
an assignment for the benefit of creditors, whether voluntary or involuntary, or
consents to the appointment of a trustee or receiver, or if either shall be
appointed for any of the Lease Parties or for a substantial part of its property
without its consent and, in the case of any such involuntary proceeding, such
proceeding remains undismissed or unstayed for forty-five days following the
commencement thereof; (e) any petition or proceeding is filed by or against any
of the Lease Parties under any Federal or State bankruptcy or insolvency code or
similar law and, in the case of any such involuntary petition or proceeding,
such petition or proceeding remains undismissed or unstayed for forty-five days
following the filing or commencement thereof, or any of the Lease Parties takes
any action authorizing any such petition or proceeding; (f) any of the Lease
Parties fails to pay when due any indebtedness for borrowed money or under
conditional sales or installment sales contracts or similar agreements, leases,
or obligations evidenced by bonds, debentures, notes, or other similar
agreements or instruments to any creditor (including Lessor under any other
agreement) after any and all applicable cure periods therefor shall have
elapsed; (g) any judgment shall be rendered against any of the Lease Parties
which shall remain unpaid or unstayed for a period of sixty days; (h) any of the
Lease Parties shall dissolve, liquidate, wind up or cease its business, sell or
otherwise dispose of all or substantially all of its assets, or make any
material change in its lines of business; (i) any of the Lease Parties shall
amend or modify its name, unless such Lease Party delivers to Lessor, thirty
days prior to any such proposed amendment or modification, written notice of
such amendment or modification and within ten days before such amendment or
modification delivers executed financing statements (in form and substance
satisfactory to the Lessor); (j) any of the Lease Parties shall merge or
consolidate with any other entity or make any material change in its capital
structure, in each case without Lessor's prior written consent, which shall not
be unreasonably withheld; (k) any of the Lease Parties shall suffer any loss or
suspension of any material license, permit, or other right or asset necessary to
the profitable conduct of its business, fail generally to pay its debts as they
mature, or call a meeting for purposes of compromising its debts; (l) any of the
Lease Parties shall deny or disaffirm its obligations hereunder or under any of
the documents delivered in connection herewith; (m) without Lessor's consent
there is a change in more than 35% of the ownership of any equity interests of
any of the Lease Parties on the date hereof or more than 35% of such interests
become subject to any contractual, judicial or statutory lien, charge, security
interest, or encumbrance; or (n) any of the Lease Parties suffers a material
adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise).
21. REMEDIES. Upon the occurrence and continuation of an Event of
Default, Lessor shall have the right, in its sole discretion, to exercise any
one or more of the following remedies: (a) terminate each Lease; (b) declare any
and all Rent and other amounts then due and any and all Rent and other amounts
to become due under each Lease (collectively, the "Lease Obligations")
immediately due and payable; (c) in accordance with applicable law take
possession of any or all items of Equipment, wherever located, without demand,
notice, court order, or other process of law, and without liability for entry to
Lessee's premises, for damage to Lessee's property, or otherwise except as a
result of the gross negligence or willful misconduct of Lessor or Lessor's
agents; (d) demand that Lessee immediately return any or all Equipment to Lessor
in accordance with Paragraph 13 above, and, for each day that Lessee shall fail
to return any item of Equipment, Lessor may demand an amount equal to the Rent
payable for such Equipment in accordance with Paragraph 13 above; (e) lease,
sell, or otherwise dispose of the Equipment in a commercially reasonable manner,
with or without notice and on public or private bid, provided that Lessor shall
apply the proceeds thereof to the obligations owning from Lessee to Lessor under
the Lease; (f) recover the following amounts from the Lessee (as damages,
including reimbursement of costs and expenses, liquidated for all purposes and
not as a
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penalty): (i) all costs and expenses of Lessor reimbursable to it hereunder,
including, without limitation, expenses of disposition of the Equipment,
reasonable legal fees, and all other amounts specified in Paragraph 22 below;
(ii) an amount equal to the sum of (A) any accrued and unpaid Rent through the
later of (1) the date of the applicable default, (2) the date that Lessor has
obtained possession of the Equipment, or (3) such other date as Lessee has made
an effective tender of possession of the Equipment to Lessor (the "Default
Date") and (B) if Lessor resells or re-lets the Equipment, Rent at the periodic
rate provided for in each Lease for the additional period that it takes Lessor
to resell or re-let all of the Equipment; (iii) the present value of all future
Rent reserved in the Leases and contracted to be paid over the unexpired Term of
the Leases discounted at five percent compound interest; (iv) the reversionary
value of the Equipment as of the expiration of the Term of the applicable Lease
as set forth on the applicable Schedule; and (v) any indebtedness for Lessee's
indemnity under Paragraph 17 above, plus a late charge at the rate specified in
Paragraph 3 above, less the amount received by Lessor, if any, upon sale or
re-let of the Equipment; and (g) exercise any other right or remedy to recover
damages or enforce the terms of the Leases. Upon the occurrence and continuance
of an Event of Default, Lessor shall have the right, whether or not Lessor has
made any demand or the obligations of Lessee hereunder have matured, to
appropriate and apply to the payment of the obligations of Lessee hereunder all
security deposits and other deposits (general or special, time or demand,
provisional or final) now or hereafter held by and other indebtedness or
property now or hereafter owing by Lessor to Lessee. Lessor may pursue any other
rights or remedies available at law or in equity, including, without limitation,
rights or remedies seeking damages, specific performance, and injunctive relief.
Any failure of Lessor to require strict performance by Lessee, or any waiver by
Lessor of any provision hereunder or under any Schedule, shall not be construed
as a consent or waiver of any other breach of the same or of any other
provision. Any amendment or waiver of any provision hereof or under any Schedule
or consent to any departure by Lessee herefrom or therefrom shall be in writing
and signed by Lessor.
No right or remedy is exclusive of any other provided herein or
permitted by law or equity. All such rights and remedies shall be cumulative and
may be enforced concurrently or individually from time to time.
22. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs
and expenses (including legal fees and expenses) incurred in connection with the
preparation, execution and delivery of this Agreement and any other agreements
and transactions contemplated hereby, which expenses shall not exceed $7,500
without the written consent of Lessee and all costs and expenses in protecting
and enforcing Lessor's rights and interests in each Lease and the equipment,
including, without limitation, legal, collection, and remarketing fees and
expenses incured by Lessor in enforcing the terms, conditions, or provisions of
each Lease or upon the occurrence and continuation of an Event of Default.
23. LESSEE'S WAIVERS. To the extent permitted by applicable law,
Lessee hereby waives any and all rights and remedies conferred upon a lessee by
Sections 2A-508 through 2A-522 of the UCC. To the extent permitted by applicable
law, Lessee also hereby waives any rights now or hereafter conferred by statute
or otherwise which may require Lessor to sell, lease, or otherwise use any
Equipment in mitigation of Lessor's damages as set forth in Paragraph 21 above
or which may otherwise limit or modify any of Lessor's rights or remedies under
Paragraph 21. Any action by Lessee against Lessor for any default by Lessor
under any Lease shall be commenced within one year after any such cause of
action accrues.
24. NOTICES; ADMINISTRATION. Except as otherwise provided herein,
all notices, approvals, consents, correspondence, or other communications
required or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica
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Technology Finance Division, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Assistant Vice President, Lease Administration, with a copy to
Lessor at Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department, if to Lessee, then to Continuus
Software Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer or such other address as shall be designated by Lessee or
Lessor to the other party. All such notices and correspondence shall be
effective when received.
25. REPRESENTATIONS. Lessee represents and warrants to Lessor
that (a) Lessee is duly organized, validly existing, and in good standing under
the laws of the State of its incorporation; (b) the execution, delivery, and
performance by Lessee of this Agreement are within Lessee's powers, have been
duly authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery, and
performance by Lessee of this Agreement; (d) each Lease constitutes the legal,
valid, and binding obligations of Lessee enforceable against Lessee in
accordance with its terms except as limited by any bankruptcy, insolvency,
reorganization, or other similar laws of general application affecting the
enforcement of creditor or lessor rights or subject to the effect of general
principles of equity or law; (e) the cost of each item of Equipment does not
exceed the fair and usual price for such type of equipment purchased in like
quantity and reflects all discounts, rebates, and allowances for the Equipment
(including, without limitation, discounts for advertising, prompt payment,
testing, or other services) given to the Lessee by the manufacturer, supplier,
or any other person; and (f) all information supplied by Lessee to Lessor in
connection herewith is correct and does not omit any material statement
necessary to insure that the information supplied is not misleading.
26. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will
execute, acknowledge, record, or file, as the case may be, such further
documents and do such further acts as may be reasonably necessary, to carry out
more effectively the purposes of this Agreement. Lessee hereby appoints Lessor
as its attorney-in-fact to execute on behalf of Lessee and authorizes Lessor to
file without Lessee's signature any UCC financing statements and amendments
necessary to perfect any security interest granted by Lessee to Lessor in the
Equipment.
27. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as
soon as available, but not later than 120 days after the end of each fiscal year
of Lessee and its consolidated subsidiaries, the consolidated balance sheet,
income statement, and statements of cash flows and shareholders equity for
Lessee and its consolidated subsidiaries (the "Financial Statements") for such
year, audited by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments). Lessee shall also
deliver to Lessor as soon as available copies of all press releases and other
similar communications issued by Lessee.
28. CONSENT TO JURISDICTION. Lessee irrevocably submits to the
jurisdiction of any Illinois state or federal court sitting in Illinois for any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and Lessee irrevocably agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Illinois state or federal court.
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29. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
30. FINANCE LEASE. Lessee and Lessor agree that each Lease is a
"Finance Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges
that Lessee has reviewed and approved each written Supply Contract (as defined
by UCC 2A-103(y)) covering Equipment purchased from each "Supplier" (as defined
by UCC 2A-103(x)) thereof.
31. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer or supplier, nor any salesman, representative, or other agent of
the manufacturer or supplier, is an agent of Lessor. No salesman,
representative, or agent of the manufacturer or supplier is authorized to waive
or alter any term or condition of this Agreement or any Schedule and no
representation as to the Equipment or any other matter by the manufacturer or
supplier shall in any way affect Lessee's duty to pay Rent and perform its other
obligations as set forth in this Agreement or any Schedule.
32. SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that Lessor,
in determining the Rent due hereunder, has assumed that certain tax benefits as
are provided to an owner of property under the Internal Revenue Code of 1986, as
amended (the "Code"), and under applicable state tax law, including, without
limitation, depreciation deductions under Section 168(b) of the Code, and
deductions under Section 163 of the Code in an amount at least equal to the
amount of interest paid or accrued by Lessor with respect to any indebtedness
incurred by Lessor in financing its purchase of the Equipment, are available to
Lessor as a result of the lease of the Equipment. In the event Lessor is unable
to obtain such tax benefits as a result of an act or omission of Lessee, is
required to include in income any amount other than the Rent, or is required to
recognize income in respect of the Rent earlier than anticipated pursuant to
this Agreement, Lessee shall pay Lessor additional rent ("Additional Rent") in a
lump sum in an amount needed to provide Lessor with the same after-tax yield and
after-tax cash flow as would have been realized by Lessor had Lessor (i) been
able to obtain such tax benefits, (ii) not been required to include any amount
in income other than the Rent, and (iii) not been required to recognize income
in respect of the Rent earlier than anticipated pursuant to this Agreement. The
Additional Rent shall be computed by Lessor, which computation shall be binding
on Lessee. The Additional Rent shall be due immediately upon written notice by
Lessor to Lessee of Lessor's inability to obtain tax benefits, the inclusion of
any amount in income other than the Rent or the recognition of income in respect
of the Rent earlier than anticipated pursuant to this Agreement. The provisions
of this Paragraph 32 shall survive the termination of this Agreement.
33. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR
UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL
NOT IN ANY WAY BE AFFECTED OR IMPAIRED.
LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE HERETO,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED IN
CONNECTION HEREWITH FROM TIME TO TIME, AND THE COMMITMENT LETTER ARE THE
COMPLETE AND
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EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL
PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. SHOULD THERE EXIST
ANY INCONSISTENCY BETWEEN THE TERMS OF THE COMMITMENT LETTER AND THIS AGREEMENT,
THE TERMS OF THIS AGREEMENT SHALL PREVAIL.
IN WITNESS WHEREOF, the parties hereto have executed or caused
this Agreement to be duly executed by their duly authorized officers as of the
date first written above.
CONTINUUS SOFTWARE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President and CEO
Federal Tax ID: ▇▇-▇▇▇▇▇▇▇
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
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Name:
Title:
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