EXHIBIT 10.20
[LOGO] Master Agreement No. 1103
MASTER AGREEMENT TO LEASE EQUIPMENT
THIS MASTER AGREEMENT TO LEASE EQUIPMENT (this "Agreement") is entered into
as of January 20, 1998 by and between CISCO SYSTEMS CAPITAL CORPORATION
("Lessor") having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and INTERNAP NETWORK SERVICES CORPORATION, a
_______________________ corporation ("Lessee"), having a principal place of
business at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇. In consideration
of the covenants set forth herein, Lessor and Lessee have agreed as follows:
I. THE LEASE
1.1 LEASE OF EQUIPMENT. In accordance with the terms and conditions of
this Agreement, Lessor shall lease to Lessee, and Lessee shall
lease from Lessor, the units of personal property (individually, a
"Unit," and, collectively, the "Equipment") described in the lease
schedule(s) (each, a "Lease") to be entered into from time to time
into which this Agreement is incorporated. Each Lease shall
constitute a separate, distinct, and independent lease and
contractual obligation of Lessee. Lessor or its assignee shall at
all times retain the full legal title to the Equipment, it being
expressly agreed by both parties that each Lease is an agreement of
lease only. Notwithstanding any provision to the contrary contained
in this Agreement, Lessee shall be deemed to accept the Equipment
on the Commencement Date (as specified in each Lease).
1.2 TERM OF LEASE. The original term (the "Original Term") of each Unit
shall commence on the Commencement Date and, subject to Sections 3.3
and 3.5 below, shall terminate on the date specified in such Lease.
Notwithstanding the foregoing, the Original Term for each Unit shall
automatically extend for successive 30-day periods after its
expiration unless either party gives the other party written notice,
at least 90 days prior to the expiration of the Original Term or the
then extended term, as the case may be, of its intent not to so
extend the applicable Lease. Except as specifically provided in this
Section 1.2, no Lease may be terminated by Lessor or Lessee, for any
reason whatsoever, prior to the end of the Original Term or any
extended term.
1.3 RENTAL PAYMENTS. Lessee shall pay Lessor rent ("Rent") for each Unit
in the amounts and at the times specified in the Lease. The Lease
Term for each Unit shall commence on the Commencement Date and shall
continue for the period specified in the Lease, [unless otherwise
extended pursuant to Section __ below]. The Lease Term as to any Unit
may not be terminated by Lessee unless otherwise expressly provided
in the Lease. All rental and other amounts payable by Lessee to
Lessor hereunder shall be paid to Lessor at the address specified
above, or at such other place as Lessor may designate in writing to
Lessee from time to time.
1.4 RETURN OF EQUIPMENT. Upon expiration of the Original Term of a Unit,
Lessee shall immediately return such Unit to Lessor as provided in
Section 3.3 below. Except as provided in Section 1.2 above, should
Lessee not return any Unit at the end of its Original Term, Lessee
shall continue to pay Rent to Lessor with respect to such Unit in
the sum and on the due dates set out in the applicable Lease, as a
month-to-month lease, until such Unit is returned by Lessee. If
Lessee fails to return any of the Equipment upon demand therefor by
Lessor, Lessee shall pay Lessor, as the measure of Lessor's damages,
the Casualty Value (as defined in the applicable Lease) of such
Equipment.
II. DISCLAIMERS AND WARRANTIES; INTELLECTUAL PROPERTY
2.1 DISCLAIMERS; WARRANTIES. Lessee represents and acknowledges that
each Unit is of a size, design, capacity and manufacture selected by
it, and that it is satisfied that each Unit is suitable for its
purposes. LESSOR SUPPLIES THE EQUIPMENT AS IS, AND, NOT BEING THE
MANUFACTURER OF THE EQUIPMENT, THE MANUFACTURER'S AGENT OR THE
SELLER'S AGENT, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS
OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, DESIGN OR CONDITION OF THE EQUIPMENT, LESSOR SHALL NOT BE
RESPONSIBLE FOR ANY LOSS OR DAMAGE RESULTING FROM THE INSTALLATION,
OPERATION OR OTHER USE, OR DEINSTALLATION OF THE EQUIPMENT,
INCLUDING, WITHOUT LIMITATION, ANY DIRECT, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGE OR LOSS. Lessee shall look solely to the
manufacturer or the supplier of Equipment for correction of any
problems that may arise with respect thereto, and all warranties
made by the manufacturer or such supplier are, to the degree
possible, hereby assigned to Lessee for the term of the applicable
Lease. To the extent any such warranty requires performance of any
kind by the beneficiary of the warranty, Lessee shall perform in
accordance therewith.
2.2 INTELLECTUAL PROPERTY. Except as otherwise expressly provided in
each Lease, LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS WHATSOEVER
WITH RESPECT TO THE INTELLECTUAL PROPERTY RIGHTS, INCLUDING, WITHOUT
LIMITATION, ANY PATENT, COPYRIGHT AND TRADEMARK RIGHTS, OF ANY THIRD
PARTY WITH RESPECT TO THE EQUIPMENT, WHETHER RELATING TO
INFRINGEMENT OR OTHERWISE. Lessor shall, at Lessee's cost and expense,
exercise, when requested by Lessee, rights of indemnification, if
any, for patent, copyright or other intellectual property
infringement obtained from the manufacturer under any agreement for
purchase of the Equipment. If notified promptly in writing of any
action brought against Lessee based on a claim that the Equipment
infringes a United States patent, copyright or other intellectual
property right, Lessor shall promptly notify the manufacturer
thereof for purposes of exercising, for the benefit of Lessee,
Lessor's rights with respect to such claim under any such agreement.
III. COVENANTS OF LESSEE
3.1 PAYMENTS UNCONDITIONAL; TAX BENEFITS; ACCEPTANCE. EACH LEASE SHALL
BE A NET LEASE, AND LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER
SUMS THEREUNDER, AND THE RIGHTS OF LESSOR IN AND TO SUCH PAYMENTS,
SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY
ABATEMENT, REDUCTION, SETOFF, DEFENSE, COUNTERCLAIM, INTERRUPTION,
DEFERMENT OR RECOUPMENT, FOR ANY REASON WHATSOEVER. It is the intent
of Lessor, and an inducement to Lessor, to enter into each Lease, to
claim all available tax benefits of ownership with respect to the
Equipment subject thereto. Lessee acknowledges and represents that
(a) no right, title or interest in such Equipment has been or is
intended to be passed to Lessee, other than the right to maintain
possession of and use of such Equipment for the Original Term of
such Lease, conditioned on Lessee's performance of the terms and
conditions of such Lease, (b) Lessee has not taken and will not, at
any time during the Original Term of such Lease, take any action
which could cause Lessor to lose any tax benefits of ownership, and
(c) the Casualty Value of each Unit (as defined in the applicable
Lease) includes an amount which provides for Lessor's recovery of
the loss of such tax benefits. Lessee's acceptance of the Equipment
subject to a Lease shall be conclusively and irrevocably evidenced
by Lessee executing an Acceptance Certificate with respect to such
Equipment, and,
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upon acceptance, such Lease shall be noncancellable for its
Original Term unless otherwise agreed to in writing by Lessor. Any
nonpayment of Rent or other amounts payable under any Lease shall
result in Lessee's obligation to promptly pay Lessor as additional
Rent on such overdue payment, for the period of time during which
it is overdue (without regard to any grace period), interest at a
rate equal to the lesser of (a) 14% per annum, or (b) the maximum
rate of interest permitted by law.
3.2 USE OF EQUIPMENT. Lessee shall use the Equipment solely in the
conduct of its business, in a manner and for the use contemplated by
the manufacturer thereof, and in compliance with all laws, rules and
regulations of every governmental authority having jurisdiction over
the Equipment or Lessee and with the provisions of all policies of
insurance carried by Lessee pursuant to Section 3.6 below; provided,
however, Lessee shall have the right to allow third parties, under
Lessee's supervision, to use the Equipment, so long as Lessee shall
retain uninterrupted possession and control of the Equipment. Lessee
shall pay all costs, expenses, fees and charges incurred in
connection with the use and operation of the Equipment.
3.3 DELIVERY; INSTALLATION; RETURN; MAINTENANCE AND REPAIR; INSPECTION.
Lessee shall be solely responsible, at its own expense, for (a) the
delivery of the Equipment to Lessee, (b) the packing, rigging and
delivery of the Equipment back to Lessor, upon expiration of the
Original Term, in good repair, condition and working order, ordinary
wear and tear excepted, at the location(s) within the continental
United States specified by Lessor, and (c) the installation,
de-installation, maintenance and repair of the Equipment. During the
term of the applicable Lease, Lessee shall ensure that each Unit is
covered by a maintenance agreement, to the extent available, with
the manufacturer of such Unit or such other party, reasonably
acceptable to Lessor. Lessee shall, at its expense, keep the
Equipment in good repair, condition and working order, ordinary wear
and tear excepted, and, at the expiration of the Original Term, or
any renewal term, with respect to any of the Equipment, have such
Equipment inspected and certified acceptable for maintenance service
by the manufacturer. In the event any of the Equipment, upon its
return to Lessor, is not in good repair, condition and working
order, ordinary wear and tear excepted, Lessee shall be obligated to
pay Lessor for the out-of-pocket expenses Lessor incurs in bringing
such Equipment up to such status, but not in excess of the Casualty
Value (as defined in the applicable Lease) for such Equipment,
promptly alter its receipt of an invoice for such expenses. Lessor
shall be entitled to inspect the Equipment at Lessee's location at
reasonable times.
3.4 TAXES. Lessee shall be obligated to pay, and hereby indemnifies
Lessor and its successors and assigns against, and holds each of
them harmless from, all license fees, assessments, and sales, use,
property, excise and other taxes and charges, other than those
measured by Lessor's net income, now or hereafter imposed by any
governmental body or agency upon or with respect to any of the
Equipment, or the possession, ownership, use or operation thereof,
or any Lease or the consummation of the transactions contemplated in
any Lease or this Agreement. Notwithstanding the foregoing, Lessor
shall file all required personal property tax returns, and shall pay
all personal property taxes payable, with respect to the Equipment,
Lessee shall pay to Lessor, as additional rental, the amount of all
such personal property taxes within 15 days of its receipt of an
invoice for such taxes.
3.5 LOSS OF EQUIPMENT. Lessee shall bear the entire risk of the
Equipment being lost, destroyed or otherwise rendered permanently
unfit or unavailable for use from any cause whatsoever (an "Event of
Loss") after it has been delivered to a common carrier for shipment
to Lessee. If an Event of Loss shall occur with respect to any Unit,
Lessee shall promptly and fully notify Lessor thereof in writing. On
the rental payment date following Lessor's receipt of such notice,
Lessee shall pay to Lessor an amount equal to the rental payment or
payments due and payable with respect to such Unit on or prior to
such date, plus a sum equal to the Casualty Value of such Unit as of
the date of such payment, as set forth in such Lease. Upon the
making of such payment by Lessee regarding any Unit, the rental for
such Unit shall cease to accrue, the term of this Lease as to such
Unit shall terminate and (except in the case of loss, theft or
complete destruction) Lessor shall be entitled to recover possession
of such Unit in accordance with the provisions of Section 3.3 above.
Provided that Lessor has received the Casualty Value for any Unit,
Lessee shall be entitled to the proceeds of any recovery in respect
of such Unit from insurance or otherwise.
3.6 INSURANCE. Lessee shall obtain and maintain for the entire term of
each Lease, at its own expense, property damage and liability
insurance and insurance against loss or damage to the Equipment
subject to such Lease including, without limitation, loss by fire
(including so-called extended coverage), theft and such other risks
of loss as are normally maintained on equipment of the type leased
hereunder by company's carrying on the business in which Lessee is
engaged, in such amounts, in such form and with such insurers as
shall be satisfactory to Lessor. Each insurance policy will name
Lessee as insured and Lessor as an additional insured and loss payee
thereof as Lessor's interests may appear, and shall provide that it
may not be canceled or altered without at least 30 days prior
written notice thereof being given to Lessor or its successors and
assigns.
3.7 INDEMNITY. Except with respect to the gross negligence or willful
misconduct of Lessor, Lessee hereby indemnifies, protects, defends
and holds harmless Lessor and its successors and assigns, from and
against any and all claims, demands, actions, suits, and
proceedings, losses costs, expenses, damages and liabilities,
including, without limitation, reasonable attorneys' fees and costs
(collectively, "Claims"), arising out of, connected with, or
resulting from this Agreement, any Lease or any of the Equipment,
including, without limitation, the manufacture, selection, purchase,
delivery, possession, condition, use, operation, or return of the
Equipment. Each of the parties shall give the other prompt written
notice of any Claim of which it becomes aware. The provisions of
this Section 3.7 shall survive the expiration or termination of this
Agreement or any Lease.
3.8 PROHIBITIONS RELATED TO EQUIPMENT. Without the prior written consent
of Lessor, which consent as it pertains to subsections (a) and (c)
below shall not be unreasonably withheld, Lessee shall not: (a)
sublease any of the Equipment (provided that Lessee may, without the
prior written consent of Lessor, permit any Affiliate (defined
below) of Lessee to use any of the Equipment in the ordinary course
of its business); (b) create or incur, or permit to exist, any lien
or encumbrance with respect to any of the Equipment, or any part
thereof; (c) move any of the Equipment from the location at which it
is first installed; or (d) permit any of the Equipment to be moved
outside the continental limits of the United States. For purposes of
this Agreement, the term "Affiliate" shall mean (i) any corporation
which controls, is controlled by, or under common control with
Lessee, (ii) any corporation resulting from the merger or
consolidation of Lessee, or (iii) any entity which acquires all of
the assets of Lessee as a going concern. For purposes of this
Section 3.8, the term "control" shall mean the power to direct the
management of the relevant entity.
3.9 IDENTIFICATION. Lessee shall place and maintain permanent
markings provided by Lessor on each Unit evidencing ownership,
security and other interests therein, as specified from time to
time by Lessor. Lessee shall not place or permit to be placed on
any Unit any other markings that might indicate any other ownership
or security interest in such Unit. Any markings on any Unit not
made at Lessor's request shall be removed by Lessee, at Lessee's
sole cost and expense, prior to the return of such Unit in
accordance with Section 3.3.
3.10 ALTERATIONS OR MODIFICATIONS. Lessee shall not make any additions,
attachments, alterations or improvements to the Equipment without
the prior written consent of Lessor. At any time during the Original
Term of a Lease, there may be added to such Lease additional Units
of the same type as are rented thereunder for a term equal to the
remaining portion of such Original Term and, subject to the terms
and conditions hereof, at the Rent applicable to such Units for such
term at the time the order for such Units is placed, provided that
the order is in writing and accepted by Lessor. Such acceptance
shall be at the sole discretion of Lessor. Each addition,
attachment, alteration or improvement to any Unit shall belong to
and become the property of Lessor unless, at the request of Lessor,
it is removed prior to the return of such Unit by Lessee. Lessee
shall be responsible for all costs relating to such removal and
shall restore such Unit to its operating condition that existed at
the time it became subject to the applicable Lease.
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3.11 EQUIPMENT TO BE PERSONAL PROPERTY. Lessee acknowledges and
represents that the Equipment shall be and remain personal property,
notwithstanding the manner in which it may be attached or affixed to
realty, and Lessee shall do all acts and enter into all agreements
necessary to ensure that the Equipment remains personal property.
3.12 FINANCIAL STATEMENTS. Lessee shall promptly furnish to Lessor such
financial or other statements respecting the condition and
operations of Lessee, and information respecting the Equipment, as
Lessor may from time to time reasonably request.
3.13 LESSEE REPRESENTATIONS. Lessee hereby represents that, with respect
to this Agreement and each Lease: (a) the execution, delivery and
performance thereof by Lessee have been duly authorized by all
necessary corporate action; and (b) the individual executing such
document is duly authorized to do so; (c) such document constitutes
legal, valid and binding obligations of Lessee, enforceable in
accordance with its terms.
IV. DEFAULT AND REMEDIES
4.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default hereunder: (a) Lessee shall fail to
pay any rental or other payment due hereunder within five (5) days
after its receipt of notice of nonpayment; (b) any representation or
warranty of Lessee made in this Agreement, any Lease, or in any
document furnished pursuant to the provisions of this Agreement or
otherwise, shall prove to have been false or misleading in any
material respect as of the date when it was made; (c) Lessee shall
fail to perform any covenant, condition or agreement made by it
under any Lease, and such failure shall continue for twenty (20)
days after its receipt of notice thereof; (d) bankruptcy,
receivership, insolvency, reorganization, dissolution, liquidation
or other similar proceedings shall be instituted by or against
Lessee or all or any part of its property under the Federal
Bankruptcy Code or other law of the United States or of any other
competent jurisdiction, and, if such proceeding is brought against
Lessee, it shall consent thereto or shall fail to cause the same to
be discharged within thirty (30) days after it is filed; (e) Lessee
shall default under any agreement with respect to the purchase or
installation of any of the Equipment; or (f) Lessee or any guarantor
of Lessee's obligations under any Lease shall default under any
other agreement with Lessor or Cisco Systems, Inc.
4.2 REMEDIES. If an Event of Default hereunder shall occur and be
continuing, Lessor may exercise any one or more of the following
remedies: (a) terminate any or all of the Leases and Lessee's rights
thereunder; (b) proceed, by appropriate court action or actions,
either at law or in equity, to enforce performance by Lessee of the
applicable covenants of any or all of the Leases or to recover
damages for the breach thereof; (c) recover from Lessee an amount
equal to the sum of (i) all amounts due under any or all of the
Leases on or before the Lessor giving Lessee written notice that
such Event of Default has occurred and, if Lessor obtains a judgment
against Lessee with respect to such Event of Default, the entry of
such judgment, whichever shall last occur, (ii) as liquidated
damages for loss of a bargain and not as a penalty, the present
value of the balance of all rentals and other sums payable
thereunder and hereunder, without any presentment, demand, protest
or further notice (all of which are hereby expressly waived by
Lessee), discounted at a rate equal to the rate for United States
Treasury Bills, as the case may be, as shown in the Wall Street
Journal, with a maturity which is closest to the balance of the term
of such Lease (the "Discount Rate") as of the date of the payment of
such amount, and (iii) any loss or damage to the Lessor's residual
interest in the Equipment caused by such Event of Default; (d)
personally, or by its agents, take immediate possession of any or
all of the Equipment from Lessee and, for such purpose, enter upon
Lessee's premises where any of the Equipment is located with or
without notice or process of law and free from all claims by Lessee;
and (e) require the Lessee to, and the Lessee shall, assemble the
Equipment and deliver the Equipment to a location which is
reasonably convenient to Lessor and Lessee. The exercise of any of
the foregoing remedies by Lessor shall not constitute a termination
of any Lease or this Agreement unless Lessor so notifies Lessee in
writing.
4.3 DISPOSITION OF EQUIPMENT. In the event, upon the occurrence of an
Event of Default, Lessor repossesses any of the Equipment, Lessor
may lease any or all of such Equipment, or sell any or all of such
Equipment at one or more public or private sales, in such manner, at
such times and upon such terms as Lessor may determine. In the event
that Lessor leases any of such Units, any rentals received by Lessor
for the "Remaining Lease Term" (the period ending on the date when
the Original Term for such Unit would have expired if an Event of
Default had not occurred), discounted to present value, at the
Discount Rate, as of the Possession Date (the "Recovery Rentals"),
for such Units shall be applied to the payment of (a) all costs and
expenses (including, without limitation, reasonable attorneys' fees)
incurred by Lessor in retaking possession of, and removing, storing,
repairing, refurbishing and leasing, such Units, (b) accrued and
unpaid rentals as of the date Lessor obtained possession of such
Units or the date on which Lessee made an effective tender of
possession of such Units to Lessor, whichever shall first occur (the
"Possession Date"), (c) the present value of the rentals for such
Units for the balance of the Original Term of the applicable Lease
(the "Discounted Remaining Rentals") and any other sums payable
thereunder or hereunder with respect to such Units, discounted at
the Discount Rate as of the Possession Date, (d) any and all other
sums (other than rentals) with respect to such Units then owing to
Lessor by Lessee thereunder or hereunder, and (e) any loss or damage
to the Lessor's residual interest in such Units caused by such Event
of Default (the aggregate of such amounts being referred to as the
"Release Recovery Amount"). In the event that Lessor shall sell or
otherwise dispose of (other than pursuant to a lease) any such
Units, the proceeds thereof (the "Recovery Proceeds") shall be
applied to the payment of the amounts referred to in clauses (a)
through (d) above and the amount by which the Casualty Value for
such Units, as of the Possession Date, exceeds the Discounted
Remaining Rentals (the aggregate of such amounts being referred to
as the "Sale Recovery Amount"). The balance, if any, of the Recovery
Rentals, in the case of a release, and of the Recovery Proceeds, in
the case of a sale or other disposition, shall be applied first to
reimburse Lessee for any sums previously paid by Lessee as
liquidated damages with respect to such Units, and any remaining
amounts shall be retained by Lessor. Lessee shall remain liable to
Lessor, with respect to any Units which are released or sold or
otherwise disposed of, to the extent that the Release Recovery
Amount exceeds the Recovery Rentals or the Sale Recovery Amount
exceeds the Recovery Proceeds. Lessor shall be entitled to, and
Lessee shall have no claim with respect to, all rentals, with
respect to any period commencing after the expiration of the
applicable Remaining Lease Term, from released Units.
V. MISCELLANEOUS
5.1 PERFORMANCE OF LESSEE'S OBLIGATIONS. Upon Lessee's failure to pay
Rent (or any other sum due hereunder) or perform any obligation
hereunder when due, Lessor shall have the right, but shall not be
obligated, to pay such sum or perform such obligation, whereupon
such sum or the cost of such performance shall immediately become
due and payable hereunder as additional rent, with interest thereon
at the highest legal rate from the date such payment or performance
was made.
5.2 ASSIGNMENT. LESSEE SHALL NOT RELINQUISH POSSESSION OR CONTROL OF, OR
ASSIGN, SUBLEASE, PLEDGE, HYPOTHECATE OR OTHERWISE TRANSFER, DISPOSE
OF OR ENCUMBER ANY UNIT, THIS AGREEMENT OR ANY LEASE OR SCHEDULE, OR
ANY PART THEREOF OR INTEREST THEREIN, OR ANY RIGHT OR OBLIGATION
WITH RESPECT THERETO, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
5.3 QUIET ENJOYMENT. So long as Lessee shall not be in default of any of
its obligations under any Lease, neither Lessor nor its assignee
shall interfere with Lessee's right of quiet enjoyment and use of
the Equipment.
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5.4 FURTHER ASSURANCES. Lessee shall, upon the request of Lessor, from
time to time, execute and deliver such further documents and do such
further acts as Lessor may reasonably request in order fully to
effect the purposes of any Lease and Lessor's rights thereunder.
Lessor is authorized to file a financing statement, signed only by
Lessor in accordance with the Uniform Commercial Code or signed by
Lessor as Lessee's attorney in fact, with respect to any of the
Equipment.
5.5 RIGHT AND REMEDIES. Each and every right and remedy granted to
Lessor under any Lease shall be cumulative and in addition to any
other right or remedy therein specifically granted or now or
hereafter existing in equity, at law, by virtue of statute or
otherwise, and may be exercised by Lessor from time to time
concurrently or independently and as often and in such order as
Lessor may deem expedient. Any failure or delay on the part of
Lessor in exercising any such right or remedy, or abandonment or
discontinuance of steps to enforce the same, shall not operate as a
waiver thereof or affect Lessor's right thereafter to exercise the
same. Waiver of any right or remedy on one occasion shall not be
deemed to be a waiver of any other right or remedy or of the same
right or remedy on any other occasion.
5.6 NOTICES. Any notice, request, demand, consent, approval or other
communication provided for or permitted hereunder shall be in
writing and shall be conclusively deemed to have been received by a
party hereto on the day it is delivered to such party at its address
set forth above (or at such other address as such party shall
specify to the other party in writing), or if sent by registered or
certified mail, return receipt requested, on the fifth day after the
day on which it is mailed, addressed to such party at such address.
5.7 SECTION HEADINGS; COUNTERPARTS. Section headings are inserted for
convenience of reference only and shall not affect any construction
or interpretation of this Agreement. This Agreement and each Lease
may be executed in counterparts, and when so executed each
counterpart shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument.
5.8 ENTIRE LEASE. This Agreement and each Lease constitute the entire
agreement between Lessor and Lessee with respect to the lease of
Equipment and supersede all other prior or contemporaneous
agreements, whether oral or in writing, with respect thereto. No
waiver or amendment of, or any consent with respect to, any
provision of this Agreement shall bind either party unless set forth
in writing, specifying such waiver, consent, or amendment, signed by
both parties, and then such waiver, consent, or amendment shall be
effective only in the specific instance and for the specific purpose
given. Any term or condition of any purchase order or other document
(with the exception of any Lease) submitted by Lessee in connection
with this Lease which is in addition to or inconsistent with the
terms and conditions of this Agreement shall not be binding on
Lessor and shall not apply to this Agreement. To the extent
permitted by applicable law and not otherwise specifically provided
to Lessee in this Agreement, Lessee hereby waives any and all rights
or remedies conferred upon a lessee under the California Uniform
Commercial Code, and any other applicable similar code or statutes
of another jurisdiction, with respect to a default by Lessor under
this Agreement.
5.9 SEVERABILITY. Should any provision of this Agreement or any Lease be
or become invalid, illegal, or unenforceable under applicable law,
the other provisions of this Agreement and such Lease shall not be
affected and shall remain in full force and effect, and, to the
extent permissible under applicable law and possible, any such
invalid, illegal or unenforceable provision shall be deemed amended
to the extent necessary to be valid, legal and enforceable and to
conform to the intent of the parties; provided, however, in the
event Lessee's obligation under any Lease to pay rent or any other
amount shall be invalid, illegal or unenforceable, Lessor shall have
the right to terminate such Lease as if an Event of Default shall
have occurred.
5.10 ATTORNEYS' FEES. Should either party institute any action or
proceeding to enforce this Agreement or any Lease, or any provision
hereof or thereof, or for a declaration of rights under any such
agreement, the prevailing party in any such action or proceeding
shall be entitled to receive from the other party all reasonable
out-of-pocket costs and expenses, including, without limitation,
attorneys' fees, which it incurs in connection with such action or
proceeding.
5.11 GOVERNING LAW. This Lease shall be governed in all respects by the
laws of the State of California with respect to agreements entered
into, and to be performed, entirely in California. EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN ANY LEASE, THIS AGREEMENT AND
EACH LEASE SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. LESSOR AND
LESSEE WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING
FROM THIS AGREEMENT OR ANY LEASE. LESSEE CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE COURTS OF CALIFORNIA, AND
THE FEDERAL COURTS SITTING IN THE STATE CALIFORNIA, FOR THE
RESOLUTION OF ANY DISPUTES HEREUNDER.
5.12 SURVIVAL. All obligations of Lessee to make payments to Lessor under
any Lease or to indemnify Lessor, pursuant to Section 3.4 or 3.7
above, with respect to a Lease, and all rights of Lessor hereunder
with respect to a Lease, shall survive the termination of such Lease.
LESSEE, BY THE SIGNATURE BELOW OF ITS AUTHORIZED REPRESENTATIVE,
ACKNOWLEDGES THAT IT HAS READ THIS LEASE, UNDERSTANDS IT, AND AGREES
TO BE BOUND BY ITS TERMS AND CONDITIONS.
CISCO SYSTEMS CAPITAL CORPORATION INTERNAP NETWORK SERVICES CORPORATION
(Lessor) (Lessee)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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(Authorized Signature) (Authorized Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇, Controller ▇▇▇▇ ▇. ▇▇▇▇▇▇▇/CFO
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(Name/Title) (Name/Title)
5/27/98 1/23/98
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(Date) (Date)
4
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▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ Aerosmith 17 November 1999
InterNAP Network Services Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇ and Mr. Aerosmith,
Cisco Systems Capital Corporation ("CSC"), a wholly owned subsidiary of Cisco
Systems, Inc. ("Cisco Systems"), specializes in providing innovative finance
solutions for Cisco Systems products and services. We are pleased to present
this proposal ("Proposal") for the transaction described below:
LESSOR:
Cisco Systems Capital Corporation.
LESSEE:
InterNAP Network Services Corporation
EQUIPMENT:
Cisco Systems products, or other products satisfactory to CSC, as presented in
a quotation from the Cisco Systems Account team.
MAXIMUM EQUIPMENT COST:
In the aggregate, up to $17,500,000. This line will be available for one year
after acceptance of this proposal. A review for an uplift will be done should
InterNAP require a higher line.
SHIP TO:
Location within the U.S., unless approved by CSC and InterNAP along with the
International Addendum
PARTIAL SHIPMENTS:
Please indicate at the bottom of this letter whether Lessee will accept
scheduling of partial purchase order shipments. (If not, please note that
Cisco Systems will retain shipments until complete.)
ORIGINAL TERM:
36 months.
RENTAL FACTOR:
36 MONTH FAIR MARKET VALUE LEASE: Lease Rate Factor: .02995
MONTHLY PAYMENT:
In accordance with the pricing and configuration referenced above, the rent
payment for each Rental Period ("Rent") on the lease would be the total
Equipment Cost multiplied by the Lease Rate Factor.
SOFT COSTS:
"Soft Costs," such as shipping, maintenance, installation, cabling, and
software may be included financed in the lease up to 10% of the total
transaction, as approved by Lessor in its discretion. They will be included at
a .0329 Soft Costs Factor for a 36 month lease. Shipping costs are to be
financed in the lease, per this request by InterNAP.
MAINTENANCE:
When ordered to cover the full term of the lease, the maintenance will be
included at 0% Financing. Take the cost of the maintenance over 3 years, and
divide by 36 to calculate the monthly payment.
ADVANCE PAYMENTS/INTERIM RENT:
None, but deemed acceptance of the equipment will take place 30 days after
shipment of the final piece of equipment per schedule. There is no interim
rent, and commencement of rental payments will occur on the 1st of the month
on or after acceptance or deemed acceptance.
NET LEASE:
This is a net lease transaction under which all costs and liabilities,
including without limitation, for insurance, maintenance and taxes, are paid
by Lessee for the term of the lease. Transferable manufacturer's guarantees or
warranties will be passed on to Lessee, assuming due performance of Lessee
obligations.
ADJUSTMENT OF RENTAL FACTOR:
The rental amount quoted in this Proposal will be adjusted prior to the date
of preparation of any Equipment Lease Schedule to reflect changes equal to
or greater than one quarter of one percent (.25%) in the weekly average of the
Three Year Treasury Note interest rate, as specified in Federal Reserve
statistical release H.15 from the week preceding the date of this Proposal to
the week preceding the date of preparation of the Schedule. Changes to the
benchmark rate of less than one quarter of one percent (.25%) will not affect
the Lease Rate Factor quoted herein. The Three Year Treasury Note H.15
statistic is updated weekly by the U.S. Federal Reserve for the
Lease Proposal
Page 2 of 3
preceding week's average yield. The statistic is publicly available on the
Internet at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.▇▇▇.▇▇/▇▇▇▇▇▇▇▇/▇▇▇/.
INVOICING:
An invoice will be provided monthly unless otherwise mutually agreed.
END OF LEASE OPTIONS:
FAIR MARKET PURCHASE OPTION: At the end of the Original Term of the Lease,
Lessee may select one of the following options: (1) purchase the equipment
for the then Fair Market Value or (2) renew the lease of the equipment per
mutually approved parameters or (3), return the Equipment to the Lessor.
FAIR MARKET VALUE CAP:
The Fair Market Value Purchase Cap will be 30% of the original invoice at the
end of the lease term.
UTILIZATION PERIOD:
All purchase orders for equipment under this Proposal shall be submitted no
later than 12 months after the acceptance of this proposal, subject to the
terms and conditions set forth herein.
Incurance Test:
The Lessee will have to meet the following financial covenants in order to
continue utilizing the lease line:
12/31/99 - $4,700,000
3/3/2000 - $6,600,000
6/30/2000 - $9,000,000
9/30/2000 - $15,000,000
12/31/2000 - $18,000,000
CASH SET ASIDE:
By signing this document, both sides agree that there are no current or
previous restricted cash requirements (i.e. Cash Set Aside) related to any
prior lease schedules.
CREDIT APPROVAL:
This Proposal includes only a brief description of the substantive terms and
conditions of the contemplated lease transactions and is not intended as a
formal commitment of credit by CSC or Cisco Systems. Any funding by CSC for
the purchase of equipment is subject to the ongoing credit approval of CSC
(including the absence of any material adverse change, in the judgment of
CSC, in the business or financial condition or prospects of Lessee) and to
satisfactory documentation including as described below. You agree to provide
two years' audited financial statements, bank references, a completed credit
application and any other required credit information along with the signed
copy of this Proposal. You hereby authorize CSC and/or its agents to make a
complete credit investigation and to relate this information to others as
necessary to secure credit approval.
The parties acknowledge that the financing contemplated by this Proposal is
subject to the above-referenced conditions and the execution and delivery of
all appropriate documents (in form and substance satisfactory to CSC),
including without limitation, to the extent applicable, the Master Agreement
to Lease Equipment, any Schedule, Lease Assignment of Purchase Order,
financing statements, legal opinion and other documents and agreements
reasonably required by CSC.
By signing this document, you hereby authorize CSC to order, when
appropriate, for manufacture and delivery, the equipment configuration
described herein (or in the attached or future purchase orders) and to file a
financing statement in accordance with the Uniform Commercial Code signed
only by CSC or signed by CSC as Lessee's attorney in fact with respect to any
of the Equipment. If, for any reason, you and CSC shall fail to consummate
all or any portion of the financing contemplated by this Proposal, you shall
be solely responsible for the payment in full of the purchase price (and all
related costs and expenses, including Soft Costs), incurred by CSC or Cisco
Systems associated with any such outstanding orders. All such orders shall be
subject to the standard Terms & Conditions of Sale of Cisco Systems or a
Cisco Value Added Reseller, including but not limited to the "net 30" payment
terms commencing from date of shipment.
Please indicate your acceptance of all of the terms and conditions set
forth herein by signing and dating this Proposal in the space provided below
by no later than the expiration date reference above, at which time this
Proposal will expire if not accepted. This Proposal is confidential and may
not be disclosed to any person or entity without our consent. Thank you for
the opportunity to present this Proposal. We look forward to doing business
with you. If you have any questions, please do not hesitate to call me at
▇▇▇-▇▇▇-▇▇▇▇.
Sincerely,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ACKNOWLEDGED AND AGREED:
Cisco Systems Capital Corporation InterNAP Network Services Corporation
2 Confidential
Lease Proposal
Page 3 of 3
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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(Authorized Signature)
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: DIRECTOR OF FINANCE
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Dated: 11-19-99
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Lessee (is) is not [CIRCLE ONE] willing to
accept scheduling of partial purchase order
shipments.
3 Confidential