EXHIBIT 10.1
Sun Microsystems
SUN MICROSYSTEMS FINANCE MASTER LEASE AGREEMENT
Master Lease #
Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor,
subject to the following terms of this Master Lease Agreement ("Master
Lease") and any Lease Schedule ("Schedule"), collectively referred to as the
Lease ("Lease"), the personal property described in any Schedule together
with attachments, replacements, parts, substitutions, additions, upgrades,
accessories, software licenses and operating manuals (the "Product"). Each
Schedule shall constitute a separate, distinct, and independent Lease and
contractual obligation of Lessee.
1. Commencement Date And Term
The initial lease term ("Initial Term") and Lessee's rental obligations shall
begin on the Commencement Date and continue for the number of Rental Periods
specified in the Lease as set forth in Section 2 below and shall renew
automatically thereafter until terminated by either party upon not less them
ninety (90) days prior written notice. The Commencement Date with respect to
each item of Product shall be the 16th day after date of shipment to Lessee.
2. Rent and Rental Period
All rental payments and any other amounts payable under a Lease are collectively
referred to as "Rent". The Rental Period shall mean the rental payment period
of either calendar months, quarters, or as otherwise specified in each Schedule.
Rent for the specified Rental Period is due and payable in advance, to the
address specified in Lessor's invoice, on the first day of each Rental Period
during the Initial Term and any extension (collectively, the "Lease Term"),
provided, however, that Rent for the period of time (if any) from the
Commencement Date to the first day of the first Rental Period shall begin to
accrue on the Commencement Date. If any Rent is not paid when due, Lessee will
pay a service fee equal to five percent (5%) of the overdue amount plus interest
at the rate of one and one half percent (1.5%) per month or the maximum legal
interest rate, whichever is less.
3. Net Lease, Taxes and Fees
Each Schedule shall constitute a net lease and payment of Rent shall be absolute
and unconditional, and shall not be subject to any abatement, reduction, set
off, defense, counterclaim, interruption, deferment or recoupment for any reason
whatsoever. Lessee agrees to pay Lessor when due shipping charges, fees,
assessments and all taxes (municipal, state and federal) imposed upon a Lease or
the Product or its ownership, leasing, renting, possession or use except for
taxes based on Lessor's income.
4. Title
Product shall always remain personal property. Lessee shall have no right or
interest in the Product except as provided in this Master Lease and the
applicable Schedule and shall hold the Product subject and subordinate to the
rights of Lessor. Lessee agrees to execute UCC financing
statements as and when requested by Lessor and hereby appoints Lessor as its
attorney-in-fact to execute such financing statements. Lessor may file a
photocopy of any Lease as a financing statement.
Lessee will, at its expense, keep the Product free and clear from any liens
or encumbrances of any kind (except any caused by Lessor) and will indemnify
and hold Lessor harmless from and against any loss or expense caused by
Lessee's failure to do so. Lessee shall give Lessor immediate written notice
of any attachment or judicial process affecting the Product or Lessor's
ownership. If requested, Lessee shall label the Product as the property of
Lessor and shall allow, subject to Lessee's reasonable security requirements,
the inspection of the Product during regular business hours.
5. Use, Maintenance And Repair
Lessee, at its own expense, shall keep the Product in good repair, appearance
and condition other than normal wear and tear and shall obtain and keep in
effect throughout the term of the Schedule a hardware and software maintenance
agreement with the manufacturer or other party acceptable to Lessor. All parts
furnished in connection with such repair and maintenance shall be manufacturer
authorized parts and shall immediately become components of the Product and the
property of Lessor. Lessee shall use the Product in compliance with the
manufacturer's or supplier's suggested guidelines.
6. Delivery And Return of Product
Lessee assumes the full expense of transportation, insurance, and installation
to Lessee's site. Upon termination of each Schedule, Lessee will provide Lessor
a letter from the manufacturer certifying that the Product is in good operating
condition and is eligible for continued maintenance and that the operating
system is at the then current level, unless under a Sun service contract during
the Lease Term. Lessee, at its expense, shall de-install, pack and ship the
Product to a U.S. Location identified by Lessor. Lessee shall remain obligated
to pay Rent on the Product until the Product and certification are received by
Lessor.
7. Assignment And Relocation
Lessee may sublease or assign its rights under this agreement with Lessor's
prior written consent, which consent shall not be unreasonably withheld,
subject, however, to any terms and conditions which Lessor may require. No
permitted assignment or sublease shall relieve Lessee of any of its obligations
hereunder.
Lessee acknowledges Lessor may sell and/or assign its interest or grant
a security interest in each Lease and/or the Product to an assignee
("Lessor's Assignee"), so long as Lessee is not in default hereunder. Lessor
or Lessor's Assignee shall not interfere with Lessee's right of quiet
enjoyment and use of the product. Upon the assignment of each Lease, Lessor's
Assignee shall have any and all discretions, rights and remedies of Lessor
and all references to Lessor shall mean Lessor's Assignee. In no event shall
any assignee of Lessor be obligated to perform any duty, covenant or
condition under this Lease and Lessee agrees it shall pay such assignee
without any defense, rights of set-off or counterclaims and shall not hold or
attempt to hold such assignee liable for any of
Lessor's obligations hereunder.
Lessee, at its expense, may relocate Product (after packing it for shipment
in accordance with the manufacturer's instructions) to a different address
with thirty (30) days prior written notice to Lessor. The Product shall at
all times be used solely within the United States.
8. Upgrades And Additions
Lessee may affix or install any accessory, addition, upgrade, equipment or
device on the Product ("Additions") provided that such Additions (i) can be
removed without causing material damage to the Product, (ii) do not reduce the
value of the Product and (iii) are obtained from or approved by Sun Microsystems
Computer Corporation and are not subject to the interest of any third party
other than Lessor. Any other Additions may not be installed without Lessor's
prior written consent. At the end of the Schedule Term, Lessee shall remove any
Additions which (i) were not leased by Lessor and (ii) are readily removable
without causing material damage or impairment of the intended function, use, or
value of the Product and restore the Product to its original configuration. Any
Additions which are not so removable will become the Lessor's property (lien
free).
9. Lease End Options
Upon written notice given at least ninety (90) days prior to expiration of the
Lease Term, and provided Lessee is not in default under any Schedule Lessee may
(i) exercise any purchase option set forth on the Schedule, or (ii) renew the
Schedule for a minimum extension period of twelve (12) months, or (iii) return
the Product to Lessor at the expiration date of the Schedule pursuant
to Section 6 above.
10. Insurance, Loss Or Damage
Effective upon shipment of Product to Lessee and until Product is received by
Lessor, Lessee shall provide at its expense (i) insurance against the loss or
theft or damage to the Product for the full replacement value, and (ii)
insurance against public liability and property damage. Lessee shall provide a
certificate of insurance that such coverage is in effect, upon request by
Lessor, naming Lessor as loss payee and/or additional insured as may be
required.
Lessee shall bear the entire risk of loss, theft, destruction of or damage to
any item of Product. No loss or damage shall relieve Lessee of the obligation
to pay Rent or any other obligation under the Schedule. In the event of loss
or damage, Lessee shall promptly notify Lessor and shall, at Lessor's option,
(i) place the Product in good condition and repair, or (ii) replace the
Product with lien free Product of the same model, type and configuration in
which case the relevant Schedule shall continue in full force and effect and
clear title in such Product shall automatically vest in Lessor, or (iii) pay
Lessor the present value of remaining Rent plus the buyout purchase option
price provided for in the applicable Schedule.
11. Selection, Warranties And Limitation Of Liability
Lessee acknowledges that it has selected the Product and disclaims any reliance
upon statements made by Lessor. Lessee acknowledges and agrees that use and
possession of the Product by Lessee shall be subject to and controlled by the
terms of any manufacturer's or, if appropriate,
supplier's warranty, and Lessee agrees to look solely to the manufacturer or,
if appropriate, supplier with respect to all mechanical, service and other
claims, and the right to enforce all warranties made by said manufacturer are
hereby assigned to Lessee for the term of the Schedule.
EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR HAS NOT MADE AND DOES NOT MAKE
ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, NONFRINGEMENT, THE DESIGN,
QUALITY, CAPACITY OR CONDITION OF THE PRODUCT, ITS MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE. IT BEING AGREED THAT AS THE LESSEE SELECTED BOTH
THE PRODUCT AND THE SUPPLIER, NO DEFECT, EITHER PATENT OR LATENT SHALL
RELIEVE LESSEE OF ITS OBLIGATION HEREUNDER. LESSEE AGREES THAT LESSOR SHALL
NOT BE LIABLE FOR SPECIFIC PERFORMANCE OR ANY LIABILITY, LOSS, DAMAGE OR
EXPENSE OF ANY KIND INCLUDING, WITHOUT LIMITATION, INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY NATURE, DAMAGES ARISING FROM THE LOSS
OF USE OF PRODUCT, LOST DATA, LOST PROFITS, OR FOR ANY CLAIM OR DEMAND.
12. Indemnity
Lessee shall indemnify and hold harmless Lessor and Lessor's Assignee from and
against any and all claims, actions, suits, proceedings, liabilities, damages,
penalties, costs and expenses (including reasonable attorneys' fees), arising
out of the use, operation, possession, ownership (for strict liability in tort
only), selection, leasing, maintenance, delivery or return of any item of
Product.
13. Default And Remedies
Lessee shall be in default of any Lease if (i) Lessee fails to pay Rent within
ten (10) days of due date; (ii) Lessee fails to perform or observe or breaches
any covenant or condition or any representation or warranty in such Lease and
such failure or breach continues unremitted for a period of ten (10) days after
written notice from Lessor; (iii) Lessee, except as expressly permitted in the
Lease, attempts to move, sell, transfer, encumber, or sublet without consent any
item of Product leased under such Lease; (iv) Lessee files or has filed against
it a petition in bankruptcy or becomes insolvent or makes an assignment for the
benefit of creditors or consents to the appointment of a trustee or receiver or
either shall be appointed for Lessee or for a substantial part of its property
without its consent, or (v) Lessee or any guarantor of Lessee is declared
legally deceased or if Lessee shall terminate its existence by merger,
consolidation, sale of substantially all of its assets or otherwise.
Upon default, Lessor may, at its option, take one or more of the following
actions, (i) declare all sums due and to become due under the Schedule
immediately due and payable, (ii) require Lessee to return immediately all
Product leased under such Schedule to Lessor in accordance with Paragraph 6
hereof, (iii) without breach of the peace take immediate possession of and
remove the Product; (iv) sell any or all of the Product at public or private
sale or otherwise dispose of, hold, use or lease to others, or; (v) exercise
any right or remedy which may be available to Lessor under applicable law,
including the right to recover damages for the breach of the Schedule. In
addition, Lessee shall be liable for reasonable attorney's fees, other costs
and expenses resulting
from any default, or the exercise of Lessor's remedies, including placing
such Product in the condition required by Paragraph 6 hereof. Each remedy
shall be cumulative and in addition to any other remedy otherwise available
to Lessor at law or in equity. No express or implied waiver of any default
shall constitute a waiver of any of Lessor's other rights.
14. Lessee's Representations
Less represents and warrants for the Master Lease and each Schedule that the
execution, delivery and performance by Lessee have been duly authorized by all
necessary corporate action; the individual executing was duly authorized to do
so; the Master Lease and each Schedule constitute valid, binding agreements of
the Lessee enforceable in accordance with their terms; that all information
supplied by Lessee, including but not limited to the credit application and
other financial information concerning Lessee, is accurate in all material
respects as of the date provided; and if there is any material change in such
information prior to manufacturer's or, if appropriate, supplier's shipment of
Product under the Schedule, Lessee will advise Lessor of such change in writing.
15. Applicable Law
This Master Lease and each Schedule shall in all respects be governed by and
construed in accordance with the laws of the state of California without giving
effect to the principles of conflict of laws.
16. Miscellaneous
Lessee agrees to execute and deliver to Lessor such further documents,
including, but not limited to, financing statements, assignments, and financial
reports and take such further action as Lessor may reasonably request to protect
Lessor's interest in the Product.
The performance of any act or payment by Lessor shall not be deemed a waiver
of any obligation or default on the part of Lessee. Lessor's failure to
require strict performance by Lessee of any of the provisions of this Master
Lease shall not be a waiver thereof. 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.
This Master Lease together with any Schedule constitutes the entire
understanding between the parties and supersedes any previous representations
or agreements whether verbal or written with respect to the use, possession
and lease of the Product described in that Schedule. In the event of a
conflict the terms of the Schedule shall prevail over the Master Lease.
No amendment or change of any of the terms or conditions herein shall be
binding upon either party unless they are made in writing and are signed by
an authorized representative of each party Each Schedule is non-cancelable
for the full term specified and each Schedule shall be binding upon, and
shall inure to the benefit of Lessor, Lessee, and their respective
successors, legal
representatives and permitted assigns.
All agreements, representations and warranties contained herein shall be for
the benefit of Lessor and shall survive the execution, delivery and
termination of this Master Lease, any Schedule or related document.
Any provision of this Master Agreement and/or each Schedule which is
unenforceable shall not cause any other remaining provision to be ineffective
or invalid. The captions set forth herein are for convenience only and shall
not define or limit any of the terms hereof. Any notices or demands in
connection with any Schedule shall be given in writing by regular or
certified mail at the address indicated in the Schedule, or to any other
address specified.
THIS MASTER LEASE SHALL BECOME EFFECTIVE ON THE DATE ACCEPTED BY LESSOR.
LESSOR: SUN MICROSYSTEMS FINANCE LESSEE: New Mexico Software,Inc.
A Sun Microsystems, Inc. Business
BY: /s/ Xxxxxx X. Xxxxxxxxx BY: /s/ Xxxxxxx X. Xxxxxxxx
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(Authorized Signature) (Authorized Signature)
NAME: Carries X.Xxxxxxxxx NAME: Xxxxxxx X. Xxxxxxxx
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TITLE: TITLE:
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DATE: DATE:
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ADDITIONAL TERMS FOR SMI PRODUCTS
The following additional terms and conditions shall govern the use of Sun
Microsystems Inc. ("SMI") Products leased hereunder.
1.0 USE OF SOFTWARE
Lessee's use of any software Products ("Software") provided under this
Schedule shall be governed by the object code license accompanying such
Software.
2.0 WARRANTY
Product warranties may vary depending on the specific SMI Product leased.
Applicable terms and conditions are as set out in the then current U.S. End
User Price List. Software is warranted to conform to published specifications
for a period of ninety (90) days from the date of delivery.
SMI does not warrant that: (i) operation of any Software will be
uninterrupted or error free; or (ii) functions contained in Software will
operate in combinations which may be selected for use by the licensee or meet
the licensee's requirements. These warranties extend only to Lessee as an
original Lessee.
Lessee's exclusive remedy and SMI's entire liability under these warranties
will be: (i) with respect to Product, repair or at SMI's option, replacement;
and (ii) with respect to Software, use its best efforts to correct such
Software as soon as practical after licensee has notified SMI of Software's
nonconformance. If such repair, replacement or correction is not reasonably
achievable, SMI will refund the rental fee/license fee. Unless Lessee has
executed an on-site service agreement, repair or replacement will be
undertaken at a service location authorized by SMI.
All Software customization is provided "AS IS," without a warranty of any
kind.
No SMI warranty shall apply to any Software that is modified without SMI's
written consent or any Product or Software which has been misused, altered,
repaired or used with equipment or software not supplied or expressly
approved by SMI.
SMI reserves the right to change these warranties at any time upon Notice and
without liability to Lessee or third parties.
EXCEPT AS SPECIFIED IN THIS AGREEMENT, ALL EXPRESS OR IMPLIED REPRESENTATIONS
AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT, ARE HEREBY DISCLAIMED.
3.0 TRADEMARKS AND OTHER PROPRIETARY RIGHTS
"Trademarks" means all company names, products' names, marks, logos, designs,
trade dress and other designations or brands used by Sun Microsystems, Inc.,
its subsidiaries and affiliates ("Sun") in connection with Products,
including, Sun, Sun Microsystems, the Sun logo, SPARCstation, SPARCserver,
and all Sun product designs.
Lessee is granted no right, title, license or interest in the
Trademarks. Lessee acknowledges Sun's rights in the Trademarks and agrees
that any and all use of the Trademarks by Lessee shall inure to the sole
benefit of Sun.
4.0 HIGH RISK ACTIVITIES
PRODUCTS ARE NOT FAULT-TOLERANT AND ARE NOT DESIGNED, MANUFACTURED OR
INTENDED FOR USE OR RESALE AS ON-LINE CONTROL EQUIPMENT IN HAZARDOUS
ENVIRONMENTS REQUIRING FAIL-SAFE PERFORMANCE, SUCH AS IN THE OPERATION OF
NUCLEAR FACILITIES, AIRCRAFT NAVIGATION OR COMMUNICATION SYSTEMS, AIR TRAFFIC
CONTROL, DIRECT
LIFE SUPPORT, OR WEAPONS SYSTEMS IN WHICH THE FAILURE OF PRODUCTS COULD LEAD
DIRECTLY TO DEATH, PERSONAL INJURY, OR SEVERE PHYSICAL OR ENVIRONMENTAL
DAMAGE ("HIGH RISK ACTIVITIES"). SMI SPECIFICALLY DISCLAIMS ANY EXPRESS OR
IMPLIED WARRANTY OR FITNESS FOR HIGH RISK ACTIVITIES.
Lessee represents and warrants that it will not use, distribute or resell
Products (including Software) for High Risk Activities and that it will
ensure that its end-users or customers of Products are provided with a copy
of the notice in the previous paragraph.
