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EXHIBIT 10.16
MASTER LEASE AGREEMENT
COMDISCO, INC. - LESSOR
MASTER LEASE AGREEMENT dated April 20, 1995 by and between COMDISCO,
INC. ("Lessor") and CONTINUUS SOFTWARE CORPORATION ("Lessee").
IN CONSIDERATION of the mutual agreements described below, the
parties agree as follows (all capitalized terms are defined in Section 14.19):
1. PROPERTY LEASED.
Lessor leases to Lessee all of the Equipment described on each Schedule.
In the event of a conflict, the terms of a Schedule prevail over this Master
Lease.
2. TERM.
On the Commencement Date, Lessee will be deemed to accept the Equipment,
will be bound to its rental obligations for each item of Equipment and the term
of a Schedule will begin and continue through the Initial Term and thereafter
until terminated by either party upon prior written notice received during the
Notice Period. No termination may be effective prior to the expiration of the
Initial Term.
3. RENT AND PAYMENT.
Rent is due and payable in advance, in immediately available funds, on
the first day of each Rent Interval to the payee and at the location specified
in Lessor's invoice. Interim Rent is due and payable when invoiced. If any
payment is not made when due, Lessee will pay interest at the Overdue Rate. Upon
Lessee's execution of each Schedule, Lessee will pay Lessor the Advance
specified on the Schedule. The Advance will be credited towards the final Rent
payment if Lessee is not then in default. No interest will be paid on the
Advance.
4. SELECTION; WARRANTY AND DISCLAIMER OF WARRANTIES.
4.1 SELECTION. Lessee acknowledges that it has selected the
Equipment and disclaims any reliance upon statements made by the Lessor.
4.2 WARRANTY AND DISCLAIMER OF WARRANTIES. Lessor warrants to Lessee
that, so long as Lessee is not in default, Lessor will not disturb Lessee's
quiet and peaceful possession, and unrestricted use of the Equipment. To the
extent permitted by the manufacturer, Lessor assigns to Lessee during the term
of the Schedule any manufacturer's warranties for the Equipment. LESSOR MAKES NO
OTHER WARRANTY, EXPRESS OR IMPLIED AS TO ANY MATTER WHATSOEVER, INCLUDING,
WITHOUT LIMITATION, THE MERCHANTABILITY OF THE EQUIPMENT OR ITS FITNESS FOR A
PARTICULAR PURPOSE. Lessor is not responsible for any liability, claim, loss,
damage or expense of any kind (including strict liability in tort) caused by the
Equipment except for any loss or damage
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caused by the negligent acts of Lessor. In no event is Lessor responsible for
special, incidental or consequential damages.
5. TITLE; RELOCATION OR SUBLEASE; AND ASSIGNMENT.
5.1 TITLE. Lessee holds the Equipment subject and subordinate to the
rights of the Owner, Lessor, any Assignee and any Secured Party. Lessee
authorizes Lessor, as Lessee's agent, to prepare, execute and file in Lessee's
name precautionary Uniform Commercial Code financing statements showing the
interest of the Owner, Lessor, and any Assignee or Secured Party in the
Equipment and to insert serial numbers in Schedules as appropriate. Lessee will,
at its expense, keep the Equipment free and clear from any liens or encumbrances
of any kind (except any caused by Lessor) and will indemnify and hold Lessor,
Owner, any Assignee and Secured Party harmless from and against any loss caused
by Lessee's failure to do so.
5.2 RELOCATION OF SUBLEASE. Upon prior written consent, Lessee may
relocate Equipment to any location within the continental United States provided
(i) the Equipment will not be used by an entity exempt from federal income tax,
(ii) all additional costs (including any administrative fees, additional taxes
and insurance coverage) are reconciled and promptly paid by Lessee.
Lessee may sublease the Equipment upon the reasonable consent of the
Lessor and the Secured Party. Such consent to sublease will be granted if: (i)
Lessee meets the relocation requirements set out above, (ii) the sublease is
expressly subject and subordinate to the terms of the Schedule, (iii) Lessee
assigns its rights in the sublease to Lessor and the Secured Party as additional
collateral and security, (iv) Lessee's obligation to maintain and insure the
Equipment is not altered, (v) all financing statements required to continue the
Secured Party's prior perfected security interest are filed, and (vi) the
sublease is not to a leasing entity affiliated with the manufacturer of the
Equipment described on the Schedule. Lessor acknowledges Lessee's right to
sublease for a term which extends beyond the expiration of the Initial Term. If
Lessee subleases the Equipment for a term extending beyond the expiration of
such initial Term of the applicable Schedule, Lessee will remain obligated upon
the expiration of the Initial Term to return such Equipment, or, at Lessor's
sole discretion to (i) return Like Equipment or (ii) negotiate a mutually
acceptable lease extension or purchase. If the parties cannot mutually agree
upon the terms of an extension or purchase, the term of the Schedule will extend
upon the original terms and conditions until terminated pursuant to Section 2.
No relocation or sublease will relieve Lessee from any of its
obligations under this Master Lease and the relevant Schedule.
5.3 ASSIGNMENT BY LESSOR. The terms and conditions of each Schedule
have been fixed by Lessor in order to permit Lessor to sell and/or assign or
transfer its interest or grant a security interest in each Schedule and/or the
Equipment to a Secured Party or Assignee. In that event, the term Lessor will
mean the Assignee and any Secured Party. However, any assignment, sale, or other
transfer by Lessor will not relieve Lessor of its obligations to Lessee and will
not materially change Lessee's duties or materially increase the burdens or
risks imposed on Lessee. The Lessee consents to and will acknowledge such
assignments in a written notice given to Lessee. Lessee also agrees that:
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(a) The Secured Party will be entitled to exercise all of
Lessor's rights, but will not be obligated to perform any of the obligations of
Lessor. The Secured Party will not disturb Lessee's quiet and peaceful
possession and unrestricted use of the Equipment so long as Lessee is not in
default and the Secured Party continues to receive all Rent payable under the
Schedule; and
(b) Lessee will pay all Rent and all other amounts payable
to the Secured Party, despite any defense or claim which it has against Lessor.
Lessee reserves its right to have recourse directly against Lessor for any
defense or claim;
(c) Subject to and without impairment of Lessee's leasehold
rights in the Equipment, Lessee holds the Equipment for the Secured Party to the
extent of the Secured Party's rights in that Equipment.
6. NET LEASE; TAXES AND FEES.
6.1 NET LEASE. Each Schedule constitutes a net Lease. Lessee's
obligation to pay Rent and all other amounts is absolute and unconditional and
is not subject to any abatement, reduction, set-off, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever.
6.2 TAXES AND FEES. Lessee will pay when due or reimburse Lessor for
all taxes, fees or any other charges (together with any related interest or
penalties not arising from the negligence of Lessor) accrued for or arising
during the term of each Schedule against Lessor, Lessee or the Equipment by any
governmental authority (except only Federal, state and Local taxes on the
capital or the net income of Lessor). Lessor will file all personal property tax
returns for the Equipment and pay all property taxes due. Lessee will reimburse
Lessor for property taxes within thirty (30) days of receipt of an invoice.
7. CARE, USE AND MAINTENANCE; ATTACHMENTS AND RECONFIGURATIONS; AND
INSPECTION BY LESSOR.
7.1 CARE, USE AND MAINTENANCE. Lessee will maintain the Equipment in
good operating order and appearance, protect the Equipment from deterioration,
other than normal wear and tear, and will not use the Equipment for any purpose
other than that for which it was designed. If commercially available, Lessee
will maintain in force a standard maintenance contract with the manufacturer of
the Equipment, or another party acceptable to Lessor, and will provide Lessor
with a complete copy of that contract. If Lessee has the Equipment maintained by
a party other than the manufacturer, Lessee agrees to pay any costs necessary
for the manufacturer to bring the Equipment to then current release, revision
and engineering change levels, and to re-certify the Equipment as eligible for
manufacturer's maintenance at the expiration of the Lease term. The Lease term
will continue upon the same terms and conditions until recertification has been
obtained.
7.2 ATTACHMENTS AND RECONFIGURATIONS. Upon receiving the prior
written consent of Lessor, Lessee may reconfigure and install Attachments on the
Equipment. In the event of such a Reconfiguration or Attachment, Lessee will,
upon return of the Equipment, at its expense, restore the Equipment to the
original configuration specified on the Schedule in accordance with
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the manufacturer's specifications and in the same operating order, repair and
appearance as when installed (normal wear and tear excluded). If any parts of
the Equipment are removed during a Reconfiguration or Attachment, Lessor may
require Lessee to provide additional security, satisfactory to the Lessor, in
order to ensure performance of Lessee's obligations set forth in this
subsection. Neither Attachments nor parts installed on Equipment in the course
of Reconfiguration will be accessions to the Equipment.
7.3 INSPECTION BY LESSOR. Upon request, Lessee, during reasonable
business hours and subject to Lessee's security requirements, will make the
Equipment and its related log and maintenance records available to Lessor for
inspection.
8. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee hereby represents,
warrants and covenants that with respect to the Master Lease and each Schedule
executed hereunder:
(a) The Lessee is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business in each jurisdiction (including
the jurisdiction where the Equipment is, or is to be, located) where its
ownership or lease of property or the conduct of its business requires such
qualification; and has full corporate power and authority to hold property under
the Master Lease and each Schedule and to enter into and perform its obligations
under such Lease.
(b) The execution and delivery by the Lessee of the Master
Lease and each Schedule and its performance thereunder have been duly authorized
by all necessary corporate action on the part of the Lessee, and the Master
Lease and each Schedule are not inconsistent with the Lessee's Certificate of
Incorporation or Bylaws, do not contravene any law or governmental rule,
regulation or order applicable to it, do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract
or other instrument to which it is a party or by which it is bound, and the
Master Lease and each Schedule constitute legal, valid and binding agreements of
the Lessee, enforceable in accordance with their terms.
(c) There are no actions, suits, proceedings or patent
claims pending or, to the knowledge of the Lessee, threatened against or
affecting the Lessee in any court or before any governmental commission, board
or authority which, if adversely determined, will have a material adverse effect
on the ability of the Lessee to perform its obligations under the Master Lease
and each Schedule.
(d) The Equipment is personal property and when subjected to
use by the Lessee will not be or become fixtures under applicable law.
(e) The Lessee has no material liabilities or obligations,
absolute or contingent (individually or in the aggregate), except the
liabilities and obligations of the Lessee as set forth in the Financial
Statements and liabilities and obligations which have occurred in the ordinary
course of business, and which have not been, in any case or in the aggregate,
materially adverse to Lessee's ongoing business.
(f) To the best of the Lessee's knowledge, the Lessee owns,
possesses, has access to, or can become licensed on reasonable terms under all
patents, patent applications, trademarks, trade names, inventions, franchises,
licenses, permits, computer software and
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copyrights necessary for the operations of its business as now conducted, with
no known infringement of, or conflict with, the rights of others.
(g) All material contracts, agreements and instruments to
which the Lessee is a party are in full force and effect in all material
respects, and are valid, binding and enforceable by the Lessee in accordance
with their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally, and rules of law
concerning equitable remedies.
9. DELIVERY AND RETURN OF EQUIPMENT.
Lessee hereby assumes the full expense of transportation and in-transit
insurance to Lessee's premises and installation thereat of the Equipment. Upon
termination (by expiration or otherwise) of each Schedule, Lessee shall,
pursuant to Lessor's instructions and at Lessee's full expense (including,
without limitation, expenses of transportation and in-transit insurance), return
the Equipment to Lessor in the same operating order, repair, condition and
appearance as when received, less normal depreciation and wear and tear. Lessee
shall return the Equipment to Lessor at its address set forth herein or at such
other address within the continental United States as directed by Lessor,
provided, however, that Lessee's expense shall be limited to the cost of
returning the equipment to Lessor's address as set forth herein. During the
period subsequent receipt of a notice under Section 2, Lessor may demonstrate
the Equipment's operation in place and Lessee will supply any of its personnel
as may reasonably be required to assist in the demonstrations.
10. LABELING.
Upon request, Lessee will ▇▇▇▇ the Equipment indicating Lessor's
interest. Lessee will keep all Equipment free from any other marking or labeling
which might be interpreted as a claim of ownership.
11. INDEMNITY.
Lessee will indemnify and hold Lessor, any Assignee and any Secured
Party harmless from and against any and all claims, costs, expenses, damages and
liabilities, including reasonable Attorneys' fees, arising out of the ownership
(for strict liability in tort only), selection, possession, leasing, operation,
control, use, maintenance, delivery, return or other disposition of the
Equipment. However, Lessee is not responsible to a party indemnified hereunder
for any claims, costs, expenses, damages and liabilities occasioned by the
negligent acts of such indemnified party. Lessee agrees to carry bodily injury
and property damage liability insurance during the term of the Master Lease in
amounts and against risks customarily insured against by the Lessee on equipment
owned by it. Any amounts received by Lessor under that insurance will be
credited against Lessee's obligations under this Section.
12. RISK OF LOSS.
Effective upon delivery and until the Equipment is returned, Lessee
relieves Lessor of responsibility for all risks of physical damage to or loss or
destruction of the Equipment. Lessee will carry casualty insurance for each item
of Equipment in an amount not less than the Casualty
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Value. All policies for such insurance will name the Lessor and any Secured
Party as additional insured and as loss payee, and will provide for at least
thirty (30) days prior written notice to the Lessor of cancellation or
expiration, and will insure Lessor's interests regardless of any breach or
violation by Lessee of any representation, warranty or condition contained in
such policies and will be primary without right of contribution from any
insurance effected by Lessor. Upon the execution of any Schedule, the Lessee
will furnish appropriate evidence of such insurance acceptable to Lessor.
Lessee will promptly repair any damaged item of Equipment unless such
Equipment has suffered a Casualty Loss. Within fifteen (15) days of a Casualty
Loss, Lessee will provide written notice of that loss to Lessor and Lessee will,
at Lessor's option, either (a) replace the item of Equipment with Like Equipment
and marketable title to the Like Equipment will automatically vest in Lessor or
(b) pay the Casualty Value and after that payment and the payment of all other
amounts due and owing, Lessee's obligation to pay further Rent for the item of
Equipment will cease.
13. DEFAULT, REMEDIES AND MITIGATION.
13.1 DEFAULT. The occurrence of any one or more of the following
Events of Default constitutes a default under a Schedule:
(a) Lessee's failure to pay Rent or other amounts payable by
Lessee when due if that failure continues for five (5) days after written
notice; or
(b) Lessee's failure to perform any other term or condition
of the Schedule or the material inaccuracy of any representation or warranty
made by the Lessee in the Schedule or in any document or certificate furnished
to the Lessor hereunder if that failure or inaccuracy continues for ten (10)
days after written notice; or
(c) An assignment by Lessee for the benefit of its
creditors, the failure by Lessee to pay its debts when due, the insolvency of
Lessee, the filing by Lessee or the filing against Lessee of any petition under
any bankruptcy or insolvency law or for the appointment of a trustee or other
officer with similar powers, the adjudication of Lessee as insolvent, the
liquidation of Lessee, or the taking of any action for the purpose of the
foregoing; or
(d) The occurrence of an Event of Default under any Schedule
or other agreement between Lessee and Lessor or its Assignee or Secured Party.
13.2 REMEDIES. Upon the occurrence of any of the above Events of
Default, Lessor, at its option, may:
(a) enforce Lessee's performance of the provisions of the
applicable Schedule by appropriate court action in law or in equity;
(b) recover from Lessee any damages and or expenses,
including Default Costs;
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(c) with notice and demand, recover all sums due and
accelerate and recover the present value of the remaining payment stream of all
Rent due under the defaulted Schedule (discounted at the same rate of interest
at which such defaulted Schedule was discounted with a Secured Party plus any
prepayment fees charged to Lessor by the Secured Party or, if there is no
Secured Party, then discounted at 6%) together with all Rent and other amounts
currently due as liquidated damages and not as a penalty;
(d) with notice and process of law and in compliance with
Lessee's security requirements, Lessor may enter on Lessee's premises to remove
and repossess the Equipment without being liable to Lessee for damages due to
the repossession, except those resulting from Lessor's, its assignees', agents'
or representatives' negligence; and
(e) pursue any other remedy permitted by law or equity.
The above remedies, in Lessor's discretion and to the extent permitted by
law, are cumulative and may be exercised successively or concurrently.
13.3 MITIGATION. Upon return of the Equipment pursuant to the terms
of Section 13.2, Lessor will use its best efforts in accordance with its normal
business procedures (and without obligation to give any priority to such
Equipment) to mitigate Lessor's damages as described below. EXCEPT AS SET FORTH
IN THIS SECTION, LESSEE HEREBY WAIVES ANY RIGHTS NOW OR HEREAFTER CONFERRED BY
STATUTE OR OTHERWISE WHICH MAY REQUIRE LESSOR TO MITIGATE ITS DAMAGES OR MODIFY
ANY OF LESSOR'S RIGHTS OR REMEDIES STATED HEREIN. Lessor may sell, lease or
otherwise dispose of all or any part of the Equipment at a public or private
sale for cash or credit with the privilege of purchasing the Equipment. The
proceeds from any sale, lease or other disposition of the Equipment are defined
as either:
(a) if sold or otherwise disposed of, the cash proceeds less
the Fair Market Value of the Equipment at the expiration of the Initial Term
less the Default Costs; or
(b) if leased, the present value (discounted at three points
over the prime rate as referenced in the Wall Street Journal at the time of the
mitigation) of the rentals for a term not to exceed the Initial Term, less the
Default Costs.
Any proceeds will be applied against Liquidated damages and any
other sums due to Lessor from Lessee. However, Lessee is liable to Lessor for,
and Lessor may recover, the amount by which the proceeds are less than the
liquidated damages and other sums due to Lessor from Lessee.
14. ADDITIONAL PROVISIONS.
14.1 BOARD ATTENDANCE. Lessor or its duly appointed representative
will have the right to attend Lessee's corporate Board of Directors meetings and
Lessee will give Lessor reasonable notice in advance of any special Board of
Directors meeting, which notice will provide an agenda of the subject matter to
be discussed at such board meeting. Lessee will provide Lessor with a certified
copy of the minutes of each Board of Directors meeting within thirty (30) days
following the date of such meeting held during the term of this Lease.
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14.2 FINANCIAL STATEMENTS. Lessee will provide to Lessor the
financial statements specified in this Section, prepared in accordance with
generally accepted accounting principles, consistently applied (the "Financial
Statements"); provided, however, after the effective date of the initial
registration statement covering a public offering of Lessee's securities, the
term "Financial Statements" will be deemed to refer to only those statements
required by the Securities and Exchange Commission, to be provided no less
frequently than quarterly. Lessee will provide to Lessor (i) as soon as
practicable (within thirty (30) days) after the end of each month, the same
information which Lessee provides to its Board of Directors, but which will
include not less than a monthly income statement, balance sheet and statement of
cash flows, certified by Lessee's Chief Executive or Financial Officer to be
true and correct; and (ii) as soon as practicable (and in any event within
ninety (90) days) after the end of each fiscal year, audited balance sheets as
of the end of such year (consolidated if applicable), and related statements of
income or loss, retained earnings or deficit and changes in the financial
position and capital structure of Lessee for such year, setting forth in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by an audit report and opinion of the independent certified public
accountants selected by Lessee. Lessee will promptly furnish to Lessor any
additional information (including but not limited to tax returns, income
statements, balance sheets, and names of principal creditors) as Lessor
reasonably believes necessary to evaluate Lessee's continuing ability to meet
financial obligations.
14.3 OBLIGATION TO LEASE ADDITIONAL EQUIPMENT. Upon notice to Lessee,
Lessor will not be obligated to lease any Equipment which would have a
Commencement Date after said notice if: (i) Lessee is in default under this
Master Lease or any Schedule; (ii) Lessee is in default under any loan
agreement, the result of which would allow the lender or any secured party to
demand immediate payment of the indebtedness; (iii) there is a material adverse
change in Lessee's credit standing; or (iv) Lessor determines (in reasonable
good faith) that Lessee will be unable to perform its obligations under this
Master Lease.
14.4 MERGER AND SALE PROVISIONS. Lessee will notify Lessor of any
proposed Merger at least twenty (20) days prior to the closing date. Lessor may,
in its discretion, either (i) consent to the assignment of the Master Lease and
all relevant Schedules to the successor entity, or (ii) terminate the Master
Lease and all relevant Schedules. If Lessor elects to consent to the assignment,
Lessee and its successor will sign the assignment documentation provided by
Lessor. If Lessor elects to terminate the Master Lease and all relevant
Schedules, then Lessee will pay Lessor all amounts then due and owing and a
termination fee equal to the present value (discounted at 6%) of the remaining
Rent for the balance of the Initial Term(s) of all Schedules, and will return
the Equipment in accordance with Section 9.
14.5 ENTIRE AGREEMENT. This Master Lease and associated Schedules
supersede all other oral or written agreements or understandings between the
parties concerning the Equipment including, for example, purchase orders. ANY
AMENDMENT OF THIS MASTER LEASE OR A SCHEDULE, MAY ONLY BE ACCOMPLISHED BY A
WRITING SIGNED BY THE PARTY AGAINST WHOM THE AMENDMENT IS SOUGHT TO BE ENFORCED.
14.6 NO WAIVER. No action taken by Lessor or Lessee will be deemed to
constitute a waiver of compliance with any representation, warranty or covenant
contained in this Master
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Lease or a Schedule. The waiver by Lessor or Lessee of a breach of any provision
of this Master Lease or a Schedule will not operate or be construed as a waiver
of any subsequent breach.
14.7 BINDING NATURE. Each Schedule is binding upon, and inures to the
benefit of Lessor and its assigns. LESSEE MAY NOT ASSIGN ITS RIGHTS OR
OBLIGATIONS.
14.8 SURVIVAL OF OBLIGATIONS. All agreements, obligations including,
but not limited to those arising under Section 6.2, representations and
warranties contained in this Master Lease, any Schedule or in any document
delivered in connection with those agreements are for the benefit of Lessor and
any Assignee or Secured Party and survive the execution, delivery, expiration or
termination of this Master Lease.
14.9 NOTICES. Any notice, request or other communication to either
party by the other will be given in writing and deemed received upon the earlier
of actual receipt or three days after mailing if mailed postage prepaid by
regular or airmail to Lessor (to the attention of "Lease Administrator") or
Lessee, at the address set out in the Schedule or, one day after it is sent by
courier or on the same day as sent via facsimile transmission, provided that the
original is sent by personal delivery or mail by the receiving party.
14.10 APPLICABLE LAW. THIS MASTER LEASE HAS BEEN, AND EACH SCHEDULE
WILL HAVE BEEN MADE, EXECUTED AND DELIVERED IN THE STATE OF ILLINOIS AND WILL BE
GOVERNED AND CONSTRUED FOR ALL PURPOSES IN ACCORDANCE WITH THE LAWS OF THE STATE
OF ILLINOIS WITHOUT GIVING EFFECT TO CONFLICT OF LAW PROVISIONS. NO RIGHTS OR
REMEDIES REFERRED TO IN ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE WILL BE
CONFERRED ON LESSEE UNLESS EXPRESSLY GRANTED IN THIS MASTER LEASE OR A SCHEDULE.
14.11 SEVERABILITY. If any one or more of the provisions of this
Master Lease or any Schedule is for any reason held invalid, illegal or
unenforceable, the remaining provisions of this Master Lease and any such
Schedule will be unimpaired, and the invalid, illegal or unenforceable provision
replaced by a mutually acceptable valid, legal and enforceable provision that is
closest to the original intention of the parties.
14.12 COUNTERPARTS. This Master Lease and any Schedule may be executed
in any number of counterparts, each of which will be deemed an original, but all
such counterparts together constitute one and the same instrument. If Lessor
grants a security interest in all or any part of a Schedule, the Equipment or
sums payable thereunder, only that counterpart Schedule marked "Secured Party's
Original" can transfer Lessor's rights and all other counterparts will be marked
"Duplicate".
14.13 NONSPECIFIED FEATURES AND LICENSED PRODUCTS. If the Equipment is
supplied from Lessor's inventory and contains any features not specified in the
Schedule, Lessee grants Lessor the right to remove any such features. Any
removal will be performed by the manufacturer or another party acceptable to
Lessee, upon the request of Lessor, at a time convenient to Lessee, provided
that Lessee will not unreasonably delay the removal of such features.
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Lessee will obtain no title to Licensed Products which will at all times
remain the property of the owner of the Licensed Products. License from the
owner may be required and it is Lessee's responsibility to obtain any required
License before the use of the Licensed Products. Lessee agrees to treat the
Licensed Products as confidential information of the owner, to observe all
copyright restrictions, and not to reproduce or sell the Licensed Products.
14.14 ADDITIONAL DOCUMENTS. Lessee will, upon execution of this Master
Lease and as may be requested thereafter, provide Lessor with a secretary's
certificate of incumbency and authority and any other documents reasonably
requested by Lessor. Upon the execution of each Schedule with a purchase price
in excess of $1,000,000, Lessee will provide Lessor with an opinion from
Lessee's counsel in a form acceptable to Lessor regarding the representations
and warranties in Section 8.
14.15 ELECTRONIC COMMUNICATIONS. Each of the parties may communicate
with the other by electronic means under mutually agreeable terms.
14.16 LESSOR'S RIGHT TO MATCH. Lessee's rights under Section 5.2 and
7.2 are subject to Lessor's right to match any sublease or upgrade proposed by a
third party. Lessee will provide Lessor with the terms of the third party offer
and Lessor will have three (3) business days to match the offer. Lessee will
obtain such upgrade from or sublease the Equipment to Lessor if Lessor has
timely matched the third party offer.
14.17 LANDLORD/MORTGAGEE WAIVER. Lessee agrees to provide Lessor with
a Landlord/Mortgagee Waiver with respect to the Equipment. Such waiver shall be
in a form satisfactory to Lessor.
14.18 EQUIPMENT PROCUREMENT CHARGES/PROGRESS PAYMENTS. Lessee hereby
agrees that Lessor shall not, by virtue of its entering into this Lease, be
required to remit any payments to any manufacturer or other third party until
Lessee accepts the Equipment subject to this Lease.
14.19 DEFINITIONS.
"ADVANCE" means the amount due to Lessor by Lessee upon Lessee's
execution of each Schedule.
"ASSIGNEE" means an entity to whom Lessor has sold or assigned its
rights as owner and Lessor of Equipment.
"ATTACHMENT" means any accessory, equipment or device and the
installation thereof that does not impair the original function or use of the
Equipment and is capable of being removed without causing material damage to the
Equipment and is not an accession to the Equipment.
"CASUALTY LOSS" means the irreparable loss or destruction of Equipment.
"CASUALTY VALUE" means the greater of the aggregate Rent remaining to be
paid for the balance of the lease term or the Fair Market Value of the Equipment
immediately prior to the Casualty Loss. However, if a Casualty Value Table is
attached to the relevant Schedule its terms will control.
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"COMMENCEMENT CERTIFICATE" means the Lessor provided certificate which
must be signed by Lessee within ten (10) days of the Commencement Date as
requested by Lessor.
"COMMENCEMENT DATE" is defined in each Schedule.
"DEFAULT COSTS" means reasonable attorney's fees and remarketing costs
resulting from a Lessee default or Lessor's enforcement of its remedies.
"EQUIPMENT" means the property described on a Schedule and any
replacement for that property required or permitted by this Master Lease or a
Schedule but not including any Attachment.
"EVENT OF DEFAULT" means the events described in Subsection 13.1.
"FAIR MARKET VALUE" means the aggregate amount which would be obtainable
in an arm's-length transaction between an informed and willing buyer/user and an
informed and willing seller under no compulsion to sell.
"INITIAL TERM" means the period of time beginning on the first day of
the first full Rent Interval following the Commencement Date for all items of
Equipment and continuing for the number of Rent Intervals indicated on a
Schedule.
"INSTALLATION DATE" means the day on which Equipment is installed and
qualified for a commercially available manufacturer's standard maintenance
contract or warranty coverage, if available.
"INTERIM RENT" means the pro-rata portion of Rent due for the period
from the Commencement Date through but not including the first day of the first
full Rent Interval included in the Initial Term.
"LICENSED PRODUCTS" means any software or other licensed products
attached to the Equipment.
"LIKE EQUIPMENT" means replacement Equipment which is lien free and of
the same model, type, configuration and manufacture as Equipment.
"LIKE PART" means a substituted part which is lien free and of the same
manufacturer and part number as the removed part, and which when installed on
the Equipment will be eligible for maintenance coverage with the manufacturer of
the Equipment.
"MERGER" means any consolidation or merger of the Lessee with or into
any other corporation or entity, any sale or conveyance of all or substantially
all of the assets of the Lessee to any other person or entity or any stock
acquisition of the Lessee by any other person or entity.
"NOTICE PERIOD" means the time period described in a Schedule during
which Lessee may give Lessor notice of the termination of the term of that
Schedule.
11.
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"OVERDUE RATE" means the lesser of five percent (5%) of the payment due
or the maximum rate permitted by the law of the state where the Equipment is
located.
"OWNER" means the owner of Equipment.
"RECONFIGURATION" means any change to Equipment that would upgrade or
downgrade the performance capabilities of the Equipment in any way.
"RENT" means the rent, including Interim Rent, Lessee will pay for each
item of Equipment expressed in a Schedule either as a specific amount or an
amount equal to the amount which Lessor pays for an item of Equipment multiplied
by a lease rate factor plus all other amounts due to Lessor under this Master
Lease or a Schedule.
"RENT INTERVAL" means a full calendar month or quarter as indicated on a
Schedule.
"SCHEDULE" means an Equipment Schedule which incorporates all of the
terms and conditions of this Master Lease and, for purposes of Section 14.12,
its associated Commencement Certificate(s).
"SECURED PARTY" means an entity to whom Lessor has granted a security
interest in a Schedule and related Equipment for the purpose of securing a loan.
IN WITNESS WHEREOF, the parties hereto have executed this Master Lease
on or as of the day and year first above written.
CONTINUUS SOFTWARE CORPORATION COMDISCO, INC.
as Lessee as Lessor
By: /s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/
--------------------------------- ----------------------------------
Title: Chief Financial Officer Title:
------------------------------ -------------------------------
04/20/93 05/25/95
12.
13
ADDENDUM TO THE MASTER LEASE AGREEMENT
DATED AS OF APRIL 20, 1995
BETWEEN COMDISCO, INC., AS LESSOR, AND
CONTINUUS SOFTWARE CORPORATION, AS LESSEE
The undersigned hereby agree that the terms and conditions of the
above-referenced Master Lease Agreement are amended and modified as follows:
1. In the first paragraph after the words "MASTER LEASE AGREEMENT" insert
"(the "Master Lease")."
2. Section 1, "PROPERTY LEASED"
In the first sentence before the word "Schedule" insert the words
"Summary Equipment".
Second sentence, second line, replace "a Schedule" with "the applicable
Schedule".
3. Section 2, "TERM"
In the second line delete "a and insert "the applicable Summary
Equipment" before "Schedule".
4. Section 3, "RENT AND PAYMENT"
Second sentence, delete "when invoiced" and insert "within five (5) days
of receipt of an invoice therefor".
In the third sentence, delete the words, "interest at the Overdue Rate."
and replace with "a Late Charge on the overdue amount, provided,
however, no Late Charge shall be assessed on payments made within five
(5) days of the due date thereof."
Fifth sentence, line 2, delete "Lessee is not then in default" and
insert "no Event of Default has occurred thereunder which has not been
cured".
5. Section 5, "TITLE: RELOCATION OR SUBLEASE; AND ASSIGNMENT"
Subsection 5.1, line 4 before "Schedules" insert "Summary Equipment".
Subsection 5.2, second paragraph, first sentence, line 7, revise
"ffiliated" to read "affiliated".
In the second paragraph, fourth sentence, insert "Summary Equipment"
before "Schedule".
Subsection 5.3, paragraph (a), second sentence, line 2, delete "Lessee
is not in default" and insert "as no Event of Default has occurred which
has not been cured".
1.
14
6. Section 7, "CARE. USE AND MAINTENANCE; ATTACHMENTS AND RECONFIGURATIONS;
AND INSPECTION BY LESSOR"
Subsection 7.1, line 3, after the words "commercially available", add
the words "and if customary in the industry".
Subsection 7.2, second sentence, line 3, after the words "specified on
the", insert "Summary Equipment". Fourth Sentence, line 1, delete "the"
and insert "such" between "accessions to" and "Equipment".
Subsection 7.3, line 1, insert "and reasonable notice" after the words
"upon request".
7. Section 8, "REPRESENTATIONS AND WARRANTIES OF LESSEE"
Paragraph (a), line 4, insert the clause "except where the failure to so
qualify would not have a material adverse effect on the Company's
business."
8. Section 9, third sentence, line 2, delete "its address set forth herein"
and insert "6111 ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇." Fourth sentence,
insert "to" after "subsequent".
9. Section 11, "INDEMNITY", second sentence, line 3, insert "or wilful
misconduct".
10. Section 13, "DEFAULT, REMEDIES AND MITIGATION"
Subsection 13.1
Introductory sentence, line 2, insert "Summary Equipment" after the word
"under".
Paragraph (b), line 1, insert "the applicable" before the word
"Schedule".
Paragraph (c), insert the following at the end of the paragraph:
", provided, however, that in case of a filing against Lessee of
any petition under any bankruptcy or insolvency law or for the
appointment of a trustee or other officer with similar powers,
if Lessee can obtain the dismissal of such proceeding within
sixty (60) days after the commencement of any such proceeding or
appointment, it shall not constitute an Event of Default".
Paragraph (d), line 1, insert the phrase "(after giving effect to the
applicable grace period)" after the words "Event of Default".
Subsection 13.2, first paragraph, after the words "Events of Default",
add the words "under any Schedule".
2.
15
11. Section 14, "ADDITIONAL PROVISIONS"
Delete subsection 14.1 in its entirety and replace with the following:
"Lessee agrees to provide to Lessor on a monthly basis the
executive summary and minutes of the Board of Directors meetings
that are sent to all investors, including all attachments so
distributed."
Subsection 14.2, second sentence, line 5, delete "ninety (90)" and
insert "one hundred twenty (120)" before the word "(days)".
Subsection 14.3, clause (i) is amended in its entirety to read: "(i) an
Event of Default has occurred under this Master Lease or any Schedule
which has not been cured:".
Subsection 14.4, second sentence, line 2, insert "reasonably" after the
word "documentation". Third sentence, line 1, after the words "all
relevant Schedules" insert the phrase "pursuant to this Section".
Subsection 14.9, line 4, insert "applicable" before "Schedule".
Subsection 14.10, second sentence, line 2, insert "OR LESSOR" after the
words "ON LESSEE".
Subsection 14.13, first sentence, insert "Summary Equipment" before
"Schedule".
Subsection 14.17, first sentence, line 1, insert the phrase "upon the
reasonable request of Lessor." at the beginning thereof.
Definition "Commencement Certificate" delete this definition in its
entirety.
Add the following definition, "`Delivery Date' means the date of
delivery of inventory Equipment to Lessee's address."
Definition "Equipment" insert "Summary Equipment" before the word
"Schedule".
Definition "Installation Date" is deleted in its entirety.
Add the following definition: "'Lease' means a Summary Equipment
Schedule which incorporates all the terms and conditions of the related
Schedule and Master Lease."
Definition "Merger", line 3, insert "acquisition of all or substantially
all of the stock of" before "the Lessee" and delete "any stock
acquisition of".
Definition "Overdue Rate" is amended to read "Late Charge" and the word
"Late Charge" and the word "rate" is deleted and "amount" is inserted.
Definition "Rent", line 2, insert "Summary Equipment" before "Schedule."
Definition "Rent Interval" insert "Summary Equipment" before the word
"Schedule".
3.
16
Definition "Schedule" delete this definition and replace with the
following:
"means, either an Equipment Schedule or a Licensed
Product Schedule which incorporates all of the terms and
conditions of this Master Lease."
Add the following definition: "`Summary Equipment Schedule'" means, a
Lessor provided certificate summarizing all of the Equipment for which
Lessor has received Lessee approved invoices, purchase documentation and
evidence of delivery, as applicable, during a calendar quarter which
will incorporate all of the terms and conditions of the related Schedule
and this Master Lease and will constitute a separate Lease."
CONTINUUS SOFTWARE CORPORATION COMDISCO, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/
------------------------------------- ------------------------------
Title: Chief Financial Officer Title:
---------------------------------- ---------------------------
Date: 4-21-95 Date: 5-30-95
----------------------------------- ----------------------------
4.