EXHIBIT 10.10
MASTER LEASE AGREEMENT
This Master Lease Agreement (the "Lease") is made the 13th day of March, 1997
between Leasing Technologies International, Inc., with its principal office at
Soundview Plaza, 0000 Xxxx Xxxxxx, Xxxxxxxx, XX 00000 (the "Lessor"), and SQL
Financials International, Inc., with its principal office at 0 Xxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000 (the "Lessee"). The parties hereto agree as
follows:
1. Lease:
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This Lease establishes the general terms and conditions by which Lessor may
lease to Lessee the Equipment (the "Equipment") listed on each Equipment
Schedule executed periodically pursuant to this Lease. Each such Equipment
Schedule shall incorporate by reference the terms of this Lease, and shall be a
separate lease agreement as to the Equipment listed thereon for all purposes,
including default. In the event of any conflict between the terms and conditions
of this Lease and the terms and conditions of any Equipment Schedule(s) or
Rider(s) thereto, the terms and conditions of such Equipment Schedule(s) or
Rider(s) shall prevail.
2. Definitions:
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(a) The "Installation Date" means the date determined in accordance with
the applicable Equipment Schedule.
(b) The "Commencement Date" means, as to any item of Equipment designated
on any Equipment Schedule where the Installation Date for such item of Equipment
falls on the first day of the month, that date, or, in any other case, the first
day of the month following the month in which such Installation Date falls.
(c) The "Daily Rental" means 1/30th of the amount set forth as the monthly
rental in the applicable Equipment Schedule.
3. Term of Lease:
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The term of this Lease, as to all Equipment designated on any Equipment
Schedule, shall commence on the Installation Date for such Equipment, and shall
continue for an initial period ending that number of months as is specified on
the applicable Equipment Schedule from the Commencement Date for the last item
of Equipment to be installed (the "Initial Term"). The term of this Lease for
all such Equipment shall be automatically extended for successive monthly
periods until terminated in accordance with this Lease. Any termination shall
be effective only on the last day of the Initial Term or the last day of any
such successive monthly period.
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4. Rental:
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The monthly rental payable hereunder is as set forth in the Equipment
Schedule(s). Rental shall begin to accrue on the Installation Date for each item
of Equipment and shall be due and payable by Lessee in advance on the first day
of each month. If the Installation Date does not fall on the first day of a
month, the rental for that period of time from the Installation Date until the
Commencement Date shall be an amount equal to the Daily Rental multiplied by the
number of days from (and including) the Installation Date to (but not including)
the Commencement Date and shall be due and payable on the Installation Date. In
addition to the monthly rental set forth in the Equipment Schedule(s), Lessee
shall pay to Lessor an amount equal to all taxes paid, payable or required to be
collected by Lessor, however designated, which are levied or based on the
rental, on the Lease or on the Equipment or on its purchase for lease hereunder,
or on its use, lease, operation, control or value (including, without
limitation, state and local privilege or excise taxes based on gross revenue),
any penalties or interest in connection therewith which are attributable to
Lessee's negligence or taxes or amounts in lieu thereof paid or payable by
Lessor in respect of the foregoing, but excluding taxes based on Lessor's net
income. Personal property taxes assessed on the Equipment during the term
hereof shall be paid by Lessee. Lessee agrees that Lessor, or Lessor's agent may
file all required property tax returns and reports and pay all taxes thereon
pertaining to the Equipment. In such event, Lessee shall reimburse Lessor or
Lessor's agent for all costs and expenses incurred in connection therewith,
provided that such costs and expenses (including property taxes) shall not
exceed the property taxes pursuant to statutory tax rates and regulations. If
requested by Lessor, Lessee agrees to file, on behalf of Lessor, all required
property tax returns and reports concerning the Equipment with all appropriate
governmental agencies, and, within not more than thirty (30) days after the due
date of such filing to send Lessor confirmation of such filing.
Interest on any past due payments, including but not limited to
administrative charges and any other charges or fees arising out of or related
to this Lease, shall accrue at the rate of 1 1/2% per month, or if such rate
shall exceed the maximum rate allowed by law, then at such maximum rate, and
shall be payable on demand. Charges for taxes, penalties and interest shall be
promptly paid by Lessee when invoiced by Lessor.
As security for the full performance of all of Lessee's obligations under
each Equipment Schedule, Lessee shall, simultaneously with the execution and
delivery of each Equipment Schedule, deposit with Lessor the amount set forth on
such Equipment Schedule. The security deposit shall be promptly returned to
Lessee by Lessor upon the expiration of such Equipment Schedule and return or
purchase of all Equipment, as the case may be, provided that all Lessee
obligations under such Equipment Schedule have been fulfilled.
5. Installation, Use and Quiet Possession of Equipment:
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(a) Lessee, at its own expense, will provide the required suitable electric
current to operate the Equipment and appropriate installation facilities as
specified by the manufacturer.
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(b) Any equipment, cards, disks, tapes or other items not specified in the
Equipment Schedule(s) which are used on or in connection with the Equipment must
meet the specifications of the manufacturer and shall be acquired by Lessee at
its own expense.
(c) Lessee shall use the Equipment solely in connection with Lessee's
business and for no other purpose. Subject to the preceding sentence, Lessee
shall be entitled to unlimited usage of the Equipment without extra charge by
Lessor.
(d) Unless otherwise set forth in the applicable Equipment Schedule, Lessee
will at all times keep the Equipment in its sole possession and control. The
Equipment shall not be moved from the location stated in the applicable
Equipment Schedule without the prior written consent of Lessor. Notwithstanding
the foregoing, Lessor acknowledges that some items of Equipment may (a) be in
the possession of Lessee's employees for an extended period of time or (b) may
be returned to the manufacturer or service company for repair. Lessee shall,
with respect to such items of Equipment, maintain records with respect to such
items of Equipment indicating the location and serial number thereof, and shall
furnish to Lessor within ten days after the close of each calendar quarter, a
list of such items of Equipment which shall identify such items of Equipment by
location (including the name, address and telephone number of the employee
utilizing such Equipment or of the repair company, as the case may be) and
serial number. In addition, Lessee shall obtain from such employees and furnish
to Lessor an acknowledgment that such Equipment is owned by Lessor. Lessee
shall indemnify and hold Lessor harmless from any adverse tax consequences
resulting from the movement and location of the Equipment set forth in this
Section. Any failure to comply with this section shall constitute a default
pursuant to Section 9 (c) of this Lease.
(e) After prior notice to Lessor, Lessee may, at its own expense, make
alterations in or add attachments to the Equipment, provided such alterations or
attachments do not interfere with the normal and satisfactory operation or
maintenance of the Equipment or with Lessee's ability to obtain and maintain the
maintenance contract required by Section 5(h) hereof. The manufacturer or other
organization selected by Lessee and approved in writing by Lessor to maintain
the Equipment ("Maintenance Organization") may incorporate engineering changes
or make temporary alterations to the Equipment upon request of Lessee. All such
alterations and attachments shall be and become the property of Lessor or, at
the option of Lessee, shall be removed by Lessee and the Equipment restored, at
Lessee's expense, to its original condition as of the Installation Date thereof,
reasonable wear and tear only excepted, and upon the removal and restoration,
the alteration and/or attachment which was made by Lessee shall become the
property of Lessee.
(f) So long as Lessee is not in default hereunder, neither Lessor nor any
party claiming through or under Lessor shall interfere with Lessee's use or
possession of any Equipment during the term of this Lease.
(g) Lessee shall, during the term of this Lease, at its expense, keep the
Equipment in good working order and condition and make all necessary
adjustments, repairs and replacements
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and shall not use or permit the Equipment to be used in any manner or for any
purpose for which, in the opinion of the manufacturer, the Equipment is not
designed or reasonably suitable.
(h) Unless otherwise set forth in the applicable Equipment Schedule, Lessee
shall, during the term of this Lease, at its own expense, enter into and
maintain in force a contract with the manufacturer or the Maintenance
Organization covering at least prime shift maintenance of each item of
Equipment. Such contract shall commence upon expiration of the manufacturer's
warranty period, if any, relating to such item. Lessee shall furnish Lessor
with a copy of such contract(s).
(i) At the termination of the applicable Equipment Schedule, Lessee at its
expense shall return, if permitted by the applicable Equipment Schedule, not
less than all the Equipment subject thereto to Lessor (at the location
designated by Lessor within the Continental United States) in the same operating
order, repair, condition and appearance as on the Installation Date, reasonable
wear and tear only excepted. Lessee shall, prior to such termination, arrange
and pay for any repairs, changes and manufacturer's certifications as are
necessary for the manufacturer or Maintenance Organization to accept the
Equipment under contract maintenance at its then standard rates. Lessee shall
return all accessories supplied with the Equipment, including but not limited to
all manuals, cables and software diskettes. Lessee shall promptly pay, after
receipt of an invoice therefore, all costs and expenses pertaining to the
replacement of any missing items and for the repair of any Equipment necessary
to meet the standards set forth herein, together with any audit, inspection or
certification charges reasonably incurred by Lessor.
6. Leasehold Rights and Inspection:
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(a) Lessee shall have no interest in the Equipment other than the rights
acquired as a lessee hereunder and the Equipment shall remain personalty
regardless of the manner in which it may be installed or attached. Lessee
shall, at Lessor's request, affix to the Equipment, tags, decals or plates
furnished by Lessor, indicating Lessor's ownership and Lessee shall not permit
their removal or concealment. Lessee shall replace any such tag, decal or plate
which may be removed or destroyed or become illegible. Lessee shall keep all
Equipment free from any marking or labeling which might be interpreted as a
claim of ownership thereof by Lessee or any party other than Lessor or anyone
claiming through Lessor.
(b) Lessee shall keep the Equipment free and clear of all liens and
encumbrances except liens or encumbrances arising through the actions or
omissions of Lessor. LESSEE SHALL NOT ASSIGN OR OTHERWISE ENCUMBER THIS LEASE
OR ANY OF ITS RIGHTS HEREUNDER OR SUBLEASE THE EQUIPMENT WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR except that Lessee may assign this Lease or sublease
the Equipment to its parent or any subsidiary corporation, or to a corporation
which shall have acquired all or substantially all of the property of Lessee by
merger, consolidation or purchase. No permitted assignment or sublease shall
relieve Lessee of any of its obligations hereunder.
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(c) Lessor or its agents shall upon reasonable prior notice have free
access to the Equipment at all reasonable times for the purpose of inspection
and for any other purpose contemplated by this Lease. Lessor shall not be
required to furnish prior notice if Lessee is in default under this Lease.
(d) Lessee shall immediately notify Lessor of all details concerning any
damage to, or loss of, the Equipment arising out of any event or occurrence
whatsoever, including but not limited to, the alleged or apparent improper
manufacture, functioning or operation of the Equipment.
7. No Warranties By Lessor:
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Lessee represents that, at the Installation Date thereof, it shall have (a)
thoroughly inspected the Equipment; (b) determined for itself that all items of
Equipment are of a size, design, capacity and manufacture selected by it; and
(c) satisfied itself that the Equipment is suitable for Lessee's 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 EQUIPMENT'S MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, DESIGN, CONDITION, QUALITY, CAPACITY, MATERIAL
OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed that
all such risks, as between Lessor and Lessee, are to be borne by Lessee. Lessee
agrees to look solely to the manufacturer or to suppliers of the Equipment for
any and all warranty claims and any and all warranties made by the manufacturer
or the supplier of Lessor are, to the extent to which the same may be
assignable, hereby assigned to Lessee for the term of the applicable Equipment
Schedule. Lessee agrees that Lessor shall not be responsible for the delivery,
installation, maintenance, operation or service of the Equipment or for delay or
inadequacy of any or all of the foregoing. Lessor shall not be responsible for
any direct or consequential loss or damage resulting from the installation,
operation or use of the Equipment or otherwise. Lessee will defend, indemnify
and hold Lessor harmless against any and all claims, demands and liabilities
arising out of or in connection with the design, manufacture, possession or
operation of the Equipment.
8. Risk of Loss on Lessee:
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(a) Beginning on the Installation Date thereof and continuing until the
Equipment is either returned to Lessor or purchased by Lessee as provided in
this Lease, Lessee relieves Lessor of responsibility for all risks of physical
damage to or loss or destruction of the Equipment, howsoever caused. During the
term of this Lease as to any Equipment Schedule, Lessee shall, at its own
expense, keep in effect "all risk" property insurance and public liability
insurance policies covering the Equipment designated in each Equipment Schedule.
The public liability insurance policy shall be in such amount as is reasonably
acceptable to Lessor. The "all risk" property insurance policy shall be for an
amount not less than the replacement cost of the Equipment. Lessor, its
successors and assigns and/or such other party as may be designated by
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any thereof to Lessee, in writing, shall be named as additional insureds and
loss payees on such policies, which shall be written by an insurance company of
recognized responsibility which is reasonably acceptable to Lessor. Evidence of
such insurance coverage shall be furnished to Lessor no later than the
Installation Date set forth in the Equipment Schedule(s) and, from time to time,
thereafter as Lessor may request. Such policies shall provide that no less than
ten days written notice shall be given Lessor and any other party named as loss
payee prior to cancellation of such policies for any reason. To the extent of
Lessor's interest therein, Lessee hereby irrevocably appoints Lessor or any
other party named as loss payee as Lessee's attorney-in-fact coupled with an
interest to make claim for, receive payment of, and execute any and all
documents that may be required to be provided to the insurance carrier in
substantiation of any such claim for loss or damage under said insurance
policies, and to endorse Lessee's name to any and all drafts or checks in
payment of the loss proceeds.
(b) If any item of Equipment is rendered unusable as a result of any
physical damage to, or destruction of, the Equipment, Lessee shall give to
Lessor immediate notice thereof and this Lease shall continue in full force and
effect without any abatement of rental. Lessee shall determine, within fifteen
(15) days after the date of occurrence of such damage or destruction, whether
such item of Equipment can be repaired. In the event Lessee determines that the
item of Equipment cannot be repaired, Lessee shall either, at its expense,
promptly replace such item of Equipment and convey title to such replacement to
Lessor free and clear of all liens and encumbrances, and this Lease shall
continue in full force and effect as though such damage or destruction had not
occurred, or pay Lessor therefor in cash the Stipulated Loss Value (defined
below) within sixty (60) days of such loss or damage. "Stipulated Loss Value,"
as used herein, shall be an amount as shown on Exhibit A to the applicable
Equipment Schedule. In the event Lessee determines that such item of Equipment
can be repaired, Lessee shall cause such item of Equipment to be promptly
repaired. All proceeds of insurance received by Lessor, the designated loss
payee, or Lessee under the policy referred to in the preceding paragraph of this
Section shall be applied toward the cost of any such repair or replacement so
long as Lessee shall not be in default of its obligations hereunder.
9. Events of Default and Remedies:
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The occurrence of any one of the following shall constitute an Event of
Default hereunder:
(a) Lessee fails to pay an installment of rent on or before the date when
the same becomes due and payable and such failure continues for a period of ten
days;
(b) Lessee attempts to remove, sell, transfer, encumber, sublet or part
with possession of the Equipment or any items thereof, except as expressly
permitted herein;
(c) Lessee shall fail to observe or perform any of the other obligations
required to be observed or performed by Lessee hereunder and such failure shall
continue uncured for thirty (30) days after written notice thereof to Lessee by
Lessor or the then assignee hereof;
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(d) Lessee ceases doing business as a going concern, makes an assignment
for the benefit of creditors, admits in writing its inability to pay its debts
as they become due, files a voluntary petition of bankruptcy, is adjudicated a
bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute, law or regulation or
files an answer admitting the material allegations of the petition filed against
it in any such proceeding, consents to or acquiesces in the appointment of a
trustee, receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or if it or its shareholders shall take any action looking
to its dissolution or liquidation;
(e) Within sixty (60) days after the commencement of any proceedings
against Lessee seeking reorganization, arrangement, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceedings shall not have been dismissed, or if within sixty
(60) days after the appointment without Lessee's consent or acquiescence of any
trustee, receiver or liquidator of it or of all or any substantial part of its
assets and properties, such appointment shall not be vacated;
(f) Lessee defaults in the performance or observation of any material term,
condition or covenant of its loan agreement, with Silicon Valley Bank ("SVB"),
and SVB accelerates the obligations of Lessee due thereunder, or if Lessee is in
default in the payment of any obligation in excess of $75,000.00 with respect to
any other loan agreement, indenture, trust agreement, lease or similar agreement
to which it is a party or by which Lessee is bound and such default continues
beyond any applicable cure period;
(g) Lessee enters into any transaction, the effect of which adversely
affects (i) a material portion of Lessee's business value and (ii) the ability
of Lessee, in Lessor's reasonable judgment, to repay Lessee's obligations under
the Lease as they become due. Lessee shall have sixty days, after notice
thereof, to cure the default set forth in this Section 9 (g).
Upon the occurrence of an Event of Default, Lessor may at its option do any
one or more of the following: (i) by notice to Lessee terminate this Lease as
to any or all Equipment Schedules; (ii) whether or not this Lease is terminated
as to any or all Equipment Schedules, take possession on not less than three (3)
days' notice of any or all of the Equipment listed on any or all Equipment
Schedules, wherever situated, and for such purpose, enter upon any premises
without liability for so doing or Lessor may cause Lessee and Lessee hereby
agrees, to return said Equipment to Lessor as provided in this Lease; (iii)
recover from Lessee, as liquidated damages for loss of a bargain and not as a
penalty, all past due amounts as well as an amount equal to the present value of
all monies to be paid by Lessee during the remaining Initial Term or any
successive period then in effect, calculated by discounting at the rate of six
percent (6%) per annum compounded monthly, which payment shall become
immediately due and payable; and (iv) sell, dispose of, hold, use or lease any
Equipment as Lessor in its sole discretion may determine in accordance with the
Uniform Commercial Code (and Lessor shall not be obligated to give preference to
the sale, lease or other disposition of the Equipment over the sale, lease or
other disposition of similar equipment owned or leased by Lessor).
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In the event that Lessee shall have first paid to Lessor or its assigns the
liquidated damages referred to in (iii) above, Lessee shall thereafter be
entitled to receive all rentals or proceeds received from any reletting or sale
of the Equipment during the balance of the Initial Term (after deduction of
Lessor's expected residual value of the Equipment at the expiration of the
Initial Term or any extension thereof and of all expenses incurred in connection
therewith) said amount never to exceed the amount of the liquidated damages paid
by Lessee. Lessee agrees that Lessor shall have no obligation to sell the
Equipment. The preceding sentence shall not affect Lessor's obligation to
mitigate its damages in accordance with applicable law. Lessee shall in any
event remain fully liable for reasonable damages as provided by law and for all
costs and expenses incurred by Lessor or its assigns on account of such default
including but not limited to all court costs and reasonable attorney's fees.
Lessee hereby agrees that, in any event, it will be liable for any deficiency
after any lease or other disposition of the Equipment. The rights afforded
Lessor hereunder shall not be deemed to be exclusive, but shall be in addition
to any rights or remedies provided by law.
10. Net Lease:
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Except as otherwise specifically provided in this Lease, it is understood
and agreed that this is a net lease, and that, as between Lessor and Lessee,
Lessee shall be responsible for all costs and expenses of every nature
whatsoever arising out of or in connection with or related to this Lease or the
Equipment (including, but not limited to, transportation in and out, rigging,
manufacturer's approved packing, installation, certification costs and
disconnect charges). Lessee hereby agrees that in the event that Lessee fails to
pay or perform any obligation under this Lease, Lessor may, at its option, pay
or perform said obligation and any payment made or expense incurred by Lessor in
connection therewith shall become additional rent which shall be due and payable
by Lessee upon demand. Lessee acknowledges that Lessor may, from time to time,
and at Lessee's request, execute and deliver purchase orders pertaining to the
purchase of equipment to be leased pursuant to this Lease. Lessee agrees that
it will indemnify and hold Lessor harmless from and against any and all loss,
cost, liability and expense that Lessor may incur as a result of the execution
and delivery of such purchase orders.
11. Assignment:
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Lessee agrees that Lessor may transfer or assign all or any part of
Lessor's right, title, and interest but not its obligations in, under or to the
Equipment and this Lease and any or all sums due or to become due pursuant to
any of the above, to any third party other than a competitor of Lessee (the
"Assignee") for any reason and that the Assignee may so re-assign and transfer
in each case subject to the terms and provisions of this Lease. Lessee agrees
that upon receipt of written notice from Lessor or Assignee of such assignment,
Lessee shall perform all of its obligations hereunder for the benefit of
Assignee and any successor assignee and, if so directed in writing by Lessor,
shall pay all sums due or to become due thereunder directly to the Assignee or
to any other party designated by the Assignee. Lessee hereby covenants,
represents and warrants as follows and agrees that the Assignee and any
successor assignee shall be entitled to rely on and shall be considered a third
party beneficiary of the following
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covenants, representations and warranties: (i) Lessee's obligations hereunder
are absolute and unconditional and are not subject to any abatement, reduction,
recoupment, defense, offset or counterclaim available to Lessee for any reason
whatsoever including operation of law, defect in the Equipment, failure of
Lessor or Assignee to perform any of its obligations hereunder or for any other
cause or reason whatsoever, whether similar or dissimilar to the foregoing; (ii)
Lessee shall not look to Assignee or any successor assignee to perform any of
Lessor's obligations hereunder; (iii) Lessee will not amend or modify this
Agreement without the prior written consent of the Assignee and any successor
assignee; and (iv) Lessee will send a copy to Assignee and any successor
assignee of each notice which Lessee sends to Lessor.
12. Representations and Warranties of Lessee:
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Lessee represents and warrants to Lessor and its assigns, as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessee in accordance with its
terms, subject to laws governing creditors' rights, judicial discretion and
equitable remedies;
2. The performance by Lessee will not result in any breach, default or
violation of, Lessee's certificate of incorporation or by-laws or any agreement
to which Lessee is a party;
3. Lessee is in good standing in its jurisdiction of incorporation and in
any jurisdiction in which any of the Equipment is to be located, if so required
under the laws of such jurisdiction; and
4. Any and all financial statements or other information with respect to
Lessee heretofore furnished by Lessee to Lessor was, when furnished, and remains
at the time of execution of this Lease, true and complete in all material
respects as of the date hereof.
Lessor represents and warrants to Lessee as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessor in accordance with its
terms, subject to laws governing creditors' rights; and
2. The performance by Lessor will not result in any breach, default or
violation of, Lessor's certificate of incorporation or by-laws or any agreement
to which Lessor is a party;
The foregoing representations and warranties shall survive the expiration
or termination of this Lease.
13. End of Lease:
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Provided (i) no Event of Default has occurred and is continuing and
(ii) Lessee has made all payments in accordance with the Lease, upon written
notice furnished by Lessee no later than four (4) months prior to the expiration
of the Initial Term, Lessee shall, with respect to each Equipment Schedule elect
only such alternatives as may be set forth on the Equipment Schedule.
To the extent that any of such alternatives involves a determination of
Fair Market Value, the Fair Market Value shall be defined and determined by the
provisions of this Section. For purposes hereof, Fair Market Value shall mean
the amount that would obtain in a retail arm's length transaction between an
informed and willing lessee-buyer in possession and an informed and willing
lessor-seller. Rental charges previously paid pursuant to the applicable
Equipment Schedule shall have no effect on the determination of Fair Market
Value. Unless otherwise stated in the Equipment Schedule: the Fair Market Value
for items set forth on the Equipment Schedule which do not have a readily
ascertainable market value, (including but not limited to software, cabling and
certain equipment) shall be determined by multiplying the Lessor's acquisition
cost of such items by a fraction, the numerator of which shall be the Fair
Market Value of the other items and the denominator of which shall be the
Lessor's acquisition cost of such other items; and the determination of Fair
Market Value shall be based upon the assumption that all items set forth on the
Equipment Schedule or included with the Equipment may be transferred to, and
used by, a third party user. In such determination, all alternative uses in the
hands of each buyer or lessee, including, without limitation, the further
leasing of the Equipment shall be taken into account in making such
determination.
Not less than ninety (90) days prior to the end of the Initial Term, Lessee
may provide written notice to Lessor of Lessee's intention to exercise the
purchase or extension option described above. If, on or before a date sixty
(60) days prior to the expiration of the Initial term Lessor and Lessee are
unable to agree upon a determination of the fair market value of the Equipment,
such fair market value shall be determined in accordance with the procedure for
appraisal as described below. After a determination of the fair market value of
the Equipment has been made in accordance with the procedure described below,
Lessee may exercise its option to purchase the Equipment for the fair market
value thereof by delivering written notice to Lessor not more than ten (10) days
after completion of appraisal as described below.
Appraisal shall mean a procedure whereby two independent appraisers,
neither of whom shall be a manufacturer of such Items of Equipment, one chosen
by Lessee and one by Lessor, shall mutually agree upon the amount in question
based upon the definition set forth below. Each party shall deliver a written
notice to the other party appointing its appraiser on or before a date sixty
days prior to the expiration of the Initial Term. If within fifteen (15) days
after appointment of the two appraisers as described above, the two appraisers
are unable to agree upon the amount in question, a third independent appraiser,
who shall not be a manufacturer of such Items of Equipment, shall be chosen
within five (5) business days thereafter by the mutual consent of such first two
appraisers or, if such first two appraisers fail to agree upon the appointment
of a third appraiser, such appointment shall be made by an authorized
representative of the American Arbitration Association or any organization
successor thereof. The decision of the third appraiser so appointed and chosen
shall be given ten (10) business days after the
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selection of such third appraiser. Lessee shall pay the fees and expenses of its
appraiser and one-half of the fees and expenses of such third appraiser, if any.
The Lease, including the obligation to pay monthly rentals, shall remain in
effect pending the determination of Fair Market Value.
14. Additional Collateral:
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In order to secure the prompt and full performance of all of Lessee's
obligations (the "Obligations") arising under the Lease, the Lessee hereby
grants to Lessor a security interest in the equipment set forth on Exhibit A
annexed hereto and made a part hereof, as additional collateral (the
"Collateral") for the performance of the Obligations. Lessee agrees to deliver
to Lessor, at any time or times hereafter, any Uniform Commercial Code financing
statements and amendments and all other agreements, documents and instruments
requested by Lessor to perfect and maintain Lessor's security interest in the
Collateral and pay any cost incurred in connection with the filing or recording
of such documents, agreements or instruments. Lessee represents and warrants
that subject only to the lien or security interest of SVB it has title to the
equipment, free and clear of all liens, claims or encumbrances and that the
obligations pertaining to the other Equipment subject to this Lease shall apply
to the Collateral, including but not limited to the obligation to adequately
insure and maintain the Collateral and to inform Lessor of any change in the
location of the Collateral. Upon a default under the Lease in the payment or
performance of any of the Obligations which continues beyond any grace or cure
periods, Lessor shall have all of the rights of a secured party under the
Uniform Commercial Code.
15. Miscellaneous:
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(a) During the term of this Lease, Lessee hereby agrees to deliver to
Lessor or Assignee and any successor assignee a copy of Lessee's monthly
unaudited financial statements, and the annual financial budget for the upcoming
year as soon as available and as it may be adjusted during the year which will
be held in confidence by Lessor, but may be disclosed to Lessor's officers,
directors and consultants as well as Lessor's financing institutions. Lessee
shall also furnish, as soon as available and in any event within ninety (90)
days after the last day of Lessee's fiscal year, a copy of Lessee's annual
audited statements and consolidating and consolidated balance sheet, if any, as
of the end of such fiscal year, accompanied by the opinion of an independent
certified public accounting firm of recognized standing. The Lessee shall
furnish such other financial information as may be reasonably requested by
Lessor, including but not limited to any material changes in budgets or
financial reports furnished to the Lessee's Board of Directors or Shareholders.
(b) This Lease constitutes the entire agreement between Lessee and Lessor
with respect to the Equipment, and except as agreed upon in writing no covenant,
condition or other term or provision hereof may be waived or modified orally.
11
(c) All notices hereunder shall be in writing and shall be delivered in
person or sent by registered or certified mail, postage prepaid, or by facsimile
transmission (confirmed by registered mail as set forth in this section) to the
address of the other party as set forth herein or to such other address as such
party shall have designated by proper notice.
(d) This Lease shall be binding upon and inure to the benefit of Lessor
and Lessee and their respective successors and assigns (including any subsequent
assignee of Assignee).
(e) If any term or provision of this Lease or the application thereof to
any person is, to any extent, invalid or unenforceable, the remainder of this
Lease, or the application of such provision to the person other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
(f) No waiver of any of the terms and conditions hereof shall be effective
unless in writing and signed by the party against whom such waiver is sought to
be enforced. Any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given. The subsequent acceptance
of rental payments hereunder by Lessor shall not be deemed a waiver of any prior
existing breach by Lessee regardless of Lessor's knowledge of such prior
existing breach at the time of acceptance of such rental payments.
(g) Lessor is hereby authorized by Lessee to cause this Lease or other
instruments, including Uniform Commercial Code Financing Statements to be filed
or recorded for the purpose of showing Lessor's interest in the Equipment and
Lessee agrees that Lessor may execute such instruments for and on behalf of
Lessee. All filing fees reasonably incurred by Lessor in connection therewith
and filing fees incurred by Lessor's assignees in perfecting security interests
shall be paid by Lessee or reimbursed to Lessor by Lessee.
(h) In the event of any conflict between the terms and conditions of this
Lease and the terms and conditions of any Equipment Schedule(s) or Rider(s)
thereto, the terms and conditions of such Equipment Schedule(s) or Rider(s)
shall prevail.
(i) No consent or approval provided for herein shall be binding upon
Lessor or Lessee unless signed on its behalf by an officer. THIS LEASE AND EACH
EQUIPMENT SCHEDULE SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF CONNECTICUT
AND SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF SUCH STATE. The Lessee
accepts for itself the non-exclusive jurisdiction of any Federal or State court
of competent jurisdiction in the State of Connecticut in any action, suit or
proceeding of any kind against it which arises out of or by reason of this Lease
or any Equipment Schedule.
(j) Lessee acknowledges that the late payment by Lessee to Lessor of
monthly rental and other sums due hereunder will cause Lessor harm and to incur
costs not contemplated by this Lease, the precise amount and severity of which
will be difficult to ascertain. Such costs include, but are not limited to,
administrative, accounting and legal charges which Lessor may
12
incur due to such late payment. Accordingly, if any monthly rent or any other
sum due from Lessee shall not be received by Lessor or Lessor's assignee within
twenty (20) days after the same is due, Lessee shall pay to Lessor or Lessor's
assignee a late charge equal to five per cent (5%) of such overdue amount
monthly until such overdue amount is paid. Lessee acknowledges that such late
charge represents a fair and reasonable estimate of the cost Lessor will incur
by reason of a late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's default, if any, with respect
to such overdue amounts, nor prevent Lessor from exercising any of the other
rights and remedies which Lessor may have pursuant to this Lease.
(k) The obligations which Lessee is required to perform during the term of
this Lease shall survive the expiration or other termination of this Lease.
(l) Lessee will promptly execute and deliver to Lessor such further
documents and assurances and take such further action as Lessor may reasonably
request in order to effectuate the intent and purpose of this Lease and to
establish and protect the rights, interests and remedies intended to be created
in favor of Lessor hereunder, including without limitation, the execution and
filing of financing statements and continuation statements with respect to this
Lease, the Equipment and any Equipment Schedule. Lessee authorizes Lessor to
effect any such filing and Lessor's reasonable expenses (together with the
reasonable expenses of Lessor's assignees in this regard) shall be payable by
Lessee on demand.
LESSOR: LESSEE:
Leasing Technologies International, Inc. SQL Financials International, Inc.
BY: /s/ BY: /s/
------------------------------------- -------------------------------
Name Name
--------------------------------- ---------------------------
Title: Title:
------------------------------- -------------------------
Date: Date:
-------------------------------- --------------------------
13
EXHIBIT A
TO
MASTER LEASE AGREEMENT DATED MARCH 13, 1997 (THE "LEASE")
BETWEEN LEASING TECHNOLOGIES INTERNATIONAL, INC. (THE "LESSOR")
AND SQL FINANCIALS INTERNATIONAL, INC. (THE "LESSEE")
Collateral
----------
All of the assets of the Lessee, wherever located and whether now owned or
hereafter acquired or arising, and all proceeds therefrom, including but not
limited to:
(i) all of the Lessee's inventory, goods, wares, merchandise, raw materials,
supplies, work in process, finished goods, and other personal property of every
kind and description held for sale or lease or furnished or to be furnished
under any contract of service, and all goods which are in transit, and all
returned, repossessed and rejected goods of the foregoing description, and any
other tangible personal property held by the Lessee for licensing, processing,
sale or other business purpose or to be used, licensed or consumed in the
Lessee's business;
(ii) all machinery, equipment, motor vehicles, furniture, office equipment and
supplies, plant equipment, tools, dies, molds, fixtures and leasehold
improvements of Lessee, of every kind and description, wherever located and
including all additions, improvements, accessions and substitutions thereto;
(iii) accounts receivable now owned or hereafter acquired and all proceeds
thereof. "Accounts Receivable" means all accounts receivable of Debtor,
including but not limited to (i) all notes, drafts, acceptances and other
instruments representing or evidencing a right to payment for goods sold or
leased, or services rendered, whether or not earned by performance; (ii) all
general intangibles of Debtor that constitute debts obligations or liabilities
owed to Debtor arising out of or in connection with such accounts receivable;
(iii) all of Debtor's chattel paper of every kind and description from account
debtors including all additions thereto and substitutions therefor. (iv) all
files, records (including, without limitation computer programs, disks, tapes
and related electronic data processing media) and writings of Debtor or in which
Debtor has an interest in any way relating to the foregoing property and all
rights of Debtor to the retrieval from third parties of electronically processed
and recorded information pertaining to any of such property; (v) all of
Debtor's documents and instruments constituting or evidencing the foregoing and
(vi) all guaranties and securities for, and all proceeds of any of the
foregoing.
(iv) all insurance proceeds, whether arising out of any of the foregoing or
otherwise.
LESSOR: LESSEE:
Leasing Technologies International, Inc. SQL Financials International, Inc.
BY: BY:
------------------------------------- -------------------------------
Name Name
--------------------------------- ---------------------------
Title: Title:
------------------------------- -------------------------
Date: Date:
-------------------------------- --------------------------
EQUIPMENT SCHEDULE NO. ____ ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED ______________, 1996 ("LEASE")
--
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND __________________________ ("LESSEE")
1. EQUIPMENT:
Model/ Purchase Serial
Qty Feature Description Mfr Price Number
--- ------- ----------- --- ----- ------
2. EQUIPMENT LOCATION:
3. INSTALLATION DATE: _____________________. If this space is not completed,
the Installation Date shall be: the date which the Vendor(s) determines to
be the date of installation, which, Lessee agrees, will not occur without
Lessor's prior written consent or the fifth day following delivery of the
Equipment to the location set forth in Section 2, whichever is earlier; or
in the case of Equipment which is the subject of a sale and leaseback
between Lessor and Lessee, the date upon which Lessor obtains title to the
Equipment from Lessee (but not later than the date Lessor pays for the
Equipment).
4. COMMENCEMENT DATE: ____________________. (Subject to the terms and
conditions of Section 3 of the Lease, if all of the Equipment is not
installed on the same date).
5. INITIAL TERM: _______________________ months.
6. MONTHLY RENTAL: $___________. The Monthly Rental set forth in this section
is conditional upon Lessor acquiring the Equipment at a purchase price of
$__________ based on an 8.25% Prime Interest Rate. Lessor and Lessee agree
that the Monthly Rental shall be increased by $_______ for each one-quarter
of one percent (1/4 of 1%) by which the Prime Interest Rate (as stated by
Citibank N.A.) increases prior to the Commencement Date, or the date Lessor
has received sufficient documentation so as to finance the Lease, whichever
is later. Lessee agrees that it shall confirm the amount of the rental
payable hereunder after adjustment, if any, in such form as Lessor may
request.
7. LESSOR'S OBLIGATIONS: Lessor's obligations under this Equipment Schedule are
subject to there being no tax legislation enacted prior to the Installation
Date which would have an adverse effect on the rights or anticipated
benefits to Lessor or any Assignee.
8. SECURITY DEPOSIT: $______________.
Page 1 of 2
EQUIPMENT SCHEDULE NO. ____ ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED______________ , 1996 ("LEASE")
--
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND __________________________ ("LESSEE")
9. END OF LEASE: Provided (i) no Event of Default has occurred and is
continuing and (ii) Lessee has made all payments in accordance with the
Lease, upon written notice furnished by Lessee to Lessor no earlier than
one-hundred eighty (180) days and no later than one hundred twenty (120)
days prior to the expiration of the Initial Term, Lessee shall either:
(a) Extend the Initial Term for not less than all the Equipment for an
additional 12 months at Fair Market Value rental;
(b) Purchase not less than all the Equipment at Fair Market Value for a
purchase price equal to the Fair Market Value thereof as of the end
of the Initial Term, plus any taxes applicable at the time of
purchase. The purchase price shall be paid by Lessee to Lessor at
least thirty (30) days before the expiration of the Initial Term;
(c) Extend the Initial Term for not less than all the Equipment for an
additional 12 months at a Monthly Rental equal to _______% of the
Monthly Rental paid by Lessee during the Initial Term, provided all
payments have been made in accordance with the Lease and there shall
be no default under the Lease by Lessee, title to the Equipment shall
pass to Lessee at the expiration of the 12 month extension and upon
payment of $1.00; or
(d) Return not less than all the Equipment, subject to a remarketing
charge equal to ______% of the Purchase Price.
10. LEASE AGREEMENT: All of the terms, covenants and conditions set forth in the
Lease are incorporated herein by reference as if the same had been set forth
herein in full.
LESSOR: LESSEE:
Leasing Technologies International, Inc. SQL Financials International, Inc.
BY: BY:
------------------------------------- -------------------------------
Name Name
--------------------------------- ---------------------------
Title: Title:
------------------------------- -------------------------
Date: Date:
-------------------------------- --------------------------
This is Counterpart No. ___ of ___ executed Counterparts of this Equipment
Schedule. Counterpart No. 1 of this Equipment Schedule shall constitute the
only original executed counterpart of this Equipment Schedule. For purposes of
perfection of a security interest in chattel paper by possession under the
Connecticut Uniform Commercial Code, (a) such Counterpart shall be deemed the
only original counterpart of this Equipment Schedule, and transfer or possession
of such Counterpart shall effect such perfection, (b) transfer or possession of
no other purported Counterpart of this Equipment Schedule shall effect such
perfection and (c) transfer or possession of an original counterpart of the
Master Lease Agreement shall not be necessary to effect such perfection.
Page 2 of 2
CERTIFICATE OF ACCEPTANCE
-------------------------
To: Leasing Technologies International, Inc.
Soundview Plaza
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
From: ______________________________, Lessee under that certain Master Lease
Agreement ("Lease") dated __________________________, hereby certifies to
Leasing Technologies International, Inc., Lessor under the said Lease, that, to
wit:
1. The Lessee is a corporation in good standing in ____________, the state of
its incorporation.
2. The signatures which appear in said Lease have been duly authorized by the
Lessee and the Lease constitutes a valid and binding obligation of, and is
enforceable by its terms against Lessee.
3. All items of equipment ("Equipment") described in Equipment Schedule
No. ____ to the said Lease, have been delivered to Lessee.
4. The equipment has been received and inspected, and is approved and accepted
by Lessee, effective _________________________________, 1997.
5. As of the date hereof, the Lessee's interest in the Equipment is free and
clear of any liens and encumbrances other than those created by and in favor
of the Lessor.
6. The Lessee hereby represents and warrants that no event of Default or event
which, with the giving of notice or the lapse of time, or both, would become
such an Event of Default has occurred and is continuing under the Lease.
7. The Lessee hereby represents and warrants that the Lessee has obtained all
insurance policies, with respect to the Equipment, that may be required
under the terms of the Lease and such policies are in full force and effect.
Lessee is delivering this Certificate to Lessor pursuant to and in connection
with the said Lease.
LESSOR: LESSEE:
Leasing Technologies International, Inc. SQL Financials International, Inc.
BY: BY:
------------------------------------- -------------------------------
Name Name
--------------------------------- ---------------------------
Title: Title:
------------------------------- -------------------------
Date: Date:
-------------------------------- --------------------------
EQUIPMENT SCHEDULE NO. ____
TO
MASTER LEASE AGREEMENT DATED _______________________
EXHIBIT A
---------
STATEMENT OF CASUALTY VALUES
----------------------------
Monthly Stipulated Monthly Stipulated Loss
Pmt. Made Value* Pmts. Made Value*
--------- ------ ---------- ------
1 120.00 19 84.00
2 118.00 20 82.00
3 116.00 21 80.00
4 114.00 22 78.00
5 112.00 23 76.00
6 110.00 24 74.00
7 108.00 25 72.00
8 106.00 26 70.00
9 104.00 27 68.00
10 102.00 28 66.00
11 100.00 29 64.00
12 98.00 30 62.00
13 96.00 31 60.00
14 94.00 32 58.00
15 92.00 33 56.00
16 90.00 34 54.00
17 88.00 35 52.00
18 86.00 36 50.00
* Expressed as a percentage of Lessor's original purchase price for the
equipment.
LESSOR: LESSEE:
Leasing Technologies International, Inc. SQL Financials International, Inc.
BY: BY:
------------------------------------- -------------------------------
Name Name
--------------------------------- ---------------------------
Title: Title:
------------------------------- -------------------------
Date: Date:
-------------------------------- --------------------------
